2. Notice of Disclosure
CONFIDENTIAL INFORMATION. This information is published solely for
informational purposes and is not to be construed as a solicitation or an offer to
buy any security or related financial instruments. This presentation may
include “forward-looking statements” within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Exchange Act of 1934 and are
intended to be covered by the safe harbor provisions for forward looking
statements. This information is supplied from sources we believe to be reliable
but we can not guarantee accuracy. This document and the information
contained herein is confidential.
The agents and the agents’ counsel assume no responsibility or liability of any
nature whatsoever for the accuracy, adequacy or completeness of the publicly
available information or as to whether all information concerning the Company
required to be disclosed by the Company has been generally disclosed. The
agents’ counsel and the Company’s counsel are acting as counsel to the agents
and the Company, respectively, and not as legal counsel to the subscriber. The
agents have not engaged in any independent investigation or verification with
respect to any of the concerning the Company. Prospective purchasers are
responsible for their own due diligence investigation in respect of any
investment in the Company.
3. Company Profile
Company Flexpoint Sensor Systems (OTC BB:
FLXT.OB)
Location: 106 W Business Park Drive, Draper, Utah 84020
Industry: flexible potentiometer technology
Share Price (5/6/11): $.37
Fully Diluted Shares 35.8 Million
Outstanding:
Market Capitalization: $13.2 MM
2010 Revenues: $96,100
2010 Net Income: ($1,552,835)
2010 EPS: (Diluted) ($0.06)
Auditor: Mantyla MCREYNOLDS, LLC - audit committee consists
of Messrs. Mower and Gill, with Mr. Gill serving as
Chairman.
US Counsel Cindy Shy
4. Company Overview
Flexpoint is engaged principally in designing, engineering, and
manufacturing sensor technology and equipment using Bend Sensors®
flexible potentiometer technology
• Located in Draper, Utah
• During the last 12 months they have matured from a
research and development only company into a
manufacturing and production company and continue to
expand their product line.
• They have nine issued patents for their Bend Sensor®
technology and have filed three additional patent
applications, and are in the process of preparing one
additional patent for new types of sensors using their
technology.
• During 2010, many Fortune 500 and Global Fortune 1000
companies began using Flexpoint’s products.
5. Company Overview (cont.)
Follow-up and recurring purchase orders are realized in late 2010. Established
relationships with several Tier 1 suppliers in the automotive industry.
The Company has been working on custom sensors under a joint development
agreement with a major Tier 1 supplier in the automotive industry.
Finalizing pre-production requirements to enter into production contracts for 2012
and 2013 model years.
Received awards at the 2008 and 2009 EMS show and continue to gain acceptance in
the industry.
University of Rome used these sensors to develop an interactive glove to assist them
in their neuroscience studies and understanding. The University’s conclusion was that
data glove, and similar devices would have multiple applications in many fields
including medical, work, sports and entertainment (the full article published in the
Journal of Neuroscience Methods “Improving Performance of Data Glove on Bend
Sensors," by Giovanni Saggio Ph.D. )
Flexpoint technology featured at 2010 Los Angeles and 2011 Shanghai Auto Show.
6. Competitive Advantages
Technology
• Innovation
◦ The Company owns the patent rights to the Bend Sensor®
◦ The Sensor is a thin single layer potentiometer with no mechanical assembly that is more reliable,
significantly smaller, lighter in weight and usually less expensive than mechanical potentiometers
◦ Can work in very harsh environments (temperature, humidity)
◦ Unique “thinking” sensor
• Resource Reutilization
◦ Additional R&D and manufacturing of the technology for products used by customers that
emphasize functionality, reliability, quality, and user convenience
• Sustainability
◦ Current potentiometers are mechanical devices and are subject to mechanical breakdown, include
multiple layers, are larger in size, and more expensive to produce
• Flexpoint also has added value by expanding their sensor product lines to include circuit boards,
enclosures, etc. and have moved toward a fully integrated product while validating and showing the
versatility of their Bend Sensor® technology. They currently have several such fully developed
products that will directly compete with existing products in the automotive industry. The products
provide:
◦ Greater reliability, and more functionality and can be implemented at a lower overall cost to the
customer
◦ They are in the process of finalizing their marketing campaign that will include a technology based
company that is interested in being their outside sales representative for the sensor technology
◦ These fully integrated products will create a much larger value added profit margin for the
Company
7. Competitive Advantages – Management Team
• Clark M. Mower – Mr. Mower was appointed President and CEO in January 2005. He was appointed as
Director, President and CEO of Sensitron in February 2005. In November 2005 he was elected to serve a one
year term as director (or until the next annual meeting). He formerly served as Senior Vice President - Mergers
and Acquisitions - Merchant Energy Group for El Paso Energy Corporation (NYSE: EP). From August 2002
through 2004 he was the managing member of Polaris Energy, LLC, a non-affiliated consulting company to
energy related mergers and acquisition. From August 2002 to July 2004 he was a management committee
member for Saguaro Power Company, a non-affiliated company operating a 100 megawatts power plant in
Henderson, Nevada. Prior to that he served as President and Chief Executive Officer of Bonneville Pacific
Corporation (a public company) for eight years until El Paso Corporation acquired Bonneville Pacific Corporation
in October 1999. He has not been involved in any legal proceedings during the past ten years that are
material to an evaluation of his ability or integrity.
