Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 143

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 1A
Chunk 143
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 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 to comply with state-specific securities regulations.
States like California have stricter definitions of “investment contracts” than the SEC, increasing the risk of additional
regulatory scrutiny.

The classification of digital assets that we
hold as a commodity could subject us to additional CFTC regulation, resulting in significant compliance costs or the cessation of certain
operations.

Under current interpretations,
SOL are classified as a commodity under the Commodity Exchange Act and are subject to regulation by the CFTC. If our activities require
CFTC registration, we may be required to comply with extensive regulatory obligations, which could result in significant costs and operational
disruptions. Additionally, current