Company: FWDI
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001683168-25-003548
Chunk: 36

Company: Forward Industries, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Item 1
Chunk 36
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     (1,735,000) 
     176.1% 
  
    Other expense, net 
     –  
     7,000  
     (7,000) 
     (100.0%)
  
    Loss from continuing operations 
    $(2,720,000) 
    $(992,000) 
    $(1,728,000) 
     174.2% 

The discussion that follows
below provides further details about our results from continuing operations for the 2025 Period as compared to the 2024 Period.

The decline in net revenues
from the 2024 Period to the 2025 Period is primarily attributable to the loss of a major customer in December 2024 as well as a net decrease
in volume of work and projects with continuing customers, partially offset by projects from new customers. In December 2024, our largest
design customer notified us of its plan to discontinue their insulin patch pump program, on which we were working. We expect this to continue
to cause a material decrease in our revenues in fiscal 2025. We are working on cost reduction efforts to mitigate the reduction in revenue.
Additionally, based on current economic conditions, in part due to the uncertainty in how tariffs will affect our customers, we believe
that our revenues will continue to decrease in the design business as customers are slow to commit funds to projects.

Our gross margin decreased
from 27.1% in the 2024 Period to 12.3% in the 2025 Period, driven by lower staff utilization rates and was partially offset by an increase
in the average bill rate.

Sales and marketing expenses
decreased primarily due to lower personnel costs but remained flat at 4.0% of revenues in both periods.

General and administrative
expenses decreased in the 2025 Period. Lower personnel costs related to staff reductions, coupled with a reduction in expenses related
to our annual shareholder meeting and lower director compensation were partially offset by higher professional fees. Management continues
to monitor the various components of general and administrative expenses and how these costs are affected by inflationary and other factors.
We intend to adjust these costs as needed based on the overall needs of the business.

During the 2025 Period, we
recorded a goodwill impairment charge of $225,000 related to the IPS reporting unit. This impairment charge resulted from the quantitative
goodwill impairment testing performed at December 31, 2024 and was driven by the