•
• John A. Sindt – Mr. Sindt has served as a director of the company since 1999 and served as President and
Chief Executive and Financial Officer from 2001 to 2004. He served as Secretary/Treasurer from January 2005
through July 2005. In November 2005 he was elected to serve a two year term as director (or until the next
annual meeting). Mr. Sindt is also the Chairman of the Board of Sensitron, one of our subsidiaries. He has been
employed since 1965 as a Salt Lake County, Utah Constable and he currently heads that department. He has
also served as President, Corporate Secretary and Director for the National Constables Association. He has
owned and operated a successful chain of retail jewelry stores in Utah. He has not been involved in any legal
proceedings during the past ten years that are material to an evaluation of his ability or integrity.
• Ruland J. Gill, Jr. - Mr. Gill retired from Questar Corporation (NYSE: STR) where he served as Vice President of
Government Affairs and Senior Attorney from 1973 until his retirement in 2008. He was appointed as a
Director of Sensitron in February 2005. In addition to his professional career, Mr. Gill has held several
important positions including President of the Utah Petroleum Association, and Trustee of the Rocky Mountain
Mineral Law Foundation. He is also a current Board member of Prime Snax, a privately held company. He has
not been involved in any legal proceedings during the past ten years that are material to an evaluation of his
ability or integrity.
• Thomas N. Strong – Prior to accepting the position of Controller and Chief Financial Officer of Flexpoint in
August 2008, Mr. Strong was employed by Praxair Healthcare Services as a Regional Financial Analyst, and part
of his responsibilities with this provider of medical gases and equipment was to direct that company’s regional
compliance with the Sarbanes-Oxley Act of 2002. From 2002 to 2005 he was employed as Regional Corporate
Controller for INVE America and Subsidiaries, an international agriculture and aquaculture company responsible
for the accounting, financial reporting and treasury duties for all of North and South America. Mr. Strong has
over 20 years experience in the accounting field, primarily in controller positions. He has not been involved in
any legal proceedings during the past ten years that are material to an evaluation of his ability or integrity.
8. Market Competitive Advantages
• The Sensor market is a rapidly growing multi-billion dollar industry encompassing all
mechanical control situations from simple voice response mechanisms in dolls, to
sophisticated robotics, to drug delivery systems and complex safety equipment.
• Within this enormous market, the Bend Sensor has a broad range of potential
applications in an array of industries. The Bend Sensor offers a versatile, robust variable
resistance sensing technology capable of measuring changes in weight, pressure,
distance, speed, patterns, etc.
• Flexpoint intends to target those applications that management feels have the greatest
revenue generating possibilities, including those in the medical, industrial controls and
consumer products sectors, as well as continuing development of product and further
penetration of the automotive industry.
• A one inch movement can yield 200,000 data points
• Facility houses offices, R&D, and manufacturing
• Location provides access to skilled labor and industry resources
• 14,000 sq ft manufacturing and office facility
• Manufacturing is underway on multiple products
9. Current Market
• Indications of interest have been received from automotive Tier 1 suppliers
and Flexpoint is working to obtain joint development agreements for the
concept. There has been significant interest in the concept and it appears
that the timing is good for this type of a product. Products include both
replacement of existing products and new applications.
