Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 1502

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 12
Chunk 1502
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 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 Payable Conversion Agreement

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 Fiscal 2025 and Fiscal 2024, respectively, Forward China agreed to convert $2,725,000
and $2,200,000, respectively, of amounts due to Forward China into 2,725 shares and 2,200 shares, respectively, of the Company’s
Series A-1. See Note 8.

     F-36 

FORWARD INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 interest
at a 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 $49,000 and $63,000 in Fiscal
2025 and Fiscal 2024, respectively. At September 30, 2024, the maturity date of this note was December 31, 2024. In October 2024, the
maturity date of this note was extended to June 30, 2025. 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 the note has been extended on several occasions to assist the Company with liquidity.
The Company fully paid off this note in September 2025.

Other Related Party Activity

In October 2020, the Company
began selling smart-enabled furniture, which was sourced by Forward China and sold in the U