**  **

----

**UNITED STATES SECURITIES AND EXCHANGE COMMISSION****Washington, D.C. 20549**

**FORM 10-QSB**

(Mark One)

[X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended December 31, 2003. 

or 

[  ]     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ____ to ____ 

Commission file number 0-6669

**FORWARD INDUSTRIES, INC.**(Exact name of registrant as specified in its charter) 

|  New York |   | 13-1950672
 (State or other jurisdiction of incorporation ororganization)
 
(I.R.S. Employer Identification No.)          
1801 Green Rd., Suite E, Pompano Beach, FL 
33064 

(Address of principal executive offices)
 
(Zip Code) 
                                                      (954) 419-9544                                                           (Issuer's Telephone Number, including Area Code) 

                                                                                                                                                 (Former name, former address and former fiscal year, if changed since last report) 

Check whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]. 

As of January 21, 2004, 6,069,441 shares of Common Stock were outstanding. 

Transitional Small Business Disclosure Format: Yes [] No [X]

 

1

**FORWARDINDUSTRIES, INC. AND SUBSIDIARIESFORM 10-QSBTHREEMONTHS ENDED DECEMBER 31, 2003 CONTENTS**

PAGE

**PART  I**

** **

**FINANCIAL  INFORMATION**

** **
   
Item  1.

Financial  Statements 

     Consolidated Balance Sheets as of December 31, 2003 (Unaudited)

     and September 30, 2003............................................................................................................  

3
   
     Unaudited Consolidated Statements of Income for the Three

     Months Ended December 31, 2003 and 2002........................................................................  

4
   
     Unaudited Consolidated Statements of Cash Flows for the Three

     Months Ended December 31, 2003 and 2002........................................................................  

5
   
     Notes to Consolidated Financial Statements.......................................................................  

6
   
Item  2.

Management's  Discussion and Analysis of Financial Condition and Results of Operations.....................................................................................................................................  

  12
   
Item  3.

Controls  and Procedures.............................................................................................................  

17
   
**PART  II**

** **

**OTHER  INFORMATION**

** **
   
Item  1.

Legal  Proceedings........................................................................................................................  

18
   
Item  2.

Changes  in Securities...................................................................................................................  

18
   
Item  3.

Defaults  upon Senior Securities.................................................................................................  

18
   
Item  4.

Submission  of Matters to a Vote of Security Holders............................................................  

18
   
Item  5.

Other  Information.........................................................................................................................  

18
           
Item  6.

Exhibits  and Reports on Form 8-K.............................................................................................  

18
   
Signatures......................................................................................................................................  

19
   
Certifications.................................................................................................................................  

20

 

 

**Note RegardingUse of Certain Terms**

                In this Quarterly Report on Form10-QSB, unless the context otherwise requires, the terms "we","our", "Company" and "Forward" refer to ForwardIndustries, Inc., a New York corporation, together with its consolidatedsubsidiaries; "common stock" refers to the common stock, $.01 par value pershare, of Forward Industries, Inc.; "Koszegi" refers to ForwardIndustries' wholly owned subsidiary Koszegi Industries Inc., an Indiana corporation; "Koszegi Asia" refers to Forward Industries' whollyowned subsidiary Koszegi Asia Ltd., a Hong Kong corporation; "ForwardInnovations" refers to Forward Industries' wholly owned subsidiary ForwardInnovations GmbH, a Swiss corporation;  "Commission"refers to the United States Securities and Exchange Commission; and "ExchangeAct" refers to the United States Securities Exchange Act of 1934.

 

2

**PART I.   FINANCIAL INFORMATION**

ITEM 1.  FINANCIAL STATEMENTS

**FORWARD INDUSTRIES, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS**

**December 31,**

** **

**September 30,**

**2003**

** **

**2003**

**ASSETS**

**(Unaudited)**

** **

** **

 

Current assets:

   Cash and cash equivalents............................................................................................  

$  2,212,005  

 $  2,125,300  

   Accounts receivable - net ............................................................................................  

3,471,292

3,460,085  

   Inventories........................................................................................................................  

927,511

708,235  

   Prepaid expenses and other current assets.................................................................  

176,653

197,476  

   Deferred tax asset............................................................................................................  

58,700

58,700  

      Total current assets......................................................................................................  

6,846,161

6,549,796
     
Property, plant, and equipment - net...............................................................................  

241,310

258,323

Deferred tax asset...............................................................................................................  

331,300

331,300  

Other assets.........................................................................................................................  

40,607

40,607

     **TOTAL ASSETS**...........................................................................................................  

$  7,459,378  

 $  7,180,026  
     
**LIABILITIES AND SHAREHOLDERS' EQUITY**
     
Current liabilities:

   Accounts payable...........................................................................................................  

$  1,619,587  

 $  1,140,960  

   Accrued expenses and other current liabilities...........................................................  

252,108

743,450  

      Total current liabilities.................................................................................................  

1,871,695

1,884,410  
     
Commitments and contingencies.....................................................................................  
     
Shareholders' equity:

   Preferred stock, 4,000,000 authorized shares, par value $.01;  none issued............. 

--

--

   Common stock, 40,000,000  authorized shares, par value $.01; 6,587,031 and 6,503,541 shares issued,  respectively (including 527,090 held in treasury)....... 

65,870

65,027  

   Paid-in capital...................................................................................................................  

8,587,125

8,487,438

   Accumulated deficit........................................................................................................  

(2,291,876)

(2,483,413)
     
      6,361,119

6,069,052

   Less: Cost of shares in treasury....................................................................................  

