Forward Industries’ Largest Shareholder & Board Member, Terence Bernard Wise, Sets the Record Straight on His Intention to ...
June 20 2014 - 8:00AM
Business Wire
Wise seeks to introduce new, highly qualified, and independent
directors capable of creating value for Forward's shareholders
Forward’s share price has plummeted over 60% under the
leadership of Chairman Frank LaGrange Johnson and his management
team
It is time for Forward shareholders to hold Mr. Johnson and his
management team accountable for years of poor operating
performance, weak corporate governance, and substantial declines in
Forward's share price
Terence Bernard Wise, the largest shareholder and member of the
board of directors of Forward Industries, Inc. (NASDAQ: FORD), a
designer and distributor of custom carry and protective solutions,
commented today on his decision to nominate himself and three
highly qualified independent director candidates for election as
directors at the 2014 Annual Meeting of Shareholders of the
Company. In response to Mr. Wise’s decision to nominate a slate of
directors, the Company issued a press release that made a number of
false and unsubstantiated claims. Mr. Wise rejects their claims and
seeks to set the record straight as to his intentions:
It is greatly disheartening to see Mr. Johnson and his
supporters on the board expending Forward's funds on baseless
public relations tactics. They have intentionally perverted a
public record that only attests to their own misfeasance.
My actions have been borne out of a deep concern for Forward's
financial position, which under Mr. Johnson's leadership has seen a
share price decline of over 60%. As Forward's largest shareholder,
owning 19.6% of its common stock, the value of my investment in
Forward has suffered under Mr. Johnson's regime. I am thus
compelled to act as a result of my fiduciary duties as a director
and my concern as an investor.
- I do not seek to control the board or
to take the Company private.
- My sole goal is to remove Mr. Johnson
and CEO Robert Garrett in order to establish an independent and
balanced board that will represent the best interests of all
shareholders.
- My concerns with Forward’s leadership
derive from my disappointment with the Company’s returns and my
firm belief that Mr. Johnson has been exploiting his position as
Chairman for personal gain through a string of questionable
transactions with the Company.
- I am not seeking to introduce new
directors to represent my interests, but rather fully independent
directors with relevant management, financial, and operational
experience, including in industries directly relevant to Forward's
core business, that are capable of maximizing value for all
shareholders. While I believe my new director candidates would be
highly valuable additions to the board, I remain open to discussing
alternative independent candidates that are acceptable to both
myself and the other members of the board to replace Messrs.
Johnson and Garrett.
Mr. Johnson and his supporters on the board have claimed that my
real goal is to “perpetuate and enhance the cash flows” from the
sourcing and supply arrangement between the Company and Forward
Industries (Asia−Pacific) Corporation.
- My primary motivation since first
investing in Forward has been to improve its profitability by
capitalizing on my well-established sourcing operations and
contacts in the Far East.
- I find it truly alarming that Mr.
Johnson and his supporters would now question the sourcing
arrangement, which has been the key driver in Forward’s modest
return to profitability in FY 2013, and which the entire board just
renewed in February of this year. In truth, it is the Company that
has much to lose if our sourcing relationship were to
terminate.
- Forward even acknowledges the
significant benefits that the sourcing arrangement with Forward
Asia has produced. According to Forward’s most recent annual report
for FY 2013, “gross profit increased $2.5 million, or 64%, to $6.4
million in Fiscal 2013 from $3.9 million in Fiscal 2012…This
improvement was driven primarily by cost savings realized in Fiscal
2013 from the restructuring of our Asia-based sourcing and quality
assurance operations (refer to Note 12, “Buying Agency and
Supply Agreement,” to our Consolidated Financial Statements), which
were initiated in March 2012 and substantially completed as of
September 30, 2012."
For over six months, I have repeatedly entreated the board to
address the Company’s chronic underperformance, poor corporate
governance standards, and lack of independent board leadership and
to rethink the numerous related-party transactions benefiting Mr.
Johnson at the expense of Forward’s shareholders. Despite my
attempts to engage Mr. Johnson and his cohorts in a constructive
dialogue, I have been met with silence and intentional obstruction.
It has now become necessary to bring these issues directly to the
attention of the shareholders.
As Forward's largest shareholder, my interests are irrefutably
aligned with those of the stockholders. I would encourage my fellow
shareholders in Forward to review the public filings and question
whether you can continue to afford the leadership that is currently
in place.
ADDITIONAL INFORMATION:
Terence Bernard Wise, together with the other participants named
herein, intends to file a preliminary proxy statement and
accompanying proxy card with the Securities and Exchange Commission
(the “SEC”) to be used to solicit votes for the election of his
director nominees at the 2014 annual meeting of stockholders of
Forward Industries, Inc. ("Forward"), a New York corporation.
Forward stockholders are strongly advised to read the proxy
statement when it becomes available, as it will contain important
information. SUCH PROXY STATEMENT AND OTHER PROXY MATERIALS WILL BE
AVAILABLE AT NO CHARGE ON THE SEC’S WEB SITE AT HTTP://WWW.SEC.GOV.
IN ADDITION, THE PARTICIPANTS IN THIS PROXY SOLICITATION WILL
PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT CHARGE, WHEN
AVAILABLE, UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO
Innisfree M&A Incorporated TOLL-FREE AT (888) 750-5834 (BANKS
AND BROKERS MAY CALL COLLECT AT (212) 750-5833).
The Participants in the proxy solicitation are Terence Bernard
Wise, Howard Morgan, Michael Luetkemeyer and Eric Freitag
(collectively, the “Participants”).
As of the date hereof, Mr. Wise beneficially owns 1,608,541
shares of the Company's common stock, constituting approximately
19.6% of the class. As of the date hereof, Mr. Morgan beneficially
owns 25,000 shares of the Company's common stock.
Innisfree M&A IncorporatedScott Winter, 212-750-5833
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