Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 442

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 2
Chunk 442
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 the design segment, a decrease of $4,405,000 in gross profit and
a reduction in gross margin from 25.9% in Fiscal 2024 to 5.7% in Fiscal 2025, driven by lower utilization rates, partially mitigated by
staff reductions in January and June 2025.

Sales and marketing expenses
increased primarily due to increased corporate marketing spend of $500,000 related to corporate market research related activities and
was partially offset by a $240,000 reduction in the design segment, driven by cost reduction efforts, including lower personnel costs
and lower marketing spend.

 35 

Corporate general and administrative
expenses increased $4,392,000 due to higher share-based compensation, professional fees related to the sale of the OEM segment and our
recent financing transactions, costs associated with additional shareholder meetings and higher investor relations spending. Design segment
expenses decreased $769,000 due to lower personnel costs related to staff reductions and other cost-cutting measures in response to the
decline in revenues. Digital assets general and administrative expenses of $539,000 are asset management fees to Galaxy Digital. 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 Fiscal 2025, the Company
recorded goodwill impairment charges of $1,167,000 related to the IPS reporting unit and $391,000 related to the Kablooe reporting unit,
and intangible asset impairment charges of $271,000 related to the IPS reporting unit and $197,000 related to the Kablooe reporting unit,
all of which are included in the design segment. These impairment charges resulted from recurring impairment testing and were driven by
historical losses and a reduction in expected future performance of the reporting units.

The change in other expense/(income),
net is due to a $160,035,000 reduction in the fair value of our digital assets resulting from a decline in the market value of SOL, a
$658,000 increase in the estimated fair value of the warrant liability from July 1, 2025 through August 8, 2025 based on changes in the
inputs to the valuation model, and lower interest income, interest expense and foreign currency exchange rate losses.

In Fiscal 2025, we recorded a
tax provision of $20,000, incurred a loss from continuing operations before income taxes of