WEST PALM BEACH, Fla.,
July 22, 2014 /PRNewswire/
-- Forward Industries, Inc. (NASDAQ: FORD), a designer and
distributor of custom carry and protective solutions, announced
today that it has filed a lawsuit in the U.S. District Court for
the Southern District of New York
against Terence Bernard Wise, a
director of Forward, and his long-time business partner,
Jenny P. Yu, alleging multiple
violations of federal securities laws, including the filing of
deceptive and deficient Schedules 13D and proxy solicitation
materials with the Securities and Exchange Commission
("SEC"). In its complaint, Forward alleges that Mr. Wise and
Ms. Yu have been acting as an undisclosed "group" in connection
with their involvement in Mr. Wise's bid to replace the Board of
Directors of Forward (the "Board") with his hand-picked
designees. The suit alleges, among other things, that:
- Mr. Wise and Ms. Yu each violated Section 13(d) of the
Securities Exchange Act of 1934 (the "Exchange Act") by improperly
failing to report their beneficial ownership of Forward stock and
plans and activities as a "group" in their respective Schedule 13D
filings;
- Mr. Wise violated Section 14(a) of the Exchange Act, including
the anti-fraud provisions thereunder, by improperly failing to
disclose in his proxy solicitation materials the identity of Ms.
Yu, her ownership of Forward stock and that she and Mr. Wise are
members of a "group" within the meaning of the securities
laws;
- Ms. Yu improperly acquired Forward stock while in possession of
material non-public information about the Company that she obtained
while attending Board meetings and in her capacity as Managing
Director of the Company's exclusive sourcing vendor; and
- The purported notices of director nominations provided by Mr.
Wise do not comply with the advance notice of nomination
requirements contained in Forward's bylaws as they do not disclose
his arrangements and understandings with Ms. Yu with respect to
their "group" activities or their beneficial ownership of Forward
stock, and are therefore invalid.
As previously announced, on June 6,
2014, Mr. Wise chose to launch a costly and disruptive proxy
contest to replace a majority of the entire Board at the 2014
Annual Meeting of Shareholders. Since then, Mr. Wise has
stepped up his campaign to replace the Board with his hand-picked
designees. On June 26, 2014,
Mr. Wise submitted a second nomination letter purporting to
nominate an additional three director candidates. Instead of
seeking to elect a majority-slate, Mr. Wise now seeks to replace
the entire Board with himself and his designees.
Frank LaGrange Johnson, Chairman
of the Board of Forward and a member of the Special Committee of
the Board that is evaluating Mr. Wise's purported nominations,
commented: "The Special Committee believes Mr. Wise and Ms. Yu have
been misleading in their filings with the SEC and in Mr. Wise's
communications with shareholders. We are fully committed to
aggressively pursuing this legal action in order to protect the
interests of all Forward shareholders."
Forward's lawsuit seeks injunctive and declaratory relief, among
other things, directing Mr. Wise and Ms. Yu to comply with the
federal securities laws.
Groundless Wise Lawsuit
Forward also commented today on the lawsuit filed by Mr. Wise in
a New York State Court against the
five members of the Board comprising the Special Committee, seeking
a temporary restraining order ("TRO") and an injunction that would
prevent a majority of the Board from voting on proposals to raise
capital or engage in any extraordinary transactions. The
Special Committee believes that Mr. Wise's lawsuit is a frivolous
and ill-advised effort to usurp the Board's authority without a
shareholder vote.
Last week, Forward's lawyers appeared in court in opposition to
Mr. Wise's request for a TRO. The Court declined to issue a
restraining order, did not schedule a hearing on Mr. Wise's
proposed preliminary injunction, and expressed strong skepticism
about the relief requested by Mr. Wise. Yesterday, the
members of the Special Committee filed with the Court an Answer
denying Mr. Wise's claims.
Mr. Johnson commented on behalf of the Special Committee: "We
are extremely disappointed that Mr. Wise has chosen to resort to
meritless litigation. We believe Mr. Wise's lawsuit is not in
the best interests of shareholders and serves no purpose other than
to perpetuate his scorched-earth campaign to elect his dissident
slate. While Mr. Wise claims to be suing on behalf of the
Company, he is really representing his own interests and those of
his company, which enjoys a multi-million dollar sourcing contract
with Forward, and not those of the shareholders. The Section
13(d) disclosure laws were specifically designed to protect
shareholders from undisclosed 'groups' surreptitiously accumulating
significant positions in companies without disclosing their true
intent."
The members of the Special Committee intend to vigorously defend
themselves and to continue their efforts to maximize value for all
shareholders, including but not exclusively Mr. Wise and Ms. Yu,
through Forward's carefully planned growth strategy that balances
organic and merger related opportunities.
Note Regarding Forward-Looking Statements
In addition to the historical information contained herein, this
press release contains certain "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, that reflect the Company's current expectations and
projections about its future results, performance, prospects and
opportunities. The Company has tried to identify these
forward-looking statements by using words such as "may," "should,"
"expect," "hope," "anticipate," "believe," "intend," "plan,"
"estimate" and similar expressions. These forward-looking
statements are based on information currently available to the
Company and are subject to a number of risks, uncertainties and
other factors that could cause its actual results, performance,
prospects or opportunities to differ materially from those
expressed in, or implied by, these forward-looking
statements. No assurance can be given that the actual results
will be consistent with the forward-looking statements.
Investors should read carefully the factors described in the "Risk
Factors" section of the Company's filings with the SEC, including
the Company's Form 10-K for the year ended September 30, 2013 for information regarding risk
factors that could affect the Company's results. Except as
otherwise required by Federal securities laws, the Company
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events, changed circumstances or any other reason.
About Forward Industries
Incorporated in 1962, and headquartered in West Palm Beach, Florida, Forward Industries
is a global designer and distributor of mobile device cases and
accessories. Forward's products can be viewed online at
www.forwardindustries.com.
Additional Information and Where To Find It
In connection with the proxy contest initiated by Mr. Wise, the
Company will be filing documents with the SEC, including the filing
by the Company of a Proxy Statement. Shareholders are urged
to read the Proxy Statement for the 2014 Annual Meeting of
Shareholders when it becomes available, as well as other documents
filed with the SEC, because they will contain important
information. The final Proxy Statement will be mailed to
shareholders of the Company. Shareholders may obtain free
copies of these documents (when they are available) and other
documents filed with the SEC at (www.sec.gov) or by contacting the
Company at (561) 465-0030.
Participants in the Solicitation of Proxies
The following directors and executive officers of Forward
Industries may be deemed to be participants in the solicitation of
proxies from shareholders in connection with the Company's 2014
Annual Meeting of Shareholders (each individual's beneficial
ownership of shares of Common Stock of the Company is set forth in
the parenthetical opposite his name): Robert Garrett, Jr. (401,157 shares),
James O. McKenna III (176,953
shares), Frank LaGrange Johnson
(202,855 shares), Owen P.J. King
(45,000 shares), John F. Chiste
(45,000 shares) and Timothy Gordon
(113,427 shares). Shareholders are advised to read the
Company's Proxy Statement for the 2014 Annual Meeting of
Shareholders and other relevant documents when they become
available, because they will contain important information. You
can obtain free copies of these documents from the Company as
described above.
Contact:
MacKenzie Partners, Inc.
Larry Dennedy
Laurie Connell
(212) 929-5500
SOURCE Forward Industries, Inc.