Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission file number 001-34780 FORWARD INDUSTRIES, INC. (Exact name of registrant as specified in its charter) ( ...

Revenue and Profitability - Revenues for the 2024 Quarter were $7,152,000, a decrease of 26.7% compared to $9,753,000 in the 2023 Quarter[105]. - Gross profit for the 2024 Quarter was $1,643,000, down 16.4% from $1,966,000 in the 2023 Quarter, while gross margin increased from 20.2% to 23.0%[105][108]. - The OEM distribution segment's revenues fell to $2,010,000, a decline of 54.1% from $4,377,000 in the 2023 Quarter, primarily due to lower sales volume from diabetic customers[114][115]. - Revenues from diabetic products in the OEM distribution segment decreased by 64.3%, from $3,985,000 in the 2023 Quarter to $1,424,000 in the 2024 Quarter[116][118]. - Operating loss for the 2024 Quarter was $380,000, compared to a loss of $128,000 in the 2023 Quarter, representing a 196.9% increase in losses[105][112]. Expenses and Cost Management - Sales and marketing expenses decreased by 10.2% to $369,000 in the 2024 Quarter, while as a percentage of revenues, they increased from 4.2% to 5.2%[105][109]. - The design segment's operating income margin decreased from 8.1% in the 2023 Quarter to 5.2% in the 2024 Quarter due to lower utilization rates and higher direct labor costs[125]. - The company has reduced its sourcing fee with Forward China from $100,000 to $65,833 per month effective October 2023[123]. Liquidity and Financial Position - As of December 31, 2023, the working capital deficit was $949,000, a decrease from $26,000 at September 30, 2023, primarily due to the inclusion of an $850,000 promissory note in current liabilities[126]. - Cash on hand as of January 31, 2024, was approximately $3,200,000, with an additional $1,300,000 available under a line of credit maturing on May 31, 2024[126]. - The company anticipates that liquidity and financial resources will be adequate for the next 12 months, but may require additional capital for strategic acquisitions or investments[128]. - The company does not foresee the need for significant capital asset purchases but may need to acquire equipment in the future[129]. Cash Flow Activities - Cash provided by operating activities during the 2024 Quarter was $116,000, resulting from an increase in accounts payable of $522,000 and a decrease in accounts receivable of $445,000[130]. - Cash used in operating activities during the 2023 Quarter was $149,000, driven by a net loss of $430,000 and an increase in accounts receivable of $994,000[131]. - Cash used in investing activities was $20,000 in the 2024 Quarter and $45,000 in the 2023 Quarter, primarily for purchases of property and equipment[132]. - Cash used in financing activities was $250,000 in the 2024 Quarter and $50,000 in the 2023 Quarter, consisting of principal payments on the promissory note held by Forward China[133]. Accounts Payable and Future Considerations - Accounts payable due to Forward China was approximately $8,894,000 as of December 31, 2023, with an agreement to limit collections to $500,000 in any 12-month period[127]. - The company faces uncertainty regarding the extension of the FC Note and additional payment terms from Forward China[127]. - The company expects to liquidate remaining retail inventory by June 30, 2024, following the strategic exit from the retail distribution segment[100].

Financial Performance - Net revenues for Fiscal 2023 were $36,688,000, a decrease of 4.0% from $38,207,000 in Fiscal 2022[128] - Gross profit decreased to $8,364,000, with a gross margin decline from 23.0% in Fiscal 2022 to 22.8% in Fiscal 2023[129] - Operating income fell significantly by 72.8% to $160,000 compared to $588,000 in Fiscal 2022[128] - Income from continuing operations was $159,000, a decline of 64.7% from $450,000 in Fiscal 2022[128] - Fiscal 2023 consolidated revenues decreased to $36,688,000, down 4.0% from $38,207,000 in Fiscal 2022[135] Segment Performance - The design segment showed revenue growth, partially offsetting the decline in the OEM distribution segment[128] - OEM distribution segment revenues fell to $14,002,000, a decline of 22.4% compared to $18,036,000 in Fiscal 2022, primarily due to lower sales volume from diabetic customers[137] - Revenues from diabetic products decreased by 23.4% to $11,805,000 in Fiscal 2023, representing 84% of OEM distribution revenues, down from 85% in Fiscal 2022[140] - Operating income for the OEM distribution segment dropped to $440,000 in Fiscal 2023, with an operating income margin of 3.1%, down from 5.0% in Fiscal 2022[143] - Operating income for the design segment increased slightly, but the operating income margin decreased from 10.6% in Fiscal 2022 to 9.6% in Fiscal 2023 due to inflationary pressures[146] Expenses and Costs - Sales and marketing expenses increased by 12.5% to $1,663,000, rising as a percentage of revenue from 3.9% to 4.5%[130] - General and administrative expenses decreased to $6,541,000, primarily due to bad debt recoveries and lower share-based compensation[131] - Cash provided by operating activities in Fiscal 2023 was $1,041,000, compared