Company: FWDI
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001683168-25-003548
Chunk: 21

Company: Forward Industries, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Item 1
Chunk 21
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On February 21, 2025, the
Company was notified by Nasdaq that due to its reported Shareholders’ Equity of $2,279,297 at December 31, 2024, it was not in compliance
with the Stockholders’ Equity Rule. Due to the Panel Monitor, the Company was not eligible for any grace period and Nasdaq determined
the Company’s common stock would be scheduled for delisting from Nasdaq. On February 27, 2025, the Company requested a hearing on
this matter with the Panel, which stayed any trading suspension or delisting of the Company’s common stock until the completion
of the hearings process.

As a result of the fourth
conversion agreement with Forward China (see Note 8), the Company regained compliance with the Stockholders’ Equity Rule in March
2025 and was formally notified by Nasdaq in April that it was in compliance with all applicable continued listing standards and that the
scheduled hearing had been canceled.

Preferred Stock

In
connection with the Accounts Payable Conversion Agreements with Forward China (see Note 8), the Company filed three Certificates of Amendment
to the Certificate of Incorporation (the “COD”) designating 6,700 shares of Series A-1 Convertible Preferred Stock (the “Series
A-1”) with a stated value of $1,000 per share (the “Stated Value”).

The
holders of the Series A-1 have no voting rights and rank senior to all classes or series of the Company’s common stock with respect
to the distribution of assets upon liquidation, dissolution, or winding up. Subject to a 19.9% share cap (as defined in the COD), the
Series A-1 shall be convertible into a number of shares of the Company’s common stock as determined by (i) multiplying the number
of shares to be converted by the Stated Value, (ii) adding the result of all accrued and accumulated and unpaid dividends on such shares
to be converted, and then (iii) dividing the result by the conversion price of $7.50, subject to adjustment as defined in the COD. The
Series A-1 is not redeemable.

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Stock Options

On October 1, 2024, the Company
granted options to two of its non-employee directors to purchase an aggregate of 48,020 shares of its common stock at an exercise price
of $3.73 per share. The options vest