What changed in this filing

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Item 1. Business

2025-12-11 compared with 2024-12-27 · 357 added, 228 removed, 54 unchanged (92% of the section changed)

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Industries (IN), Inc.

(“Forward US”), Forward Industries (Switzerland) GmbH (“Forward Switzerland”), Forward Industries

UK Limited (“Forward UK”), Intelligent Product Solutions, Inc.

(“IPS”), and Kablooe, Inc.

is a global design, sourcing and distribution company serving top tier medical and technology customers worldwide.

The principal customer in

our original equipment manufacturer (“OEM”) distribution business has been OEMs or the contract manufacturing firms of these

OEM customers, that either package our products as accessories “in box” together with their branded product offerings or sell

them through their retail distribution channels.

Our OEM products include carrying cases and other accessories for medical monitoring

and diagnostic kits and a variety of other portable electronic and non-electronic products such as sporting and recreational products,

bar code scanners, GPS location devices, tablets and firearms.

Our OEM customers are located in various regions worldwide.

We do not manufacture

any of our OEM or retail distribution products and source substantially all these products from independent suppliers in China through

Forward Industries Asia-Pacific Corporation, a British Virgin Islands corporation (“Forward China”).

Forward China is owned

by our Chairman and Chief Executive Officer.

Our design business provides

(“Forward US”), DE Sub 1, LLC (“Forward Delaware”), Forward Industries (Switzerland) GmbH

(“Forward Switzerland”), Forward Industries UK Limited (“Forward UK”), Intelligent Product Solutions, Inc.

and Kablooe, Inc.

(“Kablooe”), is a design company serving top tier medical and technology customers.

The Company provides

hardware and software product design and engineering services to customers predominantly located in the U.S.

Our expertise in various

disciplines enables us to serve a wide variety of industries and provide clients with a single source solution for concepts, industrial

design, mechanical engineering, embedded software and systems architecture, mobile and enterprise application software, and optical engineering.

Discontinued Operations

Considering the recurring

losses incurred by the retail segment, in July 2023, the Company decided to cease operations of our retail distribution segment and we

are presenting the results of operations for this segment within discontinued operations in the current and prior periods presented herein.

The discontinuation of the retail segment represents a strategic shift in the Company’s business.

The primary assets of the retail

segment were inventory and accounts receivable.

The Company sold, liquidated, or otherwise disposed of the remaining retail inventory

and collected the remaining retail accounts receivable as of September 30, 2024.

As of September 30, 2024, the retail segment was fully

discontinued, and we expect to have no further significant involvement in this segment.

The inventory of the retail segment is presented

as discontinued assets held for sale on the balance sheet at September 30, 2023 and the results of operations for the retail segment have

been classified as discontinued operations on the consolidated statements of operations for the years ended September 30, 2024 and 2023.

All information and results in this annual report on Form 10-K exclude the discontinued retail segment unless otherwise noted.

3 to our consolidated financial statements for additional information on the discontinued retail segment.

Corporate History

Forward was incorporated

in 1961 as a manufacturer and distributer of advertising specialty and promotional products.

In 1989, we acquired Forward US, a manufacturer

of soft-sided carrying cases.

The carrying case business became our predominant business, and in September 1997, we sold the assets relating

to the production of advertising specialty and promotional products, ceasing to operate in that segment.

In May 2001, we formed Forward

Switzerland to facilitate distribution of aftermarket products under our licenses for cell phone cases and to further develop our OEM

European business presence.

After the expiration of the last of these licenses in March 2009, staff at Forward Switzerland was significantly

reduced and in recent years has primarily served our OEM customers in Europe.

In January 2018, Forward

acquired IPS, an engineering design company, and in August 2020, Forward acquired the assets of Kablooe Design, a medical and consumer

design and development company.

We believe that the design and engineering service capabilities of Kablooe has complemented the IPS business

and further diversified the industries and customers with which we do business.

Our OEM distribution customers

are located in all geographic regions worldwide.

Our design business provides services to Fortune 500 companies, established mid-level

companies, and start-ups.

