Cover
Cover - USD ($) | 12 Months Ended | ||
Sep. 30, 2023 | Dec. 08, 2023 | Mar. 31, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Sep. 30, 2023 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2023 | ||
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 | 547-3055 | ||
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 | $ 7,800,000 | ||
Entity Common Stock, Shares Outstanding | 10,061,185 | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Auditor Firm ID | 596 | ||
Auditor Name | CohnReznick LLP | ||
Auditor Location | Melville, New York |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Current assets: | ||
Cash | $ 3,180,468 | $ 2,575,522 |
Accounts receivable, net | 6,968,778 | 7,542,666 |
Inventories, net | 334,384 | 650,853 |
Discontinued assets held for sale | 508,077 | 3,150,177 |
Prepaid expenses and other current assets | 378,512 | 417,605 |
Total current assets | 11,370,219 | 14,336,823 |
Property and equipment, net | 274,046 | 241,146 |
Intangible assets, net | 893,143 | 1,105,901 |
Goodwill | 1,758,682 | 1,758,682 |
Operating lease right-of-use assets, net | 3,021,315 | 3,427,726 |
Other assets | 68,737 | 68,737 |
Total assets | 17,386,142 | 20,939,015 |
Current liabilities: | ||
Accounts payable | 518,892 | 268,160 |
Due to Forward China | 8,246,015 | 7,713,880 |
Deferred income | 297,407 | 438,878 |
Current portion of earnout consideration | 0 | 25,000 |
Current portion of operating lease liability | 416,042 | 377,940 |
Accrued expenses and other current liabilities | 1,357,743 | 1,153,906 |
Total current liabilities | 10,836,099 | 9,977,764 |
Other liabilities: | ||
Note payable to Forward China | 1,100,000 | 1,400,000 |
Operating lease liability, less current portion | 2,833,782 | 3,249,824 |
Earnout consideration, less current portion | 0 | 45,000 |
Total liabilities | 14,769,881 | 14,672,588 |
Commitments and contingencies (Note 12) | ||
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, 2023 and 2022 | 100,612 | 100,612 |
Additional paid-in capital | 20,202,202 | 20,115,711 |
Accumulated deficit | (17,686,553) | (13,949,896) |
Total shareholders' equity | 2,616,261 | 6,266,427 |
Total liabilities and shareholders' equity | $ 17,386,142 | $ 20,939,015 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2023 | Sep. 30, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares issued | 10,061,185 | 10,061,185 |
Common stock, shares outstanding | 10,061,185 | 10,061,185 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||
Revenues, net | $ 36,688,307 | $ 38,206,958 |
Cost of sales | 28,323,822 | 29,407,009 |
Gross profit | 8,364,485 | 8,799,949 |
Sales and marketing expenses | 1,663,791 | 1,477,936 |
General and administrative expenses | 6,541,036 | 6,733,543 |
Operating income | 159,658 | 588,470 |
Fair value adjustment of earnout consideration | (70,000) | 0 |
Interest income | (23,188) | 0 |
Interest expense | 104,201 | 123,411 |
Other (income)/expense, net | (30,019) | 12,612 |
Income from continuing operations before income taxes | 178,664 | 452,447 |
Provision for income taxes | 20,006 | 2,554 |
Income from continuing operations | 158,658 | 449,893 |
Loss from discontinued operations, net of tax | (3,895,315) | (1,828,144) |
Net loss | $ (3,736,657) | $ (1,378,251) |
Basic earnings/(loss) per share : | ||
Basic earnings per share from continuing operations | $ 0.02 | $ 0.04 |
Basic loss per share from discontinued operations | (0.39) | (0.18) |
Basic loss per share | (0.37) | (0.14) |
Diluted earnings/(loss) per share: | ||
Diluted earnings per share from continuing operations | 0.02 | 0.04 |
Diluted loss per share from discontinued operations | (0.39) | (0.18) |
Diluted loss per share | $ (0.37) | $ (0.14) |
Weighted average common shares outstanding: | ||
Basic | 10,061,185 | 10,061,185 |
Diluted | 10,061,185 | 10,200,792 |
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, 2021 | $ 100,612 | $ 19,914,476 | $ (12,571,645) | $ 7,443,443 |
Beginning balance, shares at Sep. 30, 2021 | 10,061,185 | |||
Share-based compensation | 201,235 | 201,235 | ||
Net loss | (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 | |||
Share-based compensation | 86,491 | 86,491 | ||
Net loss | (3,736,657) | (3,736,657) | ||
Ending balance, value at Sep. 30, 2023 | $ 100,612 | $ 20,202,202 | $ (17,686,553) | $ 2,616,261 |
Ending balance, shares at Sep. 30, 2023 | 10,061,185 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Operating Activities: | ||
Net loss | $ (3,736,657) | $ (1,378,251) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Share-based compensation | 86,491 | 201,235 |
Depreciation and amortization | 315,940 | 309,239 |
Bad debt expense | 78,786 | 264,912 |
Change in fair value of earn-out consideration | (70,000) | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 495,102 | 953,137 |
Inventories | 316,469 | 108,223 |
Discontinued assets held for sale | 2,642,100 | (1,846,696) |
Prepaid expenses and other current assets | 39,093 | 143,467 |
Other assets | 0 | 3,514 |
Accounts payable and due to Forward China | 782,867 | 1,856,340 |
Deferred income | (141,471) | 251,183 |
Net changes in operating lease liabilities | 28,471 | 44,076 |
Accrued expenses and other current liabilities | 203,837 | 624,409 |
Net cash provided by operating activities | 1,041,028 | 1,534,788 |
Investing Activities: | ||
Purchases of property and equipment | (136,082) | (169,631) |
Net cash used in investing activities | (136,082) | (169,631) |
Financing Activities: | ||
Repayment of note payable to Forward China | (300,000) | (200,000) |
Net cash used in financing activities | (300,000) | (200,000) |
Net increase in cash | 604,946 | 1,165,157 |
Cash at beginning of year | 2,575,522 | 1,410,365 |
Cash at end of year | 3,180,468 | 2,575,522 |
Supplemental Disclosures of Cash Flow Information: | ||
Cash paid for interest | 104,201 | 123,411 |
Cash paid for taxes | 10,271 | 10,856 |
Supplemental Disclosures of Non-Cash Information: | ||
Operating lease assets obtained in exchange for operating lease liabilities | $ 0 | $ 204,881 |
OVERVIEW
OVERVIEW | 12 Months Ended |
Sep. 30, 2023 | |
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, sourcing and distribution company serving top tier medical and technology customers worldwide. 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 original equipment manufacturing (“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 does not manufacture any of its OEM 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 14. Discontinued Operations In July 2023, the Company decided to cease operations of its retail distribution segment and is presenting the results of operations for this segment within discontinued operations in the current and prior periods presented herein. Our retail distribution business sources and sells smart-enabled furniture, hot tubs and saunas and a variety of other products through various online retailer websites to customers predominantly located in the U.S. and Canada. The inventory of the retail segment is presented as discontinued assets held for sale on the balance sheets at September 30, 2023 and 2022. Where applicable, certain footnotes exclude the discontinued operations unless otherwise noted. See Note 3 for additional information on discontinued operations. Liquidity In Fiscal 2023, the Company generated a net loss of $ 3,737,000 159,000 1,041,000 1,300,000 Impact of COVID-19 On May 11, 2023, the U.S. Department of Health and Human Services declared the end of the Public Health Emergency for COVID-19; however, the effects of COVID-19 continue to linger throughout the global economy and our businesses. Though the severity of COVID-19 has subsided, new variants, or the outbreak of a new pathogen, could interrupt our business, cause renewed labor and supply chain disruptions, and negatively impact the global and US economy, which could materially and adversely impact our business. |