(773,436)

(773,436)

      Total shareholders' equity...........................................................................................  

5,587,683

5,295,616  
     
**TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY**.........................................  

$  7,459,378  

 $  7,180,026  

The accompanying notes are an integral part of theconsolidated financial statements.

 

3
****
**FORWARD INDUSTRIES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME(UNAUDITED)**

** **

** **

**Three Months Ended December 31,**

**2003**

** **

**2002**

Net  sales..............................................................................

$  4,492,973  

$  5,691,642 

Cost of goods  sold............................................................

3,023,293

3,851,623

Gross  profit.........................................................................

1,469,680

1,840,019
   
Operating expenses:

  Selling.........................................................................

728,222

674,420

General and  administrative......................................

572,133

619,988

Total operating expenses...................................

1,300,355

1,294,408
   
Income  from operations...................................................

169,325

545,611
   
Other income (expense):

Interest expense.......................................................  

--

(1,401)

Interest income........................................................  

2,226

3,137

Other income - net..................................................  

41,597

36,799

Total other income  .............................................

43,823

38,535
   
Income before provision for  income taxes....................

213,148

584,146

Provision for income  taxes..............................................

21,611

25,000
   
Net income  ........................................................................

$    191,537

$     559,146  
   
Net income per common and  common equivalent share

  Basic.....................................................................

$0.03 

$0.10 

  Diluted..................................................................

$0.03 

$0.10 
   
Weighted average number of  common and common equivalent shares outstanding

  Basic.....................................................................

6,025,046

5,813,908

  Diluted.................................................................

6,327,112

5,813,908
   
The accompanying notes are an integral part of theconsolidated financial statements.

 

4

**FORWARD INDUSTRIES, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)**

** **

**Three Months Ended December 31,**
   
**     2003**

** **

**2002**

**OPERATING ACTIVITIES:**

Net  income........................................................................................................................  

$   191,537  

$   559,146  

Adjustments to reconcile  net income to net cash (used) provided           by operating activities:

Depreciation  and amortization..............................................................................  

29,806

32,074

Deferred  taxes.........................................................................................................  

--

2,800

     Provision for obsolete inventory.........................................................................  

35,850

32,786

     Changes in operating assets and  liabilities:

Accounts receivable..............................................................................................  

(11,207)

(1,192,679)

Inventories..............................................................................................................  

(255,126)

(496,226)

Prepaid expenses and other  current assets........................................................ 

20,823

90,436

Accounts payable..................................................................................................  

478,627

1,103,704

Accrued expenses and other  current liabilities.................................................. 

(491,342)

131,643

**NET CASH  (USED) PROVIDED BY OPERATING ACTIVITIES**

**(1,032)**

** **

**263,684**
     
**INVESTING ACTIVITIES:**

Purchases of property,  plant, and equipment.............................................................  

(12,793)

(37,367)

**NET CASH USED BY  INVESTING ACTIVITIES**

**(12,793)**

** **

**(37,367)**
     
**FINANCING ACTIVITIES:**

Proceeds from exercise of  stock options......................................................................  

100,530

--

Principal payments on  capital lease obligations.........................................................  

--

(6,782)

Purchase of treasury shares...........................................................................................  

--

(35,321)

**NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES**

**100,530**

** **

**(42,103)**
   
NET INCREASE IN CASH AND  CASH EQUIVALENTS

86,705

184,214
      
CASH AND CASH  EQUIVALENTS - beginning of period..........................................  

2,125,300

1,207,311
     
CASH  AND CASH EQUIVALENTS - end of period.....................................................  

$  2,212,005

$  1,391,525  
     
The accompanying notes are an integral part of theconsolidated financial statements.

 

5

**Forward Industries, Inc.Notes to Consolidated Financial StatementsThree-Month Periods Ended December 31, 2003 and 2002(Unaudited)**

 

1.             BASIS OF PRESENTATION             

The accompanying unaudited consolidated financialstatements have been prepared in accordance with accounting principlesgenerally accepted in the United States for interim financial information andwith the instructions to Form 10-QSB and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required byaccounting principles generally accepted in the United States for completefinancial statements.  In the opinion of management, all adjustments(consisting of normal recurring accruals) considered necessary for a fairpresentation have been included.  Operating results for the three-month periodended December 31, 2003 are not necessarily indicative of the results that maybe expected for the fiscal year ending September 30, 2004.

The consolidated balance sheet at September 30, 2003has been derived from the audited consolidated balance sheet at that date, butdoes not include all of the information and footnotes required by accountingprinciples generally accepted in the United States for complete financialstatements.

The accounting policies used in the preparation ofthe financial statements included in this Form 10-QSB are the same as those setforth in the Company's annual report on Form 10-KSB for the fiscal year endedSeptember 30, 2003 and should be read in conjunction with the disclosurespresented therein.  

Certain reclassifications of the prior period'sfinancial statements have been made to conform to the current period'spresentation.

                The Company did not have anycomponents of comprehensive income other than net income.

