Company: FWDI
Filing Date: 2025-09-16
Form Type: 8-K
Source: 0001683168-25-007036
Chunk: 2

Company: Forward Industries, Inc.
Filing Date: 2025-09-16
Form: 8-K
Item: Item 8
Chunk 2
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 the Company will continue
as a going concern. As discussed in Notes 2 and 4 to the consolidated financial statements, the Company has goodwill and intangible assets
related to its Kablooe, Inc. (“Kablooe”) operating unit. The Company reviews goodwill for impairment at least annually, or
more often if triggering events occur, and performs an annual goodwill impairment test on September 30, the end of the fiscal year, or
upon the occurrence of a triggering event. The Company reviews intangible assets for impairment whenever events or changes in circumstances
indicate that the carrying amount of the asset may not be recoverable. The Company estimates the fair value of its reporting unit using
a combination of the income, or discounted cash flows approach, and the market approach, which utilizes Kablooe’s forecasted operating
results. Specifically, the Company’s forecasted cash flows are sensitive to significant assumptions such as forecasted revenue and
operating results, all of which are affected by the expected future market or economic conditions and inflation.

Significant judgment is exercised by the Company in
forecasting operating results which factor into the Company’s going concern assessment and its goodwill and intangible assets impairment
analysis related to its Kablooe operating segment. Specifically, the forecasted operating results used by the Company in its going concern
assessment and the impairment analysis of goodwill and intangible assets included in its Kablooe operating segment are sensitive to significant
assumptions such as future revenue and expenses, all of which are affected by uncertain future events.

Given these factors, the related audit effort in evaluating
management’s judgments in forecasting operating results which factor into the Company’s going concern assessment and its goodwill
and intangible assets impairment analysis related to its Kablooe reporting segment, were challenging, subjective, and complex and required
a high degree of auditor judgment.

How our Audit Addressed the Critical Audit Matter

Our principal audit procedures related to the forecasted
cash flows and operating results used in the Company’s going concern assessment and impairment of Kablooe’s goodwill and intangible
assets analysis included the following:

    ·
    We gained an understanding of and evaluated the design and implementation of the Company’s process to develop forecasted cash flows and operating results, including significant assumptions used in developing forecasted cash flows and operating results as well as considering the appropriateness of the underlying data used by the Company in its analyses.

    ·
    Evaluating the reasonableness of the Company’s forecasted revenue, expenses, and cash