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CEA Industries Requests That 10X Capital and YZi Labs Terminate Their Secret Side Agreement

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  • CEA Industries Inc. (NASDAQ: BNC) requests YZi Labs and 10X Capital Asset Management LLC to confirm the termination of a previously hidden "Secret Side Agreement" linked to the Asset Management Agreement (AMA).
  • The Secret Side Agreement diverted a portion of fees paid to 10X to YZi Labs in exchange for undefined services, a fact disclosed to the Company four months after the agreement was signed.
  • The Board believes the Secret Side Agreement increased the AMA's overall cost to the Company without providing commensurate benefits.
  • 10X claims the Secret Side Agreement prohibits it from renegotiating key AMA provisions, such as fees, term, & termination, without YZi Labs' consent.
  • While YZi Labs claims to have unilaterally terminated the agreement, 10X states it is uncertain if that termination is effective, prompting the Board's request for mutual confirmation.
  • CEA has provided 10X with a termination agreement form to facilitate the process.
  • 10X has indicated willingness to terminate the Secret Side Agreement & renegotiate the AMA, including discussions on management fee magnitude.
  • The Board seeks to amend the AMA to improve terms & gain flexibility for executing the Company's BNB-dedicated treasury strategy.
  • CEA intends to file a consent revocation statement on Schedule 14A regarding YZi Labs' consent solicitation.
  • Company directors & executive officers are listed as participants in the solicitation of consent revocations from stockholders.