Red Cat Holdings Reports Financial Results for Fiscal Year Ended April 30, 2022 and Provides Corporate Update
July 27 2022 - 3:05PM
Red Cat Holdings, Inc. (Nasdaq: RCAT) (“Red Cat” or “Company”), a
hardware-enabled software provider to the drone industry, reports
its financial results for its fiscal year ended April 30, 2022 and
provides a business update.
Fiscal 2022 and Recent Corporate
Highlights:
- Acquired Teal Drones (“Teal”) and Skypersonic, Inc. to better
penetrate the military and industrial inspection markets,
respectively
- Raised $76 million in gross proceeds from public market
financings
- Strengthened management team with hiring of Dr. Allan Evans as
Chief Operating Officer and Geoffrey Hitchcock as Senior Vice
President of Global Defense Solutions
Teal
- Teal was among five contractors awarded a firm, fixed price,
multiple-award, blanket purchase agreement worth an estimated $90
million in total over a five-year ordering period by the U.S.
Customs and Border Protection
- Teal was selected from more than three dozen competitors by
U.S. Army for the Short Range Reconnaissance Tranche 2 Drone
Program; received a $1.5 million prototype contract
- Teal received an initial purchase order for 15 Golden Eagle
drone units from a NATO member country for deployment in
Ukraine
- Teal completed the development of the 4-Ship and 4-Ship+
multi-vehicle packages, which allow for a single drone pilot to
control an up to four-drone system with applications for the
defense, government, and public safety markets
Skypersonic
- Skypersonic was awarded a five-year contract by NASA to provide
drone and rover software, hardware, and support for NASA’s
Simulated Mars mission
- Skypersonic completed a two-year program with General Motors
using the Skycopter™ to perform crane rail inspections in all 19 of
its North American stamping (metalworking) facilities
- Skypersonic successfully completed a trans-Atlantic inspection
of an Italian utility plant with the pilot physically located in
the U.S. while controlling a drone located at the plant using the
Internet connection from a normal cellphone
Fat Shark
- Fat Shark launched a new first-person viewer (FPV) drone
headset called the Dominator, a low-latency, 1080p digital goggle
with an extended flight range higher than existing competing
systems
Financial Highlights:
- Revenue for the fiscal year ended
April 30, 2022 increased 29% year-over-year to $6.4 million
- Cash and marketable securities were
approximately $49 million as of April 30, 2022
“As the drone industry continues to build
momentum, we believe we are positioned well to maintain our
emerging leadership position,” commented CEO Jeff Thompson. “With
our strong cash position of nearly $49 million, we believe we have
a clear path to profitability without the need for additional
financing.
“Furthermore, we continue to steadily increase
our monthly unit production at Teal with strong demand from the
U.S. military, other government agencies, and other NATO countries
as a response to the Ukraine conflict. Along with the potential
from the U.S. Army’s Short Range Reconnaissance Tranche 2 Drone
Program, our recent introduction of the 4-Ship should keep our
pipeline of activity from Teal quite full for the next 12-24
months.
“Beyond Teal, we expect revenue growth for Fat
Shark to be strong in fiscal 2023 thanks to the recent rollout of
the Dominator FPV state-of-the-art goggles. With unmatched
technical performance, the Dominator is the latest innovation from
Fat Shark, and we believe it will appeal to professional drone
pilots across the world.
“Additionally, once U.S. federal funds from the
$1 trillion Infrastructure Bill begin to get apportioned, we feel
Skypersonic is positioned well to capitalize on the inspection
market. There are significant efficiencies in both cost and time
from using drone technology, such as Skypersonic’s Skycopter drone,
to perform the thousands of necessary inspections of roads,
bridges, towers, etc. across the government landscape,” concluded
Mr. Thompson.
