Wolf Haldenstein Adler Freeman & Herz LLP announces that it is investigating Red Cat Holdings, Inc. for potential violations of securities laws

Globe Newswire 29-Jan-2025 4:58 PM

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NEW YORK, Jan. 29, 2025 (GLOBE NEWSWIRE) -- Wolf Haldenstein Adler Freeman & Herz LLP ("Wolf Haldenstein"), a preeminent national shareholder rights litigation firm, announces that it is investigating claims on behalf of investors of Red Cat Holdings, Inc. (NASDAQ:RCAT) ("Red Cat" or the "Company").

The investigation concerns whether Red Cat Holdings, Inc. and certain of its officers and/or directors have engaged in securities fraud.

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The Company is focused on providing integrated robotic hardware and software across a variety of applications. Red Cat's solutions provide critical situational awareness and actionable intelligence to on-the-ground warfighters and battlefield commanders, as well as firefighters and public safety officials. The Company completed a sale of its Consumer businesses on February 26, 2024, and is now focusing its efforts and capital on defense.

On January 16, 2025, Kerrisdale Capital published a report, which alleged that Red Cat overstated the potential revenue of its U.S. Army Short Range Reconnaissance (SRR) drone contract. Specifically, Red Cat had reported that the agreement was worth almost $400 million over five years but noted that Army documents show that the budget for its SRR drone is just slightly below $25 million for 2025. Kerrisdale also reports that the Army may select new contractors for the program every two to three years.

The report also claimed that the Company lacks the production capacity to deliver on its projects. According to the report, Red Cat would have to produce three new drones three times faster than its best-selling drone of all time to meet its 2025 guidance.

On this news, the price of Red Cat common stock declined from a closing price of $10.91 per share on January 15, 2025, down to $8.56 per share at closing on January 17, 2025.

Wolf Haldenstein has experience in the prosecution of securities class actions and derivative litigation in state and federal trial and appellate courts across the country. The firm has attorneys in various practice areas, and offices in New York, Chicago, Nashville and San Diego. The reputation and expertise of this firm in shareholder and other class litigation has been repeatedly lauded by the courts, which have appointed it to major positions in complex securities, multi-district and consolidated litigation.

If you wish to discuss this investigation or have any questions regarding your rights and interests, please immediately contact Wolf Haldenstein by telephone at (800) 575-0735 or via e-mail at classmember@whafh.com.

Contact:

Wolf Haldenstein Adler Freeman & Herz LLP
Gregory Stone, Director of Case and Financial Analysis
Email: gstone@whafh.com or classmember@whafh.com
Tel: (800) 575-0735 or (212) 545-4774

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