Huge $585.7M loss as Forward Industries (NASDAQ: FWDI) leans on Solana
Forward Industries shifted to a Solana-focused digital asset strategy and reported extremely volatile first-quarter results. For the three months ended December 31, 2025, revenue rose to $21.4 million from $4.6 million, driven mainly by $17.4 million of Solana staking and related income. Gross margin expanded to 78.6% as the new digital asset segment generated very high-margin rewards, while the design services business saw modest revenue decline and lower margins.
The pivot came at a steep cost. A sharp drop in Solana valuations produced a $560.2 million loss on digital assets and $33.0 million of fwdSOL impairment, leading to a net loss of $585.7 million, or $5.91 per share. Digital assets on the balance sheet fell to a $826.8 million carrying value from $1.43 billion. Despite this, the company ended the quarter with $25.4 million of cash, working capital of about $52.9 million, and expects existing resources to cover liquidity needs through at least February 2027, assuming it can sell digital assets as needed.
Forward also began aggressively reshaping its capital structure, launching a $4 billion at-the-market equity program and a $1 billion share repurchase authorization. In the quarter it sold 312,000 new shares for $7.6 million and repurchased 1.54 million shares for $10.9 million, with additional buybacks in January 2026. Management highlights significant risks tied to Solana price swings, DeFi exposure, custody and smart-contract vulnerabilities, and potential regulatory changes that could reclassify Solana as a security and impact the company’s regulatory status.
Positive
- None.
Negative
- None.
Insights
Massive digital-asset losses overshadow strong revenue growth and introduce high structural risk.
Forward Industries’ first quarter under its Solana treasury strategy shows how powerful and dangerous this model can be. Revenue jumped to
However, mark-to-market and impairment effects were devastating. A decline in Solana prices generated a
Management projects liquidity through at least
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
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| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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There were
FORWARD INDUSTRIES, INC. AND SUBSIDIARIES
Table of Contents
| Page No. | ||
| PART I. | FINANCIAL INFORMATION | |
| Item 1. | Financial Statements | |
| Condensed Consolidated Balance Sheets at December 31, 2025 (Unaudited) and September 30, 2025 | 3 | |
| Condensed Consolidated Statements of Operations (Unaudited) for the Three Months Ended December 31, 2025 and 2024 | 4 | |
| Condensed Consolidated Statements of Shareholders' Equity (Unaudited) for the Three Months Ended December 31, 2025 and 2024 | 5 | |
| Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended December 31, 2025 and 2024 | 6 | |
| Notes to Condensed Consolidated Financial Statements | 7 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 23 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 28 |
| Item 4. | Controls and Procedures | 28 |
| PART II. | OTHER INFORMATION | |
| Item 1. | Legal Proceedings | 30 |
| Item 1A. | Risk Factors | 30 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 30 |
| Item 3. | Defaults Upon Senior Securities | 31 |
| Item 4. | Mine Safety Disclosures | 31 |
| Item 5. | Other Information | 31 |
| Item 6. | Exhibits | 31 |
| Signatures | 32 |
| 2 |
PART I. FINANCIAL INFORMATION
| Item 1. | Financial Statements |
FORWARD INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| December 31, | September 30, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | (See Note 2) | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net of allowances for credit losses of $ | ||||||||
| Contract assets | ||||||||
| Loans Receivable - Digital Assets - related party | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Digital assets | ||||||||
| Digital assets - restricted | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use assets, net | ||||||||
| Other assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and shareholders' equity | ||||||||
| Current liabilities: | ||||||||
| Loans Payable - Digital Assets | $ | $ | ||||||
| Accounts payable | ||||||||
| Accounts payable-related party | ||||||||
| Deferred income | ||||||||
| Current portion of operating lease liability | ||||||||
| Accrued expenses and other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Other liabilities: | ||||||||
| Operating lease liability, less current portion | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies | – | |||||||
| Shareholders' equity: | ||||||||
| Common stock, $ | ||||||||
| Treasury Stock, at cost, | ( | ) | ||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total shareholders' equity | ||||||||
| Total liabilities and shareholders' equity | $ | $ | ||||||
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
| 3 |
FORWARD INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| For the Three Months Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenues, net | $ | $ | ||||||
| Cost of sales | ||||||||
| Gross profit | ||||||||
| Sales and marketing expenses | ||||||||
| General and administrative expenses | ||||||||
| General and administrative expenses - related party | ||||||||
| Loss on digital assets | ||||||||
| Impairment of digital assets | ||||||||
| Goodwill impairment | ||||||||
| Operating loss | ( | ) | ( | ) | ||||
| Interest income | ( | ) | ( | ) | ||||
| Interest income - related party | ( | ) | ||||||
| Interest expense - related party | ||||||||
| Other expense, net | ||||||||
| Loss from continuing operations before income taxes | ( | ) | ( | ) | ||||
| Provision for income taxes | ||||||||
| Loss from continuing operations | ( | ) | ( | ) | ||||
| Income from discontinued operations, net of tax | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Basic (loss)/earnings per share : | ||||||||
| Basic loss per share from continuing operations | $ | ( | ) | $ | ( | ) | ||
| Basic earnings per share from discontinued operations | ||||||||
| Basic loss per share | $ | ( | ) | $ | ( | ) | ||
| Diluted (loss)/earnings per share: | ||||||||
| Diluted loss per share from continuing operations | $ | ( | ) | $ | ( | ) | ||
| Diluted earnings per share from discontinued operations | ||||||||
| Diluted loss per share | $ | ( | ) | $ | ( | ) | ||
| Weighted average common shares outstanding: | ||||||||
| Basic | ||||||||
| Diluted | ||||||||
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
| 4 |
FORWARD INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(UNAUDITED)
| For the Three Months Ended December 31, 2025 | ||||||||||||||||||||||||||||||||||||
| Series A-1 Convertible | Additional | |||||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Treasury Stock | Paid-In | Accumulated | ||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| Share-based compensation | – | – | – | – | – | – | – | |||||||||||||||||||||||||||||
| Proceeds from ATM, net | – | – | – | – | – | |||||||||||||||||||||||||||||||
| Proceeds from stock options exercised | – | – | – | – | – | |||||||||||||||||||||||||||||||
| Share repurchases | – | – | – | – | ( | ) | ( | ) | – | – | ( | ) | ||||||||||||||||||||||||
| Fees related to Securities Purchase Agreement | – | – | – | – | – | – | ( | ) | – | ( | ) | |||||||||||||||||||||||||
| Net loss | – | – | – | – | – | – | – | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| For the Three Months Ended December 31, 2024 | ||||||||||||||||||||||||||||||||||||
| Series A-1 Convertible | Additional | |||||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Treasury Stock | Paid-In | Accumulated | ||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||||||||
| Balance at September 30, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
| Share-based compensation | – | – | – | – | – | – | – | |||||||||||||||||||||||||||||
| Net loss | – | – | – | – | – | – | – | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||||||
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
| 5 |
FORWARD INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| For the Three Months Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Operating Activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Share-based compensation | ||||||||
| Depreciation and amortization | ||||||||
| Credit loss expense | ||||||||
| Loss on digital assets | ||||||||
| Impairment of digital assets | ||||||||
| Non-cash digital asset revenue, net | ( | ) | ||||||
| Goodwill impairment | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Contract assets | ( | ) | ||||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Accounts payable | ( | ) | ||||||
| Accounts payable-related party | ||||||||
| Deferred income | ( | ) | ||||||
| Net changes in operating lease liabilities | ( | ) | ||||||
| Accrued expenses and other current liabilities | ( | ) | ||||||
| Net cash used in operating activities-continuing operations | ( | ) | ( | ) | ||||
| Net cash used in operating activities-discontinued operations | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Investing Activities: | ||||||||
| Purchases of property and equipment | ( | ) | ||||||
| Purchases of digital assets | ( | ) | ||||||
| Sales of digital assets | ||||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Financing Activities: | ||||||||
| Fees associated with Securities Purchase Agreement | ( | ) | ||||||
| Proceeds from ATM, net | ||||||||
| Proceeds from stock options exercised | ||||||||
| Treasury stock purchases | ( | ) | ||||||
| Deferred financing costs associated with ATM | ( | ) | ||||||
| Net cash used in financing activities | ( | ) | ||||||
| Net decrease in cash | ( | ) | ( | ) | ||||
| Cash at beginning of period | ||||||||
| Cash at end of period | $ | $ | ||||||
| Supplemental Disclosures of Cash Flow Information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for taxes | ||||||||
| Supplemental Disclosures of Non-Cash Investing and Financing Activities: | ||||||||
| Operating lease assets obtained in exchange for operating lease liabilities | $ | $ | ||||||
| Digital assets loan receivable | ||||||||
| Digital assets loan payable | ||||||||
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
| 6 |
FORWARD INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| NOTE 1 | OVERVIEW |
Background and Nature of Business
Forward Industries, Inc. (“Forward”, “we”, “our” or the “Company”) is a Solana (“SOL”) focused digital asset treasury company, with the strategy to buy, hold, stake, trade, invest in, and grow SOL and SOL related digital assets, protocols and businesses. Our mission is to expand and strengthen the Solana ecosystem by acquiring and staking SOL and engaging with, providing tools to and investing in the Solana protocol, Solana developers and Solana related projects in order to increase shareholder value. In connection with a private placement transaction in September 2025, we launched our digital asset treasury strategy, which we have been executing to date by holding SOL, staking SOL, operating a SOL validator, engaging in the SOL decentralized finance (“DeFi”) ecosystem and actively repurchasing shares of our common stock.
