SCHEDULE: Activists Criticize SkyAI Governance, Plan Director 'Withhold'

A group of reporting persons, including Bastion Trading Limited, has filed a Schedule 13D expressing deep concerns over SkyAI, Inc.'s corporate governance, conflicts of interest, and compensation practices, and intends to withhold votes for all incumbent directors.

Summary

• Bastion Trading Limited, Bastion Holdings Limited, Lucio Holding Limited, and Wei Zhu (collectively, the Reporting Persons) have filed a Schedule 13D concerning their beneficial ownership of SkyAI, Inc. common stock.
• The Reporting Persons collectively beneficially own 9.99% of SkyAI, Inc.'s outstanding shares.
• They express significant concerns regarding the Issuer's underperformance, corporate governance practices, conflicts of interest, and related party transactions.
• Specific concerns include compensation paid to Sol Edge Limited and Sol Markets, which are controlled by the brother of director Alice Zhang, and former employment of her husband by Sol Edge Limited.
• These concerns led to the resignation of an independent director in December 2025.
• The Reporting Persons also find revisions to corporate governance, including bylaw amendments and the adoption of a 'poison pill,' to be concerning.
• They intend to vote 'WITHHOLD ALL' for the re-election of all five incumbent directors at the 2026 annual meeting.
• The Reporting Persons aim to engage in dialogue with the Board and management to ensure stockholder interests are represented.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as negative due to significant concerns raised by the reporting persons regarding corporate governance, conflicts of interest, and management compensation, leading to a 'WITHHOLD ALL' recommendation for incumbent directors.

Positives

• The Reporting Persons believe the shares represented an attractive investment opportunity when purchased.
• Participation in the PIPE offering was based on the belief that it represented an attractive investment opportunity.
• The Reporting Persons hope to engage in meaningful dialogue with the Board and management to improve stockholder representation.

Negatives

• Deep concerns are raised regarding the Issuer's underperformance.
• Questionable corporate governance practices are highlighted.
• Apparent conflicts of interest and related party transactions are a major concern.
• High compensation paid to Sol Edge Limited and Sol Markets, entities controlled by a director's brother, is criticized.
• Revisions to corporate governance, including bylaw amendments and adoption of a 'poison pill,' are viewed negatively.
• The Issuer's perceived attempt to rush the 2026 annual meeting process with short notice is troubling.
• The Reporting Persons intend to vote 'WITHHOLD ALL' for all incumbent directors.

Risks

• Potential for continued underperformance of SkyAI, Inc. shares.
• Ongoing conflicts of interest and related party transactions could negatively impact the company.
• Further deterioration of corporate governance practices.
• Shareholder activism and potential proxy contests could disrupt operations.
• The 'poison pill' could deter future beneficial ownership or strategic actions.
• The intention to withhold votes for directors may lead to governance challenges or instability.

Future Outlook

The Reporting Persons intend to review their investment in SkyAI, Inc. on a continuing basis and may engage in various actions including communications with management and the Board, discussions with stockholders, making proposals for changes to capitalization, Board, or operations, purchasing or selling additional securities, or engaging in hedging transactions.

Management Comments

• The Reporting Persons purchased the Shares based on the belief that the Shares, when purchased, were undervalued and represented an attractive investment opportunity.
• The Reporting Persons participated in the PIPE based on their belief that the PIPE and the securities, when purchased, represented an attractive investment opportunity.
• The Reporting Persons are deeply concerned by the Issuer's underperformance, as well as its questionable corporate governance practices, apparent conflicts of interest and related party transactions.
• These concerns are highlighted by the apparent conflicts of interest raised by the high level of compensation paid by the Issuer to Sol Edge Limited and Sol Markets under the Consulting Agreement and Strategic Advisor Consulting Agreement, respectively.
• We also find it telling that a proposal for stockholders to ratify the poison pill is not included on the agenda for the Issuer's 2026 annual meeting of stockholders.
• The Reporting Persons also find it troubling that the Issuer is seemingly attempting to rush the process for the 2026 Annual Meeting - providing a mere 32 days' notice of such meeting.
• For the foregoing reasons, on September 3, 2026, the Reporting Persons determined that they currently intend to vote their shares 'WITHHOLD ALL' with respect to the re-election of all five of the Issuer's incumbent directors.
• The Reporting Persons hope to engage in a meaningful dialogue with the Board and management with the goal of ensuring that the best interests of stockholders are appropriately represented in the boardroom.

Industry Context

StockSavvy.ai notes that this filing reflects a common theme in the current market where activist investors are scrutinizing corporate governance, executive compensation, and related-party transactions, particularly following capital raises like the PIPE. The concerns raised about bylaw amendments and 'poison pills' are often seen as defensive measures by management against shareholder influence.

Corporate Governance

Related Party Transactions

• Concerns are raised regarding high compensation paid to Sol Edge Limited and Sol Markets, which are wholly-owned and controlled by the brother of director Alice Zhang.
• Sol Edge Limited formerly employed Alice Zhang's husband.

Stakeholder Impact

• Shareholders: Potential negative impact due to concerns about underperformance, governance, and conflicts of interest; intention to withhold votes may lead to board instability or pressure for change.
• Directors: Incumbent directors face a 'WITHHOLD ALL' recommendation, indicating a loss of confidence from a significant shareholder group.
• Management: May face increased scrutiny and pressure to address governance and compensation concerns.

Next Steps

• The Reporting Persons intend to vote their shares 'WITHHOLD ALL' for the re-election of all incumbent directors at the 2026 annual meeting.
• The Reporting Persons aim to engage in a meaningful dialogue with the Board and management.
• The Reporting Persons will continue to review their investment in the Issuer and may take further actions as deemed advisable.

Key Dates

Recommendation

The significant governance concerns, conflicts of interest, and the explicit 'WITHHOLD ALL' recommendation for all incumbent directors suggest a fundamental lack of trust in the current leadership and strategic direction. This, combined with criticisms of compensation and bylaw changes, points to a high probability of continued underperformance or value destruction, making a sell recommendation prudent for seasoned investors.

Keywords

Schedule 13D, SkyAI, Inc., Corporate Governance, Conflicts of Interest, Shareholder Activism, Director Election, PIPE, Warrants