BNCWW

CEA Industries Inc. Warrants represent the right to purchase shares of CEA Industries common stock at a predetermined exercise price during a specified time period. These warrants were issued as part of previous financing transactions and provide holders with leveraged exposure to CEA Industries' prospects in the controlled environment agriculture (CEA) equipment and cannabis cultivation equipment markets. The warrants trade separately from the common stock and appeal to investors seeking amplified participation in potential share price appreciation. As derivative securities, these warrants' value derives from the underlying CEA Industries common stock price. When the stock price rises above the warrant's exercise price, the warrants gain intrinsic value. Additionally, warrants possess time value based on the remaining exercise period and expected stock volatility. This leverage characteristic enables warrants to deliver larger percentage returns than the underlying stock during appreciation periods, though they also carry higher risk, potentially declining more sharply during downturns and expiring worthless if the stock price remains below the exercise price at expiration. CEA Industries provides equipment and systems for controlled environment agriculture including indoor farming and cannabis cultivation facilities. The company's performance depends on growth in indoor agriculture adoption, cannabis cultivation market dynamics, product competitiveness, customer acquisition, and execution on operational improvements. Positive developments such as expanding market share, securing significant customer contracts, improving profitability, cannabis market growth, or broader adoption of CEA technologies could drive stock price appreciation benefiting warrant holders. These instruments suit investors with higher risk tolerance who believe in the long-term growth of controlled environment agriculture and cannabis cultivation markets and CEA Industries' ability to capture market opportunity. However, warrant holders face risks including cannabis regulatory uncertainties, market volatility, company execution challenges, and the warrants' expiration creating time-limited investment horizons.