Forward Industries, Inc. designs and distributes carry and protective solutions,
primarily for hand held electronic devices, including soft-sided carrying cases,
bags, clips, hand straps, protective plates and other accessories made of leather,
nylon, vinyl, plastic, PVC and other synthetic materials. Our principal customer
market is original equipment manufacturers, or “OEMs” (or the contract
manufacturing firms of these OEM customers), that either package our products
as accessories “in box” together with their branded product offerings,
or sell them through their retail distribution channels. Our OEM products include
carrying cases and other accessories for blood glucose monitoring kits and a
variety of other portable electronic and non-electronic products (such as sporting
and recreational products, bar code scanners, smartphones, GPS and location
devices, tablets, firearms and other products). Our carrying cases are designed
to enable these devices to be stowed in a pocket, handbag, briefcase, or backpack,
clipped to a belt or shoulder strap, or strapped to an arm, while protecting
the consumer electronic or other product from scratches, dust, and mishandling.
Our OEM customers are located in: (i) the Asia-Pacific Region, which we refer
to as the “APAC Region”; (ii) Europe, the Middle East, and Africa,
which we refer to as the “EMEA Region”; and (iii) the Americas.
We do not manufacture any of our OEM products and source substantially all of
our OEM products from independent suppliers in China.
In May 2001, we formed Forward Switzerland to facilitate distribution of aftermarket
products under our licenses for cell phone cases with a major North American
multinational and to further develop our OEM European business presence. After
the expiration of the last of these licenses in March 2009, staff at Forward
Switzerland was significantly reduced and in recent years has primarily served
our OEM customers in Europe.
Diabetic Products
We sell carrying cases for blood glucose diagnostic kits (“Diabetic
Products”) directly to OEMs (or their contract manufacturers) of these
electronic monitoring kits made for use by diabetics. We typically sell these
cases at prices ranging from approximately $0.50 to $6.50 per unit. Unit volumes
are sold predominantly at the lower end of this price range. The OEM customer
(or its contract manufacturer) packages our carry cases “in box”
as a custom accessory for the OEM’s blood glucose testing and monitoring
kits, or to a much lesser extent, sells them through their retail distribution
channels. These kits typically include a small, electronic blood glucose monitor,
testing strips, lancets for drawing a drop of blood and our carrying case, customized
with the manufacturer’s logo and designed to fit and secure the glucose
monitor, testing strips, and lancets in separate straps, pouches, and holders.
As the kits and technology change, our carrying case designs change to accommodate
the changes in size, shape and layout of the electronic monitoring device, strips
and lancet. For Fiscal 2016, our Diabetic Products customers accounted for approximately
88% of our total net revenues.
Other Products
We also sell carrying and protective solutions to OEMs for a diverse array
of other portable electronic and other products (“Other Products”),
including sporting and recreational products, bar code scanners, smartphones,
GPS and location devices, tablets, and firearms, on a made-to-order basis that
are customized to fit the products sold by our OEM customers. Our selling prices
for these products also vary across a broad range, depending on the size and
nature of the product for which we design and sell the carry solution.
Product Development
In our OEM business, the product life cycle in distributing and selling our
technology solutions to our OEM customers is as described below. We typically
receive requests to submit product designs in connection with a customer’s
introduction and rollout to market of a new product that the customer has determined
to accessorize and customize with a carry solution. Our OEM customers furnish
the desired functionality, size and other basic specifications for the carrying
solutions or other product, including the OEM’s identifying logo imprint
on the product. Our design and production resources develop more detailed product
specifications and design options for our customer’s evaluation. We then
furnish the customer with product samples. Working with our suppliers and the
customer, samples are modified and refined. Once approved for commercial introduction
and order by our customer, we work with our suppliers to ensure conformity of
commercial production to the definitive product samples and specifications.
Manufacture and delivery of products in production quantities are coordinated
with the customer’s manufacturing and shipment schedules so that our carry
solution products are available with the customer’s product (and included
“in box”, as the case may be) prior to shipment and sale, or to
a lesser extent sold by our customer through its retail distribution channels.
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