The wide range of industries served includes industrial electronics, medical and dental equipment, food/beverage,

certain luxury brands, and oil/gas.

Our design customers are located primarily in the U.S.

Our products include carrying

cases and other accessories for medical monitoring and diagnostic kits and a variety of other portable electronic and non-electronic products

(such as sporting and recreational products, bar code scanners, GPS location devices, tablets, and firearms).

We do not manufacture any

of our products and we source substantially all our products from independent suppliers in China through Forward China, a related party

(see Note 14 to the consolidated financial statements).

Diabetic Products

We sell carrying cases for

blood glucose diagnostic kits directly to OEM customers, or their contract manufacturers.

These electronic monitoring kits are made for

use by diabetics.

The diabetic products customer (or its contract manufacturer) packages our carry cases “in box” as a custom

accessory for the customer’s blood glucose testing and monitoring kits, or to a much lesser extent, sells them through their retail

distribution channels.

These kits typically include a small, electronic blood glucose monitor, testing strips, lancets for drawing a drop

of blood and our carrying case, customized with the manufacturer’s logo and designed to fit and secure the glucose monitor, testing

strips, and lancets in separate straps, pouches, and holders.

As the kits and technology change, our carrying case designs change to accommodate

the changes in size, shape and layout of the electronic monitoring device, strips and lancet.

Other Products

We also sell carrying and

protective solutions to customers for a diverse array of other portable electronic and other products, including sporting and recreational

products, bar code scanners, GPS location devices, tablets, and firearms, on a made-to-order basis that are customized to fit the products

sold by our customers.

Our selling prices for these products vary across a broad range, depending on the size and nature of the product

for which we design and sell the carry solution.

Design Products

The Company also acquires

and holds Solana (“SOL”) and other digital assets and has adopted SOL as its primary treasury reserve asset.

On November 17, 2025, the Company

changed its ticker symbol on the Nasdaq Capital Market from FORD to FWDI.

Design Business

Our design business provides

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and computer-aided design files.

Product Development

In the OEM division, we typically

receive requests to submit product designs in connection with a customer’s introduction and rollout to market of a new product.

We collaborate with clients to determine functionality, size and other basic specifications and requirements for products.

and production resources develop more detailed product specifications and design options for our customers’ evaluation.

documentation of each phase to the client and gain approval of a working prototype.

Working with our suppliers and the customer, samples

are modified and refined.

Once approved for commercial introduction and order by our customer, we work with our suppliers to ensure conformity

of commercial production to the definitive product samples and specifications.

Manufacture and delivery of products in production quantities

are coordinated with the customer’s manufacturing and shipment schedules so that our products are available to be packaged with

the customer’s additional product components prior to shipment and sale, or to make the product available to the customer for direct

sale through its retail distribution channels.

Services offered in our design

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IoT System Architecture

Channels of Distribution

We ship the majority of our

OEM distribution products directly to our customers (or their contract manufacturers), who package our accessory products “in box”

with their branded products.

Some of our customers also purchase certain of our products and offer them for sale as stand-alone accessories

to complement their product offerings.

We utilize a third-party warehouse in Europe to store certain inventory items.

We do not recognize

revenue for products shipped to the warehouse until such products have been shipped to the customer and our performance obligation is

Product Supply

Manufacturing

The manufacture of custom

carrying cases and other carry and protective solutions generally consists of die cutting fabrics and heat sealing, gluing, sewing, and

affixing logos to the cut-outs by means of silk screening, hot-stamping, embroidering or embossing.

The principal materials used in the

manufacture of our products are vinyl, nylon, leather, metal and plastic parts (for clips, buckles, loops, hinges and other hardware),

foam padding and cardboard, all of which are obtained from suppliers based on our specifications.

We do not believe that any

of the component materials or parts used in the manufacture of our products are supply constrained.

We believe that there are adequate

available alternative sources of supply for all of the materials used to manufacture, package, and ship our products.

Dependence on Sourcing Agent

We have a Buying Agency and

Supply Agreement (the “Supply Agreement”) with Forward China.

The Supply Agreement provides that Forward China acts as our

exclusive buying agent for the products we sell.

