Company: FWDI
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001683168-25-006141
Chunk: 38

Company: Forward Industries, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 1
Chunk 38
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 these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking
statements.

Business Overview

Forward Industries, Inc.
is a global design company serving top tier medical and technology customers. The Company provides
hardware and software product design and engineering services to customers predominantly located in the U.S.

In June 2024, the Company’s
stockholders authorized, and the Company’s Board of Directors approved, a 1-for-10 reverse stock split of our common stock, which became
effective on June 18, 2024. Accordingly, all references made to share, per share, or common share amounts in the accompanying condensed
consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the reverse stock split.

 24 

Discontinued Operations

In July 2023, we decided
to cease operations of our retail distribution segment (“Retail Exit”) and we are presenting the results of operations for
this segment within discontinued operations in the current and prior periods presented herein. The discontinuation of the retail segment
represented a strategic shift in the Company’s business. The primary assets of the retail segment were inventory and accounts receivable.
The Company sold, liquidated, or otherwise disposed of the remaining retail inventory and collected the 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 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 sheet 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 and
nine months ended June 30, 2025 and 2024.

In March 2025, in connection
with the fourth Conversion Agreement (see Note 8 to the condensed consolidated financial statements), Forward China determined it would
not renew the Buying Agency and Supply Agreement, which subsequently expired on May 9, 2025. 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