YZILabs Accuses 10X Capital of Violating Securities Act
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 18 2026
0mins
Should l Buy BNC?
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."
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy BNC?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on BNC
About BNC
CEA Industries Inc. is a growth-oriented company focused on building businesses in regulated consumer markets. It focuses on the Canadian nicotine vape industry. The Company, through its subsidiary, Surna Cultivation Technologies LLC, is focused on selling environmental control and other technologies and services to the Controlled Environment Agriculture (CEA) industry. Its service and product offerings include floor plans and architectural design of cultivation facilities; licensed mechanical, electrical, and plumbing (MEP) engineering of commercial scale environmental control systems specific to cultivation facilities; process cooling systems and other climate control systems; air handling equipment and systems; benching and racking solutions for indoor cultivation; and others. The Company also provides capital, operational expertise, and strategic resources to accelerate retail expansion, strengthen e-commerce infrastructure, and drive value creation in performance-driven sectors.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
10X Capital's Concealed Ownership Exceeds 5% Threshold Raises Concerns
- Lack of Ownership Transparency: YZi Labs highlights that 10X Capital and its affiliates own over 5% of the company without SEC-required disclosure, potentially violating securities laws and undermining investor confidence.
- Board Actions Raise Questions: The unanimous adoption of aggressive governance measures by the board suggests the possibility of undisclosed 'group' actions, necessitating further investigation to protect shareholder rights.
- Warrant Exercise Data Reveals Issues: The reported exercise of 2,376,236 warrants closely aligns with holdings of 10X BNB Cayman Sponsor, indicating that they may have crossed the 5% ownership threshold by late 2025.
- Regulatory Compliance Failures: Hans Thomas, the controller of 10X Capital, has not filed the required SEC Form 3, exacerbating concerns over ownership transparency and potentially leading to legal repercussions.
See More
10X Capital's Undisclosed Ownership Exceeds 5%, Raising Concerns
- Ownership Exceeding Threshold: Recent filings indicate that 10X Capital and its affiliates have surpassed the 5% ownership threshold, raising serious concerns about their transparency and compliance, potentially violating SEC regulations and impacting corporate governance.
- Board Actions Raise Doubts: The unanimous adoption of aggressive governance measures, including a poison pill, by the company's board suggests possible coordinated actions among insiders, exacerbating concerns over the company's transparency.
- Undisclosed 'Group' Issues: The overlapping ownership between 10X Capital and other insiders may indicate the existence of an undisclosed shareholder 'group' that could require disclosure under Section 13(d) of the SEC, affecting investor confidence.
- Regulatory Compliance Risks: The failure of 10X Capital and its controller Hans Thomas to file necessary SEC documents as required may lead to legal repercussions, further damaging the company's reputation and impacting shareholder rights.
See More
CEA Industries Reveals Secret Agreement with YZi Labs
- Secret Agreement Disclosure: CEA Industries Inc. (NASDAQ:BNC) has raised concerns over a secret agreement with YZi Labs that was not disclosed to the board or shareholders due to confidentiality clauses, potentially undermining investor confidence.
- Missing Fee Information: The partial disclosure of the agreement lacks details on the fees YZi Labs is entitled to receive, which may raise concerns among shareholders regarding the company's financial management and could negatively impact stock performance.
- Shareholder Action Call: The company is urging YZi Labs to promptly release the full agreement to address shareholder demands for transparency; failure to do so may lead to shareholder dissatisfaction and possible legal actions.
- Future Outlook Risks: The company’s forward-looking statements highlight multiple risks, including the ability to keep pace with technological advancements and changing market needs, which could result in actual performance deviating significantly from expectations, thereby increasing investment uncertainty.
See More
YZi Labs Raises Compliance Concerns Against 10X Capital
- Compliance Issues Raised: YZi Labs formally delivered a letter to 10X Capital, highlighting potential breaches of Sections 13(d) and 16(a) of the Exchange Act due to failure to disclose ownership exceeding 5% of CEA Industries Inc., which could undermine investor confidence.
