Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 1854

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 8
Chunk 1854
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 either for cause or upon certain acts of insolvency,
each as described therein. While the Asset Manager is the exclusive asset manager for the Company, the Asset Manager may nonetheless provide
similar services to other clients, and the Asset Manager or its affiliates may engage in transactions for their own accounts. The Asset
Management Agreement contains customary representations, warranties, confidentiality, indemnification and limitation of liability provisions,
and is governed by the laws of the State of New York.

     F-35 

FORWARD INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During Fiscal 2025, the Company
incurred fees of $535,000 related to the Asset Management Agreement, which were recorded on the consolidated financial statements as a
component of related party expenses and related party payables at and for the fiscal year ended September 30, 2025.

Buying Agency and Supply Agreement

The Company had a Buying Agency
and Supply Agreement (the “Supply Agreement”) with Forward China. The Supply Agreement provided that, upon the terms and subject
to the conditions set forth therein, Forward China would act as the Company’s exclusive buying agent and supplier of Products (as
defined in the Supply Agreement) in the Asia-Pacific region. The Company purchased products at Forward China’s cost and, from October
2023 through October 2024, paid Forward China a monthly service fee equal to the sum of (i) $65,833, and (ii) 4% of “Adjusted Gross
Profit”, which is defined as the selling price less the cost from Forward China. Due to the Retail Exit and decline in the OEM distribution
segment business, this sourcing agreement expired October 31, 2024. In November 2024, the Company and Forward China agreed to: (i) extend
the sourcing 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 month, and (iii) change the payment terms to better align with payments from the Company’s customers.
The Sourcing Agreement was extended until May 9, 2025, and was subsequently terminated in connection with the sale of the OEM segment.
See Note 3.

In connection with the sale of
the OEM segment, effective May 16, 2025, the Company and Terence Wise, who served as the Chief Executive Officer of the Company