ACCOUNTING POLICIES
ACCOUNTING POLICIES | 12 Months Ended |
Sep. 30, 2023 | |
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. 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 As a result of the discontinued retail segment, as disclosed in Note 3, the Company now has two reportable segments: OEM 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 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 16 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 Cash The Company maintains cash deposits and a money market account 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, 2023 and 2022, there were deposits totaling $ 2,565,000 358,000 2,037,000 467,000 Accounts Receivable Accounts receivable consist of unsecured trade accounts with customers in amounts that have been invoiced ($ 6,949,000 7,861,000 no 185,000 75,000 771,000 852,000 The Company has agreements with various retailers which contain different terms for trade discounts, promotional and other sales allowances. At September 30, 2023, 2022 and 2021, the Company recorded accounts receivable allowances of $ 139,000 55,000 0 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. 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, 2023, 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 Discontinued 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 Accounting Standards Codification (“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 no 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 $ 976,000 609,000 693,000 297,000 439,000 188,000 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 gains (losses) from foreign currency transactions were $2,000 and ($13,000) in Fiscal 2023 and 2022, respectively. Fair Value Measurements We perform fair value measurements in accordance with the guidance provided by ASC 820, “Fair Value Measurement.” ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at their fair values, we consider the principal or most advantageous market in which we would transact and consider assumptions that market participants would use when pricing the assets or liabilities, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset's or liability's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 establishes three levels of inputs that may be used to measure fair value: · Level 1: quoted prices in active markets for identical assets or liabilities; · Level 2: inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or · Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities. 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 9). 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 and is not expected to have a material impact on our consolidated financial statements. |
DISCONTINUED OPERATIONS AND ASS
DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE | 12 Months Ended |
Sep. 30, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE | NOTE 3 DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE Considering the recurring losses incurred by the retail segment, in July 2023, the Company decided to cease operations of its retail distribution segment (“Retail Exit”). The primary assets of the retail segment are inventory and accounts receivable. The Company expects to sell, liquidate, or otherwise dispose of remaining retail inventory by June 30, 2024, and to collect remaining retail accounts receivable by the end of Fiscal 2024. After this time, we expect to have no further significant continuing involvement with the retail distribution segment. The Retail Exit is considered a strategic shift that will have a significant impact on the Company’s operations and financial results. The inventory of the retail segment meets the criteria to be considered “held-for-sale” in accordance with ASC 205-20, “Discontinued Operations.” Accordingly, the retail inventory is classified on our consolidated balance sheet as “discontinued assets held for sale” at September 30, 2023 and 2022, and the results of operations for the retail segment have been classified as “Discontinued Operations” on the consolidated statements of operations for the years ended September 30, 2023 and 2022. The consolidated balance sheets and results of operations for comparable prior periods have been reclassified to conform to this presentation in accordance with the accounting guidance. Consistent with the Company's plan for the Retail Exit, the Company re-evaluated its retail inventory and recorded an increase in the reserve of approximately $ 685,000 1,021,000 298,000 723,000 1,002,000 238,000 The following table presents the major classes of the “Net loss from discontinued operations, net of tax” in our consolidated statements of operations. Schedule of discontinued operations For the Fiscal Years Ended September 30, 2023 2022 Revenues, net $ 4,332,890 $ 4,130,427 Cost of sales 5,285,495 4,562,106 Gross profit (952,605 ) (431,679 ) Sales and marketing expenses 1,210,563 1,376,729 General and administrative expenses 26,762 19,736 Loss from operations (2,189,930 ) (1,828,144 ) Loss on classification as held for sale 1,705,385 – Net loss from discontinued operations before income taxes (3,895,315 ) (1,828,144 ) Provision for income taxes – – Loss from discontinued operations $ (3,895,315 ) $ (1,828,144 ) At September 30, 2023 and 2022, discontinued assets held for sale of $ 508,000 3,150,000 1,464,000 535,000 There was no depreciation, amortization, investing or financing cash flow activities, or other significant noncash operating cash flow activities for the retail segment in Fiscal 2023 or 2022. |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 12 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | NOTE 4 INTANGIBLE ASSETS AND GOODWILL Intangible Assets The Company’s intangible assets consist of the following: Schedule of intangible assets September 30, 2023 September 30, 2022 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 (203,000 ) (879,000 ) (1,082,000 ) (164,000 ) (705,000 ) (869,000 ) Net carrying amount $ 382,000 $ 511,000 $ 893,000 $ 421,000 $ 685,000 $ 1,106,000 The Company’s intangible assets resulted from 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 eight 213,000 At September 30, 2023, estimated amortization expense for the Company’s intangible assets for each of the next five years and thereafter is as follows: Schedule of estimated amortization expense Fiscal 2024 $ 213,000 Fiscal 2025 213,000 Fiscal 2026 121,000 Fiscal 2027 81,000 Fiscal 2028 78,000 Thereafter 187,000 Total $ 893,000 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 and are held under the design segment of our business. 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. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 5 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, 2023 2022 Computer hardware and software $ 502,000 $ 473,000 Furniture and fixtures 67,000 67,000 Equipment 171,000 74,000 Property and equipment, cost 740,000 614,000 Less accumulated depreciation and amortization (466,000 ) (373,000 ) Property and equipment, net $ 274,000 $ 241,000 Depreciation expense was $ 103,000 96,000 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 6 FAIR VALUE MEASUREMENTS The earnout consideration of $ 0 70,000 Schedule of fair value assumptions September 30, 2023 2022 Volatility 40% 40% Risk-free interest rate 4.9%-5.3% 4.1% Expected term in years 0.4 - 1.4 0.4 - 2.4 Dividend yield – – In Fiscal 2023, the Company reduced this liability from $70,000 to $0 based on changes in the expected likelihood of Kablooe reaching the specified earnings targets. In Fiscal 2022, there were no changes to the total fair value of this earnout liability. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 12 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | NOTE 7 ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities at September 30, 2023 and 2022 are as follows: Schedule of accrued expenses and other current liabilities September 30, 2023 2022 Accrued commissions/bonuses $ 872,000 $ 722,000 Paid time off 285,000 228,000 Other 201,000 204,000 Total $ 1,358,000 $ 1,154,000 |
