Red Cat Holdings Announces Closing of Public Offering of Common Stock and Full Exercise of Underwriters’ Option to Purchase Additional Shares

Rhea-AI Summary

Red Cat Holdings (Nasdaq: RCAT), a drone technology company, has successfully completed a public offering of common stock, including the full exercise of the underwriters' option. The company issued a total of 17,968,750 shares, raising gross proceeds of approximately $172.5 million.

The offering was managed by Northland Capital Markets as sole bookrunner and Ladenburg Thalmann & Co. Inc. as co-manager. Red Cat plans to use the net proceeds for general corporate purposes and working capital, with a focus on operating expenditures for its new unmanned surface vessel division.

Positive

• Substantial capital raise of $172.5 million strengthens balance sheet
• Full exercise of underwriters' option indicates strong demand
• Proceeds will support expansion into unmanned surface vessel division

Negative

• Significant dilution for existing shareholders due to large share issuance

Insights

Financial Analyst

Red Cat's $172.5M stock offering significantly bolsters its balance sheet, funding expansion into unmanned surface vessels beyond its drone business.

Red Cat Holdings has successfully completed a substantial public offering, raising $172.5 million in gross proceeds through the issuance of 17,968,750 shares of common stock. This includes the full exercise of the underwriters' option to purchase an additional 2,343,750 shares, indicating strong demand from investors. For a company operating in the specialized drone technology sector, this represents a significant capital infusion that substantially strengthens their financial position.

The timing is strategic as Red Cat expands beyond its core drone business into the unmanned surface vessel market. This diversification represents a notable strategic pivot, broadening their footprint in the autonomous vehicle space from air to water. The company has explicitly earmarked these funds for general corporate purposes and working capital, with specific mention of operating expenditures for their new unmanned surface vessel division.

The successful completion of this offering, with full exercise of the underwriters' option, signals market confidence in Red Cat's business model and growth strategy. The involvement of Northland Capital Markets as sole bookrunner and Ladenburg Thalmann as co-manager adds credibility to the offering. This capital raise provides Red Cat with substantial financial flexibility to execute their expansion plans without immediate revenue pressure from the new division, potentially accelerating their market position in multiple autonomous vehicle segments simultaneously.

SAN JUAN, Puerto Rico, Sept. 19, 2025 (GLOBE NEWSWIRE) -- 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, announced today the pricing of an underwritten public offering of 17,968,750 shares of common stock, including the full exercise of the underwriters’ option to purchase 2,343,750 additional shares on September 19, 2025. The gross proceeds from the offering to the Company were approximately $172.5 million, before deducting underwriting discounts and commissions and other offering expenses.

The Company intends to use net proceeds from the offering for general corporate and working capital purposes, including but not limited to operating expenditures related to its new unmanned surface vessel division.

Northland Capital Markets acted as sole bookrunner and Ladenburg Thalmann & Co. Inc. acted as co-manager for this transaction.

A shelf registration statement on Form S-3 relating to the securities offered in the public offering described above was filed with the Securities and Exchange Commission (the “SEC”) on September 15, 2025 (File No. 333- 290259) and declared effective by the SEC on September 17, 2025. The offering was made by means of a written prospectus and prospectus supplement that formed a part of the registration statement. A final prospectus supplement and accompanying prospectus relating to the offering was filed with the SEC and is available on the SEC’s website at www.sec.gov. Copies of the final prospectus supplement and the accompanying prospectus may also be obtained from Northland Securities, Inc., 150 South Fifth Street, Suite 3300, Minneapolis, MN.

This press release does not constitute an offer to sell, or the solicitation of an offer to buy these securities, nor will there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale is not permitted.

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.

Safe Harbor 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 our intended use of proceeds from the offering. 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.

Contact:

INVESTORS:
E-mail: Investors@redcat.red

NEWS MEDIA:
Phone: (347) 880-2895
Email: peter@indicatemedia.com

FAQ

How much did Red Cat Holdings (RCAT) raise in its September 2025 public offering?

Red Cat Holdings raised $172.5 million in gross proceeds through the offering of 17,968,750 shares of common stock.

What will Red Cat Holdings use the proceeds from its 2025 stock offering for?

Red Cat will use the proceeds for general corporate and working capital purposes, including operating expenditures for its new unmanned surface vessel division.

Who were the underwriters for Red Cat Holdings' September 2025 stock offering?

Northland Capital Markets acted as sole bookrunner and Ladenburg Thalmann & Co. Inc. acted as co-manager for the offering.

How many additional shares were purchased through the underwriters' option for RCAT's offering?

The underwriters exercised their full option to purchase an additional 2,343,750 shares of common stock.

When was Red Cat Holdings' shelf registration statement declared effective?

The shelf registration statement was declared effective by the SEC on September 17, 2025.