Company: FWDI
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001683168-25-003548
Chunk: 8

Company: Forward Industries, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Item 1
Chunk 8
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Liquidity and Going Concern

The accompanying condensed
consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among
other things, the realization of assets and satisfaction of liabilities in the ordinary course of business. The Company had an accumulated
deficit and working capital (excluding assets and liabilities held for sale) of $21,797,000 and $2,784,000, respectively, at March 31,
2025, a net loss of $2,160,000 for the six months ended March 31, 2025 and $1,951,000 in Fiscal 2024 and a cash balance of approximately
$1,400,000 at April 30, 2025.

The Company’s
OEM distribution segment procures substantially all its products through independent suppliers in China through Forward China. In order
to preserve the Company’s current and future liquidity, the Company and Forward China entered into an agreement whereby Forward
China agreed to limit the amount of outstanding payables it would seek to collect from the Company (See Note 8).

In December 2024, our
largest design customer notified us of its plan to discontinue their insulin patch pump program, on which we were working.  We expect
this to cause a material decrease in our revenues beginning in the second quarter of Fiscal 2025. Based on our forecasted cash flows,
we believe our existing cash balance and working capital will not be sufficient to meet our liquidity needs through May 14, 2026, 12 months
from the date of issuance of these condensed consolidated financial statements. These factors raise substantial doubt about our ability
to continue as a going concern.

In conjunction with the OEM Plan, the Company
and Forward China have entered into proposed terms which would provide a framework by which Forward China would purchase either the assets
or the securities of the OEM distribution segment of the business. As part of those proposed terms, a payment plan on the amounts owed
under the note payable and the outstanding payables will be provided by Forward China as part of the consideration paid. We can provide
no assurance that a definitive agreement will be reached or that any transaction will be completed.

The Company is currently in preliminary discussions
regarding a potential sale of equity securities and establishment of an equity line of credit facility with an institutional investor.
We can provide no assurance that either financing will close or, if closed, will be on terms acceptable to us. 

     7 

Management