LCTC 8-K
Lifeloc Technologies, Inc (LCTC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 2.02 | Results of Operations and Financial Condition. |
On August 8, 2024, Lifeloc Technologies, Inc. (the “Company”) issued a press release announcing its operating results for the period ended June 30, 2024. This press release was made available on the Company’s website as of August 8, 2024. 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 8, 2024, issued by the Company |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
SIGNATURES
Pursuant to the requirements of the Securities and 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 8, 2024 | LIFELOC TECHNOLOGIES, INC. | |
| By: | /s/ Vern D. Kornelsen | |
| Chief Financial Officer and Secretary | ||
Exhibit 99.1
Lifeloc Reports Second Quarter 2024 Results
WHEAT RIDGE, Colo., August 8, 2024 -- 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 quarter ended June 30, 2024.
Second Quarter Financial Highlights
Lifeloc posted quarterly net revenue of $2.387 million in the second quarter of 2024, resulting in a quarterly net loss of $(298) thousand, or $(0.12) per diluted share. These results compare to net revenue of $2.280 million and quarterly net income of $55 thousand, or $0.02 per diluted share in the second quarter of 2023. Revenue for the quarter increased 5% versus the second quarter last year. Six-month net revenues of $4.541 million and a net loss of $(582) thousand, or $(0.24) per diluted share, compared to net revenue of $4.445 million and a net profit of $1 thousand, or $0.00 per diluted share, for the same six months of 2023. Total gross margin in the second quarter declined to 41.6% versus 45.7% for the same quarter last year. For the first six months of 2024 gross margin was 40.3% versus 44.5% for the same period last year, with the decline due primarily to increases in costs resulting from inflation. The research and development investment of $662 thousand rose by 67% versus the second quarter last year, primarily for SpinDx development, contributing significantly to the current period loss.
We believe our core alcohol detection product line-up is strong. The L-series LX9 and LT7 units have features and performance that have driven market penetration by meeting previously unaddressable market needs, such as wider temperature ranges and fast customization that incorporates local languages. Additionally, LX9 units capable of smart phone pairing began to ship in this quarter.
“We are excited to be able to offer and ship LX9 units with smart phone pairing to achieve better systems integration, which some customers have been seeking commented Dr. Wayne Willkomm, President and CEO. "This demonstrates again our commitment to innovation.”
We expect that sales of our newer L-series devices will be incremental to FC-series devices rather than displacing FC sales. The L-series devices have been certified to meet the requirements of most modern registration standards, such as SAI’s (Standards Australia International) latest AS 3547:2019 standards for Breath Alcohol Detectors. Our FC-series devices remain popular with many law enforcement and international organizations. Our Easycal® automated calibration station, the only automated calibration available for portable breath alcohol testers, builds valuable protection around our brand and contributes to market share gains by the workplace Phoenix® 6.0 BT and EV 30 devices.
We believe our most important goal and best opportunity remains the convergence of the global need for rapid detection of drugs of abuse with Lifeloc’s proven capability to build easy-to-use portable testing equipment. We are therefore focusing our research and development efforts on leveraging the SpinDx™ technology platform, sometimes referred to as “Lab on a Disk,” to develop a series of devices and tests that can be used at roadside and in emergency rooms, forensic labs and workplace test sites to achieve a rapid and quantitative measure for a panel of drugs of abuse. The initial product release is projected to be a device with a disk that allows for detection of delta-9-THC (the major intoxicating component of the cannabis plant) from a test subject’s saliva, followed by a disk for a panel of other drugs. SpinDx has been demonstrated in our laboratory to effectively detect for delta-9-THC, cocaine, fentanyl, amphetamine methamphetamine, morphine, MDMA, and benzodiazepines. Testing has validated the SpinDx measurement technology against the definitive standard liquid chromatography-mass spectroscopy (LCMS) measurement utilizing human samples. The LCMS data have validated the SpinDx test results on real-world human saliva tests at a limit of detection of approximately 10 ng/ml. With our research and development work, we continue to improve our technology’s robustness, speed, and convenience of operation. We plan to start of beta testing of our SpinDx saliva testing system utilizing the delta-9-THC disks later in 2024 using prototype readers as shown in the photograph below. Commercial launch of our first SpinDx application is projected to occur in 2025. Following initial commercialization, we expect more offerings from this technology platform to include expanded drug panels and samples collected from blood and breath. Following the release of our SpinDx saliva testing system, we expect to accelerate development of combining our LX9 breathalyzer with the THC SpinDx detection unit, to produce our roadside marijuana breathalyzer system.