SHAREHOLDERS_ EQUITY
SHAREHOLDERS’ EQUITY | 12 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
SHAREHOLDERS’ EQUITY | NOTE 8 SHAREHOLDERS’ EQUITY “Blank Check” Preferred Stock The Company is authorized to issue up to 4,000,000 100,000 no Warrants At September 30, 2023, the Company had 75,000 1.75 76,000 Nasdaq On July 31, 2023, the Company was notified by Nasdaq that it was not compliant with its closing bid price requirement because the closing bid price of our common stock was below $1.00 per share for 30 consecutive trading days. The Company has until January 29, 2024 (the “Deadline Date”) to become compliant. We have since remained non-compliant with the closing bid price requirement as our stock price has remained below $1.00 since we received the notice. We are currently assessing all options to regain compliance. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | NOTE 9 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 1,291,000 889,000 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: Schedule of assumptions used for options Fiscal 2023 Fiscal 2022 Expected term (years) 2.75 2.5 - 5.0 Expected volatility 69.0 68.8 78.6 Risk free interest rate 4.31 0.4 3.1 Expected dividends – – In Fiscal 2023, the Company granted options to three of its non-employee directors to purchase an aggregate of 124,740 1.03 0.48 60,000 On October 1, 2023, the Company granted options to three of its non-employee directors to purchase an aggregate of 332,409 0.76 0.36 120,000 In Fiscal 2022, the Company made the following option grants which collectively had a weighted-average grant date fair value of $ 0.82 · 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 Company recognized compensation expense for stock option awards of $ 86,000 201,000 No At September 30, 2023, there was $ 22,000 0.2 The following table summarizes stock option activity during Fiscal 2023: Schedule of stock option activity Weighted Weighted Average Average Aggregate Number of Exercise Remaining Intrinsic Options Price Life (Yrs.) Value Outstanding at September 30, 2022 1,085,000 $ 1.48 Granted 125,000 $ 1.03 Expired (287,000 ) $ 1.46 Outstanding at September 30, 2023 923,000 $ 1.43 2.6 $ – Exercisable at September 30, 2023 789,000 $ 1.49 2.3 $ – Options outstanding at September 30, 2023 have an exercise price between $ 1.03 2.39 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 10 INCOME TAXES The following table summarizes the Company’s consolidated provision from continuing operations for U.S. federal, state and foreign taxes on income: Schedule of income tax provision Fiscal 2023 Fiscal 2022 Current: Federal $ – $ – State 20,000 3,000 Foreign – – Deferred: Federal 112,000 220,000 State (244,000 ) 32,000 Foreign (39,000 ) (23,000 ) Deferred income tax expense (benefit) (151,000 ) 232,000 Change in valuation allowance 171,000 (229,000 ) Income tax provision $ 20,000 $ 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 tax assets and liabilities September 30, 2023 2022 Deferred tax assets Net operating losses $ 2,976,000 $ 2,006,000 Share-based compensation 242,000 220,000 AMT & other tax credits 5,000 5,000 Excess tax over book basis in inventory 18,000 101,000 Reserves and other allowances 893,000 649,000 Deferred rent – 8,000 Lease liability 794,000 – Accrued compensation 101,000 70,000 Accrued related party interest 5,000 5,000 Charitable contributions 1,000 – Interest expense limitation 46,000 48,000 Total deferred tax assets 5,081,000 3,112,000 Deferred tax liabilities Depreciation (9,000 ) (12,000 ) Prepaid expenses (88,000 ) (96,000 ) Intangible assets (145,000 ) (178,000 ) ROU Asset (737,000 ) – Total deferred tax liabilities (979,000 ) (286,000 ) Valuation allowance (4,102,000 ) (2,826,000 ) Net deferred tax assets $ – $ – The Company recorded a provision for income taxes which includes net expense of $20,000 and $3,000 in Fiscal 2023 and 2022, respectively, primarily for state income tax expenses in states where net operating loss carryforwards (“NOLs”) were not available. At September 30, 2023, the Company had available NOLs for U.S. federal income tax purposes of $ 9,350,000 5,113,000 2,283,000 371,000 1,839,000 322,000 4,102,000 2,826,000 113,000 158,000 At September 30, 2023, 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, 2023 and 2022, the valuation allowance was $4,102,000 and $2,826,000, respectively. The change in the valuation allowance of $1,275,000 is comprised of $171,000 from continuing operations and $1,104,000 from discontinued operations. 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: Schedule of reconciliation of effective tax rate Fiscal 2023 Fiscal 2022 U.S. federal statutory rate 21.0 21.0 State tax rate, net of federal benefit 3.9 5.8 Foreign rate differential (9.2 ) (5.3 ) Tax return to provision adjustments (94.6 ) 4.1 Effect of state tax rate change (8.5 ) 7.0 Change in valuation allowance 95.7 (34.1 ) Permanent differences 2.9 2.0 Effective tax rate 11.2 0.5 At September 30, 2023 and 2022, 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, 2020, are closed to federal and state examination. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 11 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 reconciliation of basic and diluted earnings/loss per share For the Fiscal Years Ended September 30, 2023 2022 Numerator: Income from continuing operations $ 179,000 $ 450,000 Loss from discontinued operations, net of tax (3,895,000 ) (1,828,000 ) Net loss $ (3,716,000 ) $ (1,378,000 ) Denominator: Weighted average common shares outstanding 10,061,000 10,061,000 Dilutive common share equivalents – 140,000 Weighted average dilutive shares outstanding 10,061,000 10,201,000 Basic earnings/(loss) per share : Basic earnings per share from continuing operations $ 0.02 $ 0.04 Basic loss per share from discontinued operations (0.39 ) (0.18 ) Basic loss per share $ (0.37 ) $ (0.14 ) Diluted earnings/(loss) per share: Diluted earnings per share from continuing operations $ 0.02 $ 0.04 Diluted loss per share from discontinued operations (0.39 ) (0.18 ) Diluted loss per share $ (0.37 ) $ (0.14 ) The following securities were excluded from the calculation of diluted earnings per share in Fiscal 2023 and 2022 because their inclusion would have been anti-dilutive: Schedule of anti-dilutive For the Fiscal Years Ended September 30, 2023 2022 Options 923,000 277,000 Warrants 75,000 151,000 Total potentially dilutive shares 998,000 428,000 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 12 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 $79,000 at September 30, 2023) 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 $358,000 at September 30, 2023). At September 30, 2023, 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, 2023, 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, 2023 | |
Leases | |
