Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 16, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | FLEXPOINT SENSOR SYSTEMS INC | |
Entity Central Index Key | 0000925660 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 99,713,464 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | DE | |
Entity File Number | 0-24368 | |
Document Quarterly Report | true | |
Document Transition Report | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash and cash equivalents | $ 170,004 | |
Accounts receivable, net of allowance for bad debts of $114,991 and $114,991 | 68,163 | 26,471 |
Deposits and prepaid expenses | 27,249 | 26,517 |
Total Current Assets | 95,412 | 222,992 |
Long-Term Deposits | 6,550 | 6,550 |
Property and Equipment, net of accumulated depreciation of $595,163 and $593,484 | 2,011 | 3,690 |
Goodwill | 4,896,917 | 4,896,917 |
Total Assets | 5,000,890 | 5,130,149 |
Current Liabilities | ||
Bank overdraft | 63,674 | |
Accounts payable | 230,129 | 177,647 |
Accounts payable - related party | 5,200 | 2,197 |
Accrued liabilities | 1,922,684 | 1,616,951 |
Note payable, current | 89,534 | |
Convertible notes payable, net of discount of $1,200 and $-0- | 938,800 | 930,000 |
Convertible notes payable to related party, net of discount of $-0- and $-0- | 218,513 | |
Total Current Liabilities | 3,468,534 | 2,726,795 |
Long-term Liabilities | ||
Notes payable, net of current portion | 19,966 | |
Convertible notes payable to related party, net of discount of $-0- and $-0- | 218,513 | |
Total Liabilities | 3,488,500 | 2,945,308 |
Stockholders' Equity | ||
Preferred stock - $0.001 par value; 1,000,000 shares authorized; no shares issued or outstanding | ||
Common stock - $0.001 par value; 200,000,000 shares authorized; 99,713,464 shares issued and outstanding | 99,713 | 99,713 |
Additional paid-in capital | 30,874,733 | 30,872,733 |
Accumulated deficit | (29,462,056) | (28,787,605) |
Total Stockholders' Equity | 1,512,390 | 2,184,841 |
Total Liabilities and Stockholders' Equity | $ 5,000,890 | $ 5,130,149 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for bad debts | $ 114,991 | $ 114,991 |
Property and Equipment, accumulated depreciation | 595,163 | 593,484 |
Convertible notes payable, discount | 1,200 | 0 |
Convertible notes payable to related party, current discount | 0 | 0 |
Convertible notes payable to related party, non-current discount | $ 0 | $ 0 |
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 99,713,464 | 99,713,464 |
Common stock, shares outstanding | 99,713,464 | 99,713,464 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Design, Contract and Testing Revenue | $ 24,938 | $ 54,209 | $ 106,236 | $ 691,250 |
Operating Costs and Expenses | ||||
Amortization of patents and proprietary technology | 2,314 | 15,958 | ||
Cost of revenue | 12,572 | 8,545 | 42,074 | 29,206 |
Administrative and marketing expense | 132,783 | 150,800 | 393,042 | 404,287 |
Research and development expense | 80,070 | 60,498 | 227,689 | 213,956 |
Total Operating Costs and Expenses | 225,425 | 222,157 | 662,805 | 663,407 |
Net Operating Income (Loss) | (200,487) | (167,948) | (556,569) | 27,843 |
Other Income and Expenses | ||||
Interest expense | (40,373) | (79,324) | (118,165) | (236,106) |
Interest income | 15 | 12 | 283 | 35 |
Gain on extinguishment of debt | 90,325 | |||
Gain on forgiveness of debt | 57,320 | 57,320 | ||
Loss on derivative | (151,673) | (440,367) | ||
Total Other Income (Expense) | (40,358) | (173,665) | (117,882) | (528,793) |
Net Loss | $ (240,845) | $ (341,613) | $ (674,451) | $ (500,950) |
Basic and Diluted Earnings per Common Share | $ 0 | $ 0 | $ (0.01) | $ (0.01) |
Basic and Diluted Weighted-Average Common Shares Outstanding | 99,713,464 | 95,704,123 | 99,713,464 | 94,291,641 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Beginning balance at Dec. 31, 2018 | $ 92,863 | $ 29,785,568 | $ (28,212,547) | $ 1,665,884 |
Beginning balance, shares at Dec. 31, 2018 | 92,863,464 | |||
Net income (loss) | (266,822) | (266,822) | ||
Ending balance at Mar. 31, 2019 | $ 92,863 | 29,785,568 | (28,479,369) | 1,399,062 |
Ending balance, shares at Mar. 31, 2019 | 92,863,464 | |||
Conversion of notes payable to common stock | $ 6,850 | 332,237 | 339,087 | |
Conversion of notes payable to common stock, shares | 6,850,000 | |||
Net income (loss) | 107,485 | 107,485 | ||
