Company: FWDI
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001683168-25-003548
Chunk: 15

Company: Forward Industries, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Item 1
Chunk 15
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 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 and six months ended March 31, 2025 and 2024.

In March 2025, in connection
with the fourth Conversion Agreement (see Note 8), Forward China determined it would not renew the Buying Agency and Supply Agreement,
which was scheduled to expire on April 30, 2025 (see Note 11). 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 in the next three months, after which it does not plan to have
any significant continuing involvement with this segment. The sale of the OEM business is considered a strategic shift that will have
a significant impact on the Company’s operations and financial results. The assets and liabilities of the OEM segment are classified
as assets and liabilities held for sale on the condensed consolidated balance sheets at March 31, 2025 and September 30, 2024. The results
of operations for the OEM segment have been classified as discontinued operations on the condensed consolidated statement of operations
for the three and six months ended March 31, 2025 and 2024. The condensed consolidated balance sheets and statements of operations for
comparable periods have been reclassified to conform to this presentation in accordance with the accounting guidance.

The following table presents
the major components of the “Income from discontinued operations, net of tax” in our condensed consolidated statements