LEASES | NOTE 13 LEASES The Company’s operating leases are primarily for corporate, engineering, and administrative office space. Total operating lease expense in Fiscal 2023 was $ 621,000 3,000 618,000 631,000 57,000 574,000 575,000 601,000 At September 30, 2023, the Company’s operating leases had a weighted average remaining lease term of 7.6 5.7 Future minimum payments under non-cancellable operating leases are as follows: Schedule of future minimum payments under operating leases Fiscal 2024 $ 592,000 Fiscal 2025 556,000 Fiscal 2026 510,000 Fiscal 2027 419,000 Fiscal 2028 428,000 Thereafter 1,551,000 Total future minimum lease payments 4,056,000 Less imputed interest (806,000 ) Present value of lease liabilities 3,250,000 Less current portion of lease liabilities ( 416,000 ) Long-term portion of lease liabilities $ 2,834,000 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 14 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 through March 2023 paid 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. Considering the loss of a significant OEM distribution customer (see Note 16), effective April 1, 2023, the Company and Forward China agreed to reduce the fixed portion of the sourcing fee from $100,000 to $83,333 per month for the remaining term of the Supply Agreement, which expired in October 2023, resulting in cash savings of $100,000 in Fiscal 2023. Effective October 2023, the Company and Forward China entered into a new sourcing agreement under which the fixed portion of the sourcing fee was further reduced to $65,833 per month. Other terms in the agreement are substantially the same as the prior agreement. Due to the Retail Exit and decline in the OEM distribution segment business, the new sourcing agreement expires October 31, 2024. 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 $ 1,266,000 1,398,000 12,799,000 18,055,000 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. No commissions were recognized in Fiscal 2023 and Fiscal 2022. In connection with the new sourcing agreement and in order to preserve the Company’s future liquidity, in November 2023, the Company and Forward China entered into an agreement whereby Forward China agreed to limit the amount of outstanding payables it would seek to collect from the Company to $500,000 in any 12-month period, which the Company agreed to pay within 30 days of any such request. This agreement pertains only to payables that were outstanding at October 30, 2023 of approximately $ 7,365,000 The Company made prepayments to Forward China for inventory purchases of $ 20,000 1,021,000 Promissory Note On January 18, 2018, the Company issued a $ 1,600,000 8 104,000 122,000 December 31, 2024 300,000 200,000 1,100,000 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 $ 2,058,000 1,741,000 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 was effective until August 31, 2023. Effective September 1, 2023, the Company entered into an agreement to extend this agreement on a month-to-month basis and to expand its scope to include inventory management assistance. The Company incurred costs of $ 127,000 120,000 7,000 90,000 84,000 6,000 10,000 15,000 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 $ 626,000 780,000 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 2022. The Company recognized revenue of $ 0 13,000 |
401(k) PLAN
401(k) PLAN | 12 Months Ended |
Sep. 30, 2023 | |
Retirement Benefits [Abstract] | |
401(k) PLAN | NOTE 15 401(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 Internal Revenue Service limitations. The Company made immediately vested contributions of $ 426,000 310,000 25,000 91,000 379,000 313,000 16,000 50,000 |
SEGMENTS AND CONCENTRATIONS
SEGMENTS AND CONCENTRATIONS | 12 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
SEGMENTS AND CONCENTRATIONS | NOTE 16 SEGMENTS AND CONCENTRATIONS Segments As a result of discontinuing the retail segment, see Note 3, the Company now has two reportable segments: OEM distribution and design. See Note 2 for more information on the composition and accounting policies of our reportable segments. The results of the retail segment were classified as discontinued operations as discussed in Note 3. Segment information presented herein excludes the results of the retail segment for all periods presented. 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 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: Schedule of segment and related reconciliations Revenues Fiscal 2023 Fiscal 2022 OEM distribution $ 14,002,000 $ 18,036,000 Design 22,686,000 20,171,000 Total segment revenues $ 36,688,000 $ 38,207,000 Operating Income/(Loss) Fiscal 2023 Fiscal 2022 OEM distribution $ 440,000 $ 905,000 Design 2,182,000 2,148,000 Total segment operating income 2,622,000 3,053,000 General corporate expenses (2,462,000 ) (2,465,000 ) Operating loss from continuing operations before income taxes 160,000 588,000 Other expense/(income), net (19,000 ) 136,000 Income from continuing operations before income taxes $ 179,000 $ 452,000 Depreciation and Amortization Fiscal 2023 Fiscal 2022 OEM distribution $ 4,000 $ 8,000 Design 312,000 301,000 Total $ 316,000 $ 309,000 Schedule of condensed balance sheet Segment Assets September 30, 2023 2022 OEM distribution $ 2,478,000 $ 4,276,000 Design 6,721,000 6,116,000 Total segment assets 9,199,000 10,392,000 General corporate assets 6,924,000 6,731,000 Discontinued assets held for sale 508,000 3,150,000 Other assets of discontinued retail segment 755,000 666,000 Total assets $ 17,386,000 $ 20,939,000 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 2023 and Fiscal 2022: Schedule of consolidated net revenues Revenues Fiscal 2023 Fiscal 2022 United States $ 27,116,000 $ 25,538,000 China 3,443,000 5,325,000 Germany 3,000,000 2,976,000 Poland 1,275,000 2,643,000 Other foreign countries 1,854,000 1,725,000 Total $ 36,688,000 $ 38,207,000 Customer Concentrations The Company had certain customers in the OEM distribution segment whose individual percentage of the Company’s consolidated revenues was 10% or greater. Revenue from one of these customers or their affiliates or contract manufacturers represented 11.2 25.5 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 27.9 11.8 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. One customer or its affiliate or contract manufacturer represented 12.0 28.1 At September 30, 2023, the Company had one customer in the design segment whose accounts receivable balances accounted for 10% or more of the Company’s consolidated accounts receivable. Accounts receivable from this customer represented 31.1 In March 2023, the Company’s contract with one of its major diabetic customers in the OEM distribution segment expired. Due to increased pricing pressures, the Company did not extend its contract with this customer. Revenue from this customer represented approximately 13 Supplier Concentration The Company’s OEM distribution segment procures substantially all its products through independent suppliers in China through Forward China (see Note 14). 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, 2023 | |
Debt Disclosure [Abstract] | |
LINE OF CREDIT | NOTE 17 LINE OF CREDIT The Company, specifically IPS, has a $ 1,300,000 May 31, 2024 0.75% above The Wall Street Journal 9.25 7.0 1,300,000 |
ACCOUNTING POLICIES (Policies)
ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Sep. 30, 2023 | |
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. |
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 As a result of the discontinued retail segment, as disclosed in Note 3, the Company now has two reportable segments: OEM 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 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 16 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 |
