Red Cat Holdings, Inc. (Nasdaq: RCAT) (“Red Cat” or “Company”), a
drone technology company integrating robotic hardware and software
for military, government, and commercial operations, reports its
financial results for the second quarter ended March 18, 2024, and
provides a business update.
Operating Highlights:
- Continued global expansion with entry into Latin America
and Middle East markets
- Partnered with Primordial Labs to integrate AI-driven voice
control technology to its platforms
- Part of successful joint drone industry effort resulting in the
passing of the American Security Drone Act by Congress
- Red Cat subsidiary, Teal Drones, received $750k Manufacturing
Modernization Grant from the State of Utah
- Selected as finalist for US Army's Short Range Reconnaissance
program with $3M extended contract award
- In Q4, Retired Four-Star Army General Paul Edward Funk II
joined Red Cat’s Board of Directors
Financial Highlights:
- Record revenues of $5.8 million for fiscal third quarter ending
January 31, 2024, representing growth of more than 250% compared to
the prior-year period and 49% on a sequential basis
- Funded backlog remained strong as of January 31, 2024, at $5.1
million
- Closed the sale of the Consumer segment on February 16, 2024,
resulting in 4,250,000 shares of UMAC common stock issued to Red
Cat, a $1 million cash payment, and a $2 million note payable to
Red Cat
- $12.7 million of combined Cash and Account Receivable balances
as of January 31, 2024
"Red Cat has continued to meet global customer
demand resulting in record third quarter revenue that is more than
250 percent above the same period in our previous fiscal year,"
said Jeff Thompson, Red Cat Chairman and Chief Executive Officer.
"The Teal 2 drone has quickly become the small uncrewed system of
choice and our ability to scale production has been well received
by our domestic and international customers. We believe we are well
positioned for the U.S. Department of Defense Replicator Initiative
and the U.S. Army’s Short Range Reconnaissance Program of Record
being awarded later this year, in which we are one of two
finalists."
"With the increasing demand for our drone
solutions with U.S. Defense and Security Forces and NATO Allies,
our growing pipeline and strong backlog, Red Cat is positioned for
continued growth. Our guidance for the upcoming fourth
quarter of $7 million will be another record quarter and continued
double digit sequential growth into fiscal year 2025," Thompson
added.
“We are reporting record revenues again for the
third quarter of fiscal 2024,” stated Leah Lunger, Interim Chief
Financial Officer. “Having closed the sale of our Consumer segment,
we look forward to focusing exclusively on the expanding
opportunities for our Enterprise segment, such as external
partnerships, entrance into new global markets, and delivering Army
prototypes between now and the beginning of fiscal 2025.”
Retirement of Chief Financial Officer and
Appointment of Leah Lunger as Interim Chief Financial Officer
“With the sale of the Consumer Segment completed
and the focus solely on Teal Drones going forward, it’s a perfect
time to slightly accelerate my planned retirement date,” stated
Joseph Hernon. “I’ve thoroughly enjoyed working with Leah over the
past three plus years and congratulate her on a hard-earned,
well-deserved promotion.”
“Joseph and I have worked together for more than
12 years at two technology companies, and I thank him for deferring
his previously planned retirement for four years to assist in the
maturation of Red Cat from an early-stage development,” said Jeff
Thompson. “He built an All-Star corporate finance team and left us
in good hands.”
“Red Cat is pleased to announce Leah Lunger as
interim Chief Financial Officer. She has done a stellar job, and
the company expects this to become a permanent position for
Lunger,” added Thompson.
Earnings Conference Call
CEO Jeff Thompson and Interim CFO Leah Lunger
will host an earnings conference call at 4:30 p.m. ET on Monday,
March 18, 2024, to review financial results and provide an update
on corporate developments. Following management’s formal remarks,
there will be a question- and-answer session.
