Company: FWDI
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001683168-25-003548
Chunk: 37

Company: Forward Industries, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Item 1
Chunk 37
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 expected reduction in revenues following the loss of
a significant customer.

 22 

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.

We generated a loss from
continuing operations of $2,720,000 in the 2025 Period compared to $992,000 in the 2024 Period. 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 $2.47 and $0.90 for the 2025 Period and the 2024 Period, respectively.

LIQUIDITY AND CAPITAL RESOURCES

Our primary source of liquidity
is our operations. The primary demand on our working capital has historically been (i) operating losses, (ii) repayment of debt obligations,
and (iii) any increases in accounts receivable and inventories arising in the ordinary course of business. Historically, our sources of
liquidity have been adequate to satisfy working capital requirements arising in the ordinary course of business. At March 31, 2025, our
working capital (excluding discontinued assets held for sale) was $2,784,000 compared to working capital of $4,663,000 at September 30,
2024. The decrease was primarily due to lower cash and accounts receivable balances.

Forward China, our largest
vendor and an entity owned by our Chairman of the Board and Chief Executive Officer, holds a $1,600,000 promissory note (the “FC
Note”) issued by us which matures on June 30, 2025 (see Note 8 to the condensed consolidated financial statements). The outstanding
balance of the FC Note has been reduced to $600,000 following principal payments totaling $1,000,000 made through March 31, 2025. While
the FC Note has been extended multiple times to support our liquidity position, we intend to fund the repayment at maturity using existing
cash balances, proceeds from equity and/or debt financing, and/or by seeking additional extensions as deemed necessary. Additionally,
Forward China has extended payment terms on our outstanding payables due to them when necessary. At March 31, 2025, our