This week, in East Eight Time, the board of directors of CEA Industries and institutional shareholder YZi Labs erupted into a public conflict over an arrangement referred to as the "Secret Agreement." The board had previously disclosed information based on the so-called secret agreement, triggering market inquiries into the company's governance and compliance with information disclosure, while YZi Labs countered with an open letter, denying the relevant claims. The dispute surrounding whether the SSA agreement has been terminated, when it was terminated, and whether it was adequately disclosed quickly evolved into a battle over transparency and discourse, reflecting a deep game of chess between the board of directors and institutional shareholders over information control, governance structure, and the protection of the rights of minority shareholders in a U.S. listed company.

The Open Letter Turns the Tables: Secret Agreement Allegations are Countered

● The starting point of the narrative lies in the information previously released by the board: it used the so-called "Secret Agreement" as a hook, directing the controversy towards a specific arrangement between YZi Labs and the company, thereby explaining the current governance disputes and investigative actions. Due to the lack of complete original text support, the outside world has yet to learn the specific accusations and wording details in the board's press release, but this disclosure method using "Secret Agreement" as a keyword itself leaves substantial room for speculation and questioning from the market.

● YZi Labs subsequently released an open letter, directly attacking the narrative of the "Secret Agreement" disclosed by the board, firmly stating that there is no undisclosed secret agreement and emphasizing that the existence and nature of the relevant agreement have been deliberately packaged as a "secret," thus constructing a public perception that severely deviates from the facts. The open letter claims that the board intentionally blurred the nature of the agreement in its external communications, misleading investors into believing there exists a deliberately hidden arrangement.

● In terms of wording, YZi Labs employed strong expressions such as "using 'investigation' as a guise to cover inaction on known issues", directly pointing out that the board's public narrative is not aimed at uncovering the truth but at selectively avoiding existing problems and known information. Meanwhile, YZi Labs also accused the board of "using the 'Secret Agreement' narrative to mislead the public and protect the revenue stream of 10X", escalating the information disclosure deviation to a question of interest protection tendency, making the discourse conflict between both parties particularly sharp.

● It was precisely this open letter that pushed the governance conflict, which was originally limited to the company's internal affairs and a few institutional circles, directly into the spotlight of the capital market. Investors not only began to question whether the so-called "Secret Agreement" actually exists, but also started to re-examine whether all of the board's previous disclosures related to the SSA agreement, associated arrangements, and control structure were true, complete, and non-misleading, thus forming a larger market event from this open confrontation.

2.15 Million Shares and SSA Termination: ...

● According to current single-source information, YZi Labs claims to directly hold 2,150,481 shares of CEA stock, a figure that has not yet been cross-verified item by item in broader public documents. Even so, this scale of shareholding is sufficient for the market to recognize: the controversy does not stem from marginal small shareholders, but from institutional investors who have substantial influence over the company, whose discourse and accusations will inherently lead to a greater impact on the company's image and governance structure.

● Also based on single-source information, one focal point of the dispute, the SSA (a certain service or settlement arrangement) is said to have been terminated on December 11, 2025. Currently, there is a lack of publicly disclosed texts to verify this termination date and specific process, and the textual content of the related termination notice and delivery process has also been marked as information pending verification. In this state of information asymmetry, whether the SSA has been effectively terminated and whether the termination has been timely communicated to the market has become the key anchor point of the narrative conflict between the board and YZi Labs.

● From a company governance perspective, the holding volume claimed by YZi Labs and the potential position of the SSA in the overall business architecture are directly related to the power struggle over company control and discourse. If the SSA is linked to revenue streams, service rights, or certain strategic rights arrangements, then its existence and termination are not merely technical contractual questions but are at the core of which party controls the company resources and cash flow distribution, and the market will naturally associate this with the potential power struggle for control.

