Company: FWDI
Filing Date: 2025-06-10
Form Type: PRE 14A
Source: 0001683168-25-004370
Chunk: 19

Company: Forward Industries, Inc.
Filing Date: 2025-06-10
Form: PRE 14A
Chunk 19
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 New Agreement was
substantially similar to the Supply Agreement (disclosed above) except for the reduced monthly fee payable to Forward China. In November
2024, the Company and Forward China agreed to: (i) extend the New Agreement until April 30, 2025, but allow either party to cancel with
30 days’ notice, (ii) reduce the fixed portion of the sourcing fee to $35,000 per months, and (iii) change the payment terms to
better align with payments from our customers. The New Agreement expired in May 2025.

On November 2, 2023, Forward
and Forward China entered into a Deferred Payment Agreement. As of October 30, 2023, Forward owed Forward China $7,365,238 for the purchase
of products in its OEM and retail divisions and the cancelation of open purchase orders related to Forward’s exit from the retail
division. To preserve Forward’s liquidity position in the future, Forward China agreed to limit the amount of the payables that
it would seek to collect from Forward to $500,000 in any 12-month period. The amount due to Forward China has been settled in accordance
with the Transaction Agreement and Separation Agreement (described below).

In order to maintain compliance
with Nasdaq’s listing standards, the Company entered into four separate agreements with Forward China (the “Conversion Agreements”),
to convert an aggregate $4,925,000 of accounts payable due to Forward China into 4,925 shares of newly designated Series A-1 convertible
preferred stock with a stated value of $1,000 per share. 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 Certificate of Amendment of the Certificate of Incorporation filed related to the transaction),
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.

In October 202