**RecentAccounting Pronouncements**

In May 2003, the FASB issued Statement of FinancialAccounting Standard (SFAS) No. 150, *Accounting for Certain FinancialInstruments with Characteristics of both Liabilities and Equity*. SFAS No.150 establishes standards for how companies classify and measure certainfinancial instruments with characteristics of both liabilities and equity. Itrequires companies to classify a financial instrument that is within its scopeas a liability (or an asset in some circumstances). SFAS No. 150 is effectivebeginning with the second quarter of fiscal 2004, and the Company does notbelieve the adoption of SFAS No. 150 will have an impact on its currentfinancial position or its results of operations.
** 

 

 **
6

******Forward Industries, Inc.Notes to Consolidated Financial StatementsThree-Month Periods Ended December 31, 2003 and 2002(Unaudited)**

1.             BASIS OF PRESENTATION(CONTINUED)

**Accounting for Stock BasedCompensation **

In December 2002, theFASB issued SFAS No. 148, *Accounting for Stock-Based Compensation -Transition and Disclosure - an amendment of SFAS 123*, which providesalternative methods for a voluntary change to the fair value method ofaccounting for stock-based employee compensation and amends the disclosurerequirements of SFAS 123. The Company has elected to continue to account forits stock-based employee compensation plans under APB Opinion 25, *Accountingfor Stock Issued to Employees*, and related interpretations. The followingdisclosures are provided in accordance with SFAS 148.

The Company has a stockoption plan and accounts for that plan under the recognition and measurementprinciples of APB Opinion No. 25, *Accounting for Stock Issued to Employees*,and related Interpretations.  No stock-based employee compensation cost hasbeen reflected in net income, as all options granted under the plan had anexercise price equal to the quoted market value of the underlying common stockon the date of grant.

If the Company hadelected to recognize expense in the three month periods ended December 31, 2003and 2002, for the stock options granted based on the fair value at the date ofgrant consistent with the method prescribed by SFAS No. 123, unaudited netincome and income per share would have been changed to the pro forma amountsindicated below:

 

Three Months Ended

December 31,

     2003

     2002

Net income, as reported.............................  

$   191,537

$  559,146 

Less: Stock-based employee compensation costs  determined under fair value based method for all awards, net of related tax  effects...................................................... 

25,623

30,384

Pro forma net income..................................  

$   165,914

$  528,762
      
Earnings per share:

Basic  - as reported................................. 

$        0.03

$        0.10  

Basic  - pro forma.................................... 

$        0.03  

$        0.09  
      
Diluted  - as reported.............................. 

$        0.03  

$        0.10  

Diluted  - pro forma................................. 

$        0.03  

$        0.09

The fair value of theabove stock-based compensation costs was determined using the Black-Scholesoption valuation model.  The Black-Scholes option valuation model was developedfor use in estimating the fair value of traded options, which have no vestingrestrictions, are fully transferable and do not include a discount for largeblock trades.  In addition, option valuation models require the input of highlysubjective assumptions including the expected stock price volatility, expectedlife of the option and other estimates.  Because the Company's employee stockoptions have characteristics significantly different from those of tradedoptions, and because changes in the subjective input assumptions can materiallyaffect the fair value estimate, in management's opinion, the existing models donot necessarily provide a reliable single measure of the fair value of itsemployee stock options.

 

7

**Forward Industries, Inc.Notes to Consolidated Financial StatementsThree-Month Periods Ended December 31, 2003 and 2002(Unaudited)**

 

2.            CREDITFACILITIES

In September 2002, the Company renewed its creditfacility with a bank that provides for an uncommitted line of credit in themaximum amount of $1.5 million, including a $1.0 million sub-limit for directborrowings and bankers acceptances and a $500,000 sub-limit for letters ofcredit. The line is renewable annually at the discretion of the bank and, asextended in April 2003, expires March 31, 2004. The Company is required toeliminate borrowings for thirty consecutive days during the term of thefacility and is required to maintain operating performance that is acceptableto the bank.  Amounts drawn under the credit facility bear interest at thebank's prime rate (4.00% as of December 31, 2003) in effect from time-to-timeplus one half of one percent and are secured by substantially all of Koszegi'sassets. There are no fees with respect to undrawn balances. At December 31,2003, there were no outstanding borrowings or letter of credit obligationsunder this facility. The Company is currently in the process of negotiating arenewal of this credit facility with the bank, although there can be noassurance that it will be successful in doing so.

In February 2003, the Company, through ForwardInnovations, established an additional credit facility with a bank thatprovides for an uncommitted line of credit in the maximum amount of $400,000. Amounts borrowed under the facility may be structured as either term loans,with a maximum repayment period of 12 months, or as a guarantee facility, orany combination of the foregoing.  The bank or the Company may terminate thefacility at any time; however, such termination would not affect the statedmaturity of term loans outstanding.  Amounts borrowed other than as a term loanmust be settled quarterly or converted into term loans.  An intercompanybalance owed by Forward Innovations to the Company secures borrowings under theline and the subsidiary has agreed to certain covenants.  Amounts drawn underthis credit facility bear interest at variable rates established by the bank(5.0% as of December 31, 2003).  Additionally, the Company pays a creditcommission of 0.25% of the maximum amount of credit used during a quarter. Thiscredit facility has not been drawn. Therefore, at December 31, 2003, there wereno outstanding borrowings under this credit facility.

