Wed, May 14, 9:08 PM (60 days ago)
**Red Cat Holdings, Inc. (RCAT) Q1 2025 Financial Summary** **Financial Health and Performance:** - **Revenue:** Q1 2025 revenue was $1,629,662, a 75% decrease from Q1 2024's $6,614,029 due to a shift in manufacturing focus. - **Gross Profit:** Q1 2025 saw a gross loss of $850,410, compared to a gross profit of $1,121,204 in Q1 2024, due to lower manufacturing levels and higher overhead costs. - **Operating Expenses:** Increased by 29% (R&D), 135% (Sales & Marketing), and 58% (General & Admin) year-over-year, driven by higher headcount and strategic investments. - **Net Loss:** Q1 2025 net loss was $23,123,351, a 328% increase from Q1 2024's $5,407,623, primarily due to a $10,699,677 loss on convertible notes. - **Cash Flow:** Net cash used in operating activities increased by 264% year-over-year, mainly due to lower gross profit and higher operating expenses. **Key Metrics and Trends:** - **Liquidity:** As of March 31, 2025, Red Cat Holdings had $7,722,410 in cash, $29,412,488 in current assets, and $28,906,372 in current liabilities, resulting in a working capital of $506,116. - **Debt:** The company has $25,132,556 in convertible notes payable as of Q1 2025. - **Share Count:** 85,647,618 shares outstanding as of March 31, 2025. - **Going Concern:** Despite substantial losses, management believes recent financings and strategic developments alleviate substantial doubt about the company's ability to continue operations for the next 12 months. **Future Operations and Uncertainties:** - **Strategic Initiatives:** Red Cat Holdings is scaling its production manufacturing facility to increase revenue and improve gross margins. The company was selected as the winner of the U.S. Army’s Short Range Reconnaissance (SRR) Program of Record. - **Uncertainties:** The company faces risks related to market conditions, competition, regulatory changes, and the successful execution of its strategic initiatives. **Recent Developments:** - **Financings:** In Q1 2025, the company raised $14,432,880 through convertible notes. Additionally, in April 2025, the company raised $30 million in a registered direct offering. - **Amendments to Convertible Notes:** The company amended terms of its convertible notes with Lind Global Asset Management, including changes to conversion prices and maturity dates.