Company: FWDI
Filing Date: 2025-09-16
Form Type: 8-K
Source: 0001683168-25-007036
Chunk: 98

Company: Forward Industries, Inc.
Filing Date: 2025-09-16
Form: 8-K
Item: Item 1
Chunk 98
---
 April 1, 2023, the Company and
Forward China agreed to reduce the fixed portion of the sourcing fee from $100,000 to $83,333 per month for the remaining term of the
Supply Agreement, which expired in October 2023. Effective October 2023, the Company and Forward China entered into a new sourcing agreement
under which the fixed portion of the sourcing fee was further reduced to $65,833 per month. Other terms in the agreement are substantially
the same as the prior agreement. Due to the Retail Exit and decline in the OEM distribution segment business, the new sourcing agreement
expired October 31, 2024. In November 2024, the Company and Forward China agreed to: (i) extend the sourcing agreement until April 30,
2025, but allow either party to cancel with 30 days’ notice, (ii) reduce the fixed portion of the sourcing fee to $35,000 per month,
and (iii) change the payment terms to better align with payments from the Company’s customers.

Terence Wise, Chief Executive
Officer and Chairman of the Company, is the owner of Forward China. 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 $159,000 and $234,000 during the three months ended December 31, 2024 and 2023, respectively, which are 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 months ended December 31, 2024 and 2023. The Company had purchases from Forward China during the three months ended December
31, 2024 and 2023 of approximately $1,671,000 and $1,516,000, respectively.

In order to preserve the
Company’s current and future 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 pertains only to payables that were outstanding at
October 30, 2023 of approximately $7,365,000. Purchases from Forward China made after October