Company: FWDI
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001683168-25-006141
Chunk: 33

Company: Forward Industries, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 1
Chunk 33
---
able Conversion Agreements

In order to maintain compliance
with Nasdaq’s listing standards, the Company entered into four separate agreements with Forward China (the “Conversion Agreements”)
pursuant to which Forward China agreed to convert an aggregate $4,925,000 of amounts due to Forward China into shares of preferred stock.
Under the terms of the Conversion Agreements, in the fourth quarter of fiscal 2024 and the second quarter of fiscal 2025, respectively,
Forward China agreed to convert $2,200,000 and $2,725,000, respectively, of amounts due to Forward China  into 2,200 shares and 2,725
shares, respectively, of the Company’s Series A-1. See Note 6.

     20 

Promissory Note

On January 18, 2018, the
Company issued a $1,600,000 unsecured promissory note payable to Forward China to fund the acquisition of IPS. The promissory note bears
an interest rate of 8% per annum and had an original maturity date of January 18, 2019. Monthly interest payments commenced on February
18, 2018, with the principal due at maturity. The Company incurred and paid interest associated with this note of $12,000 and $14,000
in the three months ended June 30, 2025 and 2024, respectively and $36,000 and $50,000 in the nine months ended June 30, 2025 and 2024,
respectively. In connection with the sale of the OEM segment, the maturity date of this note was extended to December 31, 2025. The maturity
date of this note has been extended multiple times pursuant to amendments between the parties, with the current maturity date being December
31, 2025. This note has a remaining balance of $600,000 at June 30, 2025.

Other Related Party Activity 

The Company’s retail
division sold smart-enabled furniture, which was sourced by Forward China and sold in the U.S. under the Koble brand name. The Koble brand
is owned by The Justwise Group Ltd. (“Justwise”), a company owned by Terence Wise, former Chief Executive Officer and Chairman
of the Company. The Company recognized revenues from the sale of Koble products of $4,000 and $380,000 in the three and nine months ended
June 30, 2024, respectively