Company: FWDI
Filing Date: 2025-06-20
Form Type: DEF 14A
Source: 0001683168-25-004653
Chunk: 19

Company: Forward Industries, Inc.
Filing Date: 2025-06-20
Form: DEF 14A
Chunk 19
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 fee was calculated at $100,000 plus 4% of
“Adjusted Gross Profit.”, which is defined as the selling price less the cost from Forward China. From April 2023 through
October 2023, the fixed portion of the monthly fee was reduced to $83,333 per month. The Company recorded service fees to Forward China
of approximately $891,000 and $1,266,000 during fiscal 2024 and 2023, respectively. This supply agreement expired October 22, 2023.

On November 2, 2023, Forward
and Forward China entered into a Buying Agency and Supply Agreement (the “New Agreement”). The New Agreement provided that
Forward China will act as Forward’s exclusive buying agent and supplier of products in the Asia Pacific region. Forward purchased
products at Forward China’s cost and paid Forward China a monthly fee for services it provided under the New Agreement. The monthly
service fee was $65,833 plus 4% of “Adjusted Gross Profit”, which is defined as the revenues recognized by Forward from the
sale of the product less Forward China’s cost for the product. The New Agreement expired October 31, 2024. The New Agreement was
substantially similar to the Supply Agreement (disclosed above) except for the reduced monthly fee payable to Forward China. In November
2024, the Company and Forward China agreed to: (i) extend the New 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 months, and (iii) change the payment terms to
better align with payments from our customers. The New Agreement expired in May 2025.

On November 2, 2023, Forward
and Forward China entered into a Deferred Payment Agreement. As of October 30, 2023, Forward owed Forward China $7,365,238 for the purchase
of products in its OEM and retail divisions and the cancelation of open purchase orders related to Forward’s exit from the retail
division. To preserve Forward’s liquidity position in the future, Forward China agreed to limit the amount of the payables that
it would seek to collect from Forward to $500,000 in any 12-month period. The amount due to Forward China has been settled in accordance
with the Transaction Agreement and Separation Agreement (described below).

In order to maintain compliance
with Nasdaq