• Flexpoint is in negotiations with several Tier 1 suppliers and OEMs in the
automotive industry on the following products:
• Variable Speed Seat Switch
• Comfort Seats
• Seat Belt Reminder
• Pedestrian Impact Detection Sensor
• Emergency vehicle market
• While other technologies are affected by dirt, dust, and liquids, the Bend
Sensor® product is able to operate under these and other harsh conditions.
• They anticipate that the success of their existing products will allow them
to successfully introduce new products and applications to the market.
• As this market grows they anticipate expanding a distribution network
throughout the world.
10. Products
PRINCIPAL PRODUCTS
Bend Sensor® Technology - The Company owns the patent rights to their
Bend Sensor® technology through Sensitron, a wholly-owned
subsidiary of the Company. The Bend Sensor® is a flexible
potentiometer bend sensor product consisting of a coated substrate,
such as plastic, that changes electrical conductivity as it is
bent. Electronic systems can connect to this sensor and measure in
detail the amount of bending or movement that occurs in a
predictable manner. Certain applications of the Bend Sensor®
potentiometer have been patented.
The following includes a partial list of applications and devices for the
Bend Sensor® technology that have been developed:
• Medical Bed
• Robotics
• Switches
• Flow Control Applications
• Automotive Products:
• Variable Speed Seat Switch
• Seat Belt Reminder
• Pedestrian Impact Detection Sensor
• Emergency vehicle market
11. Products (cont.)
ADDITIONAL PRODUCT APPLICATIONS
Management believes the potential market for their
technology includes using the technology to replace or
upgrade existing devices used in industrial control
systems, medical equipment and instrumentation,
computer peripherals, automotive transmission
equipment, commercial vending equipment and other
devices. They have developed, or are developing:
• Vibration sensor
• Toys and video gaming devises
• Sports applications
• Infant bed cover for the prevention of sudden infant
death syndrome (SIDS)
12. Company Facility & Equipment
The 14,000 sq ft manufacturing, office, and R & D facility is located at
106 W Business Park Drive, Draper, Utah 84020
Automobile manufacturers, Tier 1 suppliers and many international
companies require all manufactured parts be manufactured in
ISO/TS-16949 certified facilities. Several manufacturers have
been identified who have the required certifications and who have
expressed interest in entering into cooperative agreements to
manufacture products for Flexpoint until the required
certifications can be obtained.
13. Sales Cycle
Since their intended customers are typically technology
companies, the design phase of the sales cycle is
extremely important and considerably longer than other
industries.
• The original equipment manufacturers typically approach
them with a conceptual product and request that they
assist in the:
Initial engineering,
Design, and then
Production of a working prototype.
• The prototype is then tested in the environment in which
the ultimate product will be placed.
• During this process, the customer is in constant contact
with the Flexpoint application and electrical engineers.
• Customers also meet with internal sales and support
individuals to discuss marketing and distribution
strategies for the end consumer products.
14. Environmental Protection & Safety
SOURCE OF RAW MATERIALS
The single layer design of the Bend Sensor® eliminates
many of the problems associated with conventional
sensors such as dust, dirt, liquids, and heat and
pressure affects. Depending on the application, over-
laminates or over-molding may also be applied to the
sensors for added environmental protection.
• The base material dictates ultimate environmental
stability.
• Due to its unique construction and the ability to use
multiple types of substrates all raw materials needed
to produce the Bend Sensor® are readily available and
therefore, the Company is not reliant on a single
supplier.
15. Development Processes and Advantages
There are two development processes:
1. OEM mechanical designers build
interfaces to integrate Bend Sensor®
components into their products.
2. Flexpoint develops and markets products
incorporating their Bend Sensor®
products.
Bend Sensor® technical detail:
• The Bend Sensor changes electrical conductivity as it is bent providing significant data
points.
• Uses Flexpoint’s proprietary carbon/polymer based ink (manufactured by
Flexpoint) on substrates ranging from flexible metals to plastic films. The most
unique characteristic of this ink occurs when the material is bent over a given radius
repeatedly as it returns to its original value within the same slope or curve of
resistance.
• The Bend Sensor is highly customizable/scalable as many patterns can be applied with
several thickness and resistance values as required by any number of applications.
