Red Cat (RCAT) Prnewswire·2025-06-07 14:15Core Viewpoint - Red Cat Holdings, Inc. is facing a class action lawsuit for alleged violations of the Securities Exchange Act of 1934, with claims of misleading statements regarding production capacity and contract values during the specified class period [1][3]. Company Overview - Red Cat Holdings, Inc. provides products and solutions to the drone industry, including the "Teal 2" drone designed for military operations [2]. Allegations of the Lawsuit - The lawsuit alleges that Red Cat overstated the production capacity of its Salt Lake City facility and the value of its Short Range Reconnaissance Program contract [3]. - On July 27, 2023, Red Cat disclosed that its Salt Lake City facility could only produce 100 drones per month, with potential future capacity of 1,000 drones per month contingent on additional investments [4]. - Following this announcement, Red Cat's stock price fell nearly 9% [4]. Financial Performance - On September 23, 2024, Red Cat reported a loss per share of 0.09, and revenue of 1.07 million [5]. - The company admitted that retooling its Salt Lake City facility impacted Teal 2 sales, leading to a stock price drop of over 25% [5]. Additional Reports - On January 16, 2025, Kerrisdale Capital published a report questioning the size and favorability of Red Cat's SRR contract, leading to a stock price decline of more than 21% over two trading sessions [6]. Legal Process - Investors who purchased Red Cat securities during the class period can seek appointment as lead plaintiff in the class action lawsuit, representing the interests of all class members [7].