UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM
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CURRENT REPORT
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Item 1.01 Entry into a Material Definitive Agreement.
On November 2, 2023, Forward Industries, Inc. (the “Company”) and Forward Industries (Asia-Pacific) Corporation (“FC”) entered into a Buying Agency and Supply Agreement (the “New Agreement”). FC is a company owned by Terence Wise, the Company’s Chairman and Chief Executive Officer. In addition, Jenny P. Yu, a Managing Director of FC, owns more than 5% of the Company’s common stock. The New Agreement provides that FC will act as the Company’s exclusive buying agent and supplier of products in the Asia Pacific region. The Company purchases products at FC’s cost and pays FC a monthly fee for services it provides under the New Agreement. The monthly service fee is $65,833 plus 4% of “Adjusted Gross Profit”, which is defined as the revenues recognized by the Company from the sale of the product less FC’s cost for the product (collectively, the “Service Fee”). The New Agreement expires October 31, 2024. The New Agreement is substantially similar to the prior Buying Agency and Supply Agreement between the Company and FC except for the reduced monthly fee payable to FC ($100,000 reduced to $65,833).
Additionally, on November 2, 2023, the Company and FC entered into a Deferred Payment Agreement. As of October 30, 2023, the Company owed FC $7,365,238 (“Payables”) for the purchase of products in its OEM and Retail Divisions and the cancelation of open purchase orders related to the Company’s exit from the Retail Division. To preserve the Company’s liquidity position in the future, FC agreed to limit the amount of the Payables that it would seek to collect from the Company to $500,000 in any 12-month period.
Effective September 1, 2023, on November 3, 2023, the Company and Justwise Group Ltd. (“Justwise”), a company owned by Mr. Wise, entered into an agreement to extend its previously executed Consultancy Agreement. Under the Consultancy Agreement, Justwise will provide inventory management, marketing support and other consulting services. In consideration of their services, the Company shall pay Justwise $10,000 per month. The Consultancy Agreement is effective as of September 1, 2023, and will continue on a month-to-month basis.
The foregoing description of the terms of the New Agreement, the Deferred Payment Agreement, the Justwise Consultancy Extension Agreement and the transactions contemplated thereby do not purport to be complete and are qualified in their entirety by reference to the form of New Agreement, the form of Deferred Payment Agreement, and the extension to the Consultancy Agreement which are filed as Exhibits 10.1, 10.2 and 10.4 to this Current Report on Form 8-K and are incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. | Description of Exhibit |
| 10.1 | Buying Agency and Supply Agreement* |
| 10.2 | Deferred Payment Agreement |
| 10.3 | Consultancy Agreement – Justwise (Incorporated herein by reference to Exhibit 10.1 in the Form 10-Q filed on May 12, 2022) |
| 10.4 | Extension to the Consultancy Agreement – Justwise |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
* Certain schedules, appendices and exhibits to this agreement have been omitted in accordance with Item 601 of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished supplementally to the Securities and Exchange Commission staff upon request.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FORWARD INDUSTRIES, INC. | |||
| Date: November 8, 2023 | By: | /s/ Kathleen Weisberg | |
| Name: Kathleen Weisberg | |||
| Title: Chief Financial Officer | |||
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