● However, in the absence of complete disclosures and verification from multiple documents, key information surrounding the SSA's undisclosed terms, termination notice details, and compensation arrangements must be approached with caution by outside observers. Whether the accuracy of the termination date is established or whether the nature of the agreement constitutes a related transaction or should be disclosed separately remains to be clarified, and investors must recognize that the current version of the facts is still highly incomplete when assessing risks.

Battle of Narratives: Board Investigation Claims...

● On one end is the board's public narrative under the guise of "investigation"—that the company is currently conducting internal evaluations and investigations of relevant agreements and arrangements, implying that complex facts require time to clarify; on the other end is YZi Labs' accusation in the open letter of "using 'investigation' as a guise to cover inaction on known issues". The two narratives collide directly: the former emphasizes procedural legitimacy and caution, while the latter questions whether this "investigation" has itself become a tool for delay, evasion, and concealment.

● In this narrative, YZi Labs further directs its attack towards the interest chain behind the so-called "Secret Agreement" story, accusing the board of "using the 'Secret Agreement' narrative to mislead the public and protect the revenue stream of 10X". In other words, the open letter is not merely a dissatisfaction with wording but implicitly suggests: the direction of the investigation and the choice of public narrative may be utilized to protect specific revenue streams and their beneficiaries, thus forming selective disclosure and selective action under profit-oriented choices, making the already tense trust further slip towards rupture.

● From the general practice of governance in U.S. listed companies, institutional investors like YZi Labs are typically expected to play a supervisory and check-and-balance role, applying voting, communication, or even public pressure to impose external constraints on the board. In the current events, the institutional shareholder has taken a stand against the board, which strengthens the market's scrutiny of the board's disclosure quality and governance attitude, because this indicates that the two forces originally expected to jointly maintain the company's long-term value have shown substantial fractures in information disclosure and governance paths.

● In contexts where narratives are misaligned, the market often does not simply side with either party but instead focuses more on whether the information disclosure itself is true, complete, and non-misleading. Investors will inquire: Has the board fulfilled its obligations at all necessary disclosure points? Has it provided a clear account of the nature, existence, and termination status of the SSA? Is there verifiable data supporting the institutional shareholders' claims? The lack of clear answers to these questions constitutes part of the governance risk premium.

Multiple Actors: 10X and Law Firms in the Mix...

● In this "Secret Agreement" controversy, 10X Capital has been named multiple times, with its interests related to revenue streams reportedly being "protected." Although current public information does not reveal the deeper capital arrangements between 10X and CEA, just from the point of revenue streams, if the SSA or related arrangements are indeed tied to 10X's revenue, then the dispute over the existence of that agreement and the manner of disclosure is naturally interpreted by the market as a question regarding whether 10X's economic rights are prioritized, thereby pushing it to the center of the storm.

● Meanwhile, law firms such as Winston & Strawn find themselves in an especially sensitive position: as gatekeepers of compliance and disclosure, law firms must help companies meet securities regulatory requirements while also managing clients' legal risks amid complex shareholder conflicts. As their prior knowledge and internal advice processes are marked as pending verification, it is currently impossible and inappropriate to infer details of their involvement, but simply their name appearing is sufficient for the market to focus on the company's preparation and attitude regarding legal and compliance matters.

● As the board, institutional shareholders, 10X, and law firms are successively drawn into this situation, what could have been seen as a technical dispute over "whether a certain agreement has been terminated" quickly escalates into a comprehensive battle over corporate control arrangements and governance credibility. Once the market begins to suspect whether the board is "sailing for" specific parties' revenue streams and whether legal advisors are placed in an awkward balancing position, the overall reputation capital and governance premium of the company will face greater challenges, far beyond the economic value of a single agreement.

● At this stage, any attempt to dramatize the law firms' prior knowledge level or communication details with the board or 10X is an overreach. Given that the related content is clearly marked as unverified information, analysis can only remain at the objective positions and potential responsibilities of the various parties, restraining from speculating about their specific behaviors and motivations, and avoiding artificially constructing plotlines before the facts are disclosed.