"Fiscal 2022 was a momentous year in the
evolution and growth of Red Cat,” stated Joseph Hernon, Chief
Financial Officer. “We completed the acquisitions of Teal Drones
and Skypersonic, which together will compose our Enterprise Segment
in fiscal 2023. Our financial position remains strong with almost
$49 million of cash and marketable securities and debt obligations
of less than $2 million.”
Conference Call TodayCEO Jeff
Thompson and CFO Joseph Hernon will also host an earnings
conference call at 5:00 p.m. ET on Wednesday, July 27, 2022 to
review financial results and provide an update on corporate
developments. Following management’s formal remarks, there will be
a question-and-answer session.
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, Inc. conference call.
Participants can also pre-register for this event using the
following link: https://dpregister.com/sreg/10169409/f3b79d8714
The conference call will also be available
through a live webcast that can be accessed at:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=GSCAirbi
The webcast replay will be available until
October 27, 2022 and can be accessed through the above link or on
the Company’s website. A telephonic replay will be available until
August 10, 2022 by calling 1-877-344-7529 (domestic) or
1-412-317-0088 (international) and using access code 9552326.
About Red Cat Holdings, Inc. Red Cat provides
drone-based products, services, and solutions through its four
subsidiaries and services the enterprise, military, and consumer
markets. Teal Drones is a leader in unmanned aircraft systems
(UAS), and its Golden Eagle is one of only five drones approved by
the Department of Defense for reconnaissance, public safety, and
inspection applications. Skypersonic's technology enables 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. Fat Shark is a leading
provider of First Person View (FPV) video goggles. Rotor Riot,
LLC is a reseller of FPV drones and equipment, primarily to the
consumer marketplace. Learn more
at https://www.redcatholdings.com/.
Forward Looking StatementsThis
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.
Contact:
INVESTORS: |
NEWS
MEDIA: |
CORE IR |
Dalton Agency |
Phone: (516) 222-2560 |
(615) 515-4880 (o) |
E-mail: Investors@redcat.red |
(615) 337-0964 (m) |
Website: https://www.redcatholdings.com/ |
Email: jbradford@daltonagency.com |
RED CAT HOLDINGS |
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Condensed Consolidated Balance Sheets |
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April 30, |
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April 30, |
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2022 |
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2021 |
ASSETS |
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|
|
|
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Cash and marketable securities |
|
$ |
48,875,184 |
|
|
|
$ |
277,347 |
|
Intangible assets including goodwill, net |
|
|
27,837,281 |
|
|
|
|
10,049,502 |
|
Inventory, including deposits |
|
|
5,602,955 |
|
|
|
|
841,011 |
|
Other |
|
|
2,763,205 |
|
|
|
|
525,505 |
|
|
|
|
|
|
|
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|
TOTAL
ASSETS |
|
$ |
85,078,625 |
|
|
|
$ |
11,693,365 |
|
|
|
|
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LIABILITIES AND
STOCKHOLDERS' EQUITY |
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|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
2,541,171 |
|
|
|
$ |
1,202,049 |
|
Debt obligations |
|
|
1,970,661 |
|
|
|
|
2,412,254 |
|
Warrant derivative liability |
|
|
1,607,497 |
|
|
|
|
2,812,767 |
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Other |
|
|
1,043,624 |
|
|
|
|
— |
|
Total liabilities |
|
|
7,162,953 |
|
|
|
|
6,427,070 |
