Red Cat Holdings: Company Profile
Disclaimer: All information presented is for research purposes & not financial advice. All opinions posted are my own. At the time of writing, I own shares & calls of $RCAT.
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THIS ARTICLE IS A WORK IN PROGRESS & SUBJECT TO CHANGE
Company Overview
About
Company Timeline
2016 - Company founded focusing on blockchain encrypted “black-box” recordings for drones.
2020 - Acquired Rotor Riot & Fat Shark and entered the consumer drones & manufacturing space.
2021 - Acquired Teal Drones & Skypersonic, expanding the business to the defense sector
2023 - Divested Rotor Riot & Fat Shark into Unusual Machines ($UMAC)
2024 - Acquired Flightwave adding an MRR drone to the portfolio
Financials Overview
Revenue
Expenses
Cash Position
Following the Teal acquisition in FY2021, Red Cat Holding’s raised capital via an offering.
They operated on that cash/securities until December 2023 where they did another offering.
Since then, Red Cat Holdings has done another offering. They raised funds via their divestiture in Unusual Machines and most recently via promissory notes from Lind Capital.
Based on historical cash flow & the most recent SEC filings, I estimate Red Cat to have ~$15M in cash on hand to start December 2024. Assuming no positive cash flow, Red Cat should have enough cash on hand to fund operations until May 2024.
They have an upcoming upfront payment from the short range reconaissance contract and have mentioned applying for funding from the Office of Strategic Capital (OSC) in Jan. 2025.
Guidance hopefully to be released in December 2024 should shed light on their cash positions and when they expect funding.
Stock Ownership
Leadership
Red Cat’s leadership is led by an experienced entrepreneur in Jeffrey Thompson. In his time, he has built a team with extensive industry experience at some of the most successful UAS companies and has also promoted rising executives. Most notably, bringing George Matus on board in 2021 as CTO. George was highlighted by Forbes 30 under 30 and is seen as a prodigy within the drone industry.
Jeffrey Thompson (CEO)
After graduating with a degree in Electrical Engineering (1994), Jeff has went on to found 4 companies and serve on the board of one other. He got his start in wireless & internet service companies (EdgeNet & Towerstream).
Jeff cco-founded Towerstream in 1999 and served as CEO from 2005-2016 when his co-founder Phillip Urso took over as CEO.
After leaving Towerstream in 2016, Jeff founded Red Cat Propware. In 2019, he oversaw a reverse merger with TimefireVR/Teraforge to become a publicly traded company. [source]
Jeff has a long history of acquiring companies everywhere he has been. Between 2010-2013, Towerstream made four separate acquisitions. During his time at Red Cat, Jeff has overseen a number of acquisitions (Rotor Riot - 2020, Fat Shark - 2020, Teal Drones - 2021, Flightwave -2024)
George Matus (Chief Technical Officer)
An entrepreneur since a young age, George saved money from various “ventures” to buy a hobby RC plane at age 12. Since that moment, he has been all in on remote aviation.
He launched Teal Drones in 2014, while a sophomore in high school. He opted to bypass college and was accepted as a Thiel Fellow in 2015. At the end of 2017, he released his first drone the “Teal Sport”. By 2019, he pivoted Teal to a defense company and released the “Golden Eagle” as part of the original short range reconnaissance program (SRR) that was later won by Skydio.
After navigating the tricky VC world, George made the decision to sell to Red Cat in 2021 and raise money in the public markets.
Since then, he has served as the CTO and has oversaw the company winning a Tranche 2 of SRR, the program of record he previously lost.
His story is easy to compare to the likes of Bill Gates and other prodigies who started a company in high school & went on to incredible success.
Geoff Hitchcock (Chief Revenue Officer)
Geoff spent majority of his career at AeroVironment where he was part of a company getting its roots in the defense space and establishing itself as a major player in the space.
He came to RedCat in 2021 overseeing Global Defense Solutions and was promoted to CRO in November 2024.
Leah Lunger (Chief Financial Officer)
Leah served in multiple accounting roles between 2012-2018, until starting her own consulting firm, Lunger Consulting, she left that role in 2020 and then in 2021 joined Red Cat.
Since then she has oversaw acquisitions & a public listing, she climbed the ranks to become CFO in March 2024.
Brian Huinker (VP Business Development)
Brian spent majority of his career (2005-2022) at Aeronvironment overseeing Flight Operations where he led critical projects in their journey.
He joined Red Cat in 2022 as Director of Business Development and was promoted to VP in 2024.
Brendan Stewart (VP Regulatory Affairs)
Brendan has extensive experience in the UAS regulatory space. He acquired the 4th ever 107.39 waiver and the first Part 107 waiver. Having been a part of the early days of FAA regulations, Brendan brings a wealth of knowledge on the regulatory constraints present in the industry.