YZi Labs Blasts CEA Industries for ’Poison Pill’ Tactics and Annual Meeting Delays

Corporate governance just got a hostile takeover—of common sense. YZi Labs isn't mincing words, publicly slamming CEA Industries for deploying a classic 'poison pill' defense while dragging its feet on a crucial annual shareholder meeting. It's a move straight out of the legacy finance playbook, where protecting the boardroom table often trumps shareholder value.

The Tactical Stall

Delaying an annual meeting isn't just a scheduling conflict—it's a strategy. For CEA Industries, the calendar shuffle creates a fog of uncertainty, buying time and complicating any coordinated action from investors. In the fast-paced world of tech and finance, where agility is currency, this kind of bureaucratic foot-dragging feels like a relic. It's the corporate equivalent of hitting the snooze button while the house is on fire.

Poison Pill: Cure or Curse?

The 'poison pill' remains the ultimate defensive gambit. By threatening to flood the market with new shares if a hostile bidder acquires a certain stake, it aims to make a takeover prohibitively expensive. Critics call it a management entrenchment tool, shielding underperforming execs from accountability. Proponents argue it protects long-term strategy from short-term raiders. Either way, it ignites immediate conflict—and in this case, YZi Labs is holding the match.

A Clash of Visions

This isn't just a procedural spat. It's a fundamental clash over direction and control. YZi Labs' public broadside signals a deep frustration with CEA's stewardship, suggesting a belief that shareholder returns are being sacrificed at the altar of executive job security. In an era where activist investors can mobilize via social media and decentralized forums, the old guard's defensive walls look increasingly porous.

The finance jab? Nothing says 'we're creating shareholder value' like spending millions on legal maneuvers to avoid letting those very shareholders vote. The final word? When governance tools become weapons, everyone loses—except, perhaps, the lawyers billing by the hour.

YZi calls CEA Industries’ plan a poison pill

YZi Labs in the statement it shared via its official website has called CEA Industries’ actions stockholder-unfriendly, claiming it is designed to frustrate and delay the ability of stockholders to act by written consent. 

The company claims the effect of these actions is to add unnecessary constraints and procedural burdens that go beyond the requirements of Nevada law. It claims the company’s board of directors took those steps to entrench itself even though YZi had warned that any more degradation of voting rights WOULD be frowned upon by stockholders.

“We warned the Board that it risked exposing itself to potential liability for failure to properly execute its fiduciary duties,” YZi claimed. “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.” 

The prominent Binance-linked investment firm says other stockholders have echoed its sentiments and expressed surprise about BNC’s ill-advised strategic pivot away from BNB.

YZi expressed disappointment that the Board seems to be more focused on putting out 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,” the statement read. 

As it stands, YZi claims BNC has already delayed its 2025 annual meeting, which was supposed to hold on its December 17 anniversary, and has urged the board to avoid engaging in any further manipulative behavior, particularly with respect to the scheduling of the 2025 annual meeting. 

YZi further claims that the board’s oversight of the company has been deficient, but that past errors do not relieve the board members of their responsibility to ensure a fair director nomination and election process, free from conflicts of interest or additional entrenchment-motivated conduct. 

The investment firm has also rejected what it called false claims from BNC that it “has never considered an alternative token for the Company’s digital asset treasury (“DAT”) 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,” YZi has said. 

It concluded its statement by claiming it looks forward to providing stockholders an opportunity to elect new board members at the 2025 Annual Meeting.

What were the poison pill amendments made by BNC?

CEA designed its “poison pill” to deter a hostile takeover and is similar to other rights plans adopted by public companies. It will trigger in the event that a person or group successfully acquires at least 15% of the company’s common stock without the board’s approval. 

Should it come into play, it will allow other shareholders to buy extra shares at a 50% discount, which dilutes the acquirer’s stake, ultimately making their rights void. The current ownership levels, including YZi group’s, are reportedly grandfathered in. However, if there is any increase in their shares following the adoption of the poison pill, the plan is triggered. 

The poison pill or Rights Plan, as it is famously called, is expected to expire on December 26, 2026, or earlier, as provided in the Rights Plan. 

Aside from the poison pill, another measure BNC took was to amend and restate its bylaws to facilitate an orderly process for any future changes in control, enhancing governance and shareholder rights. 

Those amendments will require any stockholder interested in seeking action by written consent, like YZi, to first demand a record date from the company while providing detailed information on par with what is presented in Annual Meeting proposals. 

After that, all consents must be submitted within a 60-day window. 

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