Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 650

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 4
Chunk 650
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, we consider
the principal or most advantageous market in which we would transact and consider assumptions that market participants would use when
pricing the assets or liabilities, such as inherent risk, transfer restrictions, and risk of nonperformance.

ASC 820 establishes a fair value
hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring
fair value. An asset’s or liability’s categorization within the fair value hierarchy is based upon the lowest level of input
that is significant to the fair value measurement. ASC 820 establishes three levels of inputs that may be used to measure fair value:

    ·
    Level 1: quoted prices in active markets for identical assets or liabilities;

    ·
    Level 2: inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or

    ·
    Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities.

The acquisition of Kablooe provided
annual contingent earnout payments based on results of Kablooe’s operations through August 2025. In accordance with ASC 820, the
fair value of this earnout liability was measured on a recurring basis at each reporting date using inputs categorized within Level 3
of the fair value hierarchy. Due to the low likelihood of Kablooe reaching the specified earnout targets, the fair value of this earnout
liability was $0 at September 30, 2024. The carrying amounts of cash, accounts receivable, accounts payable, due to Forward China, and
the Note payable to Forward China approximate fair value due to their short-term maturities.

     F-15 

FORWARD INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company applies ASC 820 in
the valuation of SOL held by the Company for financial statement purposes. The fair value of SOL uses Level 1 inputs to reflect the price
that would be received for SOL in a current sale, which assumes an orderly transaction between market participants on the measurement
date in SOL’s “principal market,” or in the absence of