Under our new treasury policy and strategy, the principal holding in our treasury reserve on the balance sheet will be allocated to digital assets, primarily SOL, fwdSOL (a Liquid Staking Token, or “LST”, developed by the Company in collaboration with Socean Labs Inc., doing business as Sanctum, on the Solana blockchain) and similar assets. We have selected SOL as our primary treasury asset because we believe it is earlier in its lifecycle, operationally superior, higher yield generating and underexposed as compared to Bitcoin and other digital assets, presenting a unique opportunity for Forward to become the largest Solana asset treasury operator in the industry. Our planned approach involves acquiring SOL, staking our holdings via our own validator, deploying SOL into various DeFi protocols to earn yield, fees or rewards, lending SOL to earn interest, pledging SOL as collateral to borrow other assets and generating revenue through strategic acquisitions, partnerships and deployments within the Solana ecosystem.
Forward also operates an engineering services business, which provides hardware and software product design and engineering services to customers predominantly located in the U.S.
Discontinued Operations
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 prior period 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 former related party owned by the Company’s former CEO (see Note 8).
Unless otherwise noted, amounts related to these discontinued operations are excluded from the disclosures presented herein. See Note 3 for more information on these discontinued operations.
Liquidity and Going Concern
The accompanying condensed
consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among
other things, the realization of assets and satisfaction of liabilities in the ordinary course of business. The Company had an accumulated
deficit of $772,263,000 and working capital of $
Based on our forecasted cash flows, we believe our existing cash balance and working capital will be sufficient to meet our liquidity needs through at least February 2027.
| 7 |
| NOTE 2 | ACCOUNTING POLICIES |
Basis of Presentation
The accompanying condensed consolidated financial statements include the accounts of Forward Industries, Inc. and all of its wholly-owned subsidiaries: Forward Industries (IN), Inc. (“Forward US”), DE Sub 1 LLC (“Forward Delaware”), Forward Industries (Switzerland) GmbH (“Forward Switzerland”), Forward Industries UK Limited (“Forward UK”), Intelligent Product Solutions, Inc. (“IPS”) and Kablooe, Inc. (“Kablooe”). In May 2025, the Company sold all of its equity interests in Forward Switzerland and Forward UK. As a result, our operating results for the 2026 Quarter do not include operating results of either entity. The terms “Forward”, “we”, “our” or the “Company” as used throughout this document are used to indicate Forward Industries, Inc. and all of its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.
In the opinion of management, the accompanying condensed consolidated financial statements presented in this Quarterly Report on Form 10-Q reflect all normal recurring adjustments necessary to present fairly the financial position and results of operations and cash flows for the interim periods presented herein but are not necessarily indicative of the results of operations for the year ending September 30, 2026. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended September 30, 2025, and with the disclosures and risk factors presented therein. The September 30, 2025 condensed consolidated balance sheet has been derived from the audited consolidated financial statements.
Accounting Estimates
The preparation of the Company’s condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates and assumptions. Within this report, certain dollar amounts and percentages have been rounded to their approximate values.
Segment Reporting
As a result of the Company’s digital asset treasury strategy and the OEM Plan, the Company now has two reportable segments: digital assets and design. The digital assets segment captures SOL-based yield generated by participating in the Solana network’s staking protocol, which currently comprises rewards received from native staking. The design segment consists of two operating segments (IPS and Kablooe, which have been aggregated into one reportable segment) that provide a full spectrum of hardware and software product design and engineering services to customers predominantly located in the U.S. See Note 5 for additional information on our segments.
Digital Assets
The Company accounts for its holdings of digital assets, including cryptocurrencies such as Solana, as indefinite-lived intangible assets in accordance with Accounting Standards Codification (“ASC”) 350-60, “Intangibles – Goodwill and Other – Crypto Assets (“ASC 350-60”). Digital assets under ASC 350-60 are initially measured at cost and subsequently measured at fair value, with changes in fair value recognized in net income/(loss) each reporting period. Digital assets are classified as current assets if the Company intends to sell them or otherwise realize their value within twelve months after the reporting date, or as noncurrent assets if the Company intends to hold them for longer than twelve months. The Company evaluates its intent and ability to hold digital assets at each reporting date. Upon disposal of a digital asset (e.g., by sale, exchange or transfer) the Company derecognizes the asset and recognizes a realized gain or loss in net loss, calculated as the difference between the sale proceeds and the asset’s carrying amount, which is determined using a first in-first out method.
| 8 |
Digital assets that are not in scope of ASC 350-60, primarily wrapped tokens that provide the holder with an enforceable right to redeem the underlying digital assets, such as fwdSOL, are accounted for as indefinite-lived intangible assets subject to impairment testing, or as financial assets if they are redeemable for cash. These digital assets are accounted for as intangible assets and measured at the lower of cost or market value. The Company determines market value using the lowest observed transaction price of the asset during the holding period. The Company elected to apply the fair value option to digital assets that meet the definition of financial assets.
The Company has developed fwdSOL, a Liquid Staking Token (“LST”) in collaboration with Socean Labs Inc. on the Solana blockchain. fwdSOL allows Forward and other SOL holders to stake native SOL and continue earning staking rewards while receiving and using fwdSOL elsewhere in the Solana ecosystem. fwdSOL is backed by SOL staked on Forward Industries' institutional grade validator infrastructure which automatically accrues staking rewards.
Digital Asset Loan Receivable and Payable
The Company engages in digital asset lending and borrowing activities. Digital asset loans receivable are typically fixed short-term loans or loans with no specified maturity dates that are callable or prepayable with a short notice period and no penalties. The borrower has the ability to use the loaned digital assets at its discretion for the duration of the loan. The Company derecognizes the underlying digital assets upon loan origination and recognizes a digital asset loan receivable that represents the Company’s right to receive the loaned digital asset upon settlement of the loan. The digital asset loan receivable is measured at the fair value of the underlying digital assets that the Company expects to receive under the arrangement. The Company evaluates its digital asset loan receivables for possible credit losses using the current expected credit loss framework outlined in ASC Topic 326, Financial Instruments—Credit Losses, (“ASC 326”). Digital asset loan interest is denominated in the same underlying digital asset that is loaned out. The Company recognizes interest income over the life of the loan using the effective rate method.
The Company also borrows digital assets from counterparties. As borrower, the Company has the ability to use the borrowed digital assets at its discretion. The Company pays interest on borrowed digital assets that is denominated in the borrowed digital assets and recognizes interest expense over the term of the loan. The borrowed digital assets are recognized as digital assets in accordance with the Company’s accounting policies for digital assets. The obligation to repay digital assets in the future is recorded as a Loan Payable - Digital Assets and is remeasured at fair value.
The Company may post or receive digital assets as collateral associated with its digital asset lending and borrowing activities. The Company evaluates the nature of the arrangement with counterparties to determine whether it obtains or losses control of the collateral assets. Where control of the collateral assets transfers to or from the Company, it is accounted for in the same manner as digital asset loans receivable or payable.
Accounts Receivable
Accounts receivable consists
of unsecured trade accounts with customers net of an allowance for credit losses. Collectability of accounts receivable is estimated by
evaluating the number of days accounts are outstanding, customer payment history, recent payment trends and perceived creditworthiness,
adjusted as necessary based on specific customer situations. At December 31, 2025, September 30, 2025 and September 30, 2024, the Company
had allowances for credit losses of $
Treasury Stock
The Company accounts for
treasury stock using the cost method. As of December 31, 2025 and September 30, 2025, the Company held 1,540,000 and
| 9 |
Revenue Recognition
Digital Asset Staking
The Company participates in proof-of-stake validation. Proof-of-stake validation, also referred to as staking, requires the Company to delegate its digital assets to a validator. Staking can be performed on proprietary validation infrastructure or through the use of third-party infrastructure or service providers. The Company concluded that where it controls the validation infrastructure, it is a principal in the provision of staking services to the blockchain and recognizes staking revenue on a gross basis. Blockchain rewards distributed to third parties staking on the Company’s validation infrastructure are included in cost of sales.
