Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 1325

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 10
Chunk 1325
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 the title of the goods had transferred. If the Company
received consideration before achieving the criteria previously mentioned, it recorded a contract liability, which would be classified
as a component of liabilities held for sale in the accompanying consolidated balance sheets. The OEM distribution segment had no contract
liabilities at September 30, 2025, 2024 or 2023. The results of operations of the OEM segment are reported as discontinued operations
for Fiscal 2025 and Fiscal 2024 (see Note 3).

     F-13 

FORWARD INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Discontinued Retail Distribution Segment

The retail distribution segment
sold products primarily through online websites operated by authorized third-party retailers. Revenue was recognized when control (as
defined in Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers”) of the related
goods was transferred to the retailer, which generally occurred upon shipment to the end customer. Other than product delivery, the retail
distribution segment did not typically have other deliverables or performance obligations associated with its products. Revenue was measured
as the amount of consideration expected to be received in exchange for the products provided, net of allowances taken by retailers for
product returns and any taxes collected from customers that will be remitted to governmental authorities. When the Company received consideration
before achieving the criteria previously mentioned, it recorded a contract liability, which would be classified as a component of deferred
income in the accompanying consolidated balance sheets. The retail distribution segment had no contract liabilities at September 30, 2025,
2024 or 2023. The results of operations of the retail segment are reported as discontinued operations for Fiscal 2025 and Fiscal 2024
(see Note 3).

Design Segment

The Company applies the “cost
to cost” and “right to invoice” methods of revenue recognition to the contracts with customers in the design segment.
The design segment typically engages in two types of contracts: (i) time and material and (ii) fixed price. The Company recognizes revenue
over time on its time and material contracts utilizing a “right to invoice” method. Revenues from fixed price contracts that
require performance of services that are not related to the production of tangible assets are recognized by using cost inputs to measure
progress toward the completion of its performance obligations, or the “cost to cost” method. Revenues from fixed price contracts
that contain specific deliverables are