$CEAD CEA Industries - AppHarvest - Vertical indoor farm with bullish + pump possible momentun

Research & Analysis
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$CEAD CEA Industries, Inc. engages in in the development, design, and distribution of cultivation technologies for controlled environment agriculture, primarily for cannabis crops. It offers controlled climate systems, controls, and biosecurity cultivation products, and MEP engineering, odor control, and installation support services. Main product is https://www.appharvest.com/

This recently caught my eye and have noted the following so far:

  • Crops have generally been horrible this summer due to droughts, indoor farming could get some added sentiment
  • Trading significantly below it’s cash per share at .46: currently around $1.20 versus $2.59 cash per share
    • meanwhile $UGRO has a p/c ratio of 1.63 and also just got a PT with coverage initiated by ROTH (sector could be warming up)
      *(Can this be used as a similar concept to NAV with a stock going this far below it’s p/c ratio?)
  • A beloved Furu, BoredBilionaire (cringe), has been dropping some cryptic posts on this ticker:
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  • seems to also have some added weed stock following from the agriculture sector
  • $20M in cash versus 500K in debt
  • no options (wahhh)
  • Float: ~7M
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I’m in @ $1.21 (no options) as a speculative add ahead of the Benzinga Cannabis Capital Conference in Chicago, IL on September 13-14 that Surna Cultivation Technologies LLC, a leader in controlled environment agriculture (CEA) systems engineering and technologies, and a subsidiary of CEA Industries Inc., will participate in. Limiting my position to 1,000 shares max with some lower bids in for eod and room to average down tomorrow if CPI is bearish.

Biggest risk about this swing is that CPI data is dropping tomorrow, but since the conference is starting tomorrow… I choose violence :wink:

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Some good news coming out for $CEAD from Benzinga Cannabis Award Winners Announced At Chicago Conference. Marida Capital, who $CEAD is the sole provider of certain products and services for Merida’s indoor cultivation facilities, won an award! :pepecelebrate: But also pretty dope it’s the “investors award”… :bigbrain:

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And back on June 29, 2022 you had their exclusive agreement as a sole provider to Merida for certain products/services:

CEA Industries Inc. Signs Letter of Engagement with Merida Capital Holdings

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Currently $CEAD is trading at 0% on the day while the entire market is red. I’d say that “dip” this morning down to 1.16 was eaten up very fast on that 76k block this morning. The fact that it didn’t move down significantly with CPI, along with the news above is overall bullish on a fundamental basis (trading below cash per share, established bottom, etc.) and value play (25+% CAGR by 2028) standpoint for this stock.

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Looking for a pop tomorrow on a sympathy food run form the Biden speech. Has gotten some more FURUs tracking today along with some big volume around noon. I have shares at $1.21 looking to swing this week (as long as JPOW doesn’t F it up lol)

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Volume coming in strong today, looking for a break above $1.20 and this could run :pepepray:

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Running a bit premarket on this news… I may look for an exit today if this breaks up resistance levels past $1.30 as it could run to $2 before settling, anything under $1.20 is a good entry imo… (my basis is $1.21) Remember, pumpers have been in this stock and some even might have been waiting to “get out” as it has stayed between $1-1.20 for a while since the last run a few months back.

CEA Industries Inc. Signs Contract with Merida Capital Holdings Client

Louisville, Colorado, Oct. 04, 2022 (GLOBE NEWSWIRE) – CEA Industries Inc. (NASDAQ: CEAD, CEADW) (“CEA Industries” or the “Company”), a leader in controlled environment agriculture (CEA) systems engineering and technologies, today announced that its subsidiary, Surna Cultivation Technologies LLC (“Surna”), has signed a contract with a client of its previously announced partner, Merida Capital Holdings (“Merida”). The contract is incremental to Surna’s announced backlog of $9.7 million as of August 11, 2022.

In June of this year, the Company announced it had entered into an agreement with Merida in which Merida agreed to use the Company as its sole provider of certain products and services for Merida’s indoor cultivation facilities.

“Surna has had success as Merida’s go to provider of products and services for their indoor cultivation needs on several projects,” stated Tony McDonald, Chairman and CEO of CEA Industries Inc. “We are excited to further advance our partnership with Merida with the undertaking of this new project and we look forward to growing our relationship with the success of each of Merida’s client engagements.”

Surna will be providing a suite of HVAC systems for the Connecticut-based client. The systems include Surna’s EnviroPro™ air handlers, as well as heat recovery fan coils, dehumidifiers, humidifiers and circulating fans. Surna has previously provided mechanical engineering services for the client.

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Surna Cultivation Technologies and Hydrobuilder Holdings Announce Strategic Alliance

Surna Cultivation Technologies LLC and Hydrobuilder Holdings LLC have entered into a non-equity strategic alliance to create a O ne- S top - Shop for Cultivation Companies

Louisville, Colorado, Nov. 10, 2022 (GLOBE NEWSWIRE) – Surna Cultivation Technologies LLC, a subsidiary of CEA Industries Inc. (NASDAQ: CEAD), has entered into a non-equity strategic alliance, combining its industry leading controlled environment agriculture (CEA) systems engineering and technologies with Hydrobuilder Holdings’ expansive commercial-first omnichannel platform.

