Cover
Cover - USD ($) | 12 Months Ended | ||
Sep. 30, 2022 | Dec. 09, 2022 | Mar. 31, 2022 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Sep. 30, 2022 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2022 | ||
Current Fiscal Year End Date | --09-30 | ||
Entity File Number | 001-34780 | ||
Entity Registrant Name | FORWARD INDUSTRIES, INC. | ||
Entity Central Index Key | 0000038264 | ||
Entity Tax Identification Number | 13-1950672 | ||
Entity Incorporation, State or Country Code | NY | ||
Entity Address, Address Line One | 700 Veterans Memorial Highway | ||
Entity Address, Address Line Two | Suite 100 | ||
Entity Address, City or Town | Hauppauge | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 11788 | ||
City Area Code | (631) | ||
Local Phone Number | 547-3041 | ||
Title of 12(b) Security | Common Stock, par value $0.01 | ||
Trading Symbol | FORD | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 12,000,000 | ||
Entity Common Stock, Shares Outstanding | 10,061,185 | ||
Auditor Name | CohnReznick LLP | ||
Auditor Location | Melville, New York | ||
Auditor Firm ID | 596 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Current assets: | ||
Cash | $ 2,575,522 | $ 1,410,365 |
Accounts receivable, net | 7,542,666 | 8,760,715 |
Inventories, net | 3,801,030 | 2,062,557 |
Prepaid expenses and other current assets | 417,605 | 561,072 |
Total current assets | 14,336,823 | 12,794,709 |
Property and equipment, net | 241,146 | 167,997 |
Intangible assets, net | 1,105,901 | 1,318,658 |
Goodwill | 1,758,682 | 1,758,682 |
Operating lease right of use assets, net | 3,427,726 | 3,743,242 |
Other assets | 68,737 | 72,251 |
Total assets | 20,939,015 | 19,855,539 |
Current liabilities: | ||
Accounts payable | 268,160 | 391,992 |
Due to Forward China | 7,713,880 | 5,733,708 |
Deferred income | 438,878 | 187,695 |
Current portion of earnout consideration | 25,000 | 25,000 |
Current portion of operating lease liability | 377,940 | 340,151 |
Accrued expenses and other current liabilities | 1,153,906 | 529,497 |
Total current liabilities | 9,977,764 | 7,208,043 |
Other liabilities: | ||
Note payable to Forward China | 1,400,000 | 1,600,000 |
Operating lease liability, less current portion | 3,249,824 | 3,559,053 |
Earnout consideration, less current portion | 45,000 | 45,000 |
Total liabilities | 14,672,588 | 12,412,096 |
Commitments and contingencies (Note 11) | ||
Shareholders' equity: | ||
Common stock, par value $0.01 per share; 40,000,000 shares authorized; 10,061,185 shares issued and outstanding at September 30, 2022 and 2021 | 100,612 | 100,612 |
Additional paid-in capital | 20,115,711 | 19,914,476 |
Accumulated deficit | (13,949,896) | (12,571,645) |
Total shareholders' equity | 6,266,427 | 7,443,443 |
Total liabilities and shareholders' equity | $ 20,939,015 | $ 19,855,539 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2022 | Sep. 30, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par or stated value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 40,000,000 | 40,000,000 |
Common stock, shares issued (in shares) | 10,061,185 | 10,061,185 |
Common stock, shares outstanding (in shares) | 10,061,185 | 10,061,185 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||
Revenues, net | $ 42,337,385 | $ 39,021,996 |
Cost of sales | 33,969,115 | 30,887,577 |
Gross profit | 8,368,270 | 8,134,419 |
Sales and marketing expenses | 2,854,664 | 2,503,518 |
General and administrative expenses | 6,753,280 | 6,395,900 |
Loss from operations | (1,239,674) | (764,999) |
Gain on forgiveness of note payable | 0 | (1,356,570) |
Fair value adjustment of earnout consideration | 0 | (20,000) |
Interest income | 0 | (88,760) |
Interest expense | 123,411 | 171,957 |
Other expense, net | 12,612 | 4,569 |
(Loss)/income before income taxes | (1,375,697) | 523,805 |
Provision for income taxes | 2,554 | 0 |
Net (loss)/income | $ (1,378,251) | $ 523,805 |
(Loss)/earnings per share: | ||
Basic | $ (0.14) | $ 0.05 |
Diluted | $ (0.14) | $ 0.05 |
Weighted average common shares outstanding: | ||
Basic | 10,061,185 | 9,950,094 |
Diluted | 10,061,185 | 10,443,018 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Sep. 30, 2020 | $ 98,838 | $ 19,579,684 | $ (13,095,450) | $ 6,583,072 |
Beginning balance, shares at Sep. 30, 2020 | 9,883,851 | |||
Share-based compensation | 68,855 | 68,855 | ||
Stock options exercised | $ 1,774 | 265,937 | 267,711 | |
Stock options exercised, shares | 177,334 | |||
Net income | 523,805 | 523,805 | ||
Ending balance, value at Sep. 30, 2021 | $ 100,612 | 19,914,476 | (12,571,645) | 7,443,443 |
Ending balance, shares at Sep. 30, 2021 | 10,061,185 | |||
Share-based compensation | 201,235 | 201,235 | ||
Net income | (1,378,251) | (1,378,251) | ||
Ending balance, value at Sep. 30, 2022 | $ 100,612 | $ 20,115,711 | $ (13,949,896) | $ 6,266,427 |
Ending balance, shares at Sep. 30, 2022 | 10,061,185 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Operating Activities: | ||
Net (loss)/income | $ (1,378,251) | $ 523,805 |
Adjustments to reconcile net (loss)/income to net cash provided by/(used in) operating activities: | ||
Share-based compensation | 201,235 | 68,855 |
Depreciation and amortization | 309,239 | 327,290 |
Bad debt expense | 264,912 | 506,469 |
Gain on forgiveness of note payable | 0 | (1,356,570) |
Change in fair value of earn-out consideration | 0 | (20,000) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 953,137 | (1,664,868) |
Inventories | (1,738,473) | (786,863) |
Prepaid expenses and other current assets | 143,467 | (141,600) |
Other assets | 3,514 | 44,446 |
Accounts payable and due to Forward China | 1,856,340 | 2,306,277 |
Deferred income | 251,183 | (297,383) |
Net changes in operating lease liabilities | 44,076 | 49,258 |
Accrued expenses and other current liabilities | 624,409 | (87,427) |
Net cash provided by/(used in) operating activities | 1,534,788 | (528,311) |
Investing Activities: | ||
Purchases of property and equipment | (169,631) | (67,207) |
Net cash used in investing activities | (169,631) | (67,207) |
Financing Activities: | ||
Proceeds from line of credit borrowings | 0 | 150,000 |
Repayment of line of credit borrowings | 0 | (1,150,000) |
Repayment of notes payable | 0 | (156,798) |
Repayment of note payable to Forward China | (200,000) | 0 |
Proceeds from stock options exercised | 0 | 267,711 |
Repayments of finance leases | 0 | (29,657) |
Net cash used in financing activities | (200,000) | (918,744) |
Net increase/(decrease) in cash | 1,165,157 | (1,514,262) |
Cash at beginning of year | 1,410,365 | 2,924,627 |
Cash at end of year | 2,575,522 | 1,410,365 |
Supplemental Disclosures of Cash Flow Information: | ||
Cash paid for interest | 123,411 | 154,510 |
Cash paid for taxes | 10,856 | 8,389 |
Supplemental Disclosures of Non-Cash Information: | ||
Operating lease assets obtained in exchange for operating lease liabilities | $ 204,881 | $ 565,590 |
OVERVIEW
OVERVIEW | 12 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
OVERVIEW | NOTE 1 OVERVIEW Business Forward Industries, Inc. (“Forward”, “we”, “our”, or the “Company”), is a global design, manufacturing, sourcing and distribution group serving top tier medical and technology customers worldwide. As a result of the continued expansion of our design development capabilities through our wholly-owned subsidiaries, IPS and Kablooe, the Company is able to introduce proprietary products to the market from concepts brought to it from a number of different sources, both inside and outside the Company. The Company’s design division provides hardware and software product design and engineering services to customers predominantly located in the U.S. The Company’s OEM distribution division sources and sells carrying cases and other accessories for medical monitoring and diagnostic kits as well as a variety of other portable electronic and non-electronic devices to original equipment manufacturers (“OEM”s), or their contract manufacturers worldwide, that either package our products as accessories “in box” together with their branded product offerings or sell them through their retail distribution channels. The Company’s retail distribution division sources and sells smart-enabled furniture, hot tubs and various other products through various online retailer websites to customers predominantly located in the U.S. The Company does not manufacture any of its OEM or retail products and sources substantially all of these products from independent suppliers in China, through Forward Industries Asia-Pacific Corporation, a British Virgin Islands corporation (“Forward China”). See Note 13. Liquidity In Fiscal 2022, the Company generated a net loss of $ 1,378,000 1,535,000 Impact of COVID-19 The effects of the COVID-19 pandemic continue to impact the retail and OEM distribution segments of our business. The increase in global consumer demand, coupled with the global shipping container shortage, dramatically increased demand for both ocean freight and ground transportation. These factors led to a significant increase in freight costs, particularly from the Asia-Pacific region and most notably in Fiscal 2022. Labor shortages at U.S. ports and in ground transportation services caused container ships to spend a significant amount of time waiting for goods to be unloaded and to arrive at our warehouses. These factors caused an increase in the demand for and cost of ground transportation and delayed consumer availability for many of our products in Fiscal 2022. The timing and extent of these COVID-19 related transportation disruptions are still largely unknown but are expected to continue into Fiscal 2023. The effects of the pandemic had a lesser impact on the design segment of our business. Rising inflation caused an increase in the cost of acquiring and retaining our employees, particularly in the second half of Fiscal 2022. The timing and extent of future inflation is difficult to predict, but we expect these rising costs to continue into Fiscal 2023. The effects of COVID-19 may further impact our business in ways we cannot predict, and such impacts could be significant. The current economic conditions may continue to negatively impact our results of operations, cash flows and financial position in future periods as well as that of our customers, including their ability to pay for our products and services and to choose to allocate their budgets to new or existing projects which may or may not require our products and services. The long-term financial impact on our business cannot be reasonably estimated at this time. As a result, the effects of COVID-19 may not be fully reflected in our financial results until future periods. Until the effects of the pandemic have fully receded, we expect business conditions to remain challenging. In response to these challenges, we will continue to focus on those factors that we can control: closely managing and controlling our expenses and inventory levels; aligning our design and development schedules with demand in a proactive manner to minimize our cash operating costs; pursuing further improvements in the productivity and effectiveness of our development, selling and administrative activities and, where appropriate, taking advantage of opportunities to enhance our business growth and strategy. |
ACCOUNTING POLICIES
ACCOUNTING POLICIES | 12 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
