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FORD > SEC Filings for FORD > Form 8-K on 11-Dec-2013All Recent SEC Filings

Show all filings for FORWARD INDUSTRIES INC

Form 8-K for FORWARD INDUSTRIES INC


11-Dec-2013

Non-Reliance on Previous Financials, Audits or Interim Review


ITEM 4.02 NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED AUDIT REPORT OR COMPLETED INTERIM REVIEW.

On December 5, 2013, the Audit Committee of the Board of Directors of Forward Industries, Inc. (the "Company") determined, upon the recommendation of the Company's management, and in consultation with the Company's independent registered public accounting firm, that the Company should restate its previously issued consolidated financial statements for the quarter ended June 30, 2013 due to certain errors made in the accounting for a certain transaction contained therein, as discussed below. Accordingly, the financial statements contained in the Company's Form 10-Q for the quarter ended June 30, 2013 filed with the Securities and Exchange Commission on August 8, 2013 (the "Form 10-Q") should no longer be relied upon.

This error occurred in the accounting for the calculation of value of 381,674 shares of the Company's 6% Senior Convertible Preferred Stock, par value $0.01 per share (the "Convertible Preferred Stock") and warrants to purchase a total of 381,674 shares of the Company's common stock, par value $0.01 per share (the "Warrants), issued in a private placement on June 28, 2013 at an aggregate purchase price of $1.965 per share. The Company subsequently determined that the carrying value of each share of Convertible Preferred Stock on June 28, 2013 was below (after giving effect to the reallocation of the carrying value between each share of Convertible Preferred Stock and Warrant) the conversion value of each share of Convertible Preferred Stock at June 30, 2013. As a result, the accounting for the Convertible Preferred Stock issuance has been revised to reflect the beneficial conversion feature associated with the Convertible Preferred Stock and Warrants. While the Company's review is not yet complete, it has progressed sufficiently to enable the Company to conclude that the effect of these error corrections will be to increase net loss available to common equity and basic and diluted loss per share from continuing operations for the three month period ended June 30, 2013 and to decrease net income available to common equity and basic and diluted earnings per share from continuing operations for the nine month period ended June 30, 2013. The adjustments only affect the quarter ended, and nine months ended, June 30, 2013, and have no effect on the Company's net loss, cash flows and liquidity for the three- and nine-month periods ended June 30, 2013.

The Company expects to file in the near future an amended Form 10-Q for the quarter ended June 30, 2013 to reflect the restatement. The Company will label the quarterly financial information in the Form 10-Q/A "As Restated" and will provide explanatory disclosure consistent with the requirements of Accounting Standard Codification ("ASC") 250, "Accounting Changes and Error Corrections-a replacement of APB Opinion No. 20 and FASB Statement No. 3."

The Audit Committee of the Company's Board of Directors discussed the matters disclosed in this Item 4.02 with the Company's independent registered public accounting firm, CohnReznick LLP.


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