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In a recent turn of events, Forward Industries (NASDAQ:FORD), Inc. has potentially secured its position on The Nasdaq Capital Market after addressing non-compliance issues related to stockholders’ equity requirements. The New York-based plastics products company was previously notified by Nasdaq’s Listing Qualifications Staff of its intent to delist the company’s securities due to a shortfall in the required $2.5 million stockholders’ equity.
On March 20, 2025, Forward Industries entered into an Accounts Payables Conversion Agreement with Forward Industries (Asia-Pacific) Corporation, a company owned by its CEO and Chairman of the Board. Through this agreement, $2.5 million of the company’s outstanding accounts payable was converted into 2,500 shares of Series A-1 Convertible Preferred Stock, each with a stated value of $1,000.
This strategic move to convert debt into equity was aimed at bolstering the company’s stockholders’ equity and aligning with Nasdaq’s continued listing criteria. Following the transaction, Forward Industries believes it has successfully met the minimum stockholders’ equity threshold. However, formal confirmation from Nasdaq is still pending.
The company’s proactive measures to rectify the equity deficit have resulted in a stay of delisting, pending a decision by the Nasdaq Hearings Panel. Forward Industries’ compliance with the Equity Rule will continue to be monitored by Nasdaq, especially at the time of the company’s next periodic financial statement filing. Failure to demonstrate ongoing compliance could potentially trigger a reconsideration of the company’s listing status.
The information about Forward Industries’ financial maneuvers and its implications for its Nasdaq listing status is based on a press release statement filed with the Securities and Exchange Commission on March 31, 2025. The company’s management, represented by Chief Financial Officer Kathleen Weisberg, authorized the report, ensuring adherence to regulatory requirements.
In other recent news, Forward Industries has made significant financial maneuvers to strengthen its financial position. The company has entered into agreements to convert portions of its debt into equity. Specifically, $2.5 million of its outstanding accounts payable to Forward Industries (Asia-Pacific) Corporation, controlled by CEO Terence Wise (LON:WISEa), was converted into 2,500 shares of Series A-1 Convertible Preferred Stock. Additionally, $225,000 of accounts payable was converted into 225 shares of the same preferred stock. These conversions are part of Forward Industries’ strategy to manage its financial obligations and meet Nasdaq listing requirements.
In a related development, the company’s CEO has expressed interest in acquiring Forward Industries’ OEM distribution business. Preliminary terms for this potential sale have been agreed upon, though they are subject to further negotiation and approval. The company has not yet reached a definitive agreement, and there is no certainty that a transaction will occur. These steps aim to bolster the company’s shareholder equity and streamline operations.
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