ACCOUNTING POLICIES | NOTE 2 ACCOUNTING POLICIES Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates and assumptions. Within this report, certain dollar amounts and percentages have been rounded to their approximate values. The extent to which COVID-19 may impact our financial condition or results of operations is uncertain. As of the date of issuance of this report, we are not aware of any specific events or circumstances that would require us to update our estimates or judgments or adjust the carrying amount of our assets or liabilities. Basis of Presentation The accompanying consolidated financial statements include the accounts of Forward Industries, Inc. and its wholly-owned subsidiaries (Forward US, Forward Switzerland, Forward UK, IPS and Kablooe). All significant intercompany transactions and balances have been eliminated in consolidation. Segment Reporting The Company has three reportable segments: OEM distribution, retail distribution and design. The OEM distribution segment sources and sells carrying cases and other accessories for medical monitoring and diagnostic kits and a variety of other portable electronic and non-electronic devices (such as sporting and recreational products, bar code scanners, GPS location devices, tablets and firearms) on a made-to-order basis that are customized to fit the products sold by our OEM customers worldwide. The retail distribution segment sources and sells smart-enabled furniture, hot tubs and a variety of other products through various online retailer websites to customers predominantly located in the U.S. The design segment consists of two operating segments (IPS and Kablooe, which have been aggregated into one reportable segment) that provide a full spectrum of hardware and software product design and engineering services to customers predominantly located in the U.S. See Note 15 for more information on segments. Goodwill The Company reviews goodwill for impairment at least annually, or more often if triggering events occur. The Company has two reporting units with goodwill (the IPS and Kablooe operating segments) and we perform our annual goodwill impairment test on September 30, the end of the fiscal year, or upon the occurrence of a triggering event. The Company has the option to perform a qualitative assessment to determine if an impairment is more likely than not to have occurred. If the Company can support the conclusion that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then the Company would not need to perform a quantitative impairment test for the reporting unit. If the Company cannot support such a conclusion or does not elect to perform the qualitative assessment, then the Company will perform the quantitative impairment test by comparing the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, no impairment charge is recognized. If the fair value of the reporting unit is less than its carrying amount, an impairment charge will be recognized for the amount by which the reporting unit’s carrying amount exceeds its fair value. A significant amount of judgment is required in performing goodwill impairment tests including estimating the fair value of a reporting unit. Management evaluated and concluded there were no Intangible Assets Intangible assets include trademarks and customer relationships, which were acquired as part of the acquisitions of IPS in Fiscal 2018 and Kablooe in Fiscal 2020 and are amortized over their estimated useful lives, which are periodically evaluated for reasonableness. Our intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In assessing the recoverability of our intangible assets, we must make estimates and assumptions regarding future cash flows and other factors to determine the fair value of the respective assets. These estimates and assumptions could have a significant impact on whether an impairment charge is recognized and the magnitude of any such charge. Fair value estimates are made at a specific point in time, based on relevant information. These estimates are subjective in nature and involve uncertainties and matters of significant judgments and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. If these estimates or material related assumptions change in the future, we may be required to record impairment charges related to our intangible assets. Management evaluated and concluded that there were no indications of impairments of intangible assets at September 30, 2022 or 2021. Cash The Company maintains cash deposits in banks with financial institutions in the United States (that at times may exceed federally insured limits of $250,000 per financial institution) and Switzerland. At September 30, 2022 and 2021, there were deposits totaling $ 2,037,000 467,000 805,000 436,000 Accounts Receivable Accounts receivable consist of unsecured trade accounts with customers in amounts that have been invoiced ($ 7,861,000 8,864,000 0 90,000 20,000 0 852,000 706,000 The Company has agreements with various retailers which contain different terms for trade discounts, promotional and other sales allowances. At September 30, 2022, 2021 and 2020, the Company recorded accounts receivable allowances of $ 55,000 0 0 In Fiscal 2019, the Company recorded bad debt expense of $ 1,626,000 s to an allowance on the note receivable. The Company received $ 101,000 89,000 12,000 Inventories Inventories consist primarily of finished goods and are stated at the lower of cost (determined by the first-in, first-out method) or net realizable value. Based on management’s estimates, an allowance is made to reduce excess, obsolete, or otherwise unsellable inventories to net realizable value. The allowance is established through charges to cost of sales in the Company’s consolidated statements of operations. In determining the adequacy of the allowance, management’s estimates are based upon several factors, including analyses of inventory levels, historical loss trends, sales history and projections of future sales demand. The Company’s estimates of the allowance may change from time to time based on management’s assessments, and such changes could be material. At September 30, 2022 and 2021, the allowance for slow-moving inventory, which relates entirely to our retail segment, was $ 535,000 50,000 Property and Equipment Property and equipment consist of computer hardware and software, furniture, fixtures and equipment and are recorded at cost. Expenditures for major additions and improvements are capitalized, and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method. The estimated useful lives for all property and equipment ranges from three to five years. Leases Lease assets and liabilities are recognized at lease commencement date based on the present value of lease payments over the lease term, using the Company’s incremental borrowing rate commensurate with the lease term, since the Company’s lessors do not provide an implicit rate, nor is one readily available. The Company has certain leases that may include an option to renew and when it is reasonably probable to exercise such option, the Company will include the renewal option terms in determining the lease asset and lease liability. Lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Operating lease assets are shown as right of use assets and financing lease assets are a component of property and equipment on the consolidated balance sheets. The current and long-term portions of operating and financing lease liabilities are shown separately as such on the consolidated balance sheets. Income Taxes The Company recognizes future tax benefits and liabilities measured at enacted rates attributable to temporary differences between financial statement and income tax bases of assets and liabilities and to net tax operating loss carryforwards to the extent that realization of these benefits is more likely than not. At September 30, 2022, there was no change to our assessment that a full valuation allowance was required against all net deferred tax assets as it is not probable that such deferred tax assets will be realized. Accordingly, any deferred tax provision or benefit was offset by an equal and opposite change to the valuation allowance. Our income tax provision or benefit is generally not significant due to the existence of significant net operating loss carryforwards. Revenue Recognition OEM Distribution Segment The OEM distribution segment recognizes revenue when: (i) finished goods are shipped to its customers (in general, these conditions occur at either point of shipment or point of destination, depending on the terms of sale 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 consolidated balance sheets. The OEM distribution segment had no Retail Distribution Segment The retail distribution segment sells products primarily through online websites operated by authorized third-party retailers. Revenue is recognized when control (as defined in ASC 606, “Revenue from Contracts with Customers”) of the related goods is transferred to the retailer, which generally occurs upon shipment to the end customer. Other than product delivery, the retail distribution segment does not typically have other deliverables or performance obligations associated with its products. Revenue is 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 consolidated balance sheets. The retail distribution segment had contract liabilities of $ 0 0 75,000 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 to measure progress toward the completion of its performance obligations, or the “cost to cost” method. Revenues from fixed price contracts that contain specific deliverables are recognized when the performance obligation has been satisfied or the transfer of goods to the customer has been completed and accepted. Recognized revenues that will not be billed until a later date, or contract assets, are recorded as an asset and classified as a component of accounts receivable in the accompanying consolidated balance sheets. The design segment had contract assets of $ 609,000 693,000 649,000 439,000 188,000 410,000 Shipping and Handling Fees The Company includes shipping and handling fees billed to customers in net revenues and the related transportation costs in cost of sales. Foreign Currency Transactions The Company’s functional currency is the U.S. dollar. Foreign currency transactions may generate receivables or payables that are fixed in terms of the amount of foreign currency that will be received or paid. Fluctuations in exchange rates between such foreign currency and the functional currency increase or decrease the expected amount of functional currency cash flows upon settlement of the transaction. These increases or decreases in expected functional currency 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 $ 13,000 5,000 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. Share-Based Compensation Expense The Company estimates the fair value of employee and non-employee director share-based compensation on the date of grant using the Black-Scholes option pricing model, which includes variables such as the expected volatility of the Company’s share price, the exercise behavior of its grantees, interest rates, and dividend yields. These variables are projected based on the Company’s historical data, experience, and other factors. The fair value of employee and non-employee director share-based compensation is recognized in the consolidated