Irvine-based Lantronix Inc., which faces a challenge by its founder and longtime board member, on Monday urged shareholders to back its candidates in an upcoming board election.
“Lantronix urges all stockholders to vote for Lantronix’s highly qualified and experienced directors,” the company said in a letter to shareholders.
Shareholders are set to elect directors at a Dec. 15 annual meeting.
The move follows a budding board fight launched by Bernhard Bruscha, who owns nearly 40% of Lantronix.
Bruscha, a former chairman of Lantronix, is mounting a board challenge after more than a year of agitating for change at the maker of networking electronics.
He is backing himself and two other change-minded candidates for spots on the company’s nine-member board.
Lantronix on Monday offered a big concession to try and avoid a proxy fight by saying it would assure Bruscha and his two slate candidates seats on the board.
But the two sides remain at odds over other issues.
Bruscha also is seeking the ouster of Chief Executive Jerry Chase and Chairman Lew Solomon as well as changes to the company’s bylaws and business strategy.
Lantronix takes issue with the larger effort by Bruscha to shakeup Lantronix’s business model, according to its letter to shareholders.
“Despite our efforts to accommodate Mr. Bruscha, he has embarked on a public campaign attacking your current board and management,” the company said. “This campaign is not about board seats. It is about two fundamentally different visions of the future of Lantronix.”
Lantronix’s management defended its strategy and said the company has “taken decisive steps to reposition Lantronix for growth.”
The company purports that its plan of action “will build long-term value for Lantronix stockholders.”
Bruscha’s slate also includes Fred Thiel, a former Lantronix chief executive from 1998 to 2002, and Hoshi Printer, a former chief financial officer with Irvine’s Autobytel Inc.
Lantronix makes small electronic devices that allow vending machines, thermostats, retail terminals, ATMs and other machines to be accessed via the Internet or other computers.
Last month, Bruscha laid out his case against Lantronix in a letter and Securities and Exchange Commission filings that argue that management and directors have presided over “lackluster” results and have a “lack of vision.”
Lantronix’s shares are roughly flat in the past month on a market value of $34 million.
