This was the breakdown of intended usage of monies from the uplift monies:
Amount Percent
USE OF NET PROCEEDS1 $ 14,504,318 100 %
Service, Sales, and Marketing Efforts for Red Cat Drone Services2 $ 4,641,382 32 %
Strategic Acquisitions and Related Costs3 $ 6,962,072 48 %
Working Capital4 $ 2,900,864 20 %
TOTAL APPLICATION OF NET PROCEEDS $ 14,504,318 100.00 %
1 Reflects estimated offering expenses, underwriting discounts, and commissions payable by us and assumes no exercise of the underwriters? option to purchase additional shares of our common stock.
2 We intend to use approximately $4,641,382, or approximately 32% of the net proceeds of the offering to build out our sales, marketing and customer support team for our Red Cat Drone Services and Drone Box licensing.
3 We intend to use approximately $6,962,072, or approximately 48% of the net proceeds of the offering to fund due diligence activities and acquisition costs for businesses accretive to revenues and complimentary to our corporate capabilities.
4 We intend to use approximately $2,900,864, or 20% of the net offering proceeds, for working capital and general corporate purposes.
The actual allocation of proceeds realized from this offering will depend upon our operating revenues and cash position and our working capital requirements and may change.
Therefore, as of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net proceeds to be received upon the completion of this offering. Accordingly, we will have discretion in the application of the net proceeds, and investors will be relying on our judgment regarding the application of the proceeds of this offering.
Pending our use of the net proceeds from this offering, we intend to invest the net proceeds in a variety of capital preservation investments, including short-term, investment-grade, interest-bearing instruments and U.S. government securities. We anticipate that the proceeds from this offering will enable us to become cash flow from operations positive.
