CEA Industries Deploys 'Poison Pill' to Thwart Activist Takeover

NEW YORK, NY – December 29, 2025 – In a dramatic move to defend against a hostile takeover, the board of CEA Industries Inc. (NASDAQ: BNC) has unanimously adopted a limited duration stockholder rights plan, commonly known as a “poison pill.” The defensive measure, enacted on December 26, is a direct response to an aggressive campaign by activist investor YZi Labs Group to seize control of the company’s board of directors, placing the future of the world’s largest corporate treasury of BNB cryptocurrency at the center of a high-stakes corporate showdown.

The board’s action aims to prevent YZi Labs, which currently holds 7.0% of CEA's common stock, from gaining a controlling stake without offering a fair premium to all shareholders. The unfolding battle highlights a deep rift over the company's strategic direction, management of its vast digital assets, and persistent stock underperformance, setting the stage for a contentious proxy fight.

The Activist's Gambit

The conflict escalated on November 27, 2025, when YZi Labs Management Ltd. filed a preliminary consent statement with the U.S. Securities and Exchange Commission (SEC). The filing revealed the group's intention to expand CEA’s board and install its own slate of seven director nominees, a move that would effectively grant it majority control. YZi Labs, which has ties to prominent crypto figure Changpeng “CZ” Zhao, has been vocal in its criticism of the current leadership.

In public statements, YZi Labs has cited “weak strategic execution, inadequate investor communication, and a lack of effective oversight” as primary drivers for its campaign. The group argues that these failures have led to CEA Industries' poor stock performance, despite the significant appreciation of its primary asset, BNB. YZi Labs contends that new, experienced directors are “urgently needed to unlock BNC’s true value.”

Specific grievances include delays in SEC filings, a lack of transparency regarding the company’s Net Asset Value (NAV), and what YZi Labs calls “ongoing confusion” about the company’s core strategy. The activist investor has also leveled accusations of mismanagement against 10X Capital, CEA Industries' asset manager, particularly concerning its handling of the BNB treasury, demanding corrective action from the board.

A 'Poison Pill' Defense

In response, CEA Industries’ board has drawn a clear line in the sand. The newly adopted Rights Plan is a powerful defensive tool designed to make a hostile acquisition prohibitively expensive. It is triggered if any entity acquires 15.0% or more of the company's outstanding common stock without the board's approval. Should this threshold be crossed, the plan allows all other shareholders to purchase additional shares at a 50% discount, massively diluting the acquirer's stake and economic power.

This “poison pill” is not designed to prevent a sale of the company but rather to force any potential suitor, including YZi Labs, to negotiate directly with the board. The board stated the measure is intended to “protect stockholders from coercive or otherwise unfair takeover tactics” and ensure they receive a fair control premium. The plan is a temporary measure, set to expire on December 26, 2026.

In addition to the Rights Plan, the board also amended and restated the company’s bylaws. The new bylaws introduce specific procedures for stockholder consent solicitations, such as the one initiated by YZi Labs. These rules now require a fixed record date and a strict 60-day window for consent submissions, measures aimed at preventing what the company sees as disruptive and destabilizing tactics by activist shareholders.

The Billion-Dollar Crypto Cache

At the heart of this corporate struggle lies CEA Industries' unique and immensely valuable asset: its digital asset treasury. The company has publicly positioned itself around its BNB-focused strategy, having amassed the largest known corporate holding of the cryptocurrency. As of late 2025, the company reported holding approximately 515,054 BNB tokens.

This treasury's value has been subject to the crypto market's dramatic volatility. During a peak in mid-December, when BNB’s price surged to an all-time high of $1,330, CEA's holdings were valued at over $611 million. This digital fortune is central to both the company's identity and the current conflict. CEA’s CEO, David Namdar, has described BNB not merely as a token but as the “fulcrum of a massively integrated ecosystem,” justifying its strategic importance.

However, this is precisely where YZi Labs' criticism is sharpest. The activist investor, which initially invested based on the promise of the BNB strategy, now alleges that management has failed to communicate the value of this treasury effectively or manage it with sufficient transparency. The control of this digital asset portfolio is arguably the ultimate prize in this boardroom battle.

Market Volatility and Shareholder Stakes

The dispute is unfolding against a backdrop of severe stock price volatility for CEA Industries (BNC). After announcing its BNB treasury strategy in July 2025, the stock peaked at $57.59. However, it subsequently plummeted, hitting an all-time low of $4.65 in November. By the time YZi Labs launched its consent solicitation, the stock was trading under $7.00, a fraction of its former high.

This precipitous drop has fueled investor discontent and provided YZi Labs with a powerful argument that the current board and management are failing to translate the treasury's value into shareholder returns. While the stock saw a brief 8% climb after a positive treasury update in mid-December, it has remained under pressure, closing at $6.67 on the day the poison pill was announced.

The board’s defensive maneuvers have now formally initiated a shareholder showdown. The coming weeks will likely see both sides engage in an intense campaign to win the support of retail and institutional investors. The outcome will not only determine the composition of CEA Industries' board but will also set a crucial precedent for how companies with significant, unconventional assets like cryptocurrency treasuries navigate the pressures of shareholder activism and the open market.