YZi Labs accuses 10X Capital of concealing over 5% ownership, raising suspicions of an shadow group behind the poison pill plan

CEA Industries Inc. (NASDAQ: BNC) major shareholder YZi Labs issued an supplemental filing on February 27, alleging that entities related to 10X Capital, controlled by board member Hans Thomas, may have held over 5% of BNC’s issued common stock without reporting, clearly reaching the U.S. Securities and Exchange Commission (SEC) mandatory disclosure threshold.

Document Evidence: Calculation of 5.39% Unreported Ownership

YZi Labs’ allegations are based on figures from publicly available company documents. According to BNC’s quarterly report (10-Q) as of October 31, 2025, a total of 2,376,236 warrants have been exercised in the past six months; the company’s S-3 filing on September 19, 2025, shows that 10X BNB Cayman Sponsor holds 2,376,239 shares related to strategic advisor warrants, and 10X Capital Partners LLC holds 640,099 shares related to asset manager warrants.

YZi Labs explicitly confirms it has not exercised any of the strategic advisor warrants, excluding other holders. This means the exercised warrants—2,376,236—are almost certainly attributable to entities related to 10X. Based on the 44,062,938 shares outstanding as of December 12, 2025, these exercised warrants represent approximately 5.39% of the issued common stock, reaching and exceeding the SEC’s mandatory reporting threshold.

The core issue is: 10X Capital and Hans Thomas have yet to file Schedule 13D with the SEC; Thomas has served as a director for over six months and has not filed Form 3 as required by Section 16.

“Coordination Group” Suspicion: 7.41% Insider Ownership Pattern

YZi Labs’ concerns extend beyond 10X Capital’s individual holdings. Public documents show other insiders also hold BNC shares—CEO David Namdar (864,428 shares), Chairman Anthony K. McDonald (15,025 shares), Director Nicholas J. Etten (9,347 shares), and Director Carly E. Read (1,330 shares)—totaling about 2.02% of the issued shares.

Adding the approximately 5.39% held by 10X BNB Cayman Sponsor, these insiders collectively control about 7.41% of BNC shares. Notably, on December 26, 2025, the board unanimously approved a shareholder rights plan (poison pill) and amended the company’s bylaws. YZi Labs believes this highly coordinated governance action may constitute a “group” under SEC Rule 13(d)(3) requiring disclosure.

Key Points of YZi Labs’ Allegations

Unreported Ownership: Exercise of warrants related to 10X entities may have pushed their BNC holdings over the SEC’s 5% reporting threshold.

Form 3 Not Filed: Hans Thomas, serving as director for over six months, has not filed Form 3 as required by Section 16.

Potential Coordination Action: The board’s unanimous approval of the poison pill, combined with overlapping related-party relationships, may constitute a “group” under SEC Rule 13(d)(3).

One-Week Silence: YZi Labs notes over a week of silence from 10X Capital and Thomas.

Frequently Asked Questions

What is SEC Schedule 13D, and why is 10X Capital required to file?

Schedule 13D is a mandatory SEC filing required when an individual or group acquires more than 5% of a publicly traded company’s shares. It must be filed within 10 trading days of crossing the threshold to ensure the market and shareholders are fully informed of large shareholders’ identities and intentions. YZi Labs’ calculations show that the exercise of warrants by entities related to 10X Capital has exceeded this threshold, yet no filings have been made to date.

What role does the “poison pill” play in this dispute?

A poison pill is a defensive measure against hostile takeovers, allowing existing shareholders to purchase additional shares at a discount if a shareholder exceeds a certain ownership level, diluting the acquirer’s stake. YZi Labs believes that the board’s unanimous approval of the poison pill amidst unresolved unreported ownership issues indicates highly coordinated governance actions, potentially constituting a “group” under SEC Rule 13(d)(3) requiring disclosure.

If 10X Capital and Hans Thomas indeed violate SEC reporting rules, what consequences might they face?

Violating SEC mandatory reporting requirements can lead to SEC enforcement investigations, civil penalties, and orders to file disclosures. If found to have intentionally evaded reporting, they could face more severe civil or criminal charges. YZi Labs has stated it will continue to take all necessary measures to ensure BNC shareholders are informed and that relevant parties comply strictly with federal securities laws.