Forward Industries, Inc. Leases Disclosure
NOTE 13 LEASES
The Company’s operating leases are primarily for corporate, engineering, and administrative office space and the related expense is recorded in general and administrative expenses on the consolidated financial statements. Total operating lease expense in Fiscal 2025 and Fiscal 2024 was $617,000 and $619,000, respectively. Cash paid for amounts included in operating lease liabilities in Fiscal 2025 and Fiscal 2024, which have been included in cash flows from operating activities, was $607,000 and $592,000, respectively.
The Company signed a renewal to extend the lease term of one of its New York locations through April 2027. Payments under this operating lease commenced February 1, 2025, and escalate 4.0% per year. The monthly rent payment is $6,000 per month.
At September 30, 2025, the Company’s operating leases had a weighted average remaining lease term of 6.0 years and a weighted average discount rate of 5.9%.
At September 30, 2025, future minimum payments under non-cancellable operating leases were as follows:
Future minimum payments under non-cancellable operating leases are as follows:
| Fiscal 2026 | $ | 587,000 | ||
| Fiscal 2027 | 465,000 | |||
| Fiscal 2028 | 428,000 | |||
| Fiscal 2029 | 440,000 | |||
| Fiscal 2030 | 452,000 | |||
| Thereafter | 659,000 | |||
| Total future minimum lease payments | 3,031,000 | |||
| Less imputed interest | (486,000 | ) | ||
| Present value of lease liabilities | 2,545,000 | |||
| Less current portion of lease liabilities | ) | |||
| Long-term portion of lease liabilities | $ |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.