Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 159

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 1A
Chunk 159
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 headcount in each of our operating units;

    ·
    our ability to engage employees in assignments during natural disasters or pandemics;

    ·
    our ability to manage attrition;

    ·
    our need to devote time and resources to training, business development, professional development, and other non-chargeable activities; and

    ·
    our ability to match the skill sets of our employees to the needs of the marketplace.

If we over-utilize our workforce,
our employees may become disengaged, which could impact employee attrition. If we under-utilize our workforce, our profit margin and profitability
will suffer.

Future design revenues are difficult to predict
and are likely to show significant variability as a consequence of customer concentration.

Because our design revenues can
at times be concentrated in a few large customers, and because the volumes of these customers’ order flows to us can fluctuate markedly
in a short period of time, our quarterly design revenues, and consequently our design business results of operations, may be highly variable
and subject to significant changes over a relatively short period of time. Our large design customers may have their budgets limited from
many factors including economic declines (resulting from a pandemic, tariffs or any other reason) causing discretionary budgets to decline
or may from-time-to-time choose to do their development work in-house. Further, in our design business, customers may decline to use us
for future work after a project is completed, which may be due to lack of continued need for our services after their product has been
developed, produced, and marketed or because they are dissatisfied with our pricing or performance. All of these factors tend to lead
to a high degree of variability in our quarterly design revenue levels. Significant, rapid shifts in our operating results may occur if
and when one or more of these customers increases or decreases the size(s) of, or eliminates, their orders or engagement from us by amounts
that are material to our design business.

The gross margins, and therefore the potential
profitability, in our design business vary considerably, and if the revenue contribution from one or more customers or projects changes
materially, our gross profit percentage may fluctuate.

Our design business gross profit
margins can vary widely depending on the project type, customer, and contract size. Because of this variability, we anticipate that gross
margins, and accordingly their impact on operating income or loss, may fluctuate significantly depending on the relative revenue contribution
from each customer or project. Similarly,