Red Cat Raises Up to $20 Million in Debt Financing
Rhea-AI Summary
Red Cat Holdings (NASDAQ: RCAT) has secured up to $20 million in debt financing through an agreement with The Lind Partners, with an initial tranche of $16.5 million already closed. The debt financing is convertible at $16.15 share price and includes 1 million warrants exercisable at $15.00 per share non-cashless.
Additionally, the company has applied for $58 million in debt financing from the Department of Defense Office of Strategic Capital (OSC). The combined potential financing of $93 million will be used to scale up production and continue development of its Arachnid Family of Systems, including Black Widow™, Edge 130, and FANG™ First-Person View drones. These systems are designed to provide low-cost, portable, field repairable, and recoverable drone solutions for the U.S. Department of Defense and NATO Allies.
Positive
- Secured $16.5M initial tranche of debt financing with potential for up to $20M total
- Applied for additional $58M in debt financing from Department of Defense OSC
- Financing structure is minimally dilutive to shareholders
- Funds will support production scaling and development of military drone systems
Negative
- Debt financing includes convertible features that could lead to future dilution
- OSC financing application of $58M is pending approval with no guarantee of success
News Market Reaction 1 Alert
On the day this news was published, RCAT declined 3.28%, reflecting a moderate negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
Applies for
SAN JUAN, Puerto Rico, Feb. 12, 2025 (GLOBE NEWSWIRE) -- Red Cat Holdings, Inc. (Nasdaq: RCAT) (“Red Cat”), a drone technology company integrating robotic hardware and software for military, government, and commercial operations, today announced it has entered into an agreement for up to
- Debt Financing convertible at
$16.15 share price - Initial Tranche proceeds of
$15 million - 1 million warrants exercisable at
$15.00 per share non cashless
Additionally, Red Cat has applied for
- Seed Areas of Emerging Opportunity
- Effective Adoption Areas
- Defense-Specific Areas
The investment is expected to provide Red Cat with the working capital needed to scale up production and the ongoing development of its Arachnid Family of Systems, which includes Black Widow™, Edge 130, and a new line of FANG™ First-Person View (FPV) drones. The goal of the Family of Systems is to meet the needs of the U.S. Department of Defense and NATO Allies for drone systems that are low-cost, portable, field repairable, and recoverable.
“The recent financing will allow us to expedite and expand the Edge 130 factory and build-out and ramp up mass production of the Black Widow,” said Jeff Thompson. Red Cat CEO. “As a company focused on technology that advances the Department of Defense capabilities, we are a strong candidate for the Office of Strategic Capital's low-cost debt program. The potential total financing of
About Red Cat, Inc.
Red Cat (Nasdaq: RCAT) is a drone technology company integrating robotic hardware and software for military, government, and commercial operations. Through two wholly owned subsidiaries, Teal Drones and FlightWave Aerospace, Red Cat has developed a Family of Systems. This includes the Black Widow™, a small unmanned ISR system that was awarded the U.S. Army’s Short Range Reconnaissance (SRR) Program of Record contract. The Family of Systems also includes TRICHON™, a fixed wing VTOL for extended endurance and range, and FANG™, the industry's first line of NDAA compliant FPV drones optimized for military operations with precision strike capabilities. Learn more at www.redcat.red.
About The Lind Partners
The Lind Partners manages institutional funds that are leaders in providing growth capital to small- and mid-cap companies publicly traded in the US, Canada, Australia and the UK. Lind's funds make direct investments ranging from US
Forward-Looking Statements
This press release contains "forward-looking statements" that are subject to substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this press release are forward-looking statements. Forward-looking statements contained in this press release may be identified by the use of words such as "anticipate," "believe," "contemplate," "could," "estimate," "expect," "intend," "seek," "may," "might," "plan," "potential," "predict," "project," "target," "aim," "should," "will," "would," or the negative of these words or other similar expressions, although not all forward-looking statements contain these words. Forward-looking statements are based on Red Cat Holdings, Inc.'s current expectations and are subject to inherent uncertainties, risks and assumptions that are difficult to predict. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. These and other risks and uncertainties are described more fully in the section titled "Risk Factors" in the final prospectus related to the public offering filed with the Securities and Exchange Commission. Forward-looking statements contained in this announcement are made as of this date, and Red Cat Holdings, Inc. undertakes no duty to update such information except as required under applicable law.
Contacts:
INVESTORS:
E-mail: Investors@redcat.red
NEWS MEDIA:
Indicate Media
Phone: (347) 880-2895
Email: peter@indicatemedia.com
FAQ
How much debt financing did Red Cat (RCAT) secure from The Lind Partners?
What is the conversion price for RCAT's new debt financing?
How much additional financing has RCAT applied for from the Department of Defense?
What will RCAT use the debt financing proceeds for?
What is the total potential financing amount RCAT could receive?
