Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 18, 2019 | |
Details | ||
Registrant CIK | 0001103090 | |
Fiscal Year End | --12-31 | |
Registrant Name | REFLECT SCIENTIFIC INC | |
SEC Form | 10-Q | |
Period End date | Sep. 30, 2019 | |
Tax Identification Number (TIN) | 87-0642556 | |
Number of common stock shares outstanding | 79,108,086 | |
Filer Category | Non-accelerated Filer | |
Current with reporting | Yes | |
Interactive Data Current | Yes | |
Shell Company | false | |
Small Business | true | |
Emerging Growth Company | false | |
Entity File Number | 000-31377 | |
Entity Incorporation, State or Country Code | UT | |
Entity Address, Address Line One | 1266 South 1380 West | |
Entity Address, City or Town | Orem | |
Entity Address, State or Province | UT | |
Entity Address, Postal Zip Code | 84058 | |
City Area Code | 801 | |
Local Phone Number | 226-4100 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Document Quarterly Report | true | |
Document Transition Report | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
CURRENT ASSETS | ||
Cash | $ 457,094 | $ 220,427 |
Accounts receivable, net | 40,689 | 155,543 |
Inventory, net | 182,724 | 142,325 |
Prepaid assets | 3,510 | 3,510 |
Total Current Assets | 684,017 | 521,805 |
FIXED ASSETS, NET | 4,781 | 7,766 |
OTHER ASSETS | ||
Operating lease right-of-use assets | 61,137 | 0 |
Goodwill | 60,000 | 60,000 |
Deposits | 3,100 | 3,100 |
Total Other Assets | 124,237 | 63,100 |
TOTAL ASSETS | 813,035 | 592,671 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expense | 61,053 | 52,450 |
Short-term lines of credit | 9,010 | 9,878 |
Customer deposits | 185,731 | 12,500 |
Operating lease liabilities - current portion | 48,765 | 0 |
Income taxes payable | 100 | 100 |
Total Current Liabilities | 304,659 | 74,928 |
Operating lease liabilities - long term | 12,877 | 0 |
Total Liabilities | 317,536 | 74,928 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, $0.01 par value, authorized 5,000,000 shares; No shares issued and outstanding | 0 | 0 |
Common stock, $0.01 par value, authorized 100,000,000 shares; 79,108,086 and 79,108,086 issued and outstanding, respectively | 791,081 | 791,081 |
Additional paid in capital | 20,027,369 | 20,027,369 |
Accumulated deficit | (20,322,951) | (20,300,707) |
Total Stockholders' Equity | 495,499 | 517,743 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 813,035 | $ 592,671 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets - Parenthetical - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Details | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares, Outstanding | 79,108,086 | 79,108,086 |
Common Stock, Shares, Issued | 79,108,086 | 79,108,086 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Details | ||||
REVENUES | $ 366,431 | $ 359,151 | $ 977,312 | $ 1,119,491 |
COST OF GOODS SOLD | 101,366 | 151,178 | 300,901 | 381,015 |
GROSS PROFIT | 265,065 | 207,973 | 676,411 | 738,476 |
OPERATING EXPENSES | ||||
Salaries and wages | 113,611 | 128,339 | 343,924 | 400,873 |
Rent expense | 8,977 | 6,379 | 28,173 | 27,830 |
Research and development expense | 75,417 | 34,542 | 105,040 | 49,447 |
General and administrative expense | 63,823 | 80,832 | 220,935 | 421,469 |
Total Operating Expenses | 261,828 | 250,090 | 698,072 | 899,619 |
OPERATING INCOME (LOSS) | 3,237 | (42,117) | (21,661) | (161,143) |
OTHER EXPENSE | ||||
Total Other Income (Expenses) | (1,716) | (456) | (583) | (456) |
NET INCOME (LOSS) BEFORE TAXES | 1,521 | (42,573) | (22,244) | (161,599) |
Provision for income taxes | 0 | 0 | 0 | 0 |
NET INCOME (LOSS) | $ 1,521 | $ (42,573) | $ (22,244) | $ (161,599) |
NET INCOME (LOSS) PER SHARE - BASIC AND DILUTED | $ 0 | $ 0 | $ 0 | $ 0 |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED | 79,108,086 | 76,512,086 | 79,108,086 | 73,959,705 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Total | Common Stock | Additional Paid-in Capital | Retained Earnings |
Common Stock, Shares, Outstanding | 71,312,086 | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 455,426 | $ 713,121 | $ 19,793,489 | $ (20,051,184) |
Balance, December 31, 2017 at Dec. 31, 2017 | 455,426 | $ 713,121 | 19,793,489 | (20,051,184) |
Balance, December 31, 2017 at Dec. 31, 2017 | 71,312,086 | |||
Net income (loss) | 98,721 | $ 0 | 0 | 98,721 |
Common Stock, Shares, Outstanding | 71,312,086 | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 455,426 | $ 713,121 | 19,793,489 | (20,051,184) |
Common Stock, Shares, Outstanding, Ending Balance at Mar. 31, 2018 | 71,312,086 | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Mar. 31, 2018 | 554,147 | $ 713,121 | 19,793,489 | (19,952,463) |
