Colorado-based climate control systems provider CEA Industries (NASDAQ: CEAD), which does business as Surna Cultivation Technologies, saw its fortunes plummet over the past year. That trend continued in the third quarter this year, as leadership stated candidly that the company is in search of new ownership.
CEA posted a net loss of $799,000 for the quarter that ended Sept. 30, up from its loss of $694,000 in Q2 but down from its loss of more than $1 million for Q3 last year.
The big tell for CEA is revenue, however. The company pulled in just $914,000 in the most recent quarter, down from $5 million for the same period a year prior, which the company attributed to “lower bookings over the last 12 months.”
“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,” CEO Tony McDonald said in a press release. “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.”
Net bookings in the third quarter of 2023 were just $400,000 compared to $2.2 million a year ago, and the quarter-end backlog was just $500,000, down from $6.8 million in the same period a year ago. The company pointed to “fewer capital expenditures by cannabis operators in the markets we serve, in addition to a reduced sales effort” for the steep declines in both metrics.
CEA slashed operating expenses by 58%, to $700,000 from $1.7 million, by reducing staff, cutting marketing budgets, and lessening production expenses. But the company also decided – in yet another sign of distress – to cancel its quarterly earnings call.
At the end of September, CEA had $14.6 million in total assets, including $13.3 million in cash, against $1.4 million in liabilities.
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