FORM 10-QSB/A
(Amendment No. 1)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarterly Period Ended March 31, 1999
Commission File Number 0-24368
FLEXPOINT SENSOR SYSTEMS, INC.
(Formerly Micropoint, Inc.)
(Exact name of small business issuer as identified in its charter)
Delaware 87-0620425
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
6906 South 300 West, Midvale, Utah 84047
(Address of principal executive offices)
(Zip Code)
(801) 568-5111
(Registrant's telephone number, including area code)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
[ x ] Yes [ ] No
State the number of shares outstanding of each of the issuer's classes of
common equity, as of May 7, 1999: 17,148,554
<PAGE>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements.
FLEXPOINT SENSOR SYSTEMS, INC. AND SUBSIDIARIES
(A Company in the Development Stage)
CONDENSED CONSOLIDATED BALANCE SHEETS
UNAUDITED
March 31, December 31,
1999 1998
-------------- --------------
ASSETS
Current Assets
Cash $ 1,102,325 $ 657,775
Trade accounts receivable, net of allowance
of $89,801 and $90,721 209,541 298,586
Royalties receivable - 152,570
Receivable from shareholder - 1,573,750
Inventory 106,522 42,691
Prepaid expense 32,337 50,915
-------------- --------------
Total Current Assets 1,450,725 2,776,287
-------------- --------------
Property and Equipment 2,761,424 1,273,326
Less accumulated depreciation (463,226) (387,858)
-------------- --------------
Net Property and Equipment 2,298,198 885,468
-------------- --------------
Goodwill, Net of Accumulated Amortization of
$83,861 and $77,871 35,941 41,931
Deposits 52,049 246,441
Patents, net of accumulated amortization of
$48,618 and $45,018 113,831 101,331
-------------- --------------
Total Assets $ 3,950,744 $ 4,051,458
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Trade accounts payable $ 425,407 $ 348,473
Related party payable - 1,234
Accrued liabilities 450,011 100,290
Income taxes payable 8,314 8,314
-------------- --------------
Total Current Liabilities 883,732 458,311
-------------- --------------
Stockholders' Equity
Preferred stock - $0.001 par value; 1,000,000
shares authorized; - no shares issued - -
Common stock - $0.001 par value; 100,000,000
shares authorized; 17,148,554 and 16,990,296
shares issued and outstanding 17,149 16,990
Additional paid in capital 9,928,082 9,127,091
Unearned Compensation (116,586) -
Deficit accumulated during the
development stage (6,761,633) (5,550,934)
-------------- --------------
Total Stockholders' Equity 3,067,012 3,593,147
-------------- --------------
Total Liabilities and Stockholders' Equity $ 3,950,744 $ 4,051,458
============== ==============
The accompanying notes are an integral part of these financial statements.
2
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FLEXPOINT SENSOR SYSTEMS, INC. AND SUBSIDIARIES
(A Company in the Development Stage)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
<TABLE>
<CAPTION>
For the Period
January 5, 1995
(Date of
Inception)
For the Three Months Through
Ended March 31, March 31,
1999 1998 1999
-------------- -------------- --------------
<S> <C> <C> <C>
Sales $ 121,757 $ 60,088 $ 3,412,482
Cost of sales 845 44,726 1,529,148
-------------- -------------- --------------
Gross profit 120,912 15,362 1,883,334
General and administrative expense 674,063 317,269 4,617,101
Research and development 670,079 153,757 3,974,028
-------------- -------------- --------------
Loss from operations (1,223,230) (455,664) (6,707,795)
Interest expense - (40) (71,201)
Interest income 11,845 - 47,456
Other income (expense) 686 - (30,093)
-------------- -------------- --------------
Net Loss $ (1,210,699) $ (455,704) $ (6,761,633)
============== ============== ==============
Basic and Diluted Loss Per Common Share $ (0.07) $ (0.05) $ (0.60)
============== ============== ==============
Weighted average number of common
shares used in per share calculation 17,262,234 9,860,279 11,345,729
============== ============== ==============
The accompanying notes are an integral part of these financial statements.
