8-K
Lifeloc Technologies, Inc (LCTC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of the SecuritiesExchange Act of 1934
Date of Report (Date of earliest event reported): August13, 2020
LIFELOC TECHNOLOGIES, INC.
(Exact name of registrant as specified inits charter)
| Colorado | 000-54319 | 84-1053680 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification Number) |
| 12441 West 49th Ave., Unit 4 | ||
| --- | --- | |
| Wheat Ridge, CO | 80033 | |
| (Address of Principal Executive Offices) | (Zip Code) |
(303) 431-9500
(Registrant’s telephone number, includingarea code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| [_] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| [_] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [_] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [_] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company [_]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [_]
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock | LCTC | N/A |
| Item 2.02 | Results of Operations and Financial Condition. | |
| --- | --- |
On August 13, 2020, Lifeloc Technologies, Inc. (the “Company”) issued a press release announcing its operating results for the second quarter and for the six months of 2020. This press release was made available on the Company’s website as of August 13, 2020. A copy of the press release is furnished herewith as Exhibit 99.1.
The information in this Form 8-K, including the exhibit attached hereto, is being “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any Company filing under the Securities Act of 1933, as amended, unless expressly set forth by specific reference in such filing that such information is incorporated by reference therein.
| Item 9.01 | Financial Statements and Exhibits. |
|---|
(d) Exhibits.
Exhibit No. Description
99.1 Press Release, dated August 13, 2020, issued by the Company
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: August 14, 2020 | LIFELOC TECHNOLOGIES, INC. | |
|---|---|---|
| By: | /s/ Vern D. Kornelsen | |
| Chief Financial Officer and Secretary |
Exhibit 99.1
LifelocReports Second Quarter 2020 Results
WHEAT RIDGE, Colo., August 13, 2020 -- Lifeloc Technologies, Inc. (OTC: LCTC), a global leader in the development and manufacturing of breath alcohol and drug testing devices, has announced financial results for the second quarter and for the six months ended June 30, 2020.
SecondQuarter Financial Highlights
Lifeloc posted quarterly net revenue of $1.320 million resulting in a quarterly net loss of $350 thousand, or $(0.14) per diluted share. These results compare to net revenue of $2.338 million and net income of $219 thousand, or $0.09 per diluted share, in the second quarter of 2019. Revenue for the current quarter declined 44% versus the second quarter last year. Net revenue of $3,338 million and a net loss of $515 thousand, or $0.20 per diluted share, compare to net revenue of $4.406 million and net income of $250 thousand, or $0.10 per diluted share, for the same six months of 2019.
This sales decline and the resulting loss are primarily a result of the global Covid-19 pandemic. Travel bans, governmental orders, and social distancing guidelines continue to force severe contractions in demand in both domestic and international markets. As an essential part of transportation and public safety, Lifeloc has continued operations during this time. To encourage demand and assure users of the safety of Lifeloc brand breath alcohol testers, we commissioned an independent laboratory study to assess the risk of viral cross contamination between users. As previously reported, this study showed no risk of viral cross contamination between users of Lifeloc brand breath alcohol testers.
We have implemented structural cost savings throughout the company. Lifeloc is complying with all currently published SBA guidance on loan forgiveness, and we are hopeful that the Paycheck Protection loan obtained in May of $465 thousand will be forgiven.
Current market conditions do not change our vision that Lifeloc is becoming the world’s leading provider of real-time alcohol and drug abuse detection and monitoring equipment. In fact, current conditions highlight the urgency of achieving this vision. We continue to invest strongly in product development, and are currently focused on R.A.D.A.R. and SpinDx, which we expect to significantly impact performance.