3.            BUSINESS SEGMENT INFORMATION

The Company operates in a single segment providingcarrying solutions for portable electronic devices. The Company designs andmarkets its products primarily to manufacturers of electronic devices such aswireless telecommunications devices and medical equipment.  Geographiclocations are determined based primarily on the location of the customer.  Information by geographic location is as follows:

**Revenues from external customers:**

 
Three Months Ended  December 31,

                                                                         (thousands  of dollars)

          2003

          2002

United States

   $  2,049

$  3,081

Europe

2,154

                2,325

Other

290

                286

Total net sales

$  4,493 

$  5,692

 

8

**Forward Industries, Inc.Notes to Consolidated Financial StatementsThree-Month Periods Ended December 31, 2003 and 2002(Unaudited)**

 

4.            EARNINGS PER SHARE

Basic earnings pershare is computed using the weighted-average number of shares of common stockoutstanding during each period. Diluted earnings per share is computed usingthe weighted-average number of common and dilutive common-equivalent sharesoutstanding during the period. Dilutive common-equivalent shares consist ofshares that would be issued upon the exercise of stock options and warrants(computed using the treasury stock method). The average quoted market pricesfor the Company's common stock for the three-month periods ended December 31,2003 and December 31, 2002 were $2.36 and $0.95, respectively. Because theaverage quoted market price for the Company's common stock during thethree-month period ended December 31, 2002 was below the exercise price of anyoptions outstanding, no exercise or dilution is presumed to have occurred inthat period. Calculation of diluted earnings per share is as follows:

Three Months Ended December 31,

     2003

      2002

Numerator:

Net  income................................................... 

$ 191,537

 $ 559,146

 

Denominator:

Denominator for basic earnings per share - weighted  average shares......................... 

6,025,046

5,813,908

Dilutive stock options and warrants - treasury stock  method............................... 

302,066

--

Denominator for diluted earnings per share -  weighted average shares............. 

6,327,112

5,813,908
             
Net  income per common share

Basic......................................................  

$0.03 

$0.10

Diluted...................................................  

$0.03 

    $0.10

Shares excluded due to antidilution

616,250

2,353,750

 

9

**Forward Industries, Inc.Notes to Consolidated Financial StatementsThree-Month Periods Ended December 31, 2003 and 2002(Unaudited)**

 

 

5.            INCOME TAXES

The Company's incometax provision consists of the following:

Three Months Ended  December 31,

U.S.  Federal and State

               2003

               2002

    Current......................... 

$ 21,611

$          --

    Deferred....................... 

                --

--
   
Foreign:

    Current......................... 

                --

               27,800

    Deferred....................... 

--

(2,800)

Income  tax provision

$ 21,611 

$ 25,000

In June 2001, theCompany established a wholly owned foreign subsidiary in Switzerland to engagein marketing and distribution activities throughout Europe, the Middle East andAfrica. At December 31, 2003, the subsidiary had cumulative undistributed earningsof approximately $161,000.  The Company considers its investment in thesubsidiary to be permanent.   Accordingly, no provision has been made for U.S.federal income taxes on undistributed foreign earnings.  

The Company also has not recorded a currentprovision for U.S. income taxes, other than for state taxes and federal AMT, onits U.S. sourced income because it has, as a component of its deferred taxassets, sufficient net operating tax loss carryforwards available to offset itscurrent U.S. taxable income. The Company has recorded a valuation allowance toreduce its deferred tax assets to their net realizable value. The Company willcontinue to monitor the likelihood of realization of the benefits of itsdeferred tax assets and may adjust the valuation allowance in future periods asthe benefit of the asset becomes more certain. 

6.            COMMITMENTSAND CONTINGENCIES

**Royalty Commitments**

Effective January 1, 2001, theCompany obtained a license for the use of certain trademarks of Motorola, Inc.("Motorola") for products to be sold throughout Europe, the MiddleEast and Africa (the "EMEA Region") .  Under the terms of the licenseagreement, as amended, the Company is required to pay Motorola a royalty basedupon a percentage of the Company's net sales to third parties of licensedproducts within the EMEA Region. The license requires the Company to make aminimum guaranteed royalty payment to Motorola of $408,000 for the contractperiod of October 1, 2003 to September 30, 2004.

If the Company electsto terminate the license before September 30, 2004, when the license is toexpire by its terms, the Company would be required to pay the balance, if any,of the minimum guarantee for the contract period in effect at the date ofcancellation.

The minimum royaltycommitments are recognized as expense over the applicable contract period.  TheCompany recorded royalty expense of $102,000 and $97,000 in the three-monthperiods ended December 31, 2003 and 2002, respectively, which is included inselling expenses in the accompanying consolidated statements of income.

 

10
****Forward Industries, Inc.Notes to Consolidated Financial StatementsThree-Month Periods Ended December 31, 2003 and 2002(Unaudited)**

6.            COMMITMENTS AND CONTINGENCIES (CONTINUED)****

**Legal Proceedings**

In October 2001, theCompany initiated an action against Royal Industries Inc. ("Royal"),in the Supreme Court of the State of New York, Kings County, asserting causesof action for conversion and unjust enrichment. The Company alleges that,without consent or authority, and with full knowledge of the Company's rightsunder a security agreement, Royal wrongfully took possession of certain assetsin which the Company had a properly perfected security interest. The Companyseeks compensatory damages of $1 million. Royal has filed a counterclaimagainst the Company alleging abuse of process and harassment and is seeking anaward of punitive damages in the amount of $1 million.  Although the partieshave made discovery demands, neither has complied, having each interposedobjections to the nature and scope of the discovery sought, and the action hasremained essentially dormant since service of the answer on November 5, 2001. No depositions have been held, no judicial intervention in the discoverydispute has been sought, and no trial has been scheduled or is likely to bescheduled in the foreseeable future. To date, efforts to resolve the matter bynegotiation have not borne fruit, yet Royal declines to prosecute itscounterclaims.  After consultation with the Company's legal counsel, managementbelieves the case is without merit and it does not appear reasonably possiblethat Royal's counterclaims will result in material losses and therefore, atDecember 31, 2003, no provision for losses related to this action has beenrecorded in the accompanying consolidated financial statements.