4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FLEXPOINT SENSOR SYSTEMS, INC. AND SUBSIDIARIES
(A Company in the Development Stage)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
For the Period
January 5, 1995
(Date of
Inception)
For the Three Months Through
Ended March 31, March 31,
1999 1998 1999
-------------- -------------- --------------
<S> <C> <C> <C>
Cash Flows From Operating Activities
Net loss $ (1,210,699) $ (455,704) $ (6,761,633)
Adjustments to reconcile net loss to
net cash used by operating activities - - (21,225)
Gain on Sale of available-for-sale
securities - - -
Loss on sale of assets - - 9,227
Depreciation and amortization 84,958 34,657 608,041
Stock issued for services - - 268,102
Non-cash compensation for issuance
of options 51,539 - 51,539
Allowance for doubtful accounts - - 242,288
Write-off of related party receivable - - -
Changes in operating assets and liabilities:
Accounts receivable 241,615 (5,318) (315,788)
Inventory (63,831) - (106,522)
Accounts payable 76,934 (332,775) 246,593
Accrued liabilities 349,721 (264,211) 381,027
Deferred revenue - - (6,163)
Other assets 171,736 45,489 (110,489)
-------------- -------------- --------------
Net Cash Used By Operating Activities (298,027) (977,862) (5,515,003)
-------------- -------------- --------------
Cash Flows From Investing Activities
Payments to Flexpoint prior to
acquisition - - (268,413)
Cash paid to acquire Tamco - - (25,000)
Proceeds from the sale of available-for-
sale securities - - 455,082
Net cash received form Nanotech
acquisition - - 1,492,907
Payments received from related parties - - 34,661
Collection of receivables from escrow
agent - - 64,825
Payments for the purchase of property
and equipment (1,448,098) (153,793) (2,448,895)
Proceeds received from sale of property
and equipment - - 22,682
Investment in patents (16,100) (12,147) (126,424)
-------------- -------------- --------------
Net Cash Used By Investing Activities (1,464,198) (165,940) (798,575)
-------------- -------------- --------------
Cash Flows From Financing Activities
Proceeds from the issuance of stock 633,025 8,000 4,723,689
Cash payments to officers to repurchase
stock - - (50,000)
Cash paid for offering costs - - (123,020)
Proceeds from borrowings - 1,565 303,960
Principal payments of long-term debt - (303,336) (398,751)
Proceeds of bridge loan - 1,000,000 1,000,000
Proceeds from stock subscription
receivable 1,573,750 390,000 1,963,750
Proceeds from related party notes - - 60,208
Principal payments of related party notes - (13,329) (63,933)
-------------- -------------- --------------
Net Cash Provided By Financing
Activities 2,206,775 1,082,900 7,415,903
-------------- -------------- --------------
Net Change In Cash 444,550 (60,902) 1,102,325
Cash at Beginning of Period 657,775 106,494 -
-------------- -------------- --------------
Cash at End of Period $ 1,102,325 $ 45,592 $ 206,798
============== ============== ==============
The accompanying notes are an integral part of these financial statements.
4
</TABLE>
<PAGE>
NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Through April 1998, the Company operated through Sensitron, Inc. a Utah
Corporation, at which time it changed its name to Micropoint, Inc. In June
1999 the name was changed to Flexpoint Sensor Systems, Inc.
Principles of Consolidation - The accompanying consolidated financial
statements include the accounts of Flexpoint Sensor Systems, Inc. (Flexpoint)
and its wholly owned subsidiaries. The operations of acquired entities have
been included from the dated of their acquisitions. Intercompany Transactions
and accounts have been eliminated in consolidation.
Restatement - As further discussed in Note 4, the accompanying condensed
consolidated financial statements have been restated to correctly reflect
compensation resulting from grants of stock options and to correct timing of
depreciation of property and equipment. These restated condensed consolidated
financial statements should be read in conjunction with the annual financial
statements included in Form 10-KSB as of December 31, 1999.
Nature of Operations - The Company is a development stage enterprise engaged
principally in designing, engineering, and manufacturing sensor technology and
equipment using flexible potentiometer technology. Flexpoint, Inc. entered
into a Purchase and Supply Agreement (the "Supply Agreement") with Delphi
Automotive Systems ("Delphi") in June 1998. Under the terms of the Supply
Agreement, the Company will supply its proprietary sensor mats to Delphi for
integration into a weight based suppression system as a critical part of a
smart air bag system. The Supply Agreement provides that such sensor mats will
be exclusively supplied to General Motors, through Delphi, by the Company
through 2002. The Company is looking to the Supply Agreement to provide the
bulk of its revenues in the immediate future. . The information regarding the
Supply Agreement is forward looking information. Such forward looking
information is subject to many risks and uncertainties, including the fact
that Delphi is not obligated under the terms of the Supply Agreement to
purchase any minimum number of sensor mats and there can be no assurance that
the Supply Agreement will result in any material amount of sales.