statements of operations over the related service or vesting period of each grant. In the case of awards with multiple vesting periods, the Company has elected to use the graded vesting attribution method, which recognizes compensation cost on a straight-line basis over each separately vesting portion of the award as if the award was, in substance, multiple awards (see Note 8). Business Combinations The Company allocates the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, the Company makes significant estimates and assumptions, especially with respect to intangible assets. Critical estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from customer relationships and developed technology, discount rates and terminal values. Our estimates of fair value are based upon assumptions believed to be reasonable, but actual results may differ from estimates. Other estimates associated with the accounting for acquisitions may change as additional information becomes available regarding the assets acquired and liabilities assumed. Recent Accounting Pronouncements In November 2019, the FASB issued ASU 2019-11, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses.” ASU 2019-11 is an accounting pronouncement that provides clarity to and amends earlier guidance on this topic and would be effective concurrently with the adoption of such earlier guidance. This pronouncement is effective for the Company for fiscal years beginning after December 15, 2022 and interim periods within those fiscal years. The Company is currently evaluating the effects of this pronouncement on its consolidated financial statements. In December 2019, the FASB issued ASU 2019-12 “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This guidance removes certain exceptions to the general principles in Topic 740 and provides consistent application of U.S. GAAP by clarifying and amending existing guidance. The effective date of the new guidance for public companies is for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years. Early adoption is permitted. The Company adopted this guidance in the first quarter of fiscal 2022 with no material impact to its consolidated financial statements. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 12 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | NOTE 3 INTANGIBLE ASSETS AND GOODWILL Intangible Assets The Company’s intangible assets consist of the following: Schedule of intangible assets September 30, 2022 September 30, 2021 Trademarks Customer Relationships Total Intangible Assets Trademarks Customer Relationships Total Intangible Assets Gross carrying amount $ 585,000 $ 1,390,000 $ 1,975,000 $ 585,000 $ 1,390,000 $ 1,975,000 Less accumulated amortization (164,000 ) (705,000 ) (869,000 ) (125,000 ) (531,000 ) (656,000 ) Net carrying amount $ 421,000 $ 685,000 $ 1,106,000 $ 460,000 $ 859,000 $ 1,319,000 The Company’s intangible assets were acquired as a result of the acquisitions of Kablooe and IPS in Fiscal 2020 and Fiscal 2018, respectively, and relate to the design segment of our business. Intangible assets are amortized over their expected useful lives of 15 8 213,000 At September 30, 2022, estimated amortization expense for the Company’s intangible assets for each of the next five years and thereafter is as follows: Estimated amortization expense Fiscal 2023 $ 213,000 Fiscal 2024 213,000 Fiscal 2025 213,000 Fiscal 2026 121,000 Fiscal 2027 81,000 Thereafter 265,000 Total $ 1,106,000 Goodwill Goodwill represents the future economic benefits of assets acquired in a business combination that are not individually identified or separately recognized. The Company’s goodwill resulted from the acquisitions of Kablooe and IPS in Fiscal 2020 and Fiscal 2018, respectively. The goodwill associated with the IPS acquisition is not deductible for tax purposes, but the goodwill associated with the Kablooe acquisition is deductible for tax purposes. All of the Company’s goodwill is held under the design segment of our business. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 4 PROPERTY AND EQUIPMENT Property and equipment and related accumulated depreciation and amortization are summarized in the table below: Schedule of property and equipment September 30, 2022 2021 Computer hardware and software $ 473,000 $ 483,000 Furniture and fixtures 67,000 159,000 Equipment 74,000 52,000 Property and equipment, cost 614,000 694,000 Less accumulated depreciation and amortization (373,000 ) (526,000 ) Property and equipment, net $ 241,000 $ 168,000 Depreciation expense was $ 96,000 115,000 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 5 FAIR VALUE MEASUREMENTS The earnout consideration of $ 70,000 Fair value assumptions September 30, 2022 2021 Volatility 40% 40% Risk-free interest rate 4.1% 0.3% Expected term in years 0.4 - 2.4 0.5 - 3.4 Dividend yield - - In Fiscal 2022, there were no 90,000 70,000 |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | NOTE 6 ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities at September 30, 2022 and 2021 are as follows: Schedule of accrued expenses and other accrued liabilities September 30, 2022 2021 Accrued commissions/bonuses $ 722,000 $ 127,000 Paid time off 228,000 241,000 Other 201,000 161,000 Total $ 1,151,000 $ 529,000 |
SHAREHOLDERS_ EQUITY
SHAREHOLDERS’ EQUITY | 12 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
SHAREHOLDERS’ EQUITY | NOTE 7 SHAREHOLDERS’ EQUITY “Blank Check” Preferred Stock The Company is authorized to issue up to 4,000,000 100,000 Warrants At September 30, 2022, the Company had 151,000 1.75 1.84 1.80 76,000 0.9 75,000 90 days after a registration statement registering common stock (other than pursuant to an employee benefit plan) is declared effective Other Activity In Fiscal 2021, the Company issued 177,000 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | NOTE 8 SHARE-BASED COMPENSATION 2021 Equity Incentive Plan In February 2021, shareholders of the Company approved the 2021 Equity Incentive Plan (the “2021 Plan”), which is administered by the Compensation Committee of the Board of Directors and authorizes 1,291,000 1,014,000 2011 Long Term Incentive Plan In March 2011, shareholders of the Company approved the 2011 Plan, which originally authorized 850,000 shares of common stock for grants of various types of equity awards to officers, directors, employees, consultants, and independent contractors. In February 2018, the shareholders of the Company approved an amendment to the 2011 Plan to increase the aggregate number of shares of the Company's common stock authorized for issuance under the 2011 Plan by 1,000,000 shares of common stock, from 850,000 shares of common stock to 1,850,000 Stock Options The fair value of option awards is estimated on the date of grant using the Black-Scholes option pricing model that uses the assumptions in the following table. The expected term represents the period over which the stock option awards are expected to be outstanding. The Company utilizes the simplified method to develop an estimate of the expected term of “plain vanilla” option grants. The expected volatility used is based on the historical price of the Company’s stock over the most recent period commensurate with the expected term of the award. The risk-free interest rate used is based on the implied yield of U.S. Treasury zero-coupon issues with a remaining term equivalent to the award’s expected term. The Company historically has not paid any dividends on its common stock and had no intention to do so on the date the share-based awards were granted. The Company accounts for forfeitures in the period they occur. In applying the Black-Scholes option pricing model to options granted, the Company used the following assumptions: Assumptions used for options Fiscal 2022 Fiscal 2021 Expected term (years) 2.5 - 5.0 – Expected volatility 68.8 78.6 – Risk free interest rate 0.4 3.1 – Expected dividends – – The Company made no grants of stock options or other equity awards in Fiscal 2021. In Fiscal 2022, the Company made the following option grants: · Options to current and former non-employee directors to purchase an aggregate of 297,000 245,000 · Options to an employee to purchase 27,000 20,000 The options granted during Fiscal 2022 had a weighted average grant date fair value of $ 0.82 201,000 69,000 No 177,000 268,000 306,000 At September 30, 2022, there was $ 48,000 0.6 The following table summarizes stock option activity during Fiscal 2022: Schedule of stock option activity Weighted Weighted Average Average Aggregate Number of Exercise Remaining Intrinsic Options Price Life (Yrs.) Value Outstanding at September 30, 2021 928,000 $ 1.43 Granted 324,000 $ 1.73 Exercised – $ – Forfeited (23,000 ) $ 1.90 Expired (144,000 ) $ 1.60 Outstanding at September 30, 2022 1,085,000 $ 1.48 2.6 $ 26,920 Exercisable at September 30, 2022 938,000 $ 1.45 2.3 $ 26,920 Options outstanding at September 30, 2022 have an exercise price between $ 1.13 2.39 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 9 INCOME TAXES The following table summarizes the Company’s consolidated provision for U.S. federal, state and foreign taxes on income: Schedule of income tax provision Fiscal 2022 Fiscal 2021 Current: Federal $ – $ – State 3,000 – Foreign – – Deferred: Federal (224,000 ) (506,000 ) State 6,000 (47,000 ) Foreign (22,000 ) (146,000 ) Deferred Income Tax Expense (Benefit) (237,000 ) (699,000 ) Change in valuation allowance 240,000 699,000 Income tax provision $ 3,000 $ – The deferred tax provision/(benefit) is the change in the deferred tax assets and liabilities representing the tax consequences of changes in the amounts of temporary differences, net operating loss carryforwards and changes in tax rates during the fiscal year. The Company’s deferred tax assets and liabilities are comprised of the following: Schedule of deferred income taxes September 30, 2022 2021 Deferred tax assets Net operating losses $ 2,006,000 $ 2,093,000 Share-based compensation 220,000 175,000 Excess tax over book basis in inventory 101,000 43,000 Reserves and other allowances 649,000 569,000 Accrued compensation 70,000 15,000 Interest expense limitation 48,000 40,000 Other items 18,000 16,000 Total deferred tax assets 3,112,000 2,951,000 Deferred tax liabilities Depreciation (12,000 ) (18,000 ) Prepaid expenses (96,000 ) (131,000 ) Intangible assets (178,000 ) (216,000 ) Total deferred tax liabilities (286,000 ) (365,000 ) Valuation allowance (2,826,000 ) (2,586,000 ) Net deferred tax assets $ – $ – The Company recorded a provision for income taxes which includes net expense of $3,000 and $0 in Fiscal 2022 and 2021, respectively. The Fiscal 2022 expense of $3,000 is for state income tax expenses in states where net operating loss carryforwards (“NOLs”) were not available. At September 30, 2022, the Company had available net NOLs for U.S. federal income tax purposes of $ 6,940,000 978,000 1,680,000 40,000 1,569,000 283,000 2,826,000 2,586,000 45,000 150,000 At September 30, 2022, as part of its periodic evaluation of the necessity to maintain a valuation allowance against its deferred tax assets, and after consideration of all factors, including, among others, projections of future taxable income, current year NOL utilization and the extent of the Company's cumulative losses in recent years, the Company determined that, on a more likely than not basis, it would not be able to use remaining deferred tax