• The Bend Sensor is highly desirable over “force” sensors as the Bend Sensor has a
record of having high reliability, consistency, and repeatability.
16. Product Expansion Plan
Management believes the potential market for their
technology includes using the technology to replace or
upgrade existing devices used in industrial control
systems, medical equipment and instrumentation,
computer peripherals, automotive equipment, commercial
vending equipment and other devices. Product expansion
plans in these areas include:
• Elderly Remote Monitoring Systems
• Theater Seats
• A vibration sensor
• Toys and video gaming devises
• Sports applications
• Infant bed cover for the prevention of sudden infant
death syndrome (SIDS)
• Military and security applications
• Telecom
• NASA
17. Competitive Product Market
Certain force transducer sensors and fiber optic sensors
are comparable to our Bend Sensor® technology;
however, management believes that the force
transducer sensor is not as reliable as our Bend Sensor®
technology and that the fiber optic sensors are not as
cost effective as our Bend Sensor® technology.
We intend to compete by offering products that have
enhanced features, ease of use, functionality,
compatibility, reliability, comparable price, quality and
support. Management also believes our intellectual
property provides an advantage over our competitors.
18. Demand and Forecasts/Market Share
The US Sensors Industry is valued at $9.7 Billion with a forecast rise in demand of
6.1% annually to 2014 1.
The motor vehicle market will grow the fastest based on a rebound in motor
vehicle production and the rising use of newer sensor-laden systems. Proximity
and positioning and chemical property sensors will be the fastest growing types
according to industry reports 1.
Proximity and positioning sensors will also see above average gains. The
large automotive market will drive much of the growth, as safety products such
as side airbags continue to achieve greater penetration, thereby increasing
demand for related sensing products. In addition, more advanced occupant
position and crash detection sensors will continue to penetrate the US motor
vehicle market, although these technologies are not expected to become as
widespread as airbags. Beyond the motor vehicle sector, proximity/positioning
sensor demand will be supported by the ongoing recovery in the industrial sector
- the other significant market for these products.2
Global Service Robotics Market worth US $21 Billion by 2014 – CAGR 49.6%
from 2009 – 2014. Domestic Robotics to reach US $1.97 Billion by 2014;
Entertainment to reach US $1.85B; Defense, Security & Surveillance
(Professional service robotics) is the largest and will be taken over by field
robotics by 2014 1 .
1(http://www.freedoniagroup.com/Sensors.html;
http://www.strategyr.com/Smart_Sensors_Market_Report.asp)
2http://www.sensorsportal.com/HTML/DIGEST/may_06/Sensors_market.htm
19. Sales Strategy and Pricing
Management believes their future success will depend upon their ability to
coordinate their product design, manufacturing, distribution and service
strategies in a long-term business model.
• Offer a line of standard sensor products with corresponding hardware,
electronics and software to facilitate ease of implementation of our technology
into a customer's system.
• The standard product line is expected to be sold directly to the customer and
through manufacturer's representatives and distributors.
• Expand product offering to include substantially complete value-added
assemblies.
• Continue to consider licensing or partnership arrangements.
• Anticipate selling primarily to original equipment manufacturers for worldwide
distribution.
• For the international customers, we plan to contract, sell and distribute our
products through various manufacturer representatives and distributors.
• Have added value by expanding our sensor product lines to include circuit
boards, enclosures, etc. and have moved toward a fully integrated product while
validating and showing the versatility of our Bend Sensor® technology. We
currently have several such fully developed products that will directly compete
with existing products in the automotive industry.
20. Sales Strategy and Pricing (cont.)
MARKETING AND SALES
Market their automotive products primarily to original equipment
manufacturers (“OEM’s”), either directly or through Tier 1 suppliers.
Other products will be marketed directly to manufacturers or
distributors.
Primary marketing objectives are to:
• generate demand for our products,
• enhance name recognition and
• support OEM’s and manufacturers – It is believed the successful
use of their products by OEM’s and Tier 1 suppliers will create
additional demand for higher quantities of their existing products.
Market their products through the use of their web site, and by
developing a field sales force including direct marketing employees in
strategic areas and manufacturer’s representatives nationwide to
generate OEM and Tier 1 supplier customers. As their market grows,
anticipate expanding their distribution network throughout the world.