Ending balance at Jun. 30, 2019 | $ 99,713 | 30,117,805 | (28,371,884) | 1,845,634 |
Ending balance, shares at Jun. 30, 2019 | 99,713,464 | |||
Net income (loss) | (341,613) | (341,613) | ||
Ending balance at Sep. 30, 2019 | $ 99,713 | 30,117,805 | (28,713,497) | 1,504,021 |
Ending balance, shares at Sep. 30, 2019 | 99,713,464 | |||
Beginning balance at Dec. 31, 2019 | $ 99,713 | 30,872,733 | (28,787,605) | $ 2,184,841 |
Beginning balance, shares at Dec. 31, 2019 | 99,713,464 | 99,713,464 | ||
Net income (loss) | (254,663) | $ (254,663) | ||
Ending balance at Mar. 31, 2020 | $ 99,713 | 30,872,733 | (29,042,268) | 1,930,178 |
Ending balance, shares at Mar. 31, 2020 | 99,713,464 | |||
Net income (loss) | (178,943) | (178,943) | ||
Ending balance at Jun. 30, 2020 | $ 99,713 | 30,872,733 | (29,221,211) | 1,751,235 |
Ending balance, shares at Jun. 30, 2020 | 99,713,464 | |||
Beneficial Conversion Feature upon issuance of convertible note payable | 2,000 | 2,000 | ||
Net income (loss) | (240,845) | (240,845) | ||
Ending balance at Sep. 30, 2020 | $ 99,713 | $ 30,874,733 | $ (29,462,056) | $ 1,512,390 |
Ending balance, shares at Sep. 30, 2020 | 99,713,464 | 99,713,464 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (674,451) | $ (500,950) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of patents and proprietary technology | 15,958 | |
Amortization of discount on note payable | 800 | 106,432 |
Depreciation | 1,679 | 1,679 |
Gain on settlement of debt | (90,325) | |
Gain on forgiveness of debt | (57,320) | |
Gain (loss) on change in fair value of derivative liabilities | 440,367 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (41,692) | (23,690) |
Prepaid expenses and other assets | (732) | (4,500) |
Accounts payable | 52,482 | (107,498) |
Accounts payable - related parties | 3,003 | 19,000 |
Accrued liabilities | 305,733 | 288,748 |
Net Cash Provided by (Used) in Operating Activities | (353,178) | 87,901 |
Cash Flows from Financing Activities: | ||
Proceeds from borrowings under note payable | 109,500 | |
Proceeds from bank overdrafts | 63,674 | |
Proceeds from borrowings under convertible note payable | 10,000 | 100,000 |
Net Cash Provided by Financing Activities | 183,174 | 100,000 |
Net Change in Cash and Cash Equivalents | (170,004) | 187,901 |
Cash and Cash Equivalents at Beginning of Period | 170,004 | 17,798 |
Cash and Cash Equivalents at End of Period | 205,699 | |
Supplemental Cash Flow Information: | ||
Cash paid for income taxes | ||
Cash paid for interest | ||
Supplemental Disclosure on Noncash Investing and Financing Activities | ||
Recognition of discounts on convertible notes payable | 2,000 | 86,327 |
Conversion of note payable and accrued interest to common stock | 410,574 | |
Conversion of due to related party to convertible notes | 39,000 | |
Gain on settlement of debt | 90,325 | |
Gain on forgiveness of debt | $ 57,320 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 Condensed Consolidated Interim Financial Statements Nature of Operations The COVID-19 Pandemic (the Pandemic) has had a dramatic effect on our business as well as the business of our customers. The wide ranging effects on the World Wide business market has led to a general reluctance for businesses to move forward with entering into major commitments until their future markets have been clarified. Because of this, we have experienced a significant slowdown in the size and number of orders received and, while we cannot predict when the influence of the Pandemic will end, we expect that orders will return to their former levels and increase following a return to normal business operations. Use of Estimates Cash and Cash Equivalents Fair Value Measurements Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3: Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement. The carrying value of the Companys cash, accounts payable, short-term borrowings (including convertible notes payable), and other current assets and liabilities approximate fair value because of their short-term maturity. Accounts Receivable Inventories Property and Equipment Valuation of Long-lived Assets Intangible Assets Research and Development Lease Obligations Goodwill Revenue Recognition Revenue from Contracts with Customers A part of our customer base is made up of international customers. The table below allocates