WEST PALM BEACH, Fla., Jan. 22, 2015 /PRNewswire/ -- Eriksen Capital Management, the owner of 6.3% of Solitron Devices (SODI) shares, has a sent a letter to the Board expressing its outrage at the board's recent actions.
Summary of the facts:
- Prior to 2013, Solitron failed to hold an annual meeting for over ten years.
- It took a shareholder lawsuit for the board to hold its annual meeting in 2013. At that meeting, shareholders rejected two of the company's four board nominees. Management responded by reappointing one of those nominees anyway.
- At the 2014 annual meeting, shareholders rejected the board's sole nominee.
- After that meeting large shareholders reached out to the company and submitted potential candidates. The board ignored them all.
- On January 12, 2015 Solitron filed an 8-K with the SEC stating that on January 12 the board voted to increase its size to five members and appointed Dwight Aubrey and John Chiste to fill the two vacancies. Due to a staggered board shareholders cannot vote on either appointee until 2017.
- We believe Solitron made a false statement in its 8-k filing on January 12, 2015. Solitron states that "Mr. Chiste is a director and Chairman of the Audit Committee of Forward Industries, Inc." The truth is Mr. Chiste was voted out as a director by shareholders (along with the rest of Forward Industries nominees) in a proxy contest that was certified on January 5, 2015.
Unfortunately it gets worse. Mr. Chiste, who owned no stock in Forward, supported spending company resources to work against large shareholders. During the proxy battle, Mr. Chiste was accused of voting to issue preferred stock just before the proxy vote in order to try and tilt the election in its favor. Shareholders thoroughly rejected his leadership as Forward's slate got clobbered by nearly 3 to 1.
Incredibly, Solitron not only wants Mr. Chiste as a director, they placed him on their Nominating Committee to help select other directors. Solitron needs directors who are also shareholders that passionately care about the future of the company, not ones with a history of fighting against shareholders. Mr. Chiste should be asked to resign immediately.
There is clearly a board and management problem at Solitron. We intend to fight with shareholders to fix both.
Eriksen Capital Management
SOURCE Eriksen Capital Management