Forward China also arranges for sourcing, manufacture and exportation of such products.

We purchase products at Forward China’s cost and through March 2023 paid them a monthly service fee calculated at $100,000 plus

4% of “Adjusted Gross Profit”, which is defined as the selling price less the cost from Forward China.

Considering the loss

of a significant OEM distribution customer (see Note 16 to the consolidated financial statements), effective April 1, 2023, the Company

and Forward China agreed to reduce the fixed portion of the sourcing fee from $100,000 to $83,333 per month for the remaining term of

the Supply Agreement, which expired in October 2023, resulting in cash savings of $100,000 in Fiscal 2023.

Effective October 2023, the

Company and Forward China entered into a new sourcing agreement under which the fixed portion of the sourcing fee was further reduced

to $65,833 per month.

Other terms in the agreement were substantially the same as the prior agreement.

Due to the Company’s decision

to cease operations of its retail distribution segment and the decline in the OEM distribution segment business, the new sourcing agreement

expired October 31, 2024.

In November 2024, the Company and Forward China agreed to:

(i) extend the sourcing agreement until April 30,

2025, but allow either party to cancel with 30 days notice, (ii) reduce the fixed portion of the sourcing fee to $35,000 per month, and

(iii) change the payment terms to better align with payments from our customers.

Terence Wise, our Chairman, Chief Executive Officer and

largest shareholder, is the owner of Forward China.

In addition, Jenny P.

Yu, a Managing Director of Forward China, beneficially owns

more than 5% of the Company’s common stock.

See “Item 1A.

– Risk Factors” regarding our dependence on Forward

We procure substantially

all our OEM distribution products from independent suppliers in China through Forward China.

Depending on the product, we may require

several different suppliers to furnish component parts or pieces.

We place orders for particular products and do not have minimum supply

requirement agreements to guarantee a supply of finished product, nor have we made purchase commitments to purchase minimum amounts.

from time to time, we may order certain OEM products in advance of receiving a customer purchase order, or in quantities in excess of

those forecasted to us by our customer, for which they are contractually obligated to us, in order to meet our customers’ anticipated

delivery demands.

There are very few suppliers

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the United States.

Quality Assurance

Forward’s quality assurance

manager oversees the process to ensure that our distribution products manufactured in China meet our quality assurance standards.

quality assurance manager independently verifies and supervises the inspection of products provided by independent contractors in China.

In July 2024, Forward China received its ISO 9001:2008 quality certification, which was renewed and is valid until July 2027.

Our design business follows

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contracts and we work closely with the customer to identify and correct any quality issues that arise.

Distribution Business

Our OEM distribution business

is highly competitive in terms of product pricing, design, delivery terms, and customer service.

In the production of our distribution

products, we compete with numerous U.S.

and foreign producers and distributors.

Some of our competitors are substantially larger than

we are and have greater financial and other resources.

We believe that we sustain our competitive position through maintenance of an effective

product design capability, rapid response time to customer requests for proposals and product shipment, reliable product delivery and

product quality, and competitive pricing.

We believe that our ability to compete based on product quality assurance considerations is

enhanced by Forward China’s local presence, quality control, shipment capabilities and expertise in sourcing.

Design Business

The depth and breadth of

services offered, and industries served by our design segment are unique.

Our management team is aware that there are very few competitive

firms that have the full set of capabilities that our design segment has under one roof.

The depth and breadth of services

offered, and industries served by our design segment are unique.

Our management team is aware that there are very few competitive firms

that have the full set of capabilities that our design segment has under one roof.

There are, however, numerous design and engineering

companies that compete with us in specific industries and/or with specific targeted skills or have competitive advantages.

New Digital Asset Treasury Strategy

In September 2025, we announced

the launch of our digital asset treasury strategy, pursuant to which we plan to pursue a number of strategic initiatives to acquire Solana

(“SOL”) and other digital assets.

We entered into asset management and services agreements to guide us through the implementation

of our new digital assets treasury business.

On September 15, 2025, we announced our initial liquid SOL purchases of 6,822,000 at an average

price of $232 per SOL, or approximately $1.58 billion in the aggregate.