revenue between domestic and international customers. The following table presents Flexpoint Sensor Systems revenues disaggregated by region and product type: Three months ended: September 30, September 30, 2020 2019 Consumer Long-term Consumer Long-term Segments Products Contract Total Products Contract Total Domestic $ 10,123 - 10,123 $ 27,907 - 27,907 International 14,815 - 14,815 26,305 - 26,305 $ 24,938 - 24,938 $ 54,209 - 54,209 Components 21,938 - 21,938 27,089 - 27,089 Engineering Services 3,000 - 3,000 27,120 - 27,120 $ 24,938 - 24,938 $ 54,209 - 54,209 Nine months ended: September 30, September 30, 2020 2019 Consumer Long-term Consumer Long-term Segments Products Contract Total Products Contract Total Domestic $ 38,842 - 38,842 $ 563,055 - 563,055 International 67,394 - 67,394 128,195 - 128,195 $ 106,236 - 106,236 $ 691,250 - 691,250 Components 38,842 - 38,842 103,907 - 103,907 Engineering Services 67,394 - 67,394 137,343 - 137,343 Licensing fee - - - 450,000 - 450,000 $ 106,236 - 106,236 $ 691,250 - 691,250 Basic and Diluted Loss Per Share Concentrations and Credit Risk - Income Taxes - Recent Accounting Pronouncements |
GOING CONCERN
GOING CONCERN | 9 Months Ended |
Sep. 30, 2020 | |
GOING CONCERN[Abstract] | |
GOING CONCERN | NOTE 2 GOING CONCERN The Company continues to accumulate significant operating losses and has an accumulated deficit of $29,462,056 at September 30, 2020. These factors raise substantial doubt about the Companys ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of these uncertainties. Management is seeking additional funding to provide operating capital for its operations until such time as revenues are sufficient to sustain our level of operations. However, there is no assurance that additional funding will be available on acceptable terms, if at all. |
NOTES PAYABLE
NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2020 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | NOTE 3 NOTES PAYABLE The Company applied for and received a Small Business Administration loan under the Paycheck Protection Program in the amount of $59,500. The loan was funded on April 30, 2020, bears an interest rate of 1% per annum and has a maturity date of April 30, 2022. Under the terms of the borrowing it is expected that this entire loan amount will be forgiven at such time as the lending institution published the form under which the request for forgiveness of the loan can be filed. The funds obtained under this loan were used for the payment of salaries, health insurance costs, rent and utilities, all of which expenses qualify for the loan forgiveness under the terms of the loan. In August 2020 the Company received $50,000 from John Kelley, a large shareholder, to meet operating expenses. Mr. Kelly indicated that he would want the $50,000 loan repaid when the Company was in a position to do so. This loan has not formally been documented by a note at the time of this filing, and there is no term or interest on the note. |
CONVERTIBLE NOTES PAYABLE
CONVERTIBLE NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES PAYABLE | NOTE 4 CONVERTIBLE NOTES PAYABLE Convertible Note Payable At September 30, 2020, there are notes outstanding with principal balances which total $940,000, on which there is $1,200 of debt discount that is being amortized over the term of the note. Of the notes, $900,000 are convertible notes bearing a 10% annual rate of interest (with a 15% default rate) and are convertible into shares of common stock at the rate of $0.05 to $0.07 per share. $40,000 is a convertible note entered into on August 8, 2011 with a former Company Director, at a rate of $0.20 per share. That note was due on December 31, 2015 and bears a default interest rate of 10%. Convertible Note Payable - Related Party At September 30, 2020, there are notes outstanding with two directors of the Company with balances of $164,257 and $54,257, respectively. The notes bear an 8% annual rate of interest with a 12% default rate and are convertible into shares of restricted common stock. Of the notes, $114,514 is convertible into shares of restricted common stock at $0.07 per share and $104,000 of the notes are convertible at $0.06 per share. All of these notes have a maturity date of March 31, 2021. |
STOCK OPTION PLANS
STOCK OPTION PLANS | 9 Months Ended |
Sep. 30, 2020 | |