Balance, December 31, 2017 at Dec. 31, 2017 | 455,426 | $ 713,121 | 19,793,489 | (20,051,184) |
Balance, December 31, 2017 at Dec. 31, 2017 | 71,312,086 | |||
Net income (loss) | (161,599) | |||
Stock issued for compensation | 40,000 | |||
Common Stock, Shares, Outstanding | 71,312,086 | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 455,426 | $ 713,121 | 19,793,489 | (20,051,184) |
Common Stock, Shares, Outstanding, Ending Balance at Sep. 30, 2018 | 76,512,086 | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Sep. 30, 2018 | 501,827 | $ 765,121 | 19,949,489 | (20,212,783) |
Common Stock, Shares, Outstanding | 71,312,086 | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 554,147 | $ 713,121 | 19,793,489 | (19,952,463) |
Balance, December 31, 2017 at Mar. 31, 2018 | 554,147 | $ 713,121 | 19,793,489 | (19,952,463) |
Balance, December 31, 2017 at Mar. 31, 2018 | 71,312,086 | |||
Net income (loss) | (217,747) | (217,747) | ||
Stock issued for consulting services | 168,000 | $ 42,000 | 126,000 | 0 |
Stock issued for consulting services | 4,200,000 | |||
Stock issued for compensation | 40,000 | $ 10,000 | 30,000 | 0 |
Stock issued for compensation | 1,000,000 | |||
Common Stock, Shares, Outstanding | 71,312,086 | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 554,147 | $ 713,121 | 19,793,489 | (19,952,463) |
Common Stock, Shares, Outstanding, Ending Balance at Jun. 30, 2018 | 76,512,086 | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Jun. 30, 2018 | 544,400 | $ 765,121 | 19,949,489 | (20,170,210) |
Common Stock, Shares, Outstanding | 76,512,086 | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 544,400 | $ 765,121 | 19,949,489 | (20,170,210) |
Net income (loss) | (42,573) | (42,573) | ||
Common Stock, Shares, Outstanding | 76,512,086 | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 544,400 | $ 765,121 | 19,949,489 | (20,170,210) |
Common Stock, Shares, Outstanding, Ending Balance at Sep. 30, 2018 | 76,512,086 | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Sep. 30, 2018 | 501,827 | $ 765,121 | 19,949,489 | (20,212,783) |
Common Stock, Shares, Outstanding | 76,512,086 | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 501,827 | $ 765,121 | 19,949,489 | (20,212,783) |
Common Stock, Shares, Outstanding | 79,108,086 | 79,108,086 | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 517,743 | $ 791,080 | 20,027,369 | (20,300,707) |
Balance, December 31, 2017 at Dec. 31, 2018 | $ 517,743 | $ 791,080 | 20,027,369 | (20,300,707) |
Balance, December 31, 2017 at Dec. 31, 2018 | 79,108,086 | 79,108,086 | ||
Net income (loss) | $ (5,535) | $ 0 | 0 | (5,535) |
Common Stock, Shares, Outstanding | 79,108,086 | 79,108,086 | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 517,743 | $ 791,080 | 20,027,369 | (20,300,707) |
Common Stock, Shares, Outstanding, Ending Balance at Mar. 31, 2019 | 79,108,086 | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Mar. 31, 2019 | 512,208 | $ 791,080 | 20,027,369 | (20,306,242) |
Balance, December 31, 2017 at Dec. 31, 2018 | $ 517,743 | $ 791,080 | 20,027,369 | (20,300,707) |
Balance, December 31, 2017 at Dec. 31, 2018 | 79,108,086 | 79,108,086 | ||
Net income (loss) | $ (22,244) | |||
Stock issued for compensation | $ 0 | |||
Common Stock, Shares, Outstanding | 79,108,086 | 79,108,086 | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 517,743 | $ 791,080 | 20,027,369 | (20,300,707) |
Common Stock, Shares, Outstanding, Ending Balance at Sep. 30, 2019 | 79,108,086 | 79,108,086 | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Sep. 30, 2019 | $ 495,499 | $ 791,081 | 20,027,369 | (20,322,951) |
Common Stock, Shares, Outstanding | 79,108,086 | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 512,208 | $ 791,080 | 20,027,369 | (20,306,242) |
Balance, December 31, 2017 at Mar. 31, 2019 | 512,208 | $ 791,080 | 20,027,369 | (20,306,242) |
Balance, December 31, 2017 at Mar. 31, 2019 | 79,108,086 | |||
Net income (loss) | (18,230) | $ 0 | 0 | (18,230) |
Common Stock, Shares, Outstanding | 79,108,086 | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 512,208 | $ 791,080 | 20,027,369 | (20,306,242) |
Common Stock, Shares, Outstanding, Ending Balance at Jun. 30, 2019 | 79,108,086 | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Jun. 30, 2019 | 493,978 | $ 791,081 | 20,027,369 | (20,324,472) |
Common Stock, Shares, Outstanding | 79,108,086 | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 493,978 | $ 791,081 | 20,027,369 | (20,324,472) |
Net income (loss) | $ 1,521 | 1,521 | ||
Common Stock, Shares, Outstanding | 79,108,086 | 79,108,086 | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 493,978 | $ 791,081 | 20,027,369 | (20,324,472) |
