Gate News, March 24 — YZi Labs issued a statement in response to CEA Industries (Nasdaq: BNC) filing the 10-Q and 8-K forms on March 16, 2026, accusing the company of systemic governance failures.
The statement noted that BNC’s SEC filings disclosed significant deficiencies in internal financial controls, including that the CEO and CFO roles were held by the same individual, and that the company lacked sufficient oversight controls in key areas such as revenue, taxation, and equity compensation.
YZi Labs estimates that the transition agreement with former CEO David Namdar is valued at approximately $1.98 million, including: $375,000 in retroactive consulting fees, about $276,000 in future monthly consulting fees, approximately $434,300 paid in cash to replace shareholder-approved equity plans, and a $900,000 lump sum severance payment tied to restrictive terms. YZi Labs believes these restrictive clauses effectively prevent Namdar from assisting shareholders in making claims or taking actions that influence management, serving as a de facto control dispute management tool.
The statement also pointed out that BNC paid $2 million this quarter to an asset management entity controlled by sitting director Hans Thomas, with total payments since June 7, 2025, reaching $3.8 million. Additionally, the 10-Q form contains unresolved reconciliation issues regarding the exercise of 17,648 warrants.
Alex Odagiu, investment partner at YZi Labs, stated that the board transferred millions of dollars to related parties without holding an annual shareholder meeting or obtaining shareholder approval. YZi Labs demands that the board publicly explain the reasonableness of the severance compensation, release a plan to address major deficiencies, and disclose the full scope of restrictions in the transition agreement.
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