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 in the financial statements
and accompanying notes. Actual results could differ from those estimates.
Interim Financial Statements - The accompanying condensed consolidated
balance sheets, and the condensed consolidated statements of operations and
cash flows are unaudited. In the opinion of management, all necessary
adjustments (which include only normal recurring adjustments) have been made
to present fairly the financial position, results of operations and cash flows
for the periods presented. The financial statements have been condensed and do
not contain all of the disclosure required by generally accepted accounting
principles. Accordingly, these statements should be read in conjunction with
the annual financial statements included in the annual reports on Form 10-KSB,
dated December 31, 1998 and 1999. The results of operations for the three
months ended March 31, 1999 are not necessarily indicative of the operating
results that occurred for the entire year.
Business Condition - The accompanying financial statements contemplate
continuation of the Company as a going concern. However, the Company has
suffered losses from operations and has had negative cash flows from operating
activities which conditions raise substantial doubt about the Company's
ability to continue as a going concern. The company has negotiated a
significant contract to supply its flexible sensor
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mat to an automotive component manufacturer, which, if successful, will
provide significant revenue to the Company. Management believes this and
other similar potential contracts will provide sufficient cash flows for the
Company to continue as a going concern at to ultimately establish profitable
operations. However, there is no assurance that these objectives will be
accomplished
The Company is concurrently seeking funding from several sources. The Company
has no material current contractual arrangements with respect to additional
financing and there can be no assurance that additional financing will be
available on commercially reasonable terms or at all. Any inability to obtain
additional financing will have a material adverse effect on the Company,
including possibly requiring the Company to significantly curtail or cease its
operations.
NOTE 2 - PROPERTY AND EQUIPMENT
At March 31, 1999 property and equipment consisted of the following:
Furniture and fixtures $ 79,558
Machinery and equipment 1,596,727
Office equipment 186,233
Software 30,919
Leasehold improvements 867,987
-----------------
Total $ 2,761,424
=================
Of the $867,987 of leasehold improvements, $483,833 is for the infrastructure
required by the Supply Agreement. Depreciation expense for the three months
ended March 31, 1999 and 1998 was $75,368 and $25,068 respectively.
NOTE 3 - NON CASH COMPENSATION
The Company measures compensation under stock-based options and plans using
the intrinsic value method prescribed in Accounting Principles Opinion 25,
Accounting for Stock Issued to Employees, and related interpretations, for
stock options granted to employees, and determines compensation cost under
options granted to non-employees based upon the fair value of the options at
the grant dates consistent with Statement of Financial Accounting Standards
No. 123, Accounting for Stock-Based Compensation.
During the quarter, the Company granted options to new employees which are
exercisable at $4.00 per share. The intrinsic value of these options was
$168,125 and is being recognized over the period the options vest.
Amortization of the deferred compensation of $51,539 was recognized during the
three months ending March 31, 1999. Had compensation cost for the Plan been
determined based upon the fair value of the options at the grant dates
consistent with the alternative method of SFAS No. 123, Accounting for Stock
Based Compensation, the Company would have recognized approximately $65,800 in
non-cash compensation.
NOTE 4 - RESTATEMENT
During the three months ending March 31, 1999, the Company hired additional
employees and granted, as an incentive, stock options at an exercise price
equal to the price of restricted common stock being sold by the Company in a
Private Placement which was below the current market price. Therefore,
additional unearned compensation of $116,586 was recorded in a contra equity
account in this restatement that was not recorded in the original filing.
This amount will be amortized over the vesting periods of the options
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<PAGE>
granted. Amortization of unearned compensation during the three months ended
March 31, 1999 totaled $51,539.
Item 2. Management's Discussion and Analysis or Plan of Operation.
The following discussion and analysis provides information which
management believes is relevant to an assessment and understanding of the
consolidated results of operations and financial condition of Flexpoint Sensor
Systems, Inc. The discussion should be read in conjunction with the condensed
consolidated financial statements, related notes and Management's Discussion
and Analysis or Plan of Operation for the year ended December 31, 1998.