The Company recognizes noncash consideration from staking activities related to its digital asset holdings in accordance with ASC 606, “Revenue from Contracts with Customers”. Staking income is generated when the Company participates in digital asset networks to validate transactions and, in return, earns rewards in the form of additional digital assets. The Company considers its performance obligation to be satisfied at the point in time when it has successfully provided validation services to the network and the reward is determinable and collectible. Revenue is measured as the fair value of digital assets received as staking rewards at contract inception, which occurs at the beginning of each epoch of the respective blockchain.
Design Segment
The Company applies the “cost to cost” and “right to invoice” methods of revenue recognition to the contracts with customers in the design segment. The design segment typically engages in two types of contracts: (i) time and material and (ii) fixed price. The Company recognizes revenue over time on its time and material contracts utilizing a “right to invoice” method. Revenues from fixed price contracts that require performance of services that are not related to the production of tangible assets are recognized by using cost inputs to measure progress toward the completion of its performance obligations, or the “cost to cost” method. Revenues from fixed price contracts that contain specific deliverables are recognized when the performance obligation has been satisfied or the transfer of goods to the customer has been completed and accepted.
Recognized revenues that
will not be billed until a later date are recorded as contract assets in the accompanying condensed consolidated balance sheets. The
design segment had contract assets of $
Disaggregation of Revenue
Digital assets staking revenue is recognized at a point in time. Design segment revenue is predominantly recognized over time and has similar other economic factors, including, but not limited to, the geographic location and type of customer, payment terms and length of contracts. See Note 5 for disaggregated revenue amounts.
Income Taxes
The Company recognizes future tax benefits and liabilities measured at enacted rates attributable to temporary differences between financial statement and income tax bases of assets and liabilities and to net tax operating loss carryforwards (“NOLs”) to the extent that realization of these benefits is more likely than not. At December 31, 2025, there was no change to our assessment that a full valuation allowance was required against all net deferred tax assets as it is not probable that such deferred tax assets will be realized.
| 10 |
Utilization of NOLs may be subject to substantial limitation under Section 382 of the Internal Revenue Code of 1986, due to ownership change limitations that have occurred previously or could occur in the future, which may limit the amount of NOLs that can be used to offset future taxable income. Similar rules may apply under state tax laws. The Company has engaged external tax experts to perform a comprehensive Section 382 study, but as of the date of this filing, this study has not been completed and therefore, the effects of any Section 382 limitations cannot be determined as of the date of this filing. If the Company earns taxable income, such limitations could result in an increased future income tax liability, and its future cash flows could be adversely affected.
Our income tax provision
for the three months ended December 31, 2025 resulted from taxable income for which NOLs may not be available to offset due to the Section
382 limitations described above. For the three months ended December 31, 2024, we reported no income tax provision or benefit due to the
existence of significant net operating loss carryforwards. Our effective tax rate was (
Fair Value Measurements
ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset's or liability's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 establishes three levels of inputs that may be used to measure fair value:
| · | Level 1: quoted prices in active markets for identical assets or liabilities; | |
| · | Level 2: inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or | |
| · | Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities. |
The Company applies ASC 820 in the valuation of SOL held by the Company for financial statement purposes. The fair value of SOL uses Level 1 inputs to reflect the price that would be received for SOL in a current sale, which assumes an orderly transaction between market participants on the measurement date in SOL’s “principal market,” or in the absence of a principal market, the most advantageous market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact. The Company determines its principal market (or in the absence of a principal market, the most advantageous market) on a periodic basis to determine which market is its principal market for the purpose of calculating fair value for the creation of quarterly and annual financial statements. Issuer-specific events, market trends, bid/ask quotes of brokers and information providers and other data may be reviewed in the course of making a good faith determination of the digital asset’s fair value.
For purposes of fair value disclosures and impairment testing, wrapped digital assets, such as fwdSOL, are classified within Level 2 of the fair value hierarchy, as the valuation is based on observable inputs other than quoted prices for identical assets in active markets.
The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value hierarchy for each of those assets and liabilities:
| Schedule of fair value assets and liabilities | ||||||||||||||||
| December 31, 2025 | ||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | |||||||||||||
| Assets: | ||||||||||||||||
| Digital assets | $ | $ | $ | |||||||||||||
| Digital assets - restricted | ||||||||||||||||
| Loans Receivable - Digital Assets - related party | ||||||||||||||||
| Liabilities: | ||||||||||||||||
| Loans Payable - Digital Assets | ||||||||||||||||
| September 30, 2025 | ||||||||||||||||
| Total | Level 1 | Level 2 | Level 3 | |||||||||||||
| Assets: | ||||||||||||||||
| Digital assets | $ | $ | ||||||||||||||
| 11 |
Share-Based Compensation Expense
The Company estimates the fair value of employee and non-employee director share-based compensation on the date of grant using the Black-Scholes option pricing model, which includes variables such as the expected volatility of the Company’s share price, the exercise behavior of its grantees, interest rates, and dividend yields. These variables are projected based on the Company’s historical data, experience, and other factors. The fair value of employee and non-employee director share-based compensation is recognized in the condensed consolidated statements of operations over the related service or vesting period of each grant. In the case of awards with multiple vesting periods, the Company has elected to use the graded vesting attribution method, which recognizes compensation cost on a straight-line basis over each separately vesting portion of the award as if the award was, in substance, multiple awards.
Leases
Lease assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term, using the Company’s incremental borrowing rate commensurate with the lease term, since the Company’s lessors do not provide an implicit rate, nor is one readily available. The Company has certain leases that may include an option to renew and when it is reasonably probable to exercise such option, the Company will include the renewal option terms in determining the lease asset and lease liability. Lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Operating lease assets are shown as right-of-use assets on the condensed consolidated balance sheets. The current and long-term portions of operating lease liabilities are shown separately as such on the condensed consolidated balance sheets.
Recent Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” and in January 2025, the FASB issued ASU No. 2025-01, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date”, which clarified the effective date of ASU 2024-03 for non-calendar year-end companies. ASU 2024-03 will require the Company to disclose the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization, as applicable, included in certain expense captions in the condensed consolidated statements of operations, as well as qualitatively describe remaining amounts included in those captions. ASU 2024-03 will also require the Company to disclose both the amount and the Company’s definition of selling expenses. This ASU is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 31, 2027. The Company is currently evaluating the effects of the pronouncement on its condensed consolidated financial statements.
In December 2023, the FASB issued ASU 2023-08, Intangibles - Goodwill and Other - Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). ASU 2023-08 requires certain crypto assets meeting defined criteria to be measured at fair value each reporting period with changes in fair value recognized in net income, presented separately from other intangible assets and accompanied by enhanced disclosures. This standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted this standard in the fourth quarter of Fiscal 2025, in conjunction with its new treasury strategy. The adoption of this standard had no impact to prior reported financial statements and no cumulative adjustment to retained earnings was required or recorded.
In December 2023, the FASB issued ASU 2023-09, "Income Taxes - Improvements to Income Tax Disclosures", requiring enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024 on a prospective basis and retrospective application is permitted. The Company adopted this pronouncement in the first quarter of Fiscal 2026 with no material impact on its condensed consolidated financial statements.
| 12 |
| NOTE 3 | DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE |
In March 2025, in connection
with the fourth Conversion Agreement (see Note 8), Forward China determined it would not renew the Buying Agency and Supply Agreement
(“Sourcing Agreement”), which subsequently expired on May 9, 2025 (see Note 8). Without this agreement, the Company determined
it would not continue the OEM segment of the business and committed to a plan to sell the segment. On May 16, 2025, the Company and Forward
US entered into a transaction agreement with Forward China, pursuant to which: (i) the Company sold all equity interest in Forward Switzerland
and Forward UK and sold certain other net assets related to Forward US’ OEM segment to Forward China to satisfy outstanding payables
due to Forward China under the Sourcing Agreement; (ii) the Company and Forward China terminated the Sourcing Agreement and extended the
term of the Note Payable (see Note 8) to December 31, 2025; and (iii) the Company paid Forward China $
The sale of the OEM business was considered a strategic shift that had a significant impact on the Company’s operations and financial results. The assets and liabilities of the OEM segment were classified as assets and liabilities held for sale on the condensed consolidated balance sheets at September 30, 2025. The results of operations for the OEM segment have been classified as discontinued operations on the condensed consolidated statements of operations for the three months ended December 31, 2024.
