Company: FWDI
Filing Date: 2025-11-14
Form Type: 424B5
Source: 0001683168-25-008451
Chunk: 33

Company: Forward Industries, Inc.
Filing Date: 2025-11-14
Form: 424B5
Chunk 33
---
 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 policies we maintain ourselves. Our custody agreements typically run for one to three years, may be terminated on 30 days’
notice, and include fees for storage and transactions. Our qualified custodians do not rehypothecate or otherwise use our SOL.

Use of DeFi Protocols

We may from time to time interact with DeFi protocols,
either directly or indirectly through staking, validator operations, custody arrangements, or liquidity management activities. DeFi protocols
generally rely on open-source smart contracts deployed on public blockchains, including SOL. While these smart contracts are intended
to operate automatically according to their code, they may contain coding errors, vulnerabilities, or design flaws that can be exploited.
We actively evaluate DeFi opportunities within the Solana ecosystem to enhance treasury productivity, while maintaining robust risk management
practices.

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SOL - The Token of the Solana Blockchain

SOL is the native token of the Solana blockchain.
SOL was created with an initial supply of 500 million SOL, though much of the initial supply was locked or earmarked for various use cases
including the community, the foundation and investors. New SOL are brought into existence primarily through inflationary rewards distributed
to validators and delegators. The SOL staking yield is made up of three primary components: inflationary rewards, transaction/priority
fees, and maximal extractable value. Inflationary rewards started out at 8.0%, and are currently 4.3%, and will fall 15% every epoch-year
until they reach a long-term floor of 1.5%. Unlock schedules applicable to these allocations may periodically increase circulating supply,
creating potential selling pressure and adversely affecting the price of SOL. Historically, 50% of all transaction fees were burned (with
the other 50% going to the validator), but now all transaction fees go to the validator after the passage and adoption of the Sol