BREAKING NEWS: The U.S. Army Selects the "Black Widow" Brand Drone from Utah's Teal Drones for a Five-Year Contract Valued at least $79 Million

South Salt Lake, Utah-based Teal Drones, a wholly owned subsidiary of San Juan, Puerto Rico-based Red Cat Holdings (NASDAQ:RCAT), has been awarded a five-year contract from the U.S. Army valued at at least $79 million.

According to the news release announcing the selection by the Army,

"The company is focused on ramping production of Teal’s next generation system to meet the Army’s currently stated acquisition objective for 5,880 systems, which is subject to change over the 5 year period of performance."

The selection comes after Teal's exhaustive competition in the Army's "... test and evaluation process of Teal’s next generation sUAS, completed by the Army Project Management Office for Uncrewed Aircraft Systems, Army Maneuver Battle Lab, Army Test and Evaluation Command, and Army Operational Test Center."

{AUTHOR'S NOTE: "sUAS" is an acronym that stands for "Small Unmanned Aircraft Systems," a term typically applied to airborne drones, regardless of size or capability.}

Per terms of the official U.S. Army notification, Teal will provide the Army with its "Black Widow" brand drones, quadcopter products housed within Teal's ARACHNID family of sUAS that are "... specifically designed for operation in electronic warfare (EW) environments."

As noted in the news release, Teal is being asked to provide the Army with 5,880 Black Widow drones over the five-year contract.

However, the release also explains that the total "... is subject to change over the 5 year period of performance."

Additionally, Teal Drones and

"Red Cat (are) also preparing to meet increased demand across the rest of the U.S. DoD, federal government, and allied countries, to support operators and warfighters globally."

By way of reference, Jeff Thompson (Red Cat CEO) explained in yesterday's Red Cat SRR Town Hall recording that

Ukraine has at least 30,000 drones in the air every day and is losing 10,000 drones each month.

Additionally, as also noted by Red Cat's Brendan Stewart (VP, Regulatory Affairs) in yesterday's investor presentation, $79.5 million is the "approximate program line value" (of the contract) within the National Defense Authorization Act. {See Red Cat's SRR Town Hall Recording between approximately 16:40 and 17:05 for the exact quote.}

Teal Drones is currently housed in a 20,000-square-foot facility in South Salt Lake operating on just one eight-hour shift, Monday through Friday, meaning it has the ability to significantly scale-up its production capabilities within its current base of operations.

AUTHOR'S NOTE:

This Teal Drones/Red Cat contract news comes less than a month after the inaugural Zero Gravity Summit produced by 47G, the Utah-based nonprofit organization supporting and promoting the defense, military, cybersecurity, and information security industries united to protect the United States and freedom-loving countries and peoples everywhere, an event attended by ~600 individuals from throughout Utah and around the world.

Learning what I did at the Zero Gravity Summit led me to a deep dive what I now see as Utah's burbling "Inflection Point," a coming collision of as many as "14 Technology Areas" identified by the U.S. Department of Defense as critical to the future of the U.S.

Out of this reporting, Utah Money Watch published its longest report ever, one centered around "Global Chaos" and the opportunity for Utah-based business leaders and entrepreneurs to profit from what I foresee as a "Transformation of Utah's Quiet, yet Decades-Old, Emerging Ecosystem" supporting our growing defense, military, cybersecurity, and infosec needs.

So, if you have not read our Global Chaos Report yet, I strongly encourage you to do so.

However, be forewarned that it's a good 10-to-12 minute read.

David

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Thx. DLP