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CEA Industries Refutes Nasdaq Compliance Claims from YZi Labs
CEA Industries Inc. (NASDAQ: BNC) forcefully rejected claims by YZi Labs regarding potential Nasdaq delisting risks, asserting full compliance with exchange regulations concerning the timing of its annual stockholder meeting. The company, which focuses on managing a large corporate treasury of BNB tokens, issued a clear statement defending its regulatory standing.
In its response, BNC emphasized that it remains in complete compliance with Nasdaq Rule 5620(a), which governs the timing of annual stockholder meetings. The company pointed out that its fiscal year doesn’t end for another two months, making YZi Labs’ claims about delisting risks “self-evidently false.”
“BNC is in full compliance with Nasdaq Rule 5620(a),” the company stated. “Nasdaq rules also allow the Company to submit a plan to regain compliance if the Annual Meeting has not been held by the fiscal year end.”
The dispute centers on BNC’s fiscal year-end date, which was changed to June 29, 2025. The company stressed that this change occurred on June 29, 2025—well before YZi Labs acquired any BNC stock—and was properly disclosed to all stockholders via a Form 8-K filing with the Securities and Exchange Commission on July 3, 2025.
According to BNC, the fiscal year change was implemented to align with the fiscal year end of the company’s then-largest operating business, contradicting YZi Labs’ implication that the change was made to create obstacles for the activist investor.
“We are disappointed that YZi Labs would resort to promoting baseless conspiracy theories that it knows, or should know, are false,” BNC stated in its release. The company affirmed its commitment to “disciplined governance, long-term value creation and acting in the best interests of all stockholders.”
This exchange marks the latest development in an escalating dispute between BNC and YZi Labs. Recent months have seen BNC navigate a strategic shift toward a BNB-focused digital asset treasury while simultaneously dealing with growing activist pressure from YZi Labs through consent solicitations.
The governance friction has been building since December 2025, when BNC adopted a stockholder rights plan following YZi Labs’ formation of a group. The company has also added independent directors to its board, including governance and compliance expert Glenn W. Tyranski in early February.
BNC’s stock has faced significant pressure amid these developments, trading at $4.31, down 5.49% over a 24-hour period and near its 52-week low of $4.28. This represents a substantial decline from its 52-week high of $31.62. Trading volume of 332,590 shares has remained consistent with 20-day averages, suggesting no unusual trading pressure despite the public dispute.
In December 2025, BNC reported strong financial results for its second quarter of fiscal 2026, with net income of $283.6 million and earnings per share of $5.36. The company also reported holding 515,554 BNB tokens as of December 4, 2025.
BNC indicated it intends to file a consent revocation statement with the SEC in response to YZi Labs’ consent solicitation, urging stockholders to carefully review all documents when they become available.
As this corporate governance battle unfolds, BNC maintains its focus on its core business strategy as “a growth-oriented company that has focused on building category-leading businesses in consumer markets, including building and managing the world’s largest corporate treasury of BNB.”
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7 Comments
Disputes over regulatory compliance can be messy, but it’s good to see CEA Industries taking a firm stance in defending their position. Transparency from both sides would be helpful for investors to assess the situation.
Corporate governance and compliance are always important topics for investors to watch closely. I’ll be curious to see if any further details emerge that could shed more light on the claims and counterclaims between CEA Industries and YZi Labs.
Interesting dispute over compliance claims. It’s important for companies to be transparent and accurate in their regulatory reporting. I wonder what the underlying motivations are behind YZi Labs’ accusations against CEA Industries.
Agreed, regulatory compliance is critical for publicly traded companies. CEA Industries seems to have a strong case that they are in full compliance with Nasdaq rules.
This seems like a classic case of one company trying to gain an advantage by raising doubts about a competitor’s regulatory standing. CEA Industries’ clear rebuttal is reassuring, but I hope they continue to provide updates to shareholders.
The change in CEA Industries’ fiscal year-end date raises some questions. I hope the company can provide more details to fully address YZi Labs’ concerns and reassure shareholders.
Clearly there’s more to this story than meets the eye. It will be interesting to see how this dispute between the two companies plays out.