Company: FWDI
Filing Date: 2025-09-16
Form Type: 8-K
Source: 0001683168-25-007036
Chunk: 14

Company: Forward Industries, Inc.
Filing Date: 2025-09-16
Form: 8-K
Item: Item 8
Chunk 14
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 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-10 

Leases

Lease assets and liabilities
are recognized at lease commencement date based on the present value of lease payments over the lease term, using the Company’s
incremental borrowing rate commensurate with the lease term, since the Company’s lessors do not provide an implicit rate, nor is
one readily available. The Company has certain leases that may include an option to renew and when it is reasonably probable to exercise
such option, the Company will include the renewal option terms in determining the lease asset and lease liability. Lease assets represent
the Company’s right-to-use an underlying asset for the lease term and lease liabilities represent the Company’s obligation
to make lease payments arising from the lease. Lease expense for lease payments is recognized on a straight-line basis over the lease
term. Operating lease assets are shown as right-of-use assets and financing lease assets are a component of property and equipment on
the consolidated balance sheets. The current and long-term portions of operating and financing lease liabilities are shown separately
as such on the consolidated balance sheets.

Income Taxes

The Company recognizes future
tax benefits and liabilities measured at enacted rates attributable to temporary differences between financial statement and income tax
bases of assets and liabilities and to net tax operating loss carryforwards to the extent that realization of these benefits is more likely
than not. At September 30, 2024, there was no change to our assessment that a full valuation allowance was required against all net deferred
tax assets as it is not probable that such deferred tax assets will be realized. Accordingly, any deferred tax provision or benefit was
offset by an equal and opposite change to the valuation allowance. Our income tax provision or benefit is generally not significant due
to the existence of significant net operating loss carryforwards. 

Revenue Recognition 

Discontinued OEM Distribution Segment

The OEM distribution