FLEXPOINT SENSOR SYSTEMS INC

The Company applied for and was granted a second Paycheck Protection Program loan on February 25, 2021, also in the amount of $59,500. The agreement provides an interest rate of 1%.  The Company may begin making monthly payments of $1,017 starting April 5, 2021, or it may elect to defer payments until sixteen months from the date of the loan funding, providing time for the Company to file for forgiveness of the loan and accrued interest.  The Company will elect to defer payment for the time specified, anticipating that during that time period the request for forgiveness will be filed, reviewed and approved. As no payments will be made within the coming year the total $59,500 is shown in the long-term liability section of the balance sheet.

During the three months ended March 31, 2021, the Company received three payments of $25,000 each from one of the convertible note holders in Note 4, as working capital loans to enable the Company to meet its obligations for operating expenses.  While it is the intent of both parties to enter into a convertible note, of which these payments will be a part, no terms, either as to conversion rate, interest rate, or maturity date have been agreed upon as of this date. Until such agreement is reached the balance of $75,000 as of March 31, 2021 is unsecured, non-interest bearing and due on demand.  

In August 2020 the Company received $50,000 from a large shareholder to meet operating expenses. The shareholder indicated that he would want the $50,000 loan repaid when the Company was in a position to do so. The shareholder subsequently provided an additional $5,000, for a total loan of $55,000.  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.  During the three-month period ended March 31, 2021, $10,000 of the loan was repaid to the shareholder, leaving a remaining balance of $45,000.

On June 15, 2020, Flexpoint announced its largest order from Manus VR https://manus-vr.com/, consisting of 1,000 pairs of sensors for gloves to be phased into three deliveries.  All of the product ordered has been delivered.  We have recently received an even larger order from Manus VR which we are currently in the process of producing. The Company’s Bend Sensor® continues to be a part of the world’s most trending sectors, one being the VR/AR market. The VR/AR industry is predicted to reach more than $25 billion by 2025 and show steady growth, thereafter.