- YZi Labs seeks major board changes to address governance and value concerns at CEA.
- CEA stock plunged over 92% despite BNB reaching a record high in October.
- YZi Labs alleges management conflicts and urges urgent shareholder action.
Binance co-founder Changpeng “CZ” Zhao and YZi Labs are calling for major leadership changes at CEA Industries, the publicly traded BNB treasury firm whose stock has collapsed despite strong performance in its underlying digital asset.
A consent filing submitted to the U.S. Securities and Exchange Commission shows that YZi Labs is seeking a board expansion, new director appointments, and a reversal of recent bylaw changes as part of its effort to address what it describes as operational lapses and eroding shareholder value.
Investor Group Calls for Board Expansion and Governance Changes
In its filing, YZi Labs asked CEA shareholders to vote on four proposals aimed at changing the firm’s board structure. The request includes adding new board seats, electing nominees put forward by YZi Labs, and repealing any amendments to corporate bylaws that were not in place at the time of the company’s July filing. The filing includes a white consent card that provides shareholders with the option to support, oppose, or abstain from each measure.
YZi Labs holds approximately 2.1 million BNC shares, which account for roughly 5% of the outstanding shares, and is valued at around $14 million as of Monday. The firm also participated in the treasury company’s $500 million PIPE financing earlier this year, stating in the filing that it viewed the creation of a listed BNB treasury vehicle as an opportunity for institutional investment.
Stock Collapse Fuels Tensions Over Management
CEA Industries’ share price soared to $82.88 in July following the treasury announcement, but has since lost more than 92%, closing at $6.47 on Monday after a 10% daily decline. The sharp drop stands in contrast with BNB’s performance, which reached a record high of $1,369 in October.
According to YZi Labs, concerns began emerging shortly after the treasury structure was introduced. The firm said it contacted director Hans Thomas to question delays in investor communication and the company’s muted public visibility.
YZi Labs also alleged that senior figures at CEA, including director Shai Namdar, participated in fundraising efforts for other digital-asset treasury projects while still serving in their roles at the company. The filing states that similar concerns resurfaced in November.
YZi Labs Says Immediate Action Is Needed
The investor group argued that these issues contributed to the company’s poor market performance and that shareholders “must act now” to prevent further erosion of value. Although the names of YZi Labs’ proposed board nominees were redacted, the firm emphasized that new oversight is needed if CEA intends to reverse its trajectory.
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About the Author: Peter Mwangi
