CEA Industries Mounts "Poison Pill" Defense Against YZi Labs Takeover

LOUISVILLE, CO – December 28, 2025 – CEA Industries Inc. (BNC), a company notable for managing the world's largest corporate treasury of BNB, has initiated a powerful defensive strategy against a looming boardroom battle. The company announced today that its Board of Directors unanimously adopted a stockholder rights plan, colloquially known as a “poison pill,” and amended its corporate bylaws in a direct response to a stockholder group seeking to seize control of the company.

The move escalates a tense standoff with YZi Labs Management Ltd. and its newly formed “YZi Labs Group,” which has openly declared its intention to gain a majority on CEA's board. The defensive measures, adopted on December 26, are designed to prevent a takeover without a substantial premium being paid to all stockholders, effectively drawing a line in the sand for the aspiring activist investors.

The Activist Threat and Warrant Arsenal

The board's decisive action follows recent filings by YZi Labs that signaled a clear intent to challenge the current leadership. On December 23, YZi Labs filed an amended Schedule 13D with the U.S. Securities and Exchange Commission (SEC), officially reporting the formation of a group with seven proposed director nominees. While the YZi Labs Group currently holds a reported 7.0% of CEA's outstanding common stock, its potential influence is magnified by a significant cache of warrants.

According to the company's press release, this arsenal of warrants could dramatically alter the ownership landscape. The group holds in-the-money warrants that, upon exercise, would allow it to acquire over 11.3 million shares at a negligible price of $0.00001 per share. This action alone would catapult the group's aggregate ownership to 19.99%, just shy of a critical threshold.

Furthermore, the YZi Labs Group possesses out-of-the-money warrants for an additional 11 million shares. If exercised along with their other holdings, their total stake could surge to a commanding 34.2% of the company’s common stock on a diluted basis. This potential to rapidly accumulate a controlling stake without negotiating with the board appears to be the primary catalyst for CEA's defensive posture.

Deconstructing the "Poison Pill" Defense

The newly adopted stockholder rights plan is a classic, yet potent, corporate defense mechanism. It is designed to make a hostile takeover prohibitively expensive and highly dilutive for the acquiring party. The plan will issue one preferred share purchase right for each outstanding share of common stock as of January 8, 2026. These rights remain dormant, trading with the common stock, until a specific trigger event occurs.

The trigger is set at a 15.0% ownership threshold. If any person or group acquires 15.0% or more of CEA's common stock in a transaction not approved by the board, the rights become exercisable. In a crucial detail, the YZi Labs Group’s current holding is “grandfathered,” meaning their existing stake does not trigger the plan. However, the pill will be activated if the group increases its ownership beyond the 15% threshold.

Should the plan be triggered, every other stockholder—excluding the acquiring group—will be entitled to purchase additional shares of CEA's stock at a 50% discount. This flood of new, discounted shares would massively dilute the acquirer's stake, crippling their voting power and making the takeover financially unpalatable. The plan also contains a “flip-in” provision that would allow rights holders to buy shares of an acquiring company at a discount if a merger occurs, further protecting shareholder value. The board retains the option to redeem the rights for a nominal fee, giving it a tool for negotiation if a suitable offer is presented. This limited-duration plan is set to expire on December 26, 2026.

New Rules for a Corporate Contest

In addition to the poison pill, CEA's board has amended and restated the company's bylaws, specifically targeting the tactics YZi Labs intends to use. YZi Labs has filed a preliminary consent statement, a method that allows stockholders to take action—such as replacing directors—without holding a formal meeting. This can be a faster, more aggressive route to seizing control.

The new bylaws are intended to ensure what the company calls an “orderly and informed consent solicitation.” Under the new rules, any stockholder seeking to act by written consent must first formally request that the company set a record date. They must also provide the same detailed information that would be required for proposing actions at a traditional annual meeting. Critically, the new bylaws impose a 60-day time limit from the receipt of the first consent for all necessary consents to be collected, preventing an open-ended and potentially disruptive campaign.

While CEA Industries states that these measures are not intended to prevent YZi Labs from making its case to stockholders, the practical effect is to slow the process down, level the playing field, and force the activist group's campaign into a more structured and transparent framework. The company has announced it will file its own consent revocation statement, accompanied by a YELLOW card, urging stockholders to reject YZi Labs' proposals. This sets the stage for a direct proxy battle, where both sides will vie for the support of shareholders in a fight for the future direction of the BNB treasury giant.