to $1,535,000 in Fiscal 2022[151] - Working capital decreased to $26,000 as of September 30, 2023, from $1,209,000 a year earlier, primarily due to higher payables and accrued expenses[147] - The company reduced the fixed portion of its sourcing fee with Forward China from $100,000 to $83,333 per month, resulting in cash savings of $100,000 for Fiscal 2023[144] Other Financial Metrics - Other income reported was $19,000 in Fiscal 2023, contrasting with other expenses of $135,000 in Fiscal 2022[132] - The effective tax rate for Fiscal 2023 was 11.2%, compared to 0.5% in Fiscal 2022[133] Operational Changes - The company ceased operations of its retail distribution segment in July 2023, classifying it as discontinued operations[114] - A significant diabetic customer, which represented approximately 12% of consolidated net revenues in 2022, was lost in March 2023, expected to impact future OEM distribution revenues[136] - The company has approximately $3,800,000 in cash on hand and $1,300,000 available under a line of credit maturing on May 31, 2024[147]

Financial Performance - Consolidated revenues for the 2023 Quarter were $10,127,000, a decrease of 4.4% compared to $10,589,000 in the 2022 Quarter[102]. - The net loss for the 2023 Quarter was $537,000, compared to a net loss of $419,000 in the 2022 Quarter, representing an increase of 28.2%[108]. - Net revenues for the consolidated results decreased by $922,000, or 2.8%, from $32,517,000 in 2022 to $31,595,000 in 2023[124]. - Operating loss increased from $494,000 in 2022 to $1,833,000 in 2023, representing a change of $1,339,000, or 271.1%[124]. - The operating loss margin for the retail distribution segment increased from 33.6% in 2022 to 51.3% in 2023[143]. Revenue Decline - The OEM distribution segment experienced a significant revenue decline of 38.6%, from $4,775,000 in the 2022 Quarter to $2,930,000 in the 2023 Quarter, primarily due to the loss of a major diabetic customer[112]. - Revenues from diabetic products in the OEM distribution segment decreased by 41.2%, from $4,087,000 in the 2022 Quarter to $2,402,000 in the 2023 Quarter[113]. - The OEM distribution segment revenues fell by $3,328,000, or 22.7%, from $14,692,000 in 2022 to $11,364,000 in 2023, primarily due to the loss of a significant diabetic customer[135]. Cost and Expenses - Gross profit decreased to $1,823,000 in the 2023 Quarter, with a slight decrease in gross margin from 18.1% in the 2022 Quarter to 18.0% in the 2023 Quarter[104]. - Sales and marketing expenses increased to 7.0% of revenues in the 2023 Quarter, up from 6.3% in the 2022 Quarter, driven by higher commission expenses[105]. - General and administrative expenses decreased slightly in the 2023 Quarter, primarily due to lower corporate expenses[106]. - Gross profit decreased by $1,535,000, or 22.6%, from $6,789,000 in 2022 to $5,254,000 in 2023, with gross margin declining from 20.9% to 16.6%[124][126]. - Sales and marketing expenses increased by $69,000, or 3.3%, from $2,106,000 in 2022 to $2,175,000 in 2023[124]. Future Outlook - The company plans to exit its retail operations, which is expected to lead to a decline in consolidated revenues in future periods[103]. - The company expects consolidated revenues to decline in future periods due to the Retail Exit[125]. - The company anticipates continued volatility in OEM and retail distribution cost of sales for the remainder of fiscal 2023[104]. - The company plans to evaluate its OEM cost structure and implement additional cost-cutting initiatives due to ongoing operating losses in the retail distribution segment[147]. - The company anticipates that its liquidity and financial resources will be adequate for the next 12 months, but may require additional capital for strategic acquisitions or investments[149]. Cash Flow and Liquidity - Cash provided by operating activities for the 2023 Period was $562,000, resulting from a decrease in inventories of $1,908,000 and an increase in accounts payable of $651,000, despite a net loss of $1,838,000[151]. - As of June 30, 2023, the company's working capital decreased to $2,476,000 from $4,359,000 at September 30, 2022, primarily due to lower inventory balances[147]. - The company had approximately $3,000,000 in cash on hand and $1,300,000 available under a renewed line of credit as of July 31, 2023[147]. - The balance of the promissory note held by Forward China was reduced to $1,200,000 after principal payments of $400,000 through June 30, 2023[148]. - As of June 30, 2023, accounts payable due to Forward China was approximately $8,000,000, with no assurance of continued favorable payment terms[148]. Strategic Initiatives - The company is working on a plan to exit the retail business in an orderly manner while satisfying existing customer obligations[147]. - Cash savings of $50,000 were realized in the third quarter of fiscal 2023 from a reduction in the sourcing fee with Forward China[141]. - The company plans to further evaluate the OEM distribution segment cost structure and implement additional cost-cutting initiatives as necessary[141]. - Cash used in investing activities for the 2023 Period was $117,000, compared to $140,000 in the 2022 Period, primarily for purchases of property and equipment[153]. - Cash used in financing activities for the 2023 Period was $200,000, consisting of principal payments on the promissory note held by Forward China[154].