Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 1636

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 14
Chunk 1636
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 of business or the usage of a significant portion of historic assets in a business.
Failure to meet these requirements not only affects the ability to utilize NOLs, but may also result in limitations or forfeiture of other
deferred tax assets.

The Company has engaged external
tax experts to perform a comprehensive Section 382 study, but as of the date of this filing, this study has not been completed and therefore,
the effects of any Section 382 limitations on the utilization of NOLs cannot be determined as of the date of this filing. If the Company
earns taxable income, such limitations could result in an increased future income tax liability, and its future cash flows could be adversely
affected.

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 2025  
    Fiscal 2024 
  
    U.S. federal statutory rate 
     21.0%  
     21.0% 
  
    State tax rate, net of federal benefit 
     4.0%  
     2.1% 
  
    Foreign rate differential 
     0.0%  
     0.7% 
  
    Tax return to provision adjustments 
     (0.1%) 
     (14.3%)
  
    Effect of state tax rate change 
     0.1%  
     1.9% 
  
    Change in valuation allowance 
     (24.8%) 
     (12.6%)
  
    Permanent differences 
     (0.2%) 
     (0.1%)

    Effective tax rate 
     0.0%  
     (1.3%)

     F-32 

FORWARD INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

At September 30, 2025 and 2024,
the Company had no significant uncertain tax positions or related interest or penalties requiring accrual. It is the Company’s policy
to recognize interest and/or penalties, if any, related to income tax matters in income tax expense in the consolidated statements of
operations. For the periods presented in the accompanying consolidated statements of operations, no material income tax related interest
or penalties were assessed or recorded. All fiscal years prior to the fiscal year ended September