Our new breath alcohol testers, the LX9 and LT7 have been released and are on the U.S. Department of Transportation Conforming Products List, are starting to find adoption both domestically and internationally. With highly flexible configuration, multiple language capability and a wide temperature use range, these breathalyzers are expected to facilitate future sales growth. Additionally, our Easycal® G2 has broadened our automated calibration capability and is compatible with our existing installed base of professional breathalyzers as well as the new LX9 and LT7. The G2 model also includes RFID (Radio Frequency Identification) reading of calibration standard data, which further automates the calibration process.
Likewise, the R.A.D.A.R.^®^ (Real-time Alcohol Detection and Reporting) model 200 has been released to manufacturing and is in final testing. This new model has updated communication, improved GPS accuracy and mechanical reliability. These devices have alcohol monitoring capability and onboard biometrics that automatically verify the identity of the test subject and are intended as a tool for supervising offenders. This alternative to incarceration represents a critical step in moving our business towards a recurring monitoring revenue model and is expected to contribute to an increase in revenue and earnings this year and in the future.
Our SpinDx-based marijuana breathalyzer remains a key product of interest in attempts to address the broadening legalization of marijuana. Legalization and decriminalization of marijuana only increases the need for a rapid, quantitative roadside test to identify drivers under the influence of marijuana. The ability of our technology to detect delta-9-THC down to a concentration of 5 nanograms per milliliter and to collect a testable sample from a vapor stream has been demonstrated in our laboratories, and we continue the development work needed to convert this technology into a simple-to-operate device that is suitable for roadside testing. Detection of THC is accomplished through the SpinDx technology, licensed exclusively by Lifeloc Technologies for drugs of abuse from Sandia National Laboratory. We are targeting the end of 2021 for the first product release from this platform.
“COVID-19 and the impact of this pandemic dominate the current business environment,” said CEO Dr. Wayne Willkomm. “But we remain committed to accomplishing our vision of growing the monitoring portion of our business and developing products for real-time drug testing. The Lifeloc board of directors endorses our commitment to research and development, even if losses persist until the release of the SpinDx and marijuana breathalyzer products.”
About Lifeloc Technologies
Lifeloc Technologies, Inc. (OTC: LCTC) is a trusted U.S. manufacturer of evidential breath alcohol testers and related training and supplies for Workplace, Law Enforcement, Corrections and International customers. Lifeloc stock trades over-the-counter under the symbol LCTC. We are a fully reporting Company with our SEC filings available on our web site, www.lifeloc.com/investor.
Forward Looking Statements
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which involve substantial risks and uncertainties that may cause actual results to differ materially from those indicated by the forward-looking statements. All forward-looking statements expressed or implied in this press release, including statements about our strategies, expectations about new and existing products, market demand, acceptance of new and existing products, technologies and opportunities, market size and growth, and return on investments in products and market, are based on information available to us on the date of this document, and we assume no obligation to update such forward-looking statements. Investors are strongly encouraged to review the section titled “Risk Factors” in our SEC filings.
Easycal^®^and R.A.D.A.R.^®^ are registered trademarks of Lifeloc Technologies, Inc.
SpinDx™ is a trademark of Sandia Corporation.
Kristie LaRose
Lifeloc Technologies, Inc.
http://www.lifeloc.com
(303) 431-9500
LIFELOC TECHNOLOGIES, INC.
