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 letter, released today, outlines several concerns about SkyAI's governance and financial practices, and highlights the rejection of Forward's acquisition proposal.
In the letter, Forward Industries points out that SkyAI rejected its all-stock acquisition proposal made on June 15, which valued SkyAI at $1.55 per share, representing a 20% premium to SkyAI's prior closing price. According to Forward, this rejection indicates that SkyAI's board may not be acting in the best interests of its shareholders, particularly given the potential value creation that could have resulted from the combination.
Forward also raised concerns about related-party transactions disclosed in SkyAI's proxy statement. The proxy reportedly reveals that 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 asserts that these entities are owned and controlled by the brother of SkyAI's Chief Investment Officer and director, Yuwen (Alice) Zhang. Such arrangements, Forward argues, raise serious questions about conflicts of interest and the stewardship of shareholder capital.
Financial performance and shareholder value are additional focal points of Forward's concerns. The letter suggests that SkyAI's financial results have been underwhelming, and that the proposed equity incentive plan would exacerbate dilution. The plan would authorize an additional 5,145,000 shares for equity awards, representing approximately 7.2% additional dilution. Forward is urging shareholders to cast their votes against this plan, noting that it can be defeated by a majority of votes cast against it. In contrast, the director nominees are subject to an uncontested plurality voting structure, meaning that individual nominees cannot be defeated solely through withhold votes. Therefore, Forward recommends that shareholders withhold votes on all five director nominees as a signal of dissatisfaction.
Despite these criticisms, Forward Industries maintains 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 company's letter comes as part of a broader effort to influence the outcome of SkyAI's annual meeting and to protect shareholder interests.
This situation is significant for investors in both companies and for the broader market, as it highlights issues of corporate governance, related-party transactions, and the potential for value creation through mergers and acquisitions. Shareholders of SkyAI face key decisions that could impact the company's future direction and their own financial returns. The outcome of the vote will also provide insight into the level of shareholder activism and the effectiveness of governance mechanisms in the current market environment.
Forward Industries itself is a Solana-focused digital asset treasury company, with a strategy to buy, hold, and grow SOL and related assets. The company launched this strategy in September 2025 with backing from investors including Galaxy Digital and Jump Crypto. For more information on Forward's treasury strategy, visit the company's website.
The full press release is available at https://nnw.fm/1Yn1Q. Additional news and updates on Forward Industries can be found at https://nnw.fm/FWDI.
