Company: FWDI
Filing Date: 2025-09-16
Form Type: 8-K
Source: 0001683168-25-007036
Chunk: 85

Company: Forward Industries, Inc.
Filing Date: 2025-09-16
Form: 8-K
Item: Item 1
Chunk 85
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 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 was classified as a
component of deferred income in the accompanying condensed consolidated balance sheets. The retail distribution segment had no contract
liabilities at December 31, 2024, September 30, 2024 or September 30, 2023. The results of operations of the retail segment are reported
as discontinued operations for the three months ended December 31, 2023. See Note 3.

Design Segment

The Company applies the “cost
to cost” and “right to invoice” methods of revenue recognition to the contracts with customers in the design segment.
The design segment typically engages in two types of contracts: (i) time and material and (ii) fixed price. The Company recognizes revenue
over time on its time and material contracts utilizing a “right to invoice” method. Revenues from fixed price contracts that
require performance of services that are not related to the production of tangible assets are recognized by using cost inputs to measure
progress toward the completion of its performance obligations, or the “cost to cost” method. Revenues from fixed price contracts
that contain specific deliverables are recognized when the performance obligation has been satisfied or the transfer of goods to the customer
has been completed and accepted.

Recognized revenues that
will not be billed until a later date are recorded as contract assets in the accompanying condensed consolidated balance sheets. The design
segment had contract assets of $885,000, $1,273,000 and $976,000 at December 31, 2024, September 30, 2024 and September 30, 2023, respectively.
Contracts where collections to date have exceeded recognized revenues, or contract liabilities, are recorded as a liability and classified
as a component of deferred income in the accompanying condensed consolidated balance sheets. The design segment had contract liabilities
of $279,000, $399,000, and $297,000 at December 31, 2024, September 30, 2024 and September 30, 2023, respectively.

Goodwill

The Company reviews goodwill
for impairment at least annually, or more often if triggering events occur. The