Company: FWDI
Filing Date: 2025-09-16
Form Type: 8-K
Source: 0001683168-25-007036
Chunk: 83

Company: Forward Industries, Inc.
Filing Date: 2025-09-16
Form: 8-K
Item: Item 1
Chunk 83
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. All significant intercompany transactions and balances
have been eliminated in consolidation.

In the opinion of management,
the accompanying condensed consolidated financial statements presented in this Quarterly Report on Form 10-Q reflect all normal recurring
adjustments necessary to present fairly the financial position and results of operations and cash flows for the interim periods presented
herein but are not necessarily indicative of the results of operations for the year ending September 30, 2025. These condensed consolidated
financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in its
Annual Report on Form 10-K for the fiscal year ended September 30, 2024, and with the disclosures and risk factors presented therein.
The September 30, 2024 condensed consolidated balance sheet has been derived from the audited consolidated financial statements.

Accounting Estimates

The preparation of the Company’s
condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America
(“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting periods. Actual results could differ from those estimates and assumptions. Within this report, certain dollar
amounts and percentages have been rounded to their approximate values.

Segment Reporting

As a result of discontinuing
the retail and OEM segments, as disclosed in Note 3, the Company now has only one reportable segment. The design segment consists of two
operating segments (IPS and Kablooe, which have been aggregated into one reportable segment) that provide a full spectrum of hardware
and software product design and engineering services to customers predominantly located in the U.S. See Note 5 for more information on
segments.

Accounts Receivable

Accounts receivable consist
of unsecured trade accounts with customers net of an allowance for credit losses. Collectability of accounts receivable is estimated by
evaluating the number of days accounts are outstanding, customer payment history, recent payment trends and perceived creditworthiness,
adjusted as necessary based on specific customer situations. At December 31, 2024, September 30, 2024 and September 30, 2023, the Company
had allowances for credit losses of $51,000, $27,000 and $771,000, respectively.

Inventories

Inventories consist primarily
of finished goods and are stated at the lower of cost (d