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Red Cat Holdings Faces Lawsuit Over Alleged Misleading Statements.
ByAinvest
Wednesday, Jul 16, 2025 9:15 am ET1min read
The Gross Law Firm is investigating Red Cat Holdings, Inc. (NASDAQ: RCAT) for alleged misrepresentations in their statements about the company's production capacity, the value of a U.S. Army contract, and other issues. Shareholders who purchased RCAT shares between March 18, 2022, and January 15, 2025, are encouraged to contact the firm about possible lead plaintiff appointment.
Red Cat Holdings, Inc. (NASDAQ: RCAT) is the subject of a securities class action lawsuit, filed on behalf of shareholders who purchased the company's securities between March 18, 2022, and January 15, 2025. The lawsuit alleges misrepresentations and omissions regarding the production capacity of the Salt Lake City Facility and the value of the SRR Contract with the U.S. Department of Defense.The lead plaintiff deadline is July 22, 2025. Investors who believe they have suffered financial harm due to these alleged misrepresentations are encouraged to contact the Gross Law Firm to discuss their legal rights.
The lawsuit, filed in the United States District Court for the District of New Jersey, alleges that Red Cat made false and misleading statements during the class period. These include overstating the production capacity of the Salt Lake City Facility and the value of the SRR Contract.
On July 27, 2023, Red Cat revealed that the Salt Lake City Facility could only produce 100 drones per month, a significant reduction from the previously stated capacity of 1,000 drones per month. The stock price fell by 8.93% to $1.02 on July 28, 2023 [1].
On September 23, 2024, Red Cat reported a loss of $0.17 per share for the first quarter of fiscal year 2025, missing estimates by $0.09. Revenue was $2.8 million, missing estimates by $1.07 million. The stock price fell by 25.32% to $2.36 on September 25, 2024 [1].
On January 16, 2025, Kerrisdale Capital released a report estimating the SRR Contract value at $20–$25 million, challenging Red Cat's portrayal of a lucrative $400 million, five-year sole-source contract. The stock price fell by 21.54% to $8.56 on January 17, 2025 [1].
Investors who suffered losses due to these alleged misrepresentations are urged to contact the Gross Law Firm for more information.
References:
[1] https://www.morningstar.com/news/globe-newswire/9495078/shareholders-who-lost-money-on-red-cat-holdings-inc-nasdaq-rcat-should-contact-wolf-haldenstein-immediately-as-lead-plaintiff-deadline-is-july-22nd
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