Red Cat Holdings Reports Record Annual Revenues

HUMACAO, Puerto Rico, Aug. 12, 2021 /PRNewswire/ — Red Cat Holdings, Inc. (Nasdaq: RCAT) («Red Cat» or «Company»), a hardware-enabled software…

HUMACAO, Puerto Rico, Aug. 12, 2021 /PRNewswire/ — Red Cat Holdings, Inc. (Nasdaq: RCAT) («Red Cat» or «Company»), a hardware-enabled software provider to the drone industry, reports its financial results for the fiscal year ended April 30, 2021, and provides a business update:

  • Revenues for the fiscal year ended April 30, 2021, were approximately $5.0 million, representing a more than ten-fold increase compared to approximately $0.4 million for the fiscal year ended April 30, 2020
  • Adjusted Net loss for the fiscal year ended April 30, 2021, which excludes non-cash charges associated with derivative liabilities, stock-based compensation, and the amortization of debt discount, was approximately $1.6 million, as compared to an adjusted net loss of $1.3 million for the fiscal year ended April 30, 2020
  • Common Stock financings in May and July 2021 raised $76 million in gross proceeds

«We are pleased to report only a relatively modest increase in our adjusted net loss even while closing and integrating three acquisitions during the 16-month period through April 30, 2021,» stated Joseph Hernon, Chief Financial Officer.  «Our recent capital raises totaling gross proceeds of $76 million have strengthened our financial position, and we are well funded to execute on our growth initiatives.»

«Since the beginning of 2019, we have completed three acquisitions, and we are working hard to close our fourth and most exciting acquisition, Teal Drones, as fast and efficiently as possible,» stated Jeffrey Thompson, Chief Executive Officer.  «Red Cat remains focused on building a portfolio of complementary products and services to support the continued growth and maturation of the drone industry in both the enterprise and consumer market segments. Our disciplined acquisition strategy targets companies with advanced product offerings and unique drone platforms and intellectual property. After the integration of Teal Drones, we would expect military applications and infrastructure inspections to be our most significant revenue drivers.»

Conference Call Today:

Jeff Thompson, CEO and Joseph Hernon, CFO will conduct a conference call this afternoon at 5:00 p.m. ET and lead a discussion of fiscal year 2021 financial results along with a Q&A session to follow. To listen to the conference call, interested parties within the U.S. should dial 1-866-777-2509 (domestic) or 1-412-317-5413 (international). All callers should dial in approximately 10 minutes prior to the scheduled start time and ask to be joined into the Red Cat Holdings conference call.

The conference call will also be available through a live webcast that can be accessed at https://services.choruscall.com/mediaframe/webcast.html?webcastid=TxjwxSOS

The webcast replay will be available until November 12, 2021, and can be accessed through the above link. A telephonic replay will be available until August 26, 2021, by calling 1-877-344-7529 (domestic) or 1-412-317-0088 (international) and using access code 10159599.

The Company’s complete financial statements are being filed today with the Securities and Exchange Commission and can be accessed via https://sec.report/Ticker/RCAT. A condensed summary of select financial data is provided below:

Statements Of Operations













Year ended April 30,



2021


2020

Revenues


$

4,999,517



$

403,940











Cost of goods sold



3,929,832




325,379











Gross Margin



1,069,685




78,561











Operating Expenses









Operations



590,342





Research and development



516,084




488,990


Sales and marketing



172,182





General and administrative



1,279,471




949,636


Stock based compensation



3,388,216




269,895


Total operating expenses



5,946,295




1,708,521


Operating loss



(4,876,610)




(1,629,960)











Other Expense (Income)









Derivative expense



4,630,288





Change in fair value of derivative liability



2,492,894





Interest expense



1,223,767




29,186


Other, net



12,616




(57,215)


Other Expense (Income)


$

8,359,565



$

(28,029)











Net loss


$

(13,236,175)



$

(1,601,931)


 

Condensed Balance Sheets










April 30,




April 30,





2021




2020


ASSETS









Cash and other assets


$

1,643,863



$

322,191


Intangible assets, net



2,032,169




20,000


Goodwill



8,017,333




2,466,073


TOTAL ASSETS



11,693,365




2,808,264











LIABILITIES AND STOCKHOLDERS’ EQUITY









Warrant derivative liability



2,812,767





Payable to related party



2,143,209




333,684


Accounts payable and accrued expenses



1,202,049




376,811


Notes payable



269,045




568,771


Total Liabilities



6,427,070




1,279,266











Stockholders’ Capital



21,076,223




4,102,751


Accumulated deficit



(15,809,928)




(2,573,753)


Total Stockholders’ Equity



5,266,295




1,528,998


TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY


$

11,693,365



$

2,808,264











 

Condensed Statements of Cash Flows









Year ended April 30,



2021


2020

Net cash used in operating activities



(1,399,001)




(811,584)











Net cash (used in) provided by investing activities



(48,368)




46,327











Net cash provided by financing activities



1,488,048




498,487











Non-GAAP Financial Measures

We have presented a supplemental non-GAAP financial measure in this earnings release.  We believe that this supplemental information is useful to investors because it allows for an evaluation of the company with a focus on the performance of its core operations, including more meaningful comparisons of financial results to historical periods.  Adjusted Net Loss is a non-GAAP financial measure which excludes certain non-cash expenses related to derivatives, stock-based compensation and the amortization of debt discounts.  Our executive management team uses these same non-GAAP measures internally to assess the ongoing performance of the company.

Below is a reconciliation of Adjusted Net Loss to GAAP net loss for the 12 months ended April 30, 2021 and 2020:



Adjusted net loss



2021


2020

Net loss


$

(13,236,175)



$

(1,601,931)


Stock based compensation



3,388,216




269,895


Derivative expense



4,630,288





Change in fair value of derivative liability



2,492,894





Non-cash portion of interest expense



1,100,000














Adjusted Net Loss


$

(1,624,777)



$

(1,332,036)


About Red Cat Holdings, Inc.

Red Cat provides products, services and solutions to the drone industry through its four wholly owned subsidiaries. Fat Shark Holdings is the leading provider of First Person View (FPV) video goggles to the drone industry. Rotor Riot, LLC is a leader in the sale of FPV drones and equipment, primarily to the consumer marketplace through its digital storefront located at www.rotorriot.com. Rotor Riot enjoys high visibility in social media through its Facebook page and its sponsorship of a professional drone racing team that has won numerous championships. Skypersonic provides software and hardware solutions that enable drones to complete inspection services in locations where GPS is not available, yet still record and transmit data even while being operated from thousands of miles away. Red Cat Propware is developing a Software-as-a-Solution («SaaS») platform to provide drone flight data analytics and storage, as well as diagnostic products and services. Learn more at https://www.redcatholdings.com/.

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.

For Investor Relations Inquiries:

Chad Kapper

Phone: (818) 906-4701

E-mail: Investors@redcat.red

Website: https://www.redcatholdings.com/

 

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SOURCE Red Cat Holdings, Inc.