Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 827

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 6
Chunk 827
---
 in Fiscal 2020 and Fiscal 2018, respectively, and relate to the design segment
of our business. Intangible assets were amortized over their expected useful lives of 15 years for the trademarks and eight years for
the customer relationships. During Fiscal 2025 and Fiscal 2024, the Company recorded amortization expense related to intangible assets
of $213,000, which is included in general and administrative expenses in the Company’s consolidated statements of operations.

At September 30, 2025, due to
declining revenues and continuing losses in the design segment, the Company reviewed its intangible assets for impairment. Based on the
estimated future cash flows of the design business, the Company determined these intangible assets were no longer recoverable at September
30, 2025 and recorded an impairment charge for their remaining net carrying value.

Goodwill

Goodwill represents the future
economic benefits of assets acquired in a business combination that are not individually identified or separately recognized. The Company’s
goodwill resulted from the acquisitions of Kablooe and IPS in Fiscal 2020 and Fiscal 2018, respectively. The goodwill associated with
the IPS acquisition is not deductible for tax purposes, but the goodwill associated with the Kablooe acquisition is deductible for tax
purposes.

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. Using an income approach methodology, the fair value of the Kablooe reporting unit
was estimated with a discounted cash flow analysis incorporating variables categorized within level 3 of the fair value hierarchy such
as projected revenues, growth rate and discount rate. 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 Fiscal 2024, primarily driven by a reduction in
the expected future performance of the Kablooe reporting unit. The Company reviewed the fair value of the Kablooe reporting unit at September
30, 2025, in connection with its annual goodwill impairment evaluation. Based on a decrease in its estimated future cash flows, driven
by declining revenues and continued losses, the Company determined the carrying amount of this reporting unit exceeded its fair value
and recorded an impairment charge of $391,000 for the remaining goodwill balance.

     F-19 

FORWARD INDUSTRIES, INC. AND