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Leases
 3 Months Ended
Jul. 31, 2025
Leases  
Leases

Note 4 – Leases

 

The Company accounts for its leases in accordance with ASC 842. The Company determines if an arrangement is or contains a lease at inception, which is the date on which the terms of the contract are agreed to, and the agreement creates enforceable rights and obligations. Under ASC 842, a contract is or contains a lease when (i) explicitly or implicitly identified assets have been deployed in the contract and (ii) the customer obtains substantially all of the economic benefits from the use of that underlying asset and directs how and for what purpose the asset is used during the term of the contract. The Company also considers whether its service arrangements include the right to control the use of an asset.

 

The Company has entered into various agreements to lease retail space, office and manufacturing space that have initial terms ranging from 1 to 10 years. Accordingly, the Company recognizes a right-of-use (“ROU”) asset representing the right to use an underlying asset and a lease liability representing the obligation to make lease payments over the lease term for substantially all leases with a lease term greater than 12 months. Operating lease cost is recognized on a straight-line basis over the lease term.

  

 

CEA Industries Inc.

Notes to Condensed Consolidated Financial Statements

July 31, 2025

(in US Dollars except share numbers)

(Unaudited)

  

The Company’s operating and finance right-of-use assets and lease liabilities are as follows:

 

 

   Successor   Predecessor 
   Successor   Predecessor 
   July 31,   April 30, 
   2025   2025 
Operating lease right-of-use asset  $1,931,103   $1,890,013 
Operating lease liability, current  $661,985   $528,914 
Operating lease liability, long-term  $1,302,568   $1,374,639 

 

   Successor   Predecessor   Predecessor 
   Successor   Predecessor 
   Period from June 7 through July 31,   Period from May 1 through June 6,   Three Months Ended July 31, 
   2025   2025   2024 
Cash paid for operating lease  $97,215   $91,749   $188,964 

 

Future annual minimum lease payments under non-cancellable operating leases as of July 31, 2025, were as follows:

 

As of July 31, 2025  Successor 
   July 31, 
Years ended April 30,  2025 
2026 (excluding the three months ended July 31, 2025)   583,479 
2027   677,233 
2028   461,843 
2029   286,154 
2030   140,995 
Thereafter   154,246 
Total minimum lease payments   2,303,950 
Less imputed interest   (339,397)
Present value of minimum lease payments  $1,964,553 

 

 

CEA Industries Inc.

Notes to Condensed Consolidated Financial Statements

July 31, 2025

(in US Dollars except share numbers)

(Unaudited)