Red Cat Holdings, Inc. reported its financial results for the first quarter ended March 31, 2025. Consolidated revenues were $1.63 million, a substantial decrease from $6.61 million in the same period of 2024. The company reported a consolidated gross loss of $850,410, resulting in a -52% gross margin, compared to a gross profit of $1.12 million (17% gross margin) in the prior year.
Operating expenses increased to $11.63 million from $7.16 million in the prior year, driven by higher headcount and investments in anticipation of production contracts. The net loss from continuing operations widened significantly to $23.12 million, compared to $5.41 million in the prior year, primarily due to a $10.70 million fair value adjustment loss on convertible notes payable.
Despite the challenging financial results, the company's balance sheet was bolstered by a recent $30 million capital raise, which closed soon after quarter-end. Management expressed confidence that this liquidity, combined with existing cash and receivables, provides ample strength to expand manufacturing and meet impending demands from the U.S. Army’s SRR program and international opportunities in the second half of 2025.
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