Forward Industries (NASDAQ: FWDI) has issued an open letter to shareholders of SkyAI, urging them to vote against the company’s 2026 Equity Incentive Plan and to withhold votes on all five director nominees at the upcoming annual meeting scheduled for Sept. 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. Forward’s concerns extend beyond the rejected bid, focusing on related-party transactions, financial performance, and the overall impact on shareholder value.
In its letter, Forward highlighted that SkyAI’s proxy statement disclosed $3.3 million in consulting fees paid to Sol Edge Limited during 2025, as well as warrants valued at approximately $101.3 million issued to Sol Markets. According to Forward, these entities are owned and controlled by the brother of SkyAI’s Chief Investment Officer and director, Yuwen (Alice) Zhang. Forward argues that these related-party arrangements raise governance red flags and may not be in the best interest of shareholders.
The proposed equity incentive plan would authorize an additional 5,145,000 shares for equity awards, representing approximately 7.2% additional dilution. Forward notes that the plan can be defeated by a majority of votes cast against it, making shareholder opposition crucial. However, because SkyAI employs an uncontested plurality voting structure, individual director nominees cannot be defeated solely through withhold votes. As a result, Forward is urging shareholders to withhold votes from all five nominees to signal dissatisfaction with the board’s oversight.
Forward reiterated its confidence in the strategic rationale for a combination with SkyAI and expressed readiness to engage in discussions regarding a potential strategic transaction. The company believes that its proposal would have provided significant value to SkyAI shareholders and that SkyAI’s rejection was short-sighted. By taking this public stance, Forward aims to draw attention to what it perceives as governance shortcomings and value-destructive practices within SkyAI.
The outcome of the shareholder vote will be closely watched as a referendum on SkyAI’s management and board. If shareholders side with Forward, it could prompt a reassessment of SkyAI’s strategy and open the door for renewed acquisition talks. Conversely, a vote in favor of the current board’s recommendations would likely solidify the status quo. For more details on Forward’s position, the full press release is available at https://nnw.fm/1Yn1Q.