Cash | Cash The Company maintains cash deposits and a money market account 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, 2023 and 2022, there were deposits totaling $ 2,565,000 358,000 2,037,000 467,000 |
Accounts Receivable | Accounts Receivable Accounts receivable consist of unsecured trade accounts with customers in amounts that have been invoiced ($ 6,949,000 7,861,000 no 185,000 75,000 771,000 852,000 The Company has agreements with various retailers which contain different terms for trade discounts, promotional and other sales allowances. At September 30, 2023, 2022 and 2021, the Company recorded accounts receivable allowances of $ 139,000 55,000 0 |
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. |
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, 2023, 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 Discontinued 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 Accounting Standards Codification (“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 no 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 $ 976,000 609,000 693,000 297,000 439,000 188,000 |
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 gains (losses) from foreign currency transactions were $2,000 and ($13,000) in Fiscal 2023 and 2022, respectively. |
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 9). |
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 and is not expected to have a material impact on our consolidated financial statements. |
DISCONTINUED OPERATIONS AND A_2
DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of discontinued operations | Schedule of discontinued operations For the Fiscal Years Ended September 30, 2023 2022 Revenues, net $ 4,332,890 $ 4,130,427 Cost of sales 5,285,495 4,562,106 Gross profit (952,605 ) (431,679 ) Sales and marketing expenses 1,210,563 1,376,729 General and administrative expenses 26,762 19,736 Loss from operations (2,189,930 ) (1,828,144 ) Loss on classification as held for sale 1,705,385 – Net loss from discontinued operations before income taxes (3,895,315 ) (1,828,144 ) Provision for income taxes – – Loss from discontinued operations $ (3,895,315 ) $ (1,828,144 ) |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Schedule of intangible assets September 30, 2023 September 30, 2022 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 (203,000 ) (879,000 ) (1,082,000 ) (164,000 ) (705,000 ) (869,000 ) Net carrying amount $ 382,000 $ 511,000 $ 893,000 $ 421,000 $ 685,000 $ 1,106,000 |
Schedule of estimated amortization expense | Schedule of estimated amortization expense Fiscal 2024 $ 213,000 Fiscal 2025 213,000 Fiscal 2026 121,000 Fiscal 2027 81,000 Fiscal 2028 78,000 Thereafter 187,000 Total $ 893,000 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Schedule of property and equipment September 30, 2023 2022 Computer hardware and software $ 502,000 $ 473,000 Furniture and fixtures 67,000 67,000 Equipment 171,000 74,000 Property and equipment, cost 740,000 614,000 Less accumulated depreciation and amortization (466,000 ) (373,000 ) Property and equipment, net $ 274,000 $ 241,000 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value assumptions | Schedule of fair value assumptions September 30, 2023 2022 Volatility 40% 40% Risk-free interest rate 4.9%-5.3% 4.1% Expected term in years 0.4 - 1.4 0.4 - 2.4 Dividend yield – – |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses and other current liabilities | Schedule of accrued expenses and other current liabilities September 30, 2023 2022 Accrued commissions/bonuses $ 872,000 $ 722,000 Paid time off 285,000 228,000 Other 201,000 204,000 Total $ 1,358,000 $ 1,154,000 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of assumptions used for options | Schedule of assumptions used for options Fiscal 2023 Fiscal 2022 Expected term (years) 2.75 2.5 - 5.0 Expected volatility 69.0 68.8 78.6 Risk free interest rate 4.31 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, 2022 1,085,000 $ 1.48 Granted 125,000 $ 1.03 Expired (287,000 ) $ 1.46 Outstanding at September 30, 2023 923,000 $ 1.43 2.6 $ – Exercisable at September 30, 2023 789,000 $ 1.49 2.3 $ – |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax provision | Schedule of income tax provision Fiscal 2023 Fiscal 2022 Current: Federal $ – $ – State 20,000 3,000 Foreign – – Deferred: Federal 112,000 220,000 State (244,000 ) 32,000 Foreign (39,000 ) (23,000 ) Deferred income tax expense (benefit) (151,000 ) 232,000 Change in valuation allowance 171,000 (229,000 ) Income tax provision $ 20,000 $ 3,000 |
Schedule of deferred tax assets and liabilities | Schedule of deferred tax assets and liabilities September 30, 2023 2022 Deferred tax assets Net operating losses $ 2,976,000 $ 2,006,000 Share-based compensation 242,000 220,000 AMT & other tax credits 5,000 5,000 Excess tax over book basis in inventory 18,000 101,000 Reserves and other allowances 893,000 649,000 Deferred rent – 8,000 Lease liability 794,000 – Accrued compensation 101,000 70,000 Accrued related party interest 5,000 5,000 Charitable contributions 1,000 – Interest expense limitation 46,000 48,000 Total deferred tax assets 5,081,000 3,112,000 Deferred tax liabilities Depreciation (9,000 ) (12,000 ) Prepaid expenses (88,000 ) (96,000 ) Intangible assets (145,000 ) (178,000 ) ROU Asset (737,000 ) – Total deferred tax liabilities (979,000 ) (286,000 ) Valuation allowance (4,102,000 ) (2,826,000 ) Net deferred tax assets $ – $ – |
Schedule of reconciliation of effective tax rate | Schedule of reconciliation of effective tax rate Fiscal 2023 Fiscal 2022 U.S. federal statutory rate 21.0 21.0 State tax rate, net of federal benefit 3.9 5.8 Foreign rate differential (9.2 ) (5.3 ) Tax return to provision adjustments (94.6 ) 4.1 Effect of state tax rate change (8.5 ) 7.0 Change in valuation allowance 95.7 (34.1 ) Permanent differences 2.9 2.0 Effective tax rate 11.2 0.5 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of basic and diluted earnings/loss per share | Schedule of reconciliation of basic and diluted earnings/loss per share For the Fiscal Years Ended September 30, 2023 2022 Numerator: Income from continuing operations $ 179,000 $ 450,000 Loss from discontinued operations, net of tax (3,895,000 ) (1,828,000 ) Net loss $ (3,716,000 ) $ (1,378,000 ) Denominator: Weighted average common shares outstanding 10,061,000 10,061,000 Dilutive common share equivalents – 140,000 Weighted average dilutive shares outstanding 10,061,000 10,201,000 Basic earnings/(loss) per share : Basic earnings per share from continuing operations $ 0.02 $ 0.04 Basic loss per share from discontinued operations (0.39 ) (0.18 ) Basic loss per share $ (0.37 ) $ (0.14 ) Diluted earnings/(loss) per share: Diluted earnings per share from continuing operations $ 0.02 $ 0.04 Diluted loss per share from discontinued operations (0.39 ) (0.18 ) Diluted loss per share $ (0.37 ) $ (0.14 ) |
Schedule of anti-dilutive | Schedule of anti-dilutive For the Fiscal Years Ended September 30, 2023 2022 Options 923,000 277,000 Warrants 75,000 151,000 Total potentially dilutive shares 998,000 428,000 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Leases | |
Schedule of future minimum payments under operating leases | Schedule of future minimum payments under operating leases Fiscal 2024 $ 592,000 Fiscal 2025 556,000 Fiscal 2026 510,000 Fiscal 2027 419,000 Fiscal 2028 428,000 Thereafter 1,551,000 Total future minimum lease payments 4,056,000 Less imputed interest (806,000 ) Present value of lease liabilities 3,250,000 Less current portion of lease liabilities ( 416,000 ) Long-term portion of lease liabilities $ 2,834,000 |
