Company: FWDI
Filing Date: 2025-02-13
Form Type: 10-Q
Source: 0001683168-25-000993
Chunk: 29

Company: Forward Industries, Inc.
Filing Date: 2025-02-13
Form: 10-Q
Item: Item 1
Chunk 29
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 engineering services to customers predominantly located
in the U.S. The Company’s original equipment manufacturing (“OEM”) distribution division sources and sells carrying
cases and other accessories for medical monitoring and diagnostic kits as well as a variety of other portable electronic and non-electronic
devices to OEMs, or their contract manufacturers worldwide, that either package our products as accessories “in box” together
with their branded product offerings or sell them through their retail distribution channels. The Company does not manufacture any of
its OEM products and sources substantially all of these products from independent suppliers in China, through Forward Industries Asia-Pacific
Corporation, a British Virgin Islands corporation (“Forward China”). Forward China is owned by our Chairman of the Board and
Chief Executive Officer. 

In June 2024, the Company’s
stockholders authorized, and the Company’s Board of Directors approved, a 1-for-10 reverse stock split of our common stock, which became
effective on June 18, 2024. Accordingly, all references made to share, per share, or common share amounts in the accompanying condensed
consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the reverse stock split.

 20 

Discontinued Operations

Considering the recurring
losses incurred by the retail distribution segment, in July 2023, we decided to cease operations of our retail distribution segment (“Retail
Exit”) and we are presenting the results of operations for this segment within discontinued operations in the prior periods presented
herein. The discontinuation of the retail segment represents a strategic shift in the Company’s business. The primary assets of
the retail segment were inventory and accounts receivable. The Company sold, liquidated, or otherwise disposed of the remaining retail
inventory and collected the remaining retail accounts receivable by September 30, 2024, at which time the retail segment was considered
fully discontinued. We expect to have no further significant continuing involvement with this segment. The inventory of the retail segment
met the criteria to be considered “held-for-sale” in accordance with ASC 205-20, “Discontinued Operations.” Accordingly,
the retail inventory is classified on our condensed consolidated balance sheet as “discontinued assets held for sale” at September
30, 2023, and the results of operations for the retail segment have been classified as “Discontinued Operations” on the condensed
consolidated statements of operations for the three months ended December 31, 2023.

Variability of Revenues
and Results of Operations