Louisville, Colorado, Nov. 14, 2024 (GLOBE NEWSWIRE) -- CEA Industries Inc. (NASDAQ: CEAD, CEADW) ("CEA Industries” or the "Company”), is reporting results for the three months ended September 30, 2024.

Third Quarter 2024 Financial Summary (in $ thousands, excl. margin items):

 Q3 2024

(unaudited)

Q2 2024

(unaudited)

Q3 2023

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(unaudited)

Revenue$391 $1,761 $914 
Gross Profit (Loss)$(70)$180 $(104)
Operating Expenses$677 $657 $703 
Net Income/(Loss)$(740)$(470)$(799)

"Throughout 2024, we have maintained a disciplined approach to cost management, prioritizing capital preservation as we work through our remaining project backlog,” said Tony McDonald, Chairman and CEO of CEA Industries. "In alignment with our commitment to shareholders, during the third quarter we made further reductions in headcount, paused product development, and scaled back business development efforts to maintain our strong balance sheet.

"As previously announced, the Board of Directors continues their examination of strategic alternatives, including a sale, merger, special dividend, or other potential strategic or financial transaction, including a dissolution of the Company whereby cash on the balance sheet would be returned to shareholders after adequate provision for outstanding corporate obligations. We will continue to prudently manage our capital in support of our ongoing strategic review process and look forward to providing an update in the coming months.”

Third Quarter 2024 Financial Results

Revenue in the third quarter of 2024 was $0.4 million compared to $0.9 million for the same period in 2023. The decrease was primarily attributed to lower bookings and a reduced backlog over the past 18 months.

Net bookings in the third quarter of 2024 increased to $0.5 million compared to $0.4 million in the year-ago period. The Company's quarter-end backlog was $0.4 million compared to $0.5 million for the same period in 2023. The expected decrease in CEA Industries' backlog was primarily driven by fewer capital expenditures by cannabis operators in the markets served by the Company, in addition to a reduced sales effort.

Gross loss in the third quarter of 2024 improved to $70,000 compared to $104,000 for the same period in 2023. The improvement in gross profit was primarily driven by a reduction in variable costs as a percentage of revenue. Variable costs include the cost of equipment, outside engineering, shipping and handling, travel and warranty.

Operating expenses in the third quarter of 2024 remained flat at $0.7 million compared to the same period in 2023.

Net loss in the third quarter of 2024 improved to $0.7 million or $(0.94) per share, compared to a net loss of $0.8 million or $(1.19) per share for the same period in 2023.

Cash and cash equivalents were $10.3 million at September 30, 2024, compared to $12.5 million on December 31, 2023, while working capital decreased by $2.0 million during this period. At September 30, 2024, the Company remained debt free.

About CEA Industries Inc.

CEA Industries Inc. (www.ceaindustries.com) provides a suite of complementary and adjacent offerings to the controlled environment agriculture industry. The Company's comprehensive solutions, when aligned with industry operators' product and sales initiatives, support the development of the global ecosystem for indoor cultivation.

Forward Looking Statements

This press release may contain statements of a forward-looking nature relating to future events. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. These statements reflect our current beliefs, and a number of important factors could cause actual results to differ materially from those expressed in this press release, including the factors set forth in "Risk Factors” set forth in our annual and quarterly reports filed with the Securities and Exchange Commission ("SEC”), and subsequent filings with the SEC. Please refer to our SEC filings for a more detailed discussion of the risks and uncertainties associated with our business, including but not limited to the risks and uncertainties associated with our business prospects and the prospects of our existing and prospective customers; the inherent uncertainty of product development; regulatory, legislative and judicial developments, especially those related to changes in, and the enforcement of, cannabis laws; increasing competitive pressures in our industry; and relationships with our customers and suppliers. Except as required by the federal securities laws, we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise. The reference to CEA's website has been provided as a convenience, and the information contained on such website is not incorporated by reference into this press release.

Non-GAAP Financial Measures

To supplement our financial results on U.S. generally accepted accounting principles ("GAAP”) basis, we use non-GAAP measures including net bookings and backlog, as well as other significant non-cash expenses such as stock-based compensation and depreciation expenses. We believe these non-GAAP measures are helpful in understanding our past performance and are intended to aid in evaluating our potential future results. The presentation of these non-GAAP measures should be considered in addition to our GAAP results and are not intended to be considered in isolation or as a substitute for financial information prepared or presented in accordance with GAAP. We believe these non-GAAP financial measures reflect an additional way to view aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business.

Investor Contact:

Sean Mansouri, CFA

Elevate IR

[email protected]

(720) 330-2829

CEA Industries Inc.

Condensed Consolidated Balance Sheets

(in US Dollars except share numbers)

  September 30,  December 31, 
  2024  2023 
   (Unaudited)     
ASSETS        
Current Assets        
Cash and cash equivalents $10,295,159  $12,508,251 
Accounts receivable, net  71,240   18,655 
Contract assets, net  224,414   224,414 
Inventory, net  24,680   296,404 
Prepaid expenses and other  421,260   313,115 
Total Current Assets  11,036,753   13,360,839 
Noncurrent Assets        
Property and equipment, net  9,605   38,558 
Intangible assets, net  1,830   1,830 
Deposits  14,747   14,747 
Operating lease right-of-use asset  273,375   356,109 
Total Noncurrent Assets  299,557   411,244 
         
TOTAL ASSETS $11,336,310  $13,772,083 
         
LIABILITIES AND SHAREHOLDERS' EQUITY        
         
LIABILITIES        
Current Liabilities        
Accounts payable and accrued liabilities $364,154  $624,724 
Deferred revenue  468,963   499,800 
Current portion of operating lease liability  133,127   126,724 
Total Current Liabilities  966,244   1,251,248 
         
Noncurrent Liabilities        
Operating lease liability, net of current portion  166,685   259,627 
Total Noncurrent Liabilities  166,685   259,627 
         
TOTAL LIABILITIES  1,132,929   1,510,875 
         
Commitments and Contingencies (Note 6)  -   - 
         
SHAREHOLDERS' EQUITY        
Preferred stock, $0.00001 par value; 25,000,000 shares authorized; 0 shares issued and outstanding  -   - 
Common stock, $0.00001 par value; 200,000,000 authorized; 791,580 and 673,090 shares issued and outstanding, respectively  8   7 
Additional paid in capital  49,520,970   49,451,493 
Accumulated deficit  (39,317,597)  (37,190,292)
Total Shareholders' Equity  10,203,381   12,261,208 
         
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $11,336,310  $13,772,083 

CEA Industries Inc.

Condensed Consolidated Statements of Operations

(in US Dollars except share numbers)

(Unaudited)

  For the Three Months Ended September 30,  For the Nine Months Ended September 30, 
  2024  2023  2024  2023 
Revenue $390,817  $913,571  $2,386,023  $6,659,858 
                 
Cost of revenue  460,970   1,017,634   2,430,751   5,831,953 
                 
Gross (loss) profit  (70,153)  (104,063)  (44,728)  827,905 
                 
Operating expenses:                
Advertising and marketing expenses  450   21,551   13,630   256,965 
Product development costs  -   -   -   76,487 
Selling, general and administrative expenses  676,069   681,448   2,089,328   2,452,305 
Total operating expenses  676,519   702,999   2,102,958   2,785,757 
                 
Operating loss  (746,672)  (807,062)  (2,147,686)  (1,957,852)
                 
Other income (expense):                
Other income (expense), net  -   -   -   7,778 
Interest income (expense), net  6,269   8,043   20,381   26,042 
Total other income (expense)  6,269   8,043   20,381   33,820 
                 
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