Company: FWDI
Filing Date: 2025-02-13
Form Type: 10-Q
Source: 0001683168-25-000993
Chunk: 6

Company: Forward Industries, Inc.
Filing Date: 2025-02-13
Form: 10-Q
Item: Item 1
Chunk 6
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 for medical monitoring and diagnostic kits as well as a variety of other portable electronic and non-electronic
devices to OEMs or their contract manufacturers worldwide, that either package our products as accessories “in box” together
with their branded product offerings or sell them through their retail distribution channels. The Company does not manufacture any of
its OEM products and sources substantially all of these products from independent suppliers in China, through Forward Industries Asia-Pacific
Corporation, a British Virgin Islands corporation, a related party owned by the Company’s CEO (“Forward China”). See
Note 8. 

Discontinued Operations

In July 2023, the Company
decided to cease operations of its retail distribution segment (“Retail Exit”) and is presenting the results of operations
for this segment within discontinued operations in the prior periods presented herein. Our retail distribution business sourced and sold
smart-enabled furniture, hot tubs and saunas and a variety of other products through various online retailer websites to customers predominantly
located in the U.S. and Canada. The inventory of the retail segment was presented as discontinued assets held for sale on the balance
sheet at September 30, 2023. Where applicable, certain footnotes exclude the discontinued operations unless otherwise noted. See Note
3 for additional information on discontinued operations.

Liquidity and Going Concern

The accompanying condensed
consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among
other things, the realization of assets and satisfaction of liabilities in the ordinary course of business. The Company had an accumulated
deficit and working capital deficit of $20,345,000 and $162,000, respectively, at December 31, 2024, a net loss of $708,000 for the three
months ended December 31, 2024 and $1,951,000 in Fiscal 2024 and a cash balance of approximately $2,900,000 at January 31, 2025.

The Company’s
OEM distribution segment procures substantially all its products through independent suppliers in China through Forward China. In order
to preserve the Company’s current and future liquidity, 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 (See Note 8).

In December 2024, our
largest design customer notified us of its plan to discontinue their insulin patch pump program, on which we were working.  We expect