Company: FWDI
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001683168-25-006141
Chunk: 39

Company: Forward Industries, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 1
Chunk 39
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 China, pursuant to which the Company sold all equity interest in Forward Switzerland
and Forward UK and certain other net assets related to Forward US’ OEM segment to Forward China to satisfy outstanding payables
due to Forward China under the Sourcing Agreement. Additionally, the Company and Forward China terminated the Supply Agreement and extended
the term of the Note Payable (see Note 8 to the condensed consolidated financial statements) to December 31, 2025. The Company paid $200,000
at closing and agreed to make additional cash payments of $150,000 on each of July 31, 2025, August 31, 2025 and September 30, 2025, which
are shown as Due to Forward China on the condensed consolidated financial statements. Results of operations for Forward Switzerland and
Forward UK were included in the Company’s results of operations through and including May 16, 2025. The sale of the OEM business
is considered a strategic shift that will have a significant impact on the Company’s operations and financial results. The assets
and liabilities of the OEM segment were classified as assets and liabilities held for sale on the condensed consolidated balance sheets
at September 30, 2024. The results of operations for the OEM segment have been classified as discontinued operations on the condensed
consolidated statements of operations for the three and nine months ended June 30, 2025 and 2024. Unless otherwise noted, results for
discontinued operations are excluded from the discussion that follows.

Variability of Revenues
and Results of Operations

A significant portion of
our revenue is concentrated with several large customers, some of which are the same and some of which change over time. Orders from some
of these customers can be highly variable, with short lead times, which can cause our quarterly revenues, and consequently our results
of operations, to vary over a relatively short period of time.

Critical Estimates

We discussed the significant
estimation processes that are critical to our business operations and the understanding of our financial statements in our Annual Report
on Form 10-K for the fiscal year ended September 30, 2024, under the caption “Management’s Discussion and Analysis of Financial
Condition and Results of Operations—Critical Accounting Policies and Estimates.” There have been no material changes in critical
accounting policies or estimation processes during the period covered by this report, but the following accounting estimates had a material
impact on our results of operations for the 2025 Period and fiscal 2024.