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Related Party Transactions
 3 Months Ended
Jul. 31, 2025
Related Party Transactions [Abstract]  
Related Party Transactions

Note 15 – Related Party Transactions

 

Agreements and Transaction with a Company Director and previous director

 

The Company entered into a manufacturer representative agreement with RSX Enterprises (“RSX”) in March 2021 to become a non-exclusive representative for the Company to assist in marketing and soliciting orders. James R. Shipley, one of our independent directors, has a significant ownership interest in RSX.

 

Under the manufacturer representative agreement, RSX will act as a non-exclusive representative for the Company within the United States, Canada and Mexico and may receive a commission for qualified customer leads. The agreement had an initial term through December 31, 2021 with automatic one-year renewal terms unless notice is given 90 days prior to each annual expiration. No payments were made for commissions under this agreement for the three months ended July 31, 2025 (Successor).

 

 

CEA Industries Inc.

Notes to Condensed Consolidated Financial Statements

July 31, 2025

(in US Dollars except share numbers)

(Unaudited)

 

On June 19, 2024, the Company engaged Nicholas J. Etten, a director of the Company, to provide services covering transaction sourcing and evaluation, in the Company’s effort to arrange for a merger, acquisition, combination or other strategic transaction. Mr. Etten has a background in corporate development and investment banking in multiple industries. Mr. Etten will be paid a weekly fee of $2,500. It is expected that Mr. Etten will provide a minimum of 10 hours per week, up to a maximum of 40 hours a month, as determined by the Company and Mr. Etten. The consulting agreement will be on a month-to-month basis, and either the Company or Mr. Etten may terminate the arrangement on five days’ notice. The Company has agreed to indemnify Mr. Etten in respect of his services to the Company under the agreement. During the period from June 7, 2025 through July 31, 2025 (Successor), the Company paid Mr. Etten $10,250 in respect of services related to this agreement.

 

Promissory notes to former owner/current employee

 

In connection with the Company’s acquisition of Fat Panda Ltd. on June 6, 2025, the Company issued a promissory note with a principal amount of $743,351 ($1,030,000 CAD) to Jordan Vedoya, President of Fat Panda Ltd., who is an employee of the Company and was a selling shareholder of Fat Panda Ltd. See Note 9 Related Party Note Payable and Related Party Convertible Note Payable above.

 

Additionally, a convertible promissory note was issued to Mr. Vedoya with a principal amount of $743,351 ($1,030,000 CAD). See Note 9 Related Party Note Payable and Related Party Convertible Note Payable above.

 

In connection with the Company’s acquisition of Fat Panda Ltd. on June 6, 2025, the Company issued a promissory note with a principal amount of $360,850 ($500,000 CAD) to the selling shareholders of Fat Panda Ltd, one of which continues to be an employee of the Company. See Note 9 Related Party Note Payable and Related Party Convertible Note Payable above.