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 November 8, 2023, Lifeloc Technologies, Inc. (the “Company”) issued a press release announcing its operating results for the third quarter ended September 30, 2023. 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 8, 2023, 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 8, 2023 | LIFELOC TECHNOLOGIES, INC. | |
| By: | /s/ Vern D. Kornelsen | |
| Chief Financial Officer and Secretary | ||
Exhibit 99.1
Lifeloc Reports Third Quarter 2023 Results
WHEAT RIDGE, Colo., November 8, 2023 -- 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 September 30, 2023.
Third Quarter Financial Highlights
Lifeloc posted quarterly net revenue of $2.696 million in the third quarter of 2023, resulting in a quarterly net profit of $110 thousand, or $0.04 per diluted share. These results compare to net revenue of $2.032 million and quarterly net loss of $(87) thousand, or $(0.04) per diluted share in the third quarter of 2022. Revenue for the quarter increased 33% versus the third quarter last year, as demand grows. Nine-month net revenues of $7.140 million and a net profit of $111 thousand, or $0.05 per diluted share, compared to net revenue of $6.373 million and a net loss of $(433) thousand, or $(0.18) per diluted share, for the same nine months of 2022. Total gross margin in the third quarter improved to 41.5% versus 37.8% for the same quarter last year. For the first nine months of 2023 gross margin was 43.4% versus 35.7% for the same period last year.
The gross margin improvement over last year resulted from a combination of price increases, lower depreciation, and increased efficiencies resulting from a lessening of supply constraints. The margin improvement along with the sales increase was more than sufficient to offset a 65% increase in research and development investment and still result in a profitable third quarter.
We believe our core alcohol detection product line-up is strong. The newer platforms LX9 and LT7 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. We expect that most L-series sales 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 favored in many law enforcement and international organizations. Our Easycal® automated calibration station builds important protection around our brand with the only automated calibration available for portable breath alcohol testers 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 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 drugs, which currently includes cocaine, amphetamines, and fentanyl. Testing has validated the SpinDx measurement technology against the definitive standard liquid chromatography-mass spectroscopy (LCMS) measurement utilizing human samples. The LCMS data are validating 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. The release of our SpinDx saliva testing system for beta testing utilizing the delta-9-THC disks is expected in early 2024 and is projected to result in commercialization in later 2024. We expect to accelerate development by combining our LX9 breathalyzer with the THC SpinDx detection unit, to produce our roadside marijuana breathalyzer system.
“In the third quarter supply chain constraints have been significantly relieved. As a result, our production backlog has been satisfied during the quarter. We are optimistic that supply will no longer be a significant constraint to our normal order flow,” commented Dr. Wayne Willkomm, President and CEO. “Product is again flowing normally, and so our full attention is pushing the SpinDx product platform across the finish line to commercialization. We anticipate that our research and development expenses will continue to rise in this final push.”
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
| ASSETS | ||||||||
September 30, 2023 | December 31, 2022 | |||||||
| CURRENT ASSETS: | ||||||||
| Cash | $ | 2,136,873 | $ | 2,352,754 | ||||
| Accounts receivable, net | 709,307 | 627,919 | ||||||
| Inventories, net | 2,912,406 | 2,732,463 | ||||||
| Employee retention credit receivable | — | 107,575 | ||||||
| Prepaid expenses and other | 265,352 | 58,203 | ||||||
| Total current assets | 6,023,938 | 5,878,914 | ||||||
| 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 | 1,169,603 | 1,147,992 | ||||||
| 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 | 480,684 | 480,684 | ||||||
| Less accumulated depreciation | (3,263,200 | ) | (3,072,961 | ) | ||||
| Total property and equipment, net | 2,078,611 | 2,247,239 | ||||||
| OTHER ASSETS: | ||||||||
| Patents, net | 66,079 | 69,679 | ||||||
| Deposits and other | 500 | 500 | ||||||
| Deferred taxes | 435,545 | 321,429 | ||||||
| Total other assets | 502,124 | 391,608 | ||||||
| Total assets | $ | 8,604,673 | $ | 8,517,761 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 501,827 | $ | 413,957 | ||||
| Term loan payable, current portion | 51,194 | 50,028 | ||||||
| Income taxes payable | 36,476 | — | ||||||
| Customer deposits | 184,474 | 201,031 | ||||||
| Accrued expenses | 262,206 | 344,944 | ||||||
| Deferred revenue, current portion | 60,607 | 80,222 | ||||||
| Reserve for warranty expense | 46,500 | 46,500 | ||||||
| Total current liabilities | 1,143,284 | 1,136,682 | ||||||
| TERM LOAN PAYABLE, net of current portion and debt issuance costs | 1,182,751 | 1,219,677 | ||||||
| DEFERRED REVENUE, net of current portion | 12,467 | 6,191 | ||||||
| Total liabilities | 2,338,502 | 2,362,550 | ||||||
| COMMITMENTS AND CONTINGENCIES | — | — | ||||||
| STOCKHOLDERS' EQUITY: | ||||||||
| Common stock, no par value; 50,000,000 shares authorized, 2,454,116 shares outstanding | 4,668,014 | 4,668,014 | ||||||
| Retained earnings | 1,598,157 | 1,487,197 | ||||||
| Total stockholders' equity | 6,266,171 | 6,155,211 | ||||||
| Total liabilities and stockholders' equity | $ | 8,604,673 | $ | 8,517,761 | ||||
LIFELOC TECHNOLOGIES, INC.
