Company: FWDI
Filing Date: 2025-06-20
Form Type: DEF 14A
Source: 0001683168-25-004653
Chunk: 50

Company: Forward Industries, Inc.
Filing Date: 2025-06-20
Form: DEF 14A
Chunk 50
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 | Under New York law, a shareholder may bring a derivative action if the shareholder was a shareholder at the time of the transaction of which they complain or thereafter acquired the shares by operation of law. Additionally, the complaint must set forth with particularity the efforts of the plaintiff to secure the initiation of such action by the board or the reasons for not making such effort. |     | Under Nevada law, a shareholder may only bring a derivative action if: (1) the shareholder was a shareholder at the time of the transaction of which they complain or thereafter acquired the shares by operation of law; and (2) the shareholder fairly and adequately represents the interests of the corporation in enforcing the right of the corporation. Additionally, the shareholder must first make a written demand on the corporation to take suitable action before filing the derivative suit, unless such demand would be futile. |

Interest of Our Directors and Executive Officers in the Nevada Reincorporation

Our directors and executive officers
may have interests in the Nevada Reincorporation transaction that are different from, or in addition to, the interests of the shareholders
generally, which may present actual or potential conflicts of interest. For example, the Nevada Reincorporation provides our officers
and directors more clarity and certainty in the reduction of their potential personal liability and strengthens the ability of directors
to resist coercive and inadequate takeover bids. The Board has considered these interests, among other matters, in reaching its decision
to approve the Nevada Reincorporation and to recommend that our shareholders vote in favor of this proposal.

U.S. Federal Income Tax Consequences

The following discussion is a
summary of certain U.S. federal income tax consequences of the Nevada Reincorporation to the Company of U.S. holders that hold shares
of our common stock as capital assets for U.S. federal income tax purposes. The discussion is based on the Code, regulations promulgated
under the Code by the U.S. Treasury Department (including proposed and temporary regulations), rulings, current administrative interpretations
and official pronouncements of the IRS, and judicial decisions, all as currently in effect and all of which are subject to differing interpretations
or to change, possibly with retroactive effect. Such change could materially and adversely affect the tax consequences described below.
No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax consequences
described herein.

This summary does not address
all aspects of U.S. federal income taxation that may be relevant