Forward Industries , Inc. (NASDAQ:FORD), a New York-based plastics products manufacturer, has announced the extension and amendment of its Buying Agency and Supply Agreement with Forward Industries (Asia-Pacific) Corporation. The original agreement, dated November 2, 2023, has been extended to April 30, 2025, as per the company's current report filed today.
Under the terms of the amendment, either party may now terminate the agreement with a 30-day prior written notice. The monthly service fee has been significantly reduced from $65,833 to $35,000. Additionally, payment terms for all products and services fees have been altered from 60 days to seven days after Forward Industries collects payments from its customers.
In other recent news, Forward Industries has been actively restructuring its financial operations. The company announced a significant cut in the CEO's salary from $337,000 to $252,750, in a move to manage costs and streamline operations. In addition, Forward Industries converted $500,000 of accounts payable into equity, issuing 500 shares of its Series A-1 Convertible Preferred Stock and increased its authorized shares of Series A-1 from 1,700 to 2,700.
The company has also made considerable progress in regaining compliance with NASDAQ's listing requirements through strategic financial maneuvers, including the conversion of a significant portion of its debt into Series A-1 Convertible Preferred Stock, totaling $1.7 million, and executing a 1-for-10 reverse stock split of its common stock.
In the realm of leadership changes, Forward Industries announced the appointment of Dr. Brad Carlson as Vice President of Technology and Business Development at its subsidiary, Intelligent Product Solutions (IPS). With over two decades of experience, particularly in the medical devices and industrial markets, Dr. Carlson is expected to help drive IPS's growth objectives, especially in the MedTech sector.
These are recent developments that reflect Forward Industries' commitment to maintaining fiscal prudence, compliance with market regulations, and enhancing its management team to drive forward its technology and business development initiatives.
InvestingPro Insights
Forward Industries' recent amendment to its Buying Agency and Supply Agreement aligns with the company's current financial situation, as revealed by InvestingPro data. The reduction in monthly service fees from $65,833 to $35,000 and the adjustment of payment terms to improve cash flow are particularly relevant given the company's financial metrics.
InvestingPro data shows that Forward Industries has not been profitable over the last twelve months, with a negative P/E ratio of -4.04. This context underscores the importance of the company's efforts to reduce operational costs and improve cash flow through the amended agreement.
Additionally, an InvestingPro Tip indicates that Forward Industries operates with a moderate level of debt. The adjusted payment terms in the new agreement, which shorten the collection period from 60 days to seven days after customer payments, could help the company manage its debt more effectively by improving cash flow.
Another relevant InvestingPro Tip reveals that Forward Industries' stock generally trades with high price volatility. This volatility is reflected in the company's recent price performance, with a 12.04% price return over the past month but a -45.16% return year-to-date.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for Forward Industries, providing deeper insights into the company's financial health and market position.
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