Wherever in this discussion the term "Company" is used, it should be
understood to refer to Flexpoint Sensor Systems, Inc. and its wholly owned
subsidiary, Sensitron, Inc. ("Sensitron"), a Utah corporation, and Sensitron's
wholly owned subsidiaries, Flexpoint, Inc. and Technology and Machine Company,
Inc. ("Tamco"), on a consolidated basis, except where the context clearly
indicates to the contrary. The business operations of the Company are
conducted through Flexpoint, Inc. and Tamco. Prior to the April 1998, merger
wherein Flexpoint Sensor Systems, Inc. acquired Sensitron (the "Acquisition"),
Flexpoint Sensor Systems Inc. had no operations. The Acquisition was accounted
as a reorganization of Sensitron. The historical financial statements prior to
the Acquisition are those of Sensitron and have been restated accordingly.
Overview
The Company is a development stage company and, since inception, has
incurred losses from operations. As restated as of March 31, 1999, the Company
had cumulative net losses totaling $6,761,633. The Company is primarily
engaged in the sensor business and is currently marketing proprietary patented
sensor technology know as the Bend Sensor TM technology (the "Technology").
Sensing devices can be used to measure or sense changes in deflection and are
typically used to trigger an electronic device when the sensor is activated.
The worldwide market for sensing devices has grown significantly as a result
of better technology and new applications for sensing technology. This growth
has resulted in a corresponding increase in demand for high performance
sensing products. Management believes this worldwide market growth will
continue.
Restatement
During the three months ending March 31, 1999, the Company hired
additional employees and granted, as an incentive, stock options at an
exercise price equal to the price of restricted common stock being sold by
the Company in a Private Placement which was below the current market price.
Therefore, additional unearned compensation of $116,586 was recorded in a
contra equity account in this restatement that was not recorded in the
original filing. This amount will be amortized over the vesting periods of the
options granted. Amortization of unearned compensation during the three months
ended March 31, 1999 totaled $51,539.
Financial Position
As restated, the Company had $1,102,325 in cash as of March 31, 1999,
representing an increase of $444,550 from December 31, 1998. Working capital
as of March 31, 1999, decreased to $566,993 as compared to working capital of
$2,317,976 at December 31, 1998. The decrease is largely due to the
acquisition of $1,448,098 in new equipment and leasehold improvements at the
new manufacturing facility needed to meet the projected demand of the Delphi
agreement.
Results of Operations
As restated, during the three months ended March 31, 1999, the Company
had sales of $121,757 comprised almost entirely of engineering fees; compared
with sales of $60,088 for the comparable period from the prior year, comprised
primarily of product sales and engineering fees.
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Substantially all of the Company's revenues during the three ended March
31, 1999 were generated under a Purchase and Supply Agreement (the "Supply
Agreement") between the Company and Delphi Automotive Systems ("Delphi") that
was executed in June 1998. Under the Supply Agreement the Company will supply
its proprietary sensor mats to Delphi for integration into a weight based
suppression system as a critical part of a smart air bag system. The Supply
Agreement provides that such sensor mats will be exclusively supplied to
General Motors, through Delphi, by the Company through 2002.
The Company anticipates that its future success will be highly dependent
on Delphi. Although the Supply Agreement has not accounted for substantial
revenue to date, the Company could have over $300,000,000 in sales under that
Supply Agreement and it anticipates that the revenue generated from the Supply
Agreement will become a significant portion of the Company's revenues. The
projected sales and timing thereof is forward looking information and is
subject to many risks and uncertainties, including the fact that although the
Supply Agreement is a multi-year contract, it does not require Delphi to
purchase a specific minimum quantity of products. In addition, with the award
of the Supply Agreement and subsequent increases in the projected
manufacturing output under the agreement, the Company will need to materially
increase spending for additional facilities, equipment and personnel. The
Company presently does not have the funding to make the required expenditure.
See "--Liquidity and Capital Resources." As a result, the Company's business,
financial condition or results of operations could be materially adversely
affected if sufficient additional funding is not timely acquired or if sales
do not materialize as projected under the Supply Agreement, of which there can
be no assurance.
