Red Cat Holdings Inc (NASDAQ:RCAT) Net Loss Widens

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Red Cat Holdings Inc (NASDAQ:RCAT), a hardware-enabled software provider to the drone industry, stock fell 4.74% (As on Dec 21, 11:53:39 AM UTC-4, Source: Google Finance) after the company in the second quarter of FY 22 has reported the revenues of approximately $1.9 million, compared to approximately $428,000 for the same period in 2020, representing an increase of more than 300%. The company delivered adjusted Net loss for the quarter ended October 31, 2021, which excludes non-cash expenses, primarily related to stock-based compensation, of approximately $3 million, as compared to an adjusted net loss of approximately $640,000 for the fiscal quarter ended October 31, 2020. Cash and investments were approximately $60 million as of October 31, 2021.

Meanwhile, the company has closed its acquisition of Teal Drones, a leader in commercial and government unmanned aerial vehicle (“UAV”) technology. Teal manufactures the Golden Eagle, one of only five drones approved by the U.S. Department of Defense for reconnaissance, public safety, and inspection applications. Teal will anchor the Enterprise Segment at Red Cat that also includes Skypersonic, a remote inspection company. Companies in Red Cat’s Consumer Segment include Fat Shark, a drone imaging and communication company and Rotor Riot, which focuses on first person view drones and equipment for the consumer segment. Collectively, the group of complementary companies offers a comprehensive and diversified array of technologies targeted at all segments of the growing drone industry, with a special emphasis on military applications and infrastructure inspections. Teal has opened new Manufacturing Facility in Salt Lake City, Utah. The successful integration of Teal Drones and its recent move into a larger manufacturing facility will be instrumental in the company’s success going forward and allow them to execute on a number of larger Department of Defense contracts the company has been pursuing in the expanding sales funnel.  Moreover, beginning in January, the company expects to generate at least $1 million in monthly revenue from drone production at Teal to satisfy existing orders and envision revenue growth accelerating in the first half of calendar 2022 based on the current contracts alone. Further, the passage of Infrastructure Bill which has $280 billion in earmarked funds to provide inspection services on railways, roads, bridges, and electrical grid maintenance will also provide opportunities for U.S.-based drone manufacturers like Red Cat. Skypersonic awarded the contract with NASA (National Aeronautics and Space Administration) to the company.

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