Forward Industries(US:FORD)2026-02-12 21:16Revenue and Growth - The company generated revenues of $21.4 million in the 2026 Quarter, a 364% increase from $4.6 million in the 2025 Quarter, primarily driven by its new digital asset treasury strategy [126]. - The increase in net revenues was partially offset by a $570,000 decline in design segment revenue due to the loss of a major customer [129]. Gross Margin and Profitability - Gross margin improved significantly from 24.5% in the 2025 Quarter to 78.6% in the 2026 Quarter, attributed to high-margin staking revenue from the digital asset treasury strategy [126]. - The company reported a basic and diluted loss per share from continuing operations of $5.91 for the 2026 Quarter, compared to $0.82 for the 2025 Quarter [136]. Digital Asset Strategy - The company launched fwdSOL, a Liquid Staking Token, which allows for generating staking yield on SOL while unlocking additional returns through DeFi and institutional borrowing strategies [126]. - The loss on digital assets in the 2026 Quarter was $560.2 million, driven by a decline in the market value of SOL [135]. - An impairment charge of $33.0 million was recorded for fwdSOL due to the decrease in market value of SOL, reflecting the volatility of digital asset holdings [135]. - The company tokenized 1,489,896 shares of common stock on the Solana blockchain, allowing for self-custody and use in the DeFi ecosystem [126]. - The company reported non-cash net digital asset revenue of $16,462,000 during the 2026 Quarter [140]. Expenses - Sales and marketing expenses increased to $535,000, primarily due to corporate marketing spend related to market research activities [131]. - General and administrative expenses rose to $6.7 million, largely due to higher professional fees and personnel costs associated with the digital assets treasury strategy [133]. Cash Flow and Liquidity - As of December 31, 2025, the company's working capital was approximately $52.9 million [137]. - The cash balance as of January 31, 2026, was approximately $12 million [137]. - In the 2026 Quarter, cash used in operating activities amounted to $7,929,000, resulting from a net loss of $585,651,000 [140]. - Cash used in investing activities in the 2026 Quarter included purchases of digital assets totaling $335,050,000 [142]. - Cash used in financing activities in the 2026 Quarter included share repurchases of $10,883,000 [143]. - The company 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 [138]. - In the 2025 Quarter, cash used in operating activities was $434,000, resulting from a net loss of $708,000 [141]. - The company anticipates that its current liquidity will remain adequate for at least the next twelve months, assuming it can liquidate digital assets as needed [137]. - The liquidity assessment does not account for potential margin calls or collateral requirements from DeFi activities [137].