The alliance combines the strong architectural expertise, MEP design services, and curated line of HVACD products from Surna with Hydrobuilder Holdings facility programming (layouts) and deep catalogue of related consumables and equipment.

“Solidifying this relationship with Hydrobuilder Holdings is a breakthrough achievement for Surna,” stated Tony McDonald, Chairman and CEO of CEA Industries Inc. “Our combined offering can fully serve our customers with every conceivable service and product they would need to build out or refurbish an indoor cultivation facility. I am confident this will not only be of great value to our customers but will be a great source of growth for both our companies.”

“We have worked closely with Tony and the Surna team over the past few months to establish this value-added alliance that brings quality, convenience and simplicity to our customers,” said Dustin Bertram, Hydrobuilder Holdings’ Chief Commercial Officer. “Hydrobuilder Holdings brings decades of experience and a broad and deep catalogue of leading cultivation products, and we’re excited to expand our offerings to include Surna’s leading design services and HVACD products. The strength of our brands, combined with our technical expertise, industry knowledge and channel coverage will be a huge benefit for our customers.”

The takeaway I see with this alliance allows Surna to expand it’s verticals to provide for D2C on top on the B2B side that already exists. This implies a few things:

  • Increased opportunities to move inventory and speed up overall inventory turnover
  • Less long term reliance on B2B sales - Retail will indeed look towards more ways to cultivate their own agricultural endeavors and these products available at the retail level could run on tailwinds as we experience more seasonal crop failures due to extreme climate fluctuations as well as new policy on marijuana laws

This didn’t move the needle too much today, mainly because it’s only an announcement and doesn’t provide any guidance on how much revenue this will bring in. Bullish nonetheless on overall indoor agriculture becoming more of a “thing” with large and small scale operations.

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Day 2 of a potential breakout if it can push above the 50MA… This could have a little run if it breaks $1.10… Love to see that $21M in cash :slight_smile:

CEA Industries NASDAQ:CEAD reported quarterly losses of $(0.13) per share. The company reported $5.06 million in sales this quarter.

Management Commentary

“Q3 was highlighted by strong revenue growth on a sequential and year-over-year basis, reflecting both the benefit of our investments in sales and marketing this year and less disruption to our operations from past supply chain issues,” said Tony McDonald, Chairman and CEO of CEA Industries Inc. (CEAD) “We recently signed contracts with two non-cannabis vertical agriculture companies, which reflects our focus on diversifying the customer base beyond our traditional cannabis customers. Although we are proud of our sales growth, we acknowledge that the macro environment continues to present challenges as we work through a prolonged inflationary environment and certain residual supply chain headwinds.

“Last week, we announced a significant new non-equity strategic alliance with Hydrobuilder Holdings LLC, a leading omnichannel platform with 22 retail locations and 10 warehouses serving the indoor and outdoor CEA and hydroponics industry. This alliance will combine our industry-leading CEA systems engineering and technologies with Hydrobuilder Holdings’ expansive commercial-first omnichannel platform, creating a one-stop-shop solution for cultivation companies across North America.

“As we look ahead, we plan to continue executing on both our organic and inorganic growth initiatives. We have been judicious in our approach to M&A and our patience has paid off given the contraction in valuation multiples for many of the targets we have evaluated. We will continue to exercise diligence in identifying targets that will be accretive to our business and accelerate growth and profitability for the future.”

Third Quarter 2022 Financial Results

Revenue in the third quarter of 2022 increased 37% to $5.1 million compared to $3.7 million for the same period in 2021. The increase was primarily attributed to some recovery in the supply chain that enabled delivery of products with fewer delays.

Net bookings in the third quarter of 2022 were $2.2 million compared to $5.6 million in the year-ago period. The Company’s quarter-end backlog was $6.8 million compared to $9.9 million for the same period in 2021. This quarter-end backlog is expected to generate revenue over the next 18 months. The decrease in the Company’s net bookings and backlog for the third quarter of 2022 was primarily driven by fewer new orders to replace the Company’s backlog as it recognized revenue during the quarter.

Gross profit in the third quarter of 2022 was $0.6 million compared to $0.7 million for the same period in 2021. Gross margin was 11.8% compared to 20.2% in the year ago period. The decrease in gross margin was primarily driven by an increase in variable costs (which include the cost of equipment, external engineering costs, shipping and handling, and travel and warranty costs) as a percentage of revenue, as well as the reallocation of certain operating expenses to cost of goods sold.

Operating expenses in the third quarter of 2022 were $1.7 million compared to $1.2 million for the same period in 2021. The increase was primarily driven by higher selling, general and administrative expenses in support of organic and inorganic growth initiatives, and an increase in advertising and marketing expenses.

