YZILabs Expresses Strong Discontent with CEA Industries Board Actions
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 05 2026
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Should l Buy BNC?
YZILabs Management, a significant stockholder of CEA Industries, is reviewing the recent actions taken by BNC in response to YZi's group formation and launch of a consent solicitation process. YZILabs said, "These stockholder-unfriendly actions include the adoption of a poison pill and Bylaw provisions designed to frustrate and delay stockholders' ability to act by written consent. YZi believes the effect of these actions is to add unnecessary constraints and procedural burdens that go beyond the requirements of Nevada law. The Company's Board of Directors took these steps, for the apparent purpose of entrenching itself, even after YZi had cautioned that further degradation of voting rights would be viewed poorly by stockholders. We warned the Board that it risked exposing itself to potential liability for failure to properly execute its fiduciary duties. Despite this, the Board has shown that it prefers to restrict stockholder rights rather than acknowledge its mistakes, revealing that it knows it lacks the support of stockholders. Many other stockholders have confirmed to us that they share our concern and surprise about BNC's ill-advised strategic pivot away from BNB. 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. We are closely monitoring all activities and disclosures by the Company, including any announcements related to the scheduling of the 2025 Annual Meeting, which will be a critical venue for stockholders to vote on the Board's composition. At present, the Company has already delayed the 2025 Annual Meeting past its December 17 anniversary. YZi urges the Board not to engage in any further manipulative behavior, particularly with respect to the scheduling of the 2025 Annual Meeting. The Board's oversight of the Company has been deficient, but past errors do not relieve the Board members of their responsibility to ensure there is a fair director nomination and election process, free from conflicts of interest or additional entrenchment-motivated conduct. Further, YZi rejects the Company's false claim that it "has never considered an alternative token for the Company's digital asset treasury strategy, nor launched competitive DAT ventures." This denial is irreconcilable with BNC CEO David Namdar's explicit comment at a November 2025 industry conference that BNC had contemplated switching to other crypto assets, such as Solana. When taken in concert with active promotion and capital raising for other DATs by Mr. Namdar and fellow Board member Hans Thomas - while they are serving in leadership roles for BNC - we believe stockholders are right to be concerned that they have been betrayed. Ultimately, stockholders deserve to be represented by a Board that is committed to the token strategy in which they invested. YZi Labs looks forward to providing stockholders an opportunity to elect new board members at the 2025 Annual Meeting."
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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.
YZi Labs Seeks Clarification on Shareholder Written Consent Procedures
- Shareholder Rights Concern: YZi Labs has delivered a letter to CEA Industries' Board requesting clarification on how the recently amended bylaws affect shareholders' ability to act by written consent, believing that the new bylaws could materially chill shareholder actions despite the company's claims to the contrary.
- Increased Procedural Complexity: The amended bylaws stipulate that only record holders may execute written consents directly, which means that most shareholders holding shares through brokers will face multiple intermediary steps, introducing significant logistical burdens and uncertainty that may deter shareholder participation.
- Request for Waiver of Execution Requirements: YZi Labs is asking the company to waive certain execution requirements to ensure that written consents can be submitted through customary brokerage and nominee processes, emphasizing that the practical use of these rights is crucial for shareholders' interests.
- Commitment to Constructive Engagement: YZi Labs expresses its commitment to ongoing constructive engagement with the company and its Board, believing that ensuring a fair and orderly consent process is in the best interests of all shareholders, highlighting its focus on corporate governance.
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- Distribution Amount Details: For instance, the Purpose Tactical Hedged Equity Fund has a capital gain distribution of $6.2513 per share, representing 15.77% of the net asset value as of February 5, 2026, indicating strong performance and investor confidence in the fund.
- Cash vs. Notional Distribution: The distributions provided by Purpose Investments include both cash and notional distributions, with the latter immediately consolidating shares post-distribution, ensuring that the number of shares held by investors remains unchanged, thereby enhancing investor trust.
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- Shareholder Rights Concern: YZi Labs has sent a letter to CEA Industries' Board requesting clarification on how the recently amended bylaws affect shareholders' ability to act by written consent, arguing that the new bylaws could materially chill shareholder actions despite the company's claims to the contrary.
- Increased Procedural Complexity: Under the new bylaws, only record holders can execute written consents directly, meaning that most shareholders holding shares through brokers will face multiple intermediary steps, introducing significant logistical burdens and uncertainty in the consent process.