“Our top priority is pushing the SpinDx product platform across the finish line,” Dr. Willkomm said. “We anticipate continued high research and development expenses in this final push toward commercialization. With the rising demand for saliva drug testing, the initial release of SpinDx to the market becomes more urgent and valuable.”
Research and development expenditures for SpinDx completion have consumed cash down to $505 thousand at the end of the second quarter. In anticipation of declining cash, the company has sought to strengthen its financial resources. Early in the third quarter the Company closed on a $750,000 line of credit with Citywide Banks as well as a private placement of 210,000 shares of the Company’s common stock at $3.80 per share, resulting in a $798,000 capital injection to assist the SpinDx development in moving forward to testing and commercialization.
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, performance, expectations about new and existing products, market demand, economic conditions, 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.
Phoenix® and Easycal® are registered trademarks of Lifeloc Technologies, Inc.
SpinDx™ is a trademark of Sandia Corporation.
Amy Evans
Lifeloc Technologies, Inc.
http://www.lifeloc.com
(303) 431-9500
LIFELOC TECHNOLOGIES, INC.
Condensed Balance Sheets (Unaudited)
| ASSETS | June 30, 2024 | December 31, 2023 | ||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 504,642 | $ | 1,766,621 | ||||
| Accounts receivable, net | 831,501 | 812,126 | ||||||
| Inventories, net | 2,962,071 | 3,024,834 | ||||||
| Federal and state income taxes receivable | 40,280 | — | ||||||
| Prepaid expenses and other | 176,928 | 105,967 | ||||||
| Total current assets | 4,515,422 | 5,709,548 | ||||||
| PROPERTY AND EQUIPMENT, at cost: | ||||||||
| Land | 317,932 | 317,932 | ||||||
| Building | 1,928,795 | 1,928,795 | ||||||
| Real-time Alcohol Detection And Reporting equipment and software | 569,448 | 569,448 | ||||||
| Production equipment, software and space modifications | 1,337,919 | 1,154,803 | ||||||
| Training courses | 432,375 | 432,375 | ||||||
| Office equipment, software and space modifications | 233,190 | 216,618 | ||||||
| Sales and marketing equipment and space modifications | 226,356 | 226,356 | ||||||
| Research and development equipment, software and space modifications | 544,933 | 480,684 | ||||||
| Research and development equipment, software and space modifications not in service | 227,354 | — | ||||||
| Less accumulated depreciation | (3,435,629 | ) | (3,326,837 | ) | ||||
| Total property and equipment, net | 2,382,673 | 2,000,174 | ||||||
| OTHER ASSETS: | ||||||||
| Patents, net | 82,422 | 64,439 | ||||||
| Deposits and other | 34,790 | 111,157 | ||||||
| Deferred taxes | 996,005 | 806,652 | ||||||
| Total other assets | 1,113,217 | 982,248 | ||||||
| Total assets | $ | 8,011,312 | $ | 8,691,970 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 459,560 | $ | 402,231 | ||||
| Term loan payable, current portion | 52,386 | 51,588 | ||||||
| Income taxes payable | — | 44,952 | ||||||
| Customer deposits | 168,915 | 195,719 | ||||||
| Accrued expenses | 288,415 | 329,311 | ||||||
| Deferred revenue, current portion | 65,917 | 79,036 | ||||||
| Reserve for warranty expense | 46,500 | 46,500 | ||||||
| Total current liabilities | 1,081,693 | 1,149,337 | ||||||
| TERM LOAN PAYABLE, net of current portion and debt issuance costs | 1,144,876 | 1,170,243 | ||||||
| DEFERRED REVENUE, net of current portion | 5,712 | 11,565 | ||||||
| Total liabilities | 2,232,281 | 2,331,145 | ||||||
| COMMITMENTS AND CONTINGENCIES (Note 5) | — | — | ||||||
| STOCKHOLDERS' EQUITY: | ||||||||
Common stock, no par value; 50,000,000 shares authorized, 2,454,116 shares issued and outstanding as of June 30, 2024 and December 31, 2023 | 4,668,014 | 4,668,014 | ||||||
| Retained earnings | 1,111,017 | 1,692,811 | ||||||
| Total stockholders' equity | 5,779,031 | 6,360,825 | ||||||
| Total liabilities and stockholders' equity | $ | 8,011,312 | $ | 8,691,970 | ||||
LIFELOC TECHNOLOGIES, INC.