 

 

 

 

11

 

ITEM 2:   MANAGEMENT'SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This quarterly reportcontains forward-looking statements that involve certain risks anduncertainties. Important factors could arise, including those discussed inManagement's Discussion and Analysis of Financial Condition and Results ofOperations set forth in this quarterly report on Form 10-QSB and thoseidentified in "Risk Factors" in the Company's annual report on Form 10-KSB forthe fiscal year ended September 30, 2003, that could cause the Company's futureoperating results to differ materially from those set forth in any forwardlooking statement.  Such information can be identified by the use offorward-looking terminology such as "may", "will", "should", "expect","anticipate", estimate", "intend",  "continue", or "believe" or the negativesor other variations of these terms or comparable terminology.  We also mayprovide projections, forecasts or estimates of future performance. Projections, forecasts and estimates are forward-looking statements and will bebased upon a number of assumptions.  Whether those assumptions will be realizedwill be determined by future events, which are difficult to predict and may bebeyond our control.  Actual events may differ materially from those assumed. Accordingly, there can be no assurance that any estimated results, projections,forecasts or estimates can be realized or that actual returns or results willnot be materially lower than those that may be estimated.

The following discussion and analysis should be read in conjunction with the Company'sUnaudited Consolidated Financial Statements and the notes thereto appearingelsewhere in this Report.  Such discussion and analysis compares ourconsolidated results of operations for the three months ended December 31, 2003(the "2003 Quarter"), with the three months ended December 31, 2002 (the "2002Quarter"), and is based on or derived from the Unaudited Consolidated FinancialStatements included elsewhere in this Report. There have been no materialchanges in critical accounting estimates since September 30, 2003.  All figuresin the following discussion are presented on a consolidated basis. All dollaramounts and percentages presented herein have been rounded to approximatevalues.

**Results of Operations for the 2003Quarter compared to the 2002 Quarter**

Ournet income in the 2003 Quarter was $192,000 compared to net income of $559,000in the 2002 Quarter, a decrease of approximately $367,000.  The decrease wasdue to a decline in gross profit primarily as a result of lower United Statessales of cell phone carrying products to a large customer and, to a lesserextent, lower sales of carrying cases for diabetic monitoring kits, as morefully discussed below. Basic and diluted earnings per share were $0.03 for the2003 Quarter, compared to $0.10 per share in the 2002 Quarter. The decline inrevenues in the cell phone carrying case market in the 2003 Quarter is theresult of having received fewer large orders in the 2003 Quarter compared tothe 2002 Quarter, which benefited from the customer's significant order for aspecialty accessory, as discussed below.  Demand for our customers' productsand, consequently, their order flow to us, is dependent on general economicconditions as well as conditions and developments specific to their businesses,is variable, and may be difficult to predict.  Any of our large customers inwhich our sales are concentrated may increase or decrease its level of ordersto us on short notice in amounts that significantly impact our revenues butthat may not necessarily be viewed by it as significant to its business.  Thelevel of demand for licensed products is susceptible to similar uncertainties. 

**Net Sales**

Net sales decreased by $1,199,000 or 21% to$4,493,000 in the 2003 Quarter compared to $5,692,000 in the 2002 Quarter.  Thetables below set forth sales by product line and geographic location of ourcustomers for the periods indicated:

 

12

**Net  Sales for 2003 Quarter  3  Months ended December 31, 2003  (millions  of dollars)**

** **

**US**

**Europe**

**Other**

Total

Diabetic Products

$ 0.87

$ 0.86

$ 0.21

$ 1.94

Cell Phone  Products

0.71

1.28

0.08

2.07

Other Product Sales

0.47

.01

--

0.48

**Total***

**$2.05**

**$2.15**

**$0.29**

**$4.49**

                               

**Net  Sales for 2002 Quarter   3  Months ended December 31, 2002  (millions  of dollars)**

** **

**US**

**Europe**

**Other**

Total

Diabetic  Products

$ 1.20

$ 0.90

$    --

$2.10

Cell Phone  Products

$ 1.37

$ 1.42

0.17

2.96

Other Product Sales

0.52

--

0.12

0.65

**Total***

**$ 3.09**

**$ 2.32**

**$ 0.29**

**$ 5.69**

* Tablesmay not total due to rounding.

** **

**Diabetic Product Sales:**We design to the order of, and sell directly to,original equipment manufacturers, or "OEMs", carrying cases used by diabeticsto carry their electronic monitoring kits that measure blood glucose levels.OEM customers for these carrying cases include Abbott Labs, Bayer, Lifescan (asubsidiary of Johnson & Johnson), TheraSense and Roche.  Our cases arepackaged with the monitoring kits that are sold by our OEM customers.

Sales of these cases decreased $163,000 to$1,937,000 in the 2003 Quarter compared to sales of $2,100,000 in the 2002Quarter.  We believe that the decrease was due to temporary factors in that oneof our customers shifted a part of the manufacture of its blood glucosemonitors to China in the 2003 Quarter, which, we believe, temporarily disruptedorder flow to us.  We have resumed shipments to that customer's Chinaproduction facility.  We continue to experience strong demand for our carryingcases for OEM diabeticmonitoring kits. Sales of diabetes products in the 2003Quarter represented 43% of our overall sales compared to 37% in the 2002Quarter, in part due to the decrease in cell phone product sales revenues inthe 2003 Quarter.

After the close of the 2003 Quarter, in January2004, one of our customers, Abbot Laboratories, announced an agreement toacquire Therasense, another of our customers.  In their announcement concerningthe acquisition, the parties to the transaction stated that the two businesseswould continue to operate as separate divisions. We believe that Abbott intendsto grow this portion of its business and that the acquisition will notadversely affect our relationships with the two companies. However, thebusiness dynamics of an acquisition are unpredictable and there can be noassurance that the acquisition, if consummated, will not result in changes inthe two companies' product procurement.