The following table presents the major classes of the “income from discontinued operations, net of tax” in our condensed consolidated statement of operations for the quarter ended December 31, 2024.
| Schedule of discontinued operations | ||||
| Revenues, net | $ | |||
| Cost of sales | ||||
| Gross profit | ||||
| Sales and marketing expenses | ||||
| General and administrative expenses | ||||
| Income from discontinued operations | $ | 190,000 |
There were no material amounts of depreciation, amortization, investing or financing cash flow activities, or other significant non-cash operating cash flow activities for the discontinued operations in December 31, 2025 or 2024.
| NOTE 4 | DIGITAL ASSETS |
The following table shows the quantity of tokens, cost basis and carrying value of digital assets held by the Company as of:
| Schedule of fair value | ||||||||||||
| December 31, 2025 | ||||||||||||
| Quantity | Historical Cost | Carrying Value | ||||||||||
| SOL | $ | $ | ||||||||||
| 2Z | ||||||||||||
| other | ||||||||||||
| Digital assets measured at fair value | ||||||||||||
| Digital assets not measured at fair value | not meaningful | |||||||||||
| Total Digital Assets | $ | $ | ||||||||||
| 13 |
| September 30, 2025 | ||||||||||||
| Quantity | Historical Cost | Carrying Value | ||||||||||
| SOL | $ | $ | ||||||||||
Restricted Digital Assets
The doublezero (“2Z”) tokens are considered restricted digital assets and are subject to certain lockup restrictions through approximately October 2029.
Staked Digital Assets
The Company had staked $
| NOTE 5 | SEGMENTS AND CONCENTRATIONS |
As a result of our new digital asset treasury strategy and discontinuing the OEM segment, the Company now has two reportable segments: digital assets and design. See Note 2 for more information on the composition and accounting policies of our reportable segments. The results of the OEM segment were classified as discontinued operations as discussed in Note 3. The prior year segment disclosures have been reformatted from what was previously disclosed to conform to the current year presentation.
The Company’s Chief Executive Officer serves as the Chief Operating Decision Maker (“CODM”) and evaluates the financial performance of the business and makes resource allocation decisions on the basis of revenue, gross profit and net loss from continuing operations before income taxes for each reportable segment.
The tables below represent the primary measure of segment performance evaluated by the CODM, as well as additional measures that are regularly provided to the CODM on a segment level.
| Schedule of segment performance | ||||||||
| Digital Assets Segment For the Three Months Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenues | $ | $ | ||||||
| Cost of revenues | ||||||||
| Gross profit | ||||||||
| Asset management fees (a) | ||||||||
| Impairment of digital assets | ||||||||
| Loss on digital assets | ||||||||
| Interest income | ( | ) | ||||||
| Loss from continuing operations before income taxes | $ | ( | ) | $ | ||||
| 14 |
| Design Segment | ||||||||
| For the Three Months Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenues | $ | $ | ||||||
| Cost of revenues | ||||||||
| Depreciation expense (a) | ||||||||
| Gross profit | ||||||||
| Sales and marketing personnel costs | ||||||||
| Sales promotion and marketing expenses | ||||||||
| General and administrative personnel costs | ||||||||
| Occupancy costs | ||||||||
| Amortization expense (a) | ||||||||
| Impairment of goodwill and intangible assets | ||||||||
| Interest income | ( | ) | ( | ) | ||||
| Other segment expenses (b) | ||||||||
| Income/(loss) from continuing operations before income taxes | $ | $ | ( | ) | ||||
| (a) | |
| (b) |
The following table is a reconciliation of segment income/loss from continuing operations before taxes to our condensed consolidated loss from continuing operations before taxes.
| Schedule of reconciliation of segment loss | ||||||||
For the Three Months Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Digital asset segment loss from continuing operations before taxes | $ | ( | ) | $ | ||||
| Design segment income (loss) from continuing operations before taxes | ( | ) | ||||||
| Corporate and other non-segment expenses | ( | ) | ( | ) | ||||
| Consolidated loss from continuing operations before taxes | $ | ( | ) | $ | ( | ) | ||
Segment assets are shown in the table below and consist of digital assets and accounts receivable.
| Schedule of segment assets | ||||||||
| December 31 | September 30, | |||||||
| 2025 | 2025 | |||||||
| Digital assets segment | $ | $ | ||||||
| Design segment | ||||||||
| Total segment assets | ||||||||
| General corporate assets | ||||||||
| Total assets | $ | $ | ||||||
| 15 |
Revenues from two design
customers represented
Accounts receivable from
4 design segment customers represented
There were no concentrations of revenue or accounts receivable with any significant customers in our digital assets segment.
| NOTE 6 | SHAREHOLDERS’ EQUITY |
At-the-Market Offering
On
September 16, 2025, the Company entered into a Controlled Equity Offering Sales Agreement (the “ATM”) with Cantor Fitzgerald
& Company (“Cantor”), as principal and/or agent, pursuant to which it may offer and sell, from time to time, through Cantor,
shares of its common stock, having an aggregate offering price of up to $4 billion. Shares will be issued and sold pursuant to the Company’s
effective registration statement on Form S-3 as previously filed with, and declared effective by, the SEC. The Company filed a prospectus
supplement, dated September 16, 2025, with the SEC in connection with the offer and sale of shares under the ATM. We pay Cantor a commission
of up to 3% of the gross proceeds from each sale of shares under the ATM. During the three months ended December 31, 2025, we sold
Shares Reserved for Future Issuance
At
December 31, 2025, the Company had a total of
Tokenization of Common Stock
In
September 2025, the Company entered into a digital transfer agent agreement with Superstate Services LLC (“Superstate”) as
its co-transfer agent, to give shareholders the ability to tokenize their holdings of the Company’s common stock on the Solana blockchain.
Any tokenized shares are recorded and maintained by Superstate and represent the same ownership interests as the corresponding shares
of the Company’s common stock. At December 31, 2025,
Share Repurchases
In
November 2025, the Company’s Board of Directors authorized a share repurchase program permitting the Company to purchase up to $
| 16 |
During
the three months ended December 31, 2025, the Company executed open market purchases of
In
January 2026, the Company executed open market purchases of an additional
| NOTE 7 | LOSS/ EARNINGS PER SHARE |
Basic loss/earnings per share data for each period presented is computed using the weighted average number of shares of common stock outstanding during each such period and includes pre-funded warrants from their date of issuance. Diluted loss/earnings per share data is computed using the weighted average number of common and dilutive common equivalent shares outstanding during each period. Dilutive common equivalent shares consist of shares that would be issued upon the exercise of stock options and warrants, computed using the treasury stock method.
A reconciliation of basic and diluted earnings/loss per share is as follows:
| Schedule of reconciliation of basic and diluted earnings per share | ||||||||
| For the Three Months Ended | ||||||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Numerator: | ||||||||
| Loss from continuing operations | $ | (585,651,000 | ) | $ | (898,000 | ) | ||
| Income from discontinued operations, net of tax | 190,000 | |||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Denominator: | ||||||||
| Weighted average common shares outstanding | 99,099,000 | 1,101,000 | ||||||
| Dilutive common share equivalents | ||||||||
| Weighted average dilutive shares outstanding | 99,099,000 | 1,101,000 | ||||||
| Basic (loss) / earnings per share: | ||||||||
| Basic loss per share from continuing operations | $ | ( | ) | $ | ( | ) | ||
| Basic earnings per share from discontinued operations | ||||||||
| Basic loss per share | $ | ( | ) | $ | ( | ) | ||
| Diluted (loss) / earnings per share: | ||||||||
| Diluted loss per share from continuing operations | $ | ( | ) | $ | ( | ) | ||
| Diluted earnings per share from discontinued operations | ||||||||
| Diluted loss per share | $ | ( | ) | $ | ( | ) | ||
| 17 |
The following options and warrants were excluded from the calculation of diluted earnings per share for the three months ended December 31, 2025 and 2024 because their inclusion would have been anti-dilutive:
| Schedule of anti-dilutive shares | ||||||||
| For the Three Months Ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Options | ||||||||
| Warrants | ||||||||
| Total potentially dilutive shares | ||||||||
| NOTE 8 | RELATED PARTY TRANSACTIONS |
Galaxy Service Agreement
The Company has a services agreement (the “Services Agreement”) with Galaxy Digital LP (“Galaxy”), pursuant to which the Company engaged Galaxy to provide certain operational, financial and human resources services to assist with the inception of its new digital assets treasury business. Galaxy will not be providing any (i) tax advice or services, (ii) legal advice or services, or (iii) advice in connection with the Investment Company Act of 1940, as amended (the “Investment Company Act”), or any related analyses thereto.
