Company: FWDI
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001683168-25-003548
Chunk: 50

Company: Forward Industries, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Item 2
Chunk 50
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4 Quarter to the 2025 Quarter is primarily attributable to the loss of a major customer in December 2024 as well as a net
decrease in volume of work and projects with continuing customers, partially offset by projects from new customers. In December 2024,
our largest design customer notified us of its plan to discontinue their insulin patch pump program, on which we were working. We expect
this to continue to cause a material decrease in our revenues in fiscal 2025. We are working on cost reduction efforts to mitigate the
reduction in revenue. Additionally, based on current economic conditions, in part due to the uncertainty in how tariffs will affect our
customers, we believe that our revenues will continue to decrease in the design business as customers are slow to commit funds to projects.

Our gross profit/(loss) margin
declined significantly, from 26.2% in the 2024 Quarter to (5.7%) in the 2025 Quarter, driven by lower staff utilization rates, and partially
mitigated by an increase in the average bill rate.

Sales and marketing expenses
decreased primarily due to lower personnel costs and increased as a percentage of revenues from 4.1% in the 2024 Quarter to 4.7% in the
2025 Quarter.

General and administrative
expenses decreased in the 2025 Quarter. Lower personnel costs and a reduction in expenses related to our annual shareholder meeting were
partially offset by higher professional fees. Management continues to monitor the various components of general and administrative expenses
and how these costs are affected by inflationary and other factors. We intend to adjust these costs as needed based on the overall needs
of the business.

The decrease in other expense,
net is due to a decrease in interest expense resulting from a reduction in the amount of debt outstanding, a decrease in interest income
resulting from lower cash balances in interest bearing accounts and a reduction in foreign currency exchange losses.

 21 

We generated a loss from
continuing operations of $1,822,000 in the 2025 Quarter compared to $627,000 in the 2024 Quarter. We maintain significant net operating
loss carryforwards and do not recognize a significant income tax expense or benefit as our deferred tax provision is typically offset
by a full valuation allowance on our net deferred tax asset.

Consolidated basic and diluted
loss per share from continuing operations were $1.65 and $0.57 for the 2025 Quarter and the 2024