Company: FWDI
Filing Date: 2025-09-16
Form Type: 8-K
Source: 0001683168-25-007036
Chunk: 84

Company: Forward Industries, Inc.
Filing Date: 2025-09-16
Form: 8-K
Item: Item 1
Chunk 84
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etermined by the first-in, first-out method) or net realizable value. Based on
management’s estimates, an allowance is made to reduce excess, obsolete, or otherwise unsellable inventories to net realizable value.
The allowance is established through charges to cost of sales, which is now presented as a component of income/(loss) from discontinued
operations in the Company’s condensed consolidated statements of operations. In determining the adequacy of the allowance, management’s
estimates are based upon several factors, including analyses of inventory levels, historical loss trends, sales history and projections
of future sales demand. The Company’s estimates of the allowance may change from time to time based on management’s assessments,
and such changes could be material. Due to the Retail Exit and the OEM Plan, all inventory on hand at December 31, 2024 and September
30, 2024 is presented as a component of assets held for sale.

     F-34 

FORWARD INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Revenue Recognition

Discontinued OEM Distribution Segment

The OEM distribution segment
recognized revenue when: (i) finished goods were shipped to its customers (in general, these conditions occurred at either point of shipment
or point of destination, depending on the terms of sale and transfer of control); (ii) there were no other deliverables or performance
obligations; and (iii) there were no further obligations to the customer after the title of the goods has transferred. If the Company
received consideration before achieving the criteria previously mentioned, it recorded a contract liability, which would be classified
as a component of liabilities held for sale in the accompanying condensed consolidated balance sheets. The OEM distribution segment had
no contract liabilities at December 31, 2024, September 30, 2024 or September 30, 2023. The results of operations of the OEM segment are
reported as discontinued operations for the three months ended December 31, 2024 and 2023.

Discontinued Retail Distribution Segment

The discontinued retail distribution
segment sold products primarily through online websites operated by authorized third-party retailers. Revenue was recognized when control
(as defined in Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers”) of the
related goods were transferred to the retailer, which generally occurred upon shipment to the end customer. Other than product delivery,
the retail distribution segment did not typically have