Form 8-K FORWARD INDUSTRIES INC For: Feb 10
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E-mailUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 10, 2015
| Forward Industries, Inc. | ||
| (Exact name of registrant as specified in its charter) | ||
| New York | 000-6669 | 13-1950672 |
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
|
477 Rosemary Ave. Ste. 219 West Palm Beach, FL |
33401 | |
| (Address of principal executive offices) | (Zip Code) | |
Registrant’s telephone number, including area code: (561) 465-0030
| (Former name or former address, if changed since last report.) |
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 (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ 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))
Item 2.02. Results of Operations and Financial Condition.
On February 13, 2015, Forward Industries, Inc. (the “Company”) issued a press release announcing financial results for the three month period ended December 31, 2014, a copy of which release is attached hereto as Exhibit 99.1.
More complete information relating to the Company’s results of operations and financial condition for such periods is contained in the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on February 13, 2015.
The foregoing description is qualified in its entirety by reference to the above-referenced press release, which is incorporated herein by reference, and the above-referenced Form 10-Q.
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The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 hereto, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities thereof, nor shall it be deemed to be incorporated by reference into future filings by the Company under the Exchange Act or under the Securities Act of 1933, as amended, regardless of any incorporation by reference language in any such filing, unless the Company expressly sets forth in such future filing that such information is to be considered “filed” or incorporated by reference therein.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On February 10, 2015, the Company’s Board of Directors (the “Board”) voted to expand the size of the Board from five to six directors and appointed a new director, Ms. Sangita Shah, to serve until her successor has been duly elected and qualified. The Board also appointed Ms. Shah to serve on the Company’s Audit Committee and Compensation Committee. Ms. Shah has not entered into any transactions with the Company since the beginning of the Company’s last fiscal year that are reportable under Item 404(a) of Regulation S-K.
Ms. Shah, 48, currently serves as director and owner of Odyssean Enterprises Limited, a private advisory and investment company, in addition to serving on the board of Swindon Town FC. Ms. Shah is also a board advisor to Global Reach Technology, a Fast Track WiFi SME, and a non-executive director for Zypha Technologies Inc. Ms. Shah previously worked in seed/mezzanine financing and strategic investments within the environmental and technology sectors following a number of senior roles held at KPMG and Ernst & Young. Ms. Shah holds a BSc and MSc from Queen Mary University of London and is also an Associate of the Chartered Institute of Management Accountants and a Fellow of the Chartered Institute of Journalists.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit 99.1 | Press Release, dated February 13, 2015. |
Forward Looking Statements
This Current Report on Form 8-K contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that reflect the Company’s current expectations and projections about its future results, performance, prospects and opportunities. The Company has tried to identify these forward-looking statements by using words such as “may,” “should,” “expect,” “hope,” “anticipate,” “believe,” “intend,” “plan,” “estimate” and similar expressions. These forward-looking statements are based on information currently available to the Company and are subject to a number of risks, uncertainties and other factors that could cause its actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. No assurance can be given that the actual results will be consistent with the forward-looking statements. Investors should read carefully the factors described in the “Risk Factors” section of the Company’s filings with the SEC, including the Company’s Form 10-K for the year ended September 30, 2014 for information regarding risk factors that could affect the Company’s results. Except as otherwise required by Federal securities laws, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.
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.
| FORWARD INDUSTRIES, INC. | |||
| Dated: February 13, 2015 | By: | /s/ Michael Luetkemeyer | |
| Name: | Michael Luetkemeyer | ||
| Title: | Interim President | ||
FOR IMMEDIATE RELEASE
FORWARD REPORTS FISCAL 2015 FIRST QUARTER RESULTS
West Palm Beach, FL – February 13, 2015 – Forward Industries, Inc. (NASDAQ: FORD) (“Forward” or the “Company”), a designer and distributor of custom carry and protective solutions, today announced financial results for its first fiscal quarter ended December 31, 2014.
Forward generated an operating loss of ($1.6) million in the fiscal 2015 first quarter compared to operating income of $0.4 million in the fiscal 2014 first quarter primarily due to increased professional fees and settlement accruals associated with the proxy defense and other legal matters, increased professional fees associated with vetting acquisition targets in connection with prior management’s merger & acquisition strategy, plus a slight decline in gross profit as a result of a decrease in revenues.
Fiscal 2015 First Quarter Financial Results – Compared to the fiscal 2014 first quarter results:
- Net sales decreased $0.5 million, or 8%,
to $7.9 million in the fiscal 2015 first quarter from $8.4 million in the fiscal 2014 first quarter due to a $0.9 million decline
in sales of Other Products, partially offset by a $0.4 million increase in sales of Diabetic Products.