Common Stock, Shares, Outstanding, Ending Balance at Sep. 30, 2019 | 79,108,086 | 79,108,086 | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Sep. 30, 2019 | $ 495,499 | $ 791,081 | 20,027,369 | (20,322,951) |
Common Stock, Shares, Outstanding | 79,108,086 | 79,108,086 | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | $ 495,499 | $ 791,081 | $ 20,027,369 | $ (20,322,951) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ (22,244) | $ (161,599) |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Common stock issued for services | 0 | 158,322 |
Stock issued for compensation | 0 | 40,000 |
Depreciation | 2,985 | 0 |
Accounts receivable | 114,854 | (67,554) |
Inventory | (40,399) | 12,542 |
Common stock issued for services | 0 | (11,159) |
Accounts payable and accrued expenses | 8,603 | 20,860 |
Operating lease right-of-use asset | 33,950 | 0 |
Operating lease liabilities | (34,445) | 0 |
Customer deposits | 173,231 | (55,783) |
Net Cash (used in) provided by Operating Activities | 237,535 | (67,371) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Payments on short-term line of credit | (868) | 0 |
Net Cash used in investing Activities | (868) | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net funds received from line of credit | 0 | 10,177 |
Net Cash provided by Financing Activities | 0 | 10,177 |
NET CHANGE IN CASH | 236,667 | (57,194) |
CASH AT BEGINNING OF PERIOD | 220,427 | 235,858 |
CASH AT END OF PERIOD | 457,094 | 178,664 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Interest | 588 | 203 |
Income taxes | 0 | 0 |
Operating lease right of use assets obtained for operating lease liabilities | $ 95,087 | $ 0 |
Organization, Consolidation and
Organization, Consolidation and Presentation of Financial Statements | 9 Months Ended |
Sep. 30, 2019 | |
Notes | |
Organization, Consolidation and Presentation of Financial Statements | NOTE 1 - The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to accounting principles generally accepted in the United States of America. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in accordance with rules and regulations of the Securities and Exchange Commission. The information furnished in the interim condensed consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim condensed consolidated financial statements be read in conjunction with the Companys most recent audited consolidated financial statements and notes thereto included in its December 31, 2018 financial statements. Operating results for the three and nine months ended September 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. NOTE 2 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ORGANIZATION AND LINE OF BUSINESS: Cole, Inc. (the Company) was incorporated under the laws of the State of Utah on November 3, 1999. The Company was organized to engage in any lawful activity for which corporations may be organized under the Utah Revised Business Corporation Act. On December 30, 2003 the Company changed its name to Reflect Scientific, Inc. Reflect Scientific designs, develops and sells scientific equipment for the Life Science and Manufacturing industries. The Companys business activities include the manufacture and distribution of unique laboratory consumables and disposables such as filtration and purification products, customized sample handling vials, electronic wiring assemblies, high temperature silicone, graphite and vespel/graphite sealing components for use by original equipment manufacturers (OEM) in the chemical analysis industries, primarily in the field of gas/liquid chromatography. SIGNIFICANT ACCOUNTING POLICIES: PRINCIPLES OF CONSOLIDATION: USE OF ESTIMATES: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. REVENUE RECOGNITION. We have applied the new revenue standard to all contracts from the date of initial application. We recognize revenue when or as we satisfy a performance obligation. We generally satisfy performance obligations at a point in time upon shipment of goods or, with our freezers, upon final acceptance of the unit by the customer, in accordance with the terms of each contract with the customer. A part of our customer base is made up of international customers. The table below allocates revenue between domestic and international customers. September 30, 2019 September 30, 2018 Segments Consumer Products Long-term Contracts Total Consumer Products Long-term Contracts Total Domestic $ 735,566 -- 735,566 $ 845,216 -- 845,216 International 241,746 -- 241,746 274,275 -- 274,275 $ 977,312 -- 977,312 $ 1,119,491 -- 1,119,491 Components 682,537 -- 682,537 $ 792,376 -- 792,376 Engineering services 229,425 -- 229,425 327,115 -- 327,115 $ 977,312 -- 977,312 $ 1,119,491 -- 1,119,491 ACCOUNTS RECEIVABLE: Accounts receivables are presented net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, a customers historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collection. At September 30, 2019 and December 31, 2018, the Company had accounts receivable, net of the allowance, of $40,689 and $155,543, respectively. At September 30, 2019 and December 31, 2018, the allowance for doubtful accounts was $4,000 and $4,000, respectively. INVENTORY: Inventories are presented net of an allowance for obsolescence and are stated at the lower of cost or market value based upon the average cost inventory method. The Companys inventory consists of parts for scientific vial kits, refrigerant gases, components for detectors and ultra-low temperature freezers which it builds and other scientific items. At September 30, 2019 and December 31, 2018, the Company had inventory consisting of finished goods, net of allowance, of $182,724 and $142,325, respectively. At September 30, 2019 and December 31, 2018, the allowance for obsolescence was $86,339 and $86,339, respectively. INTANGIBLE ASSETS: Costs to obtain or develop patents are capitalized and amortized over the life of the patents. Patents are amortized from the date the Company acquires or is awarded the patent over their estimated useful lives, which range from 5 to 15 years. An impairment charge is recognized if the carrying amount is not recoverable and the carrying amount exceeds the fair value of the intangible assets as determined by projected discounted net future cash flows. As of September 30, 2019 and December 31, 2018, all of the intangible assets were fully amortized. GOODWILL: Goodwill represents the excess of the Companys acquisition cost over the fair value of net assets of the acquisition. Goodwill is not amortized, but is tested for impairment annually, or when a triggering event occurs. As described in ACS 360, the Company has adopted the goodwill impairment analysis that includes quantitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. A fair-value-based test is applied at the overall Company level. The test compares the estimated fair value of the Company at the date of the analysis to the carrying value of its net assets. The analysis also requires various judgments and estimates, including general and macroeconomic conditions, industry and the Companys targeted market conditions, as well as relevant entity-specific events, such as a change in the market for the Companys products and services. After considering the qualitative factors that would indicate a need for interim impairment of goodwill and applying the two-step process described in ASC 360, management has determined that the value of Companys assets is not more likely than not less than the carrying value of the Company including goodwill, and that no impairment charge needs be recognized during the reporting periods. LEASES: In February of 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2016-02 - Leases (Topic 842), which significantly amends the way companies are required to account for leases. Under the updated leasing guidance, some leases that did not have to be reported previously are now required to be presented as an asset and liability on the balance sheet. In addition, for certain leases, what was previously classified as an operating expense must now be allocated between amortization expense and interest expense. The Company adopted this update as of January 1, 2019 using the modified retrospective transition method. Prior periods have not been restated. Upon implementation, the Company recognized an initial right-of-use asset of $95,087 and lease liability of $95,087. Due to the simplistic nature of the Company's leases, no change to retained earnings was required. See Note 4 RESEARCH AND DEVELOPMENT EXPENSE - The Company accounts for research and development costs in accordance with the Financial Accounting Standards Board's Accounting Standard Codification Topic 730 Research and Development". Under ASC 730, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and developments costs are expensed when the contracted work has been performed or as milestone results have been achieved. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. NET INCOME (LOSS) PER SHARE: The computation of basic profit and loss per share of common stock is based on the weighted average number of shares outstanding during the period. Diluted EPS is computed by dividing net earnings by the weighted-average number of common shares and dilutive common stock equivalents during the period. Common stock equivalents are not used in calculating dilutive EPS when their inclusion would be anti-dilutive. At September 30, 2019 and 2018, the Company had no common stock equivalents. RECENT ACCOUNTING PRONOUNCEMENTS: Leases Leases June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Compensation - Stock Compensation The Company has reviewed all other recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its consolidated results of operation, financial position and cash flows. Based on that review, the Company believes that none of these pronouncements will have a significant effect on its current or future earnings or operations. |
