Company: FWDI
Filing Date: 2025-09-17
Form Type: S-3ASR
Source: 0001683168-25-007043
Chunk: 22

Company: Forward Industries, Inc.
Filing Date: 2025-09-17
Form: S-3ASR
Chunk 22
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 Solana operates with a proof-of-stake combined with proof-of-history consensus mechanism, which differs significantly
from bitcoin’s proof-of-work mining mechanism. This strategic shift requires specialized employee skillsets and operational, technical
and compliance infrastructure to support SOL and related staking activities. This also requires that we implement different security protocols
and treasury management practices. Further, there is ongoing scrutiny and limited formal guidance from regulatory agencies, including
Nasdaq and the SEC, with respect to the treatment of public company cryptocurrency strategies. There is no assurance that we will be able
to execute this strategy by building out the needed infrastructure within the timeframe that we currently anticipate. Errors by key management
could result in significant loss of funds and reduced rewards. As a result, our shift towards SOL could have a material adverse effect
on our business and financial condition.

| 14 |

Our shift towards a Solana-focused strategy requires substantial changes in our day-to-day operations and exposes us to significant operational risks.

Our shift towards a SOL treasury-focused strategy,
including staking, liquid staking, and other decentralized finance activities, exposes us to significant operational risks. To participate
in Solana’s Proof-of-Stake consensus mechanism, we must either operate or delegate to validator nodes, and such validator nodes
must keep software updated, maintain validator uptime and employ secure key management. In addition, the Solana ecosystem rapidly evolves,
with frequent upgrades and protocol changes that may require significant adjustments to our operational setup if we are operating a validator
node. The upgrades and protocol changes may require that we incur unanticipated costs and could cause temporary service disruptions to
the Solana network. We may also need to employ third-party service providers in our operations, which may introduce risks outside of our
control, including significant cybersecurity risks. Any of these operational risks could materially and adversely affect our ability to
execute our SOL treasury strategy and may prevent us from realizing positive returns and could severely hurt our financial condition.

The concentration of our SOL holdings enhances the risks inherent in our Solana-focused strategy.

We have and intend to purchase SOL and increase our
overall holdings of SOL in the future. The intended concentration of our SOL holdings limits the risk mitigation that we could achieve
if we were to purchase a more diversified portfolio of treasury assets, and the absence of diversification enhances the risks inherent
in our Solana-focused strategy. The price of SOL experienced a significant decline in 2022, and any similar future significant declines
in the price of SOL could have a more pronounced impact on our