As compensation for its services,
we will pay Galaxy fees of approximately $
Galaxy Asset Management Agreement
The Company has an asset management agreement (the “Asset Management Agreement”) with Galaxy Digital Capital Management LP, an SEC-registered investment adviser (the “Asset Manager”), pursuant to which the Company appointed the Asset Manager to provide discretionary investment management services with respect to all of the Company’s cash, cash equivalents, stablecoins, cryptocurrency and other investible assets (excluding (i) publicly-traded equities acquired pursuant to mergers, acquisitions, combinations or other similar transactions pursuant to which the Company acquires or otherwise combines or merges with another publicly-traded digital asset treasury company, (ii) privately offered equity securities and (iii) non-publicly traded convertible debt instruments). Title to the account and all account assets will be held in our name. The Asset Manager is not authorized to act as custodian of our assets, nor to take possession or title to any assets.
As compensation for the Asset
Manager’s services, we will pay management fees of
| 18 |
The Asset Management Agreement expires in March 2028 and renews for successive one-year renewal periods unless the Company or the Asset Manager terminates or elects not to continue effectiveness of the Asset Management Agreement. The Asset Management Agreement may be terminated by either party without cause after the initial term or any subsequent renewal period upon 90 days’ prior written notice before the expiration of such term.
During the three months ended
December 31, 2025, the Company incurred fees of $
Digital Asset Loan Receivable from Galaxy
In November 2025,
the Company and Galaxy Digital LLC (“Borrower”) entered into a loan agreement whereby the Company loaned
Galaxy Securities LLC Agreement
In connection with its share
repurchase program (see Note 6) the Company paid $
Buying Agency and Supply Agreement
The Company had a Buying Agency and Supply Agreement (the “Supply Agreement”) with Forward China. The Supply Agreement provided that, upon the terms and subject to the conditions set forth therein, Forward China would act as the Company’s exclusive buying agent and supplier of Products (as defined in the Supply Agreement) in the Asia-Pacific region. The Company purchased products at Forward China’s cost and, from October 2023 through October 2024, paid Forward China a monthly service fee equal to the sum of (i) $65,833, and (ii) 4% of “Adjusted Gross Profit”, which is defined as the selling price less the cost from Forward China. Due to the Retail Exit and decline in the OEM distribution segment business, this 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 the Company’s customers. The Sourcing Agreement was extended until May 9, 2025, and was subsequently terminated in connection with the sale of the OEM segment. See Note 3.
In connection with the sale of the OEM segment, effective May 16, 2025, the Company and Terence Wise, who served as the Chief Executive Officer of the Company, the Chairman of the Board of Directors, and a director, entered into a Separation Agreement pursuant to which, Mr. Wise resigned from all of these positions with the Company.
| 19 |
Terence Wise, former Chief
Executive Officer and Chairman of the Company, is the owner of Forward China and beneficially owned more than 5% of the Company’s
common stock prior to our September 2025 financing. In addition, Jenny P. Yu, a Managing Director of Forward China, beneficially owned
more than 5% of the Company’s common stock prior to our September 2025 financing. The Company recorded service fees to Forward China
of $
In order to preserve the
Company’s liquidity, in November 2023, the Company and Forward China entered into an agreement whereby Forward China agreed to limit
the amount of outstanding payables it would seek to collect from the Company to $500,000 in any 12-month period, which the Company agreed
to pay within 30 days of any such request. This agreement pertained only to payables that were outstanding at October 30, 2023 of approximately
$
Accounts Payable Conversion Agreements
In order to maintain compliance
with Nasdaq’s listing standards, the Company entered into four separate agreements with Forward China (the “Conversion Agreements”),
pursuant to which Forward China agreed to convert an aggregate $
Promissory Note
On January 18, 2018, the
Company issued a $
| NOTE 9 | LEGAL PROCEEDINGS |
From time to time, the Company may become a party to legal actions or proceedings in the ordinary course of its business. At December 31, 2025, and through the date of this filing, there were no such actions or proceedings, either individually or in the aggregate, that, if decided adversely to the Company’s interests, the Company believes would be material to its business.
| NOTE 10 | LEASES |
The Company’s operating
leases are primarily for corporate, engineering, and administrative office space. Total operating lease expense for the three months ended
December 31, 2025 was $
At December 31, 2025, the
Company’s operating leases had a weighted average remaining lease term of
| 20 |
At December 31, 2025, future minimum payments under non-cancellable operating leases were as follows:
| Schedule of future minimum payments under non-cancellable operating leases | ||||
| Remainder of Fiscal 2026 | $ | |||
| Fiscal 2027 | ||||
| Fiscal 2028 | ||||
| Fiscal 2029 | ||||
| Fiscal 2030 | ||||
| Fiscal 2031 | ||||
| Thereafter | ||||
| Total future minimum lease payments | ||||
| Less imputed interest | ( | ) | ||
| Present value of lease liabilities | ||||
| Less current portion of lease liabilities | (427,000 | ) | ||
| Long-term portion of lease liabilities | $ | 2,001,000 |
| NOTE 11 | ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES |
Accrued expenses and other current liabilities at December 31, 2025 and September 30, 2025 were as follows:
| Schedule of accrued expenses and other current liabilities | ||||||||
| December 31 | September 30, | |||||||
| 2025 | 2025 | |||||||
| Income taxes payable | $ | $ | ||||||
| Accrued commissions/bonuses | ||||||||
| Paid time off | ||||||||
| Professional fees | ||||||||
| Other | ||||||||
| Total | $ | $ | ||||||
| NOTE 12 | RISKS AND UNCERTAINTIES |
The Company is subject to various risks including market risk, liquidity risk and other risks related to its concentration in SOL. Investing in SOL is currently highly speculative and volatile.
The price of SOL has been, and will likely continue to be, highly volatile. Our financial results and the market price of our common stock could be materially adversely affected if the price of SOL decreases substantially, as it has in the past, including as a result of shifts in market sentiment, speculative trading, macroeconomic trends, technology-related disruptions and regulatory announcements.
Our historical financial statements do not reflect the potential variability in earnings that we may experience in the future from holding or selling digital assets. Accordingly, volatility in our earnings may be significantly more than what we experienced in prior periods, and it may be difficult to evaluate the Company’s business and future prospects. We also may need to perform an analysis each quarter to identify whether events or changes in circumstances indicate that our digital assets are impaired.
| 21 |
The Company faces risks relating to the custody of its digital assets. Cybersecurity threats, including hacking, phishing and other malicious attacks, could result in the loss, theft or misappropriation of our SOL. If we or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our private keys, or if our private keys are lost or destroyed, or other similar circumstances or events occur, we may lose some or all of our digital assets and our financial condition and results of operations could be materially adversely affected.
The Company interacts with smart contracts deployed on the Solana network. Smart contracts are self-executing code that operate without human intervention once deployed and are subject to known risks such as technical vulnerabilities, coding errors, security flaws and exploits. Any vulnerability in a smart contract we interact with could result in the loss or theft of SOL or other digital assets. There is no assurance that the smart contracts we integrate with or rely upon will function as intended or remain secure. These vulnerabilities, flaws and potential exploitations could have a materially adverse impact on our business and financial condition.
We use our digital assets in DeFi applications, which may include over-collateralized borrow-lend vaults, token-exchange pools, and other financial or commercial agreements, which introduce novel risks relating to software code bugs, liquidation risks, and governance risks, and can be subject to failures or exploits. Network congestion or downtime can increase the likelihood of asset loss or liquidation. The volatility of digital assets deployed into DeFi applications may increase the likelihood of liquidation. DeFi applications generally operate on a user-to-protocol basis where a user does not know the identity of other parties. The use of monitoring and forensics software may not prevent the Company from engaging in DeFi protocols that are also used by bad actors or sanctioned persons.
There is no clearing house for SOL, nor is there a central or major depository for the custody of SOL. There is a risk that some or all of the Company’s SOL could be lost or stolen. There can be no assurance that our custodians will maintain adequate insurance or that such coverage will cover any losses with respect to the Company’s SOL. Further, transactions in SOL are irrevocable. Stolen or incorrectly transferred SOL may be irretrievable. As a result, any incorrectly executed transactions of the Company’s SOL could adversely affect an investment in the Company’s common stock.
The Company’s shareholders have no specific rights to any specific SOL or other digital assets held by the Company. Shareholders own equity interests in the Company, not direct interests in the Company's digital assets. In the event of the insolvency or bankruptcy of the Company, its assets, including digital assets, would be subject to the claims of creditors, and such assets may be inadequate to satisfy claims by shareholders. Additionally, in a bankruptcy proceeding, there may be disputes regarding the characterization and treatment of digital assets, which could further delay or reduce any potential recovery by shareholders. The legal and regulatory framework for digital assets in bankruptcy proceedings remains uncertain and evolving.
