This Prospectus Supplement relating to
                                        Registration Statement No. 33-99338 is
                                        filed pursuant to Rule 424(b)(3) under
                                        the Securities Act of 1933.


    THIRD SUPPLEMENT TO MARCH 25, 1996 PROSPECTUS OF FORWARD INDUSTRIES, INC.
           As Supplemented by First Supplement Dated May 17, 1996 and
                      Second Supplement Dated June 21, 1996


     Forward Industries, Inc. (the "Company") filed its Quarterly Report on Form
10-QSB for the quarterly period ended June 30, 1996 (the "Quarterly Report")
with the Securities and Exchange Commission on August 14, 1996.  A copy of the
Quarterly Report is being delivered with the Prospectus.  The Quarterly Report
reflected, among other things, the following information:

Results of Operations.  For the three months ended June 30, 1996, the Company
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reported a loss before credit for income taxes of $449,750 and a net loss of
$243,750 ($.05 per share) on net sales of $3,881,188, as compared with income
before provision for income taxes of $8,704 and a net loss of $99,266 ($.03 per
share) on net sales of $3,825,089 for the comparable 1995 quarter.  For the nine
months ended June 30, 1996, the Company reported a loss before credit for income
taxes of $1,336,548 and a net loss of $842,548 ($.21 per share) on net sales of
$13,342,959, as compared with a loss before credit for income taxes of $21,134
and a net loss of $116,494 ($.04 per share) on net sales of $11,053,473 for the
comparable 1995 period.  The Company believes that its operations during the
fourth quarter of the current fiscal year will show improvement and that it will
return to profitability during the 1997 fiscal year ending September 30, 1997. 
See "Risk Factors - Lack of Profitability in Fiscal Year Ended September 30,
1995 and in Fiscal Quarter Ended December 31, 1995" at page 7 of the Prospectus.


Financing Arrangements.  Effective March 30, 1996, the Company's borrowing
- ----------------------
arrangements with 1st Source Bank, South Bend, Indiana, were extended to August
15, 1996.  In connection with such extension, the rate of interest on
outstanding borrowings was increased from 1% to 1-1/2% over prime.  The
Company's borrowing arrangements with the Bank have been further extended to
December 15, 1996 based upon the Bank's expectation that the Company's current
fiscal quarter will be profitable, of which there can be no assurance.  The
Company has not been maintaining the financial ratios required under such
borrowing arrangements, and the Bank has orally waived compliance with such
ratios through December 15, 1996.  See "Risk Factors - Inadequacy of Cash Flow
from Operations and Credit Lines" at page 7 of the Prospectus.

Deferred Income Taxes.  The Company's balance sheet at June 30, 1996 has
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characterized $1,787,000 of deferred income taxes as an asset, of which $293,000
is characterized as a current asset.  There can be no assurance that the
Company's operations will be sufficient to realize the benefit of its deferred
tax assets.  Without such deferred tax assets, the Company's stockholders'
equity at such date of $3,445,206 would have been reduced to $1,658,206.  See
"Risk Factors - Possible Inability to Realize Benefit of Deferred Income Tax
Assets" at pages 8-9 of the Prospectus.

Exercise of Warrants.  Through July 31, 1996, 1,929,000 shares of Common Stock
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covered by the Prospectus have been issued upon exercise of the Company's
Warrants and the Company has received an aggregate of $2,908,500 upon such
exercises, which funds are being used for working capital. See "Use of Proceeds"
at page 11 of the Prospectus and "Description of Securities" at pages 35-38 of
the Prospectus.

Possible Acquisition.  On June 18, 1996, the Company announced that on June 13,
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1996, it had entered into a non-binding letter of intent to acquire, subject to
certain conditions, the business of Coast Manufacturing Company.  The letter of
intent contemplated that a subsidiary of the Company would acquire all of
Coast's assets and assume specified liabilities to be agreed upon.  The proposed
transaction was subject, among other things, to completion of the Company's due
diligence.  The Company and Coast are continuing discussions with respect to a
possible transaction, but do not expect such transaction, if consummated, to be
on the terms contemplated by the letter of intent.  Any transaction with Coast
would depend, among other things, on reaching agreement with Coast's secured
creditors and the Company obtaining the necessary financing for the transaction,
of which there can be no assurance.


Dated: August 14, 1996 





               WARSHAW BURSTEIN COHEN SCHLESINGER & KUH, LLP
                               [LETTERHEAD]










                                    August 16, 1996

Securities and Exchange Commission
Washington, DC  20549

Attention:  Filing Desk

                    Forward Industries, Inc.
                    Third Supplement to Prospectus
                    Dated March 25, 1996
                    Reg. Statement No. 33-99338
                    ---------------------------

Gentlemen:

          We are transmitting for filing pursuant to Rule 424(b)(3) the Third
Supplement to the Prospectus of Forward Industries, Inc. (Reg. Statement No.
33-99338).  The Third Supplement primarily relates to information disclosed in 
the Company's Form 10-QSB for the quarterly period ended June 30, 1996.

          The Third Supplement was first sent to the holders of Forward's Class
A Warrants and Class B Warrants on August 14, 1996.

                              Sincerely yours,



                              Paul R. Frank
PRF:bds
Enc.