Red Cat, a drone technology company integrating robotic hardware and software for military, government and commercial operations, has entered into an agreement for up to $20 million and closed on the initial tranche of $16.5 million in debt financing with The Lind Partners, a New York based institutional fund manager. Details of the agreement include: debt financing convertible at $16.15 share price, initial tranche proceeds of $15 million and one million warrants exercisable at $15.00 per share non cashless.
Additionally, Red Cat has applied for $58 million in debt financing from the Department of Defense Office of Strategic Capital.
The investment is expected to provide Red Cat with the working capital needed to scale up production and the ongoing development of its Arachnid Family of Systems, which includes Black Widow, Edge 130 and a new line of FANG First-Person View (FPV) drones. The goal of the Family of Systems is to meet the needs of the U.S. Department of Defense and NATO Allies for drone systems that are low-cost, portable, field repairable and recoverable.
“The recent financing will allow us to expedite and expand the Edge 130 factory and build-out and ramp up mass production of the Black Widow,” Jeff Thompson, CEO of Red Cat, said. “As a company focused on technology that advances the Department of Defense capabilities, we are a strong candidate for the Office of Strategic Capital’s low-cost debt program. The potential total financing of $93 million is the least dilutive option for our shareholders.”
