Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 213

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 1A
Chunk 213
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 these benefits is more likely
than not. At September 30, 2025, there was no change to our assessment that a full valuation allowance was required against all net deferred
tax assets. Accordingly, any deferred tax provision or benefit was offset by an equal and opposite change to the valuation allowance.
Our income tax provision or benefit is generally not significant due to the existence of significant net operating loss carryforwards.

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 had 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 consolidated balance sheets. The OEM distribution segment had no contract
liabilities at September 30, 2025, 2024 or 2023. The results of operations of the OEM segment are reported as discontinued operations
for Fiscal 2025 and Fiscal 2024 (see Note 3).

     F-13 

FORWARD INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Discontinued Retail Distribution Segment

The 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 was 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 other deliverables or performance obligations associated with its products. Revenue was measured
as the amount of consideration expected to be received in exchange for the products provided, net of allowances taken by retailers for
product returns and any taxes collected from customers that will be remitted to governmental authorities. When the Company received consideration
before achieving the criteria previously mentioned, it recorded a contract liability, which would be classified as a component of deferred
income in the accompanying consolidated balance sheets. The retail distribution segment had no contract liabilities at September 30, 2025,
2024 or 2023. The