YZi Labs Challenges CEA Industries Over Governance Changes and Meeting Delay

• YZi Labs disputes CEA’s new rights plan, saying it restricts voting power and entrenches the board.
• Amendments to CEA bylaws add procedural hurdles to written consent and shareholder action timelines.
• Delayed 2025 annual meeting and treasury strategy comments have intensified governance tensions.

YZi Labs has publicly criticized CEA Industries over a series of governance actions that it says weaken stockholder rights and limit accountability, escalating a dispute between the investment firm and the company’s board. The criticism centers on a newly adopted stockholder rights plan, amendments to corporate bylaws, and the postponement of CEA’s 2025 annual stockholder meeting.

The dispute intensified after CEA Industries adopted a stockholder rights plan in December 2025. Under the plan, the rights are activated if any party acquires 15% or more of the company’s common stock without prior board approval. Once activated, other shareholders would be entitled to purchase shares at a discount, a mechanism that could dilute the position of the acquiring party.

CEA has stated that existing ownership stakes, including YZi Labs’ reported 7% holding, are exempt unless increased after the plan’s adoption. The company also said the measure is consistent with steps taken by other public companies to deter hostile takeovers. The plan is scheduled to expire on Dec. 26, 2026, unless ended earlier by the board.

YZi Labs disputes that rationale, stating that the board adopted the plan despite prior warnings and that it imposes restrictions beyond those required under Nevada law. In its statement, the firm said the measures limit the ability of shareholders to act through written consent and add procedural hurdles to the exercise of voting rights.

Bylaw Amendments and Procedural Changes

In addition to the rights plan, CEA amended its bylaws to require shareholders to formally request a record date before initiating written consent actions and to submit detailed proposals. Once initiated, all consents must be delivered within a 60-day window. YZi Labs said these changes increase procedural complexity for stockholders seeking to exercise their rights.

YZi Labs also raised concerns about the delay of CEA’s 2025 annual stockholder meeting beyond its Dec. 17 anniversary date. According to the firm, the company has not announced a new meeting date or provided an explanation for the postponement. YZi said it is monitoring the company’s disclosures and reiterated its intention to nominate new directors at the next annual meeting.

Treasury Strategy Disagreement

Tensions were further heightened by conflicting statements regarding CEA’s digital asset treasury strategy. CEA denied considering a shift away from its existing approach, while YZi Labs cited public remarks made by Chief Executive David Namdar at a 2025 industry conference that referenced evaluating other digital assets. YZi described the company’s denial as inconsistent with those comments.

YZi Labs concluded that it intends to continue pressing for governance changes and said it expects shareholders to have an opportunity to vote on board composition at the next annual meeting.