UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported): November 14, 2022 (
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification Number) |
| (Address of Principal Executive Offices) | (Zip Code) |
(Registrant’s telephone number, including area 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)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| N/A |
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. ☐
| |
| Item 2.02 | Results of Operations and Financial Condition. |
On November 10, 2022, Lifeloc Technologies, Inc. (the “Company”) issued a press release announcing its operating results for the quarter ended September 30, 2022. This press release was made available on the Company’s website as of November 10, 2022. 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 November 10, 2022, 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: November 14, 2022 | LIFELOC TECHNOLOGIES, INC. | |
| By: | /s/ Vern D. Kornelsen | |
| Chief Financial Officer and Secretary | ||
Exhibit 99.1
Lifeloc Reports Third Quarter 2022 Results
WHEAT RIDGE, Colo., November 10, 2022 -- 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 third quarter ended September 30, 2022.
Third Quarter Financial Highlights
Lifeloc posted quarterly net revenue of $2.032 million in the third quarter of 2022, resulting in a quarterly net loss of $(87) thousand, or $(0.04) per diluted share. These results compare to net revenue of $1.887 million and quarterly net profit of $523 thousand, or $0.21 per diluted share in the third quarter of 2021. The income for the third quarter of 2021 includes the benefit from the forgiveness of the second round SBA Paycheck Protection Program (PPP) loan of $471 thousand. Revenue for the quarter increased 8% versus the third quarter last year, as demand continued to recover from the impact of the COVID-19 global pandemic and the government ordered shutdowns. Nine-month net revenue of $6.373 million and a net loss of $(433) thousand, or $(0.18) per diluted share, compared to net revenue of $5.427 million and a net profit of $816 thousand, or $0.33 per diluted share, for the same nine months of 2021. The income for the first nine months of 2021 includes the benefit from the forgiveness of both rounds of the SBA Paycheck Protection Program (PPP) loan of $936 thousand.
Increasing research and development investment as well as supply chain disruption contributed to the net loss in this quarter despite increased revenue. Supply chain delays have added some costs, and component inflation has added more. The company implemented a broad price increase during the second quarter in response to rising costs.
New platform LX9 and LT7 devices are producing strong sales growth. The L-series devices feature a high-resolution color display with a highly customizable user interface. Their features and performance have driven penetration by meeting previously unaddressable market needs, such as wider temperature ranges and fast customization that incorporates local languages. Based on our experience to date, we expect that most L-series sales will be incremental to FC-series devices rather than displacing FC sales. The L-series devices are meeting the requirements of the most modern registration standards, such as SAI’s (Standards Australia International) latest AS 3547:2019 standards for Breath Alcohol Detectors.
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 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, emergency rooms, forensic labs and in workplace testing to get a rapid and quantitative measure for a panel of drugs of abuse, beginning with a device that allows for detection of delta-9-THC (the major intoxicating component of the cannabis plant) from a test subject’s saliva. Testing has commenced to validate the SpinDx technology against the definitive standard liquid chromatography-mass spectroscopy (LCMS) measurement utilizing human samples. The human saliva SpinDx results are showing good correlation to the LCMS data. We are also developing a device based on our recently updated LX9 breathalyzer that, when coupled with the SpinDx technology, will be our marijuana breathalyzer system. In anticipation of possible SpinDx supply chain delays, we’ve already begun purchasing small quantities of components ahead of the initial production builds.
Our R.A.D.A.R.® 200 device has been introduced to the market, and the market feedback is that the device needs a few additional specific upgrades to gain widespread acceptance. The R.A.D.A.R. device promises to address a critical and valuable market need for self-administered alcohol monitoring. Lifeloc had formed a subsidiary, Probation Tracker Inc. (PTI), in preparation for a spinoff of the R.A.D.A.R. technology into a new entity devoted to engaging in the required additional developmental upgrades. Anticipating delays with the SEC on the registration of the PTI shares, we withdrew the registration, cancelled the planned spinoff and instead have engaged a consultant to outsource the remaining R.A.D.A.R. development. We have chosen this outsourcing route so that our internal research and development team can keep its primary focus on SpinDx commercialization.
