Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 26

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 1
Chunk 26
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resources to address emerging issues, upgrade security or implement necessary improvements to the network in a timely manner. If the digital
asset network’s software is not properly maintained or developed, it could become vulnerable to security threats, operational inefficiencies
and reduced trust, all of which could negatively impact the digital assets’ long-term viability and our business.

The lack of legal recourse and insurance for
digital assets increases the risk of total loss in the event of theft or destruction.

Digital assets that we acquire
will not be insured against theft, loss or destruction. If we lose our digital assets, due to cyberattacks, fraud, theft, or other malicious
activities, we may not have any viable legal recourse or ability to recover the lost assets. Unlike funds held in insured banking institutions,
our digital assets are not protected by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation. If
our digital assets are lost under circumstances that render another party liable, there is no guarantee that the responsible party will
have the financial resources to compensate us. As a result, we and our shareholders could face significant financial losses.

The Company will face risks relating to the
custody of its digital assets. If we or our third-party service providers experience a security breach or cyberattack and unauthorized
parties obtain access to our private keys, or if our private keys are lost or destroyed, or other similar circumstances or events occur,
we may lose some or all of our digital assets and our financial condition and results of operations could be materially adversely affected.

We expect our primary counterparty
risk with respect to our SOL will be custodian performance obligations under the custody arrangements we enter into. A series of recent
high-profile bankruptcies, closures, liquidations, regulatory enforcement actions and other events relating to companies operating in
the digital asset industry, the closure or liquidation of certain financial institutions that provided lending and other services to the
digital assets industry, SEC enforcement actions against other providers, and the placement into receivership or civil fraud lawsuit against
digital asset industry participants have highlighted the perceived and actual counterparty risk applicable to digital asset ownership
and trading. Legal precedent created in these bankruptcies and other proceedings may increase the risk of future rulings adverse to our
interests in the event one or more of our custodians becomes a debtor in a bankruptcy case or is the subject of other liquidation, insolvency
or similar proceedings.

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While our custodians will be
subject to regulatory regimes intended to protect customers in the event of a