The SEC has stated that certain digital assets may be considered securities under federal securities laws. The test for determining whether a particular digital asset is a security is complex and difficult to apply, and the outcome is difficult to predict. Future developments could change the legal status of digital assets we hold. If SOL is determined to be a security under federal or state securities laws or in a proceeding in a court of law, or otherwise, it may have material adverse consequences for SOL, making it more difficult to be traded, cleared or custodied compared to other digital assets that are not considered securities. In addition, if SOL is considered a security, the Company could be considered an unregistered investment company under the Investment Company Act of 1940, which could require the Company to register as an investment company (which may not be feasible given our current structure and operations), restructure our business model, or liquidate. If the Company is required to comply with additional regulatory obligations, it could result in a significant increase in operating expenses and make it difficult to continue our current operations, which would materially and adversely affect our business, financial condition and results of operations.
The Company relies on certain third-party providers to perform certain functions essential to its operations. Any disruptions to the Company’s service providers’ business operations resulting from business failures, financial instability, security failures, government mandated regulation or operational problems could have an adverse impact on the Company’s ability to access critical services and would be disruptive to the operations of the Company.
The Company may be subject to various litigation, regulatory investigations and other proceedings that arise in the ordinary course of business.
| 22 |
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements, and the notes thereto, and other financial information appearing elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2025. The following discussion and analysis compares our condensed consolidated results of operations for the three months ended December 31, 2025 (the “2026 Quarter”) with those for the three months ended December 31, 2024 (the “2025 Quarter”). All dollar amounts and percentages presented herein have been rounded to approximate values.
Cautionary Note Regarding Forward-Looking Statements
This report contains forward-looking statements, including statements regarding our liquidity, our growth strategy, and our future business plans. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “may,” “potential,” “continues,” “plans,” “seeks,” “believes,” “estimates,” “expects” and similar references to future periods.
Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you therefore against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. The results anticipated by any or all of these forward-looking statements might not occur. Important factors that could cause actual results to differ materially from those in the forward-looking statements include: (i) the rewards and costs associated with staking or validating transactions; (ii) regulatory issues related to our business model, including potential classification of crypto assets as securities and changing regulatory frameworks; (iii) fluctuations in the price of our crypto assets; (iv) potential decreases in the value of our crypto assets and rewards; (v) competition, (vi) risks related to the loss or theft of private withdrawal keys resulting in the complete loss of crypto assets and rewards; (vii) failure to keep our Registration Statement on Form S-3 effective and (viii) other risks and uncertainties described in our filings with the SEC, including our Form 10-K for the fiscal year ended September 30, 2025. Any forward-looking statement made by us speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
Background and Business Overview
We are a Solana focused digital asset treasury company, with the strategy to buy, hold, stake, trade, invest in, and grow SOL and SOL related digital assets, protocols and businesses. Our mission is to expand and strengthen the Solana ecosystem by acquiring and staking SOL and engaging with, providing tools to and investing in the Solana protocol, Solana developers and Solana related projects in order to increase shareholder value. In connection with a private placement transaction in September 2025, we launched our digital asset treasury strategy, which we have been executing to date by holding SOL, staking SOL, operating a SOL validator, engaging in the SOL decentralized finance (“DeFi”) ecosystem and actively repurchasing shares of our common stock.
Under our new treasury policy and strategy, the principal holding in our treasury reserve on the balance sheet will be allocated to digital assets, primarily SOL, fwdSOL (a Liquid Staking Token, or “LST”, developed by the Company in collaboration with Socean Labs Inc., doing business as Sanctum, on the Solana blockchain) and similar assets. We have selected SOL as our primary treasury asset because we believe it is earlier in its lifecycle, operationally superior, higher yield generating and underexposed as compared to Bitcoin and other digital assets, presenting a unique opportunity for Forward to become the largest Solana asset treasury operator in the industry. Our planned approach involves acquiring SOL, staking our holdings via our own validator, deploying SOL into various DeFi protocols to earn yield, fees or rewards, lending SOL to earn interest, pledging SOL as collateral to borrow other assets and generating revenue through strategic acquisitions, partnerships and deployments within the Solana ecosystem.
| 23 |
Forward also operates an engineering services business, which provides hardware and software product design and engineering services to customers predominantly located in the U.S.
Discontinued Operations
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 prior period 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 condensed consolidated financial statements).
Unless otherwise noted, amounts related to discontinued operations are excluded from the disclosures presented herein. See Note 3 for more information on discontinued operations.
Critical Accounting Estimates
Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States, which requires the use of certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Although we base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances at the time of evaluation, changes in our business strategy, adverse changes in market conditions or various other factors could cause actual results to differ from these estimates and such differences could be significant.
We have identified the below critical accounting estimates. An accounting estimate is considered critical if both: (a) the nature of the estimate or assumption is material due to the levels of subjectivity and judgment involved, and (b) the impact of changes in the estimate and assumption has had or is reasonably likely to have a material effect on the condensed consolidated financial statements. This listing is not a comprehensive list of all our accounting policies. For further information regarding the application of these and other accounting policies, see Note 2 of the consolidated financial statements in our Annual Report on Form 10-K.
Share-Based Compensation
We measure share-based compensation expense related to employee and non-employee director share-based awards based on the estimated fair value of the awards as determined on the date of grant, which is recognized as expense over the requisite service period. We utilize the Black-Scholes option pricing model to estimate the fair value of stock options issued as compensation. The Black-Scholes model requires the input of highly subjective and complex assumptions, including the expected term of the stock option, and the expected volatility of our common stock over the period commensurate with the expected term of the option. Uncontrollable uncertainties, such as fluctuation in interest rates, can have an effect on our Black-Scholes estimate calculations. Such fluctuations and other unforeseen changes in inputs could have a material impact on the general and administrative expenses within our financial statements.
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Impairment of Digital Assets
We account for some of our digital assets, specifically fwdSOL, as indefinite-lived intangible assets in accordance with ASC Subtopic 350-30. These digital assets are initially recorded at cost and subsequently measured at cost less any impairment losses. We perform an impairment analysis each reporting period or more frequently if events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized when the fair value of these digital asset is less than their carrying value at any time during the period. The impaired digital asset is written down to its fair value at the time of impairment, and the impairment loss cannot be reversed in future periods even if fair values subsequently increase.
The determination of fair value requires significant judgment and involves the use of market prices from digital asset exchanges. We consider factors including trading volume, market liquidity, and the reliability of pricing sources when determining fair value. For fwdSOL, which may have limited trading activity, we may use alternative valuation methods including discounted cash flow analysis or other market-based approaches. Changes in market conditions, trading volumes, or the availability of reliable pricing information could materially affect our impairment assessments and results of operations.
Recent Accounting Pronouncements
For information on recent accounting pronouncements and impacts, see Note 2 to the unaudited condensed consolidated financial statements.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED DECEMBER 31, 2025 COMPARED TO THE THREE MONTHS ENDED DECEMBER 31, 2024
2026 Quarter Highlights
| · | We generated revenues of $21.4 million in the 2026 Quarter compared to revenues of $4.6 million in the 2025 Quarter, largely driven by our new digital asset treasury strategy. | |
| · | Gross margin increased from 24.5% in the 2025 Quarter to 78.6% in the 2026 Quarter, driven by the high margin staking revenue generated by our digital asset treasury strategy. | |
| · | In the 2026 Quarter, we launched fwdSOL, an LST developed in collaboration with Socean Labs Inc., doing business as Sanctum, on the Solana blockchain, which enables us to generate staking yield on SOL while unlocking additional sources of return through DeFi and institutional borrowing strategies. | |
| · | At December 31, 2025, 1,489,896 shares of the Company’s common stock had been tokenized on the Solana blockchain through Superstate Services LLC, our co-transfer agent. Tokenization allows for shares of common stock to be self-custodied, transferred on a peer-to-peer basis, used in the DeFi ecosystem as collateral and to be programmed into the execution of smart contracts. All issued shares, regardless of form, represent identical rights and investors may switch their ownership form at their discretion upon instructions subject to applicable procedures and requirements and processing times. |
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Consolidated Results
The table below summarizes our consolidated results from continuing operations for the 2026 Quarter as compared to the 2025 Quarter. Dollar amounts and percentages have been rounded to approximate values.
| Consolidated Results of Operations | ||||||||||||||||
| 2026 Quarter | 2025 Quarter | Change ($) | Change (%) | |||||||||||||
| Revenues, net | $ | 21,435,000 | $ | 4,624,000 | $ | 16,811,000 | 364% | |||||||||
| Cost of sales | 4,586,000 | 3,491,000 | 1,095,000 | 31% | ||||||||||||
| Gross profit | 16,849,000 | 1,133,000 | 15,716,000 | >100% | ||||||||||||
| Sales and marketing expenses | 535,000 | 160,000 | 375,000 | >100% | ||||||||||||
| General and administrative expenses | 6,697,000 | 1,646,000 | 5,051,000 | >100% | ||||||||||||
| Loss on digital assets | 560,212,000 | – | 560,212,000 | – | ||||||||||||
| Impairment of digital assets | 33,044,000 | – | 33,044,000 | – | ||||||||||||
| Goodwill impairment | – | 225,000 | (225,000 | ) | (100%) | |||||||||||
| Operating loss | (583,639,000 | ) | (898,000 | ) | (582,741,000 | ) | >100% | |||||||||
| Interest income, net | (676,000 | ) | (4,000 | ) | (672,000 | ) | >100% | |||||||||
| Other expense, net | – | 3,000 | (3,000 | ) | (100%) | |||||||||||
| Provision for income taxes | 2,688,000 | – | 2,688,000 | – | ||||||||||||
| Loss from continuing operations | $ | (585,651,000 | ) | $ | (897,000 | ) | $ | (584,754,000 | ) | >100% | ||||||
The discussion that follows below provides further details about our results from continuing operations for the 2026 Quarter as compared to the 2025 Quarter.