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission file number 001-34780 FORWARD INDUSTRIES, INC. (Exact name of registrant as specified in its charter) ( ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission file number 001-34780 FORWARD INDUSTRIES, INC. (Exact name of registrant as specified in its charter ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to_____________. Commission File Number: 001-34780 FORWARD INDUSTRIES, INC. (Exact name of registrant as specified in its charter) (State or other ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 Commission file number 001-34780 FORWARD INDUSTRIES, INC. OR (Exact name of registrant as specified in its charter) o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ 700 Veterans Memoria ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides a comprehensive overview of the company's financial performance and position for the period ended March 31, 2022 [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Total assets increased to **$22.0 million**, liabilities to **$14.6 million**, with six-month revenues of **$21.9 million** and a net loss of **$176,311** [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Items (in USD) | Balance Sheet Items | March 31, 2022 (Unaudited) | September 30, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | $14,940,817 | $12,794,709 | | Inventories, net | $3,897,479 | $2,062,557 | | **Total Assets** | **$21,973,187** | **$19,855,539** | | **Total Current Liabilities** | $11,042,179 | $7,208,043 | | Due to Forward China | $7,239,885 | $5,733,708 | | **Total Liabilities** | **$14,601,243** | **$12,412,096** | | **Total Shareholders' Equity** | **$7,371,944** | **$7,443,443** | - Total assets increased by approximately **$2.1 million**, largely driven by an **$1.8 million** increase in inventories[9](index=9&type=chunk) - Total liabilities rose by **$2.2 million**, mainly due to a **$1.5 million** increase in amounts due to Forward China and a **$1.5 million** note payable to Forward China becoming a current liability[9](index=9&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statements of Operations (in USD) | Metric | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | Six Months Ended Mar 31, 2022 | Six Months Ended Mar 31, 2021 | | :--- | :--- | :--- | :--- | :--- | | **Revenues, net** | $10,314,563 | $8,395,379 | $21,928,304 | $18,112,982 | | **Gross Profit** | $2,252,674 | $1,743,446 | $4,871,443 | $4,006,332 | | **Loss from Operations** | ($322,739) | ($816,176) | ($108,525) | ($983,669) | | **Net (Loss)/Income** | **($356,335)** | **($834,728)** | **($176,311)** | **$364,308** | | **Basic (Loss)/EPS** | ($0.04) | ($0.08) | ($0.02) | $0.04 | | **Diluted (Loss)/EPS** | ($0.04) | ($0.08) | ($0.02) | $0.04 | - For the six months ended March 31, 2021, net income was significantly impacted by a **$1,356,570** gain on the forgiveness of a note payable (PPP loan), which did not recur in the 2022 period[12](index=12&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Statements of Cash Flows (in USD) | Cash Flow Activity (Six Months Ended March 31) | 2022 | 2021 | | :--- | :--- | :--- | | **Net cash provided by/(used in) operating activities** | $360,327 | ($397,918) | | **Net cash used in investing activities** | ($129,500) | ($37,878) | | **Net cash used in financing activities** | ($100,000) | ($959,666) | | **Net increase/(decrease) in cash** | $130,827 | ($1,395,462) | | **Cash at end of period** | $1,541,192 | $1,529,165 | - The shift to positive cash flow from operations in the 2022 period was primarily driven by an increase in accounts payable and amounts due to Forward China, which offset a significant increase in inventories[18](index=18&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - The company operates in three reportable segments: OEM distribution, retail distribution, and design, with the design segment including the aggregated results of IPS and Kablooe[31](index=31&type=chunk) - The COVID-19 pandemic continues to impact the business through increased freight costs, transportation delays, and rising labor costs due to inflation, with these effects expected to continue through Fiscal 2022[22](index=22&type=chunk)[23](index=23&type=chunk) - The company has a significant related-party relationship with Forward China, owned by the company's CEO, which acts as the exclusive buying agent and supplier and is also a lender to the company[72](index=72&type=chunk) - For the six months ended March 31, 2022, two customers in the OEM distribution segment accounted for **25.7%** of consolidated revenues, and one customer in the design segment accounted for **10.2%**[60](index=60&type=chunk)[62](index=62&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses revenue growth across segments, improved gross margin, and liquidity, noting reliance on a related party for financial support [Results of Operations for the