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, 2020 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) ( ...

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 December 31, 2019 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Registrant's telephone number, including area code: (561) 465-0030 Securities registered pursuant to Section 12(b) of the Act: | Title of each class | Trading Symbol(s) | Name of ...

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, 2019 ☐ 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) incorporation or organization) New York 1 ...

[Part I. Financial Information](index=9&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=9&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements show a decrease in total assets and shareholders' equity, with a significant net loss for the nine months ended June 30, 2019, primarily due to declining gross profit and increased operating expenses Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | June 30, 2019 (in millions) | September 30, 2018 (in millions) | | :--- | :--- | :--- | | Total current assets | $13.01 | $15.21 | | Total assets | $17.37 | $19.23 | | Total current liabilities | $7.44 | $7.62 | | Total liabilities | $7.85 | $8.13 | | Total shareholders' equity | $9.52 | $11.10 | Condensed Consolidated Statements of Operations Highlights (Unaudited) | Metric | Three Months Ended June 30, 2019 (in thousands) | Three Months Ended June 30, 2018 (in thousands) | Nine Months Ended June 30, 2019 (in thousands) | Nine Months Ended June 30, 2018 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Net Revenues | $9,909 | $9,539 | $28,265 | $24,888 | | Gross Profit | $1,894 | $1,914 | $4,508 | $4,691 | | Income (loss) from operations | $(50) | $(210) | $(1,605) | $73 | | Net Income (loss) | $(104) | $235 | $(1,765) | $1,231 | | Net income (loss) per basic share | $(0.01) | $0.02 | $(0.19) | $0.13 | - For the nine months ended June 30, 2019, net cash used in operating activities was approximately **$2.2 million**, a significant reversal from the **$618,000** provided by operating activities in the prior-year period, primarily due to the net loss and changes in working capital[23](index=23&type=chunk) - The company operates through two reportable segments following the acquisition of IPS in January 2018: the Distribution segment (comprising Forward US, Forward Switzerland, and Forward UK) and the Design segment (comprising IPS)[30](index=30&type=chunk) - The company has significant revenue concentration, with four customers accounting for **86.1%** of the Distribution segment's revenue and five customers accounting for **56.8%** of the Design segment's revenue for the nine months ended June 30, 2019[110](index=110&type=chunk)[113](index=113&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=61&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's consolidated net loss for the quarter and nine-month period, attributing it to lower margins, project overruns, and increased operating expenses, while also addressing liquidity and future funding - The company is under investigation by the SEC regarding trading in its securities surrounding the January 2018 acquisition of Intelligent Product Solutions, Inc. (IPS), with certain executive officers receiving subpoenas in February 2019[129](index=129&type=chunk)[130](index=130&type=chunk) - The company is expanding its retail distribution network through agreements with manufacturer's representatives to introduce products, including those from a new partnership with Mooni AB International, into major retailers[134](index=134&type=chunk)[135](index=135&type=chunk) [Results of Operations for the Three Months Ended June 30, 2019 Compared to the Three Months Ended June 30, 2018](index=65&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20June%2030%2C%202019%20Compared%20to%20the%20Three%20Months%20Ended%20June%2030%2C%202018) Consolidated net revenues increased **3.9%** to **$9.9 million** in Q3 2019, but the company reported a net loss of **$(104,000)** due to a widened loss in the Distribution segment and a significant swing in other income/expenses Segment Performance - Q3 2019 vs Q3 2018 (in thousands) | Segment | Metric | Q3 2019 | Q3 2018 | Change | | :--- | :--- | :--- | :--- | :--- | | **Distribution** | Net Revenues | $6,022 | $5,910 | 2% | | | Gross Profit | $921 | $973 | (5.3)% | | | Income (Loss) Before Taxes | $(304) | $294 | $(598) | | **Design** | Net Revenues | $3,887 | $3,629 | 7.1% | | | Gross Profit | $973 | $940 | 3.5% | | | Income (Loss) Before Taxes | $200 | $(59) | $259 | - Distribution segment's Diabetic Products revenue increased by **4.7%** to **$5.4 million**, while Other Products revenue declined by **$134,000**[152](index=152&type=chunk)[156](index=156&type=chunk) - Distribution G&A expenses decreased primarily due to a **$191,000** decline in share-based compensation, partially offset by a **$204,000** increase in legal fees related to the SEC investigation[164](index=164&type=chunk) [Results of Operations for the Nine Months Ended June 30, 2019 Compared to the Nine Months Ended June 30, 2018](index=74&type=section&id=Results%20of%20Operations%20for%20the%20Nine%20Months%20Ended%20June%2030%2C%202019%20Compared%20to%20the%20Nine%20Months%20Ended%20June%2030%2C%202018) Consolidated revenues grew to **$28.3 million** for the nine months ended June 30, 2019, but the company incurred a **$1.77 million** net loss before tax due to revenue decline in Distribution, compressed Design segment margins, and increased G&A expenses Segment Performance - 9M 2019 vs 9M 2018 (in thousands) | Segment | Metric | 9M 2019 | 9M 2018 | Change | | :--- | :--- | :--- | :--- | :--- | | **Distribution** | Net Revenues | $17,072 | $18,441 | (7.4)% | | | Gross Profit | $2,659 | $3,021 | (12)% | | | Income (Loss) Before Taxes | $(987) | $469 | $(1,456) | | **Design** | Net Revenues | $11,193 | $6,447 | 73.6% | | | Gross Profit | $1,849 | $1,670 | 10.7% | | | Income (Loss) Before Taxes | $(779) | $14 | $(793) | - The Design segment's gross margin for the nine-month period fell to **16.5%** from a historical average above **20%**, attributed to project overruns on two significant customer projects completed in Q2 2019[184](index=184&type=chunk) - Distribution segment G&A expenses increased by **21%** (**$438,000**), primarily due to a **$354,000** increase in legal fees for the SEC investigation and a **$159,000** increase in bad debt expense[187](index=187&type=chunk) - Design segment G&A expenses for the nine months included a bad debt expense of approximately **$258,000** due to slower paying customers[188](index=188&type=chunk) [Liquidity and Capital Resources](index=86&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity, primarily from operations, saw working capital decrease to **$5.6 million** by June 30, 2019, with **$2.2 million** cash used in operations, and faces a likely risk of failing debt covenant tests at year-end Key Liquidity Ratios | Ratio | June 30, 2019 | September 30, 2018 | | :--- | :--- | :--- | | Current Ratio | 1.7 | 2.0 | | Quick Ratio | 1.5 | 1.8 | | Working Capital | ~$5.6 million | ~$7.6 million | - The company plans to fund the **$1.6 million** Forward China promissory note, due October 17, 2019, using existing cash or by obtaining an additional credit facility[195](index=195&type=chunk) - Due to the net loss at the IPS subsidiary for the nine months ended June 30, 2019, there is a likely risk of failing debt covenant testing at year-end, which could result in lenders demanding payment in full[121](index=121&type=chunk)[123](index=123&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=93&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable to the company - Not applicable[208](index=208&type=chunk) [Controls and Procedures](index=93&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2019, with no material changes to internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures were effective as of the end of the period covered by the report[209](index=209&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter[210](index=210&type=chunk) [Part II. Other Information](index=96&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=96&type=section&id=Item%201.%20Legal%20Proceedings) As of June 30, 2019, the company reported no material legal actions or proceedings in the ordinary course of business - As of June 30, 2019, there were no material legal actions or proceedings against the company in the ordinary course of business[213](index=213&type=chunk) [Risk Factors](index=96&type=section&id=Item%201A.%20Risk%20Factors) This item is not applicable as the company is a smaller reporting company - Not applicable to smaller reporting companies[214](index=214&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=96&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period - None[215](index=215&type=chunk) [Defaults Upon Senior Securities](index=96&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - None[216](index=216&type=chunk) [Mine Safety Disclosures](index=96&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not Applicable[217](index=217&type=chunk) [Other Information](index=96&type=section&id=Item%205.%20Other%20Information) The company reported no other information for this item - None[218](index=218&type=chunk) [Exhibits](index=96&type=section&id=Item%206.%20Exhibits) This section provides an index of all exhibits filed with or incorporated by reference into the Form 10-Q, including agreements related to the IPS acquisition and officer certifications - The report includes an index of exhibits filed, such as agreements related to the IPS acquisition, related-party transactions, and officer certifications[219](index=219&type=chunk)[226](index=226&type=chunk)

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, 2019 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) | New York | 13-1950672 ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Forward Industries, Inc.'s Q1 2019 unaudited financial statements report a **net loss of $530,527** and **negative operating cash flow of $789,668** [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of December 31, 2018, total assets were **$19.37 million**, liabilities **$8.79 million**, and shareholders' equity **$10.58 million** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2018 | Sep 30, 2018 | | :--- | :--- | :--- | | **Total Assets** | **$19,368** | **$19,228** | | Total Current Assets | $15,424 | $15,212 | | **Total Liabilities** | **$8,788** | **$8,128** | | Total Current Liabilities | $8,335 | $7,624 | | Line of credit | $1,300 | $350 | | **Total Shareholders' Equity** | **$10,581** | **$11,100** | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) Q1 2019 reported a **net loss of $530,527**, a downturn from prior year, due to surging operating expenses despite revenue growth Statement of Operations Summary (in thousands) | Metric | Q1 2019 (ended Dec 31, 2018) | Q1 2018 (ended Dec 31, 2017) | Change | | :--- | :--- | :--- | :--- | | Net Revenues | $10,183 | $6,336 | +60.7% | | Gross Profit | $1,303 | $1,003 | +29.9% | | Total Operating Expenses | $1,784 | $952 | +87.4% | | Income (Loss) from Operations | ($481) | $51 | N/A | | Net Income (Loss) | ($531) | $47 | N/A | | Basic EPS | ($0.06) | $0.01 | N/A | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2019 reported **net cash