CEA Industries Inc.BNC

CEA Industries Inc. Debt Disclosure

10-KFiled Jun 23, 20263 min read
Note 5 — Debt Obligations
The Company's debt obligations consisted of the following:
Successor
April 30, 2026
Weighted AverageCollateral
Carrying ValueOutstanding Face AmountMonth IssuedFinal Stated MaturityFunding CostLife (Years)Carrying Value
Related Party Notes Payable
Current
Tax Indemnification Note(A)
$
368 
$
368 
Jun-2025
n.a.
— 
%
n.a.
$
— 
Promissory Note(B)
759 
759 
Jun-2025
Nov-2026
7.0 
0.5
n.a.
Total current notes payable, gross
1,127 
1,127 
4.7 
0.5
— 
Unamortized deferred financing costs(C)
(44)
— 
Total current notes, net
1,083 
1,127 
Non-Current
Convertible Promissory Note(D)
758 
758 
Jun-2025
Jun-2027
7.0 
1.1
n.a.
Total non-current notes payable
758 
758 
7.0 
1.1
— 
Unamortized deferred financing costs(C)
(5)
— 
Total non-current notes, net
753 
758 
Total, net
$
1,836 
$
1,885 
$
— 
A.The $0.4 million note with the Selling Fat Panda Shareholders does not bear interest and does not have a fixed maturity date. The Company must repay the note in full within 15 days following the date that Canada Revenue Agency issues a letter confirming a certain tax liability does not exist in connection with the Fat Panda Acquisition. Conversely, the note payable is reduced in the amount of any tax liability assessed.
B.The $0.8 million interest-only note with the President of Fat Panda bears interest at 7.0% per annum, payable monthly.
C.During the period from June 7, 2025 through April 30, 2026, the Company amortized a total of $0.1 million of deferred financing costs for both the Related Party Notes Payable above as well as the Fat Panda Bridge Loan, which the Company repaid in full.
D.The $0.8 million convertible note with the President of Fat Panda bears interest at 7.0% per annum. The President of Fat Panda may elect to convert the note into shares of the Company's common stock at a conversion price of $19.00 per share until June 1, 2027. If no election occurs by that date, the Company must pay the entire principal plus interest in cash. At April 30, 2026, the Company accrued $— million of unpaid interest in "Other non-current liabilities" in the Consolidated Balance Sheets.
Maturities
Contractual maturities of the Company's debt obligations at April 30, 2026, are as follows:
Fiscal Years Ending April 30,
Total(A)
2027
$
759 
2028
758 
Total
$
1,517 
A.All debt obligations are recourse to the Company. Excludes the Tax Indemnification Note, which does not have a stated maturity.
Covenants
The Company's debt obligations contain customary representations and warranties, financial and non-financial covenants, and event of default provisions. The Company complied with all of its debt covenants at April 30, 2026.
Debt Activities
Other Debt Activities
In connection with the Fat Panda Acquisition, the Company entered into a nine-month loan facility on June 4, 2025 with CEAD Panda Lender LLC, a United States based lender, under which it borrowed $4.0 million ("Fat Panda Bridge Loan"). The Company fully repaid borrowings on December 4, 2025 and incurred total interest expense of $0.7 million in connection with the facility.
See Note 11 for information regarding a master loan facility into which the Company entered on April 30, 2026 and under which it received proceeds on May 1, 2026.
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Historical Timeline

Fiscal YearFiled
2026Jun 23, 2026Showing above
2022Mar 28, 2023
2018Mar 19, 2019
2016Mar 31, 2017

About Debt Disclosures

Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.

Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.

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