Red Cat (NASDAQ:RCAT) Raises Up to $20 Million in Debt Financing

Red Cat Holdings, Inc. (Nasdaq: RCAT) has recently secured a significant amount of debt financing, aiming to further bolster its operations and expansion plans within the drone technology sector. The company, renowned for integrating robotic hardware and software into military, government, and commercial ventures, announced an agreement with The Lind Partners, a reputable New York-based institutional fund manager, for up to $20 million in debt financing. In this arrangement, an initial tranche of $16.5 million has been successfully closed.

Key highlights of the debt financing agreement include the following terms:
– The debt financing is convertible at a share price of $16.15.
– Red Cat received an initial tranche of $15 million.
– Additionally, the agreement includes 1 million warrants exercisable at $15.00 per share on a non-cashless basis.

Moreover, in a strategic move towards further financial reinforcement, Red Cat has made a notable application for an additional $58 million in debt financing from the Department of Defense Office of Strategic Capital (OSC). Known for its initiatives in accelerating and scaling private investments in critical supply chain technologies essential for national security, OSC has delineated 14 crucial technology areas aligned with the 2023 National Defense Science and Technology Strategy. These encompass Seed Areas of Emerging Opportunity, Effective Adoption Areas, and Defense-Specific Areas.

This substantial investment, once secured, is anticipated to equip Red Cat with the indispensable working capital required to expand production capabilities and advance the development of its Arachnid Family of Systems. Among these systems are the Black Widow™, Edge 130, and a new line of FANG™ First-Person View (FPV) drones. The ultimate objective of these systems is to cater to the needs of the U.S. Department of Defense and NATO Allies by offering drone systems that are cost-effective, portable, field repairable, and recoverable.

Regarding these recent financial developments, Jeff Thompson, CEO of Red Cat, expressed, “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. As a company dedicated to advancing technology for the Department of Defense, we are optimistic about the potential benefits from the Office of Strategic Capital’s low-cost debt program. The potential total financing of $93 million stands as the least dilutive option for our shareholders.”

Red Cat (Nasdaq: RCAT) is a leading drone technology company that stands out for its innovative integration of robotic hardware and software for diverse operational sectors, including military, government, and commercial applications. Through its subsidiaries Teal Drones and FlightWave Aerospace, the company has developed a robust Family of Systems comprising various cutting-edge solutions, such as the Black Widow™ and TRICHON™. These systems have garnered recognition for their efficacy, with the Black Widow™ notably securing the U.S. Army’s Short Range Reconnaissance (SRR) Program of Record contract.

On the financing front, The Lind Partners, the institutional fund manager involved in providing Red Cat with debt financing, is highly-regarded for its focus on providing growth capital to small- and mid-cap companies, including those publicly traded across the US, Canada, Australia, and the UK. With a wealth of experience exceeding 150 direct investments totaling over US$1.5 billion in transaction value, Lind’s funds have notably supported companies as key capital partners since 2011.

This press release includes forward-looking statements that are inherently subject to risks and uncertainties. While these statements are based on Red Cat Holdings, Inc.’s current expectations, they remain coupled with inherent uncertainties that pose challenges for accurate predictions. It is important to note that certain forward-looking statements are laid out based on assumptions about future events that might not materialize as anticipated. A more detailed discussion of risks and uncertainties can be found in the “Risk Factors” section of the final prospectus filed with the Securities and Exchange Commission. Red Cat Holdings, Inc. commits to providing updates on any material developments as required by law, underscoring its commitment to transparency and accountability.

For investor inquiries, please reach out via email at [email protected]. For media queries, kindly contact Indicate Media at (347) 880-2895 or email [email protected].

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Red Cat’s 8K filing here.

Red Cat Company Profile

Red Cat Holdings, Inc engages in the provision of various products, services, and solutions to the drone industry. The company operates through two segments: Enterprise and Consumer. It built infrastructure to manages drone fleets and fly, and provide services remotely, navigate confined industrial interior spaces and dangerous military environment.