|
|
|
|
|
|
|
|
|
Stockholders’ capital |
|
|
106,885,000 |
|
|
|
|
21,076,223 |
|
Accumulated deficit/comprehensive loss |
|
|
(28,969,328 |
) |
|
|
|
(15,809,928 |
) |
Total stockholders' equity |
|
|
77,915,672 |
|
|
|
|
5,266,295 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
$ |
85,078,625 |
|
|
|
$ |
11,693,365 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Red Cat HoldingsCondensed Consolidated
Statements of Operations |
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Year ended April 30, |
|
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2022 |
|
2021 |
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Revenues |
|
$ |
6,428,963 |
|
|
|
$ |
4,999,517 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
|
5,503,448 |
|
|
|
|
3,929,832 |
|
|
|
|
|
|
|
|
|
|
|
|
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Gross margin |
|
|
925,515 |
|
|
|
|
1,069,685 |
|
|
|
|
|
|
|
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Operating expenses |
|
|
|
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|
|
|
|
|
Operations |
|
|
1,353,904 |
|
|
|
|
590,342 |
|
|
|
Research and development |
|
|
2,606,141 |
|
|
|
|
516,084 |
|
|
|
Sales and marketing |
|
|
1,127,532 |
|
|
|
|
172,182 |
|
|
|
General and administrative |
|
|
5,548,589 |
|
|
|
|
1,279,471 |
|
|
|
Stock based compensation |
|
|
3,291,635 |
|
|
|
|
3,388,216 |
|
|
|
Total operating expenses |
|
|
13,927,801 |
|
|
|
|
5,946,295 |
|
|
|
Operating loss |
|
|
(13,002,286 |
) |
|
|
|
(4,876,610 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Other (income) expense |
|
|
|
|
|
|
|
|
|
Derivative expense, net |
|
|
(1,042,129 |
) |
|
|
|
7,123,182 |
|
|
|
Other |
|
|
(271,029 |
) |
|
|
|
1,236,383 |
|
|
|
Other (income) expense |
|
|
(1,313,158 |
) |
|
|
|
8,359,565 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(11,689,128 |
) |
|
|
$ |
(13,236,175 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share - basic and
diluted |
|
$ |
(0.24 |
) |
|
|
$ |
(0.56 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding - |
|
|
|
|
|
|
|
|
|
basic and diluted |
|
|
48,220,265 |
|
|
|
|
23,655,743 |
|
|
|
|
|
|
|
|
|
|
|
|
Red Cat HoldingsCondensed Consolidated
Statements of Cash Flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended April 30, |
|
|
|
|
2022 |
|
|
|
|
2021 |
|
Cash Flows from Operating Activities |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(11,689,128) |
|
|
|
$ |
(13,236,175) |
|
Non-cash expenses |
|
|
2,764,709 |
|
|
|
|
11,648,229 |
|
Changes in operating assets and liabilities |
|
|
(7,094,901) |
|
|
|
|
188,945 |
|
Net cash used in operating activities |
|
|
(16,019,320) |
|
|
|
|
(1,399,001) |
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities |
|
|
|
|
|
|
|
|
Purchases of marketable securities, net |
|
|
(47,264,663) |
|
|
|
|
— |
|
Other, net |
|
|
(338,823) |
|
|
|
|
(48,368) |
|
Net cash used in investing activities |
|
|
(46,603,486) |
|
|
|
|
(48,368) |
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities |
|
|
|
|
|
|
|
|
Payments (proceeds) of debt obligations |
|
|
(2,900,709 |
) |
|
|
|
1,286,799 |
|
Proceeds from issuance of equity, net |
|
|
70,165,202 |
|
|
|
|
201,249 |
|
(Payments) proceeds from employee equity transactions |
|
|
(834,219 |
) |
|
|
|
— |
|
Net cash provided by financing activities |
|
|
66,430,274 |
|
|
|
|
1,488,048 |
|
|
|
|
|
|
|
|
|
|
Net increase in Cash |
|
|
3,807,468 |
|
|
|
|
40,679 |
|
Cash, beginning of period |
|
|
277,347 |
|
|
|
|
236,668 |
|
Cash, end of period |
|
|
4,084,815 |
|
|
|
|
277,347 |
|
Marketable securities |
|
|
44,790,369 |
|
|
|
|
— |
|
Cash and marketable securities |
|
$ |
48,875,184 |
|
|
|
$ |
277,347 |
|
|
|
|
|
|
|
|
|
|
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