Interested parties can listen to the conference
call by dialing 1-844-413-3977 (within the U.S.) or 1-412-317-1803
(international). Callers should dial in approximately ten minutes
prior to the start time and ask to be connected to the Red Cat
conference call. Participants can also pre-register for the call
using the following link:
https://dpregister.com/sreg/10187092/fbc7e3a874
The conference call will also be available through
a live webcast that can be accessed
at: https://event.choruscall.com/mediaframe/webcast.html?webcastid=GS7MpfTG
A replay of the webcast will be available until
June 18, 2024, and can be accessed through the above link or at
www.redcat.red. A telephonic replay will be available until April
1, 2024, by calling 1-877-344-7529 (domestic) or 1-412-317-0088
(international) and using access code 8799674.
About Red Cat Red Cat (Nasdaq:
RCAT) is a drone technology company integrating robotic hardware
and software for military, government, and commercial operations.
Red Cat’s solutions are designed to “Dominate the Night™” and
include the Teal 2, a small unmanned system offering the
highest-resolution thermal imaging in its class. 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. 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
RED CAT HOLDINGS |
Condensed Consolidated Balance Sheets |
|
|
|
|
|
January 31, |
|
|
April 30, |
|
|
|
|
2024 |
|
|
2023 |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and marketable securities |
|
$ |
7,697,335 |
|
$ |
15,987,687 |
|
Intangible assets including goodwill, net |
|
|
23,685,067 |
|
|
24,335,836 |
|
Inventory, including deposits |
|
|
10,063,812 |
|
|
9,280,073 |
|
Accounts receivable, net |
|
|
5,091,724 |
|
|
719,862 |
|
Other |
|
|
5,061,948 |
|
|
4,478,080 |
|
Assets of discontinued operations |
|
|
3,717,313 |
|
|
5,391,552 |
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS |
|
$ |
55,317,199 |
|
$ |
60,193,090 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
3,270,795 |
|
$ |
1,957,975 |
|
Debt obligations |
|
|
899,935 |
|
|
1,323,707 |
|
Warrant derivative liability |
|
|
285,384 |
|
|
588,205 |
|
Operating lease liabilities |
|
|
492,162 |
|
|
661,263 |
|
Liabilities of discontinued operations |
|
|
796,210 |
|
|
1,052,315 |
|
Total liabilities |
|
|
5,744,486 |
|
|
5,583,465 |
|
|
|
|
|
|
|
|
|
Stockholders’ capital |
|
|
121,135,099 |
|
|
110,057,535 |
|
Accumulated deficit/comprehensive loss |
|
|
(71,562,386 |
) |
|
(55,447,910 |
) |
Total stockholders' equity |
|
|
49,572,713 |
|
|
54,609,625 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
$ |
55,317,199 |
|
$ |
60,193,090 |
|
Condensed Consolidated Statements of
Operations |
|
|
Three months ended January 31, |
|
Nine months ended January 31, |
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Revenues |
|
$ |
5,847,933 |
|
|
$ |
1,667,683 |
|
|
$ |
11,526,930 |
|
|
$ |
3,541,846 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
|
4,746,282 |
|
|
|
1,764,612 |
|
|
|
9,050,032 |
|
|
|
3,432,804 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin |
|
|
1,101,651 |
|
|
|
(96,929 |
) |
|
|
2,476,898 |
|
|
|
109,042 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operations |
|
|
527,447 |
|
|
|
663,668 |
|
|
|
1,675,795 |
|
|
|
3,131,789 |
|
Research and development |
|
|
2,125,268 |
|
|
|
1,221,738 |
