Red Cat Holdings, Inc. Investors: Company Investigated by the Portnoy Law Firm

Investors can contact the law firm at no cost to learn more about recovering their losses

​LOS ANGELES, Aug. 14, 2025 (GLOBE NEWSWIRE) -- The Portnoy Law Firm advises Red Cat Holdings, Inc. (“Red Cat” or “the Company”) (NASDAQ: RCAT) investors that the firm has initiated an investigation into possible securities fraud and may file a class action on behalf of investors. Red Cat investors that lost money on their investment are encouraged to contact Lesley Portnoy, Esq.

Investors are encouraged to contact attorney Lesley F. Portnoy, by phone 310-692-8883 or email: info@portnoylaw.com, to discuss their legal rights, or click here to join the case. The Portnoy Law Firm can provide a complimentary case evaluation and discuss investors’ options for pursuing claims to recover their losses.

We are investigating potential claims against Red Cat Holdings, Inc. (NASDAQ: RCAT) on behalf of long-term stockholders following a class action complaint filed on May 23, 2025, covering a Class Period from March 18, 2022, through January 15, 2025. The investigation concerns whether the board of directors of Red Cat breached their fiduciary duties to the company.

Red Cat, together with its subsidiaries, provides products and solutions for the drone industry, including the “Teal 2” drone, a small unmanned aircraft system designed to “Dominate the Night” during nighttime military operations.

The Red Cat class action lawsuit alleges that, throughout the Class Period, defendants made false and/or misleading statements and/or failed to disclose that Red Cat’s Salt Lake City facility’s production capacity, and progress in developing the facility, was overstated, and that the overall value of Red Cat’s Short Range Reconnaissance Program of Record Tranche 2 contract (“SRR Contract”) was also overstated.

The complaint further alleges that on July 27, 2023, Red Cat revealed that its Salt Lake City facility could only produce 100 drones per month, that construction and expansion were still ongoing, and that the facility could potentially reach 1,000 drones per month over the next 2–3 years, but only with additional capital investments and realized manufacturing efficiencies. On this news, Red Cat’s stock fell nearly 9%.

Then, on September 23, 2024, Red Cat announced first-quarter fiscal 2025 results, reporting losses of $0.17 per share—missing consensus estimates by $0.09—and revenue of $2.8 million, missing estimates by $1.07 million. The Company disclosed that it had spent the prior four months retooling the Salt Lake City facility and preparing for high-volume production, admitting that a pause in manufacturing Teal 2 units and Army prototypes negatively impacted sales. On this news, Red Cat’s stock fell more than 25%.

Finally, on January 16, 2025, Kerrisdale Capital published a report stating that the SRR contract Red Cat had won in November was smaller and less favorable than management suggested and questioned the plausibility of building a mass-production facility for under $1 million. Following this report, Red Cat’s stock fell more than 21% over two trading sessions, according to the complaint.

Please visit our website to review more information and submit your transaction information.

The Portnoy Law Firm represents investors in pursuing claims against caused by corporate wrongdoing. The Firm’s founding partner has recovered over $5.5 billion for aggrieved investors. Attorney advertising. Prior results do not guarantee similar outcomes.

Lesley F. Portnoy, Esq.
Admitted CA, NY and TX Bars
lesley@portnoylaw.com
310-692-8883
www.portnoylaw.com

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