Company: FWDI
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001683168-25-003548
Chunk: 11

Company: Forward Industries, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Item 1
Chunk 11
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 and transfer of control); (ii) there are no other deliverables or performance
obligations; and (iii) there are no further obligations to the customer after the title of the goods has transferred. If the Company receives
consideration before achieving the criteria previously mentioned, it records a contract liability, which is classified as a component
of deferred income in the accompanying condensed consolidated balance sheets. The OEM distribution segment had no contract liabilities
at March 31, 2025, September 30, 2024 or September 30, 2023. The results of operations of the OEM segment are reported as discontinued
operations for the three and six months ended March 31, 2025 and 2024. See Note 3.

Discontinued Retail Distribution Segment

The discontinued retail distribution
segment sold products primarily through online websites operated by authorized third-party retailers. Revenue was recognized when control
(as defined in Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers”) of the
related goods were transferred to the retailer, which generally occurred upon shipment to the end customer. Other than product delivery,
the retail distribution segment did not typically have 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
receives consideration before achieving the criteria previously mentioned, it records a contract liability, which is classified as a component
of deferred income in the accompanying condensed consolidated balance sheets. The retail distribution segment had no contract liabilities
at March 31, 2025, September 30, 2024 or September 30, 2023. The results of operations of the retail segment are reported as discontinued
operations for the three and six months ended March 31, 2025 and 2024. 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