CEA Industries Inc. Reviews This autumn 2021 and Full Yr Outcomes

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Broadcasts 60% income enhance over 2020 and $9.6 million in Internet Bookings in second half of yr, highest in Firm historical past and 22% greater than in second half of 2020

Louisville, Colorado, March 29, 2022 (GLOBE NEWSWIRE) — CEA Industries Inc. (NASDAQ: CEAD, CEADW) right now introduced working and monetary outcomes for the three and twelve months ended December 31, 2021.

Monetary Highlights

  • Our FY 2021 income was $13.6 million, which represents a 60% enhance in comparison with FY 2020 income.
  • For FY 2021, our working loss and web loss was $1,979,000 and $1,338,000, respectively. This compares to a FY 2020 working loss and web lack of $2,363,000 and $1,759,000, respectively.
  • Our FY 2021 adjusted web loss1 was $889,000, in comparison with FY 2020 adjusted web earnings of $1,239,000.
  • Our This autumn 2021 income was $3,056,000, in comparison with This autumn 2020 income of $3,387,000, a lower of 10%. Our This autumn 2021 web loss was $402,000, in comparison with a This autumn 2020 web achieve of $64,000. Our This autumn 2021 adjusted web loss was $229,000, in comparison with a This autumn 2020 adjusted web achieve of $143,000.
  • Our FY 2021 gross revenue margin was 21.5% in comparison with 18.2% for FY 2020, a rise of 330 foundation factors.
  • As of December 31, 2021, our money was $2,160,000, in comparison with money of $2,285,000 as of December 31, 2020. We used $3,207,000 in money from our working actions throughout FY 2021. Our working capital deficit was $415,000 as of December 31, 2021, in comparison with a working capital deficit of $2,220,000 as of December 31, 2020. Our year-end working capital deficit consists of $83,000 of accrued fairness compensation expense that shall be paid in inventory choices in Q2 2022. The 2020 year-end working capital deficit included $128,000 of accrued fairness compensation expense that was paid in inventory choices in Q1 2021. Excluding the accrued compensation expense, the 2021 year-end working capital deficit was $332,000 in comparison with $2,092,000 in 2020.2
  • Our latest fairness elevate generated roughly $22 million in web proceeds, eradicated excellent most well-liked inventory and has supplied liquidity for us to proceed executing our strategic plan, as we pursue alternatives to develop each organically and thru strategic and opportunistic acquisitions.

Latest Gross sales Contract Development

Throughout the fourth quarter of 2021 we had web bookings totaling roughly $3.99 million, which is the very best quantity of fourth quarter web bookings in our historical past. Mixed with the $5.60 million within the third quarter of 2021, we had web bookings totaling roughly $9.59 million within the second half of 2021. This stage of web contract bookings within the second half is the most important within the Firm’s historical past and represents a 22% enhance over the second half of 2020.

Product Improvement Initiatives

In 2018 we started to broaden our product choices to offer a wider vary of HVAC technical options to serve our sturdy and increasing slate of shoppers. We continued that effort in 2019 once we launched our SentryIQ® Controls System, and in 2020 we broadened our engineering providers to incorporate full Mechanical, Electrical, and Plumbing (“MEP”) providers. We additionally expanded our environmental management product line to supply useful enhances like our break up system DX (direct growth) with built-in dehumidification, packaged DX programs with modulating sizzling gasoline reheat, warmth restoration chiller/boiler for 4-pipe programs, and most just lately, our StrataAir racking airflow options. We accelerated this growth in 2021 as introduced in our strategic replace of Might 2021. This new technique has borne fruit as our 2021 efficiency was largely pushed by our capability to offer important elements exterior of our conventional HVAC technical options, comparable to architectural design providers, lighting, benching and racking merchandise, and preventive upkeep providers to help our prospects of their cultivation operations. Since Might 2021, once we introduced this new strategic replace, we now have confirmed virtually $500,000 in contracted revenues associated to those new initiatives, and we count on this to extend over the course of the yr.