Going Concern
Going Concern | 9 Months Ended |
Sep. 30, 2019 | |
Notes | |
Going Concern | NOTE 3 GOING CONCERN The Company continues to accumulate significant operating losses and has an accumulated deficit of $20,322,951 at September 30, 2019. These factors raise substantial doubt about the Companys ability to continue as a going concern for a period of one year from the issuance of these financial statements. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. Management has taken a number of actions to reduce expenses. Management is seeking additional funding through the capital markets to facilitate the settlement of the remaining debentures, as well as to provide operating capital for its operations. However, there is no assurance that additional funding will be available on acceptable terms, if at all. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Notes | |
Leases | NOTE 4 - LEASES We adopted ASC 842 using the modified retrospective approach, which allows us not to restate our comparative periods prior to the adoption of the standard on January 1, 2019. As a result, prior period presented before this adoption are not adjusted to reflect the effect of this new standard. We have operating leases for our office and warehouse facility as well as for an automobile. We used the lease termination dates of November 30, 2020 for the building and July 7, 2021 for the automobile to calculate right of use (ROU) assets and lease liabilities. The following was included in our consolidated condensed balance sheet as of September 30, 2019: Leases As of September 30, 2019 Assets ROU operating lease assets $ 61,137 Liabilities Operating lease liabilities current portion $ 48,765 Operating lease liabilities 12,877 Total operating lease liabilities $ 61,642 We recognize lease expense on a straight-line basis over the term of the lease. Lease Cost Nine Months Ended September 30, 2019 Operating lease cost Administrative expenses $ 5,754 Rent expense 28,173 Total operating lease cost $ 33,927 Our building lease does not specify an implicit rate of interest. Therefore, we estimate our incremental borrowing rate, which is defined as the interest rate we would pay to borrow on a collateralized basis, considering such factors as length of lease term and the risks of the economic environment in which the leased asset operates. As of September 30, 2019, the following disclosures for remaining lease term and incremental borrowing rates were applicable: Supplemental Disclosures Nine Months Ended September 30, 2019 Weighted average remaining lease term 1.29 years Weighted average discount rate 7% years As of September 30, 2019, maturities of operating lease liabilities were the following: Years ended December 31, Amounts under operating leases Remaining 2019 $ 12,749 2020 48,160 2021 3,774 Total lease payments 64,682 Less imputed interest (3,040) Total $ 61,642 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Notes | |
Subsequent Events | NOTE 5 SUBSEQUENT EVENTS In accordance with ASC 855-10 management reviewed all material events through the date of this report. There are no material subsequent events to report. |
Organization, Consolidation a_2
Organization, Consolidation and Presentation of Financial Statements (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Policies | |
PRINCIPLES OF CONSOLIDATION | PRINCIPLES OF CONSOLIDATION: |
Estimates | USE OF ESTIMATES: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. |
Revenue Recognition Accounting | REVENUE RECOGNITION. We have applied the new revenue standard to all contracts from the date of initial application. We recognize revenue when or as we satisfy a performance obligation. We generally satisfy performance obligations at a point in time upon shipment of goods or, with our freezers, upon final acceptance of the unit by the customer, in accordance with the terms of each contract with the customer. A part of our customer base is made up of international customers. The table below allocates revenue between domestic and international customers. September 30, 2019 September 30, 2018 Segments Consumer Products Long-term Contracts Total Consumer Products Long-term Contracts Total Domestic $ 735,566 -- 735,566 $ 845,216 -- 845,216 International 241,746 -- 241,746 274,275 -- 274,275 $ 977,312 -- 977,312 $ 1,119,491 -- 1,119,491 Components 682,537 -- 682,537 $ 792,376 -- 792,376 Engineering services 229,425 -- 229,425 327,115 -- 327,115 $ 977,312 -- 977,312 $ 1,119,491 -- 1,119,491 |