Condensed Balance Sheets
| ASSETS | ||||||
|---|---|---|---|---|---|---|
| June<br> 30, | ||||||
| 2020 | December<br> 31, | |||||
| CURRENT ASSETS: | (Unaudited) | 2019 | ||||
| Cash | $ | 2,625,098 | $ | 3,185,996 | ||
| Accounts<br> receivable, net | 539,672 | 641,239 | ||||
| Inventories,<br> net | 2,430,448 | 1,986,299 | ||||
| Income<br> taxes receivable | 153,557 | 6,750 | ||||
| Prepaid<br> expenses and other | 107,777 | 18,857 | ||||
| Total<br> current assets | 5,856,552 | 5,839,141 | ||||
| PROPERTY AND EQUIPMENT,<br> at cost: | ||||||
| Land | 317,932 | 317,932 | ||||
| Building | 1,928,795 | 1,928,795 | ||||
| Real-time<br> Alcohol Detection And Recognition equipment and software | 569,448 | 569,448 | ||||
| Production<br> equipment, software and space modifications | 976,621 | 976,621 | ||||
| Training<br> courses | 432,375 | 432,375 | ||||
| Office<br> equipment, software and space modifications | 218,074 | 208,986 | ||||
| Sales<br> and marketing equipment and space modifications | 232,600 | 232,600 | ||||
| Research<br> and development equipment, software and space modifications | 172,429 | 172,429 | ||||
| Less<br> accumulated depreciation | (2,144,016 | ) | (1,959,541 | ) | ||
| Total<br> property and equipment, net | 2,704,258 | 2,879,645 | ||||
| OTHER ASSETS: | ||||||
| Patents,<br> net | 157,619 | 145,323 | ||||
| Deposits<br> and other | 132,850 | 74,027 | ||||
| Deferred<br> taxes | 98,174 | 86,658 | ||||
| Total<br> other assets | 388,643 | 306,008 | ||||
| Total<br> assets | $ | 8,949,453 | $ | 9,024,794 | ||
| LIABILITIES<br> AND STOCKHOLDERS' EQUITY | ||||||
| CURRENT LIABILITIES: | ||||||
| Accounts<br> payable | $ | 358,482 | $ | 261,798 | ||
| Term<br> loan payable, current portion | 45,966 | 44,879 | ||||
| Paycheck<br> Protection loan payable | 465,097 | — | ||||
| Customer<br> deposits | 166,080 | 214,031 | ||||
| Accrued<br> expenses | 210,484 | 290,458 | ||||
| Deferred<br> revenue, current portion | 44,409 | 45,874 | ||||
| Reserve<br> for warranty expense | 45,000 | 45,000 | ||||
| Total<br> current liabilities | 1,335,518 | 902,040 | ||||
| TERM LOAN PAYABLE,<br> net of current portion and | ||||||
| debt<br> issuance costs | 1,301,023 | 1,324,467 | ||||
| DEFERRED<br> REVENUE, net of current portion | 3,166 | 6,066 | ||||
| Total<br> liabilities | 2,639,707 | 2,232,573 | ||||
| COMMITMENTS AND CONTINGENCIES | ||||||
| STOCKHOLDERS' EQUITY: | ||||||
| Common stock, no<br> par value; 50,000,000 shares | ||||||
| authorized,<br> 2,454,116 shares outstanding | 4,635,727 | 4,603,304 | ||||
| Retained<br> earnings | 1,674,019 | 2,188,917 | ||||
| Total<br> stockholders' equity | 6,309,746 | 6,792,221 | ||||
| Total<br> liabilities and stockholders' equity | $ | 8,949,453 | $ | 9,024,794 |
LIFELOC TECHNOLOGIES, INC.