- Request for Waiver of Execution Requirements: YZi Labs is asking the company to waive certain execution requirements for the ongoing consent solicitation and to confirm that written consents submitted through customary brokerage and nominee processes will be accepted, ensuring shareholders can effectively exercise their rights.
- Commitment to Constructive Engagement: YZi Labs emphasizes its commitment to constructive engagement with the company and its Board, believing that ensuring a fair and orderly consent process is in the best interests of all shareholders, highlighting the critical importance of the practical usability of shareholder rights.
See More
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- Termination Notification: YZi Labs formally terminated the SSA on December 11, 2025, with written notice to 10X Capital and informed the BNC Board on December 13, ensuring all parties were aware of the termination to minimize future misunderstandings.
- Fee Waiver Proposal: Prior to the termination of the SSA, YZi Labs repeatedly offered to waive fees to reduce operating costs, demonstrating a proactive approach to improving the company's financial performance while also reflecting a focus on shareholder interests.
- Commitment to Shareholder Communication: YZi Labs stated its intention to maintain open communication with BNC shareholders to ensure transparency and prevent misinformation from distracting from governance issues, aiming to enhance the company's long-term value creation capabilities.
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- Fee Waiver Proposal: Prior to the termination, YZi Labs repeatedly offered to waive its fees under the Strategic Services Agreement to reduce operating costs and support improved performance, demonstrating its concern for BNC shareholders.
- Transparency in Disclosure: YZi Labs publicly disclosed the Strategic Services Agreement in SEC filings on November 26 and December 1, 2025, refuting BNC's claims of secrecy and highlighting its communication transparency with BNC management.
- Shareholder Engagement Advocacy: YZi Labs is seeking to expand the BNC Board through a preliminary consent statement, indicating its commitment to improving corporate governance structures and long-term value creation.
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BNC Seeks Termination of Secret Agreement to Improve Asset Management Agreement
- Impact of Secret Agreement: BNC discovered that the secret agreement with 10X increased the costs of the Asset Management Agreement (AMA) without providing corresponding services, which adversely affected shareholder interests and necessitated urgent renegotiation to lower costs and enhance flexibility.
- Board Actions: The BNC Board has requested confirmation from 10X and YZi Labs regarding the termination of the secret agreement to initiate negotiations on the AMA's terms, particularly concerning fees, duration, and termination clauses, to strengthen the company's financial strategy.
- 10X's Position: Although YZi Labs claims to have unilaterally terminated the secret agreement, 10X asserts that it requires YZi Labs' consent to renegotiate the terms, hindering BNC's negotiation process and impacting the company's strategic flexibility.
- Future Outlook: BNC aims to lower management fees by terminating the secret agreement and renegotiating the AMA, thereby enhancing its competitiveness in the BNB market and laying a foundation for future growth.
See More
YZi Labs Seeks Clarification on Shareholder Written Consent Procedures
- Shareholder Rights Concern: YZi Labs has delivered a letter to CEA Industries' Board requesting clarification on how the recently amended bylaws affect shareholders' ability to act by written consent, believing that the new bylaws could materially chill shareholder actions despite the company's claims to the contrary.
- Increased Procedural Complexity: The amended bylaws stipulate that only record holders may execute written consents directly, which means that most shareholders holding shares through brokers will face multiple intermediary steps, introducing significant logistical burdens and uncertainty that may deter shareholder participation.
- Request for Waiver of Execution Requirements: YZi Labs is asking the company to waive certain execution requirements to ensure that written consents can be submitted through customary brokerage and nominee processes, emphasizing that the practical use of these rights is crucial for shareholders' interests.
- Commitment to Constructive Engagement: YZi Labs expresses its commitment to ongoing constructive engagement with the company and its Board, believing that ensuring a fair and orderly consent process is in the best interests of all shareholders, highlighting its focus on corporate governance.
See More
Purpose Investments Announces 2025 Capital Gain Distributions
- Annual Capital Gain Distribution: Purpose Investments has announced the final annual capital gain distributions for its funds in 2025, encompassing Purpose Fund Corp., Big Banc Split Corp., and Purpose Ether Staking Corp. ETF, reflecting the company's stable performance in asset management.
- Distribution Amount Details: For instance, the Purpose Tactical Hedged Equity Fund has a capital gain distribution of $6.2513 per share, representing 15.77% of the net asset value as of February 5, 2026, indicating strong performance and investor confidence in the fund.