Under our new treasury policy

and strategy (the “Treasury Policy”), the principal holding in our treasury reserve on the balance sheet will be allocated

to digital assets, primarily SOL, by applying a public-market treasury model to an asset that we believe is earlier in its lifecycle,

structurally reflexive, and underexposed as compared to Bitcoin.

Our planned approach involves acquiring SOL directly through market purchases

and staking our holdings via our own or third-party operated validators and generating incremental revenue through strategic partnerships

and deployments within the Solana ecosystem.

In addition to operating our

hardware and software product design and engineering services business, our management will focus its resources on our new Treasury Policy

and a significant portion of the balance sheet will initially be allocated to holding SOL in our digital asset treasury.

Currently, our new Treasury Policy

is primarily dedicated to SOL and other Solana ecosystem tokens.

As a result, our assets are highly concentrated in digital assets, particularly

Adverse developments specific to SOL, its protocol, or its ecosystem could have a materially disproportionate impact on our financial

condition and results of operations.

We may utilize a range of capital markets and onchain strategies, including staking, lending, and

participation in decentralized finance (“ DeFi ”) protocols, as well as pursuing accretive partnerships and acquisitions

within the Solana ecosystem.

Competitive Conditions in the Digital Asset Treasury

The digital asset treasury business

is characterized by a dynamic and evolving competitive landscape.

Publicly listed digital asset treasury companies primarily pursue strategies

centered on holding digital assets.

As the digital asset treasury

sector evolves, competition is intensifying among companies that diversify their holdings beyond Bitcoin to include other digital assets

(such as Ethereum and SOL).

This shift toward a broader range of asset holdings is reshaping the competitive landscape, as treasury companies

seek to distinguish themselves by capitalizing on the unique advantages offered by different digital assets.

The increasing variety of

assets under management and deployment strategies is driving new dynamics and heightened competitiveness within the sector.

Periods of market volatility

and downturns may result in financial distress for smaller or less-established digital asset treasury companies, creating opportunities

for larger, more stable participants to pursue accretive mergers and acquisitions and further consolidate the market.

We believe that our focus on

SOL and the Solana ecosystem, combined with our capital markets and onchain strategies, positions us to compete effectively within this

rapidly developing market.

However, the competitive conditions described above may impact our ability to achieve our strategic objectives

and could affect the value of our digital asset holdings.

Our Treasury Policy

Our Treasury Policy is intended

to bring value to our shareholders through the following planned initiatives:

· utilizing intelligent capital markets issuances,

including the issuance of equity, preferred stock and debt, to purchase and hold SOL subject to certain factors;

· staking the majority of the SOL in our treasury

to earn a staking yield and help turn our treasury into a productive asset;

· purchasing SOL at a discount to the then-current

spot price, including through over the counter transactions and strategic partnerships;

· actively participating in DeFi protocols and

other onchain strategies;

· selling our SOL holdings, whether on the open

market, through block trades, or other negotiated transactions, for various reasons and at various times, including, in order to repurchase

shares of our Common Stock when our Board of Directors believes such repurchases will result in accretive value creation for our shareholders

and at such times when it is legally permissible to do so.

We believe that SOL is currently

the fastest and most used public blockchain in the world, processing more transactions and generating more on chain fee revenue than all

other blockchains combined.

We believe Solana has established itself as a high-performance blockchain and one of the most active onchain

ecosystems, primarily due to its differentiated approach to blockchain design, committed and growing developer community, and strong social

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.

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.

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 or collateral posting, which could reduce

available liquidity.

Option premiums paid or received may also create volatility in our near-term cash flows.

We also intend to participate

in liquid staking protocols by converting a portion of our SOL holdings into Liquid Staking Tokens (“ LSTs ”).

allow us to earn staking rewards while maintaining the liquidity of our underlying SOL and enabling us to use the LSTs in various DeFi

applications.

We may manage a mix of traditionally staked SOL and LSTs to optimize liquidity.

Use of Custodians and Storage

We utilize multiple U.S.

and regulated third-party qualified custodians to hold our SOL, except for a nominal amount held in a hot wallet used for petty payments.