STOCK OPTION PLANS [Abstract] | |
STOCK OPTION PLANS | NOTE 5 On August 25, 2005, the Board of Directors of the Company approved and adopted the 2005 Stock Incentive Plan (the Plan). The Plan became effective upon its adoption by the Board and continued in effect for ten years, terminating on August 25, 2015. This plan was approved by the stockholders of the Company at their annual meeting of shareholders on November 22, 2005. Under the Plan, the exercise price for all options issued will not be less than the average quoted closing market price of the Companys trading common stock for the thirty-day period immediately preceding the grant date plus a premium of ten percent. The maximum aggregate number of shares that may be awarded under the plan is 2,500,000 shares. On August 24, 2015, the Board of Directors approved the issuance of options to purchase 2,185,000 shares of the Companys common stock. Of the total issued, 1,960,000 options were issued to replace options held by directors and employees, which were to expire, and 225,000 options were issued to new employees. Of the options issued, 640,000 have an option price of $0.14 per share, 500,000 have an option price of $0.15 per share, 995,000 have an option price of $0.20 per share, and 50,000 have an option price of $0.25 per share. Options issued as replacement options for shares surrendered shall have immediate vesting terms. Options which are not replacements vested over a two year four month period in equal installments on the last day of 2015, 2016 and 2017, respectively. Projected data related to the expected volatility and expected life of stock options is based upon historical and other information, and notably, the Company's common stock has limited trading history. Changes in these subjective assumptions can materially affect the fair value of the estimate, and therefore, the existing valuation models do not provide a precise measure of the fair value of the Company's employee stock options. Between August 25, 2005 and August 25, 2019, the Company granted options to employees to purchase an aggregate 3,096,000 shares of common stock at exercise prices ranging from $0.15 to $2.07 per share. The options all vested by December 31, 2017 and expire 10 years from the date of grant. As of the years ended December 31, 2005 through 2019, the Company recognized a total of $2,443,768 of stock-based compensation expense, which includes charges of $0 in 2019 and $9 in 2018, leaving $0 in unrecognized expense as of December 31, 2019. There were 2,185,000 and 2,185,000 employee stock options outstanding at September 30, 2020 and December 31, 2019, respectively. A summary of all employee options outstanding and exercisable under the plan as of September 30, 2020, and changes during the three months then ended is set forth below: Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at the beginning of period 2,185,000 $ 0.17 5.65 $ -- Granted -- -- -- -- Expired -- -- -- -- Forfeited -- -- -- -- Outstanding at the end of Period 2,185,000 $ 0.17 4.90 $ -- Exercisable at the end of Period 2,185,000 $ 0.17 4.90 $ -- |
CAPITAL STOCK
CAPITAL STOCK | 9 Months Ended |
Sep. 30, 2020 | |
CAPITAL STOCK [Abstract] | |
CAPITAL STOCK | NOTE 6 CAPITAL STOCK Preferred Stock There are 1,000,000 shares of preferred stock with a par value of $0.001 per share authorized. At September 30, 2020 and December 31, 2019, there were no shares of preferred stock issued or outstanding. Common Stock There are 200,000,000 shares of common stock with a par value of $0.001 per share authorized. At September 30, 2020 and December 31, 2019, there were 99,713,464 shares of common stock issued and outstanding. The Company issued no stock during the nine months ended September 30, 2020. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2020 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 7 COMMITMENTS AND CONTINGENCIES The Company currently occupies approximately 12,548 square feet of office and manufacturing space from F.G.B.P. LLC. The building is located in a business park in Draper, Utah that consists primarily of high tech manufacturing firms and is located adjacent to Utahs main interstate highway. The Company entered into a new lease in 2019 for this facility. The lease entered into is a month-to-month lease with a 90-day termination clause and includes a basic lease payment as well as an additional component for building costs and taxes. The basic lease rate for Year 1 is $12,000 a month; it increases 3% each year thereafter. With the basic and additional component, the Company expects to pay a total lease payment of approximately $14,635 per month in 2020. The Company evaluated the lease under the new lease accounting standard and determined that it was a short-term lease due to the month-to-month provision and the 90-day notice of termination clause. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2020 | |
