Red Cat Secures Up to $20 Million in Debt Financing
Red Cat Holdings, Inc. (Nasdaq: RCAT), a pioneer in drone technology integrating robotic hardware and software for various applications including military and commercial operations, has announced the completion of an agreement facilitating up to $20 million in debt financing. An initial tranche of $16.5 million has already been finalized with The Lind Partners, a fund manager based in New York.
The financing agreement highlights several key details:
- The debt is convertible at a share price of $16.15
- Initial funds received amount to $15 million
- A total of one million warrants are exercisable at $15.00 per share, on a non-cashless basis
Moreover, Red Cat has submitted an application for an additional $58 million in debt financing through the Department of Defense’s Office of Strategic Capital (OSC). This initiative aims to foster private investment in technologies critical for national security. The OSC has pinpointed 14 essential technology areas, which are categorized as follows:
- Seed Areas of Emerging Opportunity
- Effective Adoption Areas
- Defense-Specific Areas
The financing is crucial for scaling production and advancing the development of Red Cat’s Arachnid Family of Systems, which features products like the Black Widow™, Edge 130, and an upcoming range of FANG™ First-Person View (FPV) drones. This line of systems is designed to fulfill the drone system requirements of the U.S. Department of Defense and NATO Allies, focusing on cost-effectiveness, portability, and field repairability.
Commenting on the financing, Red Cat CEO Jeff Thompson noted, “This funding will enable us to speed up the expansion of the Edge 130 factory and enhance the mass production of the Black Widow. Given our focus on technology solutions that bolster the Department of Defense’s capabilities, we are well-positioned as a candidate for the OSC’s low-cost debt program. The potential total financing of $93 million represents the least dilutive option for our shareholders.”
About Red Cat, Inc.
Red Cat (Nasdaq: RCAT) specializes in drone technology, developing robotic solutions for military, civil, and commercial purposes. Through its subsidiaries, Teal Drones and FlightWave Aerospace, Red Cat has created a comprehensive range of systems, including the Black Widow™—a compact unmanned ISR system that has earned the U.S. Army’s Short Range Reconnaissance (SRR) Program of Record contract. Other products include the TRICHON™, a vertical take-off and landing (VTOL) aircraft for prolonged missions, and FANG™, the first line of NDAA-compliant FPV drones built for military operations with precision strike capabilities. For more details, visit www.redcat.red.
About The Lind Partners
The Lind Partners specializes in managing funds that provide growth capital to small and mid-cap companies listed in the US, Canada, Australia, and the UK. Their investments range from $1 million to $30 million and have completed over 150 direct investments, amassing a transaction value exceeding $1.5 billion since their inception in 2011.