- Gross profit decreased $0.2 million, or
15%, to $1.6 million in the fiscal 2015 first quarter from $1.8 million in the fiscal 2014 first quarter. As a percentage of sales,
gross margin declined to 20% in the fiscal 2015 first quarter, compared to 22% in the fiscal 2014 first quarter. The gross profit
decrease was primarily due to the decline in sales.
- Sales and marketing expenses increased
$0.1 million, or 11%, to $0.7 million in the fiscal 2015 first quarter compared to $0.6 million in the fiscal 2014 first quarter,
due primarily to higher personnel costs as a result of expanding and restructuring the sales and sales support departments, including
their respective compensation schemes.
- General and administrative expenses increased $1.6 million, or 188%, to $2.5 million in the fiscal 2015 first quarter from $0.9 million in the fiscal 2014 first quarter due primarily to increased professional fees and settlement accruals associated with the proxy defense and other legal matters, plus increased professional fees associated with vetting acquisition targets in connection with prior management’s merger & acquisition strategy.
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- Other (income) expense, net, was $110 thousand
of expense in the fiscal 2015 first quarter compared to $25 thousand of expense in the fiscal 2014 first quarter primarily as a
result of higher losses on investments in marketable securities and prior year income from the change in the fair market value
of warrant liabilities.
- Net loss from continuing operations was
($1.7) million, or ($0.25) per basic and diluted share (after deducting preferred stock dividends and accretion), in the fiscal
2015 first quarter compared to $0.3 million of income, or $0.04 per basic and diluted share, in the fiscal 2014 first quarter.
- Net income from discontinued operations was $0.2 million, or $0.02 per basic and diluted share, in the fiscal 2015 first quarter, compared to negligible income, or $0.00 per basic and diluted share, in the fiscal 2014 first quarter.
Michael Luetkemeyer, Forward's Interim President, commented: “Having served for several weeks now, Forward’s new Board is in the early stages of implementing a strategy that invests in Forward’s future, streamlines its operations and, we expect, will grow its core business. We believe that, working with Forward’s dedicated and talented employees, as well as its customers and suppliers, Forward will remain one of the market leaders in its core business, while seeking to grow organically and realize value on behalf of all stakeholders. Terry Wise, the Board’s Chairman, and I look forward to the challenges that lie ahead and we will report back to you in the near future on our progress."
The tables below are derived from the Company’s unaudited condensed consolidated financial statements included in its Quarterly Report on Form 10-Q filed today with the Securities and Exchange Commission (“SEC”). Please refer to the Form 10-Q for complete financial statements and further information regarding the Company’s results of operations and financial condition relating to the three months ended December 31, 2014 and 2013. Please also refer to the risk factors applicable to the Company and its business included in its Annual Report on Form 10-K filed with the SEC on December 10, 2014.
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Note Regarding Forward-Looking Statements
In addition to the historical information contained herein, this press release contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that reflect Forward’s current expectations and projections about its future results, performance, prospects and opportunities. Forward has tried to identify these forward-looking statements by using words such as “may”, “should,” “expect,” “hope,” “anticipate,” “believe,” “intend,” “plan,” “estimate” and similar expressions. These forward-looking statements are based on information currently available to the Company and are subject to a number of risks, uncertainties and other factors that could cause its actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. No assurance can be given that the actual results will be consistent with the forward-looking statements. Investors should read carefully the factors described in the “Risk Factors” section of the Company’s filings with the SEC, including the Company’s Form 10-K for the year ended September 30, 2014 for information regarding risk factors that could affect the Company’s results. Except as otherwise required by Federal securities laws, Forward undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.
About Forward Industries
Incorporated in 1962, and headquartered West Palm Beach, Florida, Forward Industries is a global designer and distributor of mobile device cases and accessories. Forward’s products can be viewed online at www.forwardindustries.com.
Contact:
Forward Industries, Inc.
