Red Cat Supports Administration’s Accelerated Enforcement of NDAA Section 1709, Highlights Need for U.S. Drone Ecosystem Investment
Rhea-AI Summary
Red Cat (Nasdaq: RCAT) responded to the FCC’s immediate implementation of Section 1709 of the FY25 NDAA on Dec 23, 2025, which adds foreign-manufactured drones and critical components to the Covered List effective immediately.
Red Cat called the action a major moment for the U.S. drone industry, urged coordinated public-private investment in trusted domestic alternatives, and noted its NDAA-compliant Family of Systems, including the Black Widow platform, is designed and built in the United States to meet defense and security needs.
Positive
- FCC added foreign-manufactured drones to Covered List effective Dec 23, 2025
- Red Cat states NDAA-compliant Black Widow is designed and built in US
Negative
- Policy success depends on availability of trusted American-made alternatives
- Industry must scale quickly, requiring public and private sector investment
News Market Reaction 5 Alerts
On the day this news was published, RCAT declined 0.43%, reflecting a mild negative market reaction. Our momentum scanner triggered 5 alerts that day, indicating moderate trading interest and price volatility. This price movement removed approximately $5M from the company's valuation, bringing the market cap to $1.15B at that time.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Market Reality Check
Peers on Argus 1 Down
RCAT gained 14.53% while peers were mixed: LUNR up 11.56%, EH down 1.72%, EVEX down 0.21%, RDW flat, MOBBW up 0.59%. Momentum scanner only flagged LUNR moving down, reinforcing RCAT’s stock-specific move.
Regulatory & Risk Context
An effective S-3 shelf registration was filed on 2025-09-15 on Form S-3, with at least 2 subsequent 424B5 usages in September 2025. This provides the company with the ability to periodically offer registered securities, which can impact future capital structure and share count depending on usage.
Market Pulse Summary
This announcement underscores a regulatory shift as the FCC implements NDAA Section 1709, placing certain foreign drones on the Covered List and implicitly favoring U.S.-made systems. RCAT highlights its NDAA-compliant platforms and prior expansion via a $14.0 million acquisition. Investors may watch how procurement trends, usage of the Form S-3 shelf registration, and the elevated short interest of 16.53% interact with future contract and policy developments.
Key Terms
national defense authorization act regulatory
fcc regulatory
covered list regulatory
AI-generated analysis. Not financial advice.
SALT LAKE CITY, Dec. 23, 2025 (GLOBE NEWSWIRE) -- Red Cat Holdings, Inc. (Nasdaq: RCAT), a U.S.-based provider of advanced all-domain drone and robotic solutions for defense and national security, today responded to the Federal Communications Commission’s (FCC) announcement to immediately implement Section 1709 of the FY25 National Defense Authorization Act (NDAA).
The FCC’s action adds foreign-manufactured drones and their critical components to the Covered List effective immediately. This step was taken following an interagency review led by the White House and a national security determination that such systems pose “unacceptable risks” to U.S. safety and sovereignty. The decision follows a national security determination made by an Executive Branch interagency body convened by the White House.
“This is a major moment for the American drone industry,” said Jeff Thompson, CEO of Red Cat. “We applaud the Administration’s decision to act with urgency. The FCC’s action sends a clear signal that the U.S. is serious about securing its airspace, backing trusted technology, and leveling the playing field for U.S. manufacturers competing with foreign-subsidized products. What comes next is just as important. U.S. companies should work together to meet the demand this policy will create.”
Red Cat emphasized that while the enforcement of Section 1709 is a necessary step in safeguarding American airspace and critical infrastructure, its success hinges on the availability of trusted alternatives. Public and private sector customers must have access to cost-effective and capable American-made platforms that meet operational demands.
As the U.S. moves to reclaim technological leadership in uncrewed systems, Red Cat remains committed to working alongside government agencies and industry partners to shape a secure, resilient, and scalable domestic drone ecosystem. The company’s Family of Systems includes NDAA-compliant platforms such as the Black Widow™, which are designed and built in the United States to meet the evolving needs of defense and security customers.
About Red Cat Holdings, Inc.
Red Cat (Nasdaq: RCAT) is a U.S.-based provider of advanced all-domain drone and robotic solutions for defense and national security. Through its wholly owned subsidiaries, Teal Drones and FlightWave Aerospace, Red Cat develops American-made hardware and software that support military, government, and public safety operations across air, land, and sea. Its Family of Systems, led by Black Widow™, delivers unmatched tactical capabilities in small, unmanned aircraft systems (sUAS). Expanding into the maritime domain through Blue Ops, Inc., Red Cat is also innovating in uncrewed surface vessels (USVs), delivering integrated platforms designed to enhance safety and multi-domain mission effectiveness. Learn more at www.redcat.red.
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. Such statements include, but are not limited to, statements relating to our intended use of proceeds from the offering, annual revenue guidance, future manufacturing capacities and future market demand. 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 Form 10-KT filed with the Securities and Exchange Commission on March 31, 2025. 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.
Investor Contact:
Ankit Hira
Solebury Strategic Communications for Red Cat Holdings, Inc.
E-mail: RCAT@soleburystrat.com
Media Contact:
Peter Moran
Phone: (347) 880-2895
Email: peter@indicatemedia.com
FAQ
What did the FCC announce about Section 1709 and foreign-made drones on Dec 23, 2025 for RCAT investors?
How does the FCC action affect Red Cat (RCAT) product relevance?
Does Red Cat say what is needed after the FCC enforcement of Section 1709?
Is Red Cat’s Black Widow NDAA-compliant and where is it built?
When did Red Cat comment on the FCC decision and national security determination?
