Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 1210

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 9B
Chunk 1210
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 states where net operating loss carryforwards (“NOLs”) were not available.

At September 30, 2025, the Company
had available NOLs for U.S. federal income tax purposes of $15,776,000 and NOLs for state income tax purposes of $9,711,000. NOLs generated
prior to 2018 expire beginning in 2031 while NOLs generated after 2018 have an indefinite carryforward period. The NOLs result in a deferred
tax asset of $3,313,000 with respect to U.S. federal income taxes and $713,000 for state income taxes. Total net deferred tax assets,
before valuation allowance, were $45,643,000 and $4,307,000 at September 30, 2025 and 2024, respectively.

     F-31 

FORWARD INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

At September 30, 2025, 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. Accordingly, the Company has determined to maintain a full valuation allowance against its net deferred tax assets.
At September 30, 2025 and 2024, the valuation allowance was $45,643,000 and $4,307,000, respectively. In the future, the utilization of
the Company’s NOLs may be subject to certain change of control limitations as described below. 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.

Utilization of NOLs may be subject
to a substantial annual limitation under Section 382 of the Internal Revenue Code of 1986 (the “Code”) due to ownership change
limitations that have occurred previously or that could occur in the future. These ownership changes may limit the amount of NOLs that
can be utilized annually to offset future taxable income. An ownership change pursuant to the