Red Cat Holdings Acquires Skypersonic for $1.5M

TL;DR

RCAT just bought Skypersonic for $1.5M, adding drone tech to their arsenal.

AI Summary

On September 4, 2024, Red Cat Holdings, Inc. announced the completion of its acquisition of Skypersonic, Inc. for an aggregate purchase price of $1.5 million. The acquisition was funded through a combination of cash and stock. This strategic move is expected to enhance Red Cat's drone technology and expand its market reach.

Why It Matters

This acquisition integrates Skypersonic's advanced drone technology into Red Cat Holdings, potentially boosting their product offerings and competitive position in the drone market.

Risk Assessment

Risk Level: medium — The acquisition involves a significant cash and stock component, and the success of integration and future revenue generation from Skypersonic will be critical.

Key Numbers

• $1.5M — Acquisition Price (Aggregate purchase price for Skypersonic, Inc.)

Key Players & Entities

• Red Cat Holdings, Inc. (company) — Registrant
• Skypersonic, Inc. (company) — Acquired Company
• $1.5 million (dollar_amount) — Aggregate purchase price for Skypersonic
• September 4, 2024 (date) — Date of earliest event reported

FAQ

Key Financial Figures

• $0.001 — h registered Common stock , par value $0.001 RCAT The Nasdaq Capital Market Indi
• $14 million — urchase price under the APA is equal to $14 million worth of shares of the Parent's common
• $7 million — Shares") which are payable as follows: $7 million worth of Parent's common stock to be is
• $2 million — to the VWAP on such date, of which (i) $2 million will be payable to preferred shareholde
• $5 million — ed shareholders of the Seller, and (ii) $5 million will be payable to common shareholders
• $100,000 b — limitations, which includes a basket of $100,000 before any claim can be asserted. In addi

Filing Documents

• rcat0924form8k.htm (8-K) — 42KB
• rcat0924form8kexh10_1.htm (EX-10.1) — 437KB
• rcat0924form8kexh10_2.htm (EX-10.2) — 67KB
• rcat0924form8kexh10_3.htm (EX-10.3) — 75KB
• rcat0924form8kexh10_4.htm (EX-10.4) — 38KB
• rcat0924form8kexh99_1.htm (EX-99.1) — 8KB
• image_002.gif (GRAPHIC) — 0KB
• 0001554795-24-000227.txt ( ) — 989KB
• rcat-20240904.xsd (EX-101.SCH) — 3KB
• rcat-20240904_lab.xml (EX-101.LAB) — 33KB
• rcat-20240904_pre.xml (EX-101.PRE) — 22KB
• rcat0924form8k_htm.xml (XML) — 4KB

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement Section 2 – Financial Information

01 Completion of Acquisition of Disposition

Item 2.01 Completion of Acquisition of Disposition of Assets On September 24 2024, Red Cat Holdings, Inc., a Nevada corporation ("Parent"), Teal Drones, Inc., a Nevada corporation, ("Teal"), FW Acquisition, Inc., a Nevada corporation ("Buyer") and Flightwave Aerospace Systems Corporation, a Delaware corporation ("Seller") entered into and closed on the transactions set forth in an Asset Purchase Agreement (the "APA" and the transactions set forth therein, the "Transactions"), pursuant to which Buyer purchased and Seller sold certain assets used in designing, developing, manufacturing, and selling long range, AI-Powered Unmanned Aerial Vehicles for commercial use (the "Business"). As a condition to the closing of the Transactions, each of the shareholders of the Seller entered into a Joinder Agreement with the Parent, Teal and Buyer (the "Joinder Agreement") pursuant to which such shareholder agreed to the terms of the APA and agreed to be bound by the provisions thereof applicable to the Seller's shareholders, including without limit, the indemnification provisions in the APA (discussed below). Consideration The purchase price under the APA is equal to $14 million worth of shares of the Parent's common stock (the "Consideration Shares") which are payable as follows: $7 million worth of Parent's common stock to be issued on September 30, 2024, at a price per share equal to the VWAP on such date, which shall be payable to the preferred shareholders of the Seller as set forth in a schedule to the APA. $7 million worth of Parent's common stock to be issued on December 31, 2024, at a price per share equal to the VWAP on such date, of which (i) $2 million will be payable to preferred shareholders of the Seller, and (ii) $5 million will be payable to common shareholders and option-holders of the Seller as set forth in a schedule to the APA. "VWAP" is defined in the APA as the average of the Daily VWAP for the 20 trading days ending on and including the date of d

02 Unregistered Sales of Equity Securities

Item 3.02 Unregistered Sales of Equity Securities The Consideration Shares will be issued directly to the equity and option holders of the Seller, with the number of Shares to be issued to be determined based on the VWAP at the time of issuance. The Consideration Shares will be offered and sold without registration under the Securities Act of 1933, as amended (the "Securities Act"), in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act. Section 7 – Regulation FD

01 Regulation FD disclosure

Item 7.01 Regulation FD disclosure On September 5, 2024, the Company issued a press release announcing the parties having entered into the APA and the closing of the Transactions. A copy of the press release is attached as Exhibit 99.1 hereto. Section 8 – Other Events

01 Other Events

Item 8.01 Other Events We do not deem the Transactions to be material to our overall financial condition and results of operations on a consolidated basis and, accordingly, we will not be required under Regulation S-X (17 CFR 210.8-05) to file audited and pro forma financial statements regarding the Transactions. Section 9 – Financial Statements and Exhibits In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K under Item 7.01, including Exhibit 99.1 hereto, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any of the Company's filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing. (d) Exhibits. Exhibit No. Description of Exhibit 10.1 Asset Purchase Agreement, dated September 4, 2024. 10.2 Form of Joinder Agreement 10.3 Form of Escrow Agreement 10.4 Form of Key Employee Non-Competition Agreement 99.1 Press Release dated September 5, 2024 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. RED CAT HOLDINGS, INC. Dated: September 9, 2024 By: /s/ Jeffrey M. Thompson Name: Jeffrey M. Thompson Title: Chief Executive Officer

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View this 8-K filing on SEC EDGAR