Company: FWDI
Filing Date: 2025-09-16
Form Type: 8-K
Source: 0001683168-25-007036
Chunk: 105

Company: Forward Industries, Inc.
Filing Date: 2025-09-16
Form: 8-K
Item: Item 1
Chunk 105
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 impairment
annually, or more often if events or changes in circumstances indicate the carrying value of a reporting unit may exceed its fair value.
Evaluating goodwill for impairment requires a significant amount of judgment, including the estimation of future cash flows, future growth
rates and profitability. Changes in our business strategy or adverse changes in market conditions could impact impairment analyses and
require the recognition of an impairment charge. Although we base our estimates on historical experience and various other assumptions
that we believe to be reasonable under the circumstances at the time of evaluation, actual results could differ from these estimates.

In
December 2024, the Company was notified by its largest design customer of its plan to discontinue their insulin patch pump program, on
which IPS was working, and was beginning to wind down all activities related to it. Revenue from this customer (all of which related to
this program) represented approximately 25.2% of the Company’s consolidated net revenues in fiscal 2024. Due to the historically
high concentration of revenue with this customer, the loss of its business was considered a triggering event which prompted the Company
to evaluate the goodwill of the IPS reporting unit. Management performed quantitative testing on this reporting unit, which indicated
its carrying amount exceeded its fair value, resulting in a goodwill impairment charge of $225,000 in the 2025 Quarter, primarily driven
by a reduction in its expected future performance.

Due
to the historical losses of the Kablooe reporting unit, the Company elected to bypass the qualitative assessment and perform quantitative
goodwill impairment testing for the Kablooe reporting unit at September 30, 2024. This quantitative testing indicated the carrying amount
of the Kablooe reporting unit exceeded its fair value, resulting in a goodwill impairment charge of $200,000 in September 2024, primarily
driven by a reduction in its expected future performance.

We
will continue to monitor the IPS and Kablooe goodwill for impairment as needed in future periods. Changes in economic, industry or market
conditions, business operations, competition, the price of our common shares or market capitalization or our actual performance compared
with estimates of our future performance may affect the fair value of goodwill and could result in additional impairment charges in the
future.

 A-8 

Recent Accounting Pronouncements

For information on recent
accounting pronouncements and impacts, see Note 2 to the unaudited condensed consolidated financial statements.

RESULTS OF OPERATIONS FOR THE THREE MONTHS
ENDED DECEMBER 31