Company: FWDI
Filing Date: 2025-09-16
Form Type: 8-K
Source: 0001683168-25-007036
Chunk: 48

Company: Forward Industries, Inc.
Filing Date: 2025-09-16
Form: 8-K
Item: Item 8
Chunk 48
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 two
operating segments (IPS and Kablooe, which have been aggregated into one reportable segment) that provide a full spectrum of hardware
and software product design and engineering services to customers predominantly located in the U.S. See Note 5 for more information on
segments.

Accounts Receivable

Accounts receivable consist
of unsecured trade accounts with customers net of an allowance for credit losses. Collectability of accounts receivable is estimated by
evaluating the number of days accounts are outstanding, customer payment history, recent payment trends and perceived creditworthiness,
adjusted as necessary based on specific customer situations. At December 31, 2024, September 30, 2024 and September 30, 2023, the Company
had allowances for credit losses of $51,000, $27,000 and $771,000, respectively.

Inventories

Inventories consist primarily
of finished goods and are stated at the lower of cost (determined by the first-in, first-out method) or net realizable value. Based on
management’s estimates, an allowance is made to reduce excess, obsolete, or otherwise unsellable inventories to net realizable value.
The allowance is established through charges to cost of sales, which is now presented as a component of income/(loss) from discontinued
operations in the Company’s condensed consolidated statements of operations. In determining the adequacy of the allowance, management’s
estimates are based upon several factors, including analyses of inventory levels, historical loss trends, sales history and projections
of future sales demand. The Company’s estimates of the allowance may change from time to time based on management’s assessments,
and such changes could be material. Due to the Retail Exit and the OEM Plan, all inventory on hand at December 31, 2024 and September
30, 2024 is presented as a component of assets held for sale.

     F-34 

FORWARD INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Revenue Recognition

Discontinued OEM Distribution Segment

The OEM distribution segment
recognized revenue when: (i) finished goods were shipped to its customers (in general, these conditions occurred at either point of shipment
or point of destination, depending on the terms of sale and transfer of control); (ii) there were no other deliverables or performance
obligations; and (iii) there were no further obligations to the customer after the