**Cell Phone Product Sales:**Our cell phone products include carrying cases forhandsets and camera attachments, plastic belt clips, carrying case straps andbags, decorative faceplates and other attachments used to carry or enhance theappearance of cellular telephone handsets.  We sell these products directly tocell phone handset OEMs, including Motorola and Nokia.  Under the Motorolalicense agreement we also distribute our products directly to third partywholesalers and retailers in the EMEA Region.

Sales of our cell phone carrying case productsdeclined $887,000 to $2,073,000 in the 2003 Quarter from $2,960,000 in the 2002Quarter.  The decrease was primarily the result of a reduction in direct sales toMotorola (including its subsidiaries and affiliates) to $1,113,000 in the 2003Quarter from $2,130,000 in the 2002 Quarter, a decline of $1,017,000, and to alesser extent a reduction in sales of Motorola licensed products to thirdparties.  The Company's 2003 Quarter did not benefit from a large order relatedto specific new handset introduction comparable to the 2002 Quarter, whenMotorola launched a camera attachment for one of its cell phones, whichincorporated our camera case. The decline in Motorola OEM sales was partiallyoffset by higher sales to Nokia, which increased $375,000 to $565,000 in the2003 Quarter from $190,000 in the 2002 Quarter. 

 

13

Sales to wholesalers and retailers under ourMotorola license agreement declined $245,000 to $395,000 in the 2003 Quarterfrom $640,000 in the 2002 Quarter, bringing the total decrease in sales ofMotorola-related products (OEM and under the license) to $1,262,000.  Webelieve that the decrease was in part also due to a reduction in new productlaunches, which we believe reduces the visibility of licensed products offeredby wholesale and retail distributors.  While there can be no assurance, we donot believe that the decline in sales of products to Motorola and under thelicense is related to the expiration of the Motorola license in September 2004,but rather is related to factors that are short-term in nature, including therelationship between timing of product launches and our ability to obtainorders relating thereto.  See "Liquidity and Capital Resources" for furtherdiscussion relating to the expiration of the license agreement. 

**Other Product Sales:**We design and sell a number of other carryingsolutions for items such as cameras, portable oxygen tanks, bar code scanners,MP3 players and other carrying solutions for an assortment of products on amade-to-order basis that are customized to meet the individual needs of oursmaller OEM customers.  By their nature, sales of these customized products canvary from period to period without necessarily reflecting a significant trendin overall demand for these items. Sales of these products decreased by$167,000 to $483,000 in the 2003 Quarter compared to sales of $650,000 in the2002 Quarter.

**Gross Profit**

Gross profit on sales decreased $370,000, or 20%, to$1,470,000 in the 2003 Quarter from $1,840,000 in the 2002 Quarter as a resultof the Company's lower sales volume. The Company's gross profit percentageswere 33% and 32% in the 2003 Quarter and the 2002 Quarter, respectively.

**Selling, General, and Administrative Expenses**

Selling expenses increased $54,000, or 8%, to$728,000 in the 2003 Quarter from $674,000 in the 2002 Quarter due to anincrease in selling personnel expense offset in part by reductions in otherselling expense components. Personnel expenses increased $72,000 in the 2003Quarter compared to the 2002 Quarter due to the Company's recruitment andemployment of a sales executive to pursue additional product markets, such ascomputer carrying cases. This increase was partially offset by lower travel,entertainment, and auto expenses of $20,000 in the 2003 Quarter compared to the2002 Quarter. The ratio of selling expenses to net sales increased to 16% inthe 2003 Quarter compared to 12% in the 2002 Quarter due primarily to lowersales volumes.

General and administrative expenses decreased$48,000, or 8%, to $572,000 in the 2003 Quarter from $620,000 in the 2002Quarter due to lower personnel expenses of $45,000 in the 2003 Quarter comparedto the 2002 Quarter resulting from the expiration of a consulting contract.

**Income from Operations**

Pretax income from operations decreased $371,000 or64% to $213,000 in the 2003 Quarter from $584,000 in the 2002 Quarter as aresult of reduced gross profit due to lower sales volumes.

**Other Income (Expense)**

Total other income increased $5,000 or 14% to$44,000 in the 2003 Quarter from $39,000 in the 2002 Quarter. The "Otherincome-net" component in the 2003 Quarter consisted of a $40,000 foreigncurrency gain and a $2,000 bad debt recovery and in the 2002 Quarter consistedof a $37,000 foreign currency gain. Because the Company had no borrowings underits bank lines of credit at any time during the 2003 Quarter, it incurred nointerest expense during the 2003 Quarter, compared to $1,000 of interest expensein the 2002 Quarter.

14

**IncomeTaxes**

Our provision for income taxes decreased by $3,000in the 2003 Quarter to $22,000, compared to $25,000 in the 2002 Quarter.  Theprovision in the 2003 Quarter consists of estimated federal alternative minimumtax (AMT) taxes and state taxes payable. Other than for federal AMT and statetaxes, we did not record a current provision for U.S. income taxes in eitherquarter as we have sufficient net operating tax loss carryforwards available tooffset our current U.S. taxable income for which we have recorded a valuationallowance.  We will continue to monitor the likelihood of realization of thebenefits of our deferred tax assets and may adjust the allowance in futureperiods as the benefit of the asset becomes more certain.

