CEO to Depart by August 31 Amid Escalating Board Fight
CEA Industries announced on March 16 that CEO David Namdar will transition out of his role by August 31, 2026, injecting leadership uncertainty into the company as it battles an aggressive activist investor. The announcement was made alongside fiscal third-quarter results and comes just days after YZi Labs, an investment firm connected to Changpeng Zhao, intensified its campaign to seize control of the BNC board.
While the company presented the departure as part of a planned succession, its timing coincides with extreme external pressure. YZi Labs is seeking to add seven directors to the current six-person board, a move that would effectively hand control of BNC and its treasury of over 500,000 BNB to the activist. In his departure statement, Namdar noted his pride in building a company with a "clean balance sheet" and "institutional grade custody," stating he remains a "committed long-term stockholder."
YZi Labs Alleges 'Operational Vacuum' in Takeover Bid
The activist campaign from YZi Labs portrays BNC as a dysfunctional shell company. On March 11, YZi Labs highlighted a separate investor lawsuit that alleged BNC is in a state of near "operational vacuum." According to the claims, a site visit revealed no executives, no active operations, and not even a functioning website, describing the Nasdaq-listed firm as a "Potemkin village."
YZi Labs claims this supports its argument that BNC's board has failed in its fiduciary duties, allowing asset manager 10X Capital to extract fees through a 20-year management agreement while failing to build a legitimate business. YZi is leveraging these allegations in its consent solicitation to convince stockholders to replace the current board with its own slate of seven nominees.
BNC Warns Against Hostile Seizure of Its BNB Treasury
BNC's board is pushing back, framing the activist campaign as a hostile attempt to gain control of its digital assets without paying a premium to shareholders. The company warned investors on March 13 about the potential consequences of handing control to YZi Labs' nominees, noting that six of the seven proposed directors have ties to Changpeng Zhao, YZi Labs, or Binance.
The board argues this creates a significant conflict of interest. It stated that a YZi-controlled board could force the company to buy BNB from CZ's affiliates at inflated prices or approve other "suboptimal transactions" that benefit the activist's interests. Despite the external pressure, BNC stated it remains committed to its strategy of strategically acquiring additional BNB and executing opportunistic share repurchases.
