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Red Cat Holdings Inc. (RCAT-16.38%) has submitted its 10-Q filing for the quarterly period ended October 31, 2024.
The filing includes financial statements for the quarter, showing a decrease in revenues to $1,534,727 from $3,930,868 in the same quarter the previous year, attributed to lower product and contract revenues.
Cost of goods sold for the quarter was $1,558,202, resulting in a gross loss of $23,475, compared to a gross profit of $1,200,582 in the previous year. The decrease in gross margin is due to lower production levels and higher overhead costs.
Research and development expenses were $2,231,470, while sales and marketing expenses increased to $2,343,779 from $1,032,645, driven by higher payroll and increased tradeshow attendance.
General and administrative expenses rose to $4,517,695 from $2,838,080, primarily due to increased headcount following the FlightWave acquisition.
The company reported a net loss from continuing operations of $13,334,618, compared to $5,244,299 in the previous year, with the increase attributed to higher operating expenses and a loss on the issuance of a convertible note.
Cash used in operating activities was $12,487,713 for the six months ended October 31, 2024, compared to $11,240,359 in the previous year.
Red Cat's working capital as of October 31, 2024, was $6,240,457, with cash totaling $4,611,092.
The filing also details recent business developments, including the acquisition of FlightWave Aerospace Systems Corporation for $14,000,000 and a $8,000,000 funding agreement with Lind Global Asset Management.
The company has identified material weaknesses in its internal controls over financial reporting, specifically related to the removal of derivative liabilities.
Red Cat Holdings does not anticipate any significant changes in its financial condition in the near term, but acknowledges the need for additional equity financing to support its operations.
This content was summarized by generative artificial intelligence using public filings retrieved from SEC.gov. The original data was derived from the Red Cat Holdings Inc. quarterly 10-Q report dated December 16, 2024. To report an error, please email earnings@qz.com.