Company: FWDI
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001683168-25-003548
Chunk: 38

Company: Forward Industries, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Item 1
Chunk 38
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 accounts payable
due to Forward China was approximately $4,998,000. In connection with the sourcing agreement entered into in October 2023 (see Note 8
to the condensed consolidated financial statements) and in order to preserve our current and future liquidity, Forward China agreed to
limit the amount of outstanding payables it would seek to collect from us up to $500,000 in any 12-month period. We have agreed to pay
these amounts within 30 days of any such request. This agreement pertains only to payables that were outstanding at October 30, 2023 which
totaled $7,365,000. Purchases made from Forward China made after October 30, 2023, are not covered by this agreement and are expected
to be paid according to normal payment terms. At March 31, 2025, the remaining balance covered by this agreement was $2,099,000.

As previously disclosed on
a Form 8-K filed with the SEC on March 24, 2025, 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 business. As part of those proposed terms,
a payment plan on the amounts owed under the FC Note 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 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.

Our 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. We had an accumulated deficit and working
capital (excluding discontinued assets 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.

In December 2024, we
were notified by our largest design customer