YZi Labs has reached out to CEA Industries shareholders, urging them to back its initiative to revamp the board of the BNB treasury company by appointing its selected directors.

Binance founder Changpeng Zhao’s YZi Labs is pursuing this takeover due to concerns over what it describes as the destruction of stockholder value.

In a regulatory filing released on Monday, YZi expressed its desire to revert all bylaw amendments enacted since July, broaden the CEA board’s composition, and elect its well-qualified director nominees. YZi stated these actions are crucial to halt the ongoing decline in stockholder value at BNC and to ensure the company is directed in a way that aligns with shareholders’ best interests.

If a majority of shareholders concur, YZi, which previously branded itself as Zhao’s family office, will essentially gain control of the world’s largest public BNB treasury organization.

BNB closely correlates with Zhao and Binance, which reportedly holds the majority of the circulating supply.

CEA Shares Decline

Share prices of CEA Industries (BNC) have plummeted approximately 89% since reaching a high of $57.59 on July 28, coinciding with the day the Canadian vape company witnessed its stock surge 550% due to plans to become the premier BNB treasury entity.

As of Monday’s closing, the stock traded at $6.47, marking a decline of over 10% on that day and over 20% for the year thus far, resting below its pre-crypto pivot value.

Shares in CEA Industries fell by over 10% on Monday amid YZi Labs’ launch of its board coup. Source: Google Finance

YZi facilitated CEA’s $500 million private investment in public equity (PIPE) in August, which CEA positioned as a strategy to boost their status as the largest publicly traded BNB Chain digital asset treasury globally.

The CEA crypto pivot resulted in the installation of David Namdar, CEO of 10X Capital, into the CEO position, alongside various executives from 10X joining CEA’s board.

Despite these changes, the most recent filing indicates YZi’s complaints about CEA’s management being slow to update investors and lacking media presence or marketing initiatives to elevate the company’s visibility.

YZi also criticized Namdar for a perceived deficiency in loyalty and dedication to CEA, stating he has endorsed other crypto treasury firms and suggested that the upcoming board consider appointing a new CEO.

CEA Industries has not yet made a public comment regarding this situation.

BNB Performance

Currently, BNB, a token significantly linked to Binance that provides advantages to its holders, trades at a three-month low of $829. It has seen a near 40% drop from its all-time high of $1,367 reached in mid-October, reflecting broader macroeconomic challenges affecting the crypto market.

Despite its recent downturn, BNB has appreciated 17.8% this year, with a slight decline in the last 24 hours.

CEA Industries’s report highlights holdings of 515,054 BNB acquired at an average price of $851.29, contributing to a market NAV ratio relative to their crypto assets of 0.79x.