We intend to proceed to develop and supply new options to our prospects’ challenges, so {that a} broader group of growers can make the most of our engineering experience and capabilities. We imagine these new services and products will enhance our addressable markets and enhance gross sales, additional leveraging our funding in product growth, gross sales, and advertising and marketing.

Provide Chain Income Affect

Just like firms in different industries, we now have skilled delays with our worldwide provide of merchandise and shipments from distributors, and this negatively impacted our income for the yr. The availability chain influence was largely on account of delays at U.S. ports, compounded by a discount in cargo shipped by air, a scarcity of containers, and a scarcity of home truck supply availability. Whereas our revenues elevated yr over yr, these logistical delays affected our capability to translate a few of our contract pipeline to revenues in accordance with the unique timeframe of the contracts.

We proceed to handle our enterprise amidst congestion and intensive wait instances. We’ll work diligently with our prospects and with our community of freight companions and suppliers to expedite supply dates and supply options to cut back additional influence and delays and to finish excellent contracts.

Tony McDonald, Chairman & CEO, commented: “The second half of the yr supplied validating assist for our expanded product and providers technique. We completed the second half of 2021 with a pipeline that was 22% stronger than the second half of 2020. Sure cultivation building initiatives have been delayed or deserted through the yr, and we’re aware that our prospects are nonetheless working by the challenges introduced on by the Covid pandemic. Whereas we proceed to judge the consequences this can have on our pipeline and income, we proceed to be optimistic concerning the enterprise and can proceed to work diligently to construct gross sales momentum.

About CEA Industries Inc.

CEA Industries Inc. (www.ceaindustries.com), by its subsidiary Surna Cultivation Applied sciences, is an trade chief in CEA facility design and applied sciences. We offer full-service licensed architectural and mechanical, electrical, and plumbing (MEP) engineering providers, rigorously curated HVACD tools, proprietary controls programs, air sanitization, lighting, and benching and racking merchandise. Our workforce of venture managers, licensed skilled architects and engineers, know-how and horticulture specialists and programs integrations specialists assist our prospects by exactly designing for his or her distinctive purposes. By way of our partnership with a licensed service contractor community, we offer set up and upkeep providers to help in a easy build-out and optimum facility efficiency. We have now been offering options to indoor growers for over 15 years and have served over 800 cultivators with over 200 of them being massive, industrial initiatives.

Headquartered in Louisville, Colorado, we leverage our expertise within the trade to deliver value-added options to our prospects that assist enhance their general crop high quality and yield, optimize vitality and water effectivity, and fulfill evolving state and native codes, allowing and regulatory necessities.

Ahead Trying Statements

This press launch could include statements of a forward-looking nature referring to future occasions. These forward-looking statements are topic to the inherent uncertainties in predicting future outcomes and circumstances. These statements replicate our present beliefs, and plenty of vital components might trigger precise outcomes to vary materially from these expressed on this press launch, together with the components set forth in “Danger Elements” set forth in our annual and quarterly reviews filed with the Securities and Alternate Fee (“SEC”), and subsequent filings with the SEC. Please confer with our SEC filings for a extra detailed dialogue of the dangers and uncertainties related to our enterprise, together with however not restricted to the dangers and uncertainties related to our enterprise prospects and the prospects of our current and potential prospects; the inherent uncertainty of product growth; regulatory, legislative and judicial developments, particularly these associated to adjustments in, and the enforcement of, hashish legal guidelines; rising aggressive pressures in our trade; and relationships with our prospects and suppliers. Besides as required by the federal securities legal guidelines, we undertake no obligation to revise or replace any forward-looking statements, whether or not because of new info, future occasions or in any other case. The reference to CEA’s web site has been supplied as a comfort, and the data contained on such web site shouldn’t be included by reference into this press launch.