21. Financial Summary
2010 revenue $96,100
• EPS (.06)
2011E $1 - $2MM
• Expected year-end backlog for 2012 $2 - $4MM
• Cash flow positive and profitable during 2nd half 2011
2012E $3-6MM+
• Expected year-end backlog for 2013 $4 - $8MM
2013E $6-10MM+
• Expected year-end backlog for 2014 $15 - $20MM
Notes: Estimates based on contracts and customers either currently on market
or coming to market in the very near future. If some of the recently started
negotiations and beginning testing yield positive results, these numbers
could be substantially higher. Gross Margins should remain in excess of
60%.
22. Accomplishments
During late 2009/early 2010, transitioned from a decade of R&D
to fully commercialized and integrated products
Received market validation through multiple small-scale clients
during last 6 – 12 months
Completed implementation of testing and advanced testing
programs with dozens of current and potential customers
Positive client feed-back on reliability and functionality results
Transitioning into larger, renewable, long-term contracts
Increasing size and scope of customer base
◦ Expect number of clients to double to over 20 during the next 12
months
23. Milestones - Automotive
2008 – 2011 company working closely with Tier1 automotive
manufacturers both domestically and internationally to bring multiple
products to market for model year 2012 and 2013.
◦ Products featured at November 19 – 28, 2010 LA auto show and
April 19 – 28, 2011 Shanghai auto show
◦ Production to begin during Q3 2011
◦ Anticipated revenue $15 - $20MM annually, increasing with
additional applications
Q1 2011 joint venture agreement with Victor S.r.l. of Italy for
steering wheel product to be commercialized during 2012
Extended Sukhminder "Bobby" Bedi consulting agreement
◦ He has extensive experience, contacts and knowledge involving
product design and development with large automotive
manufacturers and suppliers.
24. Milestones
2010 through 2011
2010 the company commercialized many new products in multiple industries.
These products include Sensing Technology in Theater Seats, Emergency
vehicles incorporating Intertek’s Protek Passenger Awareness System.
2010 the company delivered to the market Sensing Technology used by a
major entertainment group with multiple international locations.
Q1 2010 company receives multiple orders from Bridgepoint Systems, a
Bridgewater company. Subsequently resulted in follow up orders of escalating
size.
Early 2010 advancements made in methods of attachment of Bend Sensors to
various materials including capabilities in applying Bend Sensors directly to
various products.
Early 2010 company receives Blue Ribbon Innovation Award for safety for its
“Triangle of Safety” product
◦ Company receives multiple orders for product from various municipalities
for emergency vehicles during 2010 and continues into 2011
April, 2010 began developing application for the US military
◦ Product application expected 2012
August, 2010 company improves product by compensating for drift and still
detecting impact
25. Milestones
2010 through 2011 (cont.)
August, 2010 company expands solid working relationship
with Sensor Products, Inc. that began during Q1 2010
Accelerated additional Global Fortune 1000 relationships that
could lead to multimillion dollar contracts during the first half
of 2011
Mid to late 2010 company receives multiple orders from
USSC (http://www.usscgroup.com/) (leading designer and
manufacturer of ergonomic operator seats for the
transportation industry)
October 2010 company receives order for 15,000 sensors
as a counting mechanism in paintball guns
Q1 2011 company jointly working with Card Access™ to
bring to market product for home, hospitality, and
commercial automation during latter part of 2011
Development underway with NASA, US Military, Fortune
500 companies, toy companies, medical bed companies,
other automotive manufacturers and suppliers, and
numerous other companies for which we have NDA’s.
26. Summary Highlights
• Flexible sensor allows for more applications than a rigid sensor
• Product is more reliable and less costly than competition
• Unique “thinking” sensor is currently integrated into a variety of
products
• Sensor market is rapidly growing multi-billion dollar industry with
dramatic push toward flexible data collecting sensors
• Long negotiation and testing cycles completed or just about
completed with several companies during last 2 years
• Expect during 2011 and beyond to “commercialize” on large scale
many of these products
27. Contact Information
Flexpoint Sensor Systems, Inc.
Clark M. Mower, President, CEO & Director
Thomas N. Strong, Controller, CFO
(801) 568-5111
Chesapeake Group, Inc.
(410) 825-3930
http://www.chesapeakegp.com