RELATED PARTY TRANSACTIONS [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 8 RELATED PARTY TRANSACTIONS At September 30, 2020, there was $5,200 payable to the Chief Executive Officer. At December 31, 2019, the Company had amounts of $2,197 payable to its Chief Executive Officer for expense reports which had been submitted for payment but were unpaid at December 31, 2019. In May 2019, the Company converted the amounts payable to officers to convertible notes in the amounts of $22,000 and $17,000. The notes bear interest at the rate of 8% per annum with a default rate of 12%, are convertible into shares of common stock at $0.06 per share, and have a maturity date of March 31, 2021. At September 30, 2020 and December 31, 2019, the Company had outstanding notes payable to an officer in the amount of $164,257 and outstanding notes payable to a director in the amount of $54,257. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2020 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | NOTE 9 SUBSEQUENT EVENTS The Company has evaluated subsequent events pursuant to ASC Topic 855 and has determined that there are no events that require disclosure as of the date of issuance. The majority of non-essential businesses are still closed or operating on a limited basis. It is therefore anticipated that revenue will continue to be negatively impacted through at a minimum the fourth quarter of 2020. Our ability to generate revenue will be dependent upon the pace at which businesses are allowed to resume operations. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Condensed Consolidated Interim Financial Statements | Condensed Consolidated Interim Financial Statements |
Nature of Operations | Nature of Operations The COVID-19 Pandemic (the Pandemic) has had a dramatic effect on our business as well as the business of our customers. The wide ranging effects on the World Wide business market has led to a general reluctance for businesses to move forward with entering into major commitments until their future markets have been clarified. Because of this, we have experienced a significant slowdown in the size and number of orders received and, while we cannot predict when the influence of the Pandemic will end, we expect that orders will return to their former levels and increase following a return to normal business operations. |
Use of Estimates | Use of Estimates |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Fair Value Measurements | Fair Value Measurements Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3: Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement. The carrying value of the Companys cash, accounts payable, short-term borrowings (including convertible notes payable), and other current assets and liabilities approximate fair value because of their short-term maturity. |
Accounts Receivable | Accounts Receivable |
Inventories | Inventories |
Property and Equipment | Property and Equipment |
Valuation of Long-lived Assets | Valuation of Long-lived Assets |
Intangible Assets | Intangible Assets |
Research and Development | Research and Development |
Lease Obligations | Lease Obligations |
Goodwill | Goodwill |
Revenue Recognition | Revenue Recognition Revenue from Contracts with Customers A part of our customer base is made up of international customers. The table below allocates revenue between domestic and international customers. The following table presents Flexpoint Sensor Systems revenues disaggregated by region and product type: Three months ended: September 30, September 30, 2020 2019 Consumer Long-term Consumer Long-term Segments Products Contract Total Products Contract Total Domestic $ 10,123 - 10,123 $ 27,907 - 27,907 International 14,815 - 14,815 26,305 - 26,305 $ 24,938 - 24,938 $ 54,209 - 54,209 Components 21,938 - 21,938 27,089 - 27,089 Engineering Services 3,000 - 3,000 27,120 - 27,120 $ 24,938 - 24,938 $ 54,209 - 54,209 Nine months ended: September 30, September 30, 2020 2019 Consumer Long-term Consumer Long-term Segments Products Contract Total Products Contract Total Domestic $ 38,842 - 38,842 $ 563,055 - 563,055 International 67,394 - 67,394 128,195 - 128,195 $ 106,236 - 106,236 $ 691,250 - 691,250 Components 38,842 - 38,842 103,907 - 103,907 Engineering Services 67,394 - 67,394 137,343 - 137,343 Licensing fee - - - 450,000 - 450,000 $ 106,236 - 106,236 $ 691,250 - 691,250 |
