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Stockholders’ Equity
 6 Months Ended
Jun. 30, 2024
Equity [Abstract]  
Stockholders’ Equity

Note 7 – Stockholders’ Equity

 

As of June 30, 2024, the Company had 200,000,000 shares of common stock and 25,000,000 shares of preferred stock authorized at a $0.00001 par value.

 

As of June 30, 2024, 791,580 shares of common stock were issued and outstanding and no shares of preferred stock were issued and outstanding.

 

Directors Remuneration

 

On January 3, 2023, the Company issued an RSU grant of 2,480 shares of common stock under the 2021 Equity Incentive Plan to each of its four independent directors. The RSUs were granted as an equity retention award pursuant to the Company’s compensation plan for independent directors effective January 17, 2022 and vested immediately on the grant date. A total of 10,200 shares of the Company’s common stock were issued in settlement of the RSUs.

 

On January 2, 2024, the Company issued an RSU grant of 3,788 shares of common stock under the 2021 Equity Incentive Plan to three of its four independent directors. Mr. Shipley declined to receive the RSUs which he was entitled to receive. The RSUs were granted as an equity retention award pursuant to the Company’s compensation plan for independent directors effective January 17, 2022 and vested immediately on the grant date. A total of 11,364 shares of the Company’s common stock were issued in settlement of the RSUs.

 

 

CEA Industries Inc.

Notes to Condensed Consolidated Financial Statements

June 30, 2024

(in US Dollars except share numbers)

(Unaudited)

 

Revised Compensation Plan for Directors

 

On January 17, 2022, the Board of Directors revised the previously adopted compensation plan. This plan supersedes the plan adopted on August 20, 2021. The Plan is effective retroactively for the current independent directors and for independent directors elected or appointed after the Effective Date.

 

At the time of initial election or appointment, each independent director received an equity retention award in the form of restricted stock units (“RSUs”). The aggregate value of the RSUs at the time of grant was to be $25,000, with the number of shares underlying the RSUs to be determined based on the closing price of the Company’s common stock on the date immediately prior to the date of grant. Vesting of the RSUs was as follows: (i) 50% at the time of grant, and (ii) 50% on the first anniversary of the grant date.

 

In addition, on the first business day of January each year, each independent director will also receive an equity retention award in the form of RSUs. The aggregate value of the RSUs at the time of grant will be $25,000, with the number of shares underlying the RSUs to be determined based on the closing price of the Company’s common stock on the date immediately prior to the date of grant. These RSUs will be fully vested at date of grant.

 

There is no additional compensation paid to members of any committee of the Board. Interested (i.e. Executive directors) serving on the Board do not receive compensation for their Board service.

 

All the independent directors, Messrs. Shipley, Etten, Reisner, and Mariathasan are subject to the Plan.

 

Each independent director is responsible for the payment of any and all income taxes arising with respect to the issuance of any equity awarded under the plan, including the exercise of any non-qualified stock options.

 

Reverse Stock Split

 

On May 7, 2024, the Company’s Board of Directors approved a reverse stock split at a ratio of one-for-twelve. The reverse stock split was effective June 7, 2024. The par value for the Common Stock was not affected. An additional 107,126 shares of common stock were issued to round up partial shares following the reverse split. As a result of the stock split, immediately thereafter there were 791,580 shares of common stock issued and outstanding.

 

As a result of the reverse stock split, all outstanding options, restricted stock units, and common stock purchase warrants were proportionately adjusted as to number of securities and exercise prices.