assets, except with respect to the U.S. federal income taxes in the event the Company elects to effect repatriation of certain foreign source income of Forward Switzerland, which income is currently considered to be permanently reinvested and for which no U.S. tax liability has been accrued. Accordingly, the Company has determined to maintain a full valuation allowance against its net deferred tax assets. At September 30, 2022 and 2021, the valuation allowance was $2,826,000 and $2,586,000, respectively. In the future, the utilization of the Company's NOLs may be subject to certain change of control limitations. If the Company determines that it will be able to use some or all of its deferred tax assets in a future reporting period, the adjustment to reduce or eliminate the valuation allowance would reduce its income tax expense and increase after-tax income. The significant elements contributing to the difference between the U.S. federal statutory tax rate and the Company’s effective tax rate are as follows: Reconciliation of effective tax rate Fiscal 2022 Fiscal 2021 U.S. federal statutory rate 21.0 21.0 State tax rate, net of federal benefit 3.0 (8.3 ) Foreign rate differential 2.9 (2.6 ) Tax return to provision adjustments (1.9 ) (78.8 ) Effect of state tax rate change (3.8 ) (7.8 ) Change in valuation allowance (20.3 ) 129.9 Permanent differences (1.1 ) (53.4 ) Effective tax rate (0.2 ) 0.0 In December 2020, the Company received approval of its application for forgiveness of its note payable related to the Paycheck Protection Program (the “PPP loan”) in the aggregate principal amount of $ 1,357,000 At September 30, 2022 and 2021, the Company had not accrued any interest or penalties related to uncertain tax positions. It is the Company's policy to recognize interest and/or penalties, if any, related to income tax matters in income tax expense in the consolidated statements of operations. For the periods presented in the accompanying consolidated statements of operations, no material income tax related interest or penalties were assessed or recorded. All fiscal years prior to the fiscal year ended September 30, 2019 are closed to federal and state examination. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Sep. 30, 2022 | |
(Loss)/earnings per share: | |
EARNINGS PER SHARE | NOTE 10 EARNINGS PER SHARE Basic earnings per share data for each period presented is computed using the weighted average number of shares of common stock outstanding during each such period. Diluted earnings per share data is computed using the weighted average number of common and dilutive common equivalent shares outstanding during each period. Dilutive common equivalent shares consist of shares that would be issued upon the exercise of stock options and warrants, computed using the treasury stock method. A reconciliation of basic and diluted earnings/loss per share is as follows: Schedule of earnings (loss) per share For the Fiscal Years Ended September 30, 2022 2021 Numerator: Net (loss)/income $ (1,378,000 ) $ 524,000 Denominator: Weighted average common shares outstanding 10,061,000 9,950,000 Dilutive common share equivalents – 493,000 Weighted average dilutive shares outstanding 10,061,000 10,443,000 (Loss)/earnings per share: Basic $ (0.14 ) $ 0.05 Diluted $ (0.14 ) $ 0.05 There were no anti-dilutive securities excluded from the calculation of diluted earnings per share in Fiscal 2021. The following securities were excluded from the calculation of diluted earnings per share in Fiscal 2022 because their inclusion would have been anti-dilutive: Schedule of anti dilutive securities excluded Fiscal 2022 Options 1,085,000 Warrants 151,000 Total potentially dilutive shares 1,236,000 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 11 COMMITMENTS AND CONTINGENCIES Guarantee Obligation In February 2010, Forward Switzerland and its European logistics provider (freight forwarding and customs agent) entered into a Representation Agreement (the “Representation Agreement”) whereby, among other things, the European logistics provider agreed to act as Forward Switzerland's fiscal representative in The Netherlands for the purpose of providing services in connection with any value added tax matters. As part of this agreement, Forward Switzerland agreed to provide an undertaking (in the form of a bank letter of guarantee) to the logistics provider with respect to any value added tax liability arising in The Netherlands that the logistics provider is required to pay to Dutch tax authorities on its behalf. In February 2010, Forward Switzerland entered into a guarantee agreement with a Swiss bank relating to the repayment of any amount up to €75,000 (equal to approximately $77,000 at September 30, 2022) paid by such bank to the logistics provider in order to satisfy such undertaking pursuant to the bank letter of guarantee. Forward Switzerland would be required to perform under the guarantee agreement only in the event that (i) a value added tax liability is imposed on the Company's revenues in The Netherlands; (ii) the logistics provider asserts that it has been called upon in its capacity as surety by the Dutch Receiver of Taxes to pay such taxes; (iii) Forward Switzerland or the Company on its behalf fails or refuses to remit the amount of value added tax due to the logistics provider upon its demand; and (iv) the logistics provider makes a drawing under the bank letter of guarantee. Under the Representation Agreement, Forward Switzerland agreed that the letter of guarantee would remain available for drawing for three years following the date that its relationship terminates with the logistics provider to satisfy any value added tax liability arising prior to expiration of the Representation Agreement but asserted by The Netherlands after expiration. The initial term of the bank letter of guarantee expired February 28, 2011, but it renews automatically for one-year periods on February 28 of each subsequent year unless Forward Switzerland provides the Swiss bank with written notice of termination at least 60 days prior to the renewal date. It is the intent of Forward Switzerland and the logistics provider that the bank letter of guarantee amount be adjusted annually. In consideration of the issuance of the letter of guarantee, Forward Switzerland has granted the Swiss bank a security interest in all of its assets on deposit with, held by, or credited to Forward Switzerland’s accounts with, the Swiss bank (approximately $467,000 at September 30, 2022). At September 30, 2022, the Company had not incurred a liability in connection with this guarantee. Legal Proceedings From time to time, the Company may become a party to legal actions or proceedings in the ordinary course of its business. At September 30, 2022, there were no such actions or proceedings, either individually or in the aggregate, that, if decided adversely to its interests, the Company believes would be material to its business. |
LEASES
LEASES | 12 Months Ended |
Sep. 30, 2022 | |
Leases | |
LEASES | NOTE 12 LEASES The Company’s operating leases are primarily for corporate, engineering and administrative office space. Total operating lease expense in Fiscal 2022 was $ 631,000 611,000 601,000 489,000 At September 30, 2022, the Company’s operating leases had a weighted average remaining lease term of 8.4 5.7 Future minimum payments under non-cancellable operating leases are as follows: Schedule of Future Minimum Rental Payments for Operating Leases Fiscal 2023 $ 575,000 Fiscal 2024 592,000 Fiscal 2025 556,000 Fiscal 2026 510,000 Fiscal 2027 419,000 Thereafter 1,979,000 Total future minimum lease payments 4,631,000 Less imputed interest (1,003,000 ) Total $ 3,628,000 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 13 RELATED PARTY TRANSACTIONS Buying Agency and Supply Agreement The Company has a Buying Agency and Supply Agreement (the “Supply Agreement”) with Forward China. The Supply Agreement provides that, upon the terms and subject to the conditions set forth therein, Forward China will act as the Company’s exclusive buying agent and supplier of Products (as defined in the Supply Agreement) in the Asia-Pacific region. The Company purchases products at Forward China’s cost and pays to Forward China a monthly service fee equal to the sum of (i) $100,000, and (ii) 4% of “Adjusted Gross Profit”, which is defined as the selling price less the cost from Forward China. The Supply Agreement expires October 22, 2023. Terence Wise, Chief Executive Officer and Chairman of the Company, is the owner of Forward China. In addition, Jenny P. Yu, a Managing Director of Forward China, beneficially owns more than 5% of the Company’s common stock. The Company recorded service fees to Forward China of $ 1,398,000 1,404,000 The Company has a separate agreement with Forward China to address the potential impact of customers sourcing directly from Forward China. In the event a customer bypasses the services of the Company and does business directly with Forward China, Forward China will pay a commission of 50% of the net revenue, less direct costs, generated from the products or services sold. The Company recognized revenue of $12,000 of commissions related to this agreement in Fiscal 2021. No commissions were recognized in Fiscal 2022. The Company made prepayments to Forward China for inventory purchases of $ 20,000 317,000 Promissory Note On January 18, 2018, the Company issued a $ 1,600,000 8 January 18, 2019 122,000 128,000 200,000 Other Related Party Activity In October 2020, the Company began selling smart-enabled furniture, which is sourced by Forward China and sold in the U.S. under the Koble brand name. The Koble brand is owned by The Justwise Group Ltd. (“Justwise”) a company owned by Terence Wise, Chief Executive Officer and Chairman of the Company. The Company recognized revenues from the sale of Koble products of $ 1,741,000 1,493,000 The Company entered into an agreement with Justwise effective March 1, 2022, under which (i) Justwise will perform design and marketing services related to the Koble products sold by the Company and (ii) the Company was granted a license to sell Koble products. In exchange for such services, the Company will pay Justwise $10,000 per month plus 1% of the cost of Koble products purchased from Forward China. This agreement is effective until August 31, 2023, may be extended thereafter for a mutually agreed upon term and can be terminated thereafter by either party giving three months’ notice. The Company incurred costs of $ 90,000 84,000 6,000 15,000 1,000 The Company recorded revenue from a customer whose principal owner is an immediate family member of Jenny P. Yu, a shareholder of the Company and managing director of Forward China. The Company recognized revenues from this customer of $ 780,000 418,000 A member of the Company’s Audit, Governance and Compensation Committees of its Board of Directors is also a member of the Board of Directors of a company to whom the Company’s OEM distribution segment sold products during Fiscal 2021. The Company recognized revenue of $ 13,000 63,000 |
401(k) PLAN
401(k) PLAN | 12 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
401(k) PLAN | NOTE 14 401(k) PLAN The Company maintains a 401(k) benefit plan allowing eligible employees to make pre-tax and/or after-tax contributions of a portion of their salary in amounts subject to IRS limitations. The Company made immediately vested contributions of $ 379,000 331,000 |