We believe these qualified custodians utilize risk management and operational best practices related to key management, hardware and software

components, access controls, cyber security and insurance, among other practices.

Our primary custodians generally

maintain the majority of their custodied SOL holdings in cold storage (>95%), with hot wallets used only for limited operational purposes.

Custodians employ SOC 2–audited security controls, geographic redundancy, multi-person approval processes, and conduct key-generation

ceremonies in offline, secure facilities.

Private keys are never exposed to networked devices.

Custodians maintain insurance coverage,

which is in addition to policies we maintain ourselves.

Our custody agreements typically run for one to three years, may be terminated

on 30 days’ notice, and include fees for storage and transactions.

Our qualified custodians do not rehypothecate or otherwise use

Use of DeFi Protocols

We may from time to time interact

with DeFi protocols, either directly or indirectly through staking, validator operations, custody arrangements, or liquidity management

DeFi protocols generally rely on open-source smart contracts deployed on public blockchains, including SOL.

While these smart

contracts are intended to operate automatically according to their code, they may contain coding errors, vulnerabilities, or design flaws

that can be exploited.

We actively evaluate DeFi opportunities within the Solana ecosystem to enhance treasury productivity, while maintaining

robust risk management practices.

SOL - The Token of the Solana

SOL is the native token of the

Solana blockchain.

SOL was created with an initial supply of 500 million SOL, though much of the initial supply was locked or earmarked

for various use cases including the community, the foundation and investors.

New SOL are brought into existence primarily through inflationary

rewards distributed to validators and delegators.

The SOL staking yield is made up of three primary components:

inflationary rewards,

transaction/priority fees, and maximal extractable value.

Inflationary rewards started out at 8.0%, and are currently 4.3%, and will fall

15% every epoch-year until they reach a long-term floor of 1.5%.

Unlock schedules applicable to these allocations may periodically increase

circulating supply, creating potential selling pressure and adversely affecting the price of SOL.

Historically, 50% of all transaction

fees were burned (with the other 50% going to the validator), but now all transaction fees go to the validator after the passage and adoption

of the Solana Improvement Document 96.

How SOL is Used

SOL is used as part of Solana’s

proof-of-stake consensus mechanism.

In general, proof-of-stake blockchains have block producers called validators that run nodes, bond

or stake the protocol’s native token, propose blocks when chosen to do so, and validate/sign the transactions and blocks of others

when not proposing such blocks.

Validators are chosen to produce a block in proportion to their stake, which makes it extremely costly

for bad actors to attempt to control the network and add invalid transactions to the blockchain.

Validators receive staking rewards for

the work they perform, which further incentivizes validators to behave properly, as they would otherwise miss out on such rewards.

proof-of-stake networks often “slash” some or all of a validator’s stake if it intentionally or unintentionally performs

its duties poorly, for example, by double-signing a transaction.

Solana, however, has not implemented slashing at this time.

to its use within consensus, SOL is also a “gas token,” meaning that users of the Solana blockchain pay SOL to validators

(and delegators) as compensation for processing their transactions.

We believe there are three particularly

notable items giving Solana a technical advantage compared to many smart contract blockchain peers.

Solana’s proof-of-history gives

validators a notion of time and allows them to produce blocks without requiring the network to first agree upon the current block, resulting

in speed advantages.

Further, unlike peer blockchains that often use single-threaded virtual machines, Solana enables parallel transaction

execution to increase throughput and take advantage of future hardware improvements resulting from increased CPU core counts.

Solana is optimized for speed and security, and is naturally growing into decentralization as hardware and bandwidth costs fall over time,

which we believe will position it well along the so-called “blockchain trilemma,” which refers to the trade-offs between scalability,

security, and decentralization.

While Solana Labs and the Solana

Foundation have played important roles in the development of the Solana ecosystem, no single entity owns or controls the Solana network.

However, concentration of influence in these entities, particularly in early-stage protocol governance, presents risks that investors

should consider.

