Company: FWDI
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001683168-25-003548
Chunk: 7

Company: Forward Industries, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Item 1
Chunk 7
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    Operating lease assets obtained in exchange for operating lease liabilities 
    $157,424  
    $– 
  
    Conversion of accounts payable to convertible preferred stock 
    $2,725,000  
    $– 

The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.

 6 

FORWARD INDUSTRIES, INC. AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

  NOTE 1
  OVERVIEW

Business

Forward Industries, Inc.
(“Forward”, “we”, “our” or the “Company”) is a global design, sourcing and distribution
company serving top tier medical and technology customers worldwide. The Company provides hardware
and software product design and engineering services to customers predominantly located in the U.S.

Discontinued Operations

In July 2023, the Company
decided to cease operations of its retail distribution segment (“Retail Exit”) and is presenting the results of operations
for this segment within discontinued operations in the periods presented herein. Our retail distribution business sourced and sold smart-enabled
furniture, hot tubs and saunas and a variety of other products through various online retailer websites to customers predominantly located
in the U.S. and Canada. The inventory of the retail segment was presented as discontinued assets held for sale on the balance sheet at
September 30, 2023. See Note 3 for additional information on discontinued operations.

In March 2025, the Company
committed to a plan to sell the original equipment manufacturer (“OEM”) distribution segment of the business (“OEM Plan”)
and is presenting the results of operations for this segment within discontinued operations in the current and prior periods presented
herein. The OEM distribution segment 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, a related party owned by the Company’s CEO (“Forward China”). See Notes 3 and 8. 

Unless
otherwise noted, amounts related to these discontinued operations are excluded from the disclosures presented herein.