Basic and Diluted Loss Per Share | Basic and Diluted Loss Per Share |
Concentrations and Credit Risk | Concentrations and Credit Risk - |
Income Taxes | Income Taxes - |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Schedule of Disaggregated Revenue | The table below allocates revenue between domestic and international customers. The following table presents Flexpoint Sensor Systems revenues disaggregated by region and product type: Three months ended: September 30, September 30, 2020 2019 Consumer Long-term Consumer Long-term Segments Products Contract Total Products Contract Total Domestic $ 10,123 - 10,123 $ 27,907 - 27,907 International 14,815 - 14,815 26,305 - 26,305 $ 24,938 - 24,938 $ 54,209 - 54,209 Components 21,938 - 21,938 27,089 - 27,089 Engineering Services 3,000 - 3,000 27,120 - 27,120 $ 24,938 - 24,938 $ 54,209 - 54,209 Nine months ended: September 30, September 30, 2020 2019 Consumer Long-term Consumer Long-term Segments Products Contract Total Products Contract Total Domestic $ 38,842 - 38,842 $ 563,055 - 563,055 International 67,394 - 67,394 128,195 - 128,195 $ 106,236 - 106,236 $ 691,250 - 691,250 Components 38,842 - 38,842 103,907 - 103,907 Engineering Services 67,394 - 67,394 137,343 - 137,343 Licensing fee - - - 450,000 - 450,000 $ 106,236 - 106,236 $ 691,250 - 691,250 |
STOCK OPTION PLANS (Tables)
STOCK OPTION PLANS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
STOCK OPTION PLANS [Abstract] | |
Schedule of Stock Option Activity | A summary of all employee options outstanding and exercisable under the plan as of September 30, 2020, and changes during the three months then ended is set forth below: Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at the beginning of period 2,185,000 $ 0.17 5.65 $ -- Granted -- -- -- -- Expired -- -- -- -- Forfeited -- -- -- -- Outstanding at the end of Period 2,185,000 $ 0.17 4.90 $ -- Exercisable at the end of Period 2,185,000 $ 0.17 4.90 $ -- |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Nature Of Business [Line Items] | |||
Anti-dilutive securities excluded from computation of earnings per share amount | 25,987,114 | 23,492,045 | |
Percentage of value of order in vast majority of sales | 50.00% | ||
Accounts receivable, allowance for bad debts | $ 114,991 | $ 114,991 | |
Sales [Member] | Customer Three [Member] | |||
Nature Of Business [Line Items] | |||
Risk percentage | 72.00% | ||
Accounts Receivable [Member] | Customer Three [Member] | |||
Nature Of Business [Line Items] | |||
Risk percentage | 91.00% | ||
Minimum [Member] | |||
Nature Of Business [Line Items] | |||
Property and equipment, useful lives | 3 years | ||
Intangible assets, useful lives | 5 years | ||
Maximum [Member] | |||
Nature Of Business [Line Items] | |||
Property and equipment, useful lives | 10 years | ||
Intangible assets, useful lives | 15 years |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Disaggregated Revenues) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Nature Of Business [Line Items] | ||||
Engineering, Contract and Testing Revenue | $ 24,938 | $ 54,209 | $ 106,236 | $ 691,250 |
Domestic [Member] | ||||
Nature Of Business [Line Items] | ||||
Engineering, Contract and Testing Revenue | 10,123 | 27,907 | 38,842 | 563,055 |
International [Member] | ||||
Nature Of Business [Line Items] | ||||
Engineering, Contract and Testing Revenue | 14,815 | 26,305 | 67,394 | 128,195 |
Components [Member] | ||||
Nature Of Business [Line Items] | ||||
Engineering, Contract and Testing Revenue | 21,938 | 27,089 | 38,842 | 103,907 |
Engineering Services [Member] | ||||
Nature Of Business [Line Items] | ||||
Engineering, Contract and Testing Revenue | $ 3,000 | $ 27,120 | $ 67,394 | 137,343 |
Licensing fee [Member] | ||||
Nature Of Business [Line Items] | ||||
