Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 175

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 1A
Chunk 175
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 highly variable, with short lead times, which can cause our quarterly revenues, and consequently our
results of operations, to vary over a relatively short period of time.

Critical Accounting Estimates

Our financial statements have
been prepared in accordance with accounting principles generally accepted in the United States, which requires the use of certain estimates
and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Although we base our estimates on historical
experience and various other assumptions that we believe to be reasonable under the circumstances at the time of evaluation, changes in
our business strategy, adverse changes in market conditions or various other factors could cause actual results to differ from these estimates
and such differences could be significant.

We have identified the below
critical accounting estimates. An accounting estimate is considered critical if both: (a) the nature of the estimate or assumption is
material due to the levels of subjectivity and judgment involved, and (b) the impact of changes in the estimate and assumption has had
or is reasonably likely to have a material effect on the consolidated financial statements. This listing is not a comprehensive list of
all our accounting policies. For further information regarding the application of these and other accounting policies, see Note 2 of the
consolidated financial statements.

 33 

Goodwill and Intangible Assets

The Company reviews goodwill
for impairment at least annually, or more often if triggering events occur. The Company has two reporting units with goodwill (the IPS
and Kablooe operating segments) and we perform our annual goodwill impairment test on September 30, the end of the fiscal year, or upon
the occurrence of a triggering event. Evaluating goodwill for impairment will often require the estimation of the fair value of the underlying
reporting unit, the inputs to which require a significant amount of judgment, such as future cash flows, future growth rates and profitability.
Changes in our business strategy or adverse changes in market conditions could impact impairment analyses and require the recognition
of an impairment charge. Although we base our estimates on historical experience and various other assumptions that we believe to be reasonable
under the circumstances at the time of evaluation, actual results could differ from these estimates.

Intangible assets include trademarks
and customer relationships, which were acquired as part of the acquisitions of IPS in Fiscal 2018 and Kablooe in Fiscal 2020 and are amortized
over their estimated useful lives, which are periodically evaluated for reasonableness. Our intangible assets are reviewed for impairment
whenever events or changes in circumstances indicate their