Condensed Statements of Income (Unaudited)
| Three<br> Months Ended June 30, | ||||||
|---|---|---|---|---|---|---|
| REVENUES: | 2020 | 2019 | ||||
| Product<br> sales | $ | 1,265,698 | $ | 2,166,634 | ||
| Royalties | 32,851 | 150,146 | ||||
| Rental<br> income | 21,489 | 20,942 | ||||
| Total | 1,320,038 | 2,337,722 | ||||
| COST OF SALES | 991,969 | 1,182,588 | ||||
| GROSS PROFIT | 328,069 | 1,155,134 | ||||
| OPERATING EXPENSES: | ||||||
| Research<br> and development | 182,485 | 243,369 | ||||
| Sales<br> and marketing | 274,780 | 315,539 | ||||
| General<br> and administrative | 324,041 | 295,618 | ||||
| Total | 781,306 | 854,526 | ||||
| OPERATING INCOME (LOSS) | (453,237 | ) | 300,608 | |||
| OTHER INCOME (EXPENSE): | ||||||
| Interest<br> income | 3,242 | 7,850 | ||||
| Interest<br> expense | (14,016 | ) | (14,468 | ) | ||
| Total | (10,774 | ) | (6,618 | ) | ||
| NET INCOME (LOSS) BEFORE<br> PROVISION FOR TAXES | (464,011 | ) | 293,990 | |||
| BENEFIT<br> FROM (PROVISION FOR) FEDERAL AND STATE INCOME TAXES | 114,419 | (75,270 | ) | |||
| NET<br> INCOME (LOSS) | $ | (349,592 | ) | $ | 218,720 | |
| NET<br> INCOME (LOSS)PER SHARE, BASIC | $ | (0.14 | ) | $ | 0.09 | |
| NET<br> INCOME (LOSS) PER SHARE, DILUTED | $ | (0.14 | ) | $ | 0.09 | |
| WEIGHTED AVERAGE<br> SHARES, BASIC | 2,454,116 | 2,454,116 | ||||
| WEIGHTED AVERAGE<br> SHARES, DILUTED | 2,454,116 | 2,454,116 |
LIFELOC TECHNOLOGIES, INC.
Condensed Statements of Income (Unaudited)
| Six<br> Months Ended June 30, | ||||||
|---|---|---|---|---|---|---|
| REVENUES: | 2020 | 2019 | ||||
| Product<br> sales | $ | 3,203,564 | $ | 4,136,735 | ||
| Royalties | 92,132 | 222,984 | ||||
| Rental<br> income | 42,678 | 46,764 | ||||
| Total | 3,338,374 | 4,406,483 | ||||
| COST OF SALES | 2,232,229 | 2,319,147 | ||||
| GROSS PROFIT | 1,106,145 | 2,087,336 | ||||
| OPERATING EXPENSES: | ||||||
| Research<br> and development | 479,382 | 489,168 | ||||
| Sales<br> and marketing | 601,344 | 631,922 | ||||
| General<br> and administrative | 680,928 | 620,793 | ||||
| Total | 1,761,654 | 1,741,883 | ||||
| OPERATING INCOME (LOSS) | (655,509 | ) | 345,453 | |||
| OTHER INCOME (EXPENSE): | ||||||
| Interest<br> income | 10,418 | 17,272 | ||||
| Interest<br> expense | (28,147 | ) | (28,891 | ) | ||
| Total | (17,729 | ) | (11,619 | ) | ||
| NET INCOME (LOSS) BEFORE<br> PROVISION FOR TAXES | (673,238 | ) | 333,834 | |||
| BENEFIT<br> FROM (PROVISION FOR) FEDERAL AND STATE INCOME TAXES | 158,340 | (84,150 | ) | |||
| NET<br> INCOME (LOSS) | $ | (514,898 | ) | $ | 249,684 | |
| NET<br> INCOME (LOSS) PER SHARE, BASIC | $ | (0.20 | ) | $ | 0.10 | |
| NET<br> INCOME (LOSS) PER SHARE, DILUTED | $ | (0.20 | ) | $ | 0.10 | |
| WEIGHTED AVERAGE<br> SHARES, BASIC | 2,454,116 | 2,454,116 | ||||
| WEIGHTED AVERAGE<br> SHARES, DILUTED | 2,454,116 | 2,454,116 |
Lifeloc Technologies, Inc.
