Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 37

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 1
Chunk 37
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) of, or eliminates, their orders or engagement from us by amounts
that are material to our design business.

The gross margins, and therefore the potential
profitability, in our design business vary considerably, and if the revenue contribution from one or more customers or projects changes
materially, our gross profit percentage may fluctuate.

Our design business gross profit
margins can vary widely depending on the project type, customer, and contract size. Because of this variability, we anticipate that gross
margins, and accordingly their impact on operating income or loss, may fluctuate significantly depending on the relative revenue contribution
from each customer or project. Similarly, because we offer a wide range of services which often vary with each customer and project, we
face challenges in maintaining and enhancing operational efficiencies. For example, because of the range of products and services we offer
and our general lack of specializations within our fields relative to some of our competitors, we may not enjoy the advantages offered
by more focused or streamlined operations, such as economies of scale or improved production capabilities from our labor, facilities,
and procedures with the passage of time. If our gross margins decrease, the results of operations in our design business will be adversely
affected.

 22 

Issues with our products or services may lead
to product liability, personal injury or property damage claims, recalls, withdrawals, replacements of products, or regulatory actions
by governmental authorities that could divert resources, affect business operations, decrease sales, increase costs, and put us at a competitive
disadvantage, any of which could have a significant adverse effect on our financial condition.

Our design business may experience
issues with products that we develop, or with the services we render, that may lead to product liability, personal injury or property
damage claims, recalls, withdrawals, replacements of products, or regulatory actions by governmental authorities. Any of these activities
could result in increased governmental scrutiny, harm to our reputation, reduced demand by consumers for our services, decreased willingness
by customers to procure our services, absence or increased cost of insurance, or additional safety and testing requirements. Such results
could divert development and management resources, adversely affect our business operations, decrease sales, increase legal fees and other
costs, and put us at a competitive disadvantage compared to other companies not affected by similar issues, any of which could have a
significant adverse effect on our financial condition and results of operations. The Company carries liability insurance and works with
its customers to satisfy quality concerns; however, there can be