Current Report Filing (8-k)
January 18 2018 - 4:43PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
January 18, 2018
Forward Industries, Inc.
(Exact name of registrant as specified in
its charter)
New York
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001-34780
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13-1950672
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(State or Other Jurisdiction
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(Commission
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(I.R.S. Employer
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of Incorporation)
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File Number)
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Identification No.)
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477 S. Rosemary Ave. Ste. 219
West Palm Beach, Florida 33401
(Address of Principal Executive Office)
(Zip Code)
(561) 465-0030
(Registrant’s telephone number, including
area code)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions:
□
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
□
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an
emerging growth company as defined in Rule 405 of the Securities Act of 1933
(17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR
§240.12b-2).
Emerging
growth company
□
If an emerging growth
company, indicate by check mark if the registrant has elected not to use the
extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act.
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Item
2.01. Completion of Acquisition or Disposition of Assets.
On January 18,
2018, Forward Industries, Inc. (the “Company”) entered into a Stock Purchase
Agreement (the “Agreement”) by and among the Company, Intelligent Product
Solutions, Inc. (“IPS”), the holders of all of the common stock of IPS and
Mitchell Maiman (“Maiman”). In consideration for the acquisition of all of
IPS’ outstanding securities, the Company: (i) paid approximately $1.9 million
in cash, (ii) assumed approximately $1.5 million of outstanding debt, (iii)
issued a total of 401,835 shares of the Company’s common stock to the two
owners of IPS, (iii) agreed to pay $1,000,000 of deferred cash payments (with
the first payment of $500,000 due on May 18, 2018) and (iv) up to $2.2 million
of earnout payments based upon IPS meeting certain EBITDA milestones over a
three year period. Additionally, the Company entered into three-year
employment agreements with Mitchell Maiman, the President of IPS and Paul
Severino, the Chief Operating Officer of IPS, and agreed to pay them each $256,000
per year.
In order to fund the acquisition of IPS, the
Company issued a $1.6 million promissory note to
Forward Industries (Asia-Pacific) Corporation (“Forward China”) in
consideration for a one-year loan. The note bears an interest rate of 8% and
pays monthly interest. Forward China is an entity which is principally owned
by the Company’s Chairman and Chief Executive Officer.
The foregoing description is qualified in its entirety by
reference to the full text of the Agreement and the form of Employment
Agreement, which have been filed as Exhibits 2.1, 4.1 and 10.1, respectively,
to this Current Report on Form 8-K and are incorporated in this Form 8-K by
reference.
Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a Registrant.
As described under Item 2.01 above, a portion of the consideration
was the assumption of debt. A portion of this relates to a $1,000,000
revolving line of credit of which $950,000 was drawn at closing. The loan under
the line of credit is: (i) secured by IPS’ assets, (ii) matures on April 8,
2018 and (iii) bears an interest rate of the Wall Street Journal Prime Rate
plus 0.75%. Additionally, the Company assumed debt relating to: (i) a secured
loan of which the balance is approximately $190,000 which will be fully
amortized (and paid in full) by April 2020 and (ii) a secured loan of
approximately $217,000 of which will be fully amortized (and paid in full) by January
2019.
The disclosure under Item 2.01 above regarding the Forward China
note is incorporated herein under this Item 2.03.
Item 3.02. Unregistered Sales of Equity Securities.
The disclosure under Item 2.01 above regarding the issuance of the
Company’s common stock and the Forward China note is incorporated herein under
this Item 3.02. These securities were issued without registration under the
Securities Act of 1933 in reliance upon the exemption provided in Section
4(a)(2) and Rule 506(b) thereunder.
Item 9.01. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
The Company will file the financial statements required by Item
9.01(a) of Form 8-K by an amendment to this Current Report on Form 8-K no later
than 71 days from the date this Current Report on Form 8-K is required to be
filed.
(b) Pro forma financial information.
The Company will file the pro forma financial information required
by Item 9.01(b) of Form 8-K by an amendment to this Current Report on Form 8-K
no later than 71 days from the date this Current Report on Form 8-K is required
to be filed.
(c)
Exhibits.
*Certain schedules, appendices and exhibits
to this agreement have been omitted in accordance with Item 601(b)(2) 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.
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.
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FORWARD INDUSTRIES, INC.
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Date: January 18, 2018
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By:
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/s/ Michael Matte
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Name: Michael Matte
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Title: Chief Financial Officer
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