“We have overcome a number of challenges over the last few years from pandemic and supply chain delays to labor tightness and inflation,” commented Dr. Wayne Willkomm, President and CEO. “We are well positioned for the future, with the new L-series devices opening new opportunities and resulting in a growing revenue contribution as well as the product pipeline built on the SpinDx product platform. We expect research and development expenses to remain high in this push to complete the first of many products on the SpinDx platform, but we are choosing to prioritize substantial value creation over short-term profitability. We are excited to see positive results from the human samples in the SpinDx testing and look forward to getting these products released.”
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.
R.A.D.A.R.® is a registered trademark 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
| ASSETS | ||||||||
| September 30, | December 31, | |||||||
| 2022 | 2021 | |||||||
| CURRENT ASSETS: | (Unaudited) | |||||||
| Cash | $ | 2,124,531 | $ | 2,571,668 | ||||
| Accounts receivable, net | 658,322 | 562,092 | ||||||
| Inventories, net | 2,694,957 | 2,668,789 | ||||||
| Prepaid expenses and other | 115,938 | 56,897 | ||||||
| Total current assets | 5,593,748 | 5,859,446 | ||||||
| PROPERTY AND EQUIPMENT, at cost: | ||||||||
| Land | 317,932 | 317,932 | ||||||
| Building | 1,928,795 | 1,928,795 | ||||||
| Real-time Alcohol Detection And Recognition equipment and software | 569,448 | 569,448 | ||||||
| Production equipment, software and space modifications | 1,149,855 | 958,785 | ||||||
| Training courses | 432,375 | 432,375 | ||||||
| Office equipment, software and space modifications | 216,618 | 216,618 | ||||||
| Sales and marketing equipment and space modifications | 226,356 | 226,356 | ||||||
| Research and development equipment, software and space modifications | 467,485 | 456,685 | ||||||
| Less accumulated depreciation | (2,898,763 | ) | (2,518,966 | ) | ||||
| Total property and equipment, net | 2,410,101 | 2,588,028 | ||||||
| OTHER ASSETS: | ||||||||
| Patents, net | 80,591 | 134,428 | ||||||
| Deposits and other | 500 | 163,480 | ||||||
| Deferred taxes | 345,228 | 204,449 | ||||||
| Total other assets | 426,319 | 502,357 | ||||||
| Total assets | $ | 8,430,168 | $ | 8,949,831 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 442,855 | $ | 445,985 | ||||
| Term loan payable, current portion | 49,645 | 48,513 | ||||||
| Customer deposits | 180,560 | 170,952 | ||||||
| Accrued expenses | 234,613 | 298,530 | ||||||
| Deferred revenue, current portion | 58,173 | 71,604 | ||||||
| Reserve for warranty expense | 46,500 | 46,500 | ||||||
| Total current liabilities | 1,012,346 | 1,082,084 | ||||||
| TERM LOAN PAYABLE, net of current portion and debt issuance costs | 1,231,790 | 1,267,551 | ||||||
| DEFERRED REVENUE, net of current portion | 8,074 | 6,430 | ||||||
| Total liabilities | 2,252,210 | 2,356,065 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| STOCKHOLDERS' EQUITY: | ||||||||
| Common stock, no par value; 50,000,000 shares authorized, 2,454,116 shares outstanding | 4,668,014 | 4,650,812 | ||||||
| Retained earnings | 1,509,944 | 1,942,954 | ||||||
| Total stockholders' equity | 6,177,958 | 6,593,766 | ||||||
| Total liabilities and stockholders' equity | $ | 8,430,168 | $ | 8,949,831 | ||||
LIFELOC
TECHNOLOGIES, INC.