Accounts Receivable | ACCOUNTS RECEIVABLE: Accounts receivables are presented net of an allowance for doubtful accounts. The Company maintains allowances for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, a customers historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collection. At September 30, 2019 and December 31, 2018, the Company had accounts receivable, net of the allowance, of $40,689 and $155,543, respectively. At September 30, 2019 and December 31, 2018, the allowance for doubtful accounts was $4,000 and $4,000, respectively. |
Inventory | INVENTORY: Inventories are presented net of an allowance for obsolescence and are stated at the lower of cost or market value based upon the average cost inventory method. The Companys inventory consists of parts for scientific vial kits, refrigerant gases, components for detectors and ultra-low temperature freezers which it builds and other scientific items. At September 30, 2019 and December 31, 2018, the Company had inventory consisting of finished goods, net of allowance, of $182,724 and $142,325, respectively. At September 30, 2019 and December 31, 2018, the allowance for obsolescence was $86,339 and $86,339, respectively. |
Intangible Assets | INTANGIBLE ASSETS: Costs to obtain or develop patents are capitalized and amortized over the life of the patents. Patents are amortized from the date the Company acquires or is awarded the patent over their estimated useful lives, which range from 5 to 15 years. An impairment charge is recognized if the carrying amount is not recoverable and the carrying amount exceeds the fair value of the intangible assets as determined by projected discounted net future cash flows. As of September 30, 2019 and December 31, 2018, all of the intangible assets were fully amortized. GOODWILL: Goodwill represents the excess of the Companys acquisition cost over the fair value of net assets of the acquisition. Goodwill is not amortized, but is tested for impairment annually, or when a triggering event occurs. As described in ACS 360, the Company has adopted the goodwill impairment analysis that includes quantitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. A fair-value-based test is applied at the overall Company level. The test compares the estimated fair value of the Company at the date of the analysis to the carrying value of its net assets. The analysis also requires various judgments and estimates, including general and macroeconomic conditions, industry and the Companys targeted market conditions, as well as relevant entity-specific events, such as a change in the market for the Companys products and services. After considering the qualitative factors that would indicate a need for interim impairment of goodwill and applying the two-step process described in ASC 360, management has determined that the value of Companys assets is not more likely than not less than the carrying value of the Company including goodwill, and that no impairment charge needs be recognized during the reporting periods. |
Leases | LEASES: In February of 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2016-02 - Leases (Topic 842), which significantly amends the way companies are required to account for leases. Under the updated leasing guidance, some leases that did not have to be reported previously are now required to be presented as an asset and liability on the balance sheet. In addition, for certain leases, what was previously classified as an operating expense must now be allocated between amortization expense and interest expense. The Company adopted this update as of January 1, 2019 using the modified retrospective transition method. Prior periods have not been restated. Upon implementation, the Company recognized an initial right-of-use asset of $95,087 and lease liability of $95,087. Due to the simplistic nature of the Company's leases, no change to retained earnings was required. See Note 4 |