Engineering, Contract and Testing Revenue | $ 450,000 |
GOING CONCERN (Details)
GOING CONCERN (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Going Concern Details Abstract | ||
Accumulated deficit | $ 29,462,056 | $ 28,787,605 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |
Aug. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Short-term Debt [Line Items] | |||
Loan received | $ 109,500 | ||
John Kelley [Member] | |||
Short-term Debt [Line Items] | |||
Loan reeceived to pay operating expenses | $ 50,000 | ||
Small Business Administration Loan [Member] | Paycheck Protection Program [Member] | |||
Short-term Debt [Line Items] | |||
Loan received | $ 59,500 | ||
Loan funded date | Apr. 30, 2020 | ||
Interest rate of loan | 1.00% | ||
Maturity date of loan | Apr. 30, 2022 |
CONVERTIBLE NOTES PAYABLE (Narr
CONVERTIBLE NOTES PAYABLE (Narrative) (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |
May 31, 2019 | Sep. 30, 2020 | Aug. 08, 2011 | |
Debt Instrument [Line Items] | |||
Convertible notes payable, principal amount outstanding | $ 940,000 | ||
Debt discount | $ 1,200 | ||
Convertible Notes Payable [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 8.00% | ||
Debt instrument, default rate | 12.00% | ||
Debt instrument, conversion price | $ 0.06 | ||
Debt instrument, maturity date | Mar. 31, 2021 | Dec. 31, 2015 | |
Convertible Notes Payable [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, conversion price | $ 0.05 | ||
Convertible Notes Payable [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, conversion price | $ 0.07 | ||
Convertible Notes Payable [Member] | Director [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 10.00% | ||
Convertible notes payable, balance | $ 40,000 | ||
Debt instrument, conversion price | $ 0.20 | ||
Convertible Debt [Member] | |||
Debt Instrument [Line Items] | |||
Convertible notes payable, principal amount outstanding | $ 900,000 | ||
Debt instrument, interest rate | 10.00% | ||
Debt instrument, default rate | 15.00% | ||
Convertible Notes Payable to Related Party [Member] | Restricted Stock [Member] | |||
Debt Instrument [Line Items] | |||
Convertible notes payable, balance | $ 114,514 | ||
Debt instrument, conversion price | $ 0.07 | ||
Convertible notes payable, rest balance conversion | $ 104,000 | ||
Convertible notes payable, rest balance conversion price | $ 0.06 | ||
Debt instrument, maturity date | Mar. 31, 2021 | ||
Convertible Notes Payable to Related Party [Member] | Director [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, interest rate | 8.00% | ||
Debt instrument, default rate | 12.00% | ||
Convertible Notes Payable to Related Party [Member] | One Director [Member] | |||
Debt Instrument [Line Items] | |||
Convertible notes payable, principal amount outstanding | $ 164,257 | ||
Convertible Notes Payable to Related Party [Member] | Two Director [Member] | |||
Debt Instrument [Line Items] | |||
Convertible notes payable, principal amount outstanding | $ 54,257 |
STOCK OPTION PLANS (Narrative)
STOCK OPTION PLANS (Narrative) (Details) - USD ($) | Aug. 24, 2015 | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Aug. 25, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Options granted during period | ||||||
Option pricing assumptions | ||||||
Stock-based compensation expense | $ 0 | $ 9 | $ 2,443,768 | |||
Options outstanding | 2,185,000 | 2,185,000 | 2,185,000 | |||
Unrecognized compensation cost related to employee stock options | $ 0 | $ 0 | ||||
2005 Stock Incentive Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Effective term | 10 years | |||||
Shares authorized | 2,500,000 | |||||
2005 Stock Incentive Plan [Member] | Stock Options [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Issuance of options for purchase of common shares | 2,185,000 | |||||
Options granted during period | 3,096,000 | |||||
Exercise price of stock options granted, minimum | $ 0.15 | |||||
Exercise price of stock options granted, maximum | $ 2.07 | |||||
Option vesting period | 2 years 4 months | |||||
Option expiration period | 10 years | |||||
2005 Stock Incentive Plan [Member] | Stock Options [Member] | Exercise Price Range One [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Issuance of options for purchase of common shares | 640,000 | |||||
Exercise price of stock options granted | $ 0.14 | |||||
