Red Cat Holdings, Inc. Investors: Company Investigated by the Portnoy Law Firm

Investors can contact the law firm at no cost to learn more about recovering their losses

/EIN News/ -- LOS ANGELES, May 29, 2025 (GLOBE NEWSWIRE) -- The Portnoy Law Firm advises Red Cat Holdings, Inc. (“Red Cat” or “the Company”) (NASDAQ: RCAT) investors that the firm has initiated an investigation into possible securities fraud and may file a class action on behalf of investors. Red Cat investors that lost money on their investment are encouraged to contact Lesley Portnoy, Esq.

Investors are encouraged to contact attorney Lesley F. Portnoy, by phone 310-692-8883 or email: info@portnoylaw.com, to discuss their legal rights, or click here to join the case. The Portnoy Law Firm can provide a complimentary case evaluation and discuss investors’ options for pursuing claims to recover their losses.

In March 2022, Red Cat Holdings announced that its subsidiary, Teal Drones, Inc. ("Teal"), had been selected to participate in Tranche 2 of the U.S. Army’s Short Range Reconnaissance Program of Record (the “SRR Program”).

On July 27, 2023, Red Cat released its fiscal year 2023 financial results, disclosing that its Salt Lake City facility was only “substantially completed” and capable of producing just 100 drones per month. The company further stated that achieving a potential production capacity of 1,000 drones per month would take two to three years and require additional capital investment. Following this news, Red Cat’s stock price declined by $0.10, or 8.9%, closing at $1.02 per share on July 28, 2023.

On September 23, 2024, Red Cat announced its first quarter fiscal 2025 results, missing analyst expectations and revealing that it had spent the previous four months retooling the Salt Lake City facility in preparation for high-volume production. The company admitted that a pause in manufacturing of the Teal 2 drone and the construction of Army prototypes negatively impacted sales, as it could not simultaneously produce and sell Teal 2 units during the retooling process. As a result, Red Cat’s stock price fell $0.80, or 25.3%, over two consecutive trading days, closing at $2.36 per share on September 25, 2024.

On November 19, 2024, Red Cat announced it had secured the SRR contract, stating it could be worth “hundreds of millions of dollars.”

However, on January 16, 2025, Kerrisdale Capital published a report asserting that Red Cat had overstated the contract’s value and that, based on U.S. Army budget documents, it was likely worth only $20–25 million. Following this revelation, Red Cat’s stock price fell $2.35, or 21.5%, over two consecutive trading days, closing at $8.56 per share on January 17, 2025, causing further harm to investors.

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The Portnoy Law Firm represents investors in pursuing claims against caused by corporate wrongdoing. The Firm’s founding partner has recovered over $5.5 billion for aggrieved investors. Attorney advertising. Prior results do not guarantee similar outcomes.

Lesley F. Portnoy, Esq.
Admitted CA, NY and TX Bars
lesley@portnoylaw.com
310-692-8883
www.portnoylaw.com

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