The Solana Ecosystem

Solana’s performance and

technical capabilities enable many use cases from DeFi to decentralized physical infrastructure networks, AI agents, social media, gaming,

stablecoins, real-world assets, among others.

We believe Solana is advantaged by best-in-class technology and strong network effects that

have attracted a large, growing, and vibrant ecosystem of users, developers, and decentralized applications.

See “–Regulation

and Environmental Protection” below for a description of the current normative framework applicable to Solana and SOL.

Discontinued Operations

In July 2023, the Company decided

to cease operations of its retail distribution segment (“Retail Exit”) and is presenting the results of operations for this

segment within discontinued operations in the periods presented herein.

Our retail distribution business sourced and sold smart-enabled

furniture, hot tubs and saunas and a variety of other products through various online retailer websites to customers predominantly located

The inventory of the retail segment was presented as discontinued assets held for sale on the balance sheet on

September 30, 2023.

In March 2025, the Company committed

to a plan to sell the original equipment manufacturer (“OEM”) distribution segment of the business (“OEM Plan”).

In May 2025, the Company completed the sale of this line of business and is presenting its results of operations within discontinued operations

in the current and prior periods presented herein.

The OEM distribution segment sourced and sold carrying cases and other accessories

for medical monitoring and diagnostic kits as well as a variety of other portable electronic and non-electronic devices to OEMs or their

contract manufacturers worldwide, that either packaged our products as accessories “in box” together with their branded product

offerings or sold them through their retail distribution channels.

The Company did not manufacture any of its OEM products and sourced

substantially all of these products from independent suppliers in China, through Forward Industries Asia-Pacific Corporation, a British

Virgin Islands corporation (“Forward China”), a related party owned by the Company’s former CEO (see Note 8 to the consolidated

financial statements).

Unless otherwise noted, amounts

related to these discontinued operations are excluded from the disclosures presented herein.

See Note 3 to the consolidated financial

statements for more information on these discontinued operations.

Corporate History

Forward was incorporated in 1961

as a manufacturer and distributer of advertising specialty and promotional products.

In 1989, we acquired Forward US, a manufacturer of

soft-sided carrying cases.

The carrying case business became our predominant business, and in September 1997, we sold the assets relating

to the production of advertising specialty and promotional products, ceasing to operate in that segment.

In May 2001, we formed Forward

Switzerland to facilitate distribution of aftermarket products under our licenses for cell phone cases and to further develop our OEM

European business presence.

After the expiration of the last of these licenses in March 2009, staff at Forward Switzerland was significantly

reduced and in recent years primarily served our OEM customers in Europe.

In January 2018, we acquired

IPS, an engineering design company, and in August 2020, we acquired the assets of Kablooe Design, a medical and consumer design and development

We believe that the design and engineering service capabilities of Kablooe has complemented the IPS business and further diversified

the industries and customers with which we do business.

In May 2025, we sold our Switzerland

and UK subsidiaries in connection with our decision to discontinue the OEM segment of our business.

In addition to operating our

hardware and software product design and engineering services business, our management will focus its resources on our new Treasury Policy

and a significant portion of the balance sheet will initially be allocated to holding SOL in our digital asset treasury.

Human Capital/Employees

As of November 30, 2024,

we had approximately 100 employees, substantially all of whom work full-time, none of which are covered by a collective bargaining

We hire consultants on an as-needed basis.

Human capital management

is critical to our ongoing business success, which requires investing in our people.

Our aim is to create a highly engaged and motivated

workforce where employees are inspired by leadership, engaged in purpose-driven, meaningful work and have opportunities for growth and

As of November 30, 2025, we had approximately

60 employees, substantially all of whom work full-time, none of which are covered by a collective bargaining agreement.

We hire consultants

on an as-needed basis.

Human capital management is critical

to our ongoing business success, which requires investing in our people.

Our aim is to create a highly engaged and motivated workforce

where employees are inspired by leadership, engaged in purpose-driven, meaningful work and have opportunities for growth and development.

We are committed to creating and maintaining a work environment in which employees are treated with respect and dignity.

We value our diverse employees and provide career and professional development opportunities that

foster the success of our company.

