By Stephen Nakrosis
Red Cat Holdings Inc. announced on Monday that it has agreed to divest its consumer division to Unusual Machines through a stock purchase agreement.
The deal will see Red Cat sell its Rotor Riot and Fat Shark Holdings for $18 million in cash and Unusual Machines securities. Red Cat will receive $5 million in cash, as well as $2.5 million in an Unusual Machines convertible senior note and $10.5 million in Unusual Machines Series A convertible preferred stock. The agreement is subject to the successful completion of an initial public offering by Unusual Machines, with conditions including Nasdaq’s approval of the listing of Unusual Machine’s common stock.
Rotor Riot and Fat Shark Holding are Red Cat’s recreational and hobbyist drone and first-person goggle subsidiaries, the company said.
Red Cat Managing Director Jeff Thompson said, “The sale of Rotor Riot and Fat Shark Holdings will allow us to focus our efforts and capital on military and defense.”
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