Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 1109

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 9A
Chunk 1109
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 2024, the Company had allowances
for credit losses of $92,000 and $27,000, respectively.

Inventories

Inventories consisted primarily
of finished goods and were stated at the lower of cost (determined by the first-in, first-out method) or net realizable value. Based on
management’s estimates, an allowance was made to reduce excess, obsolete, or otherwise unsellable inventories to net realizable
value. If needed, an allowance was established through charges to cost of sales, which is now presented as a component of income/(loss)
from discontinued operations in the Company’s consolidated statements of operations. In determining the adequacy of any allowance,
management’s estimates were based upon several factors, including analyses of inventory levels, historical loss trends, sales history
and projections of future sales demand. Due to the Retail Exit and the OEM Plan the Company has no remaining inventory at September 30,
2025. Inventory on hand at September 30, 2024 is presented as a component of assets held for sale.

Property and Equipment

Property and equipment consist
of computer hardware and software, furniture, fixtures and equipment and are recorded at cost. Expenditures for major additions and improvements
are capitalized, and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment are
retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is
included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related
assets using the straight-line method. The estimated useful lives for all property and equipment ranges from three to five years.

     F-12 

FORWARD INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Equity Offering Costs

Offering costs include underwriting
commissions, professional fees, filing fees and other costs directly associated with the Company’s recent financing transactions.
Prior to the completion of an offering, offering costs related to common and preferred stock issuances are recorded as a component of
other assets on the consolidated balance sheet and recorded a reduction to additional paid-in capital when the shares related to such
offering are issued. Offering costs associated with warrant liabilities are expensed as incurred and recorded as a component of general
and administrative expenses.

Leases

Lease assets and liabilities
are recognized at the lease commencement date based on the