Red Cat Holdings, Inc. (NASDAQ:RCAT) Q2 2023 Earnings Call Transcript

Jeff Thompson: Yes, absolutely, it would be much larger than Tranche 2 would have been by itself. And when we looked at the beginning of the program for the SRR program, it looked like it was going to be about a little under $0.5 billion program of record that was years ago. Tranche 1 ended up being $100 million. So now that Tranche 2 and Tranche 3 are combined, if we fill out the rest of that program of record, it could be a very substantial contract for hundreds of millions of dollars. Yes, it’s pretty exciting. And also we typically would get additional capital from the Army for Tranche 3 prototypes. So we were hoping that we also get additional capital from the Army early next year for the additional features and prototyping.

So this is really good news for us. Actually, it’s great news for Red Cat and Red Cat shareholders. We’re pretty far down the process. We now have a factory that’s capable of handling Tranche 2/2 and 3 now. We — there’s a lot of contracts out there across the globe, and it’s a brand-new Golden Eagle that’s just starting to come off the production line. It’s flying great. We’ve got the best payload in the industry, basically that for — that means best camera for most people to understand that. And with that new camera and the thermal capabilities, we can dominate the nighttime and nighttime is when all the missions take place. So the Golden Eagle and the new Teal capabilities with the new payload are made specifically for the military, for the Department of Defense and very much focused on the Army, Marines and Navy.

So we’re building drones for the military. We’re not a consumer company that happens to make some drones for the military. We’re only focused on the military and don’t make consumer drones. So we expect it to be quite an exciting 2023.

Joey Delahoussaye: Great. Well, Jeff, thanks for those answers. Those were the last of the previously submitted questions. And I’d like to turn the call back over to you for any other closing remarks.

Jeff Thompson: Well, I don’t have any additional remarks. I just want to thank everybody for jumping on the call, and we’ll talk to you when we do our next quarter. Thanks, everybody.

Operator: The conference has now concluded. Thank you for your participation. You may now disconnect.