Condensed Statements of Income (Loss) (Unaudited)
| Three Months Ended June 30, | ||||||||
| REVENUES: | 2024 | 2023 | ||||||
| Product sales | $ | 2,370,433 | $ | 2,246,407 | ||||
| Royalties | 8,824 | 10,150 | ||||||
| Rental income | 8,073 | 23,789 | ||||||
| Total | 2,387,330 | 2,280,346 | ||||||
| COST OF SALES | 1,393,734 | 1,237,902 | ||||||
| GROSS PROFIT | 993,596 | 1,042,444 | ||||||
| OPERATING EXPENSES: | ||||||||
| Research and development | 662,276 | 395,781 | ||||||
| Sales and marketing | 365,374 | 300,075 | ||||||
| General and administrative | 363,008 | 284,116 | ||||||
| Total | 1,390,658 | 979,972 | ||||||
| OPERATING INCOME (LOSS) | (397,062 | ) | 62,472 | |||||
| OTHER INCOME (EXPENSE): | ||||||||
| Interest income | 8,677 | 19,200 | ||||||
| Interest expense | (10,057 | ) | (10,290 | ) | ||||
| Total | (1,380 | ) | 8,910 | |||||
| NET INCOME (LOSS) BEFORE BENEFIT FROM (PROVISION FOR) TAXES | (398,442 | ) | 71,382 | |||||
| BENEFIT FROM (PROVISION FOR) FEDERAL AND STATE INCOME TAXES | 100,454 | (16,237 | ) | |||||
| NET INCOME (LOSS) | $ | (297,988 | ) | $ | 55,145 | |||
| NET INCOME (LOSS) PER SHARE, BASIC | $ | (0.12 | ) | $ | 0.02 | |||
| NET INCOME (LOSS) PER SHARE, DILUTED | $ | (0.12 | ) | $ | 0.02 | |||
| WEIGHTED AVERAGE SHARES, BASIC | 2,454,116 | 2,454,116 | ||||||
| WEIGHTED AVERAGE SHARES, DILUTED | 2,454,116 | 2,454,116 | ||||||
LIFELOC TECHNOLOGIES, INC.
Condensed Statements of Income (Loss) (Unaudited)
| Six Months Ended June 30, | ||||||||
| REVENUES: | 2024 | 2023 | ||||||
| Product sales | $ | 4,504,867 | $ | 4,379,766 | ||||
| Royalties | 19,760 | 18,356 | ||||||
| Rental income | 16,146 | 46,778 | ||||||
| Total | 4,540,773 | 4,444,900 | ||||||
| COST OF SALES | 2,711,870 | 2,467,029 | ||||||
| GROSS PROFIT | 1,828,903 | 1,977,871 | ||||||
| OPERATING EXPENSES: | ||||||||
| Research and development | 1,217,875 | 792,547 | ||||||
| Sales and marketing | 710,383 | 587,958 | ||||||
| General and administrative | 677,934 | 603,131 | ||||||
| Total | 2,606,192 | 1,983,636 | ||||||
| OPERATING (LOSS) | (777,289 | ) | (5,765 | ) | ||||
| OTHER INCOME (EXPENSE): | ||||||||
| Interest income | 26,349 | 29,000 | ||||||
| Interest expense | (20,207 | ) | (20,825 | ) | ||||
| Total | 6,142 | 8,175 | ||||||
| NET INCOME (LOSS) BEFORE BENEFIT FROM (PROVISION FOR) TAXES | (771,147 | ) | 2,410 | |||||
| BENEFIT FROM (PROVISION FOR) FEDERAL AND STATE INCOME TAXES | 189,353 | (1,053 | ) | |||||
| NET INCOME (LOSS) | $ | (581,794 | ) | $ | 1,357 | |||
| NET INCOME (LOSS) PER SHARE, BASIC | $ | (0.24 | ) | $ | — | |||
| NET INCOME (LOSS) PER SHARE, DILUTED | $ | (0.24 | ) | $ | — | |||
| WEIGHTED AVERAGE SHARES, BASIC | 2,454,116 | 2,454,116 | ||||||
| WEIGHTED AVERAGE SHARES, DILUTED | 2,454,116 | 2,454,116 | ||||||
Lifeloc Technologies, Inc.
