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 each of its five director nominees at the upcoming annual meeting scheduled for September 18, 2026. The move comes amid Forward's ongoing efforts to engage with SkyAI on a potential strategic combination, following SkyAI's rejection of 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 highlighted several concerns that it believes should prompt shareholders to oppose the company's management. Notably, the proxy statement for SkyAI's annual meeting disclosed $3.3 million in consulting fees paid in 2025 to Sol Edge Limited and 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. This related-party arrangement raises questions about corporate governance and the alignment of management's interests with those of shareholders.
Forward is specifically asking shareholders to vote against the proposed equity incentive plan, which would authorize 5,145,000 additional shares for equity awards, representing approximately 7.2% additional dilution. The company argues that such dilution is unwarranted given the concerns about financial performance and shareholder value. In addition, Forward is urging shareholders to withhold votes on all five director nominees, as a signal of dissatisfaction with the current board's oversight.
The outcome of the vote on the equity plan is critical, as it can be defeated by a majority of votes cast against it. However, due to SkyAI's uncontested plurality voting structure, individual director nominees cannot be defeated solely through withhold votes. This means that shareholders who wish to express their lack of confidence in the board must use their votes on the equity plan as the primary means of protest.
Forward Industries remains confident in the strategic rationale for a combination with SkyAI and has stated its willingness to engage with SkyAI's management and board regarding a potential strategic transaction. The company's letter is part of a broader effort to communicate directly with SkyAI shareholders, providing them with the information needed to make informed decisions at the annual meeting.
The dispute between Forward and SkyAI highlights the growing tensions in the digital asset sector, where companies are increasingly focused on treasury strategies and strategic partnerships. Forward Industries, which describes itself as a Solana-focused digital asset treasury company, has adopted a strategy to buy, hold, stake, trade, invest in, and grow SOL and related digital assets. Its mission is to expand and strengthen the Solana ecosystem by acquiring and staking SOL and engaging with developers and projects within that network.
SkyAI shareholders must weigh the implications of the equity plan and the board's performance against the backdrop of these related-party transactions and the rejected acquisition offer. The vote at the annual meeting will serve as an important indicator of shareholder sentiment and could influence the future direction of SkyAI's corporate governance and strategic decisions.
As the annual meeting approaches, investors will be watching closely to see how the vote unfolds and whether Forward's efforts to sway shareholder opinion will be successful. The outcome could have significant implications for both companies and their respective shareholders.