Condensed Statements of Stockholders' Equity
| Three<br> Months Ended June 30, | Six<br> Months Ended June 30, | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |||||||
| Total<br> shareholders' equity, beginning balances | $ | 6,659,026 | $ | 6,193,863 | $ | 6,792,221 | $ | 6,160,737 | ||
| Common stock (no shares<br> issued during periods): | ||||||||||
| Beginning<br> balances | 4,635,415 | 4,599,808 | 4,603,304 | 4,597,646 | ||||||
| Stock<br> based compensation expense related | ||||||||||
| to<br> stock options | 312 | 1,059 | 32,423 | 3,221 | ||||||
| Ending balances | 4,635,727 | 4,600,867 | 4,635,727 | 4,600,867 | ||||||
| Retained earnings: | ||||||||||
| Beginning<br> balances | 2,023,611 | 1,594,055 | 2,188,917 | 1,563,091 | ||||||
| Net<br> income (loss) | (349,592 | ) | 218,720 | (514,898 | ) | 249,684 | ||||
| Ending<br> balances | 1,674,019 | 1,812,775 | 1,674,019 | 1,812,775 | ||||||
| Total<br> shareholders' equity, ending balances | $ | 6,309,746 | $ | 6,413,642 | $ | 6,309,746 | $ | 6,413,642 |
LIFELOC TECHNOLOGIES, INC.
Condensed Statements of Cash Flows (Unaudited)
| Six<br> Months Ended June 30, | ||||||
|---|---|---|---|---|---|---|
| CASH FLOWS FROM<br> OPERATING ACTIVITIES: | 2020 | 2019 | ||||
| Net<br> income (loss) | $ | (514,898 | ) | $ | 249,684 | |
| Adjustments<br> to reconcile net income (loss) to net cash | ||||||
| provided<br> by (used in) operating activities- | ||||||
| Depreciation<br> and amortization | 191,493 | 207,725 | ||||
| Provision<br> for doubtful accounts, net change | 5,000 | — | ||||
| Provision<br> for inventory obsolescence, net change | 42,265 | 7,500 | ||||
| Deferred<br> taxes, net change | (11,516 | ) | (7,616 | ) | ||
| Stock<br> based compensation expense related to | ||||||
| stock<br> options | 32,423 | 3,221 | ||||
| Changes<br> in operating assets and liabilities- | ||||||
| Accounts<br> receivable | 96,567 | (230,626 | ) | |||
| Inventories | (486,414 | ) | (662,940 | ) | ||
| Income<br> taxes receivable | (146,807 | ) | 90,629 | |||
| Prepaid<br> expenses and other | (88,920 | ) | (94,426 | ) | ||
| Deposits<br> and other | (58,823 | ) | 62,883 | |||
| Accounts<br> payable | 96,684 | 109,760 | ||||
| Customer<br> deposits | (47,951 | ) | 120,330 | |||
| Accrued<br> expenses | (79,974 | ) | 24,770 | |||
| Deferred<br> revenue | (4,365 | ) | 16,657 | |||
| Net<br> cash (used in) | ||||||
| operating<br> activities | (975,236 | ) | (102,449 | ) | ||
| CASH FLOWS FROM INVESTING<br> ACTIVITIES: | ||||||
| Purchases<br> of property and equipment | (9,088 | ) | (128,614 | ) | ||
| Patent<br> filing expense | (18,772 | ) | — | |||
| Net<br> cash (used in) investing activities | (27,860 | ) | (128,614 | ) | ||
| CASH FLOWS FROM FINANCING<br> ACTIVITIES: | ||||||
| Principal<br> payments made on term loan | (22,899 | ) | (22,156 | ) | ||
| Proceeds<br> from Paycheck Protection loan | 465,097 | — | ||||
| Net<br> cash provided from (used in) | ||||||
| financing<br> activities | 442,198 | (22,156 | ) | |||
| NET (DECREASE) IN CASH | (560,898 | ) | (253,219 | ) | ||
| CASH<br> AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 3,185,996 | 2,788,327 | ||||
| CASH<br> AND CASH EQUIVALENTS, END OF PERIOD | $ | 2,625,098 | $ | 2,535,108 | ||
| SUPPLEMENTAL INFORMATION: | ||||||
| Cash<br> paid for interest | $ | 27,605 | $ | 28,349 | ||
| Cash<br> paid for income tax | $ | 20,063 | $ | — |