Condensed
Statements of Income (Unaudited)
| Three Months Ended September 30, | ||||||||
| REVENUES: | 2022 | 2021 | ||||||
| Product sales | $ | 2,007,652 | $ | 1,855,308 | ||||
| Royalties | 1,225 | 9,941 | ||||||
| Rental income | 22,989 | 22,239 | ||||||
| Total | 2,031,866 | 1,887,488 | ||||||
| COST OF SALES | 1,263,951 | 953,437 | ||||||
| GROSS PROFIT | 767,915 | 934,051 | ||||||
| OPERATING EXPENSES: | ||||||||
| Research and development | 313,092 | 299,653 | ||||||
| Sales and marketing | 268,515 | 306,664 | ||||||
| General and administrative | 296,806 | 245,970 | ||||||
| Total | 878,413 | 852,287 | ||||||
| OPERATING INCOME (LOSS) | (110,498 | ) | 81,764 | |||||
| OTHER INCOME (EXPENSE): | ||||||||
| Forgiveness of Paycheck Protection loan | — | 471,347 | ||||||
| Interest income | 4,508 | 1,347 | ||||||
| Interest expense | (10,724 | ) | (13,568 | ) | ||||
| Total | (6,216 | ) | 459,126 | |||||
| NET INCOME (LOSS) BEFORE PROVISION FOR TAXES | (116,714 | ) | 540,890 | |||||
| BENEFIT FROM (PROVISION FOR) FEDERAL AND STATE INCOME TAXES | 29,742 | (18,230 | ) | |||||
| NET INCOME (LOSS) | $ | (86,972 | ) | $ | 522,660 | |||
| NET INCOME (LOSS) PER SHARE, BASIC | $ | (0.04 | ) | $ | 0.21 | |||
| NET INCOME (LOSS) PER SHARE, DILUTED | $ | (0.04 | ) | $ | 0.21 | |||
| WEIGHTED AVERAGE SHARES, BASIC | 2,454,116 | 2,454,116 | ||||||
| WEIGHTED AVERAGE SHARES, DILUTED | 2,454,116 | 2,501,034 | ||||||
LIFELOC TECHNOLOGIES,
INC.
Condensed Statements
of Income (Unaudited)
| Nine Months Ended September 30, | ||||||||
| REVENUES: | 2022 | 2021 | ||||||
| Product sales | $ | 6,264,222 | $ | 5,304,800 | ||||
| Royalties | 40,437 | 56,157 | ||||||
| Rental income | 67,867 | 65,710 | ||||||
| Total | 6,372,526 | 5,426,667 | ||||||
| COST OF SALES | 4,099,087 | 3,063,321 | ||||||
| GROSS PROFIT | 2,273,439 | 2,363,346 | ||||||
| OPERATING EXPENSES: | ||||||||
| Research and development | 1,056,026 | 873,498 | ||||||
| Sales and marketing | 821,821 | 751,266 | ||||||
| General and administrative | 943,060 | 852,998 | ||||||
| Total | 2,820,907 | 2,477,762 | ||||||
| OPERATING INCOME (LOSS) | (547,468 | ) | (114,416 | ) | ||||
| OTHER INCOME (EXPENSE): | ||||||||
| Forgiveness of Paycheck Protection loan | — | 936,444 | ||||||
| Interest income | 6,130 | 2,659 | ||||||
| Interest expense | (32,451 | ) | (40,629 | ) | ||||
| Total | (26,321 | ) | 898,474 | |||||
| NET INCOME (LOSS) BEFORE PROVISION FOR TAXES | (573,789 | ) | 784,058 | |||||
| BENEFIT FROM (PROVISION FOR) FEDERAL AND STATE INCOME TAXES | 140,779 | 32,361 | ||||||
| NET INCOME (LOSS) | $ | (433,010 | ) | $ | 816,419 | |||
| NET INCOME (LOSS) PER SHARE, BASIC | $ | (0.18 | ) | $ | 0.33 | |||
| NET INCOME (LOSS) PER SHARE, DILUTED | $ | (0.18 | ) | $ | 0.33 | |||
| WEIGHTED AVERAGE SHARES, BASIC | 2,454,116 | 2,454,116 | ||||||
| WEIGHTED AVERAGE SHARES, DILUTED | 2,454,116 | 2,493,492 | ||||||
Lifeloc Technologies, Inc.
