Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 36

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 1
Chunk 36
---
. Failure to meet performance standards or complete performance on a timely basis could also adversely
affect our reputation.

 21 

Our design business results of operations could
suffer if we are not able to maintain adequate utilization of our workforce.

The cost of providing our design
services, including the extent to which we utilize our workforce, affects our profitability. The rate at which we utilize our workforce
is affected by a number of factors, including:

    ·
    our ability to transition employees from completed projects to new assignments and to hire and assimilate new employees;

    ·
    our ability to forecast demand for our services and thereby maintain an appropriate 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