Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 3

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 1
Chunk 3
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 primarily due to its differentiated approach to blockchain design, committed and growing developer community, and strong social
layer.

There can be no assurance that
the value of SOL will increase, and investors should carefully consider the risks associated with digital assets. See “Risk Factors
– Risks Related to the Company’s Digital Assets Strategy and Holdings” for additional information.

How We Earn Staking Rewards

To earn staking rewards, we intend
to delegate our SOL to our own validators, which are operated by third-party service providers through a white-label arrangement. We may
also delegate to other third-party SOL validators via Solana’s in-protocol delegation system. We will continue to keep the SOL in
custody with third party custodians. This means we deposit our SOL into a stake account, which is then delegated to a validator’s
vote account. Both our validators and the third-party validators we select are integrated into our qualified custodians’ platforms,
allowing us to stake SOL to them directly from our custody accounts. We maintain beneficial ownership of the SOL during the staking process.
We will work closely with our white-label service provider for our validators to achieve a track record of high performance, high yield
generation, and attractive delegator economics. We will also delegate to other third-party validators who, in our opinion, have demonstrated
a similar track record. We will use multiple validators, both our own and third-party, to seek to maximize the return on our SOL treasury
and to mitigate the risk of having only one or two validators for our treasury staking. We may also negotiate bespoke arrangements with
DeFi teams and validator operators to further enhance returns.

How We Manage Liquidity

We acknowledge that during the
deactivation period, as described below, 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 when staking has ceased. 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