Condensed Statements of Stockholders' Equity (Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Total stockholders' equity, beginning balances | $ | 6,264,930 | $ | 6,211,558 | $ | 6,593,766 | $ | 5,900,642 | ||||||||
| Common stock (no shares issued during periods): | ||||||||||||||||
| Beginning balances | 4,668,014 | 4,650,812 | 4,650,812 | 4,633,655 | ||||||||||||
| Stock based compensation expense related to stock options | — | — | 17,202 | 17,157 | ||||||||||||
| Ending balances | 4,668,014 | 4,650,812 | 4,668,014 | 4,650,812 | ||||||||||||
| Retained earnings: | ||||||||||||||||
| Beginning balances | 1,596,916 | 1,560,746 | 1,942,954 | 1,266,987 | ||||||||||||
| Net income (loss) | (86,972 | ) | 522,660 | (433,010 | ) | 816,419 | ||||||||||
| Ending balances | 1,509,944 | 2,083,406 | 1,509,944 | 2,083,406 | ||||||||||||
| Total stockholders' equity, ending balances | $ | 6,177,958 | $ | 6,734,218 | $ | 6,177,958 | $ | 6,734,218 | ||||||||
LIFELOC TECHNOLOGIES, INC.
Condensed Statements of Cash Flows (Unaudited)
| Nine Months Ended September 30, | ||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | 2022 | 2021 | ||||||
| Net income (loss) | $ | (433,010 | ) | $ | 816,419 | |||
| Adjustments to reconcile net income to net cash provided from (used in) operating activities- | ||||||||
| Forgiveness of Paycheck Protection loans | — | (936,444 | ) | |||||
| Depreciation and amortization | 438,549 | 206,222 | ||||||
| Provision for doubtful accounts, net change | — | (49,000 | ) | |||||
| Provision for inventory obsolescence, net change | 154,367 | (5,000 | ) | |||||
| Deferred taxes, net change | (140,779 | ) | 12,927 | |||||
| Stock based compensation expense related to stock options | 17,202 | 17,157 | ||||||
| Changes in operating assets and liabilities- | ||||||||
| Accounts receivable | (96,230 | ) | (27,465 | ) | ||||
| Inventories | (180,535 | ) | (82,991 | ) | ||||
| Income taxes receivable | — | 175,369 | ||||||
| Prepaid expenses and other | (59,041 | ) | (11,430 | ) | ||||
| Deposits and other | 162,980 | 1,318 | ||||||
| Accounts payable | (3,130 | ) | (103,279 | ) | ||||
| Customer deposits | 9,608 | 3,080 | ||||||
| Accrued expenses | (63,917 | ) | (71,780 | ) | ||||
| Deferred revenue | (11,787 | ) | 6,458 | |||||
| Net cash provided from (used in) operating activities | (205,723 | ) | (48,439 | ) | ||||
| CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES: | ||||||||
| Purchases of property and equipment | (201,870 | ) | (64,254 | ) | ||||
| Patent filing expense | (1,687 | ) | (661 | ) | ||||
| Net cash (used in) investing activities | (203,557 | ) | (64,915 | ) | ||||
| CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES: | ||||||||
| Principal payments made on term loan | (37,857 | ) | (1,328,625 | ) | ||||
| Proceeds from refinancing term loan | — | 1,350,000 | ||||||
| Cost of refinancing term loan | — | (18,156 | ) | |||||
| Proceeds from Paycheck Protection loan (round 2) | — | 471,347 | ||||||
| Net cash provided from (used in) financing activities | (37,857 | ) | 474,566 | |||||
| NET INCREASE (DECREASE) IN CASH | (447,137 | ) | 361,212 | |||||
| CASH, BEGINNING OF PERIOD | 2,571,668 | 2,195,070 | ||||||
| CASH, END OF PERIOD | $ | 2,124,531 | $ | 2,556,282 | ||||
| SUPPLEMENTAL INFORMATION: | ||||||||
| Cash paid for interest | $ | 29,223 | $ | 39,815 | ||||
| Cash paid for income tax | $ | — | $ | — | ||||