The increase in net revenues from the 2025 Quarter to the 2026 Quarter resulted from $17,381,000 in staking and other related revenue generated by our digital assets segment and was partially offset by a $570,000 decline in design segment revenue, primarily attributable to the loss of a major design customer in December 2024 and partially offset by the net increase in volume of work and projects with other customers.
Our gross profit increased and gross margin increased from 24.5% in the 2025 Quarter to 78.6% in the 2026 Quarter. The increase in both gross profit and gross margin resulted from the high margin staking revenue generated by our digital assets segment, which generated gross profit of $15,983,000 and gross margin of 92.0%. In the design segment, gross profit decreased $267,000 and gross margin decreased from 24.5% in the 2025 Quarter to 21.4% in the 2026 Quarter driven by a change in the mix of revenue coupled with higher labor costs.
Sales and marketing expenses increased primarily due to increased corporate marketing spend of $446,000 related to corporate market research related activities and was partially offset by a $71,000 reduction in the design segment, driven by cost reduction efforts, including lower personnel costs and lower marketing spend.
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Digital assets general and administrative expenses include $1,739,000 of asset management and related fees. Corporate general and administrative expenses increased $3,727,000 due to higher professional fees related to our services agreement with Galaxy, higher investor relations spending and higher personnel costs associated with hiring personnel necessary to execute our new digital assets treasury strategy. Design segment general and administrative expenses decreased $415,000 due to lower personnel costs related to staff reductions and other cost-cutting measures in response to the decline in revenues. Management continues to monitor the various components of general and administrative expenses and how these costs are affected by inflationary and other factors. We intend to adjust these costs as needed based on the overall needs of the business.
During the 2025 Quarter, the Company recorded a design segment goodwill impairment charge of $225,000 related to the IPS reporting unit. This impairment charge resulted from recurring impairment testing and was driven by a reduction in expected future performance of the reporting unit.
The loss on digital assets in the 2026 Quarter of $560,212,000 was driven by the reduction in the fair value of our digital assets resulting from the decline in the market value of SOL. The non-cash impairment charge of $33,044,000 relates to our holdings of fwdSOL and is also driven by the decline in market value of SOL. These amounts reflect the volatility inherent in digital asset holdings and the Company’s accounting policy that does not permit the reversal of impairment losses even if fair values subsequently increase. The change in interest income, net is due to non-cash interest income of $479,000 related to loaned SOL plus an increase in cash interest income of $193,000 related to higher cash balances during the 2026 Quarter compared to the 2025 Quarter.
The income tax provision in the 2026 Quarter resulted from taxable income generated for which NOLs may not be available to offset due to certain IRS limitations. For the three months ended December 31, 2024, we reported no income tax provision or benefit due to the existence of significant net operating loss carryforwards.
Consolidated basic and diluted loss per share from continuing operations were $5.91 and $0.82 for the 2026 Quarter and the 2025 Quarter, respectively.
LIQUIDITY AND CAPITAL RESOURCES
Prior to our recent financings, our primary source of liquidity has been our operations. The primary demand on our working capital has historically been (i) operating losses, (ii) repayment of debt obligations, and (iii) any increases in accounts receivable and inventories arising in the ordinary course of business. Historically, our sources of liquidity have been adequate to satisfy working capital requirements arising in the ordinary course of business. Following our strategic pivot to a digital asset treasury strategy in September 2025, our liquidity profile has fundamentally changed. While we anticipate that our current liquidity and financial resources will remain adequate to manage our operating and financial requirements for at least the next twelve months from the date of this filing, this assessment assumes that we will be able to liquidate digital assets in amounts and at times necessary to meet our obligations, which may not be possible during periods of market stress or reduced liquidity. Additionally, our liquidity assessment does not account for potential margin calls or collateral requirements that may arise from our DeFi activities, lending arrangements, or borrowing against pledged SOL. Our ability to maintain adequate liquidity depends on various factors including the market value of our digital assets, our ability to liquidate digital assets when needed, the parameters of our share repurchase program and our ongoing operating expenses. At December 31, 2025, our working capital was approximately $52.9 million. At January 31, 2026, our cash balance was approximately $12 million.
In December 2025 and January 2026, we executed open market purchases totaling 3,330,000 shares at an average cost of $7.32 per share for an aggregate cost of $24,387,000, inclusive of fees.
If we have the opportunity to make a strategic acquisition or an investment in a product or partnership, we may require additional capital beyond our current cash balance to fund the opportunity.
Cash Flows
During the 2026 Quarter and 2025 Quarter, our sources and uses of cash were as follows:
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Operating Activities
During the 2026 Quarter, cash used in operating activities of $7,929,000 resulted from a net loss of $585,651,000, non-cash net digital asset revenue of $16,462,000, an increase in accounts receivable and contract assets of $1,202,000, an increase in prepaid expenses and other current assets of $1,796,000, partially offset by the loss on digital assets of $560,212,000, the digital asset impairment charge of $33,044,000, an increase in accrued expenses and other liabilities $2,813,000, a net increase in accounts payable and related party payables of $642,000, an increase in deferred income of $428,000 and non-cash charges for depreciation, amortization and share-based compensation of $43,000.
During the 2025 Quarter, cash used in operating activities of $434,000 resulted from a net loss of $708,000, a decrease in deferred income of $121,000, a decrease in accrued expenses and other current liabilities of $131,000 and cash used in discontinued operations of $81,000, partially offset by a net decrease in accounts receivable and contract assets of $172,000, non-cash charges for depreciation, amortization, share-based compensation, credit losses and goodwill impairment of $353,000 and the net change in other operating assets and liabilities of $82,000.
Investing Activities
Cash used in investing activities in the 2026 Quarter consisted of purchases of digital assets of $335,050,000 and sales of digital assets of $333,973,000. Cash used in investing activities in the 2025 Quarter of $5,000 resulted from purchases of property and equipment.
Financing Activities
Cash used in financing activities in the 2026 Quarter consisted of share repurchases of $10,883,000, fees associated with financing activities of $229,000, and deferred financing costs associated with our ATM of $144,000, partially offset by net proceeds from ATM of $7,457,000 and proceeds from stock options exercised of $26,000. There was no cash used in or provided by financing activities in the 2025 Quarter.
Related Party Transactions
For information on related party transactions and their financial impact, see Note 8 to the unaudited condensed consolidated financial statements contained herein.
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Not applicable.
| ITEM 4. | CONTROLS AND PROCEDURES |
Evaluation of Disclosure Controls and Procedures
Our management carried out an evaluation, with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act. Based on their evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2025.
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Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our management, under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of the end of the period covered by this report. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework as issued in 2013. Based on that evaluation, our management concluded that our internal control over financial reporting as of December 31, 2025, was effective based on that criteria.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.
Changes in Internal Control
There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this report that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
| ITEM 1. | LEGAL PROCEEDINGS |
From time to time, the Company may become a party to legal actions or proceedings in the ordinary course of its business. As of December 31, 2025, there were no such actions or proceedings, either individually or in the aggregate, that, if decided adversely to the Company’s interests, the Company believes would be material to its business, financial condition, or results of operations.
| ITEM 1A. | RISK FACTORS |
While we attempt to identify, manage, and mitigate risks and uncertainties associated with our business to the extent practical under the circumstances, some level of risk and uncertainty will always be present. Item 1A - “Risk Factors” in the Form 10-K for the fiscal year ended September 30, 2025 describes some of the risks and uncertainties associated with our business, which we strongly encourage you to review. These risks and uncertainties have the potential to materially affect our business, financial condition, results of operations, cash flows, projected results, and future prospects. There have been no material changes in our risk factors from those disclosed in the Form 10-K for the fiscal year ended September 30, 2025.
| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Unregistered Sales
There were no unregistered sales of the Company’s equity securities during the three months ended December 31, 2025, that were not previously disclosed in a Current Report on Form 8-K.
