Company: FWDI
Filing Date: 2025-09-16
Form Type: 8-K
Source: 0001683168-25-007036
Chunk: 68

Company: Forward Industries, Inc.
Filing Date: 2025-09-16
Form: 8-K
Item: Item 8
Chunk 68
---
 segment (“Retail
Exit”) and we are presenting the results of operations for this segment within discontinued operations in the prior periods presented
herein. The discontinuation of the retail segment represents 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 is 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 months ended December 31, 2023.

 A-7 

In March 2025, Forward China
determined it would not renew the Buying Agency and Supply Agreement (“Sourcing 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 (the “OEM Plan”). On May 16, 2025, the Company and Forward US entered into a transaction agreement with
Forward China, pursuant to which the Company sold all equity interest in Forward Switzerland and Forward UK and certain other net assets
related to Forward US’ OEM segment to Forward China to satisfy outstanding payables due to Forward China under the Sourcing Agreement.
The sale of the OEM business is considered a strategic shift that has and will have a significant impact on the Company’s operations
and financial results. The assets and liabilities of the OEM segment were classified as assets and liabilities held for sale on the consolidated
balance sheets at December 31, 2024 and September 30, 2024. The results of operations for the OEM segment have been classified as discontinued
operations on the consolidated statements of operations for the three months ended December 31, 2024 and 2023. Unless otherwise noted,
results for discontinued operations are excluded from the discussion that follows.

Variability of Revenues
and Results of Operations

A significant portion of
our