Pomerantz Law Firm Announces the Filing of a Class Action Against Red Cat Holdings, Inc. and Certain Officers – RCAT

Core Viewpoint - A class action lawsuit has been filed against Red Cat Holdings, Inc. and certain officers for alleged violations of federal securities laws during the Class Period from March 18, 2022, to January 15, 2025, seeking damages for misleading statements regarding the company's business and operations [1][7]. Group 1: Lawsuit Details - The class action was filed in the United States District Court for the District of New Jersey, seeking to recover damages for all persons and entities that purchased Red Cat securities during the Class Period [1]. - Investors have until July 22, 2025, to request to be appointed as Lead Plaintiff for the class [2]. Group 2: Company Operations - Red Cat, through its subsidiary Teal Drones, Inc., manufactures drones, including the "Teal 2," designed for military operations [4]. - The Salt Lake City Facility was claimed to have the capacity to produce "thousands of drones per month" or "tens of thousands of drones per year" [5]. Group 3: Contract and Financial Performance - In March 2022, Red Cat was selected by the U.S. Department of Defense to compete in the Short Range Reconnaissance Program, with the contract potentially worth hundreds of millions to over a billion dollars [6][7]. - During a conference call on July 27, 2023, it was revealed that the Salt Lake City Facility could only produce 100 drones per month, contradicting earlier claims [8]. - Following the disclosure of production capacity issues, Red Cat's stock price fell by 8.93% to close at $1.02 per share on July 28, 2023 [9]. - In Q1 2025, Red Cat reported losses per share of $0.17 and revenue of $2.8 million, missing consensus estimates [10]. - On November 19, 2024, Red Cat announced it had won the SRR Contract, with expectations of generating $50 million to $79.5 million in revenue during fiscal year 2025 [12]. Group 4: Allegations of Misleading Information - The lawsuit alleges that Red Cat's executives made materially false and misleading statements regarding the production capacity of the Salt Lake City Facility and the overall value of the SRR Contract [7]. - A report published by Kerrisdale Capital on January 16, 2025, claimed that the SRR Contract was worth only $20 million to $25 million, significantly lower than previously stated [13]. - Following the Kerrisdale Report, Red Cat's stock price fell by 21.54% to close at $8.56 per share on January 17, 2025 [14].