SEGMENTS AND CONCENTRATIONS (Ta
SEGMENTS AND CONCENTRATIONS (Tables) | 12 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of segment and related reconciliations | Schedule of segment and related reconciliations Revenues Fiscal 2023 Fiscal 2022 OEM distribution $ 14,002,000 $ 18,036,000 Design 22,686,000 20,171,000 Total segment revenues $ 36,688,000 $ 38,207,000 Operating Income/(Loss) Fiscal 2023 Fiscal 2022 OEM distribution $ 440,000 $ 905,000 Design 2,182,000 2,148,000 Total segment operating income 2,622,000 3,053,000 General corporate expenses (2,462,000 ) (2,465,000 ) Operating loss from continuing operations before income taxes 160,000 588,000 Other expense/(income), net (19,000 ) 136,000 Income from continuing operations before income taxes $ 179,000 $ 452,000 Depreciation and Amortization Fiscal 2023 Fiscal 2022 OEM distribution $ 4,000 $ 8,000 Design 312,000 301,000 Total $ 316,000 $ 309,000 |
Schedule of condensed balance sheet | Schedule of condensed balance sheet Segment Assets September 30, 2023 2022 OEM distribution $ 2,478,000 $ 4,276,000 Design 6,721,000 6,116,000 Total segment assets 9,199,000 10,392,000 General corporate assets 6,924,000 6,731,000 Discontinued assets held for sale 508,000 3,150,000 Other assets of discontinued retail segment 755,000 666,000 Total assets $ 17,386,000 $ 20,939,000 |
Schedule of consolidated net revenues | Schedule of consolidated net revenues Revenues Fiscal 2023 Fiscal 2022 United States $ 27,116,000 $ 25,538,000 China 3,443,000 5,325,000 Germany 3,000,000 2,976,000 Poland 1,275,000 2,643,000 Other foreign countries 1,854,000 1,725,000 Total $ 36,688,000 $ 38,207,000 |
OVERVIEW (Details Narrative)
OVERVIEW (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Net loss | $ 3,736,657 | $ 1,378,251 |
Income from continuing operations | 158,658 | 449,893 |
Net cash provided by (used in) operating activities | 1,041,028 | $ 1,534,788 |
Line of credit borrowing amount | $ 1,300,000 |
ACCOUNTING POLICIES (Details Na
ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Cash and Cash Equivalents [Line Items] | |||
Impairment of goodwill | $ 0 | $ 0 | |
Impairments of intangible assets | 0 | 0 | |
Total cash deposits | 2,565,000 | 2,037,000 | |
Accounts receivable | 6,949,000 | 7,861,000 | |
OEM Distribution [Member] | |||
Cash and Cash Equivalents [Line Items] | |||
Allowances for doubtful accounts | 0 | 0 | |
Contract liabilities | 0 | 0 | $ 0 |
Discontinued Retail Distribution Segment [Member] | |||
Cash and Cash Equivalents [Line Items] | |||
Allowances for doubtful accounts | 185,000 | 75,000 | |
Design [Member] | |||
Cash and Cash Equivalents [Line Items] | |||
Allowances for doubtful accounts | 771,000 | 852,000 | |
Contract liabilities | 297,000 | 439,000 | 188,000 |
Contract assets | 976,000 | 609,000 | 693,000 |
Retail Distribution [Member] | |||
Cash and Cash Equivalents [Line Items] | |||
Allowances for the provisions | 139,000 | 55,000 | 0 |
Contract liabilities | 0 | 0 | $ 0 |
Foreign Bank [Member] | |||
Cash and Cash Equivalents [Line Items] | |||
Total cash deposits | $ 358,000 | $ 467,000 |
DISCONTINUED OPEARTIONS AND ASS
DISCONTINUED OPEARTIONS AND ASSETS HELD FOR SALE (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Revenues, net | $ 4,332,890 | $ 4,130,427 |
Cost of sales | 5,285,495 | 4,562,106 |
Gross profit | (952,605) | (431,679) |
Sales and marketing expenses | 1,210,563 | 1,376,729 |
General and administrative expenses | 26,762 | 19,736 |
Loss from operations | (2,189,930) | (1,828,144) |
Loss on classification as held for sale | 1,705,385 | 0 |
Net loss from discontinued operations before income taxes | (3,895,315) | (1,828,144) |
Provision for income taxes | ||
Loss from discontinued operations | $ (3,895,315) | $ (1,828,144) |
DISCONTINUED OPERATIONS AND A_3
DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Offsetting Assets [Line Items] | ||
Increase in inventory reserve | $ 685,000 | |
Total unfulfilled purchase orders | 1,021,000 | |
Prepayment of purchase orders | 298,000 | |
[custom:DueToAffiliateCurrent1-0] | 8,246,015 | $ 7,713,880 |
Discontinued assets held for sale | 508,000 | 3,150,000 |
Discontinued operation allowance | 1,464,000 | 535,000 |
Retail Segment [Member] | ||
Offsetting Assets [Line Items] | ||
[custom:DueToAffiliateCurrent1-0] | 1,002,000 | $ 238,000 |
Purchase Orders Payable [Member] | ||
Offsetting Assets [Line Items] | ||
[custom:DueToAffiliateCurrent1-0] | $ 723,000 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL (Details - Intangible Assets) - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 1,975,000 | $ 1,975,000 |
Less accumulated amortization | (1,082,000) | (869,000) |
Net Carrying Amount | 893,000 | 1,106,000 |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 585,000 | 585,000 |
Less accumulated amortization | (203,000) | (164,000) |
Net Carrying Amount | 382,000 | 421,000 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,390,000 | 1,390,000 |
Less accumulated amortization | (879,000) | (705,000) |
Net Carrying Amount | $ 511,000 | $ 685,000 |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL (Details - Estimated amortization expense) - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Fiscal 2024 | $ 213,000 | |
Fiscal 2025 | 213,000 | |
Fiscal 2026 | 121,000 | |
Fiscal 2027 | 81,000 | |
Fiscal 2028 | 78,000 | |
Thereafter | 187,000 | |
Total | $ 893,000 | $ 1,106,000 |
INTANGIBLE ASSETS AND GOODWIL_4
INTANGIBLE ASSETS AND GOODWILL (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2023 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of Intangible Assets | $ 213,000 | |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 15 years | |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 8 years |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, cost | $ 740,000 | $ 614,000 |
Less accumulated depreciation and amortization | (466,000) | (373,000) |
Property and equipment, net | 274,046 | 241,146 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, cost | 502,000 | 473,000 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, cost | 67,000 | 67,000 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, cost | $ 171,000 | $ 74,000 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $ 103,000 | $ 96,000 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details - Assumptions) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
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 | 4.9%-5.3% | 4.1% |
Measurement Input, Expected Term [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value assumptions | 0.4 - 1.4 | 0.4 - 2.4 |
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, 2023 | Sep. 30, 2022 |
Fair Value Disclosures [Abstract] | ||
Earnout consideration | $ 0 | $ 70,000 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Accounts Payable and Other Accrued Liabilities, Current | $ 1,357,743 | $ 1,153,906 |
Accrued Commissions Bonuses [Member] | ||
Accounts Payable and Other Accrued Liabilities, Current | 872,000 | 722,000 |
Paid Time Off [Member] | ||
Accounts Payable and Other Accrued Liabilities, Current | 285,000 | 228,000 |
Other Accrued Expenses [Member] | ||
Accounts Payable and Other Accrued Liabilities, Current | $ 201,000 | $ 204,000 |
SHAREHOLDERS_ EQUITY (Details N
SHAREHOLDERS’ EQUITY (Details Narrative) - $ / shares | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Class of Stock [Line Items] | ||
Shares authorized for issuance | 4,000,000 | |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Warrants outstanding | 75,000 | |
Warrants exercisable | 75,000 | |
Warrants exercise price | $ 1.75 | |
