Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 20

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 1
Chunk 20
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 hold are
classified as a security, we may be subject to extensive regulation, which could result in significant costs or force us to cease operations.

Regulatory changes or interpretations
that classify digital assets that we hold as a security under the Securities Act of 1933 or the Investment Company Act, could require
us to register as an investment company and comply with additional regulations. Compliance with these requirements could impose extraordinary,
non-recurring expenses on our business. If the costs and regulatory burdens become too great, we may be forced to modify or cease certain
operations, which could be detrimental to our investors.

The SEC has previously indicated
that certain digital assets may be considered securities depending on their structure and use. Future developments could change the legal
status of digital assets that we may hold, requiring us to comply with securities laws. If we fail to do so, we may be forced to discontinue
some or all of our business activities, negatively impacting investments in our securities.

If the SEC or other regulators
determine that digital assets that we may hold qualify as securities, we may be required to change our operations, wind down our operations,
or register as an investment company under the Investment Company Act. This classification would subject us to additional periodic reporting,
disclosure requirements, and regulatory compliance obligations, significantly increasing our operational costs. Compliance with the requirements
of the Investment Company Act applicable to registered investment companies may make it difficult for us to continue our current operations,
and this would materially and adversely affect our business, financial condition and results of operations. In addition, if SOL or another
digital asset we hold were determined to constitute a security for purposes of the federal securities laws, we would likely take steps
to reduce the percentage of SOL or such other digital assets that constitute investment assets under the Investment Company Act. These
steps may include, among others, selling SOL that we might otherwise hold for the long term and deploying our cash in non-investment assets,
and we may be forced to sell our SOL or other digital assets at unattractive prices, or cease our operations.

Although we do not currently
engage in investing, reinvesting, or trading securities, and we do not hold ourselves out as an investment company, we could inadvertently
be deemed one under the Investment Company Act. If we are unable to rely on an exclusion, we would be required to register with the SEC,
which could impose additional financial and regulatory burdens.

Further, state regulators may
conclude that the digital assets we hold are securities under state laws, requiring us