Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 160

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 1A
Chunk 160
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 because we offer a wide range of services which often vary with each customer and project, we
face challenges in maintaining and enhancing operational efficiencies. For example, because of the range of products and services we offer
and our general lack of specializations within our fields relative to some of our competitors, we may not enjoy the advantages offered
by more focused or streamlined operations, such as economies of scale or improved production capabilities from our labor, facilities,
and procedures with the passage of time. If our gross margins decrease, the results of operations in our design business will be adversely
affected.

 22 

Issues with our products or services may lead
to product liability, personal injury or property damage claims, recalls, withdrawals, replacements of products, or regulatory actions
by governmental authorities that could divert resources, affect business operations, decrease sales, increase costs, and put us at a competitive
disadvantage, any of which could have a significant adverse effect on our financial condition.

Our design business may experience
issues with products that we develop, or with the services we render, that may lead to product liability, personal injury or property
damage claims, recalls, withdrawals, replacements of products, or regulatory actions by governmental authorities. Any of these activities
could result in increased governmental scrutiny, harm to our reputation, reduced demand by consumers for our services, decreased willingness
by customers to procure our services, absence or increased cost of insurance, or additional safety and testing requirements. Such results
could divert development and management resources, adversely affect our business operations, decrease sales, increase legal fees and other
costs, and put us at a competitive disadvantage compared to other companies not affected by similar issues, any of which could have a
significant adverse effect on our financial condition and results of operations. The Company carries liability insurance and works with
its customers to satisfy quality concerns; however, there can be no assurance that customers will not seek damages beyond our insurance
coverage limits. While we have not experienced significant claims for damages or losses from the development or design of products to
date, any uninsured or underinsured claim, if successful and of significant magnitude, could have a material adverse effect on our business,
prospects, results of operations or financial condition. Our insurance coverage is subject to policy limits, deductibles, and exclusions
that may not adequately cover all potential liabilities arising from our operations.

The design business is highly competitive and
does not pose significant barriers to entry.

There are many competitors in
the engineering design business and competition is intense