- Lack of Ownership Transparency: YZi Labs believes that 10X Capital has beneficially owned over 5% of BNC's shares since late 2025 without filing Schedule 13D, leading to a lack of transparency regarding their ownership and potentially attracting regulatory scrutiny.
- Board Governance Risks: Hans Thomas, a founding partner of 10X Capital and a director of BNC, has not filed Form 3 as required, failing to meet initial ownership reporting obligations, which may affect the stability and transparency of the company's governance structure.
- Protection of Shareholder Rights: YZi Labs emphasizes that timely disclosures are essential for protecting shareholder rights and maintaining market integrity, urging 10X Capital and Thomas to immediately disclose their ownership to ensure market transparency and fairness.
See More
YZi Labs Raises Compliance Concerns Against 10X Capital
- Compliance Issues Raised: YZi Labs formally delivered a letter to 10X Capital, highlighting potential breaches of Sections 13(d) and 16(a) of the Securities Exchange Act regarding their ownership of CEA Industries Inc. stock, which could jeopardize their management role in public companies.
- Disclosure Failures: YZi Labs asserts that 10X Capital has beneficially owned over 5% of BNC shares since late 2025 without filing the required Schedule 13D, indicating significant lapses in transparency and compliance that may erode shareholder trust in corporate governance.
- Board Election Implications: YZi Labs has filed a preliminary consent statement to expand the BNC Board and nominate new members, aiming to leverage the compliance issues to push for improvements in governance structures and ensure shareholder rights are protected.
- Legal Obligations Emphasized: YZi Labs stresses that timely SEC disclosures are essential for protecting shareholder rights and maintaining market integrity, urging 10X Capital and its director Hans Thomas to promptly disclose their ownership to restore market confidence.
See More
BNC Confirms Full Compliance with Nasdaq Rules
- Compliance Statement: BNC confirms full compliance with Nasdaq Rule 5620(a), asserting that its plan to hold the Annual Meeting before the fiscal year-end is compliant, effectively countering YZi Labs' false claims and safeguarding its market reputation.
- Fiscal Year Adjustment Context: The company transitioned its fiscal year-end on June 29, 2025, to align with its largest operating business, a move legally approved prior to YZi Labs acquiring shares, demonstrating transparency and compliance in governance.
- Rebuttal of False Claims: BNC expressed disappointment over YZi Labs' baseless allegations, emphasizing its focus on long-term value creation and shareholder interests, thereby maintaining its corporate image and market trust.
- Future Outlook: BNC plans to continue adhering to Nasdaq compliance requirements and will submit a plan to regain compliance if necessary, ensuring the company remains competitive and compliant in a changing market environment.
See More
10X Capital's Concealed Ownership Exceeds 5% Threshold Raises Concerns
- Lack of Ownership Transparency: YZi Labs highlights that 10X Capital and its affiliates own over 5% of the company without SEC-required disclosure, potentially violating securities laws and undermining investor confidence.
- Board Actions Raise Questions: The unanimous adoption of aggressive governance measures by the board suggests the possibility of undisclosed 'group' actions, necessitating further investigation to protect shareholder rights.
- Warrant Exercise Data Reveals Issues: The reported exercise of 2,376,236 warrants closely aligns with holdings of 10X BNB Cayman Sponsor, indicating that they may have crossed the 5% ownership threshold by late 2025.
- Regulatory Compliance Failures: Hans Thomas, the controller of 10X Capital, has not filed the required SEC Form 3, exacerbating concerns over ownership transparency and potentially leading to legal repercussions.
See More
10X Capital's Undisclosed Ownership Exceeds 5%, Raising Concerns
- Ownership Exceeding Threshold: Recent filings indicate that 10X Capital and its affiliates have surpassed the 5% ownership threshold, raising serious concerns about their transparency and compliance, potentially violating SEC regulations and impacting corporate governance.
- Board Actions Raise Doubts: The unanimous adoption of aggressive governance measures, including a poison pill, by the company's board suggests possible coordinated actions among insiders, exacerbating concerns over the company's transparency.
- Undisclosed 'Group' Issues: The overlapping ownership between 10X Capital and other insiders may indicate the existence of an undisclosed shareholder 'group' that could require disclosure under Section 13(d) of the SEC, affecting investor confidence.