Substantially all of the Company's revenues during the three and ended
March 31, 1998 were generated under a license agreement (the "License
Agreement") whereby the Company granted to Ohio Art the exclusive worldwide
right to sell products incorporating the Technology in the toy, traditional
games and video game markets. The License Agreement provided for certain up
front fees and minimum royalties in order for Ohio Art to maintain such
exclusive rights. Certain toy customers of the Company have indicated that
they will be getting out of the plush toy business and/or will not be
manufacturing products using sophisticated sensor systems. Ohio Art has not
committed to manufacture or sell any other licensed products during 1999 or
thereafter. The toy industry is cyclical and the Company expects that the bulk
of annual royalty revenues will be greater in the second and third quarters of
any given year. As a result, the Company believes that the revenues under the
License Agreement during 1999 will be substantially less than in 1998. There
can be no assurance as to what level of sales, if any, the Company will secure
under the License Agreement in future years.
License and supply arrangements, such as those discussed above, create
certain risks for the Company, including (i) reliance for sales of products on
other parties; (ii) if the Company's products are marketed under other
parties' labels, goodwill associated with use of the products may inure to the
benefit of the other parties rather than the Company; and (iii) the Company
may have only limited protection from changes in manufacturing costs and raw
materials costs.
As restated, general and administrative expenses for the three ended
March 31, 1999 were $674,063 compared with $317,269 for the comparable periods
from the prior year. The increase in expenditures between the periods resulted
primarily from increases in salary and wage expenses as a result of hiring
additional accounting, management and clerical employees, and increases in
advertising and consulting expenses. General and administrative expenses
during the first quarter of 1998 were also limited by lack of available funds.
As restated, research and development ("R&D") expenses for the three
ended March 31, 1999 were $670,079 compared with $153,757 for the comparable
periods from the prior year. The increase in expenditures between the periods
resulted primarily from increases in R&D spending relating to the Supply
Agreement. Specifically, the Company hired additional engineering personnel
and software consultants in preparation for the beginning of production under
the Delphi agreement. Research and development expenses were also limited in
the first quarter of 1998 by lack of available funds
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Net interest and other income was $11,845 and $686 for the three months
ended March 31, 1999, respectively. The net interest and other income relates
mainly to interest earned on funds on deposit.
Liquidity and Capital Resources
To date, the Company has financed its operations principally through
private placements of debt and equity securities and product sales. As
restated, the Company generated $7,415,903 in net proceeds through financing
activities from inception through March 31, 1999. The Company used net cash in
operating activities of $298,027 during the three months ended March 31, 1999.
As of March 31, 1999, the Company's liabilities totaled $883,732. The Company
had working capital as of March 31, 1999 of $566,993.
The Company has committed to spend $233,010 in lease payments for its
physical facilities during the remainder of 1999 and $309,480, $299,550,
$249,900 and $249,900 in physical facilities lease payments for the years 2000
through 2003, respectively. The Company's working capital and other capital
requirements for the foreseeable future will vary based upon a number of
factors, including the costs to expand facilities, complete development and
bring the certain product utilizing the Technology to commercial viability and
the level of sales of and marketing for the Company's products. With the award
of the Supply Agreement and subsequent increase in the projected manufacturing
output under the agreement, the Company has needed to materially increase
spending for additional facilities, equipment and personnel. The Company will
need to raise substantial additional funding to fully execute its business
plan which includes completing two additional production lines to fulfill its
anticipated manufacturing obligations under the Supply Agreement, as amended.
The Company is concurrently seeking additional funding from several
sources. The Company has no material current contractual arrangements with
respect to additional financing and there can be no assurance that additional
financing will be available on commercially reasonable terms or at all. Any
inability to obtain additional financing will have a material adverse effect
on the Company, including possibly requiring the Company to significantly
curtail or cease its operations.
Year 2000
The Company uses computers systems and microprocessors that are embedded
in systems the Company uses. Computers and embedded microprocessors have the
potential for operational problems if they lack the ability to handle the
transition to the Year 2000. Because this issue has the potential to cause
disruption of the Company's business operations, the Company has and is
seeking to identify and remediate potential Year 2000 problems in its business
information systems and other systems embedded in its engineering and
manufacturing operations. In addition, the Company has communicated with its
major suppliers, dealers, distributors and other third parties in order to
assess and reduce the risk that the Company's operations could be adversely
affected by the failure of these third parties to adequately address the Year
2000 issue.