**Liquidity and Capital Resources**

We used $1,000 of cash from operations in the 2003Quarter, compared to generating $264,000 in the 2002 Quarter.  Operating cashflows in the 2003 Quarter resulted primarily from net income of $192,000,adjusted for non-cash items including depreciation expense of $30,000 and aprovision for obsolete inventory of $36,000, plus changes in our workingcapital accounts.  The 2002 Quarter's operating cash flows included net incomeof $559,000 adjusted for non-cash items including depreciation of $32,000 and aprovision for obsolete inventory of $33,000, plus changes in our workingcapital accounts. The inventory balance increased $255,000 to meet demand forour products based on existing sales orders. The increase in the inventorybalance accounts for the majority of the increase in the accounts payablebalance of $479,000. The remainder of the increase in the accounts payablebalance is attributed to timing differences. Accrued liabilities decreased$491,000 primarily as a result of performance bonuses that were accrued as ofDecember 31, 2002, and paid in the 2003 Quarter.

Investing activities used $13,000 in the 2003 Quarterto purchase additional computer equipment and software.  In the 2002 Quarter,investing activities used $37,000 for purchases of computer equipment andsoftware.

Financing activities generated $101,000 in the 2003Quarter in proceeds from the exercise of stock options.  In the 2002 Quarter,financing activities used $42,000, including $35,000 to purchase 35,200 sharesof our common stock in the open market pursuant to the stock buyback programdescribed below and $7,000 to make principal payments on our capital leaseobligations.

At December 31, 2003, our current ratio (currentassets divided by current liabilities) was 3.66 and our quick ratio (currentassets less inventories divided by current liabilities) was 3.16. Our workingcapital (current assets less current liabilities) was $4,974,000 and we had nolong-term debt. 

Our primary sources of liquidity are our operatingcash flow and our bank credit facilities. The primary demands on our workingcapital are: our accounts payable arising in the ordinary course of business,the most significant of which arise when our customers place orders and we, asa consequence thereof, order from our suppliers; and our commitments under ourlicense agreement with Motorola. Historically, our sources of liquidity havebeen adequate to satisfy working capital requirements arising in the ordinarycourse of business. However, it is possible that if one of our significantoriginal equipment manufacturer customers placed an unusually large order withus at a time when our credit facility could not accommodate the increaseddemands on our working capital, we might have to seek additional sources ofliquidity. Although there can be no assurance, we believe that, under suchcircumstances, we could obtain an increase in our credit facility or obtainnecessary funds under an additional facility.

 

15

We renewed our creditfacility with a bank effective September 30, 2002 until September 30, 2003. InApril 2003, the bank informed us the credit facility had been extended untilMarch 31, 2004. The credit facility provides for as uncommitted line of creditin a maximum amount of $1.5 million, including a $1.0 million sublimit fordirect borrowings and bankers acceptances and a $500,000 sublimit for lettersof credit.  The credit line is renewable annually at the discretion of the bankand is secured by a substantially all of Koszegi's assets. There are nofinancial ratios or other restrictive covenants associated with the creditfacility. We are, however, required to have a consecutive 30-day period duringthe term of the credit facility with zero borrowings, submit to periodic bankexaminations and maintain operating performance acceptable to the bank. Amounts borrowed under the credit facility bear interest at the bank's primerate in effect from time-to-time (4.00% at December 31, 2003) plus one half ofone percent. There are no fees payable in respect of undrawn balances under thecredit facility. This is an uncommitted line of credit and there is noguarantee the bank will grant additional cash advances under the line of creditto us if required, or that our performance will remain satisfactory to thebank, or that the bank will renew the credit facility. Although we believe thatwe could obtain alternate financing in the event of a loss of our currentfacility, there can be no assurance that such financing could be obtained andthe failure to do so could have a material adverse affect on our liquidity andfinancial condition.  At December 31, 2003 and for the 15 months preceding, wehad no borrowings under the credit facility and no commitments for letters ofcredit and the entire credit line was available for our use. We are currentlyin the process of negotiating a renewal of this credit facility with the bank,although there can be no assurance that we will be successful in doing so.

In February 2003, the Company, through ForwardInnovations, established an additional credit facility with a bank thatprovides for an uncommitted line of credit in the maximum amount of $400,000 Amounts borrowed under the facility may be structured as either term loans,with a maximum repayment period of 12 months, or as a guarantee facility, orany combination of the foregoing.  The bank or the Company may terminate thefacility at any time; however, such termination would not affect the statedmaturity of term loans outstanding.  Amounts borrowed other than as a term loanmust be settled quarterly or converted into term loans.  An intercompanybalance owed by Forward Innovations to the Company secures borrowings under theline and the subsidiary has agreed to certain covenants.  Amounts drawn underthis credit facility bear interest at variable rates established by the bank(5.0% as of December 31, 2003).  Additionally, the Company pays a creditcommission of 0.25% of the maximum amount of credit used during a quarter. Thiscredit facility has not been used. Therefore, at December 31, 2003, there wereno outstanding borrowings under this credit facility.

Effective January 1,2001, the Company obtained a license for the use of certain trademarks ofMotorola, Inc. ("Motorola") for products to be sold throughoutEurope, the Middle East and Africa (the "EMEA Region").  Under theterms of the license agreement, as amended, the Company is required to payMotorola a royalty based upon a percentage of the Company's net sales to thirdparties of licensed products within the EMEA Region. The license requires theCompany to make a minimum guaranteed royalty payment to Motorola of $408,000for the contract period of October 1, 2003 to September 30, 2004.  If theCompany elects to terminate the license before September 30, 2004, the Companywould be required to pay the balance, if any, of the minimum guarantee for thecontract period in effect at the date of cancellation.

