Financial Performance - The company reported a loss from continuing operations before income taxes of $1,924,600 for 2024, compared to a profit of $178,664 in 2023[41]. - Basic loss per share from continuing operations was $(1.77) in 2024, compared to a profit of $0.14 in 2023[41]. - The company reported a net loss of $1,950,587 for Fiscal 2024, compared to a net loss of $3,736,657 in Fiscal 2023, indicating an improvement in financial performance[93]. - For Fiscal 2024, total consolidated net revenues were $30,195,000, a decrease of 17.8% from $36,688,000 in Fiscal 2023[165]. - The OEM distribution segment generated revenues of $10,204,000 in Fiscal 2024, a decline of 27.5% from $14,002,000 in Fiscal 2023[197]. - The design segment revenues were $19,991,000 in Fiscal 2024, down 11.9% from $22,686,000 in Fiscal 2023[197]. - For the fiscal year ended September 30, 2024, the company reported a net loss from continuing operations of $1,951,000, compared to a loss of $3,736,000 for the fiscal year ended September 30, 2023[202]. - The basic earnings per share for the fiscal year ended September 30, 2024, was $(1.77), a decrease from $(3.39) in the previous year[202]. Assets and Liabilities - Total assets decreased from $17,386,142 in 2023 to $14,768,356 in 2024, a decline of approximately 15%[39]. - Current liabilities reduced from $10,836,099 in 2023 to $9,371,596 in 2024, representing a decrease of about 13.5%[39]. - Goodwill decreased from $1,758,682 in 2023 to $1,558,682 in 2024, a reduction of approximately 11.4%[39]. - Total shareholders' equity increased from $2,616,261 in 2023 to $2,967,034 in 2024, an increase of about 13.4%[39]. - As of September 30, 2024, the company had an accumulated deficit of $19,637,140 and working capital of $273,000[96]. - Accounts receivable amounted to $4,460,000 at September 30, 2024, down from $6,949,000 at September 30, 2023[79]. - The company had cash at the end of the year amounting to $3,022,436, a decrease from $3,180,468 at the beginning of the year[93]. - The company had total accrued expenses of $613,000 as of September 30, 2024, down from $1,358,000 in 2023[122]. - The total amount related to the retail segment included in Due to Forward China was approximately $641,000 and $1,002,000 at September 30, 2024, and 2023, respectively[130]. - The company had approximately $4,881,000 in outstanding payables to Forward China as of September 30, 2024, which is subject to a collection limit agreement[212]. Operational Changes - The company ceased operations of its retail distribution segment in July 2023, which is now classified as discontinued operations[46]. - The retail distribution segment was fully discontinued as of September 30, 2024, following a strategic shift due to recurring losses, with remaining retail inventory liquidated[114]. - The company entered into an agreement with Forward China to limit outstanding payables to $500,000 in any 12-month period, effective November 2023[47]. - The company entered into agreements to convert $2,200,000 of payables to Forward China into 2,200 shares of Series A-1 convertible preferred stock[213]. - The company reduced the fixed portion of the sourcing fee to Forward China from $100,000 to $65,833 per month effective October 2023[211]. Expenses and Costs - Sales and marketing expenses decreased from $1,663,791 in 2023 to $1,424,829 in 2024, a decline of approximately 14.3%[41]. - General and administrative expenses slightly decreased from $6,541,036 in 2023 to $6,516,246 in 2024, a reduction of about 0.4%[41]. - The company recognized share-based compensation of $101,360 in Fiscal 2024, up from $86,491 in Fiscal 2023[93]. - The Company recognized stock option compensation expenses of $101,000 in fiscal 2024, compared to $86,000 in fiscal 2023[159]. - The Company incurred interest payments of $63,000 on a promissory note to Forward China in Fiscal 2024, compared to $104,000 in Fiscal 2023[192]. - The Company recorded service fees to Forward China of $891,000 in Fiscal 2024, down from $1,266,000 in Fiscal 2023[187]. - Total operating lease expense for fiscal 2024 was $619,000, slightly down from $621,000 in fiscal 2023[206]. - The company has future minimum lease payments totaling $3,464,000, with a present value of lease liabilities at $2,834,000[208]. Impairments and Valuation - The company performed a goodwill impairment analysis, resulting in a charge of $200,000 for Fiscal 2024[93]. - The Company recognized a goodwill impairment charge of $200,000 for the Kablooe reporting unit in fiscal 2024, primarily due to a reduction in expected future performance[135]. - The carrying amount of the Kablooe reporting unit decreased from $1,759,000 on September 30, 2023, to $1,559,000 on September 30, 2024, after the impairment[137]. - The fair value of the earnout liability from the acquisition of Kablooe is measured using a Black-Scholes valuation model, categorized within level 3 of the fair value hierarchy[122]. - The Company maintained a full valuation allowance against its net deferred tax assets, with the valuation allowance increasing from $4,102,000 in 2023 to $4,307,000 in 2024, reflecting a change of $205,000[164]. Tax and NOLs - The Company recorded a provision for income taxes of $23,000 in Fiscal 2024, compared to $20,000 in Fiscal 2023, primarily for state income tax expenses[175]. - The Company had available net operating losses (NOLs) of $13,012,000 for U.S. federal income tax purposes and $7,425,000 for state income tax purposes as of September 30, 2024[176]. Future Outlook - The company’s forecasted operating results are sensitive to significant assumptions regarding future revenue and expenses[66]. - The company has suffered recurring losses from operations, raising substantial doubt about its ability to continue as a going concern[63]. - Revenue from a significant customer in the design segment represented 25.2% of consolidated net revenues in Fiscal 2024, down from 27.9% in Fiscal 2023, with expectations of a material revenue decrease starting Q2 Fiscal 2025 due to program discontinuation[167].
Forward Industries(FORD) - 2024 Q4 - Annual Report