Company: FWDI
Filing Date: 2025-09-16
Form Type: 8-K
Source: 0001683168-25-007036
Chunk: 104

Company: Forward Industries, Inc.
Filing Date: 2025-09-16
Form: 8-K
Item: Item 1
Chunk 104
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continued Operations” on the condensed
consolidated statements of operations for the three months ended December 31, 2023.

 A-7 

In March 2025, Forward China
determined it would not renew the Buying Agency and Supply Agreement (“Sourcing Agreement”), which subsequently expired on
May 9, 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 (the “OEM Plan”). On May 16, 2025, the Company and Forward US entered into a transaction agreement with
Forward China, pursuant to which the Company sold all equity interest in Forward Switzerland and Forward UK and certain other net assets
related to Forward US’ OEM segment to Forward China to satisfy outstanding payables due to Forward China under the Sourcing Agreement.
The sale of the OEM business is considered a strategic shift that has and will have a significant impact on the Company’s operations
and financial results. The assets and liabilities of the OEM segment were classified as assets and liabilities held for sale on the consolidated
balance sheets at December 31, 2024 and September 30, 2024. The results of operations for the OEM segment have been classified as discontinued
operations on the consolidated statements of operations for the three months ended December 31, 2024 and 2023. 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 Accounting Policies
and Estimates

We discussed the accounting
policies and 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
no material changes in critical accounting policies or estimation processes during the period covered by this report, but the following
accounting estimates had a material impact on our results of operations for the 2025 Quarter and fiscal 2024.

We review goodwill for