Non-GAAP Monetary Measures

To complement our monetary outcomes on U.S. typically accepted accounting ideas (“GAAP”) foundation, we use non-GAAP measures together with web bookings and backlog, in addition to different vital non-cash bills comparable to stock-based compensation and depreciation bills. We imagine these non-GAAP measures are useful in understanding our previous efficiency and are supposed to help in evaluating our potential future outcomes. The presentation of those non-GAAP measures needs to be thought of along with our GAAP outcomes and will not be supposed to be thought of in isolation or as an alternative choice to monetary info ready or offered in accordance with GAAP. We imagine these non-GAAP monetary measures replicate an extra strategy to view facets of our operations that, when considered with our GAAP outcomes, present a extra full understanding of things and traits affecting our enterprise.

CEA Industries Inc.
Consolidated Stability Sheets 

    December 31,     December 31,  
    2021     2020  
             
ASSETS                
Present Property                
Money and money equivalents   $ 2,159,608     $ 2,284,881  
Accounts receivable (web of allowance for uncertain accounts of $181,942 and $165,098, respectively)     179,444       33,480  
Stock, web     378,326       327,109  
Pay as you go bills and different     1,273,720       1,037,823  
Complete Present Property     3,991,098       3,683,293  
Noncurrent Property                
Property and tools, web     77,346       147,732  
Goodwill     631,064       631,064  
Intangible property, web     1,830       7,227  
Deposits     14,747        
Working lease right-of-use asset     565,877       343,950  
Complete Noncurrent Property     1,290,864       1,129,973  
                 
TOTAL ASSETS   $ 5,281,962     $ 4,813,266  
                 
LIABILITIES AND SHAREHOLDERS’ DEFICIT                
                 
CURRENT LIABILITIES                
Accounts payable and accrued liabilities   $ 1,345,589     $ 1,784,961  
Deferred income     2,839,838       3,724,189  
Accrued fairness compensation     83,625       128,434  
Different liabilities     37,078        
Present portion of working lease legal responsibility     100,139       266,105  
Complete Present Liabilities     4,406,269       5,903,689  
                 
NONCURRENT LIABILITIES                
Different liabilities           74,156  
Working lease legal responsibility, web of present portion     486,226       169,119  
Complete Noncurrent Liabilities     486,226       243,275  
                 
TOTAL LIABILITIES     4,892,495       6,146,964  
                 
Commitments and Contingencies (Be aware 11)            
                 
TEMPORARY EQUITY                
Collection B Redeemable Convertible Most popular Inventory, $0.00001 par worth; 3,300 and 0 issued and excellent, respectively     3,960,000        
Complete Short-term Fairness     3,960,000        
                 
SHAREHOLDERS’ DEFICIT                
Most popular inventory; 150,000,000 shares licensed              
Collection A Most popular inventory, $0.00001 par worth; 0 and 42,030,331 shares issued and excellent, respectively           420  
Frequent inventory, $0.00001 par worth; 850,000,000 and 350,000,000 shares licensed, respectively; 1,600,835 and 1,576,844 shares issued and excellent, respectively     16       16  
Further paid in capital     25,211,017       26,109,509  
Amassed deficit     (28,781,566 )     (27,443,643 )
Complete Shareholders’ Deficit     (3,570,533 )     (1,333,698 )
                 
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT   $ 5,281,962     $ 4,813,266  

CEA Industries Inc.
Consolidated Statements of Operations

    For the Twelve Months Ended
December 31,
 
    2021     2020  
Income, web   $ 13,638,558     $ 8,514,272  
                 
Price of income     10,712,563       6,961,305  
                 
Gross revenue     2,925,995       1,552,967  
                 
Working bills:                
Promoting and advertising and marketing bills     772,139       430,012  
Product growth prices     469,703       390,229  
Promoting, normal and administrative bills     3,662,668       3,095,350  
Complete working bills     4,904,510       3,915,591  
                 
Working loss     (1,978,515 )     (2,362,624 )
                 
Different earnings (expense):                
Different earnings (expense), web     627,592     $ 621,340  
Curiosity expense     (2,832 )   $ (17,432 )
Achieve on lease termination     15,832     $  
Complete different earnings (expense)     640,592       603,908  
                 