|
|
|
5,251,285 |
|
|
|
2,938,658 |
|
Sales and marketing |
|
|
883,982 |
|
|
|
1,015,412 |
|
|
|
2,546,380 |
|
|
|
1,986,121 |
|
General and administrative |
|
|
1,426,531 |
|
|
|
1,397,667 |
|
|
|
4,329,760 |
|
|
|
4,275,385 |
|
Stock based compensation |
|
|
585,771 |
|
|
|
788,691 |
|
|
|
2,693,702 |
|
|
|
2,790,958 |
|
Total operating expenses |
|
|
5,548,999 |
|
|
|
5,087,176 |
|
|
|
16,496,922 |
|
|
|
15,122,911 |
|
Operating loss |
|
|
(4,447,348 |
) |
|
|
(5,184,105 |
) |
|
|
(14,020,024 |
) |
|
|
(15,013,869 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (income) expense |
|
|
(258,015 |
) |
|
|
151,818 |
|
|
|
818,901 |
|
|
|
(254,762 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from continuing
operations |
|
|
(4,189,333 |
) |
|
|
(5,335,923 |
) |
|
|
(14,838,925 |
) |
|
|
(14,759,107 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued
operations |
|
|
(1,299,205 |
) |
|
|
(330,079 |
) |
|
|
(2,141,289 |
) |
|
|
(962,971 |
) |
Net loss |
|
$ |
(5,488,538 |
) |
|
$ |
(5,666,002 |
) |
|
$ |
(16,980,214 |
) |
|
$ |
(15,722,078 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share - basic and
diluted |
|
$ |
(0.10 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.31 |
) |
|
$ |
(0.29 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding - basic and diluted |
|
|
55,688,114 |
|
|
|
54,294,116 |
|
|
|
55,409,930 |
|
|
|
54,050,127 |
|
Condensed
Consolidated Statements of Cash Flows |
|
|
|
|
|
|
|
|
Nine months ended January 31, |
|
|
|
|
2024 |
|
|
|
2023 |
|
Cash Flows
from Operating Activities |
|
|
|
|
|
|
|
|
Net loss from continuing operations |
|
$ |
(14,838,925 |
) |
|
$ |
(14,759,107 |
) |
Non-cash expenses |
|
|
4,250,925 |
|
|
|
2,752,691 |
|
Changes in operating assets and liabilities |
|
|
(4,766,934 |
) |
|
|
(4,799,734 |
) |
Net cash
used in operating activities |
|
|
(15,354,934 |
) |
|
|
(16,806,150 |
) |
|
|
|
|
|
|
|
|
|
Cash Flows
from Investing Activities |
|
|
|
|
|
|
|
|
Proceeds from sale of marketable securities |
|
|
12,826,217 |
|
|
|
24,282,117 |
|
Other |
|
|
(184,532 |
) |
|
|
(1,985,882 |
) |
Net cash
provided by investing activities |
|
|
12,641,685 |
|
|
|
22,296,235 |
|
|
|
|
|
|
|
|
|
|
Cash Flows
from Financing Activities |
|
|
|
|
|
|
|
|
Payments of debt obligations, net |
|
|
(423,772 |
) |
|
|
(498,576 |
) |
Payments related to employee equity transactions |
|
|
(20,949 |
) |
|
|
(594,454 |
) |
Proceeds from issuance of common stock, net |
|
|
8,404,812 |
|
|
|
— |
|
Net cash
provided by (used in) financing activities |
|
|
7,960,091 |
|
|
|
(1,093,030 |
) |
|
|
|
|
|
|
|
|
|
Net cash
used in discontinued operations |
|
|
(683,041 |
) |
|
|
(4,588,708 |
) |
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in Cash |
|
|
4,563,801 |
|
|
|
(191,653 |
) |
Cash,
beginning of period |
|
|
3,260,305 |
|
|
|
4,084,815 |
|
Cash, end of
period |
|
|
7,824,106 |
|
|
|
3,893,162 |
|
Less: Cash
of discontinued operations |
|
|
(126,771 |
) |
|
|
(84,058 |
) |
Cash of
continuing operations, end of period |
|
|
7,697,335 |
|
|
|
3,809,104 |
|
Marketable
securities |
|
|
— |
|
|
|
20,730,033 |
|
Cash of
continuing operations and marketable securities |
|
$ |
7,697,335 |
|
|
$ |
24,539,137 |
|
|
|
|
|
|
|
|
|
|
Source: Red Cat Holdings, Inc.
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