Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 38

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 1
Chunk 38
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 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. Since little or no significant proprietary technology is involved in the services
we sell, others may enter the business with relative ease and compete against us. Such competition may result in the diminution of our
market share or the loss of one or more major customers, thereby adversely affecting the net revenues, results of operations, and financial
condition of our design business. Further, while management believes there are a limited number of competitors offering the broad range
of design and development services we do, there are numerous design and engineering companies that compete with us in specific industries
and/or with specific targeted skills or competitive advantages, and some prospective customers might prefer a competitor that focuses
in a specialty area in which they operate or target over an offering such as ours that is not limited to any specific industry or product
type.

Many of our competitors are larger
and more diversified than we are and may be better able to withstand a downturn in the general economy or in the product areas in which
our design business specializes. Potential customers may prefer the pricing terms offered by competitors. These competitors may also have
less sales concentration than we do and be better able to withstand the loss of a key customer or diminution in its orders. If we are
not effectively able to compete, the results of operations in our design business will be adversely affected.

If we experience system interruptions, it may
cause us to lose customers and may harm our design business.

Our inability to maintain and
improve our information technology systems and infrastructure may result in system interruptions. System interruptions and slow delivery
times, unreliable service levels, prolonged or frequent service outages, or insufficient capacity may prevent us from efficiently providing
services to our design customers, which could result in our losing customers and revenue.

Certain of our IT infrastructure
including power, security, connectivity and other services is housed within our office space in which we lease. We