Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 302

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 1B
Chunk 302
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 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 recognized when the performance obligation has been satisfied or the transfer of goods to the customer
has been completed and accepted.

Recognized revenues that will
not be billed until a later date are recorded as contract assets in the accompanying consolidated balance sheets. The design segment had
contract assets of $1,064,000, $1,273,000 and $976,000 at September 30, 2025, 2024 and 2023, respectively. Contracts where collections
to date have exceeded recognized revenues, or contract liabilities, are recorded as a liability and classified as a component of deferred
income in the accompanying consolidated balance sheets. The design segment had contract liabilities of $293,000, $399,000 and $297,000
at September 30, 2025, 2024 and 2023, respectively.

Digital Asset Staking

The Company participates in proof-of-stake
validation. Proof-of-stake validation, also referred to as staking, requires the Company to delegate its digital assets to a validator.
Staking can be performed on proprietary validation infrastructure or through the use of third-party infrastructure or service providers.
The Company concluded that where it controls the validation infrastructure, it is a principal in the provision of staking services to
the blockchain, and recognizes staking revenue