CEA Industries Inc. Q3 FY2021 earnings call

• Organic growth strategy components: new markets (expanding into non-cannabis controlled environment agriculture like indoor food farming), new products and services (expanding product/service range from environmental control to full lifecycle support, announcing partnerships and new products such as with Anden dehumidifiers, expanded chiller product line, EnviroPro Mini Air Handler line, etc.), and new trading. • Corporate strategy pillars: aggressive organic growth, seeking strategic relationships/mergers & acquisitions, and pursuing uplifting to international exchange and seeking additional growth capital. • Architectural design services allow early engagement with prospective customers in facility design process to increase revenue from projects.

In the third quarter of 2021, Surna Inc. reported revenue of $3.7 million, which is a 127% increase compared to the third quarter of the previous year. The third quarter 2021 gross profit margin was 20.2%, down from 32.2% in the third quarter of 2020. Third quarter 2021 bookings were approximately $5.6 million, net of $500,000 cancellations, representing a 32% increase from the third quarter of 2020 and a 509% increase from the second quarter of 2021. Year-to-date through September 30, 2021, revenue was $10.6 million, a 106% increase compared to the same period last year. Year-to-date gross profit margin was 22.4%, down from 24.5% in the same period last year. Third quarter 2021 operating loss was $443,000, net loss was $408,000, and adjusted net loss was $363,000. Year-to-date through September 30, 2021, operating loss was $1 million, net loss was $936,000, and adjusted net loss was $660,000.

• Believes organic growth strategy is gaining traction and will continue to bear fruit in the second half of the year. • Sees growth opportunities with additional capital to create increased shareholder value. • Intends to pursue uplifting to a national exchange, which would enhance stock as a currency for investors and acquisition targets and boost credibility, likely requiring a reverse split of stock.

• Supply chain disruptions in the third quarter delayed shipments, impacting revenue and pushing delays into the fourth quarter and possibly the first quarter of 2022. • Capital raise is potentially dilutive to existing shareholders. • Uplisting to a national exchange may require a reverse split of stock.

Q: Your recent press release mentioned you have signed contracts for preventative maintenance. Why is this important for you and your customers?

A: We believe that our customers will benefit from our preventative maintenance for maximizing their uptime in optimal growth environment. For us, it is critical that we continue to support our customers throughout the project from concept to grow. We view these maintenance contracts as part of this continual.

Q: Earlier in your remarks and in previous quarters, you stated that you want to uplift, can you provide an update of where Surna is in these efforts?

A: In this quarter we completed our pipe financing. This was a necessary first step to uplisting, it is still our intention to pursue an uplifting to national exchange.

Q: You mentioned that your supply was disrupted in the quarter. How much from both the dollar perspective and timing has this disruption impacted you in the third quarter?

A: Well, we won't go into specifics on the dollar front, we believe that the delays experienced in the third quarter from a revenue perspective will push into fourth quarter and possibly into the first quarter of 2022