The license agreementexpires on September 30, 2004.  We anticipate that we will enter discussionswith Motorola in order to renew the license agreement or to enter into adifferent agreement.  However, there can be no assurance that we will besuccessful in reaching agreement with respect to a renewal or differentagreement upon mutually acceptable terms, if at all.  Any failure to renew thelicense agreement or enter into a different agreement upon terms acceptable tous could have a material adverse affect on our results of operations andfinancial condition. In addition, while we believe that our commercialrelationship with Motorola is good, if we are unable to renew the licenseagreement or enter into a different agreement upon terms acceptable to us, wecan not predict how this would affect OEM sales to Motorola.  See "Item 6.Management's Discussion and Analysis-Risk Factors" In our Annual Report on Form10-KSB for the fiscal year ended September 30, 2003. 

TheCompany did not incur any long-term debt in the 2003 Period and at December 31,2003 we had no long-term debt.

OnSeptember 27, 2002, our Board of Directors authorized the repurchase of up to400,000 shares of our outstanding common stock, or approximately 7% of thenumber of shares then outstanding. As of December 31, 2003, we have repurchasedan aggregate of 66,200 shares at a cost of $92,000, but none during the 2003Quarter, under that authorization.

 

16

**Contractual Obligations and Commercial Commitments**

The Company has entered into various contractualobligations and commercial commitments that, under accounting principlesgenerally accepted in the United States, are not recorded as a liability.   Thefollowing is a summary of such contractual cash obligations as of December 31,2003:

**Contractual  Obligation or Commitment**

**Jan 04 - Dec 04**

**Jan 05- Dec 05**

**Jan 06 - Dec 07**

**Thereafter**

Employment & Consulting Agreements

$     680,000

$    680,000

$               -- 

$             -- 

Operating Leases

160,000

                                 238,000

57,000

--

License Agreements**

306,000

--

--

--

Totals

$  1,146,000

$   918,000

$      57,000

$             --  

**The amounts shown as licensee agreement obligations represent the minimumamounts the Company would incur as a royalty expense under the present terms ofits Motorola license agreement. 

TheCompany has not guaranteed the debt of any unconsolidated entity and does notengage in derivative transactions or maintain any off-balance sheet specialpurpose entities.  

ITEM 3.          CONTROLS AND PROCEDURES

**Evaluation ofdisclosure controls and procedures**.  

Inaccordance with Exchange Act Rules 13a-15 and 15d-15, our management, withthe participation of our Chief Executive Officer and Chief Financial Officer, performed an evaluation of the effectiveness of the Company's disclosurecontrols and procedures as of the end of the period covered by this QuarterlyReport. Based on that evaluation, the Company's Chief Executive Officer andChief Financial Officer concluded that the Company's disclosure controls andprocedures were effective, as of the end of the period covered by thisQuarterly Report, to provide reasonable assurance that information required tobe disclosed in the Company's reports filed or submitted under the Exchange Actis recorded, processed, summarized and reported within the time periodsspecified in the Commission's rules and forms. 

**Changes in internal controls**.  

Our management, with the participation our Chief Executive Officer and Chief Financial Officer, performed an evaluation as to whether any change in our internal controls over financial reporting (as defined in Rule 13a-15 and 15d-15 under the Exchange Act) occurred during the 2003 Quarter.  Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that no change occurred in the Company's internal controls over financial reporting during 2003 Quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal controls over financial reporting.
17

**PART II.   OTHER INFORMATION**

       

ITEM 1.                  LEGAL PROCEEDINGS

        None.

ITEM 2.                  CHANGES IN SECURITIES

        None.

ITEM 3.                  DEFAULTS UPON SENIORSECURITIES

        None.

ITEM 4.                  SUBMISSION OF MATTERS TO AVOTE OF SECURITY HOLDERS

        None

ITEM 5.                  OTHERINFORMATION

None.

ITEM 6.       EXHIBITS AND REPORTS 

(a) Exhibits filed herewith:

                31.1  Certification of the Chief ExecutiveOfficer under Section 302 of the Sarbanes-Oxley Act of 2002

                31.2  Certification of the Chief Financial Officer under Section302 of the Sarbanes-Oxley Act of 2002

                32.1 Certification of the Chief Executive Officer under Section 906 of the Sarbanes-OxleyAct of 2002

                32.2 Certification of the Chief Financial Officer under Section 906 of theSarbanes-Oxley Act of 2002

(b) Reports on Form 8-K 

    1. Form 8-K, (Item 5), reporting newemployment agreements with the Registrant's executive officers, filed onOctober 1, 2003.

                2. Form 8-K, (Item 7 andItem 12), press release announcing the Registrant's results of operations forthe period ended September 30, 2003 filed on November 13, 2003.

 

 

18

**SIGNATURES**

Inaccordance with the requirements of the Securities Exchange Act of 1934, theregistrant caused this report to be signed on its behalf by the undersigned,hereunto duly authorized.

Dated:  January 21, 2004
 
FORWARDINDUSTRIES, INC. (Registrant) 
  
 
  
By:/s/  Jerome E. Ball 
     
JeromeE. Ball                       
  
Chairmanand Chief Executive Officer
  
 
     
By:/s/  Douglas W. Sabra    
     
DouglasW. Sabra                               
  
VicePresident, Chief Financial Officer and
  
PrincipalAccounting Officer
  
 
 
 

19

Table of Contents** |
|----------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|