- Regulatory Compliance Risks: The failure of 10X Capital and its controller Hans Thomas to file necessary SEC documents as required may lead to legal repercussions, further damaging the company's reputation and impacting shareholder rights.
See More
CEA Industries Reveals Secret Agreement with YZi Labs
- Secret Agreement Disclosure: CEA Industries Inc. (NASDAQ:BNC) has raised concerns over a secret agreement with YZi Labs that was not disclosed to the board or shareholders due to confidentiality clauses, potentially undermining investor confidence.
- Missing Fee Information: The partial disclosure of the agreement lacks details on the fees YZi Labs is entitled to receive, which may raise concerns among shareholders regarding the company's financial management and could negatively impact stock performance.
- Shareholder Action Call: The company is urging YZi Labs to promptly release the full agreement to address shareholder demands for transparency; failure to do so may lead to shareholder dissatisfaction and possible legal actions.
- Future Outlook Risks: The company’s forward-looking statements highlight multiple risks, including the ability to keep pace with technological advancements and changing market needs, which could result in actual performance deviating significantly from expectations, thereby increasing investment uncertainty.
See More
YZi Labs Raises Compliance Concerns Against 10X Capital
- Compliance Issues Raised: YZi Labs formally delivered a letter to 10X Capital, highlighting potential breaches of Sections 13(d) and 16(a) of the Exchange Act due to failure to disclose ownership exceeding 5% of CEA Industries Inc., which could undermine investor confidence.
- Lack of Ownership Transparency: YZi Labs believes that 10X Capital has beneficially owned over 5% of BNC's shares since late 2025 without filing Schedule 13D, leading to a lack of transparency regarding their ownership and potentially attracting regulatory scrutiny.
- Board Governance Risks: Hans Thomas, a founding partner of 10X Capital and a director of BNC, has not filed Form 3 as required, failing to meet initial ownership reporting obligations, which may affect the stability and transparency of the company's governance structure.
- Protection of Shareholder Rights: YZi Labs emphasizes that timely disclosures are essential for protecting shareholder rights and maintaining market integrity, urging 10X Capital and Thomas to immediately disclose their ownership to ensure market transparency and fairness.
See More
YZi Labs Raises Compliance Concerns Against 10X Capital
- Compliance Issues Raised: YZi Labs formally delivered a letter to 10X Capital, highlighting potential breaches of Sections 13(d) and 16(a) of the Securities Exchange Act regarding their ownership of CEA Industries Inc. stock, which could jeopardize their management role in public companies.
- Disclosure Failures: YZi Labs asserts that 10X Capital has beneficially owned over 5% of BNC shares since late 2025 without filing the required Schedule 13D, indicating significant lapses in transparency and compliance that may erode shareholder trust in corporate governance.
- Board Election Implications: YZi Labs has filed a preliminary consent statement to expand the BNC Board and nominate new members, aiming to leverage the compliance issues to push for improvements in governance structures and ensure shareholder rights are protected.
- Legal Obligations Emphasized: YZi Labs stresses that timely SEC disclosures are essential for protecting shareholder rights and maintaining market integrity, urging 10X Capital and its director Hans Thomas to promptly disclose their ownership to restore market confidence.
See More
BNC Confirms Full Compliance with Nasdaq Rules
- Compliance Statement: BNC confirms full compliance with Nasdaq Rule 5620(a), asserting that its plan to hold the Annual Meeting before the fiscal year-end is compliant, effectively countering YZi Labs' false claims and safeguarding its market reputation.
- Fiscal Year Adjustment Context: The company transitioned its fiscal year-end on June 29, 2025, to align with its largest operating business, a move legally approved prior to YZi Labs acquiring shares, demonstrating transparency and compliance in governance.
- Rebuttal of False Claims: BNC expressed disappointment over YZi Labs' baseless allegations, emphasizing its focus on long-term value creation and shareholder interests, thereby maintaining its corporate image and market trust.
- Future Outlook: BNC plans to continue adhering to Nasdaq compliance requirements and will submit a plan to regain compliance if necessary, ensuring the company remains competitive and compliant in a changing market environment.
See More
