Company: FWDI
Filing Date: 2025-01-17
Form Type: 10-K/A
Source: 0001683168-25-000424
Chunk: 20

Company: Forward Industries, Inc.
Filing Date: 2025-01-17
Form: 10-K/A
Chunk 20
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 Koble brand name. The Koble brand
is owned by Justwise, a company owned by Mr. Wise. The Company recognized revenues from the sale of Koble products of $380,000 and $2,058,000
in fiscal 2024 and fiscal 2023, respectively. The agreement expired in August 2023 and was extended on a month-to-month basis until November
30, 2023. In consideration of their services, Forward paid Justwise $10,000 per month.

| 12 |

The Company has an arrangement
with Happ LLC (“Happ”), whose principal owner is the daughter of Ms. Yu, whereby the Company purchases products directly
from Forward China and ships the product directly to Happ. In consideration for these services, the Company is paid a 3.0% fee on the
total cost of the product. Revenue recognized from Happ was approximately $523,000 and $626,000 in fiscal 2024 and fiscal 2023, respectively.

The sister of Paul Severino,
the President of IPS, was employed by IPS as its Chief Marketing Officer and received total compensation of approximately $30,000 and
$120,000 in fiscal 2024 and fiscal 2023, respectively.

To fund the acquisition
of IPS, the Company issued a $1.6 million promissory note to Forward China in consideration for a one-year loan. The note was originally
due January 18, 2019, but has been subsequently extended several times and is now due on June 30, 2025. The note bears an
interest rate of 8% and charges monthly interest. The Company made approximately $63,000 and $104,000 in interest payments
associated with the note in fiscal 2024 and fiscal 2023, respectively. In fiscal 2024, the Company made $500,000 of principal payments
on this note. As of January 17, 2025, the principal on this note is $600,000.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Committee’s Pre-Approval Policy

The Audit Committee pre-approves
all audit and permissible non-audit services on a case-by-case basis. In its review of non-audit services, the Audit Committee considers
whether the engagement could compromise the independence of our independent registered public accounting firm, and whether the reasons
of efficiency or convenience is in our best interest to engage our independent registered public accounting firm to perform the