BNC News & Events

CEA Industries announced that its board of directors has made a proposal to 10X Capital to amend the company's asset management agreement, or AMA. Among other enhancements, the board is seeking lower management fees, a shorter term and a more favorable termination provision. 10X has indicated its willingness to work cooperatively with the company to amend the AMA, and the company seeks to resolve these discussions expeditiously. The board believes that an amended AMA, including a more cost-efficient structure, will enhance operational flexibility and support long-term value creation. The board looks forward to constructive discussions to renegotiate the AMA for the benefit of all stockholders. The board's proposal follows a comprehensive review of the AMA and related matters, during which the board evaluated the structure and terms of the agreement and developed a detailed plan for reform. After YZi Labs publicly confirmed the termination of its Secret Side Agreement with 10X, which had restricted 10X from agreeing to amendments, the board is moving forward with its proposal.

YZILabs Management delivered a letter to 10X Capital Asset Management, its affiliated entities, and certain related individuals regarding its significant concerns that 10X Capital appears to have breached Sections 13(d) and 16(a) of the Securities Exchange Act of 1934 in connection with 10X Capital's ownership of shares of common stock of CEA Industries. YZi said, "Section 13(d)(1) of the Exchange Act requires a person to file a Schedule 13D within five business days of such person's ownership exceeding 5% of a public issuer's outstanding stock. Section 13(d)(3) of the Exchange Act requires that when two or more persons or entities act together with respect to the acquisition, holding, or voting of a public company's securities, their beneficial ownership is aggregated for purposes of determining their disclosure obligations. Based on publicly available information, YZi Labs believes that 10X Capital has beneficially owned in excess of 5% of BNC's outstanding common stock since at least late 2025 and has failed to file a Schedule 13D disclosing the formation of such group. In addition, it is unclear whether Hans Thomas, a Founding Partner of 10X Capital and a director of BNC, beneficially owns any BNC securities. Despite currently serving as a director of the Company, Mr. Thomas has not filed a Form 3 with the Securities and Exchange Commission and therefore has not complied with his initial ownership reporting obligations under Section 16(a) of the Exchange Act. In contrast, YZi Labs promptly filed its initial Schedule 13D with the SEC on November 26, 2025, within the required timeframe, based upon the Company's share repurchases pushing YZi Labs over the 5% reporting obligation threshold. Subsequently and in response to the Company's FY Q2 2026 Form 10-Q, which disclosed the issuance of approximately 1,300,000 outstanding shares, YZi Labs' direct ownership fell below the 5% threshold. YZi Labs decided to form a group with certain other shareholders for purposes of Section 13(d)(3), in order to maintain the consent solicitation process and the ability to exercise certain rights under Nevada law. To be clear, YZi Labs has at all times filed its initial Schedule 13D and amendments thereto within the timeframes required under Section 13(d) of the Exchange Act."

CEA Industries responded to false claims made by YZILabs Management about the company's compliance with Nasdaq Stock Market rules regarding the date of the company's Annual Meeting of Stockholders: "BNC is in full compliance with Nasdaq Rule 5620(a). Nasdaq rules also allow the company to submit a plan to regain compliance if the Annual Meeting has not been held by the fiscal year end. Given that our fiscal year does not even end for two more months, YZi Labs' reckless claim that the company is at risk of delisting is self-evidently false. Furthermore, contrary to YZi Labs' implication that the change to the company's fiscal year end was intended to disadvantage or thwart YZi Labs, the company transitioned its fiscal year end on June 29, 2025 - well before YZi Labs had acquired a single share of BNC stock - to align with the fiscal year end of the company's then-largest operating business. This change was approved in accordance with applicable law and was properly disclosed to all stockholders on a Form 8-K filed on July 3, 2025. We are disappointed that YZi Labs would resort to promoting baseless conspiracy theories that it knows, or should know, are false. The company will not be drawn into inflammatory public exchanges and remains focused on disciplined governance, long-term value creation and acting in the best interests of all stockholders."

CEA Industries requests YZILabs Management Ltd. and 10X Capital Asset Management LLC to confirm that their secret side agreement relating to 10X's asset management agreement with BNC has been terminated. The Secret Side Agreement, which was partially disclosed to the company and its stockholders four months after it was signed, diverts a portion of the fees paid to 10X under the AMA to YZi Labs in exchange for no defined services. The Board believes that the Secret Side Agreement has the effect of increasing the overall cost of the AMA to the company and its stockholders without any commensurate benefit, and a revised AMA will provide the company greater flexibility in the execution of its BNB-dedicated treasury strategy. BNC's Board of Directors has been seeking to renegotiate the AMA with 10X to improve the terms for the benefit of the Company and its stockholders. In particular, the Board seeks amendments to the AMA, including its provisions concerning fees, term and termination. However, 10X has claimed that the Secret Side Agreement prevents it from renegotiating those terms without the consent of YZi Labs. While YZi Labs purports to have unilaterally terminated the Secret Side Agreement, 10X has told the Company that it believes YZi Labs' termination may not be effective. The Board is therefore requesting that YZi Labs and 10X each confirm their mutual termination of the Secret Side Agreement, which will then permit the Company to begin negotiations with 10X to amend the AMA. The company has provided 10X a form of termination agreement. 10X has indicated that it is willing to terminate the Secret Side Agreement and renegotiate the AMA, including with respect to the magnitude of the management fees.