NASDAQ: FWDI

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Electrical Engineering

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Mechanical Engineering

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Software Engineering

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Industrial Design

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User Experience/User Interface (UX/UI) Design and Development

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Optical Engineering

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Program Management

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IoT System Architecture

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IT Support

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.

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.

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.

1

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
SOL. 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
Business

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.

2

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
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 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”). This will
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
of SOL

We utilize multiple U.S. based
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
our SOL.

3

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
activities. 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
Blockchain

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. Other
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. In addition
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. In addition,
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.

4

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
in the U.S. and Canada. 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
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.

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.

5

Human Capital/Employees

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 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
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).

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
Agreements

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
services. 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.

6

Regulation and Environmental Protection

There are no specific regulatory
or environmental requirements imposed upon the design segment of our business. As a paid service provider, customers are assisted in securing
regulatory certifications including UL (Underwriters Laboratories – a U.S. based safety certification organization), FCC (Federal
Communications Commission – U.S. governmental certification department for electronic goods), CE (Conformité Européenne
– a European certification for health, safety and environmental protection standards) and others depending on needs, product types
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
activity. U.S. 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
systems. 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.

7

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 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.