RED CAT ALERT: Bragar Eagel & Squire, P.C. Announces that a Class Action Lawsuit Has Been Filed Against Red Cat Holdings, Inc. and Encourages Investors to Contact the Firm

/EIN News/ -- NEW YORK, June 02, 2025 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized stockholder rights law firm, announces that a class action lawsuit has been filed against Red Cat Holdings, Inc. (“Red Cat” or the “Company”) (NASDAQ: RCAT) in the United States District Court for the District of New Jersey on behalf of all persons and entities who purchased or otherwise acquired Red Cat securities between March 18, 2022 and January 15, 2025, both dates inclusive (the “Class Period”). Investors have until July 22, 2025 to apply to the Court to be appointed as lead plaintiff in the lawsuit.

Click here to participate in the action.

Red Cat, together with its subsidiaries, provides products and solutions to drone industry. Red Cat's products include, among others, the "Teal 2" drone, a small, unmanned aircraft system designed to purportedly "Dominate the Night" during nighttime military operations.

The Red Cat class action lawsuit alleges that defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (i) Red Cat's Salt Lake City facility's production capacity, and defendants' progress in developing the same, was overstated; and (ii) the overall value of Red Cat's Short Range Reconnaissance Program of Record Tranche 2 contract (the "SRR Contract") was overstated.

The Red Cat class action lawsuit further alleges that on July 27, 2023, Red Cat revealed that its Salt Lake City facility could only currently produce 100 drones per month, the facility was still being built, refined, and expanded, and that construction of the facility was only "substantially completed" and potentially could reach a production capacity of 1,000 drones per month over the next 2 to 3 years, but only with additional capital investments and manufacturing efficiencies realized. On this news, the price of Red Cat stock fell nearly 9%, according to the complaint.

Then, on September 23, 2024, the Red Cat class action lawsuit further alleges that Red Cat announced its financial results for the first quarter of fiscal year 2025, reporting losses per share of $0.17, missing consensus estimates by $0.09, and revenue of $2.8 million, missing consensus estimates by $1.07 million. According to the complaint, Red Cat further disclosed that Red Cat had spent "the past four months . . . retooling [the Salt Lake City facility] and preparing for high volume production," while admitting that a "pause in manufacturing of Teal 2 and building Army prototypes impacted Teal 2 sales" because, among other things, Red Cat "couldn't produce and sell Teal 2 units while retooling [its] factory." The Red Cat class action lawsuit alleges that on this news, the price of Red Cat stock fell more than 25%.

Finally, the Red Cat class action lawsuit further alleges that on January 16, 2025, Kerrisdale Capital published a report alleging that "[t]he SRR contract that Red Cat won in November and preemptively announced without the Army's permission is much smaller and less favorable than management as intimated," and that "[i]t's highly implausible that a mass-production facility for manufacturing drones has been built at any point in the last two years for less than $1 million." On this news, the price of Red Cat stock fell more than 21% over two trading sessions, according to the complaint.

If you purchased or otherwise acquired Red Cat shares and suffered a loss, are a long-term stockholder, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Marion Passmore by email at investigations@bespc.com, telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.

About Bragar Eagel & Squire, P.C.:

Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.

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Contact Information:

Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Marion Passmore, Esq.
(212) 355-4648
investigations@bespc.com
www.bespc.com