Company: FWDI
Filing Date: 2025-11-10
Form Type: 424B5
Source: 0001683168-25-008141
Chunk: 38

Company: Forward Industries, Inc.
Filing Date: 2025-11-10
Form: 424B5
Chunk 38
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aking.
We may also negotiate bespoke arrangements with DeFi teams and validator operators to further enhance returns.

| 6 |

How We Manage Liquidity

We acknowledge that during the deactivation period,
staked SOL is not earning rewards and is not yet liquid. We factor this into our liquidity and risk management framework.

Our staking program involves a temporary loss
of transferability of staked SOL during the “deactivation” or cooldown period. Under normal conditions, we expect to regain
complete control over un-staked SOL within approximately 48 hours; however, network conditions could extend this period. To mitigate liquidity
risk, we intend to maintain a portion of our treasury in un-staked SOL and cash to meet short-term obligations. We may also utilize capital
markets instruments, such as structured products and non-dilutive debt, to enhance liquidity and expand our SOL holdings. Our use of SOL
options may involve margin requirements or collateral posting, which could reduce available liquidity. Option premiums paid or received
may also create volatility in our near-term cash flows.

We also intend to participate in liquid staking
protocols by converting a portion of our SOL holdings into Liquid Staking Tokens (“LSTs”). This will allow us to earn
staking rewards while maintaining the liquidity of our underlying SOL and enabling us to use the LSTs in various DeFi applications. We
may manage a mix of traditionally staked SOL and LSTs to optimize liquidity.

Use of Custodians and Storage of SOL

We solely utilize third-party qualified custodians
to hold our SOL, other than the portion of our SOL held through a single non-qualified custodian, as set forth below. We do not self-custody
our SOL. We use qualified custodians that utilize risk management and operational best practices related to hot vs. cold storage, access
controls, custody technology and insurance, among other practices. We are in the process of onboarding with other qualified custodians
to ensure that we mitigate our SOL treasury risk through the use of several qualified custodians.

Our primary custodians generally maintain the
majority of their custodied SOL holdings in cold storage (>95%), with hot wallets used only for limited operational purposes. Custodians
employ SOC 2–audited security controls, geographic redundancy, multi-person approval processes, and conduct key-generation ceremonies
in offline, secure facilities. Private keys are never exposed to networked devices. Custodians maintain insurance coverage, which is in
addition to