Warrants expired | 76,000 | |
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, 2023 | Sep. 30, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Expected term (years) | 2.75 | 2.5 - 5.0 |
Expected volatility | 69% | |
Risk free interest rate | 4.31% | |
Expected dividends | 0% | 0% |
Minimum [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Expected volatility | 68.80% | |
Risk free interest rate | 0.40% | |
Maximum [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Expected volatility | 78.60% | |
Risk free interest rate | 3.10% |
SHARE-BASED COMPENSATION (Det_2
SHARE-BASED COMPENSATION (Details - Option activity) - Equity Option [Member] | 12 Months Ended |
Sep. 30, 2023 USD ($) $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Shares, Outstanding at Beginning | shares | 1,085,000 |
Weighted average exercise price, Outstanding at Beginning | $ / shares | $ 1.48 |
Shares, Granted | shares | 125,000 |
Weighted average exercise price, Granted | $ / shares | $ 1.03 |
Shares, Expired | shares | (287,000) |
Weighted average exercise price, Expired | $ / shares | $ 1.46 |
Shares, Outstanding at Ending | shares | 923,000 |
Weighted average exercise price, Outstanding at Ending | $ / shares | $ 1.43 |
Weighted average remaining contractual term (Years), Outstanding | 2 years 7 months 6 days |
Aggregate intrinsic value, Outstanding | $ | |
Shares, Exercisable | shares | 789,000 |
Weighted average exercise price, Exercisable | $ / shares | $ 1.49 |
Weighted average remaining contractual term (Years), Exercisable | 2 years 3 months 18 days |
Aggregate intrinsic value, Exercisable | $ |
SHARE-BASED COMPENSATION (Det_3
SHARE-BASED COMPENSATION (Details Narrative) - USD ($) | 12 Months Ended | |||
Oct. 01, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Feb. 28, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Share based compensation expense | $ 86,491 | $ 201,235 | ||
Minimum [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Option exercise price | $ 1.03 | |||
Maximum [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Option exercise price | $ 2.39 | |||
Equity Option [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Options granted | 125,000 | |||
Weighted average grant date value per share | $ 0.82 | |||
Share based compensation expense | $ 86,000 | $ 201,000 | ||
Number of options exercised | 0 | 0 | ||
Equity Option [Member] | Non Vested Options [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Unrecognized compensation cost | $ 22,000 | |||
Unrecognized compensation cost weighted average vesting period | 2 months 12 days | |||
Equity Option [Member] | Non Employee Directors [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Options granted | 332,409 | 124,740 | ||
Exercise price per share | $ 0.76 | $ 1.03 | ||
Weighted average grant date value per share | $ 0.36 | $ 0.48 | ||
Options grant date fair value | $ 120,000 | $ 60,000 | ||
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 | |||
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 | 889,000 |
INCOME TAXES (Details - Tax pro
INCOME TAXES (Details - Tax provision) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Current: | ||
Foreign | $ 0 | $ 0 |
State | 20,000 | 3,000 |
Deferred: | ||
Federal | 112,000 | 220,000 |
State | (244,000) | 32,000 |
Foreign | (39,000) | (23,000) |
Deferred income tax expense (benefit) | (151,000) | 232,000 |
Change in valuation allowance | 171,000 | (229,000) |
Income tax provision | $ 20,006 | $ 2,554 |
INCOME TAXES (Details - Deferre
INCOME TAXES (Details - Deferred tax) - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Deferred tax assets | ||
Net operating losses | $ 2,976,000 | $ 2,006,000 |
Share-based compensation | 242,000 | 220,000 |
AMT & other tax credits | 5,000 | 5,000 |
Excess tax over book basis in inventory | 18,000 | 101,000 |
Reserves and other allowances | 893,000 | 649,000 |
Deferred rent | 0 | 8,000 |
Lease liability | 794,000 | 0 |
Accrued compensation | 101,000 | 70,000 |
Accrued related party interest | 5,000 | 5,000 |
Charitable contributions | 1,000 | 0 |
Interest expense limitation | 46,000 | 48,000 |
Total deferred tax assets | 5,081,000 | 3,112,000 |
Deferred tax liabilities | ||
Depreciation | (9,000) | (12,000) |
Prepaid expenses | (88,000) | (96,000) |
Intangible assets | (145,000) | (178,000) |
ROU Asset | (737,000) | 0 |
Total deferred tax liabilities | (979,000) | (286,000) |
Valuation allowance | (4,102,000) | (2,826,000) |
Net deferred tax assets | $ 0 | $ 0 |
INCOME TAXES (Details - Tax rec
INCOME TAXES (Details - Tax reconciliation) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal statutory rate | 21% | 21% |
State tax rate, net of federal benefit | 3.90% | 5.80% |
Foreign rate differential | (9.20%) | (5.30%) |
Tax return to provision adjustments | (94.60%) | 4.10% |
Effect of state tax rate change | (8.50%) | 7% |
Change in valuation allowance | 95.70% | (34.10%) |
Permanent differences | 2.90% | 2% |
Effective tax rate | 11.20% | 0.50% |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Operating Loss Carryforwards [Line Items] | ||
Deferred tax assets | $ 5,081,000 | $ 3,112,000 |
Total net deferred tax assets | 4,102,000 | $ 2,826,000 |
Forward Switz [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net loss | 113,000 | |
Forward UK [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net loss | 158,000 | |
Federal [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforward | 9,350,000 | |
Deferred tax assets | 2,283,000 | |
State [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforward | 5,113,000 | |
Deferred tax assets | 371,000 | |
Foreign Tax [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Foreign operating loss carryforward | 1,839,000 | |
Foreign [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Deferred tax assets | $ 322,000 |
EARNINGS PER SHARE (Details - E
EARNINGS PER SHARE (Details - Earning per share) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator: | ||
Income from continuing operations | $ 179,000 | $ 450,000 |
Loss from discontinued operations, net of tax | (3,895,000) | (1,828,000) |
Net loss | $ (3,716,000) | $ (1,378,000) |
Denominator: | ||
Weighted average common shares outstanding | 10,061,000 | 10,061,000 |
Dilutive common share equivalents | 0 | 140,000 |
Weighted average dilutive shares outstanding | 10,061,000 | 10,201,000 |
Basic earnings/(loss) per share : | ||
Basic earnings per share from continuing operations | $ 0.02 | $ 0.04 |
Basic loss per share from discontinued operations | (0.39) | (0.18) |
Basic loss per share | (0.37) | (0.14) |
Diluted earnings/(loss) per share: | ||
Diluted earnings per share from continuing operations | 0.02 | 0.04 |
Diluted loss per share from discontinued operations | (0.39) | (0.18) |
Diluted loss per share | $ (0.37) | $ (0.14) |
EARNINGS PER SHARE (Details - A
EARNINGS PER SHARE (Details - Antidilutive shares) - shares | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive shares | 998,000 | 428,000 |
Equity Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive shares | 923,000 | 277,000 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total potentially dilutive shares | 75,000 | 151,000 |
LEASES (Details - Future minimu
LEASES (Details - Future minimum payments Operating lease) - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Leases | ||
Fiscal 2024 | $ 592,000 | |
Fiscal 2025 | 556,000 | |
Fiscal 2026 | 510,000 | |
Fiscal 2027 | 419,000 | |
Fiscal 2028 | 428,000 | |
Thereafter | 1,551,000 | |
Total future minimum lease payments | 4,056,000 | |
Less imputed interest | (806,000) | |
Present value of lease liabilities | 3,250,000 | |