used in operating activities of $789,668**, a reversal from prior year, with a **net cash increase of $47,415** Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2019 (ended Dec 31, 2018) | Q1 2018 (ended Dec 31, 2017) | | :--- | :--- | :--- | | Net cash from Operating Activities | ($790) | $1,300 | | Net cash from Investing Activities | ($20) | ($19) | | Net cash from Financing Activities | $857 | $0 | | **Net increase in cash** | **$47** | **$1,281** | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail business structure, accounting policies, two operating segments, customer concentration, and related party transactions - The company operates through two distinct segments following the January 2018 acquisition of IPS: Distribution (comprising Forward US, Switzerland, and UK) and Design (comprising IPS)[27](index=27&type=chunk) - The company adopted the new revenue recognition standard, ASC 606, effective October 1, 2018, using the modified retrospective method, which did not have a material impact on revenue recognition[45](index=45&type=chunk)[46](index=46&type=chunk) - The company has significant customer concentration. In the Distribution segment, four customers accounted for **82.9% of revenue**. In the Design segment, three customers accounted for **49.6% of revenue** for the quarter[88](index=88&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk) - A key related party transaction involves a Buying Agency and Supply Agreement with Forward China, which is owned by the company's CEO. The company also has a **$1.6 million promissory note** payable to Forward China, with its due date extended to April 18, 2019[95](index=95&type=chunk)[96](index=96&type=chunk)[103](index=103&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2019 financial results, noting **60.7% revenue growth** but a **net loss of $531,000** due to project overruns and increased expenses - The company's operations are managed across two segments: Distribution (historically the OEM business) and Design (the IPS business acquired in January 2018)[112](index=112&type=chunk) Consolidated Results of Operations (in thousands) | Metric | Q1 2019 | Q1 2018 | Change | | :--- | :--- | :--- | :--- | | Net revenues | $10,183 | $6,336 | $3,847 | | Gross profit | $1,303 | $1,003 | $300 | | Operating income (loss) | ($481) | $51 | ($532) | | Net income (loss) | ($531) | $47 | ($578) | - The company anticipates that its liquidity and financial resources will be adequate to manage operating requirements for the next 12 months[144](index=144&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Q1 2019 saw Distribution revenue decline and the Design segment contribute revenue but incur a significant net loss due to project overruns - Distribution segment revenue decreased **1% to $6.28 million**, primarily due to a **6% decline in Diabetic Product revenues**[123](index=123&type=chunk)[125](index=125&type=chunk) - The Design segment, acquired in January 2018, generated **$3.9 million in revenue** but had a low gross margin of **8.1%** due to project overruns. Management expects margins to return to historical levels above **20%**[130](index=130&type=chunk)[132](index=132&type=chunk) Segment Performance (in thousands) | Segment | Net Revenues (Q1 2019) | Net Income (Loss) (Q1 2019) | Net Income (Loss) (Q1 2018) | | :--- | :--- | :--- | :--- | | Distribution | $6,281 | ($32) | $47 | | Design | $3,902 | ($499) | N/A | [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) Working capital was **$7.1 million** as of Dec 31, 2018, with **negative operating cash flow of $790,000** and **$1.3 million** utilized on the line of credit - Cash used in operating activities was approximately **$790,000** for the quarter, primarily due to a **net loss of $531,000** and an increase in accounts receivable[146](index=146&type=chunk) - As of the filing date, the company had **$100,000** available under its **$1.3 million line of credit**. The maturity on a **$1.6 million promissory note** to Forward China was extended to April 18, 2019[143](index=143&type=chunk) Key Liquidity Ratios | Ratio | Dec 31, 2018 | Sep 30, 2018 | | :--- | :--- | :--- | | Current Ratio | 1.9 | 2.1 | | Quick Ratio | 1.7 | 1.8 | | Working Capital | $7.1M | $7.6M | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable to the company - Not applicable[155](index=155&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective, excluding IPS, which will be incorporated in Q2 Fiscal 2019 - Management concluded that disclosure controls and procedures are effective as of the end of the period covered by the report[156](index=156&type=chunk) - The evaluation of controls and procedures excluded IPS, which was acquired in January 2018. IPS will be incorporated into the assessment during the second quarter of Fiscal 2019[157](index=157&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) As of December 31, 2018, the company was not a party to any material legal actions or proceedings - As of December 31, 2018, there were no material legal actions or proceedings against the company[162](index=162&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) This section is not applicable as the company is a smaller reporting company - Not applicable to smaller reporting companies[163](index=163&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the period - None[164](index=164&type=chunk) [Item 6. Exhibits](index=36&type=section&id=Item%206.%20Exhibits) Exhibits listed in the 'Index to Exhibits' are filed or incorporated by reference as part of this Form 10-Q - The exhibits listed in the accompanying 'Index to Exhibits' are filed or incorporated by reference as part of this Form 10-Q[168](index=168&type=chunk)