FWDI

Forward Industries, Inc.

NASDAQ · FINANCIALS · FINANCE SERVICES

6.35

−0.59 −8.50%

USD · close Oct 30

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MKT CAP $468.9MP/E —DIV YIELD —FCF YIELD -3.92%REV TTM $53.1M +254.5%NET INCOME −$1.1BNET CASH $3.2M52W 3.54 – 14.39SEC XBRL · TTM TO Invalid Date

How FWDI rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

11%

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356

new sentences

Dropped

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Length

+4,960

words, now 14,382

New in FY2025

Summary Risk Factors Our business is subject to numerous risks and uncertainties that you should consider before investing in our common stock.
Set forth below is a summary of the principal risks we face: · We adopted a new business strategy dedicated to SOL which exposes us to significant risk as there is no assurance that we will be able to successfully execute this strategy and business plan; · The SEC has taken, and may in the future take, the view that some of the digital assets held by the Company are securities, which has adversely affected, and could adversely affect the value of such digital assets and the financial condition of the Company and result in potentially substantial expense to the Company; · A particular crypto asset’s status as a security in any relevant jurisdiction is subject to a high degree of uncertainty, and if we are unable to correctly classify a crypto asset, we may be subject to regulatory scrutiny, investigations, additional reporting requirements and other adverse consequences, including potentially becoming subject to the Investment Company Act of 1940 which would impose significant financial and regulatory burdens and compliance costs; · The high volatility of trading prices that many digital assets, including SOL, have experienced and may continue to experience could have a material adverse effect on the value of the Company’s digital assets, which could lose all or substantially all of their value, and on the overall financial position of the Company; · Crypto assets and our related activities are characterized by numerous other risks and uncertainties, including the possibility of code malfunction, theft, fraud, hacking, cyberattacks, malicious activities or manipulation, in addition to price volatility, regulatory actions, bans or restrictions, declines in the price of crypto assets, demand for or public perception of crypto assets and other external forces beyond our control; · There is a significant increase in competition in the digital asset industry and thus, the Company’s financial condition and operations may be adversely affected if the Company fails to compete effectively; · Technological innovations and new entrants into the digital asset ecosystem may render Solana obsolete which would materially affect the price of the Company’s stock price and overall financial position; · The Company’s financial position and operations may be dependent on the acceptance of digital assets, which represent a new and rapidly evolving industry; · The largely unregulated nature of the digital asset ecosystem may adversely affect the value of digital assets and, consequently, the Company’s financial position; · We are highly dependent on our new Chairman of the Board of Directors, members of our executive team, and our Asset Manager, and the loss of any of their services could materially harm our business.
Risks Related to the Company’s Digital Assets Strategy and Holdings We purchase digital assets, including SOL, the price of which has been, and will likely continue to be, highly volatile.
Our operating results and share price may significantly fluctuate, including due to the highly volatile nature of the price of such digital assets and erratic market movements.
We purchase or otherwise acquire SOL for the establishment of our digital asset treasury operations.
Digital assets, such as SOL, are highly volatile assets, as a result of many factors including shifts in market sentiment, speculative trading, macroeconomic trends, technology-related disruptions and regulatory announcements.
In addition, digital assets do not pay interest or other returns, unless utilized in staking or financial applications, and so the ability to generate a return on investment from the net proceeds of any capital raisings will principally depend on whether there is appreciation in the value of digital assets following our purchases of digital assets with the net proceeds from such capital raisings.
Future fluctuations in digital asset trading prices may result in our converting digital assets into cash with a value substantially below what we paid for such digital assets.
We adopted a digital asset treasury strategy with a focus on SOL, and we may be unable to successfully implement this new strategy.
We adopted a digital asset treasury primarily dedicated to SOL, including SOL acquisitions, staking and other decentralized finance activities.
There is no assurance that we will be able to successfully implement this new strategy or operate Solana-related activities at the scale or profitability currently anticipated.
Solana operates with a proof-of-stake combined with proof-of-history consensus mechanism, which differs significantly from bitcoin’s proof-of-work mining mechanism.
This strategic shift requires specialized employee skillsets and operational, technical and compliance infrastructure to support SOL and related staking activities.
This also requires that we implement different security protocols and treasury management practices.
Further, there is ongoing scrutiny and limited formal guidance from regulatory agencies, including Nasdaq and the SEC, with respect to the treatment of public company cryptocurrency strategies.
There is no assurance that we will be able to execute this strategy by building out the needed infrastructure within the timeframe that we currently anticipate.
Errors by key management could result in significant loss of funds and reduced rewards.
As a result, our shift towards SOL could have a material adverse effect on our business and financial condition.
Our management relies upon the advice of the Asset Manager through the Asset Management Agreement to assist in building our new Treasury Policy and the execution of the Company’s Treasury Policy and may not yield the desired return.
We have engaged the Asset Manager to manage our digital assets holdings and provide discretionary investment management services with respect to all of the Company’s cash, cash equivalents, stablecoins, cryptocurrency and certain other investible assets (the “Treasury Assets”) including all digital assets, the proceeds of any bona fide capital raise or other financing transaction conducted by or on behalf of the Company or any of our subsidiaries and any investments of the Treasury Assets.
Such Asset Manager (i) will have broad discretion in the application of our Treasury Policy and management of our Treasury Assets, (ii) will have sole responsibility and authority with respect to the discretionary investment management of the Treasury Assets and, (iii) from time to time direct the investment and reinvestment of our Treasury Assets.
The Asset Manager’s investments decisions and use of the Treasury Assets could not improve our results of operations or enhance the value of our common stock.
The failure to apply and manage these Treasury Assets effectively could result in financial losses that could cause the price of our common stock to decline.
Our shift towards a Solana-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.
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 the Solana network is disrupted or encounters any unanticipated difficulties, then the processing of transactions on the Solana network may be disrupted, which in turn may prevent us from depositing or withdrawing SOL from our accounts with our custodian or otherwise affecting SOL transactions.
Such disruptions could include, for example: the insolvency, business failure, interruption, default, failure to perform, security breach, or other problems of participants, custodians, or others; the closing of SOL trading platforms due to fraud, failures, security breaches or otherwise; or network outages or congestion, power outages, or other problems or disruptions affecting the Solana network.

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Gone since FY2024

Item 1A. – Risk Factors” regarding our dependence on Forward China.
Suppliers 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.
However, 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 required for the design segment of the business as it is a service-based business.
We do, however, purchase supplies and equipment to develop prototypes or “mock-ups” for design and development projects.
Design business suppliers are predominantly based in 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.
The 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 general industry standard practices for review and corrective actions related to its design services.
There are no independent quality assurance standards in place for its design and engineering work.
Customer specifications and scope of services are laid out in project contracts and we work closely with the customer to identify and correct any quality issues that arise.
Competition 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.
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.
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 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.
We offer fair, competitive compensation and benefits that support our employees’ overall wellbeing.
In addition to health benefits, we contribute to employees’ 401(k) plans and offer student tuition reimbursement (if certain requirements are met).
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.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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