An effective approach to

human capital management requires that we invest in talent, development, culture and employee engagement.

We aim to create an environment

where our employees are encouraged to make positive contributions and fulfill their potential.

We emphasize our core values of innovation,

encouragement, motivation, and curiosity with our employees to instill our culture and create an environment of growth and positivity.

Our Compensation Committee

is also actively involved in reviewing and approving executive compensation, and succession plans so that we have leadership in place

with the requisite skills and experience to deliver results the right way.

value our employees and provide career and professional development opportunities that foster the success of the Company.

An effective approach to human

capital management requires that we invest in talent, development, culture and employee engagement.

We aim to create an environment where

our employees are encouraged to make positive contributions and fulfill their potential.

We emphasize our core values of innovation, encouragement,

motivation, and curiosity with our employees to instill our culture and create an environment of growth and positivity.

Our Compensation Committee is

also actively involved in reviewing and approving executive compensation and succession plans so that we have leadership in place with

the requisite skills and experience to deliver results the right way.

We offer fair, competitive compensation and benefits that support

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tuition reimbursement (if certain requirements are met).

Board Advisors

In addition to our core employee

base, we have incorporated a group of over 20 special advisors and consultants who provide strategic guidance to management and our Board

of Directors, particularly with respect to the development and oversight of our new Treasury Policy.

These advisors and consultants bring

significant expertise and industry experience.

Their contributions are integral to our efforts to enhance our policies and help ensure

alignment with our long-term business objectives.

Services and Asset Management

In September 2025, we entered

into two significant agreements to support the launch and ongoing management of our new Treasury Policy.

Under the Asset Management Agreement,

we appointed Galaxy Digital Capital Management LP, an SEC-registered investment adviser, as Asset Manager to provide investment management

The Asset Manager is responsible for investment decisions but does not act as custodian or take possession of our assets, which

remain titled in our name.

Concurrently, we entered into

a Services Agreement, pursuant to which Galaxy Digital LP, as Service Provider, delivers operational, financial, and human resources support

to facilitate the establishment and operation of our new Treasury Policy.

The Service Provider does not provide tax, legal, or Investment

Company Act-related advice.

These agreements are integral

to our ability to effectively manage our digital asset strategy and operational infrastructure, and reflect our commitment to prudent

governance and the enhancement of shareholder value.

Regulation and Environmental Protection

Our OEM distribution business

is subject to various regulations in various jurisdictions, including the U.S., Canada and member states of the European Union, that restrict

the use or importation of products manufactured with compounds deemed to be hazardous.

We work with our suppliers to ensure compliance

with such regulations.

In addition, from time to time, one or more customers may require testing of our products to ensure compliance

with applicable consumer safety rules and regulations or the customer’s safety or packaging protocols.

Because we do not manufacture

the products that we sell and distribute, compliance with federal, state and local laws and regulations pertaining to the discharge of

materials into the environment, or otherwise relating to the protection of the environment, has not had, and is not anticipated to have,

any direct material effect upon our capital expenditures, earnings, or competitive position.

However, compliance with such laws and regulations

on the part of our suppliers may result in increased costs of supply to us, particularly if domestic environmental regulations in China

become more prevalent.

We have not been engaged

in any environmental litigation or incurred any material costs related to compliance with environmental or other regulations.

to time, we incur chemical and/or safety laboratory testing expenses in order to address customer requests regarding our product materials

or method of manufacture, or regarding their packaging methods and standards.

There are no specific regulatory

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and locations of customers’ product markets.

Depending on the regulatory characterization

of Solana, the markets for cryptocurrency in general, and our activities in particular, our business and our Solana acquisition strategy

may be subject to regulation by one or more regulators in the United States and globally.

Ongoing and future regulatory actions may alter,

to a materially adverse extent, the nature of digital assets markets, the participation of industry participants, including service providers

and financial institutions in these markets, and our ability to pursue our Treasury Strategy.

