CEA Industries Inc. 8-K

What Happened
CEA Industries Inc. (ticker: BNC) announced that its board adopted a stockholder rights agreement (commonly called a "poison pill") on December 26, 2025 and declared a dividend of one Right per outstanding share of common stock with a record date of January 8, 2026. The action follows a disclosed stockholder group formed by YZILabs Management Ltd. ("YZi Labs") that filed an amended Schedule 13D and is seeking control of the board. The company also filed a press release on December 28, 2025 announcing the Rights Agreement.

Key Details

• Rights Agreement dated December 26, 2025; Rights will attach to common stock and certain warrants (including Public Warrants) and become separately exercisable on a defined "Distribution Time."
• Exercise mechanics: each Right allows purchase of one one‑thousandth of a share of newly created Series C Junior Participating Preferred Stock at $33.50 per Right (subject to adjustment).
• Anti-takeover thresholds and timing: an “Acquiring Person” is generally anyone owning 15% or more of common stock; Rights expire on the earliest of Dec 26, 2026, redemption/exchange by the company, or a Board‑approved transaction.
• YZi Labs disclosed it holds 7.0% of CEA common stock and holds warrants that could increase its diluted ownership (up to ~19.99% via in‑the‑money warrants and up to ~34.2% including out‑of‑the‑money warrants) with notice.
• Board powers: Rights may be redeemed by the Board for $0.001 per Right (or exchanged under certain conditions). The Rights Agreement does not bar YZi Labs from soliciting stockholders or seeking consents and is not intended to block Board‑approved mergers.

Why It Matters
For investors, the Rights Agreement is a defensive measure designed to limit any sudden takeover by a party that surpasses certain ownership thresholds without Board approval. It could affect the dynamics of YZi Labs' attempt to influence control by diluting the economic benefit of a large accumulation of shares or warrants. The Rights do not prevent YZi Labs from soliciting votes or stockholder consents and the Board says the plan should not interfere with any merger or business combination it approves. Investors should note the Record Date (Jan 8, 2026), the 15% trigger, the $33.50 exercise price, and the Dec 26, 2026 expiration when assessing potential near‑term governance developments.