SEGMENTS AND CONCENTRATIONS
SEGMENTS AND CONCENTRATIONS | 12 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
SEGMENTS AND CONCENTRATIONS | NOTE 15 SEGMENTS AND CONCENTRATIONS Segments The Company has three reportable segments: OEM distribution, retail distribution and design. See Note 2 for more information on the composition and accounting policies of our reportable segments. Our chief operating decision maker (“CODM”) regularly reviews revenue and operating income for each segment to assess financial results and allocate resources. For our OEM and retail distribution segments, we exclude general and administrative and general corporate expenses from their measure of profitability as these expenses are not allocated to the segments and therefore not included in the measure of profitability used by the CODM. For the design segment, general and administrative expenses directly attributable to that segment are included in its measure of profitability as these expenses are included in the measure of its profitability reviewed by the CODM. We do not include intercompany activity in our segment results shown below to be consistent with the information that is presented to the CODM. Segment assets consist of accounts receivable and inventory, which are regularly reviewed by the CODM, as well as goodwill and intangible assets resulting from design segment acquisitions. Information by segment and related reconciliations are shown in tables below: Segment operating income (loss) Revenues Fiscal 2022 Fiscal 2021 OEM distribution $ 18,036,000 $ 19,290,000 Retail distribution 4,130,000 3,183,000 Design 20,171,000 16,549,000 Total segment revenues $ 42,337,000 $ 39,022,000 Operating Income/(Loss) Fiscal 2022 Fiscal 2021 OEM distribution $ 905,000 $ 1,479,000 Retail distribution (1,809,000 ) (779,000 ) Design 2,148,000 603,000 Total segment operating income 1,244,000 1,303,000 General corporate expenses (2,484,000 ) (2,068,000 ) Total loss from operations (1,240,000 ) (765,000 ) Other expense/(income), net 136,000 (1,289,000 ) (Loss)/income before income taxes $ (1,376,000 ) $ 524,000 Depreciation and Amortization Fiscal 2022 Fiscal 2021 OEM distribution $ 8,000 $ 7,000 Retail distribution – 1,000 Design 301,000 319,000 Total $ 309,000 $ 327,000 Condensed Balance Sheet Segment Assets September 30, 2022 2021 OEM distribution $ 4,276,000 $ 5,898,000 Retail distribution 3,816,000 2,178,000 Design 6,116,000 5,824,000 Total segment assets 14,208,000 13,900,000 General corporate assets 6,731,000 5,956,000 Total assets $ 20,939,000 $ 19,856,000 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 following table sets forth our consolidated net revenues by country for Fiscal 2022 and Fiscal 2021: Revenues from External Customers Revenues Fiscal 2022 Fiscal 2021 United States $ 29,490,000 $ 25,670,000 China 5,325,000 5,640,000 Germany 2,976,000 2,787,000 Poland 2,643,000 3,111,000 Other foreign countries 1,903,000 1,814,000 Total $ 42,337,000 $ 39,022,000 Customer Concentrations In Fiscal 2022 and Fiscal 2021, the Company had certain customers in the OEM distribution segment whose individual percentage of the Company’s consolidated revenues was 10% or greater. Revenues from two of these customers or their affiliates or contract manufacturers represented 23.0 36.8 In Fiscal 2022, the Company had one customer in the design segment whose individual percentage of the Company’s consolidated revenues was 10% or greater. Revenues from this customer represented 10.6 At September 30, 2022 and 2021, the Company had customers in the OEM distribution segment whose accounts receivable balances accounted for 10% or more of the Company’s consolidated accounts receivable. Accounts receivable from two customers or their affiliates or contract manufacturers represented 28.1 44.0 Supplier Concentration The Company’s OEM and retail distribution segments procure substantially all their products through independent suppliers in China through Forward China. Depending on the product, Forward China may require several different suppliers to furnish component parts or pieces. |
LINE OF CREDIT
LINE OF CREDIT | 12 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
LINE OF CREDIT | NOTE 16 LINE OF CREDIT The Company, specifically IPS, has a $ 1,300,000 May 31, 2023 0.75% above The Wall Street Journal 7.0 4.0 1,300,000 |
DEBT
DEBT | 12 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
DEBT | NOTE 17 DEBT On April 18, 2020, the Company entered into a PPP loan in an aggregate principal amount of $ 1,357,000 1.0 April 18, 2022 |
ACCOUNTING POLICIES (Policies)
ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates and assumptions. Within this report, certain dollar amounts and percentages have been rounded to their approximate values. The extent to which COVID-19 may impact our financial condition or results of operations is uncertain. As of the date of issuance of this report, we are not aware of any specific events or circumstances that would require us to update our estimates or judgments or adjust the carrying amount of our assets or liabilities. |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements include the accounts of Forward Industries, Inc. and its wholly-owned subsidiaries (Forward US, Forward Switzerland, Forward UK, IPS and Kablooe). All significant intercompany transactions and balances have been eliminated in consolidation. |
Segment Reporting | Segment Reporting The Company has three reportable segments: OEM distribution, retail distribution and design. The OEM distribution segment sources and sells carrying cases and other accessories for medical monitoring and diagnostic kits and a variety of other portable electronic and non-electronic devices (such as sporting and recreational products, bar code scanners, GPS location devices, tablets and firearms) on a made-to-order basis that are customized to fit the products sold by our OEM customers worldwide. The retail distribution segment sources and sells smart-enabled furniture, hot tubs and a variety of other products through various online retailer websites to customers predominantly located in the U.S. The design segment consists of two operating segments (IPS and Kablooe, which have been aggregated into one reportable segment) that provide a full spectrum of hardware and software product design and engineering services to customers predominantly located in the U.S. See Note 15 for more information on segments. |
Goodwill | Goodwill The Company reviews goodwill for impairment at least annually, or more often if triggering events occur. The Company has two reporting units with goodwill (the IPS and Kablooe operating segments) and we perform our annual goodwill impairment test on September 30, the end of the fiscal year, or upon the occurrence of a triggering event. The Company has the option to perform a qualitative assessment to determine if an impairment is more likely than not to have occurred. If the Company can support the conclusion that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then the Company would not need to perform a quantitative impairment test for the reporting unit. If the Company cannot support such a conclusion or does not elect to perform the qualitative assessment, then the Company will perform the quantitative impairment test by comparing the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, no impairment charge is recognized. If the fair value of the reporting unit is less than its carrying amount, an impairment charge will be recognized for the amount by which the reporting unit’s carrying amount exceeds its fair value. A significant amount of judgment is required in performing goodwill impairment tests including estimating the fair value of a reporting unit. Management evaluated and concluded there were no |
Intangible Assets | Intangible Assets Intangible assets include trademarks and customer relationships, which were acquired as part of the acquisitions of IPS in Fiscal 2018 and Kablooe in Fiscal 2020 and are amortized over their estimated useful lives, which are periodically evaluated for reasonableness. Our intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In assessing the recoverability of our intangible assets, we must make estimates and assumptions regarding future cash flows and other factors to determine the fair value of the respective assets. These estimates and assumptions could have a significant impact on whether an impairment charge is recognized and the magnitude of any such charge. Fair value estimates are made at a specific point in time, based on relevant information. These estimates are subjective in nature and involve uncertainties and matters of significant judgments and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. If these estimates or material related assumptions change in the future, we may be required to record impairment charges related to our intangible assets. Management evaluated and concluded that there were no indications of impairments of intangible assets at September 30, 2022 or 2021. |
Cash | Cash The Company maintains cash deposits in banks with financial institutions in the United States (that at times may exceed federally insured limits of $250,000 per financial institution) and Switzerland. At September 30, 2022 and 2021, there were deposits totaling $ 2,037,000 467,000 805,000 436,000 |
Accounts Receivable | Accounts Receivable Accounts receivable consist of unsecured trade accounts with customers in amounts that have been invoiced ($ 7,861,000 8,864,000 0 90,000 20,000 0 852,000 706,000 The Company has agreements with various retailers which contain different terms for trade discounts, promotional and other sales allowances. At September 30, 2022, 2021 and 2020, the Company recorded accounts receivable allowances of $ 55,000 0 0 In Fiscal 2019, the Company recorded bad debt expense of $ 1,626,000 s to an allowance on the note receivable. The Company received $ 101,000 89,000 12,000 |
Inventories | Inventories Inventories consist primarily of finished goods and are stated at the lower of cost (determined by the first-in, first-out method) or net realizable value. Based on management’s estimates, an allowance is made to reduce excess, obsolete, or otherwise unsellable inventories to net realizable value. The allowance is established through charges to cost of sales in the Company’s consolidated statements of operations. In determining the adequacy of the allowance, management’s estimates are based upon several factors, including analyses of inventory levels, historical loss trends, sales history and projections of future sales demand. The Company’s estimates of the allowance may change from time to time based on management’s assessments, and such changes could be material. At September 30, 2022 and 2021, the allowance for slow-moving inventory, which relates entirely to our retail segment, was $ 535,000 50,000 |
Property and Equipment | Property and Equipment Property and equipment consist of computer hardware and software, furniture, fixtures and equipment and are recorded at cost. Expenditures for major additions and improvements are capitalized, and minor replacements, maintenance, and repairs are charged to expense as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is included in the results of operations for the respective period. Depreciation is provided over the estimated useful lives of the related assets using the straight-line method. The estimated useful lives for all property and equipment ranges from three to five years. |