The Company uses computers systems principally for product design,
product prototyping, manufacturing and administrative functions such as
communications, word processing, accounting and management and financial
reporting. The Company uses embedded microprocessors principally in its
manufacturing and engineering operations. The Company's principal computer
systems (including the embedded microprocessors systems) have been purchased
since December 31, 1997 and the vendors supplying such systems have generally
represented that such systems are Year 2000 compliant. The software utilized
by the Company is generally standard "off the shelf" software, typically
available from a number of vendors. The Company has verified with its software
vendors that the services and products provided are, or will be, Year 2000
compliant. In addition, the Company has certain software that has been written
specifically for use by the Company and the suppliers of such software have
warranted that it is Year 2000 compliant. Based on such verification, the
Company believes that its computer systems and software is Year 2000 compliant
in all material respects. The Company estimates that the cost to
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redevelop, replace or repair its technology will not be material. The Company
is not using any independent verification or validation procedures. There can
be no assurance, however, that such systems and/or programs are or will be
Year 2000 compliant and that the failure of such would not have a material
adverse impact on the Company's business and operations.
In addition to its own computer systems, in connection with its business
activities, the Company interacts with suppliers, customers, and financial
service organizations who use computer systems. The Company has communicated
with such parties regarding their state of Year 2000 readiness. Based on its
assessment activity to date, the Company believes that a majority of the
suppliers, customers and financial service organizations with whom it
interacts are making acceptable progress toward Year 2000 readiness. The
Company currently believes that the most reasonable likely worst case scenario
is that there will be some localized disruptions of supplier, customer and/or
financial services that will affect the Company and its suppliers, and
distribution channels for a short time rather than systemic or long-term
problems affecting its business operations as a whole. In view of the
foregoing, the Company does not currently anticipate that it will experience a
significant disruption of its business as a result of the Year 2000 issue.
However, there is still uncertainty about the broader scope of the Year 2000
issue as it may affect the Company and third parties that are critical to the
Company's operations. For example, lack of readiness by electrical and water
utilities, financial institutions, government agencies or other providers of
general infrastructure could pose significant impediments to the Company's
ability to carry on its normal operations in the area or areas so affected.
The Company is currently evaluating what contingency plans, if any, to make in
the event the Company or parties with whom the Company does business
experience Year 2000 problems.
The statements made herein about the costs expected to be associated with
the Year 2000 compliance and the results that the Company expects to achieve,
constitute forward looking information. As noted above, there are many
uncertainties involved in the Year 2000 issue, including the extent to which
the Company will be able to successfully and adequately provide for
contingencies that may arise, as well as the broader scope of the Year 2000
issues as it may affect third parties that are not controlled by the Company.
Accordingly, the costs and results of the Company's Year 2000 program and the
extent of any impact on the Company's operations could vary materially from
those stated herein.
Forward-Looking Statements
When used in this Form 10-QSB, in other filings by the Company with the
SEC, in the Company's press releases or other public or stockholder
communications, or in oral statements made with the approval of an authorized
executive officer of the Company, the words or phrases "would be," "will
allow," "intends to," "will likely result," "are expected to," "will
continue," "is anticipated," "estimate," "project," or similar expressions are
intended to identify "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995.
The Company cautions readers not to place undue reliance on any
forward-looking statements, which speak only as of the date made, are based on
certain assumptions and expectations which may or may not be valid or actually
occur, and which involve various risks and uncertainties, including but not
limited to risk of product demand, market acceptance, economic conditions,
competitive products and pricing, difficulties in product development,
commercialization, and technology, and other risks. In addition, sales and
other revenues may not commence and/or continue as anticipated due to delays
or otherwise. As a result, the Company's actual results for future periods
could differ materially from those anticipated or projected. Please refer to
the "Management's Discussion and Analysis or Plan of Operation" and
specifically the discussion under "Other Factors" that is found in the
Company's Annual Report on Form 10-KSB for the period ended December 31, 1998,
for more details.
Unless otherwise required by applicable law, the Company does not
undertake, and specifically disclaims any obligation, to update any
forward-looking statements to reflect occurrences, developments, unanticipated
events or circumstances after the date of such statement.
