Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 1040

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 9
Chunk 1040
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 cash flows are foreign currency transaction gains or losses that are included in other income or expense
in the accompanying consolidated statements of operations. The approximate net losses from foreign currency transactions were $5,000 and
$8,000 in Fiscal 2025 and Fiscal 2024, respectively.

Fair Value Measurements

We perform fair value measurements
in accordance with the guidance provided by ASC 820, “Fair Value Measurement.” ASC 820 defines fair value as the price that
would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. When determining the fair value measurements for assets and liabilities required to be recorded at their fair values, we consider
the principal or most advantageous market in which we would transact and consider assumptions that market participants would use when
pricing the assets or liabilities, such as inherent risk, transfer restrictions, and risk of nonperformance.

ASC 820 establishes a fair value
hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring
fair value. An asset’s or liability’s categorization within the fair value hierarchy is based upon the lowest level of input
that is significant to the fair value measurement. ASC 820 establishes three levels of inputs that may be used to measure fair value:

    ·
    Level 1: quoted prices in active markets for identical assets or liabilities;

    ·
    Level 2: inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or

    ·
    Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities.

The acquisition of Kablooe provided
annual contingent earnout payments based on results of Kablooe’s operations through August 2025. In accordance with ASC 820, the
fair value of this earnout liability was measured on a recurring basis at each reporting date using inputs categorized within Level 3
of the fair value hierarchy. Due to the low likelihood of Kablooe reaching the specified earnout targets, the fair value of this earnout
liability was $0 at September 30, 2024. The carrying amounts of cash