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Shareholders’ Equity
 3 Months Ended
Mar. 31, 2025
Equity [Abstract]  
Shareholders’ Equity

Note 7 – Shareholders’ Equity

 

As of March 31, 2025, 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 March 31, 2025, 802,346 shares of common stock were issued and outstanding and no shares of preferred stock were issued and outstanding.

 

 

CEA Industries Inc.

Notes to Condensed Consolidated Financial Statements

March 31, 2025

(in US Dollars except share numbers)

(Unaudited)

 

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.

 

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.

 

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.

 

Also, as a result of this reverse stock split, the number of the Company’s shares of common stock issued and outstanding at December 31, 2023 was reduced from 8,076,372 to 673,090.

 

Director Compensation Program

 

On December 16, 2024 (the “Effective Date”), the Board adopted a revised compensation plan for directors. The Plan was effective retroactively for the then current independent directors and provided compensation for subsequent directors elected or appointed after the Effective Date of the plan.

 

The Company will pay its independent directors an annual cash fee of $25,000, payable quarterly in advance on the first business day of each calendar quarter, prorated for the period of service in the year and which is consideration for their participation in: (i) any regular or special meetings of the Board or any committee thereof attended in person, (ii) any telephonic meeting of the Board or any committee thereof in which the director is a member, (iii) written consent actions, (iv) any non-meeting consultations with the Company’s management, and (iv) any other services provided by them in their capacities as directors (other than services as the Chairman of the Board, the Chairman of the Company’s Audit Committee, and the other Committees’ Chairman).

 

At the time of initial election or appointment, each independent director will receive an equity retention award in the form of restricted stock units (“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 trade date immediately prior to the date of grant. Vesting of the RSUs will be 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 who was not initially appointed or elected in the previous year will 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 trade date immediately prior to the date of grant. These RSUs will be fully vested at date of grant.

 

The Company will pay the Audit Committee Chairman an additional annual fee of $10,000, payable quarterly in advance on the first business day of each calendar quarter, prorated for the period of service in the year, for the services as the Audit Committee Chairman.

 

The Company will pay the Chairmen of any other committee of the Board an additional annual fee of $5,000, payable quarterly in advance on the first business day of each calendar quarter, prorated for the period of service in the year, for services as a Committee Chairman.

 

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.

 

 

CEA Industries Inc.

Notes to Condensed Consolidated Financial Statements

March 31, 2025

(in US Dollars except share numbers)

(Unaudited)

 

Each director is responsible for the payment of any and all income taxes arising with respect to the issuance of common stock and the vesting and settlement of RSUs.

 

The Company will also reimburse directors for out-of-pocket expenses incurred in attending Board and committee meetings and undertaking certain matters on the Company’s behalf.