Leases | Leases Lease assets and liabilities are recognized at lease commencement date based on the present value of lease payments over the lease term, using the Company’s incremental borrowing rate commensurate with the lease term, since the Company’s lessors do not provide an implicit rate, nor is one readily available. The Company has certain leases that may include an option to renew and when it is reasonably probable to exercise such option, the Company will include the renewal option terms in determining the lease asset and lease liability. Lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Operating lease assets are shown as right of use assets and financing lease assets are a component of property and equipment on the consolidated balance sheets. The current and long-term portions of operating and financing lease liabilities are shown separately as such on the consolidated balance sheets. |
Income Taxes | Income Taxes The Company recognizes future tax benefits and liabilities measured at enacted rates attributable to temporary differences between financial statement and income tax bases of assets and liabilities and to net tax operating loss carryforwards to the extent that realization of these benefits is more likely than not. At September 30, 2022, there was no change to our assessment that a full valuation allowance was required against all net deferred tax assets as it is not probable that such deferred tax assets will be realized. Accordingly, any deferred tax provision or benefit was offset by an equal and opposite change to the valuation allowance. Our income tax provision or benefit is generally not significant due to the existence of significant net operating loss carryforwards. |
Revenue Recognition | Revenue Recognition OEM Distribution Segment The OEM distribution segment recognizes revenue when: (i) finished goods are shipped to its customers (in general, these conditions occur at either point of shipment or point of destination, depending on the terms of sale 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 consolidated balance sheets. The OEM distribution segment had no Retail Distribution Segment The retail distribution segment sells products primarily through online websites operated by authorized third-party retailers. Revenue is recognized when control (as defined in ASC 606, “Revenue from Contracts with Customers”) of the related goods is transferred to the retailer, which generally occurs upon shipment to the end customer. Other than product delivery, the retail distribution segment does not typically have other deliverables or performance obligations associated with its products. Revenue is 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 consolidated balance sheets. The retail distribution segment had contract liabilities of $ 0 0 75,000 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 to measure progress toward the completion of its performance obligations, or the “cost to cost” method. Revenues from fixed price contracts that contain specific deliverables are recognized when the performance obligation has been satisfied or the transfer of goods to the customer has been completed and accepted. Recognized revenues that will not be billed until a later date, or contract assets, are recorded as an asset and classified as a component of accounts receivable in the accompanying consolidated balance sheets. The design segment had contract assets of $ 609,000 693,000 649,000 439,000 188,000 410,000 |
Shipping and Handling Fees | Shipping and Handling Fees The Company includes shipping and handling fees billed to customers in net revenues and the related transportation costs in cost of sales. |
Foreign Currency Transactions | Foreign Currency Transactions The Company’s functional currency is the U.S. dollar. Foreign currency transactions may generate receivables or payables that are fixed in terms of the amount of foreign currency that will be received or paid. Fluctuations in exchange rates between such foreign currency and the functional currency increase or decrease the expected amount of functional currency cash flows upon settlement of the transaction. These increases or decreases in expected functional currency 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 $ 13,000 5,000 |
Fair Value Measurements | 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. |
Share-Based Compensation Expense | Share-Based Compensation Expense The Company estimates the fair value of employee and non-employee director share-based compensation on the date of grant using the Black-Scholes option pricing model, which includes variables such as the expected volatility of the Company’s share price, the exercise behavior of its grantees, interest rates, and dividend yields. These variables are projected based on the Company’s historical data, experience, and other factors. The fair value of employee and non-employee director share-based compensation is recognized in the consolidated statements of operations over the related service or vesting period of each grant. In the case of awards with multiple vesting periods, the Company has elected to use the graded vesting attribution method, which recognizes compensation cost on a straight-line basis over each separately vesting portion of the award as if the award was, in substance, multiple awards (see Note 8). |
Business Combinations | Business Combinations The Company allocates the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, the Company makes significant estimates and assumptions, especially with respect to intangible assets. Critical estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from customer relationships and developed technology, discount rates and terminal values. Our estimates of fair value are based upon assumptions believed to be reasonable, but actual results may differ from estimates. Other estimates associated with the accounting for acquisitions may change as additional information becomes available regarding the assets acquired and liabilities assumed. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2019, the FASB issued ASU 2019-11, “Codification Improvements to Topic 326, Financial Instruments – Credit Losses.” ASU 2019-11 is an accounting pronouncement that provides clarity to and amends earlier guidance on this topic and would be effective concurrently with the adoption of such earlier guidance. This pronouncement is effective for the Company for fiscal years beginning after December 15, 2022 and interim periods within those fiscal years. The Company is currently evaluating the effects of this pronouncement on its consolidated financial statements. In December 2019, the FASB issued ASU 2019-12 “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This guidance removes certain exceptions to the general principles in Topic 740 and provides consistent application of U.S. GAAP by clarifying and amending existing guidance. The effective date of the new guidance for public companies is for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years. Early adoption is permitted. The Company adopted this guidance in the first quarter of fiscal 2022 with no material impact to its consolidated financial statements. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Schedule of intangible assets September 30, 2022 September 30, 2021 Trademarks Customer Relationships Total Intangible Assets Trademarks Customer Relationships Total Intangible Assets Gross carrying amount $ 585,000 $ 1,390,000 $ 1,975,000 $ 585,000 $ 1,390,000 $ 1,975,000 Less accumulated amortization (164,000 ) (705,000 ) (869,000 ) (125,000 ) (531,000 ) (656,000 ) Net carrying amount $ 421,000 $ 685,000 $ 1,106,000 $ 460,000 $ 859,000 $ 1,319,000 |
Estimated amortization expense | Estimated amortization expense Fiscal 2023 $ 213,000 Fiscal 2024 213,000 Fiscal 2025 213,000 Fiscal 2026 121,000 Fiscal 2027 81,000 Thereafter 265,000 Total $ 1,106,000 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Schedule of property and equipment September 30, 2022 2021 Computer hardware and software $ 473,000 $ 483,000 Furniture and fixtures 67,000 159,000 Equipment 74,000 52,000 Property and equipment, cost 614,000 694,000 Less accumulated depreciation and amortization (373,000 ) (526,000 ) Property and equipment, net $ 241,000 $ 168,000 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair value assumptions | Fair value assumptions September 30, 2022 2021 Volatility 40% 40% Risk-free interest rate 4.1% 0.3% Expected term in years 0.4 - 2.4 0.5 - 3.4 Dividend yield - - |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses and other accrued liabilities | Schedule of accrued expenses and other accrued liabilities September 30, 2022 2021 Accrued commissions/bonuses $ 722,000 $ 127,000 Paid time off 228,000 241,000 Other 201,000 161,000 Total $ 1,151,000 $ 529,000 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Assumptions used for options | Assumptions used for options Fiscal 2022 Fiscal 2021 Expected term (years) 2.5 - 5.0 – Expected volatility 68.8 78.6 – Risk free interest rate 0.4 3.1 – Expected dividends – – |
Schedule of stock option activity | Schedule of stock option activity Weighted Weighted Average Average Aggregate Number of Exercise Remaining Intrinsic Options Price Life (Yrs.) Value Outstanding at September 30, 2021 928,000 $ 1.43 Granted 324,000 $ 1.73 Exercised – $ – Forfeited (23,000 ) $ 1.90 Expired (144,000 ) $ 1.60 Outstanding at September 30, 2022 1,085,000 $ 1.48 2.6 $ 26,920 Exercisable at September 30, 2022 938,000 $ 1.45 2.3 $ 26,920 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax provision | Schedule of income tax provision Fiscal 2022 Fiscal 2021 Current: Federal $ – $ – State 3,000 – Foreign – – Deferred: Federal (224,000 ) (506,000 ) State 6,000 (47,000 ) Foreign (22,000 ) (146,000 ) Deferred Income Tax Expense (Benefit) (237,000 ) (699,000 ) Change in valuation allowance 240,000 699,000 Income tax provision $ 3,000 $ – |
Schedule of deferred income taxes | Schedule of deferred income taxes September 30, 2022 2021 Deferred tax assets Net operating losses $ 2,006,000 $ 2,093,000 Share-based compensation 220,000 175,000 Excess tax over book basis in inventory 101,000 43,000 Reserves and other allowances 649,000 569,000 Accrued compensation 70,000 15,000 Interest expense limitation 48,000 40,000 Other items 18,000 16,000 Total deferred tax assets 3,112,000 2,951,000 Deferred tax liabilities Depreciation (12,000 ) (18,000 ) Prepaid expenses (96,000 ) (131,000 ) Intangible assets (178,000 ) (216,000 ) Total deferred tax liabilities (286,000 ) (365,000 ) Valuation allowance (2,826,000 ) (2,586,000 ) Net deferred tax assets $ – $ – |
Reconciliation of effective tax rate | Reconciliation of effective tax rate Fiscal 2022 Fiscal 2021 U.S. federal statutory rate 21.0 21.0 State tax rate, net of federal benefit 3.0 (8.3 ) Foreign rate differential 2.9 (2.6 ) Tax return to provision adjustments (1.9 ) (78.8 ) Effect of state tax rate change (3.8 ) (7.8 ) Change in valuation allowance (20.3 ) 129.9 Permanent differences (1.1 ) (53.4 ) Effective tax rate (0.2 ) 0.0 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
(Loss)/earnings per share: | |
