Company: FWDI
Filing Date: 2025-09-16
Form Type: 8-K
Source: 0001683168-25-007036
Chunk: 35

Company: Forward Industries, Inc.
Filing Date: 2025-09-16
Form: 8-K
Item: Item 8
Chunk 35
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 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.

     F-23 

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 $891,000 and $1,266,000 during
Fiscal 2024 and Fiscal 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 fiscal 2024 and 2023. The Company had purchases
from Forward China of $7,862,000 and $12,799,000 during Fiscal 2024 and Fiscal 2023, respectively.

The Company has a separate agreement
with Forward China to address the potential impact of customers sourcing directly from Forward China. In the event a customer of the Company
bypasses the services of the Company and does business directly with Forward China, Forward China will pay a commission of 50% of the
net revenue, less direct costs, generated from the products or services sold. No commissions were recognized in Fiscal 2024 and Fiscal
2023.

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