Red Lines of Information Disclosure: Related Transactions...

● Extending the perspective, this dispute essentially touches upon the red lines of disclosure for related transactions and significant agreements within the framework of U.S. listed companies. For agreements that might affect control structure, revenue stream distribution, or significant operational arrangements, the board typically bears a proactive, timely, and accurate disclosure obligation; once an agreement is defined as a related transaction, the requirements for disclosure and review become more stringent. The current debate surrounding the SSA falls into the ambiguous zone of "what its nature is, whether it constitutes an arrangement that should be disclosed separately."

● When there are disputes over the nature and termination status of an agreement, the board's primary responsibility is to clarify the boundaries of facts to the market: Is there such a thing as a secret agreement? Has the SSA been terminated on a specific date? What impact does the termination have on revenue streams and related party interests? If there are differing interpretations, they should be communicated through supplementary announcements, inquiry replies, or shareholder communications, placing key information in verifiable public texts rather than merely lingering in media narratives or unilateral statements.

● In the context of potential control battles and pressures from institutional shareholders, opaque or ambiguous disclosures can easily be interpreted as damaging the rights of minority shareholders. The reason is that information advantages are often held by the board and a small number of major shareholders, and once related transactions, revenue streams, or agreement termination situations are selectively disclosed, public shareholders at an information disadvantage may unknowingly suffer structural losses, which is the fundamental logic behind the regulatory emphasis on "truthful, accurate, and complete" information in disclosure systems.

● From a longer-term perspective, this case may very well evolve into another typical example of the struggle between institutional shareholders and the board over transparency and governance boundaries. Regardless of the ultimate outcome, the market will observe whether, in an environment where strong institutional shareholders, professional legal advisers, and multiple interest parties coexist, the board can still achieve fair and restrained information disclosure, or whether it will lean toward preferential choices between pressure and interests, which will directly affect the company's future governance discount levels.

The Storm Has Not Ceased: Truth, Regulation, and Shares...

Currently, surrounding the conflict between the CEA board and YZi Labs, the facts available to the outside world mainly come from limited contents of the open letter and single-source data, including the claim from YZi Labs of directly holding 2,150,481 shares of CEA stock and the SSA being said to terminate on December 11, 2025. The lack of broader regulatory documents, company announcements, and independent third-party materials leaves many key facts—from whether the "Secret Agreement" exists to the specific terms and termination impacts of the SSA—in a state still awaiting clarification.

Looking ahead, the attitudes of regulators, other shareholders, and market sentiment will largely determine the course of this dispute. Once regulatory agencies or exchanges issue inquiries about the authenticity of disclosures and compliance of related transactions, the company will inevitably need to provide more detailed clarifications in formal documents; if other institutional shareholders follow up and raise their voices or take action at shareholder meetings, this will also exert substantial pressure on the board, forcing it to prove its standing or adjust governance structures under a more public framework.

For investors, in a stage where agreement details have not been fully disclosed and different narratives remain seriously misaligned, rather than hastily siding with any one position, it is more prudent to focus on governance risks and the quality of information disclosure itself: Is the company willing and able to provide verifiable complete information? Will it face regulatory or litigation risks in the future due to disclosure flaws or improper related arrangements? These factors often more profoundly influence valuation and risk premiums than short-term wins or losses of public opinion.

From a more macro perspective on governance evolution, the ultimate outcome of the struggle surrounding the "Secret Agreement" will depend on the extent to which disclosure transparency is improved in the future and whether the parties are willing to resolve disputes within an open, traceable institutional framework. If the board and institutional shareholders can transform their differences under the joint scrutiny of regulators and the market into improvements in disclosure and governance structure, this storm may yet provide an opportunity for the upgrading of corporate governance; conversely, if information continues to be fragmented and narratives remain torn, this storm may loom over CEA's valuation and credibility for a long time.

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