Forward Industries, Inc. Segments Disclosure
NOTE 16 SEGMENTS AND CONCENTRATIONS
Segments
As a result of discontinuing the retail and OEM segments (Note 3) and our new digital asset treasury strategy, the Company now has reportable segments: design and digital assets. See Note 2 for more information on the composition and accounting policies of our reportable segments. The results of the retail and OEM segments were classified as discontinued operations as discussed in Note 3. The prior year segment disclosures have been reformatted from what was previously disclosed to conform to the current year presentation.
The Company’s Chief Executive Officer serves as the Chief Operating Decision Maker (“CODM”) and evaluates the financial performance of the business and makes resource allocation decisions on the basis of revenue, gross profit and net income or loss from continuing operations before income taxes for each reportable segment.
The tables below represent the primary measure of segment performance evaluated by the CODM, as well as additional measures that are regularly provided to the CODM on a segment-level.
| Design Segment | ||||||||
| Fiscal 2025 | Fiscal 2024 | |||||||
| Revenues | $ | 13,606,000 | $ | 19,991,000 | ||||
| Cost of revenues | 12,708,000 | 14,691,000 | ||||||
| Depreciation expense (a) | 119,000 | 116,000 | ||||||
| Gross profit | 779,000 | 5,184,000 | ||||||
| Sales and marketing personnel costs | 356,000 | 541,000 | ||||||
| Sales promotion and marketing expenses | 139,000 | 218,000 | ||||||
| General and administrative personnel costs | 1,872,000 | 2,627,000 | ||||||
| Occupancy costs | 668,000 | 662,000 | ||||||
| Amortization expense (a) | 213,000 | 213,000 | ||||||
| Impairment of goodwill and intangible assets | 2,026,000 | 200,000 | ||||||
| Interest income | (37,000 | ) | (79,000 | ) | ||||
| Other segment expenses (b) | 701,000 | 698,000 | ||||||
| (Loss)/income from continuing operations before income taxes | $ | (5,159,000 | ) | $ | 104,000 | |||
| Digital Assets Segment | ||||||||
| Fiscal 2025 | Fiscal 2024 | |||||||
| Revenues | $ | 4,582,000 | $ | – | ||||
| Cost of revenues | 170,000 | – | ||||||
| Gross profit | 4,412,000 | – | ||||||
| Asset management fees (a) | 539,000 | – | ||||||
| Loss on change in fair value of digital assets | 160,035,000 | – | ||||||
| Loss from continuing operations before income taxes | $ | (156,162,000 | ) | $ | – | |||
| (a) | Depreciation expense, amortization expense and asset management fees are not regularly provided to the CODM, however they are components of loss from continuing operations before income taxes and identified as a "specific profit or loss" item and therefore disclosed separately in accordance with the related accounting guidance. |
| (b) | Other segment expenses include insurance expense, bad debt expense, bank and payroll processing fees, and various other general and administrative expenses. |
The following table is a reconciliation of segment loss from continuing operations before taxes to our consolidated loss from continuing operations before income taxes.
| Fiscal 2025 | Fiscal 2024 | |||||||
| Design segment loss from continuing operations before income taxes | $ | (5,159,000 | ) | $ | 104,000 | |||
| Digital assets segment loss from continuing operations before income taxes | (156,162,000 | ) | – | |||||
| Corporate and other non-segment expenses | (7,748,000 | ) | (2,247,000 | ) | ||||
| Consolidated loss from continuing operations before income taxes | $ | (169,069,000 | ) | $ | (2,143,000 | ) | ||
Segment assets consist of accounts receivable and digital assets, which are regularly reviewed by the CODM, as well as goodwill and intangible assets resulting from design segment acquisitions.
| Segment Assets at September 30, | ||||||||
| 2025 | 2024 | |||||||
| Design segment | $ | 3,380,000 | $ | 5,820,000 | ||||
| Digital assets segment | 1,430,486,000 | – | ||||||
| Total segment assets | 1,433,866,000 | 5,820,000 | ||||||
| General corporate assets | 41,076,000 | 6,040,000 | ||||||
| Discontinued assets held for sale | – | 2,908,000 | ||||||
| Total assets | $ | 1,474,942,000 | $ | 14,768,000 | ||||
Geographic Concentrations
The Company’s long-lived assets consist of property and equipment and operating lease right-of-use assets, all of which are located in the United States. The Company’s consolidated net revenues for Fiscal 2025 and 2024 are from customers predominantly located in the United States.
Customer Concentrations
Revenues from one design segment customer represented 12.4% of the Company’s consolidated net revenues in Fiscal 2025 and revenue from two design customers represented 48.4% of the Company’s consolidated net revenues in Fiscal 2024.
Accounts receivable from three design segment customers represented 49.4% of the Company’s consolidated accounts receivable balance at September 30, 2025 and accounts receivable from two design segment customers represented 48.7% of the Company’s consolidated accounts receivable balance at September 30, 2024.
There were no concentrations of revenue or accounts receivable with any significant customer in our digital assets segment.
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.