Operating Lease, Liability, Current | 416,042 | $ 377,940 |
Operating Lease, Liability, Noncurrent | $ 2,833,782 | $ 3,249,824 |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Leases | ||
Total operating lease expense | $ 621,000 | $ 631,000 |
Sales and marketing | 3,000 | 57,000 |
General and administrative | 618,000 | 574,000 |
Cash paid for amounts included in operating lease liabilities | $ 575,000 | $ 601,000 |
Weighted average remaining lease term | 7 years 7 months 6 days | |
Weighted average discount rate | 5.70% |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Oct. 30, 2023 | Jan. 18, 2018 | |
Related Party Transaction [Line Items] | ||||
Prepaid expenses and other current assets | $ 378,512 | $ 417,605 | ||
Note payable outstanding balance | 1,100,000 | 1,400,000 | ||
Forward China [Member] | ||||
Related Party Transaction [Line Items] | ||||
Repayment of debt | 300,000 | 200,000 | ||
Forward China [Member] | Promissory Note [Member] | ||||
Related Party Transaction [Line Items] | ||||
Debt face amount | $ 1,600,000 | |||
Debt interest rate | 8% | |||
Interest expense | $ 104,000 | 122,000 | ||
Maturity date | Dec. 31, 2024 | |||
Forward China [Member] | Inventory Purchases [Member] | ||||
Related Party Transaction [Line Items] | ||||
Prepaid expenses and other current assets | 20,000 | |||
Forward China [Member] | Retail Exit [Member] | ||||
Related Party Transaction [Line Items] | ||||
Unfulfilled purchase orders | $ 1,021,000 | |||
Forward China [Member] | Subsequent Event [Member] | ||||
Related Party Transaction [Line Items] | ||||
Outstanding payables | $ 7,365,000 | |||
Forward China [Member] | Service Fees [Member] | ||||
Related Party Transaction [Line Items] | ||||
Costs and expenses related party | 1,266,000 | 1,398,000 | ||
Forward China [Member] | Purchase [Member] | ||||
Related Party Transaction [Line Items] | ||||
Costs and expenses related party | 12,799,000 | 18,055,000 | ||
Justwise Group [Member] | ||||
Related Party Transaction [Line Items] | ||||
Accounts payable to related party | 10,000 | 15,000 | ||
Justwise Group [Member] | Koble [Member] | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related party | 2,058,000 | 1,741,000 | ||
Related party costs | 127,000 | 90,000 | ||
Justwise Group [Member] | Koble [Member] | Selling And Marketing [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related party costs | 120,000 | 84,000 | ||
Justwise Group [Member] | Koble [Member] | Cost of Sales [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related party costs | 7,000 | 6,000 | ||
Board [Member] | Jenny P Yu [Member] | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related party | 626,000 | 780,000 | ||
Board [Member] | Oem Distribution Division [Member] | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related party | $ 0 | $ 13,000 |
401(k) PLAN (Details Narrative)
401(k) PLAN (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Pension contribution | $ 426,000 | $ 379,000 |
Cost of Sales [Member] | ||
Pension contribution | 310,000 | 313,000 |
Selling and Marketing Expense [Member] | ||
Pension contribution | 25,000 | 16,000 |
General and Administrative Expense [Member] | ||
Pension contribution | $ 91,000 | $ 50,000 |
SEGMENTS AND CONCENTRATIONS (De
SEGMENTS AND CONCENTRATIONS (Details - Operations) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 36,688,307 | $ 38,206,958 |
Total (loss)/income from operations | 159,658 | 588,470 |
Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 36,688,000 | 38,207,000 |
Total (loss)/income from operations | 160,000 | 588,000 |
Total segment operating income | 2,622,000 | 3,053,000 |
General corporate expenses | (2,462,000) | (2,465,000) |
Other expense/(income), net | (19,000) | 136,000 |
Income from continuing operations before income taxes | 179,000 | 452,000 |
Depreciation and amortization | 316,000 | 309,000 |
Operating Segments [Member] | OEM Distribution [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 14,002,000 | 18,036,000 |
Total (loss)/income from operations | 440,000 | 905,000 |
Depreciation and amortization | 4,000 | 8,000 |
Operating Segments [Member] | Design [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 22,686,000 | 20,171,000 |
Total (loss)/income from operations | 2,182,000 | 2,148,000 |
Depreciation and amortization | $ 312,000 | $ 301,000 |
SEGMENTS AND CONCENTRATIONS (_2
SEGMENTS AND CONCENTRATIONS (Details - Segment Assets) - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Revenue, Major Customer [Line Items] | ||
Total assets | $ 17,386,142 | $ 20,939,015 |
Net Assets, Segment [Member] | ||
Revenue, Major Customer [Line Items] | ||
Total segment assets | 9,199,000 | 10,392,000 |
General corporate assets | 6,924,000 | 6,731,000 |
Discontinued assets held for sale | 508,000 | 3,150,000 |
Other assets of discontinued retail segment | 755,000 | 666,000 |
Total assets | 17,386,000 | 20,939,000 |
Net Assets, Segment [Member] | OEM Distribution [Member] | ||
Revenue, Major Customer [Line Items] | ||
Other Assets | 2,478,000 | 4,276,000 |
Net Assets, Segment [Member] | Design [Member] | ||
Revenue, Major Customer [Line Items] | ||
Other Assets | $ 6,721,000 | $ 6,116,000 |
SEGMENTS AND CONCENTRATIONS (_3
SEGMENTS AND CONCENTRATIONS (Details - Geographic Concentrations) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | $ 36,688,307 | $ 38,206,958 |
Reportable Subsegments [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 36,688,000 | 38,207,000 |
UNITED STATES | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 27,116,000 | 25,538,000 |
CHINA | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 3,443,000 | 5,325,000 |
GERMANY | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 3,000,000 | 2,976,000 |
POLAND | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 1,275,000 | 2,643,000 |
Other Foreign Countries [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | $ 1,854,000 | $ 1,725,000 |
SEGMENTS AND CONCENTRATIONS (_4
SEGMENTS AND CONCENTRATIONS (Details Narrative) - Customer Concentration Risk [Member] | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue Benchmark [Member] | One Customer [Member] | OEM Distribution [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 11.20% | |
Revenue Benchmark [Member] | One Customer [Member] | Design [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 27.90% | 11.80% |
Revenue Benchmark [Member] | Two Customers [Member] | OEM Distribution [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 25.50% | |
Revenue Benchmark [Member] | Major Diabetic Customers [Member] | OEM Distribution [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 13% | |
Accounts Receivable [Member] | One Customer [Member] | OEM Distribution [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 12% | |
Accounts Receivable [Member] | One Customer [Member] | Design [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 31.10% | |
Accounts Receivable [Member] | Two Customer [Member] | OEM Distribution [Member] | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk, percentage | 28.10% |
LINE OF CREDIT (Details Narrati
LINE OF CREDIT (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Line of Credit Facility [Line Items] | ||
Line of credit facility maximum borrowing capacity | $ 1,300,000 | |
IPS [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility maximum borrowing capacity | $ 1,300,000 | |
Line of credit expiration date | May 31, 2024 | |
Line of credit interest rate | 0.75% above The Wall Street Journal prime rate. | |
Line of credit effective interest rate | 9.25% | 7% |
Line of credit facility borrowing capacity | $ 1,300,000 | $ 1,300,000 |