By Sam Boughedda
Investing.com — Red Cat Holdings Inc (NASDAQ:RCAT) shareholders have been given a welcome boost Wednesday after the company announced its subsidiary, Teal Drones, has been awarded a blanket purchase agreement by the United States Customs and Border Protection as one of five contractors.
The agreement has a value of approximately $90 million over a 5-year ordering period.
After falling significantly in 2021, Red Cat — software provider to the drone industry — shares are up around 24% from Tuesday's close to $2.27 at the time of writing. They hit a high of $2.73 earlier in the session.
The agreement will allow the Department of Homeland Security agencies to place orders for unmanned aircraft systems (UAS), i.e. drones. Red Cat said the drones will provide, "airborne reconnaissance, surveillance, and tracking capability" for United States Customs and Border Protection.
Red Cat CEO Jeff Thompson said: "We are honored Teal was selected to provide U.S. manufactured drones that meet the rigorous technical requirements of the Department of Homeland Security.
"This award is a milestone achievement for George Matus (Teal's Founder/CEO) and the entire Teal team, and to the foundation they have built over the past decade in arriving to this point."
Thompson added that the deal will allow the company to make full use of Teal's new 26,000-square foot facility in Salt Lake City, which it opened in October. It was initially a 13,000-square foot facility. However, the company revealed this week it will double the factory's size to meet surging demand.