Loss earlier than provision for earnings taxes     (1,337,923 )     (1,758,716 )
                 
Revenue taxes            
                 
                 
Internet loss   $ (1,337,923 )   $ (1,758,716 )
                 
Convertible Most popular Collection B Inventory Redemption Worth Adjustment   $ (2,262,847 )   $  
Convertible Most popular Collection B Inventory Dividends     (67,447 )      
Dividend on Redemption of Collection A Most popular Inventory     (20,595 )      
                 
Internet Loss Obtainable to Frequent Shareholders   $ (3,688,812 )   $ (1,758,716 )
                 
Loss per widespread share – fundamental and dilutive   $ (2.33 )   $ (1.12 )
                 
Weighted common variety of widespread shares excellent, fundamental and dilutive     1,582,869       1,574,454  

CEA Industries Inc.
Consolidated Statements of Money Flows

    For the Yr Ended
December 31,
 
    2021     2020  
Money Flows from Working Actions:                
Internet loss   $ (1,337,923 )   $ (1,758,716 )
Changes to reconcile web loss to web money supplied by (utilized in) working actions:                
Depreciation and intangible asset amortization expense     65,372       120,103  
Achieve on forgiveness of notice payable     (517,032 )     (557,203 )
Share-based compensation     240,780       277,183  
Frequent inventory issued for different expense     67,000        
Provision for uncertain accounts     16,844       13,425  
Provision for extra and out of date stock     (1,666 )     21,669  
Achieve on lease termination     (15,832 )      
Loss on disposal of property     67,567       4,124  
Amortization of ROU asset     204,521       190,183  
                 
Adjustments in working property and liabilities:                
Accounts receivable     (162,808 )     91,452  
Stock     (49,551 )     882,466  
Pay as you go bills and different     (235,897 )     (768,333 )
Accounts payable and accrued liabilities     (476,450 )     26,157  
Deferred income     (884,350 )     2,279,717  
Accrued curiosity     2,832       3,203  
Lease deposit     (14,747 )      
Working lease legal responsibility, web     (259,475 )     (135,828 )
Accrued fairness compensation     83,625       128,434  
Internet money (utilized in)/supplied by working actions     (3,207,190 )     818,036  
                 
Money Flows from Investing Actions                
Purchases of property and tools     (68,657 )     (9,332 )
Proceeds from the sale of property tools     11,500        
Internet money utilized in investing actions     (57,157 )     (9,332 )
                 
Money Flows from Financing Actions                
Money proceeds from sale of most well-liked inventory and warrants, web of issuance prices     2,624,874        
Proceeds from issuance of notice payable     514,200       554,000  
Internet money supplied by financing actions     3,139,074       554,000  
                 
Internet change in money and money equivalents     (125,273 )     1,362,704  
Money and money equivalents, starting of interval     2,284,881       922,177  
Money and money equivalents, finish of interval   $ 2,159,608     $ 2,284,881  
                 
Supplemental money circulation info:                
Curiosity paid   $     $  
Revenue taxes paid   $     $  
                 
Non-cash investing and financing actions:                
Adjustment of carrying worth of sequence B most well-liked inventory to redemption worth   $ 2,262,847        
Choices issued for accrued fairness compensation   $ 128,434     $  
Accrued Collection B dividend payable settled in shares of widespread inventory   $ 67,447     $  
Collection A Most popular Inventory transformed into shares of widespread inventory   $ 420     $  
Dividend on Redemption of Collection A Most popular Inventory settled in shares of widespread inventory   $ 20,595     $  
Proper of Use asset arising on new workplace lease   $ 582,838     $  

1 “Adjusted web earnings (loss)” means our GAAP web earnings (loss), after adjustment for non-cash fairness compensation expense, debt-related gadgets and depreciation expense.
2 Quantity excludes proceeds raised from Fairness Providing on February 22, 2022.

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