Company: FWDI
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001683168-25-003548
Chunk: 53

Company: Forward Industries, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Item 2
Chunk 53
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 $2.47 and $0.90 for the 2025 Period and the 2024 Period, respectively.

LIQUIDITY AND CAPITAL RESOURCES

Our primary source of liquidity
is our operations. The primary demand on our working capital has historically been (i) operating losses, (ii) repayment of debt obligations,
and (iii) any increases in accounts receivable and inventories arising in the ordinary course of business. Historically, our sources of
liquidity have been adequate to satisfy working capital requirements arising in the ordinary course of business. At March 31, 2025, our
working capital (excluding discontinued assets held for sale) was $2,784,000 compared to working capital of $4,663,000 at September 30,
2024. The decrease was primarily due to lower cash and accounts receivable balances.

Forward China, our largest
vendor and an entity owned by our Chairman of the Board and Chief Executive Officer, holds a $1,600,000 promissory note (the “FC
Note”) issued by us which matures on June 30, 2025 (see Note 8 to the condensed consolidated financial statements). The outstanding
balance of the FC Note has been reduced to $600,000 following principal payments totaling $1,000,000 made through March 31, 2025. While
the FC Note has been extended multiple times to support our liquidity position, we intend to fund the repayment at maturity using existing
cash balances, proceeds from equity and/or debt financing, and/or by seeking additional extensions as deemed necessary. Additionally,
Forward China has extended payment terms on our outstanding payables due to them when necessary. At March 31, 2025, our 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