Three Months Ended March 31, 2022](index=20&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202022) Results of Operations (in USD) | Metric | Q2 2022 | Q2 2021 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Revenues, net** | $10,315,000 | $8,395,000 | $1,920,000 | 22.9% | | **Gross Profit** | $2,252,000 | $1,743,000 | $509,000 | 29.2% | | **Loss from Operations** | ($323,000) | ($816,000) | $493,000 | (60.4%) | | **Net Loss** | ($356,000) | ($835,000) | $479,000 | (57.4%) | - Revenue growth was driven by all segments: OEM Distribution revenue increased by **$422,000 (9.9%)**, Retail Distribution by **$420,000 (183.4%)**, and Design by **$1,078,000 (27.6%)**[103](index=103&type=chunk) - The Design segment's operating income improved significantly to **$389,000** from a loss of **($288,000)** in the prior-year quarter, driven by higher revenues, better utilization, and lower bad debt expense[103](index=103&type=chunk)[115](index=115&type=chunk) [Results of Operations for the Six Months Ended March 31, 2022](index=23&type=section&id=Results%20of%20Operations%20for%20the%20Six%20Months%20Ended%20March%2031%2C%202022) Results of Operations (in USD) | Metric | Six Months 2022 | Six Months 2021 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Revenues, net** | $21,928,000 | $18,113,000 | $3,815,000 | 21.1% | | **Gross Profit** | $4,871,000 | $4,006,000 | $865,000 | 21.6% | | **Loss from Operations** | ($109,000) | ($984,000) | $875,000 | (88.9%) | | **Net (Loss)/Income** | ($176,000) | $364,000 | ($540,000) | (148.4%) | - The significant decrease in net income is primarily due to the non-recurrence of a **$1,357,000** gain from PPP loan forgiveness that was recognized in the 2021 period[121](index=121&type=chunk)[122](index=122&type=chunk) - By segment, revenue growth for the six-month period was led by Retail Distribution (up **228.6%** to **$2.0 million**) and Design (up **24.2%** to **$10.0 million**), with OEM Distribution growing more modestly (up **4.8%** to **$9.9 million**)[125](index=125&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) - Working capital decreased to **$3.9 million** at March 31, 2022, from **$5.6 million** at September 30, 2021, mainly because a **$1.5 million** note payable to Forward China was reclassified as a current liability[138](index=138&type=chunk) - As of April 30, 2022, the company had **$1.9 million** in cash and **$1.3 million** available under its line of credit; management plans to repay a **$1.5 million** promissory note due December 31, 2022, using existing cash or a new credit facility[139](index=139&type=chunk) - The company acknowledges its reliance on Forward China, a related party, for extending the maturity of its promissory note and providing flexible payment terms on payables to support its liquidity[139](index=139&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states this item is not applicable, indicating no material market risk exposures requiring disclosure - The company states this section is 'Not applicable'[147](index=147&type=chunk) [Item 4. Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirmed the effectiveness of disclosure controls and procedures, with no material changes to internal controls during the quarter - Management concluded that the company's disclosure controls and procedures are effective as of the end of the period covered by the report[148](index=148&type=chunk) - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[149](index=149&type=chunk) [PART II. OTHER INFORMATION](index=28&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, and other miscellaneous items, including equity sales and exhibit listings [Item 1. Legal Proceedings](index=28&type=section&id=Item%201.%20Legal%20Proceedings) A patent dispute involving a subsidiary was dismissed, and no other material legal actions are pending against the company - In January 2022, all claims in a patent dispute case involving the company's subsidiary, IPS, were dismissed without prejudice[153](index=153&type=chunk) - As of March 31, 2022, there were no other material legal actions or proceedings against the company[154](index=154&type=chunk) [Item 1A. Risk Factors](index=28&type=section&id=Item%201A.%20Risk%20Factors) The company reports no material changes to the risk factors previously disclosed in its latest annual report - The company reports no material changes in its risk factors from those disclosed in its Form 10-K for the fiscal year ended September 30, 2021[155](index=155&type=chunk) [Other Items (Items 2, 3, 4, 5, 6)](index=28&type=section&id=Other%20Items) No unregistered equity sales or defaults on senior securities were reported, with other items marked as not applicable - Item 2: No unregistered sales of equity securities were reported for the three months ended March 31, 2022[156](index=156&type=chunk) - Item 3 & 4: The company reported no defaults upon senior securities and that mine safety disclosures are not applicable[157](index=157&type=chunk)[158](index=158&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission file number 001-34780 FORWARD INDUSTRIES, INC. (Exact name of registrant as specified in its charter ...