Michael Luetkemeyer, Interim President
(561) 465-0030
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FORWARD INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
(UNAUDITED)
| Three Months Ended December 31, | ||||||||
| 2014 | 2013 | |||||||
| Net sales | $ | 7,943,860 | $ | 8,415,477 | ||||
| Cost of goods sold | 6,381,439 | 6,570,277 | ||||||
| Gross profit | 1,562,421 | 1,845,200 | ||||||
| Operating expenses | ||||||||
| Sales and marketing | 682,457 | 616,707 | ||||||
| General and administrative | 2,470,424 | 856,516 | ||||||
| Total operating expenses | 3,152,881 | 1,473,223 | ||||||
| (Loss) income from operations | (1,590,460 | ) | 371,977 | |||||
| Other (income) expense: | ||||||||
| Interest income | (3,015 | ) | (8,518 | ) | ||||
| Loss on marketable securities, net | 110,001 | 80,839 | ||||||
| Other expense (income), net | 3,308 | (47,162 | ) | |||||
| Total other expense, net | 110,294 | 25,159 | ||||||
| (Loss) income from continuing operations | (1,700,754 | ) | 346,818 | |||||
| Income from discontinued operations, net | 198,963 | 4,609 | ||||||
| Net (loss) income | (1,501,791 | ) | 351,427 | |||||
| Preferred stock dividends and accretion | (473,694 | ) | (48,898 | ) | ||||
| Net (loss) income applicable to common equity | $ | (1,975,485 | ) | $ | 302,529 | |||
| Net (loss) income | $ | (1,501,791 | ) | $ | 351,427 | |||
| Other comprehensive (loss) income: | ||||||||
| Translation adjustments | (867 | ) | 479 | |||||
| Comprehensive (loss) income | $ | (1,502,658 | ) | $ | 351,906 | |||
| Net (loss) income per basic and diluted common shares: | ||||||||
| (Loss) income from continuing operations | $ | (0.25 | ) | $ | 0.04 | |||
| Income from discontinued operations | 0.02 | 0.00 | ||||||
| Net (loss) income per share | $ | (0.23 | ) | $ | 0.04 | |||
| Weighted average number of common and common equivalent shares outstanding | ||||||||
| Basic | 8,443,391 | 8,160,571 | ||||||
| Diluted | 8,443,391 | 8,171,011 | ||||||
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FORWARD INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| December 31, 2014 | September 30, 2014 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 4,982,572 | $ | 6,477,132 | ||||
| Marketable securities | - | 1,051,230 | ||||||
| Accounts receivable | 6,154,249 | 6,124,871 | ||||||
| Inventories | 2,595,050 | 2,374,837 | ||||||
| Prepaid expenses and other current assets | 445,117 | 401,549 | ||||||
| Total current assets | 14,176,988 | 16,429,619 | ||||||
| Property and equipment, net | 105,233 | 98,990 | ||||||
| Other assets | 40,962 | 40,962 | ||||||
| Total assets | $ | 14,323,183 | $ | 16,569,571 | ||||
| Liabilities and shareholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable, accrued expenses and other current liabilities | $ | 1,105,959 | $ | 1,218,541 | ||||
| Due to Forward China | 4,593,257 | 5,215,768 | ||||||
| Total current liabilities | 5,699,216 | 6,434,309 | ||||||
| Other liabilities | 126,507 | 115,202 | ||||||
| Total liabilities | 5,825,723 | 6,549,511 | ||||||
| 6% Senior convertible preferred stock, par value $0.01 per share; 1,500,000 shares authorized; 648,846 shares issued and outstanding (aggregate liquidation value of $1,287,737 and $1,275,000 as of December 31, 2014 and September 30, 2014, respectively) | 1,287,737 | 833,365 | ||||||
| Commitments and contingencies | ||||||||
| Shareholders’ equity: | ||||||||
| Preferred stock, par value $0.01 per share; 4,000,000 shares authorized; 2,400,000 undesignated: | ||||||||
| Series A participating preferred stock, par value $0.01; 100,000 shares authorized; no shares issued and outstanding | - | - | ||||||
| Common stock, par value $0.01 per share; 40,000,000 shares authorized; | ||||||||
| 8,443,046 and 9,159,796 shares issued; 8,443,046 and 8,453,386 shares outstanding; at December 31, 2014 and September 30, 2014, respectively | 84,431 | 91,598 | ||||||
| Additional paid-in capital | 17,493,861 | 18,747,371 | ||||||
| Treasury stock, 0 and 706,410 shares at cost at December 31, 2014 and September 30, 2014, respectively | - | (1,260,057 | ) | |||||
| Accumulated deficit | (10,347,291 | ) | (8,371,806 | ) | ||||
| Accumulated other comprehensive loss | (21,278 | ) | (20,411 | ) | ||||
| Total shareholders’ equity | 7,209,723 | 9,186,695 | ||||||
| Total liabilities and shareholders’ equity | $ | 14,323,183 | $ | 16,569,571 | ||||
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