Schedule of earnings (loss) per share | Schedule of earnings (loss) per share For the Fiscal Years Ended September 30, 2022 2021 Numerator: Net (loss)/income $ (1,378,000 ) $ 524,000 Denominator: Weighted average common shares outstanding 10,061,000 9,950,000 Dilutive common share equivalents – 493,000 Weighted average dilutive shares outstanding 10,061,000 10,443,000 (Loss)/earnings per share: Basic $ (0.14 ) $ 0.05 Diluted $ (0.14 ) $ 0.05 |
Schedule of anti dilutive securities excluded | Schedule of anti dilutive securities excluded Fiscal 2022 Options 1,085,000 Warrants 151,000 Total potentially dilutive shares 1,236,000 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Leases | |
Schedule of Future Minimum Rental Payments for Operating Leases | Schedule of Future Minimum Rental Payments for Operating Leases Fiscal 2023 $ 575,000 Fiscal 2024 592,000 Fiscal 2025 556,000 Fiscal 2026 510,000 Fiscal 2027 419,000 Thereafter 1,979,000 Total future minimum lease payments 4,631,000 Less imputed interest (1,003,000 ) Total $ 3,628,000 |
SEGMENTS AND CONCENTRATIONS (Ta
SEGMENTS AND CONCENTRATIONS (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment operating income (loss) | Segment operating income (loss) Revenues Fiscal 2022 Fiscal 2021 OEM distribution $ 18,036,000 $ 19,290,000 Retail distribution 4,130,000 3,183,000 Design 20,171,000 16,549,000 Total segment revenues $ 42,337,000 $ 39,022,000 Operating Income/(Loss) Fiscal 2022 Fiscal 2021 OEM distribution $ 905,000 $ 1,479,000 Retail distribution (1,809,000 ) (779,000 ) Design 2,148,000 603,000 Total segment operating income 1,244,000 1,303,000 General corporate expenses (2,484,000 ) (2,068,000 ) Total loss from operations (1,240,000 ) (765,000 ) Other expense/(income), net 136,000 (1,289,000 ) (Loss)/income before income taxes $ (1,376,000 ) $ 524,000 Depreciation and Amortization Fiscal 2022 Fiscal 2021 OEM distribution $ 8,000 $ 7,000 Retail distribution – 1,000 Design 301,000 319,000 Total $ 309,000 $ 327,000 |
Condensed Balance Sheet | Condensed Balance Sheet Segment Assets September 30, 2022 2021 OEM distribution $ 4,276,000 $ 5,898,000 Retail distribution 3,816,000 2,178,000 Design 6,116,000 5,824,000 Total segment assets 14,208,000 13,900,000 General corporate assets 6,731,000 5,956,000 Total assets $ 20,939,000 $ 19,856,000 |
Revenues from External Customers | Revenues from External Customers Revenues Fiscal 2022 Fiscal 2021 United States $ 29,490,000 $ 25,670,000 China 5,325,000 5,640,000 Germany 2,976,000 2,787,000 Poland 2,643,000 3,111,000 Other foreign countries 1,903,000 1,814,000 Total $ 42,337,000 $ 39,022,000 |
OVERVIEW (Details Narrative)
OVERVIEW (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Net loss | $ 1,378,251 | $ (523,805) |
Net cash provided by (used in) operating activities | $ 1,534,788 | $ (528,311) |
ACCOUNTING POLICIES (Details Na
ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2019 | Sep. 30, 2020 | |
Cash and Cash Equivalents [Line Items] | ||||
Impairment of goodwill | $ 0 | $ 0 | ||
Cash, Uninsured Amount | 2,037,000 | 805,000 | ||
Accounts receivable | 7,861,000 | 8,864,000 | ||
Bad debt expense | $ 1,626,000 | |||
Proceeds from note receivable | 101,000 | |||
Interest income | 89,000 | |||
Bad debt expense recovery | 12,000 | |||
Inventory reserve | 535,000 | 50,000 | ||
Loss from foreign currency transactions | 13,000 | 5,000 | ||
OEM Distribution [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Allowances for doubtful accounts | 0 | 90,000 | ||
Contract liabilities | 0 | 0 | $ 0 | |
Retail Segment [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Allowances for doubtful accounts | 20,000 | 0 | ||
Design [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Allowances for doubtful accounts | 852,000 | 706,000 | ||
Contract liabilities | 439,000 | 188,000 | 410,000 | |
Contract assets | 609,000 | 693,000 | 649,000 | |
Retail Distribution [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Allowances for the provisions | 55,000 | 0 | 0 | |
Contract liabilities | 0 | 0 | $ 75,000 | |
Foreign Bank [Member] | ||||
Cash and Cash Equivalents [Line Items] | ||||
Cash, Uninsured Amount | $ 467,000 | $ 436,000 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL (Details - Intangible Assets) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,975,000 | $ 1,975,000 |
Accumulated Amortization | (869,000) | (656,000) |
Net Carrying Amount | 1,106,000 | 1,319,000 |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 585,000 | 585,000 |
Accumulated Amortization | (164,000) | (125,000) |
Net Carrying Amount | 421,000 | 460,000 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,390,000 | 1,390,000 |
Accumulated Amortization | (705,000) | (531,000) |
Net Carrying Amount | $ 685,000 | $ 859,000 |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL (Details - Estimated amortization expense) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Fiscal 2023 | $ 213,000 | |
Fiscal 2024 | 213,000 | |
Fiscal 2025 | 213,000 | |
Fiscal 2026 | 121,000 | |
Fiscal 2027 | 81,000 | |
Thereafter | 265,000 | |
Total | $ 1,106,000 | $ 1,319,000 |
INTANGIBLE ASSETS AND GOODWIL_4
INTANGIBLE ASSETS AND GOODWILL (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of Intangible Assets | $ 213,000 | $ 213,000 |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives | 15 years | |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives | 8 years |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 614,000 | $ 694,000 |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | (373,000) | (526,000) |
Property, Plant and Equipment, Net | 241,146 | 167,997 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 473,000 | 483,000 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 67,000 | 159,000 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 74,000 | $ 52,000 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $ 96,000 | $ 115,000 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details - Assumptions) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Measurement Input, Price Volatility [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value assumptions | 40% | 40% |
Measurement Input, Risk Free Interest Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value assumptions | 4.1% | 0.3% |
Measurement Input, Expected Term [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value assumptions | 0.4 - 2.4 | 0.5 - 3.4 |
Measurement Input, Expected Dividend Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value assumptions |
FAIR VALUE MEASUREMENTS (Deta_2
FAIR VALUE MEASUREMENTS (Details Narrative) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 |
Offsetting Assets [Line Items] | |||
Deferred Compensation Liability, Current and Noncurrent | $ 70,000 | $ 70,000 | $ 90,000 |
Kablooe [Member] | |||
Offsetting Assets [Line Items] | |||
Earnout liability | $ 0 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Payables and Accruals [Abstract] | ||
Accrued commissions/bonuses | $ 722,000 | $ 127,000 |
Paid time off | 228,000 | 241,000 |
Other | 201,000 | 161,000 |
Total | $ 1,151,000 | $ 529,000 |
SHAREHOLDERS_ EQUITY (Details N
SHAREHOLDERS’ EQUITY (Details Narrative) - $ / shares | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Class of Stock [Line Items] | ||
Warrants outstanding | 151,000 | |
Warrants exercisable | 151,000 | |
Weighted average exercise price | $ 1.80 | |
Exercise Of Stock Options [Member] | ||
Class of Stock [Line Items] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period | 177,000 | |
Warrants [Member] | ||
Class of Stock [Line Items] | ||
Warrants outstanding | 76,000 | |
Warrants remaining life | 10 months 24 days | |
Warrants 2 [Member] | ||
Class of Stock [Line Items] | ||
Warrants outstanding | 75,000 | |
Warrant expiration terms | 90 days after a registration statement registering common stock (other than pursuant to an employee benefit plan) is declared effective | |
Minimum [Member] | ||
Class of Stock [Line Items] | ||
Warrants exercise prices | $ 1.75 | |
Maximum [Member] | ||
Class of Stock [Line Items] | ||
Warrants exercise prices | $ 1.84 | |
Blank Check Preferred Stock [Member] | ||
Class of Stock [Line Items] | ||
Shares authorized for issuance | 4,000,000 | |
Series A Preferred Stock [Member] | ||
Class of Stock [Line Items] | ||
Shares authorized for issuance | 100,000 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details - Assumptions) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||
Expected term (years) | 2.5 - 5.0 | |
Expected volatility minimum | 68.80% | |
Expected volatility maximum | 78.60% | |
Expected volatility | 0% | |
Risk free interest rate minimum | 0.40% | |
Risk free interest rate maximum | 3.10% | |
Risk free interest rate | 0% | |
Expected dividends | 0% | 0% |
SHARE-BASED COMPENSATION (Det_2
SHARE-BASED COMPENSATION (Details - Option activity) - Equity Option [Member] | 12 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Shares, Outstanding at Beginning | shares | 928,000 |
Weighted average exercise price, Outstanding at Beginning | $ / shares | $ 1.43 |
Shares, Granted | shares | 324,000 |
Weighted average exercise price, Granted | $ / shares | $ 1.73 |
Shares, Exercised | shares | 0 |
Weighted average exercise price, Exercised | $ / shares | $ 0 |
Shares, Forfeited | shares | (23,000) |
Weighted average exercise price, Forfeited | $ / shares | $ 1.90 |
Shares, Expired | shares | (144,000) |
Weighted average exercise price, Expired | $ / shares | $ 1.60 |
Shares, Outstanding at Ending | shares | 1,085,000 |
Weighted average exercise price, Outstanding at Ending | $ / shares | $ 1.48 |
Weighted average remaining contractual term (Years), Outstanding | 2 years 7 months 6 days |
Aggregate intrinsic value, Outstanding | $ | $ 26,920 |
Shares, Exercisable | shares | 938,000 |
Weighted average exercise price, Exercisable | $ / shares | $ 1.45 |
Weighted average remaining contractual term (Years), Exercisable | 2 years 3 months 18 days |
Aggregate intrinsic value, Exercisable | $ | $ 26,920 |
SHARE-BASED COMPENSATION (Det_3
SHARE-BASED COMPENSATION (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Share based compensation expense | $ 201,235 | $ 68,855 |
Proceeds from options exercised | $ 0 | $ 267,711 |
Minimum [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Option exercise price | $ 1.13 | |
Maximum [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Option exercise price | $ 2.39 | |
Exercise Of Stock Options [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Stock options exercised, shares | 177,000 | |
Equity Option [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Options granted | 324,000 | |
Weighted average grant date value per share | $ 0.82 | |
Share based compensation expense | $ 201,000 | $ 69,000 |
Stock options exercised, shares | 0 | |
Proceeds from options exercised | 268,000 | |
Intrinsic value of options exercised | $ 306,000 | |
Equity Option [Member] | Non Vested Options [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Unrecognized compensation cost | $ 48,000 | |
Unrecognized compensation cost weighted average vesting period | 7 months 6 days | |
Equity Option [Member] | Directors [Member] | Five-Year Options [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Options granted | 297,000 | |
Options grant date fair value | $ 245,000 | |
Equity Option [Member] | Employee [Member] | Five-Year Options [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Options granted | 27,000 | |