Net loss in the third quarter of 2022 was $1.0 million or $(0.13) per share, compared to a net loss of $0.4 million or $(1.69) per share for the same period in 2021. Net loss per share for the third quarter of 2022 was lower than the net loss per share in the year-ago quarter due to higher issued and outstanding shares as of the third quarter of 2022.

Cash and cash equivalents were $21.1 million on September 30, 2022, compared to $2.2 million on December 31, 2021, while working capital increased by $16.4 million during this period. The increase was primarily driven by net proceeds from the Company’s sale of common stock and warrants of approximately $24 million in February 2022. At September 30, 2022, the company remained debt free.

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Surna Cultivation Technologies Awarded Third Consecutive Contract with Cultivation Facility in Massachusetts

New $1.7 Million Contract Includes a Full Suite of HVACD Equipment with Air Handlers, Fan Coils, Chillers and Dehumidifiers, Among Others

Surna Cultivation Technologies LLC (“Surna”), a leader in controlled environment agriculture (CEA) systems engineering and technologies, and a subsidiary of CEA Industries Inc. (NASDAQ: CEAD), today announced that it has signed its third consecutive contract with a Northeast cultivation facility.

“We are pleased to announce a signed contract for $1.7 million with a large cultivation facility in Massachusetts,” said Jon Kozlowski, Surna’s Vice President of Sales. “Earlier this year, we performed mechanical engineering services for this 36,000 square feet of cultivation and processing space, followed by a benching contract. As we have consistently delivered on time and on budget, the client has continued to contract with us in each phase of their build-out.”

Surna was selected by the client based on Surna’s expertise in cultivation facility design and equipment options. The first contract provided mechanical engineering design services that included professional engineer (PE) stamped drawings. The second contract earlier this year was for benching equipment, including installation, with a value of $615,000. This most recent contract includes HVACD equipment for the flower, veg, mother, clone, and dry/cure rooms, as well as cannabis processing rooms including extraction, packaging, production kitchen and trim room spaces. As part of the HVACD equipment order, Surna is providing its EnviroPro™ air handlers, IsoStream® fan coils, Surna by Anden dehumidifiers and humidifiers, dry coolers, chillers, and airflow equipment.

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Refinitiv/Verus initiates coverage for CEA INDUSTRIES ORD SHS with SELL recommendation.

On December 5, 2022 Refinitiv/Verus initiated coverage for CEA INDUSTRIES ORD SHS with a SELL recommendation.

Still like the stock: Cash/sh 2.76

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Nice clip by the Chairman & CEO, Tony McDonald, speaking to them moving into other agriculture verticals like food as well as some strong partners in the weed space.

CEA Industries shares new diversification in indoor cultivation facilities

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Currently breaking out on no news as far as I know. This always had potential for a pump and had flattened for a while around $1. Would love to see this volume continue, let the party start @ $1.21 :pepepray:

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Following up on this, yesterday was a confirmed breakout with a high of $1.19 on above average volume. The catch is that there is no news afaik and this ticker can move quick on volume. I’ll be looking to see if we can hold above $1.10 today with strong resistance around $1.20. I still have my original position and baring any news I’ll be looking to either exit or scale out on any breakout to the upside as this play has taken longer than I anticipated.

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Headline sounds like big news, dropping here then going to dig in but we’re already almost at $1 ask pre-market and this couldn’t have come any sooner with 28 days having closed below $1. I’ll likely exit if this runs above or close $1.21 (my cost basis).

Surna Cultivation Technologies Awarded Largest Design Contract in Company History

Surna Cultivation Technologies LLC (“Surna”), a leader in controlled environment agriculture (CEA) systems engineering and technologies, and a subsidiary of CEA Industries Inc. (NASDAQ: CEAD), today announced that it has signed a contract valued at $335,400 to provide architectural and engineering design services to a cannabis cultivator located in the Southeastern United States.

Under the contract, Surna has been commissioned to provide design services for a 60,0000 sq. ft. cannabis cultivation facility and a 20,000 sq. ft. processing facility that are parts of a larger operation including greenhouse production and retail. Surna’s services will include a full architectural design package and MEP (mechanical, electrical, and plumbing) engineering. Valued at over three hundred thousand dollars, the agreement marks the single largest design contract in the Company’s history. Construction is expected to be completed in 2023.

“As a leading provider of cannabis cultivation facility design solutions, we are grateful for the opportunity to play a role in the development of one of the largest cannabis operations in the Southeastern region of the United States,” said Jon Kozlowski, Vice President of Sales for Surna. “This operator has placed its trust in us to provide a design that will serve their energy efficiency and product quality needs, and we look forward to seeing this project come to life.”

CEA Industries Inc. CEO Tony McDonald added “I am very proud of our team for winning this substantial contract in the midst of a difficult time in the CEA industry. This project demonstrates that quality projects continue to be developed to serve the long-term growth of the industry.”

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