Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 890

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 7A
Chunk 890
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000 held in excess of federally insured
limits. Historically, we have not experienced any losses due to such cash concentrations.

Accounts Receivable

Accounts receivable
consist of unsecured trade accounts with customers net of an allowance for credit losses. Collectability of accounts receivable is estimated
by evaluating the number of days accounts are outstanding, customer payment history, recent payment trends and perceived creditworthiness,
adjusted as necessary based on specific customer situations. At September 30, 2025 and September 30, 2024, the Company had allowances
for credit losses of $92,000 and $27,000, respectively.

Inventories

Inventories consisted primarily
of finished goods and were stated at the lower of cost (determined by the first-in, first-out method) or net realizable value. Based on
management’s estimates, an allowance was made to reduce excess, obsolete, or otherwise unsellable inventories to net realizable
value. If needed, an allowance was established through charges to cost of sales, which is now presented as a component of income/(loss)
from discontinued operations in the Company’s consolidated statements of operations. In determining the adequacy of any allowance,
management’s estimates were based upon several factors, including analyses of inventory levels, historical loss trends, sales history
and projections of future sales demand. Due to the Retail Exit and the OEM Plan the Company has no remaining inventory at September 30,
2025. Inventory on hand at September 30, 2024 is presented as a component of assets held for sale.

Property and Equipment

Property and equipment consist
of computer hardware and software, furniture, fixtures and equipment and are recorded at cost. Expenditures for major additions and improvements
are capitalized, and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment are
retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is
included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related
assets using the straight-line method. The estimated useful lives for all property and equipment ranges from three to five years.

     F-12 

FORWARD INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Equity Offering Costs

Offering costs include underwriting
commissions, professional fees, filing fees and other costs directly associated with