Options grant date fair value | $ 20,000 | |
N 2021 Equity Incentive Plan [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Shares authorized for issuance | 1,291,000 | |
Shares available for grant | 1,014,000 | |
2011 Plan [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Shares authorized for issuance | 1,850,000 |
INCOME TAXES (Details - Tax pro
INCOME TAXES (Details - Tax provision) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Current: | ||
Federal | $ 0 | $ 0 |
State | 3,000 | 0 |
Foreign | 0 | 0 |
Deferred: | ||
Federal | (224,000) | (506,000) |
State | 6,000 | (47,000) |
Foreign | (22,000) | (146,000) |
Deferred Income Tax Expense (Benefit) | (237,000) | (699,000) |
Change in valuation allowance | 240,000 | 699,000 |
Income Tax Expense (Benefit) | $ 2,554 | $ 0 |
INCOME TAXES (Details - Deferre
INCOME TAXES (Details - Deferred tax) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Deferred tax assets | ||
Net operating losses | $ 2,006,000 | $ 2,093,000 |
Share-based compensation | 220,000 | 175,000 |
Excess tax over book basis in inventory | 101,000 | 43,000 |
Reserves and other allowances | 649,000 | 569,000 |
Accrued compensation | 70,000 | 15,000 |
Interest expense limitation | 48,000 | 40,000 |
Other items | 18,000 | 16,000 |
Total deferred tax assets | 3,112,000 | 2,951,000 |
Deferred tax liabilities | ||
Depreciation | (12,000) | (18,000) |
Prepaid expenses | (96,000) | (131,000) |
Intangible assets | (178,000) | (216,000) |
Total deferred tax liabilities | (286,000) | (365,000) |
Valuation allowance | (2,826,000) | (2,586,000) |
Net deferred tax assets | $ 0 | $ 0 |
INCOME TAXES (Details - Tax rec
INCOME TAXES (Details - Tax reconciliation) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal statutory rate | 21% | 21% |
State tax rate, net of federal benefit | 3% | (8.30%) |
Foreign rate differential | 2.90% | (2.60%) |
Tax return to provision adjustments | (1.90%) | (78.80%) |
Effect of state tax rate change | (3.80%) | (7.80%) |
Change in valuation allowance | (20.30%) | 129.90% |
Permanent differences | (1.10%) | (53.40%) |
Effective tax rate | (0.20%) | 0% |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | |||
Deferred tax assets | $ 3,112,000 | $ 2,951,000 | |
Deferred Tax Assets, Net of Valuation Allowance | 2,826,000 | 2,586,000 | |
Net income | (1,378,000) | $ 524,000 | |
P P P Loan [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Principal amount | $ 1,357,000 | ||
Forward Switz [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Net income | 45,000 | ||
Forward UK [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Net income | 150,000 | ||
Federal [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforward | 6,940,000 | ||
Deferred tax assets | 1,680,000 | ||
State [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforward | 978,000 | ||
Deferred tax assets | 40,000 | ||
Foreign Tax [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Foreign operating loss carryforward | 1,569,000 | ||
Foreign [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Deferred tax assets | $ 283,000 |
EARNINGS PER SHARE (Details - D
EARNINGS PER SHARE (Details - Diluted loss per share) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator: | ||
Net (loss)/income | $ (1,378,000) | $ 524,000 |
Denominator: | ||
Weighted Average Number of Shares Outstanding, Basic | 10,061,185 | 9,950,094 |
Dilutive common share equivalents | 493,000 | |
Weighted Average Number of Shares Outstanding, Diluted | 10,061,185 | 10,443,018 |
(Loss)/earnings per share: | ||
Basic | $ (0.14) | $ 0.05 |
Diluted | $ (0.14) | $ 0.05 |
EARNINGS PER SHARE (Details - A
EARNINGS PER SHARE (Details - Antidilutive shares) | 12 Months Ended |
Sep. 30, 2021 shares | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Total potentially dilutive shares | 1,236,000 |
Equity Option [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Total potentially dilutive shares | 1,085,000 |
Warrant [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Total potentially dilutive shares | 151,000 |
LEASES (Details)
LEASES (Details) | Sep. 30, 2022 USD ($) |
Leases | |
Fiscal 2023 | $ 575,000 |
Fiscal 2024 | 592,000 |
Fiscal 2025 | 556,000 |
Fiscal 2026 | 510,000 |
Fiscal 2027 | 419,000 |
Thereafter | 1,979,000 |
Total future minimum lease payments | 4,631,000 |
Less imputed interest | (1,003,000) |
Total | $ 3,628,000 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Leases | ||
Rent expense | $ 631,000 | $ 611,000 |
Cash paid for amounts included in operating lease liabilities | $ 601,000 | $ 489,000 |
Operating leases term | 8 years 4 months 24 days | |
Operating leases | 5.70% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 4 Months Ended | 12 Months Ended | |
Jan. 18, 2018 | Sep. 30, 2022 | Sep. 30, 2021 | |
Related Party Transaction [Line Items] | |||
Prepaid expenses and other current assets | $ 417,605 | $ 561,072 | |
Forward China [Member] | |||
Related Party Transaction [Line Items] | |||
Principal repayments | 200,000 | ||
Forward China [Member] | Promissory Note [Member] | |||
Related Party Transaction [Line Items] | |||
Debt face amount | $ 1,600,000 | ||
Debt interest rate | 8% | ||
Debt maturity date | Jan. 18, 2019 | ||
Interest expense | 122,000 | 128,000 | |
Forward China [Member] | Inventory Purchases [Member] | |||
Related Party Transaction [Line Items] | |||
Prepaid expenses and other current assets | 20,000 | 317,000 | |
Forward China [Member] | Service Fees [Member] | |||
Related Party Transaction [Line Items] | |||
Costs and Expenses, Related Party | 1,398,000 | 1,404,000 | |
Justwise Group [Member] | |||
Related Party Transaction [Line Items] | |||
Accounts payable to related party | 15,000 | 1,000 | |
Justwise Group [Member] | Koble [Member] | |||
Related Party Transaction [Line Items] | |||
Revenue from related party | 1,741,000 | 1,493,000 | |
Related Party Costs | 90,000 | ||
Justwise Group [Member] | Koble [Member] | Selling and Marketing Expense [Member] | |||
Related Party Transaction [Line Items] | |||
Related Party Costs | 84,000 | ||
Justwise Group [Member] | Koble [Member] | Cost of Sales [Member] | |||
Related Party Transaction [Line Items] | |||
Related Party Costs | 6,000 | ||
Board [Member] | Jenny P Yu [Member] | |||
Related Party Transaction [Line Items] | |||
Revenue from related party | 780,000 | 418,000 | |
Board [Member] | OEM Distribution Division [Member] | |||
Related Party Transaction [Line Items] | |||
Revenue from related party | $ 13,000 | $ 63,000 |
401(k) PLAN (Details Narrative)
401(k) PLAN (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Retirement Benefits [Abstract] | ||
Pension contribution | $ 379,000 | $ 331,000 |
SEGMENTS AND CONCENTRATIONS (De
SEGMENTS AND CONCENTRATIONS (Details - Operations) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 42,337,385 | $ 39,021,996 |
Total (loss)/income from operations | (1,239,674) | (764,999) |
Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 42,337,000 | 39,022,000 |
Total (loss)/income from operations | (1,240,000) | (765,000) |
Total segment operating income | 1,244,000 | 1,303,000 |
General corporate expenses | (2,484,000) | (2,068,000) |
Other expense/(income), net | 136,000 | (1,289,000) |
(Loss)/income before income taxes | (1,376,000) | 524,000 |
Depreciation and amortization | 309,000 | 327,000 |
Operating Segments [Member] | OEM Distribution [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 18,036,000 | 19,290,000 |
Total (loss)/income from operations | 905,000 | 1,479,000 |
Depreciation and amortization | 8,000 | 7,000 |
Operating Segments [Member] | Retail Distribution [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 4,130,000 | 3,183,000 |
Total (loss)/income from operations | (1,809,000) | (779,000) |
Depreciation and amortization | 0 | 1,000 |
Operating Segments [Member] | Design [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 20,171,000 | 16,549,000 |
Total (loss)/income from operations | 2,148,000 | 603,000 |
Depreciation and amortization | $ 301,000 | $ 319,000 |
SEGMENTS AND CONCENTRATIONS (_2
SEGMENTS AND CONCENTRATIONS (Details - Segment Assets) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Revenue, Major Customer [Line Items] | ||
Assets | $ 20,939,015 | $ 19,855,539 |
Net Assets, Segment [Member] | ||
Revenue, Major Customer [Line Items] | ||
Total segment assets | 14,208,000 | 13,900,000 |
General corporate assets | 6,731,000 | 5,956,000 |
Assets | 20,939,000 | 19,856,000 |
Net Assets, Segment [Member] | OEM Distribution [Member] | ||
Revenue, Major Customer [Line Items] | ||
Other Assets | 4,276,000 | 5,898,000 |
Net Assets, Segment [Member] | Retail Distribution [Member] | ||
Revenue, Major Customer [Line Items] | ||
Other Assets | 3,816,000 | 2,178,000 |
Net Assets, Segment [Member] | Design [Member] | ||
Revenue, Major Customer [Line Items] | ||
Other Assets | $ 6,116,000 | $ 5,824,000 |
SEGMENTS AND CONCENTRATIONS (_3
SEGMENTS AND CONCENTRATIONS (Details - Geographic Concentrations) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | $ 42,337,385 | $ 39,021,996 |
Reportable Subsegments [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 42,337,000 | 39,022,000 |
UNITED STATES | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 29,490,000 | 25,670,000 |
CHINA | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 5,325,000 | 5,640,000 |
GERMANY | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 2,976,000 | 2,787,000 |
POLAND | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 2,643,000 | 3,111,000 |
Other Foreign Countries [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | $ 1,903,000 | $ 1,814,000 |
SEGMENTS AND CONCENTRATIONS (_4
SEGMENTS AND CONCENTRATIONS (Details Narrative) - Customer Concentration Risk [Member] | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue Benchmark [Member] | Two OEM Customers [Member] | OEM Distribution [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration Risk, Percentage | 23% | |
Revenue Benchmark [Member] | Three OEM Customers [Member] | OEM Distribution [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration Risk, Percentage | 36.80% | |
Revenue Benchmark [Member] | One Customer [Member] | Design [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration Risk, Percentage | 10.60% | |
Accounts Receivable [Member] | Two OEM Customers [Member] | OEM Distribution [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration Risk, Percentage | 28.10% | |
Accounts Receivable [Member] | Three OEM Customers [Member] | OEM Distribution [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration Risk, Percentage | 44% |
LINE OF CREDIT (Details Narrati
LINE OF CREDIT (Details Narrative) - I P S [Member] - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Line of Credit Facility [Line Items] | ||
Line of credit maximum amount | $ 1,300,000 | |
Line of credit expiration date | May 31, 2023 | |
Line of credit interest rate | 0.75% above | |
Line of credit effective interest rate | 7% | 4% |
Line of credit amount available | $ 1,300,000 | $ 1,300,000 |
DEBT (Details Narrative)
DEBT (Details Narrative) | 12 Months Ended |
Sep. 30, 2022 USD ($) | |
Paycheck Protection Program [Member] | |
Debt Instrument [Line Items] | |
Debt interest rate | 1% |
Paycheck Protection Program [Member] | |
Debt Instrument [Line Items] | |
Loan received | $ 1,357,000 |
Debt maturity date | Apr. 18, 2022 |