LOUISVILLE — CEA Industries Inc. (Nasdaq: CEAD), a Louisville-based company that provides controlled-agriculture solutions for cannabis companies, reported sharply lower revenues in the third quarter, with the company exploring a possible sale or merger.
The company recorded revenue of $914,000, compared with $5.1 million in the third quarter of 2022. CEA reported a net loss of $799,000 in the most-recent quarter, compared with $1 million a year ago.
CEA attributed the decline in revenue to fewer bookings and “reduced sales efforts” as it explores strategic alternatives.
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“The decrease in the Company’s net bookings and backlog for the third quarter of 2023 was primarily driven by fewer capital expenditures by cannabis operators in the markets we serve, in addition to a reduced sales effort,” the company said in a press release.
Tony McDonald, CEA Industries’ CEO, said in August that the company would “review strategic alternatives, including a sale, merger or other potential strategic or financial transaction, to protect and maximize shareholder value.”
McDonald said in a statement Tuesday that the company will focus on preserving cash.
“Given the state of our operations, our current corporate assets, and our service position in the cannabis and controlled agricultural sectors, our focus is to work through our backlog and take action to mitigate operating expenses and preserve cash,” McDonald said.
“As previously announced on August 14, 2023, the Board of Directors continues to review strategic alternatives, including a sale, merger or other potential strategic or financial transaction. We will provide updates on any material developments that may result from this process.”
CEA reported cash and cash equivalents of $13.3 million as of Sept. 30, compared with $18.6 million as of Dec. 31, 2022.
CEA Industries was formerly known as Surna Inc. and changed its name in November 2021.