CEA Industries Inc. 8-K

What Happened

• On June 11, 2026 (filed June 17, 2026), CEA Industries Inc. announced that management and the Audit Committee concluded certain previously filed quarterly financial statements should no longer be relied upon because of an error in calculating the weighted‑average shares used to compute basic and diluted EPS. The affected reports were the Form 10‑Qs originally filed Dec. 15, 2025 (covering the three months ended Oct. 31, 2025 and related successor/predecessor periods) and Mar. 16, 2026 (covering the three months ended Jan. 31, 2026 and related periods).
• The company says the error understated weighted‑average shares and therefore led to misstated EPS in multiple periods. CEA intends to file amended Form 10‑Qs to restate the affected financial statements and related disclosures. Management discussed the matter with the company’s independent auditor, Sadler, Gibb & Associates, LLC.

Key Details

• Three months ended Oct. 31, 2025: weighted average shares understated by 2,214,508 shares; basic and diluted EPS were overstated by $0.21.
• Second Quarter Successor period (June 7–Oct. 31, 2025): basic shares understated by 1,857,056 and diluted by 857,057; basic and diluted EPS overstated by $0.45.
• Three months ended Jan. 31, 2026: weighted average shares understated by 2,376,236 shares; EPS understated by $0.08.
• Third Quarter Successor period (June 7, 2025–Jan. 31, 2026): basic and diluted weighted average shares understated by ~21,806,662–21,806,663 shares; basic EPS overstated by $4.26 and diluted EPS overstated by $4.21.
• The error did NOT affect net income (loss), total assets, total liabilities, stockholders’ equity, revenue, cash flows, or net income (loss) available to common stockholders.

Why It Matters

• EPS is a commonly used metric for evaluating quarterly results and valuation multiples (e.g., P/E). These misstatements—particularly the large impact in the Third Quarter Successor period—can materially change per‑share performance and comparisons across periods even though the company’s reported net income and balance sheet items are unchanged.
• Investors should watch for the amended Form 10‑Qs and any supplemental disclosures; those filings will show corrected EPS and may affect analyst estimates, per‑share metrics, and short‑term stock valuation. The Audit Committee and independent auditor have been involved, and the company plans to correct the records.