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 the upcoming annual meeting scheduled for September 18, 2026. The move comes after SkyAI rejected Forward's all-stock acquisition proposal valued at $1.55 per share, which represented a 20% premium to SkyAI's prior closing price.
In its letter, Forward raised significant concerns regarding SkyAI's governance and financial practices, specifically pointing to related-party transactions disclosed in SkyAI's proxy statement. According to Forward, SkyAI paid $3.3 million in consulting fees to Sol Edge Limited in 2025 and issued warrants valued at approximately $101.3 million to Sol Markets. Forward alleges that these entities are owned and controlled by the brother of SkyAI's Chief Investment Officer and director, Yuwen (Alice) Zhang. These arrangements, Forward argues, raise questions about the independence and fiduciary duties of SkyAI's board.
Forward is particularly focused on the proposed equity incentive plan, which would authorize an additional 5,145,000 shares for equity awards, representing approximately 7.2% additional dilution for existing shareholders. Forward believes this plan is not in the best interests of shareholders, especially given the company's current financial performance and the board's rejection of a premium acquisition offer. The letter emphasizes that the equity plan can be defeated by a majority of votes cast against it, providing shareholders with a clear opportunity to voice their disapproval.
On the director nominees, Forward notes that SkyAI's uncontested plurality voting structure means that individual director nominees cannot be defeated solely through withhold votes. Despite this limitation, Forward is urging shareholders to withhold votes on all five nominees to signal their dissatisfaction with the board's actions and governance practices.
Forward Industries remains confident in the strategic rationale for a combination with SkyAI and has expressed its willingness to engage in discussions regarding a potential strategic transaction. The company's letter underscores its commitment to maximizing shareholder value and its belief that SkyAI's current management is not acting in the best interests of its shareholders.
This public challenge highlights the growing tension between Forward and SkyAI over the latter's strategic direction and governance. Shareholders are now faced with critical decisions that could impact the company's future, including the potential for a more favorable acquisition or changes in board composition. The outcome of the vote will be a key indicator of shareholder sentiment and could influence SkyAI's future actions.
For more details on Forward Industries' position and the full text of the open letter, interested parties can visit the press release at https://nnw.fm/1Yn1Q. Further information about Forward Industries and its strategic initiatives is available at www.forwardindustries.com.