Share Repurchases
In November 2025, the Company’s Board of Directors authorized a share repurchase program permitting the Company to purchase up to $1 billion of its common stock through September 30, 2027. Repurchases may be made from time to time through open-market purchases, block trades, and/or privately negotiated transactions (including accelerated share repurchases), and may include Rule 10b5-1 trading plans. Any repurchase will be executed in compliance with Rule 10b-18 of the Securities Exchange Act of 1934. The Company may determine the timing, amount and method of repurchases based on market conditions, share price, legal and regulatory requirements, and other considerations in its sole discretion. The program does not obligate the Company to repurchase any specific number of shares and may be modified, suspended or terminated at any time.
During the three months ended December 31, 2025, the Company executed open market purchases of approximately 1.5 million shares at an average cost of $7.07 per share for an aggregate cost of $10,883,000, inclusive of fees and commissions. As of December 31, 2025, approximately $989.1 million remained available for future purchases under the share repurchase program.
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Issuer Purchases of Equity Securities
The following table summarizes our purchases of common stock in the three months ended December 31, 2025:
| (a) | (b) | (c) | (d) | |||||||||||||
| Period | Total number of shares purchased (1) | Weighted average price paid per share (2) | Total number of shares purchased as part of publicly announced plans or programs | Approximate dollar value of shares that may yet be purchased under the plans or programs | ||||||||||||
| October 1, 2025 through October 31, 2025 | – | – | – | – | ||||||||||||
| November 1, 2025 through November 30, 2025 | – | – | – | – | ||||||||||||
| December 1, 2025 through December 31, 2025 | 1,540,193 | $ | 7.07 | 1,540,193 | $ | 989,117,045 | ||||||||||
| Total | 1,540,193 | 1,540,193 | ||||||||||||||
__________________
| (1) | Repurchases commenced in December 2025. |
| (2) | The weighted average price paid per share includes broker commissions. |
| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
None.
| ITEM 4. | MINE SAFETY DISCLOSURES |
Not Applicable.
| ITEM 5. | OTHER INFORMATION |
No officers, as defined in Rule 16a-1(f), or directors
| ITEM 6. | EXHIBITS |
The exhibits listed in the accompanying “Index to Exhibits” are filed or incorporated by reference as part of this Form 10-Q.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
Dated: February 12, 2026
| FORWARD INDUSTRIES, INC. | |
|
By: /s/ Michael Pruitt Michael Pruitt Interim Chief Executive Officer (Principal Executive Officer)
By: /s/ Kathleen Weisberg Kathleen Weisberg Chief Financial Officer (Principal Financial and Accounting Officer) |
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EXHIBIT INDEX
| Incorporated by Reference |
||||||
| Exhibit No. |
Exhibit Description | Form | Date | Number | Filed or Furnished Herewith | |
| 2.1 | Stock Purchase Agreement dated January 18, 2018 - Intelligent Product Solutions, Inc.+ | 8-K | 1/18/18 | 2.1 | ||
| 2.2 | Asset Purchase Agreement dated August 17, 2020 - Kablooe, Inc.+ | 8-K | 8/17/20 | 2.1 | ||
| 3.1 | Restated Certificate of Incorporation | 10-K | 12/8/10 | 3(i) | ||
| 3.2 | Certificate of Amendment of the Certificate of Incorporation – Series A Participating Preferred Stock | 8-K | 4/26/13 | 3.1 | ||
| 3.3 | Certificate of Amendment of the Certificate of Incorporation – 6% Senior Convertible Preferred Stock | 8-K | 7/3/13 | 3.1 | ||
| 3.4 | Certificate of Amendment of the Certificate of Incorporation – Reverse Stock Split | 8-K | 6/20/24 | 3.1 | ||
| 3.5 | Certificate of Amendment of the Certificate of Incorporation – Series A-1 Convertible Preferred Stock | 8-K | 7/8/24 | 4.1 | ||
| 3.6 | Certificate of Amendment of the Certificate of Incorporation – Increasing the Authorized Series A-1 | 8-K | 10/4/24 | 4.1 | ||
| 3.7 | Certificate of Amendment of the Certificate of Incorporation – Increasing the Authorized Series A-1 | 8-K | 3/17/25 | 4.1 | ||
| 3.8 | Certificate of Amendment of the Certificate of Incorporation – Series B | S-1 | 6/10/25 | 3.7 | ||
| 3.9 | Certificate of Amendment of the Certificate of Incorporation – Increasing the Authorized Shares of Common Stock | 8-K | 9/8/25 | 3.1 | ||
| 3.10 | Third Amended and Restated Bylaws, as of May 28, 2014 | 10-K | 12/10/14 | 3(ii) | ||
| 3.10(a) | Amendment No. 1 to the Third Amended and Restated Bylaws | 8-K | 6/18/25 | 3.1 | ||
| 4.1 | Promissory Note dated January 18, 2018 – Forward Industries (Asia-Pacific) Corporation (as amended and restated) | 10-K | 12/27/24 | 4.2 | ||
| 4.2 | Form of Pre-Funded Warrant – PIPE Offering | 8-K | 9/8/25 | 4.1 | ||
| 10.1 | Buying Agency and Supply Agreement dated November 2, 2023 – Forward Industries (Asia-Pacific) Corporation+ | 8-K | 11/8/23 | 10.1 | ||
| 10.1(a) | Amendment to the Buying Agency and Supply Agreement - November 2024 | 8-K | 11/18/24 | 10.1 | ||
| 10.2 | Deferred Payment Agreement - Forward Industries (Asia – Pacific) Corporation | 8-K | 11/8/23 | 10.2 | ||
| 10.3 | Account Payables Conversion Agreement - Forward Industries (Asia- Pacific) Corporation – July 2024 | 8-K | 7/8/24 | 10.1 | ||
| 10.4 | Account Payables Conversion Agreement - Forward Industries (Asia- Pacific) Corporation – October 2024 | 8-K | 10/4/24 | 10.1 | ||
| 10.5 | 2021 Equity Incentive Plan* | 8-K | 12/23/20 | 4.1 | ||
| 10.5(a) | Amendment to the 2021 Equity Incentive Plan * | S-8 | 9/18/25 | 4.2 | ||
| 10.6 | Form of Securities Purchase Agreement, dated September 6, 2025 – PIPE Offering+ | 8-K | 9/8/25 | 10.1 | ||
| 10.7 | Form of Registration Rights Agreement, dated September 6, 2025 – PIPE Offering | 8-K | 9/8/25 | 10.2 | ||
| 10.8 | Strategic Advisor and Lead Investor Agreement, dated September 6, 2025, by and between Forward Industries, Inc. and Galaxy Digital LP | 8-K | 9/8/25 | 10.3 | ||
| 10.9 | Lead Investor Agreement, dated September 6, 2025, by and among Forward Industries, Inc., J Digital 6 Cayman Ltd. and Multicoin Capital Master Fund, LP | 8-K | 9/8/25 | 10.4 | ||
| 10.10 | Form of Waiver and Leak-Out Agreement – Series B Holders | 8-K | 9/8/25 | 10.5 | ||
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| 10.11 | Asset Management Agreement, dated September 10, 2025, by and between Forward Industries, Inc. and Galaxy Digital Capital Management LP+ | 8-K | 9/11/25 | 10.1 | ||
| 10.12 | Services Agreement, dated September 10, 2025, by and between Forward Industries, Inc. and Galaxy Digital LP+ | 8-K | 9/11/25 | 10.2 | ||
| 10.13 | Form of Waiver and Consent , dated October 10, 2025 – RRA Extension | 8-K | 10/10/25 | 10.1 | ||
| 31.1 | CEO Certifications (302) | Filed | ||||
| 31.2 | CFO Certification (302) | Filed | ||||
| 32.1 | CEO and CFO Certifications (906) | Furnished | ||||
| 101.INS | Inline XBRL Instance Document (the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | Filed | ||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | Filed | ||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | Filed | ||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | Filed | ||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | Filed | ||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | Filed | ||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
______________________
+ Certain schedules, appendices and exhibits to this agreement have been omitted in accordance with Item 601 of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished supplementally to the Securities and Exchange Commission staff upon request.
Copies of this filing (including the financial statements) and any of the exhibits referred to above will be furnished at no cost to our shareholders who make a written request to Forward Industries, Inc.; 700 Veterans Memorial Hwy, Suite 100, Hauppauge, NY 11788; Attention: Corporate Secretary.
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