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PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT
2.1 Agreement and Plan of Reorganization (Schedules are omitted)
(Incorporated by referenced to Exhibit 2.1 of the Company's
Current Report on Form 8-K, dated April 9, 1998).
3(i).1 Restated Certificate of Incorporation of Micropoint
(Incorporated by reference to Exhibit 3(i).1 of the
Company's Quarterly Report on Form 10-QSB, dated September
30, 1998).
3(i).2 Articles of Incorporation of Sensitron, Inc. (Incorporated
by referenced to Exhibit 3(i).3 of the Company's Annual
Report on Form 10-KSB, dated March 31, 1998).
3(i).3 Articles of Incorporation of Flexpoint, Inc. (Incorporated
by referenced to Exhibit 3(i).4 of the Company's Annual
Report on Form 10-KSB, dated March 31, 1998).
3(i).4 Articles of Incorporation of Technology and Machine Company,
Inc. (Incorporated by referenced to Exhibit 3(i).5 of the
Company's Annual Report on Form 10-KSB, dated March 31,
1998).
3(ii).1 Restated and Amended Bylaws of Micropoint (Incorporated by
reference to Exhibit 3(ii).1 of the Company's Quarterly
Report on Form 10-QSB, dated September 30, 1998).
3(ii).2 Bylaws of Sensitron, Inc. (Incorporated by referenced to
Exhibit 3(ii).2 of the Company's Annual Report on Form
10-KSB, dated March 31, 1998).
3(ii).3 Bylaws of Flexpoint, Inc. (Incorporated by referenced to
Exhibit 3(ii).3 of the Company's Annual Report on Form
10-KSB, dated March 31, 1998).
3(ii).4 Bylaws of Technology and Machine Company, Inc. (Incorporated
by referenced to Exhibit 3(ii).4 of the Company's Annual
Report on Form 10-KSB, dated March 31, 1998).
10.1 Employment Agreement with Douglas M. Odom (Incorporated by
reference to Exhibit 10.1 of the Company's current report on
Form 8-K, dated April 9, 1998).
10.2 Lease Agreement between 72nd South Associates and the
Company (Incorporated by reference to Exhibit 10.2 of the
Company's current report on Form 8-K, dated April 9, 1998).
10.3 Agreement between Ohio Art and the Company (certain portions
of the agreement were omitted from the exhibit pursuant to a
grant of confidential treatment) (Incorporated by reference
to Exhibit 10.3 of the Company's current report on Form 8-K,
dated April 9, 1998).
10.4 Purchase and Supply Agreement by and among Flexpoint, Inc.
and Delphi Automotive Systems (certain portions of the
agreement were omitted from the exhibit pursuant to a grant
of confidential treatment) (Incorporated by reference to
Exhibit 10.4 to the Company's annual report on Form 10-KSB,
dated December 31, 1998).
10.5 Industrial Space Lease between Prudential Insurance Company
of America and Micropoint (Incorporated by reference to
Exhibit 10.5 to the Company's annual report on Form 10-KSB,
dated December 31, 1998).
11
<PAGE>
27.1 Financial Data Schedule
(b) Reports on Form 8-K:
None.
12
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Date: April 24, 2000 FLEXPOINT, INC.
By /s/ Douglas M. Odom
-------------------------------
Douglas M. Odom
President, Chief Executive Officer,
Director
Date: April 24, 2000 By /s/ Thomas N. Strong
--------------------------------
Thomas N. Strong
Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS FOR THE THREE MONTH PERIOD ENDED MARCH 31, 1999, AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 1,102,325
<SECURITIES> 0
<RECEIVABLES> 299,342
<ALLOWANCES> 89,801
<INVENTORY> 106,522
<CURRENT-ASSETS> 1,450,725
<PP&E> 2,761,424
<DEPRECIATION> 463,226
<TOTAL-ASSETS> 3,950,744
<CURRENT-LIABILITIES> 883,732
<BONDS> 0
0
0
<COMMON> 17,149
<OTHER-SE> 3,049,863
<TOTAL-LIABILITY-AND-EQUITY> 3,950,744
<SALES> 1,061
<TOTAL-REVENUES> 121,757
<CGS> 845
<TOTAL-COSTS> 1,344,828
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,210,699)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,210,699)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,210,699)
<EPS-BASIC> (.07)
<EPS-DILUTED> (.07)
</TABLE>
