Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 1540

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 13
Chunk 1540
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 term of the assets or liabilities; or

    ·
    Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities.

The acquisition of Kablooe provided
annual contingent earnout payments based on results of Kablooe’s operations through August 2025. In accordance with ASC 820, the
fair value of this earnout liability was measured on a recurring basis at each reporting date using inputs categorized within Level 3
of the fair value hierarchy. Due to the low likelihood of Kablooe reaching the specified earnout targets, the fair value of this earnout
liability was $0 at September 30, 2024. The carrying amounts of cash, accounts receivable, accounts payable, due to Forward China, and
the Note payable to Forward China approximate fair value due to their short-term maturities.

     F-15 

FORWARD INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company applies ASC 820 in
the valuation of SOL held by the Company for financial statement purposes. The fair value of SOL uses Level 1 inputs to reflect the price
that would be received for SOL in a current sale, which assumes an orderly transaction between market participants on the measurement
date in SOL’s “principal market,” or in the absence of a principal market, the most advantageous market. Market participants
are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able
to transact. The Company determines its principal market (or in the absence of a principal market, the most advantageous market) on a
periodic basis to determine which market is its principal market for the purpose of calculating fair value for the creation of quarterly
and annual financial statements. Issuer-specific events, market trends, bid/ask quotes of brokers and information providers and other
data may be reviewed in the course of making a good faith determination of the digital asset’s fair value.

Share-Based Compensation Expense

The Company estimates the fair
value of employee and non-employee director share-based compensation on the date of grant using the Black-Scholes option pricing model,
which includes variables such as the expected volatility of the Company’s share price, the exercise behavior of its grantees, interest
rates, and dividend yields. These variables are projected based on the Company’s historical data, experience, and other