Company: FWDI
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001683168-25-003548
Chunk: 31

Company: Forward Industries, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Item 1
Chunk 31
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 have no further significant continuing involvement with this segment. The inventory of
the retail segment met the criteria to be considered “held-for-sale” in accordance with ASC 205-20, “Discontinued Operations.”
Accordingly, the retail inventory was classified on our condensed consolidated balance sheet as “discontinued assets held for sale”
at September 30, 2023, and the results of operations for the retail segment have been classified as “Discontinued Operations”
on the condensed consolidated statements of operations for the three and six months ended March 31, 2025 and 2024.

 19 

In March 2025, in connection
with the fourth Conversion Agreement (see Note 8 to the condensed consolidated financial statements), Forward China determined it would
not renew the Buying Agency and Supply Agreement, which was scheduled to expire on April 30, 2025. Without this agreement, the Company
determined it would not continue the OEM segment of the business and committed to a plan to sell the segment in the next three months,
after which it does not plan to have any significant continuing involvement with this segment. The sale of the OEM business is considered
a strategic shift that will have a significant impact on the Company’s operations and financial results. The assets and liabilities
of the OEM segment are classified as assets and liabilities held for sale on the condensed consolidated balance sheets at March 31, 2025
and September 30, 2024. The results of operations for the OEM segment have been classified as discontinued operations on the condensed
consolidated statements of operations for the three and six months ended March 31, 2025 and 2024.

Unless otherwise noted, results
for discontinued operations are excluded from the discussion that follows.

Variability of Revenues
and Results of Operations

A significant portion of
our revenue is concentrated with several large customers, some of which are the same and some of which change over time. Orders from some
of these customers can be highly variable, with short lead times, which can cause our quarterly revenues, and consequently our results
of operations, to vary over a relatively short period of time.

Critical Estimates

We discussed the significant
estimation processes that are critical to our business operations and the understanding of our financial statements in our Annual Report
on Form 10-K for the fiscal year ended September 30, 2024, under the caption “Management’s Discussion and Analysis of Financial
Condition and Results of Operations—Critical Accounting Policies and Estimates.” There have been