Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 1612

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 14
Chunk 1612
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U 2023-09, “Income Taxes - Improvements to Income Tax Disclosures”, requiring enhancements and further transparency to certain
income tax disclosures, most notably the tax rate reconciliation and income taxes paid. This ASU is effective for fiscal years beginning
after December 15, 2024, on a prospective basis and retrospective application is permitted. The Company is currently evaluating the effects
of this pronouncement on its consolidated financial statements.

     F-16 

FORWARD INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In November 2023, the FASB issued
ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which requires expanded segment
reporting and disclosure and is effective for the Company for fiscal years beginning after December 15, 2023, and interim periods within
fiscal years beginning after December 15, 2024. The Company adopted this guidance in Fiscal 2025, which did not have a material impact
on its financial statements.

NOTE 3         DISCONTINUED
OPERATIONS AND ASSETS HELD FOR SALE

In July 2023, the Company decided
to cease operations of its retail distribution segment (“Retail Exit”). The primary assets of the retail segment were inventory
and accounts receivable. The Company sold, liquidated, or otherwise disposed of all remaining retail inventory, and collected remaining
retail accounts receivable by September 30, 2024, at which time the retail segment was considered fully discontinued. We expect to have
no further significant continuing involvement with this segment. The Retail Exit was considered a strategic shift that would have a significant
impact on the Company’s operations and financial results. The inventory of the retail segment met the criteria to be considered
“held-for-sale” in accordance with ASC 205-20, “Discontinued Operations.” Accordingly, the retail inventory was
classified on our consolidated balance sheets as “discontinued assets held for sale” at September 30, 2023, and the results
of operations for the retail segment have been classified as “Discontinued Operations” on the consolidated statements of operations
for the years ended September 30, 2025 and 2024.

In March 2025, in
connection with the fourth Conversion Agreement (see Note 14), Forward China determined it would not renew the Buying Agency and
Supply Agreement (“Sourcing Agreement