Research and Development Expense | RESEARCH AND DEVELOPMENT EXPENSE - The Company accounts for research and development costs in accordance with the Financial Accounting Standards Board's Accounting Standard Codification Topic 730 Research and Development". Under ASC 730, all research and development costs must be charged to expense as incurred. Accordingly, internal research and development costs are expensed as incurred. Third-party research and developments costs are expensed when the contracted work has been performed or as milestone results have been achieved. Company-sponsored research and development costs related to both present and future products are expensed in the period incurred. |
Earnings Per Share | NET INCOME (LOSS) PER SHARE: The computation of basic profit and loss per share of common stock is based on the weighted average number of shares outstanding during the period. Diluted EPS is computed by dividing net earnings by the weighted-average number of common shares and dilutive common stock equivalents during the period. Common stock equivalents are not used in calculating dilutive EPS when their inclusion would be anti-dilutive. At September 30, 2019 and 2018, the Company had no common stock equivalents. |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS: Leases Leases June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Compensation - Stock Compensation The Company has reviewed all other recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its consolidated results of operation, financial position and cash flows. Based on that review, the Company believes that none of these pronouncements will have a significant effect on its current or future earnings or operations. |
Organization, Consolidation a_3
Organization, Consolidation and Presentation of Financial Statements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Tables/Schedules | |
Disaggregation of Revenue | September 30, 2019 September 30, 2018 Segments Consumer Products Long-term Contracts Total Consumer Products Long-term Contracts Total Domestic $ 735,566 -- 735,566 $ 845,216 -- 845,216 International 241,746 -- 241,746 274,275 -- 274,275 $ 977,312 -- 977,312 $ 1,119,491 -- 1,119,491 Components 682,537 -- 682,537 $ 792,376 -- 792,376 Engineering services 229,425 -- 229,425 327,115 -- 327,115 $ 977,312 -- 977,312 $ 1,119,491 -- 1,119,491 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Tables/Schedules | |
Lessee, Operating Lease, Disclosure | Leases As of September 30, 2019 Assets ROU operating lease assets $ 61,137 Liabilities Operating lease liabilities current portion $ 48,765 Operating lease liabilities 12,877 Total operating lease liabilities $ 61,642 |
Lease, Cost | Lease Cost Nine Months Ended September 30, 2019 Operating lease cost Administrative expenses $ 5,754 Rent expense 28,173 Total operating lease cost $ 33,927 |
Lessee, Operating Lease, Liability, Maturity | Years ended December 31, Amounts under operating leases Remaining 2019 $ 12,749 2020 48,160 2021 3,774 Total lease payments 64,682 Less imputed interest (3,040) Total $ 61,642 |
Organization, Consolidation a_4
Organization, Consolidation and Presentation of Financial Statements (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Domestic revenues | $ 735,566 | $ 845,216 | |||
International revenues | 241,746 | 274,275 | |||
REVENUES | $ 366,431 | $ 359,151 | 977,312 | 1,119,491 | |
Components revenues | 682,537 | 792,376 | |||
Engineering services revenues | 229,425 | $ 327,115 | |||
Accounts receivable, net | 40,689 | 40,689 | $ 155,543 | ||
Accounts Receivable, Allowance for Credit Loss | 4,000 | 4,000 | 4,000 | ||
Inventory, net | 182,724 | 182,724 | 142,325 | ||
Inventory Adjustments | 86,339 | 86,339 | $ 86,339 | ||
Initial operating lease liability | $ 95,087 | $ 95,087 |
Going Concern (Details)
Going Concern (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Details | ||
Accumulated deficit | $ 20,322,951 | $ 20,300,707 |
Leases (Details)
Leases (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Details | |||||
Operating lease right-of-use assets | $ 61,137 | $ 61,137 | $ 0 | ||
Operating lease liabilities - current portion | 48,765 | 48,765 | 0 | ||
Operating lease liabilities - long term | 12,877 | 12,877 | $ 0 | ||
Operating Lease, Liability | 61,642 | 61,642 | |||
Operating Lease, Expense | 5,754 | ||||
Rent expense | $ 8,977 | $ 6,379 | 28,173 | $ 27,830 | |
Operating Lease, Cost | $ 33,927 | ||||
Operating Lease, Weighted Average Remaining Lease Term | 1 year 3 months 14 days | 1 year 3 months 14 days | |||
Operating Lease, Weighted Average Discount Rate, Percent | 7.00% | 7.00% | |||
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year | $ 12,749 | $ 12,749 | |||
Lessee, Operating Lease, Liability, Payments, Due Year Two | 48,160 | 48,160 | |||
Lessee, Operating Lease, Liability, Payments, Due Year Three | 3,774 | 3,774 | |||
Lessee, Operating Lease, Liability, Payments, Due | $ 64,682 | 64,682 | |||
Finance Lease, Interest Payment on Liability | $ (3,040) |