Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 1255

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 9C
Chunk 1255
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 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 on a gross basis. Blockchain rewards distributed to third parties staking on the Company’s
validation infrastructure are included in the Cost of sales.

The Company recognizes noncash
consideration from staking activities related to its digital asset holdings in accordance with ASC 606. Staking income is generated when
the Company participates in digital asset networks to validate transactions and, in return, earns rewards in the form of additional digital
assets. The Company considers its performance obligation to be satisfied at the point in time when it has successfully provided validation
services to the network and the reward is determinable and collectible. Revenue is measured as the fair value of digital assets received
as staking rewards at contract inception, which generally occurs at the beginning of each epoch of the respective blockchain.

     F-14 

FORWARD INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Disaggregation of Revenue

Design segment revenue is predominantly
recognized over time and has similar other economic factors, including,