Company: FWDI
Filing Date: 2025-09-16
Form Type: 8-K
Source: 0001683168-25-007036
Chunk: 107

Company: Forward Industries, Inc.
Filing Date: 2025-09-16
Form: 8-K
Item: Item 1
Chunk 107
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 design segment was primarily driven by one customer whose revenue declined approximately $470,000, as well as a net decrease in
volume of work and projects with continuing customers, partially offset by projects from new customers. In December 2024, our largest
design customer notified us of its plan to discontinue their insulin patch pump program, on which the Company was working. We expect this
to cause a material decrease in our revenues beginning in the second quarter of fiscal 2025. We are working on cost reduction efforts
to mitigate the reduction in revenue.

Our gross margin decreased
from 28.0% in the 2024 Quarter to 24.5% in the 2025 Quarter driven by lower utilization rates and a decline in billable project hours,
partially offset by an increase in the average bill rate.

Sales and marketing expenses
decreased primarily due to lower personnel costs and decreased slightly as a percentage of revenues.

General and administrative
expenses increased slightly in the 2025 Quarter. Higher professional fees and an increase in bad debt expense were partially offset by
a reduction in various other expenses, primarily director compensation. Management continues to monitor the various components of general
and administrative expenses and how these costs are affected by inflationary and other factors. We intend to adjust these costs as needed
based on the overall needs of the business.

 A-9 

There were no significant
changes to other income/expense as the decrease in interest expense resulting from a reduction in the amount of debt outstanding was mostly
offset by a decrease in interest income and other components of other income/expense.

During the 2025 Quarter,
we recorded a goodwill impairment charge of $225,000 related to the IPS reporting unit. This impairment charge resulted from the quantitative
goodwill impairment testing performed at December 31, 2024 and was driven by the expected reduction in revenues following the loss of
a significant customer.

We generated a loss from
continuing operations of $897,000 in the 2025 Quarter compared to $365,000 in the 2024 Quarter. We maintain significant net operating
loss carryforwards and do not recognize a significant income tax expense or benefit as our deferred tax provision is typically offset
by a full valuation allowance on our net deferred tax asset.

Consolidated basic and diluted
loss per share from continuing operations were $0.82 and $0.33 for the 2025 Quarter and the 2024 Quarter, respectively.

LIQUIDITY AND
CAPITAL RES