CEA Industries has confirmed receipt of a letter from YZi Labs Management Ltd. (“YZi Labs”) requesting that the Company’s Board of Directors (the “Board”) set a record date in connection with YZi Labs’ consent solicitation (the “Request Letter”). The Request Letter is a required step in YZi Labs’ consent solicitation process to add up to seven directors to the Board. Because the current Board has only six Directors, this would effectively transfer control of the Board to YZi Labs. YZi Labs’ Request Letter asks the Board to set a date that determines which stockholders are eligible to vote on YZi Labs’ proposals, including election of its director nominees.
Only stockholders who hold shares as of that record date will be entitled to participate in the consent process. For months, YZi Labs has claimed that it desires greater “independent” Board oversight. However, six of YZi Labs’ seven proposed director nominees are or have been employees of, investors in or advisors to Changpeng Zhao (CZ) and his affiliates, YZi Labs and Binance. The Board urges stockholders to consider the potential consequences of transferring effective control of the world’s largest corporate treasury of BNB to close associates of one of the largest individual holders of BNB.
For instance, should they take control of the Board, YZi Labs’ candidates could cause the Company to buy BNB directly from CZ and his affiliates at inflated prices, approve suboptimal transactions with parties affiliated with CZ or delay or block transactions that would be beneficial to the Company but do not serve CZ’s unique interests. The Board remains focused on governing BNC in the best interests of the Company and all stockholders. The Board will fairly and objectively determine whether to recommend YZi Labs’ candidates by assessing whether, and to what extent, each candidate would augment the Board’s existing skills, experience, expertise and independent oversight. BNC’s Board is reviewing the Request Letter to confirm that it complies with the Company’s bylaws.
If the Board determines that the Request Letter has been properly submitted, the Board will announce a record date for determining the stockholders entitled to consent in connection with YZi Labs’ solicitation. The Board will present its recommendation on YZi Labs’ proposals in the Company’s definitive consent revocation statement that will be filed with the Securities and Exchange Commission (the “SEC”) and mailed to stockholders eligible to consent. The Board remains committed to ensuring that the interests and perspectives of all stockholders are fully considered. Stockholders are not required to take any action at this time.
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