Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 14

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 1
Chunk 14
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-focused strategy
requires substantial changes in our day-to-day operations and exposes us to significant operational risks.

Our shift towards a SOL treasury-focused
strategy, including staking, liquid staking, and other decentralized finance activities, exposes us to significant operational risks.
To participate in Solana’s Proof-of-Stake consensus mechanism, we must either operate or delegate to validator nodes, and such validator
nodes must keep software updated, maintain validator uptime and employ secure key management. In addition, the Solana ecosystem rapidly
evolves, with frequent upgrades and protocol changes that may require significant adjustments to our operational setup if we are operating
a validator node. The upgrades and protocol changes may require that we incur unanticipated costs and could cause temporary service disruptions
to the Solana network. We may also need to employ third-party service providers in our operations, which may introduce risks outside of
our control, including significant cybersecurity risks. Any of these operational risks could materially and adversely affect our ability
to execute our SOL treasury strategy and may prevent us from realizing positive returns and could severely hurt our financial condition.

 9 

The concentration of our SOL holdings enhances
the risks inherent in our Solana-focused strategy.

We have and intend to purchase
SOL and increase our overall holdings of SOL in the future. The intended concentration of our SOL holdings limits the risk mitigation
that we could achieve if we were to purchase a more diversified portfolio of treasury assets, and the absence of diversification enhances
the risks inherent in our Solana-focused strategy. The price of SOL experienced a significant decline in 2022, and any similar future
significant declines in the price of SOL could have a more pronounced impact on our financial condition than if we used our cash to purchase
a more diverse portfolio of assets. Our initial purchases of SOL were valued at approximately $232 per SOL, or $1.58 billion in the aggregate,
in early September. At September 30, 2025, the fair value of our SOL holdings was approximately $209 per SOL, or $1.43 billion in the
aggregate, and at November 30, 2025, the fair value of our SOL holdings was approximately $133 per SOL, or $920.5 million in the aggregate.

Solana is created and transmitted through the
operations of the peer-to-peer Solana network, a decentralized network of computers running software following the Solana protocol. If
the Solana network is disrupted or encounters any unanticipated difficulties, the value of SOL could be negatively impacted.

If