Additionally, U.S.

state and federal and

foreign regulators and legislatures have taken action against industry participants, including digital assets businesses, and enacted

restrictive regimes in response to adverse publicity arising from hacks, consumer harm, or criminal activity stemming from digital assets

federal and state energy regulatory authorities are also monitoring the total electricity consumption of cryptocurrency

mining, and the potential impacts of cryptocurrency mining to the supply and dispatch functionality of the wholesale grid and retail distribution

Many state legislative bodies have passed, or are actively considering, legislation to address the impact of cryptocurrency mining

in their respective states.

The Commodity Futures Trading

Commission (the “CFTC”) takes the position that certain digital assets fall within the definition of a “commodity”

under the Commodity Exchange Act of 1936, as amended (the “CEA”).

Under the CEA, the CFTC has broad enforcement authority

to police market manipulation and fraud in spot digital assets markets in which we may transact.

Beyond instances of fraud or manipulation,

the CFTC generally does not oversee cash or spot market exchanges or transactions involving digital asset commodities that do not utilize

margin, leverage, or financing.

In addition, CFTC regulations and CFTC oversight and enforcement authority apply with respect to futures,

swaps, other derivative products and certain retail leveraged commodity transactions involving digital asset commodities, including the

markets on which these products trade.

In addition, because transactions

in SOL provide a degree of anonymity, they are susceptible to misuse for criminal activities, such as money laundering.

This misuse, or

the perception of such misuse, could lead to greater regulatory oversight of SOL and SOL platforms, and there is the possibility that

law enforcement agencies could close SOL platforms or other SOL-related infrastructure with little or no notice and prevent users from

accessing or retrieving SOL held via such platforms or infrastructure.

As noted above, activities involving

SOL and other digital assets may fall within the jurisdiction of more than one financial regulator and various courts and such laws and

regulations are rapidly evolving and increasing in scope.

The laws and regulations applicable to SOL and digital assets are evolving and

subject to interpretation and change.

Governments around the world

have reacted differently to digital assets;

certain governments have deemed them illegal, and others have allowed their use and trade

without restriction, while in some jurisdictions, such as the U.S., digital assets are subject to overlapping, uncertain and evolving

regulatory requirements.

As digital assets have grown

in both popularity and market size, the U.S.

Executive Branch, Congress and a number of U.S.

federal and state agencies, including the

Financial Crimes Enforcement Network, the CFTC, the SEC, the Financial Industry Regulatory Authority, the Consumer Financial Protection

Bureau, the Department of Justice, the Department of Homeland Security, the Federal Bureau of Investigation, the Internal Revenue Service

and state financial regulators, have been examining the operations of digital asset networks, digital asset users and digital asset exchanges,

with particular focus on the extent to which digital assets can be used to violate state or federal laws, including to facilitate the

laundering of proceeds of illegal activities or the funding of criminal or terrorist enterprises, and the safety and soundness and consumer-protective

safeguards of exchanges or other service-providers that hold, transfer, trade or exchange digital assets for users.

Many of these state

and federal agencies have issued consumer advisories regarding the risks posed by digital assets to investors.

In addition, federal and

state agencies, and other countries have issued rules or guidance regarding the treatment of digital asset transactions and requirements

for businesses engaged in activities related to digital assets.

Available Information

Our corporate website is

www.forwardindustries.com.

On our website under “Investors” "SEC Filings", we make available access to our Annual

Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements on Schedule 14A and amendments to

those materials filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”),

free of charge.

The contents of the website are not incorporated into this report.

Our corporate website is www.forwardindustries.com.

On our website under “Investors - SEC Filings,” we make available access to our Annual Reports on Form 10-K, Quarterly Reports

on Form 10-Q, Current Reports on Form 8-K, Proxy Statements on Schedule 14A and amendments to those materials filed or furnished pursuant

to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), free of charge.

The Company also announces

material information to the public about the Company through a variety of means, including press releases and through its X (formerly

known as Twitter) account (@FWDind), in order to achieve broad, non-exclusionary distribution of information to the public and for complying

with its disclosure obligations under Regulation FD.

Therefore, we encourage investors, the media and others interested in the Company

to review the information we make available on our website and our X account.

The contents of the website and the Company’s X account

are not incorporated into this report.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business