2005 Stock Incentive Plan [Member] | Stock Options [Member] | Exercise Price Range Two [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Issuance of options for purchase of common shares | 500,000 | |||||
Exercise price of stock options granted | $ 0.15 | |||||
2005 Stock Incentive Plan [Member] | Stock Options [Member] | Exercise Price Range Three [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Issuance of options for purchase of common shares | 995,000 | |||||
Exercise price of stock options granted | $ 0.20 | |||||
2005 Stock Incentive Plan [Member] | Stock Options [Member] | Exercise Price Range Four [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Issuance of options for purchase of common shares | 50,000 | |||||
Exercise price of stock options granted | $ 0.25 | |||||
2005 Stock Incentive Plan [Member] | Stock Options [Member] | Employee [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Issuance of options for purchase of common shares | 225,000 | |||||
2005 Stock Incentive Plan [Member] | Stock Options [Member] | Director [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Issuance of options for purchase of common shares | 1,960,000 |
STOCK OPTION PLANS (Schedule of
STOCK OPTION PLANS (Schedule of Stock Option Activity) (Details) | 9 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Shares | |
Outstanding at the beginning of period | shares | 2,185,000 |
Granted | shares | |
Expired | shares | |
Forfeited | shares | |
Outstanding at the end of Period | shares | 2,185,000 |
Exercisable at the end of Period | shares | 2,185,000 |
Weighted Average Exercise Price | |
Outstanding at the beginning of period | $ / shares | $ 0.17 |
Granted | $ / shares | |
Expired | $ / shares | |
Forfeited | $ / shares | |
Outstanding at the end of Period | $ / shares | 0.17 |
Exercisable at the end of Period | $ / shares | $ 0.17 |
Weighted Average Remaining Contractual Life (Years) | |
Outstanding at the beginning of period | 5 years 7 months 24 days |
Outstanding at the end of Period | 4 years 10 months 25 days |
Exercisable at the end of Period | 4 years 10 months 25 days |
Aggregate Intrinsic Value | |
Outstanding at the beginning of period | $ | |
Granted | $ | |
Expired | $ | |
Forfeited | $ | |
Outstanding at the end of Period | $ | |
Exercisable at the end of Period | $ |
CAPITAL STOCK (Details)
CAPITAL STOCK (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
CAPITAL STOCK [Abstract] | ||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, par value per share | $ 0.001 | $ 0.001 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, par value per share | $ 0.001 | $ 0.001 |
Stock issued | ||
Common stock, shares issued | 99,713,464 | 99,713,464 |
Common stock, shares outstanding | 99,713,464 | 99,713,464 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | Sep. 30, 2020USD ($)ft² |
Lessee, Lease, Description [Line Items] | |
Lease, monthly payment in 2019 | $ 12,000 |
Lease, monthly payment in 2020 | $ 14,635 |
Increase lease rate percentage | 3.00% |
F.G.B.P. LLC [Member] | |
Lessee, Lease, Description [Line Items] | |
Area of office and manufacturing space | ft² | 12,548 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |
May 31, 2019 | Sep. 30, 2020 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | |||
Accounts payable - related party | $ 5,200 | $ 2,197 | |
Convertible Notes Payable to Related Party [Member] | Officer [Member] | |||
Related Party Transaction [Line Items] | |||
Convertible notes payable, balance | $ 22,000 | ||
New Convertible Notes Payable [Member] | Officer [Member] | |||
Related Party Transaction [Line Items] | |||
Convertible notes payable, balance | $ 17,000 | ||
Convertible Notes Payable [Member] | |||
Related Party Transaction [Line Items] | |||
Debt instrument, interest rate | 8.00% | ||
Debt instrument, default rate | 12.00% | ||
Conversion price | $ 0.06 | ||
Debt instrument, maturity date | Mar. 31, 2021 | Dec. 31, 2015 | |
Chief Executive Officer [Member] | |||
Related Party Transaction [Line Items] | |||
Accounts payable - related party | $ 5,200 | 2,197 | |
Officer [Member] | |||
Related Party Transaction [Line Items] | |||
Outstanding notes payable amount | 164,257 | 164,257 | |
Director [Member] | |||
Related Party Transaction [Line Items] | |||
Outstanding notes payable amount | $ 54,257 | $ 54,257 |