Company: FWDI
Filing Date: 2025-09-16
Form Type: 8-K
Source: 0001683168-25-007036
Chunk: 30

Company: Forward Industries, Inc.
Filing Date: 2025-09-16
Form: 8-K
Item: Item 8
Chunk 30
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 state income taxes would result. In Fiscal 2024, Forward Switzerland had a net loss for tax
purposes of $96,000 and Forward UK had a net loss for tax purposes of $41,000.

At September 30, 2024, as part
of its periodic evaluation of the necessity to maintain a valuation allowance against its deferred tax assets, and after consideration
of all factors, including, among others, projections of future taxable income, current year NOL utilization and the extent of the Company’s
cumulative losses in recent years, the Company determined that, on a more likely than not basis, it would not be able to use remaining
deferred tax assets, except with respect to the U.S. federal income taxes in the event the Company elects to effect repatriation of certain
foreign source income of Forward Switzerland, which income is currently considered to be permanently reinvested and for which no U.S.
tax liability has been accrued. Accordingly, the Company has determined to maintain a full valuation allowance against its net deferred
tax assets. At September 30, 2024 and 2023, the valuation allowance was $4,307,000 and $4,102,000, respectively. The change in the valuation
allowance of $205,000 is comprised of a $228,000 increase from continuing operations and a $23,000 decrease from discontinued operations.
In the future, the utilization of the Company’s NOLs may be subject to certain change of control limitations. If the Company determines
that it will be able to use some or all of its deferred tax assets in a future reporting period, the adjustment to reduce or eliminate
the valuation allowance would reduce its income tax expense and increase after-tax income.

     F-20 

The significant elements contributing
to the difference between the U.S. federal statutory tax rate and the Company’s effective tax rate are as follows:

     Schedule of reconciliation of effective tax
    rate 

    Fiscal 2024  
    Fiscal 2023 
  
    U.S. federal statutory rate 
     21.0%  
     21.0% 
  
    State tax rate, net of federal benefit 
     2.1%  
     3.9% 
  
    Foreign rate differential 
     0.7%  
     (9.2%)
  
    Tax return to provision adjustments 
     (14.3%) 
     (94.6