#USA #San Diego #Class Action #SEC violations #Red Cat Holdings

Legal Alert for Red Cat Holdings Investors

On May 29, 2025, Robbins Geller Rudman & Dowd LLP announced a significant opportunity for investors in Red Cat Holdings, Inc. (NASDAQ: RCAT) who experienced substantial financial losses. The firm has identified a class action lawsuit concerning the company's alleged violations of the Securities Exchange Act of 1934.

Background on the Class Action

The class action lawsuit, titled Olsen v. Red Cat Holdings, Inc., will encompass all purchasers or acquirers of Red Cat securities from March 18, 2022, until January 15, 2025. Investors interested in leading the charge against the company have until July 22, 2025, to submit their applications to be appointed as lead plaintiff.

The allegations against Red Cat involve misleading statements regarding the company’s production capabilities and overall value of contracts. The lawsuit claims that the CEO and other executives failed to disclose critical information about production capacities at the Salt Lake City facility, which were overstated.

Key Events Impacting Investors

In July 2023, Red Cat disclosed that its facilities could only produce 100 drones per month, a stark contrast to earlier claims projecting 1,000 units per month with available capital investments. This revelation led to a nearly 9% drop in stock prices. Moreover, a September 2024 announcement of financial results showed losses per share that far exceeded analysts’ expectations, resulting in a further decline in stock value by over 25%.

Further complicating matters, communication from Kerrisdale Capital in January 2025 suggested that the SRR contract acquired by Red Cat was less favorable than previously indicated, inciting further skepticism among investors. Again, this led to stock prices dropping by more than 21% over two trading sessions.

The Role of the Lead Plaintiff

Under the Private Securities Litigation Reform Act of 1995, any investor who purchased Red Cat's securities during the specified class period can pursue the role of lead plaintiff. The lead plaintiff is typically someone who has suffered the greatest financial loss while also being a typical representative of the class. This role is crucial as it directs the course of the lawsuit and can select their attorney for litigation.

About Robbins Geller

Robbins Geller Rudman & Dowd LLP has a commendable track record representing investors in securities fraud cases, having secured over $2.5 billion for their clients in the past year alone. Their expertise and history of successful recoveries make them a formidable ally in cases such as this.

Conclusion

For Red Cat investors who have faced significant losses, this class action presents a critical opportunity to stand against alleged corporate misconduct. Interested investors are encouraged to act swiftly, as the deadline for lead plaintiff applications approaches on July 22, 2025. Do not miss this chance to reclaim potential losses and hold Red Cat Holdings accountable for its actions.