Company: FWDI
Filing Date: 2025-09-16
Form Type: 8-K
Source: 0001683168-25-007036
Chunk: 54

Company: Forward Industries, Inc.
Filing Date: 2025-09-16
Form: 8-K
Item: Item 8
Chunk 54
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Topic 280): Improvements to Reportable Segment Disclosures,” which requires expanded
segment reporting and disclosure and is effective for the Company for fiscal years beginning after December 15, 2023, and interim periods
within fiscal years beginning after December 15, 2024. The Company is currently evaluating the effects of this pronouncement on its condensed
consolidated financial statements.

NOTE 3        DISCONTINUED
OPERATIONS AND ASSETS HELD FOR SALE

Considering the recurring
losses incurred by the retail segment, in July 2023, the Company decided to cease operations of its retail distribution segment (“Retail
Exit”). The primary assets of the retail segment were inventory and accounts receivable. The Company sold, liquidated, or otherwise
disposed of all remaining retail inventory, and collected 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
Retail Exit was considered a strategic shift that would have a significant impact on the Company’s operations and financial results.
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 was classified on our condensed consolidated balance sheets 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.

     F-37 

FORWARD INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In March 2025, Forward China
determined it would not renew the Buying Agency and Supply Agreement (the “Sourcing Agreement”), which subsequently expired
on May 9, 2025 (see Note 8). Without this agreement, the Company determined it would not continue the OEM segment of the business and
committed to a plan to sell the segment. On May 16, 2025, the Company and Forward US entered into a transaction agreement with Forward
China, pursuant to which the Company sold all equity interest in Forward Switzerland and Forward UK and sold certain other net assets
related to Forward US’ OEM segment to Forward China to satisfy outstanding payables due to Forward China under the S