- Cash vs. Notional Distribution: The distributions provided by Purpose Investments include both cash and notional distributions, with the latter immediately consolidating shares post-distribution, ensuring that the number of shares held by investors remains unchanged, thereby enhancing investor trust.
- Future Outlook: With over $29 billion in assets under management, Purpose Investments continues to focus on client-centric innovation, which is expected to further drive growth in its market share and client base.
See More
YZi Labs Seeks Clarification on Shareholder Written Consent Procedures
- Shareholder Rights Concern: YZi Labs has sent a letter to CEA Industries' Board requesting clarification on how the recently amended bylaws affect shareholders' ability to act by written consent, arguing that the new bylaws could materially chill shareholder actions despite the company's claims to the contrary.
- Increased Procedural Complexity: Under the new bylaws, only record holders can execute written consents directly, meaning that most shareholders holding shares through brokers will face multiple intermediary steps, introducing significant logistical burdens and uncertainty in the consent process.
- Request for Waiver of Execution Requirements: YZi Labs is asking the company to waive certain execution requirements for the ongoing consent solicitation and to confirm that written consents submitted through customary brokerage and nominee processes will be accepted, ensuring shareholders can effectively exercise their rights.
- Commitment to Constructive Engagement: YZi Labs emphasizes its commitment to constructive engagement with the company and its Board, believing that ensuring a fair and orderly consent process is in the best interests of all shareholders, highlighting the critical importance of the practical usability of shareholder rights.
See More
YZi Labs Clarifies Termination of Strategic Agreement
- Transparency of Agreement: YZi Labs emphasizes that the Strategic Services Agreement (SSA) was not secretive, as all relevant parties were aware of its terms, reinforcing the company's commitment to transparency and governance, which is crucial for building shareholder trust.
- Termination Notification: YZi Labs formally terminated the SSA on December 11, 2025, with written notice to 10X Capital and informed the BNC Board on December 13, ensuring all parties were aware of the termination to minimize future misunderstandings.
- Fee Waiver Proposal: Prior to the termination of the SSA, YZi Labs repeatedly offered to waive fees to reduce operating costs, demonstrating a proactive approach to improving the company's financial performance while also reflecting a focus on shareholder interests.
- Commitment to Shareholder Communication: YZi Labs stated its intention to maintain open communication with BNC shareholders to ensure transparency and prevent misinformation from distracting from governance issues, aiming to enhance the company's long-term value creation capabilities.
See More
YZi Labs Clarifies Termination of Strategic Services Agreement
- Strategic Agreement Clarification: YZi Labs confirmed the formal termination of its Strategic Services Agreement with 10X Capital on December 11, 2025, with notification to the BNC Board on December 13, emphasizing the company's commitment to transparency and shareholder interests.
- Fee Waiver Proposal: Prior to the termination, YZi Labs repeatedly offered to waive its fees under the Strategic Services Agreement to reduce operating costs and support improved performance, demonstrating its concern for BNC shareholders.
- Transparency in Disclosure: YZi Labs publicly disclosed the Strategic Services Agreement in SEC filings on November 26 and December 1, 2025, refuting BNC's claims of secrecy and highlighting its communication transparency with BNC management.
- Shareholder Engagement Advocacy: YZi Labs is seeking to expand the BNC Board through a preliminary consent statement, indicating its commitment to improving corporate governance structures and long-term value creation.
See More
BNC Seeks Termination of Secret Agreement to Improve Asset Management Agreement
- Impact of Secret Agreement: BNC discovered that the secret agreement with 10X increased the costs of the Asset Management Agreement (AMA) without providing corresponding services, which adversely affected shareholder interests and necessitated urgent renegotiation to lower costs and enhance flexibility.
- Board Actions: The BNC Board has requested confirmation from 10X and YZi Labs regarding the termination of the secret agreement to initiate negotiations on the AMA's terms, particularly concerning fees, duration, and termination clauses, to strengthen the company's financial strategy.
- 10X's Position: Although YZi Labs claims to have unilaterally terminated the secret agreement, 10X asserts that it requires YZi Labs' consent to renegotiate the terms, hindering BNC's negotiation process and impacting the company's strategic flexibility.
- Future Outlook: BNC aims to lower management fees by terminating the secret agreement and renegotiating the AMA, thereby enhancing its competitiveness in the BNB market and laying a foundation for future growth.
See More
