Form 8-K FORWARD INDUSTRIES INC For: Feb 16

 

 

UNITED 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 16, 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 1.01. Entry into a Material Definitive Agreement.

 

Settlement Agreement and Mutual Release

 

                On February 16, 2015, Forward Industries, Inc. (“Forward” or the “Company”) entered into a settlement agreement and mutual release (the “Agreement”) with the Company’s former Chief Financial Officer (“CFO”), James McKenna, in connection with a lawsuit filed by Mr. McKenna on August 26, 2014 in the U.S. District Court for the Southern District of New York against the Company and then-directors Frank LaGrange Johnson, Robert Garrett, John F. Chiste, Timothy Gordon and Owen P.J. King (the “SDNY Lawsuit”), alleging purported claims of retaliation for whistleblowing under the Dodd-Frank Act, breach of contract and breach of the covenant of good faith and fair dealing all as against the Company, and a single claim for tortious interference with contract as against the individual defendants. The complaint sought an unspecified amount of monetary consequential damages and punitive damages.

 

 

 

Pursuant to the Agreement, Mr. McKenna and the Company have agreed to settle and release all disputes or claims against the other party related to the SDNY Lawsuit and any such disputes or claims arising out of Mr. McKenna’s employment with the Company, without an admission of liability or wrongdoing. The Company additionally offered to reinstate Mr. McKenna as CFO; however, Mr. McKenna rejected the offer of employment to pursue other opportunities. Under the Agreement, Mr. McKenna will receive a cash payment of $315,000, representing 18 months' salary at the rate specified in Mr. McKenna’s Amended Employment Agreement, signed between the Company and Mr. McKenna and dated October 26, 2012. Mr. McKenna will also receive approximately $375,000 in legal fees, back pay, prior out-of-pocket benefits, taxes and penalties on Mr. McKenna’s 401(k) loan, and accrued paid time off, in addition to 35,000 restricted stock units vesting immediately. The Agreement includes customary non-disparagement and release provisions.

 

On February 17, 2015, in connection with the foregoing, the Company issued a press release thanking Mr. McKenna for service to Forward.

 

A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.

 

Amendment to Supply Agreement

 

On February 18, 2015, the Company entered into Amendment No. 2 (the “Amendment”) to the Amended and Restated Buying Agency and Supply Agreement (the “Supply Agreement”) with Forward Industries (Asia-Pacific) Corporation (formerly known as Seaton Global Corporation), a BVI corporation (“Agent”), dated as of February 17, 2015.  The Amendment extends the term of the Supply Agreement, as amended, until September 11, 2015, during which time the parties to the Supply Agreement intend to negotiate towards a long-term renewal of the underlying arrangement.  The Supply Agreement, as amended, provides that, upon the terms and subject to the conditions set forth therein, Agent shall act as the Company’s exclusive buying agent and supplier of Products (as defined in the agreement) in the Asia-Pacific region. The Company shall purchase products at Agent’s cost and shall pay a service fee to Agent. Terence Bernard Wise, the Chairman of the Company, is a principal of Agent.

 

Item 9.01. Financial Statements and Exhibits.

 

(d)           Exhibits

 

Exhibit 99.1

Press Release, dated February 17, 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 18, 2015	By:	/s/ Michael Luetkemeyer
		Name:	Michael Luetkemeyer
		Title:	Interim President

 

 

FOR IMMEDIATE RELEASE

FORWARD SETS RECORD STRAIGHT AND

OFFERS TO REINSTATE JAMES MCKENNA AS CFO

 

 

West Palm Beach, FL – February 17, 2015 – Forward Industries, Inc. (NASDAQ: FORD), a designer and distributor of custom carry and protective solutions, today announced that it has recently offered to reinstate James McKenna as Chief Financial Officer.  Mr. McKenna, who began his tenure at Forward in 2003, served Forward as its Corporate Controller, then Chief Financial Officer until August 2014.  Unfortunately, and with regrets, Mr. McKenna was unable to accept Forward’s offer of employment due to prior commitments and his pursuit of other opportunities.

 

Terence Bernard Wise, Forward’s Chairman of the Board of Directors, commented:

“I am very appreciative of the excellent service Mr. McKenna provided during his tenure here at Forward and I sincerely regret that we were not able to bring him back on as our Chief Financial Officer.  Mr. McKenna was a talented and highly respected member of the senior management team who has contributed greatly to Forward’s successes."

“I have worked closely with Mr. McKenna since 2012 and have known him to be a leader who has repeatedly proven his ability to add value.  By way of just one example, our decision to wind-down our retail business and restructure our company to better support our OEM business was based largely on Mr. McKenna’s analysis and guidance, and it was to Mr. McKenna that the board looked to in leading its execution. In doing so, Mr. McKenna went so far as to relocate his family across the country and take a voluntary, yet substantial, reduction in his pay.”

“I am ever grateful to Mr. McKenna for the integrity, conduct, and character he displayed throughout the course of his employment, especially in recent times, under what were trying circumstances.  Although he will be sorely missed here, I wish Mr. McKenna only the best in his future endeavors, where I am confident he will have great success.” 

For his part, Mr. McKenna stressed that he "has nothing but the utmost respect for Forward and wishes the company great success."

 

 

 

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 in the 2014 quarter and beyond 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 in 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.                                        

477 Rosemary Ave., Suite 219

West Palm Beach, FL 3301

Tel: (561) 465-0030

[email protected]