CEA Industries Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>CEA Industries Inc. (BNCWW) filed its 2023 10-K, detailing financial performance and risks including customer concentration.</b>

AI Summary

CEA Industries Inc. (BNCWW) filed a Annual Report (10-K) with the SEC on March 29, 2024. CEA Industries Inc. filed its annual report on Form 10-K for the fiscal year ended December 31, 2023. The company was formerly known as Surna Inc., with a name change occurring on January 28, 2010. The filing details financial information for the fiscal years 2023, 2022, and 2021. Significant financial statement components include common stock, additional paid-in capital, and retained earnings. The report addresses customer concentration risk for specific customers (CustomerOne, CustomerTwo, CustomerThree) across sales revenue and accounts receivable for 2023 and 2022.

Why It Matters

For investors and stakeholders tracking CEA Industries Inc., this filing contains several important signals. This 10-K filing provides a comprehensive overview of CEA Industries Inc.'s financial health and operational status for the fiscal year 2023, crucial for investors assessing the company's performance and future prospects. The explicit mention of customer concentration risk highlights potential vulnerabilities in revenue streams, which could impact future financial stability if key customers reduce their business.

Risk Assessment

Risk Level: medium — CEA Industries Inc. shows moderate risk based on this filing. The company faces medium risk due to significant customer concentration, as evidenced by the detailed reporting of sales revenue and accounts receivable from specific customers (CustomerOne, CustomerTwo, CustomerThree) in both 2023 and 2022, indicating a potential over-reliance on a few clients.

Analyst Insight

Investors should closely monitor CEA Industries Inc.'s customer retention strategies and revenue diversification efforts following the disclosure of significant customer concentration risk in the 2023 10-K.

Key Numbers

• 2023-12-31 — Fiscal Year End (Reporting period)
• 2024-03-29 — Filing Date (Date of submission)
• 2010-01-28 — Name Change Date (Date Surna Inc. became CEA Industries Inc.)

Key Players & Entities

• CEA Industries Inc. (company) — Filer name
• Surna Inc. (company) — Former company name
• 2023-12-31 (date) — Fiscal year end
• 2024-03-29 (date) — Filing date
• CustomerOne (company) — Identified customer for concentration risk
• CustomerTwo (company) — Identified customer for concentration risk
• CustomerThree (company) — Identified customer for concentration risk

FAQ

Risk Factors

• Customer Concentration Risk [medium — financial]: The company faces risk due to a significant portion of its sales revenue and accounts receivable being concentrated with a small number of customers, specifically CustomerOne, CustomerTwo, and CustomerThree, in both 2023 and 2022.

Industry Context

CEA Industries Inc. operates within the agriculture services sector, specifically focusing on industrial applications and services.

Regulatory Implications

The filing is made under the Securities Exchange Act of 1934, requiring public companies to disclose material information about their business, financial condition, and operations.

What Investors Should Do

1. Review the full 10-K filing for detailed financial statements and management's discussion and analysis.
2. Analyze the specific customer concentration risks disclosed and assess the company's mitigation strategies.
3. Monitor future filings for changes in revenue, profitability, and customer relationships.

Year-Over-Year Comparison

This is the initial analysis of the 2023 10-K filing for CEA Industries Inc.

Key Financial Figures

• $0.00001 — nge on which registered Common Stock, $0.00001 par value CEAD Nasdaq Capital Mark
• $0.75 — 5,956,865 based upon a closing price of $0.75 reported for such date on the Nasdaq Ca
• $50 million — e maximum being life imprisonment and a $50 million fine. Any change in the federal governm

Filing Documents

• form10-k.htm (10-K) — 2349KB
• ex19-1.htm (EX-19.1) — 55KB
• ex21-1.htm (EX-21.1) — 4KB
• ex23-1.htm (EX-23.1) — 5KB
• ex31-1.htm (EX-31.1) — 12KB
• ex31-2.htm (EX-31.2) — 12KB
• ex32-1.htm (EX-32.1) — 7KB
• ex32-2.htm (EX-32.2) — 7KB
• ex99-1.htm (EX-99.1) — 44KB
• 0001493152-24-011974.txt (&nbsp;) — 10355KB
• cead-20231231.xsd (EX-101.SCH) — 59KB
• cead-20231231_cal.xml (EX-101.CAL) — 70KB
• cead-20231231_def.xml (EX-101.DEF) — 298KB
• cead-20231231_lab.xml (EX-101.LAB) — 503KB
• cead-20231231_pre.xml (EX-101.PRE) — 408KB
• form10-k_htm.xml (XML) — 2006KB

Business

Business 5 Item 1A.

Risk Factors

Risk Factors 9 Item 1B. Unresolved Staff Comments 26 Item 1C. Cybersecurity 26 Item 2.

Properties

Properties 27 Item 3.

Legal Proceedings

Legal Proceedings 27 Item 4. Mine Safety Disclosures 27 Part II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 28 Item 6.

Selected Financial Data

Selected Financial Data 29 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 29 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 38 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 38 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 38 Item 9A.

Controls and Procedures

Controls and Procedures 38 Item 9B. Other Information 39 Part III Item 10. Directors, Executive Officers and Corporate Governance 40 Item 11.

Executive Compensation

Executive Compensation 47 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 53 Item 13. Certain Relationships and Related Transactions, and Director Independence 54 Item 14. Principal Accountant Fees and Services 55 Part IV Item 15. Exhibits and Financial Statement Schedules 56 Item 16. Form 10-K Summary 56

Signatures

Signatures 58 In this Annual Report, unless otherwise indicated, the "Company", "we", "us" or "our" refer to CEA Industries Inc. and, where appropriate, its wholly-owned subsidiary. Hemp and marijuana are technically both part of the "Cannabis sativa L." plant. "Hemp" is a term used to classify varieties of cannabis that contain 0.3% or less tetrahydrocannabinol ("THC") content (by dry weight), the principal psychoactive constituent of cannabis. Hemp and its derivatives were federally legalized in the United States as part the Agricultural Act of 2018. "Marijuana" is a term used to classify varieties of cannabis that contain more than 0.3% THC (by dry weight). Marijuana is not federally legal in the United States. Many states, however, have taken action to make marijuana legal for all purposes, made it available for medical uses, decriminalized it, or a combination thereof. We currently provide nearly all of our products and services to customers that cultivate marijuana. In this Annual Report, unless otherwise indicated, "cannabis" refers to "marijuana." Although our customers do, we neither grow, manufacture, distribute nor sell cannabis (marijuana) and hemp or any of their related products. 2 CAUTIONARY This Annual Report on Form 10-K, including "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7, contains forward-looking statements that involve substantial risks and uncertainties. These forward-looking statements are not historical facts but are based on current management expectations that involve substantial risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed in, or implied by, these forward-looking statements. Forward-looking statements relate to future events or our future financial performance. We generally identify forward-looking statements by terminology such as "ma

View Full Filing

View this 10-K filing on SEC EDGAR