Company: FWDI
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001683168-25-006141
Chunk: 32

Company: Forward Industries, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 1
Chunk 32
---
 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, the Chairman of the Board,
and a director, entered into a Separation Agreement pursuant to which, Mr. Wise resigned from all of these positions with the Company.

Terence Wise, former Chief
Executive Officer and Chairman of the Company, is the owner of Forward China and beneficially owns more than 5% of the Company’s
common stock. In addition, Jenny P. Yu, a Managing Director of Forward China, beneficially owns more than 5% of the Company’s common
stock. The Company recorded service fees to Forward China of $39,000 and $221,000 during the three
months ended June 30, 2025 and 2024, respectively, and $331,000 and $674,000 for the nine months ended June 30, 2025 and 2024, respectively,
which were included as a component of cost of sales upon sales of the related products. Due to the OEM Plan, these costs are now included
in income from discontinued operations for the three and nine months ended June 30, 2025 and 2024. The Company had purchases from Forward
China of approximately $480,000 and $2,149,000, for the three months ended June 30, 2025 and 2024, respectively, and $4,040,000 and $5,672,000
for the nine months ended June 30, 2025 and 2024, respectively. 

In order to preserve the
Company’s liquidity, in November 2023, 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 to $500,000 in any 12-month period, which the Company agreed
to pay within 30 days of any such request. This agreement pertained only to payables that were outstanding at October 30, 2023 of approximately
$7,365,000. Purchases from Forward China made after October 30, 2023 were not covered by this agreement and were expected to be paid according
to normal payment terms. In connection with the sale of the OEM segment in May 2025 (see Note 3), this agreement was terminated and all
amounts due thereunder extinguished.

Accounts Pay