Red Cat Holdings amends stock purchase agreement for sale of consumer drone business to Unusual Machines

Red Cat Holdings, Inc.

Cash consideration reduced to $3.0 million plus working capital adjustment; non-cash consideration changed to $17 million in Unusual common stock at IPO price.
Termination date of the agreement extended to June 12, 2023; prior convertible notes and preferred stock provisions eliminated.
Unusual must deposit $1.0 million cash into escrow upon SEC effectiveness of its registration statement.
Red Cat engaged WaveCrest Securities with a $25,000 retainer, $5,000 monthly fee, and 6% success fee to solicit alternative bidders.
Shareholders representing a majority of disinterested voting capital approved the sale to Unusual on March 8, 2023.

Key facts

Extracted from this filing and checked against the source text.

Material Agreements SEC 8-K Item 1.01/1.02 confidence 0.9

Red Cat Holdings, Inc. entered into Engagement with WaveCrest Securities LLC with WaveCrest Securities LLC valued at Fixed fee of $25,000, plus $5,000 per month commencing May 5, 2023, and a six (6%) percent success f (effective 2023-03-31).

Action: entry
Counterparty: WaveCrest Securities LLC
Value: Fixed fee of $25,000, plus $5,000 per month commencing May 5, 2023, and a six (6%) percent success f
Effective: 2023-03-31

Exact text from the filing

On March 31, 2023, the Company engaged WaveCrest Securities LLC and agreed to a fixed fee of $25,000, plus $5,000 per month commencing May 5, 2023, and a six (6%) percent success fee, plus reimbursement of expenses, upon closing of an alternative transaction.

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Material Agreements SEC 8-K Item 1.01/1.02 confidence 0.95

Red Cat Holdings, Inc. amended Amendment to Stock Purchase Agreement with Unusual Machines, Inc. valued at Cash consideration reduced to $3.0 million, plus $17 million in shares of Unusual common stock (effective 2023-03-31).

Action: amendment
Agreement: asset purchase
Counterparty: Unusual Machines, Inc.
Value: Cash consideration reduced to $3.0 million, plus $17 million in shares of Unusual common stock
Effective: 2023-03-31

Exact text from the filing

On March 31, 2023, the SPA was amended (the “ Amendment ”). Under the Amendment, the cash consideration payable at closing was reduced to $3.0 million, as may be adjusted for working capital on the closing date (increased for positive working capital and decreased for negative working capital), and the non-cash consideration adjusted to provide for payment of $17 million in shares of Unusual’s common stock, par value $0.01 per share (the “ Unusual Common Stock ”) issued at the initial public offering price for the Unusual Common Stock.

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Red Cat Holdings, Inc. filing history →

Source: SEC EDGAR

accession 0001554795-23-000109

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