Shareholder Showdown: 'Poison Pill' at CEA Industries Sparks War with Investor YZi Labs

ROAD TOWN, British Virgin Islands – January 05, 2026 – A bitter corporate governance battle has erupted between CEA Industries Inc. (NASDAQ: BNC) and one of its significant stockholders, YZi Labs Management Ltd. The dispute escalated dramatically after YZi Labs publicly condemned the BNC board for adopting a “poison pill” and other defensive bylaws, actions the investment firm decries as a blatant attempt to entrench the current leadership and disenfranchise shareholders.

The conflict places a spotlight on the strategic direction of CEA Industries, a company that recently underwent a radical transformation from a vape manufacturer into a digital asset treasury firm focused on accumulating BNB, the native token of the Binance ecosystem. YZi Labs, an investment firm with ties to Binance founder Changpeng Zhao and a key participant in the financing that enabled this pivot, is now leading an activist campaign to overhaul the company’s board, setting the stage for a critical confrontation over control and credibility.

A Board Fortifies Its Defenses

The immediate catalyst for the public feud was the CEA Industries board's decision in late December 2025 to implement a limited-duration stockholder rights plan, colloquially known as a “poison pill.” This classic anti-takeover measure is designed to make a hostile acquisition prohibitively expensive. The plan triggers if any single investor or group acquires 15% or more of BNC’s stock without board approval, allowing other shareholders to buy additional shares at a steep discount, thereby diluting the activist's stake.

In a fiery press release, YZi Labs, which holds a significant stake with warrants to acquire more, blasted the move. “YZi is disappointed that the Board seems more focused on defensive measures to entrench itself rather than meaningfully engaging in good faith with one of its largest stockholders,” the firm stated. YZi argues these measures, along with newly amended bylaws that create procedural hurdles for stockholders wishing to act by written consent, are “stockholder-unfriendly” and add “unnecessary constraints and procedural burdens that go beyond the requirements of Nevada law.”

For its part, CEA Industries has framed these actions as a necessary defense to protect shareholder value. In prior communications, the company asserted the measures were adopted to ensure the board can manage unsolicited takeover attempts and provide an “orderly process” for any change in control, preventing an acquisition without a fair premium for all shareholders.

Adding to the tension is the scheduling of the company's 2025 Annual Meeting. YZi Labs has pointed out that the meeting is already delayed past its typical December anniversary, and urged the board “not to engage in any further manipulative behavior” regarding its scheduling. This meeting is now viewed as the ultimate battleground where stockholders will have the chance to vote on the board’s composition.

A Digital Treasury at a Strategic Crossroads

At the heart of the conflict lies a fundamental disagreement over corporate strategy and executive transparency. CEA Industries pivoted its entire business model in mid-2025, rebranding from VAPE to BNC and raising $500 million in a private placement—with both YZi Labs and investment firm 10X Capital as key participants—to build a digital asset treasury (DAT) centered on BNB. The stated goal was to acquire 1% of the total BNB supply.

Despite the company accumulating over 500,000 BNB tokens and a significant rise in the token's price, BNC’s stock has plummeted, falling approximately 89% from its July 2025 peak. YZi Labs attributes this stark underperformance to “weak strategic execution, insufficient communication with investors, and a lack of effective oversight” by a board it feels has betrayed its mandate.

The most explosive allegation from YZi Labs directly challenges the board’s credibility. The investment firm flatly rejected BNC’s previous claim that it “has never considered an alternative token for the Company’s digital asset treasury.” YZi countered this by pointing to specific comments allegedly made by BNC CEO David Namdar at the Cantor Crypto & AI/Energy Infrastructure Conference in November 2025, where he supposedly “contemplated switching to other crypto assets, such as Solana.”

This apparent contradiction has fueled YZi's claims of mismanagement and potential conflicts of interest, suggesting the leadership team may not be fully committed to the BNB-centric strategy that shareholders invested in. The strategic debate between BNB, which leverages the vast Binance ecosystem, and Solana, known for its high-performance blockchain targeting institutional finance, represents a significant crossroads. For investors, a potential, unannounced pivot carries massive implications for the company's risk profile and future prospects.

An Activist Campaign Gathers Steam

This boardroom drama is quickly shaping up to be a textbook case of shareholder activism in the modern crypto era. YZi Labs has made its intentions clear: it is not a passive investor. The firm has already filed a preliminary consent statement with the SEC to solicit stockholder support to expand the BNC board and elect its own slate of directors. It claims to have the support of other concerned stockholders who feel let down by the current leadership.

The board itself is relatively new, with an average tenure of less than a year for both management and directors following the strategic pivot. Several members, including CEO David Namdar and CIO Russell Read, also hold senior positions at 10X Capital, the firm that manages BNC's digital asset treasury, raising further questions about governance and alignment.

With both sides digging in, the focus now shifts entirely to the stockholders. YZi Labs is appealing directly to them, promising an opportunity “to elect new board members at the 2025 Annual Meeting.” Meanwhile, the BNC board, armed with its new poison pill and restrictive bylaws, appears prepared for a protracted fight to maintain control. The outcome of this struggle will not only decide the leadership and strategic path of CEA Industries but will also serve as a crucial test case for shareholder rights and board accountability in the increasingly high-stakes world of corporate digital asset treasuries.