Forward Industries, Inc. (NASDAQ: FWDI) has issued an open letter to shareholders of SkyAI, urging them to vote against the company's proposed 2026 Equity Incentive Plan and to withhold votes on all five director nominees at SkyAI's annual meeting scheduled for September 18, 2026. The move comes after SkyAI rejected Forward's acquisition proposal, and Forward has raised concerns about related-party transactions and financial performance that it says undermine shareholder value.
In the letter, Forward highlights that SkyAI's board turned down its June 15 all-stock acquisition proposal, which valued SkyAI at $1.55 per share, representing a 20% premium to SkyAI's closing price at the time. Forward argues that this rejection has deprived shareholders of a significant value opportunity, and that subsequent actions by SkyAI's management have further eroded confidence in the company's governance.
A central point of contention is SkyAI's proxy disclosure, which reveals $3.3 million in consulting fees paid to Sol Edge Limited in 2025, as well as warrants valued at approximately $101.3 million issued to Sol Markets. Forward contends that both entities are owned and controlled by the brother of SkyAI's Chief Investment Officer and director, Yuwen (Alice) Zhang. These related-party arrangements raise serious questions about conflicts of interest and the proper use of corporate assets, according to Forward.
Forward is therefore asking SkyAI shareholders to vote against the proposed equity incentive plan, which would authorize the issuance of 5,145,000 additional shares for equity awards, resulting in approximately 7.2% additional dilution. The company notes that this plan can be defeated by a majority of votes cast against it, providing shareholders with a clear mechanism to express their disapproval of the current board's actions.
Additionally, Forward is urging shareholders to withhold votes on all five director nominees. While SkyAI's plurality voting structure means that individual director nominees cannot be defeated solely through withhold votes, Forward believes that a strong showing of shareholder dissent will send a clear message to the board that its current approach is unacceptable.
Despite the ongoing dispute, Forward has reiterated that it remains confident in the strategic rationale for a combination with SkyAI and is prepared to engage in discussions regarding a potential strategic transaction. The open letter serves as a call to action for shareholders to participate in the upcoming annual meeting and voice their concerns about the company's direction.
For more details on this development, the full press release is available at https://nnw.fm/1Yn1Q.