Condensed Statements of Stockholders' Equity (Unaudited)
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Total stockholders' equity, beginning balances | $ | 6,077,019 | $ | 6,101,423 | $ | 6,360,825 | $ | 6,155,211 | ||||||||
| Common stock (no shares issued during periods): | ||||||||||||||||
| Beginning balances | 4,668,014 | 4,668,014 | 4,668,014 | 4,668,014 | ||||||||||||
| Ending balances | 4,668,014 | 4,668,014 | 4,668,014 | 4,668,014 | ||||||||||||
| Retained earnings: | ||||||||||||||||
| Beginning balances | 1,409,005 | 1,433,409 | 1,692,811 | 1,487,197 | ||||||||||||
| Net income (loss) | (297,988 | ) | 55,145 | (581,794 | ) | 1,357 | ||||||||||
| Ending balances | 1,111,017 | 1,488,554 | 1,111,017 | 1,488,554 | ||||||||||||
| Total stockholders' equity, ending balances | $ | 5,779,031 | $ | 6,156,568 | $ | 5,779,031 | $ | 6,156,568 | ||||||||
LIFELOC TECHNOLOGIES, INC.
Condensed Statements of Cash Flows (Unaudited)
| Six Months Ended June 30, | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | 2024 | 2023 | ||||||
| Net income (loss) | $ | (581,794 | ) | $ | 1,357 | |||
| Adjustments to reconcile net income (loss) to net cash (used in) operating activities- | ||||||||
| Depreciation and amortization | 114,619 | 132,088 | ||||||
| Provision for doubtful accounts, net change | (3,175 | ) | — | |||||
| Provision for inventory obsolescence, net change | (35,000 | ) | — | |||||
| Deferred taxes | (189,353 | ) | 1,053 | |||||
| Changes in operating assets and liabilities- | ||||||||
| Accounts receivable | (16,200 | ) | (134,751 | ) | ||||
| Inventories | 97,763 | (171,601 | ) | |||||
| Employee retention credit and income taxes receivable | (40,280 | ) | 107,575 | |||||
| Prepaid expenses and other | (70,961 | ) | (149,575 | ) | ||||
| Deposits and other | 76,367 | — | ||||||
| Accounts payable | 57,329 | (84,118 | ) | |||||
| Income taxes payable | (44,952 | ) | — | |||||
| Customer deposits | (26,804 | ) | (26,064 | ) | ||||
| Accrued expenses | (40,896 | ) | (54,002 | ) | ||||
| Deferred revenue | (18,972 | ) | (18,955 | ) | ||||
| Net cash (used in) operating activities | (722,309 | ) | (396,993 | ) | ||||
CASH FLOWS USED IN INVESTING ACTIVITIES: | ||||||||
| Purchases of property and equipment | (263,937 | ) | (14,811 | ) | ||||
| Purchases of research and development equipment, software and space modifications not in service | (227,354 | ) | — | |||||
| Patent filing costs | (21,708 | ) | (1,404 | ) | ||||
| Net cash used in investing activities | (512,999 | ) | (16,215 | ) | ||||
CASH FLOWS USED IN FINANCING ACTIVITIES: | ||||||||
| Principal payments made on term loan payable | (26,671 | ) | (26,047 | ) | ||||
| Net cash used in financing activities | (26,671 | ) | (26,047 | ) | ||||
| NET (DECREASE) IN CASH | (1,261,979 | ) | (439,255 | ) | ||||
CASH, BEGINNING OF PERIOD | 1,766,621 | 2,352,754 | ||||||
CASH, END OF PERIOD | $ | 504,642 | $ | 1,913,499 | ||||
SUPPLEMENTAL INFORMATION: | ||||||||
| Cash paid for interest | $ | 18,105 | $ | 18,673 | ||||
| Cash paid for income tax | $ | 40,280 | $ | — | ||||
| Detail of cash paid for income tax: | ||||||||
| Q1 federal tax estimate | 13,700 | |||||||
| Q2 federal tax estimate | 13,700 | |||||||
| Q1 Colorado tax estimate | 6,440 | |||||||
| Q2 Colorado tax estimate | 6,440 | |||||||
| Total | 40,280 | — | ||||||