Condensed Statements of Income (Unaudited)
| Three Months Ended September 30, | ||||||||
| REVENUES: | 2023 | 2022 | ||||||
| Product sales | $ | 2,676,872 | $ | 2,007,652 | ||||
| Royalties | 5,063 | 1,225 | ||||||
| Rental income | 13,573 | 22,989 | ||||||
| Total | 2,695,508 | 2,031,866 | ||||||
| COST OF SALES | 1,576,117 | 1,263,951 | ||||||
| GROSS PROFIT | 1,119,391 | 767,915 | ||||||
| OPERATING EXPENSES: | ||||||||
| Research and development | 516,174 | 313,092 | ||||||
| Sales and marketing | 309,898 | 268,515 | ||||||
| General and administrative | 269,593 | 296,806 | ||||||
| Total | 1,095,665 | 878,413 | ||||||
| OPERATING INCOME (LOSS) | 23,726 | (110,498 | ) | |||||
| OTHER INCOME (EXPENSE): | ||||||||
| Interest income | 17,678 | 4,508 | ||||||
| Interest expense | (10,494 | ) | (10,724 | ) | ||||
| Total | 7,184 | (6,216 | ) | |||||
| NET INCOME (LOSS) BEFORE PROVISION FOR TAXES | 30,910 | (116,714 | ) | |||||
| BENEFIT FROM FEDERAL AND STATE INCOME TAXES | 78,693 | 29,742 | ||||||
| NET INCOME (LOSS) | $ | 109,603 | $ | (86,972 | ) | |||
| NET INCOME (LOSS) PER SHARE, BASIC | $ | 0.04 | $ | (0.04 | ) | |||
| NET INCOME (LOSS) PER SHARE, DILUTED | $ | 0.04 | $ | (0.04 | ) | |||
| 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 (Unaudited)
| Nine Months Ended September 30, | ||||||||
| REVENUES: | 2023 | 2022 | ||||||
| Product sales | $ | 7,056,638 | $ | 6,264,222 | ||||
| Royalties | 23,419 | 40,437 | ||||||
| Rental income | 60,351 | 67,867 | ||||||
| Total | 7,140,408 | 6,372,526 | ||||||
| COST OF SALES | 4,043,146 | 4,099,087 | ||||||
| GROSS PROFIT | 3,097,262 | 2,273,439 | ||||||
| OPERATING EXPENSES: | ||||||||
| Research and development | 1,308,721 | 1,056,026 | ||||||
| Sales and marketing | 897,856 | 821,821 | ||||||
| General and administrative | 872,724 | 943,060 | ||||||
| Total | 3,079,301 | 2,820,907 | ||||||
| OPERATING INCOME (LOSS) | 17,961 | (547,468 | ) | |||||
| OTHER INCOME (EXPENSE): | ||||||||
| Interest income | 46,678 | 6,130 | ||||||
| Interest expense | (31,319 | ) | (32,451 | ) | ||||
| Total | 15,359 | (26,321 | ) | |||||
| NET INCOME (LOSS) BEFORE PROVISION FOR TAXES | 33,320 | (573,789 | ) | |||||
| BENEFIT FROM FEDERAL AND STATE INCOME TAXES | 77,640 | 140,779 | ||||||
| NET INCOME (LOSS) | $ | 110,960 | $ | (433,010 | ) | |||
| NET INCOME (LOSS) PER SHARE, BASIC | $ | 0.05 | $ | (0.18 | ) | |||
| NET INCOME (LOSS) PER SHARE, DILUTED | $ | 0.05 | $ | (0.18 | ) | |||
| 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 September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Total stockholders' equity, beginning balances | $ | 6,156,568 | $ | 6,264,930 | $ | 6,155,211 | $ | 6,593,766 | ||||||||
| Common stock (no shares issued during periods): | ||||||||||||||||
| Beginning balances | 4,668,014 | 4,668,014 | 4,668,014 | 4,650,812 | ||||||||||||
| Stock based compensation expense related to stock options | — | — | — | 17,202 | ||||||||||||
| Ending balances | 4,668,014 | 4,668,014 | 4,668,014 | 4,668,014 | ||||||||||||
| Retained earnings: | ||||||||||||||||
| Beginning balances | 1,488,554 | 1,596,916 | 1,487,197 | 1,942,954 | ||||||||||||
| Net income (loss) | 109,603 | (86,972 | ) | 110,960 | (433,010 | ) | ||||||||||
| Ending balances | 1,598,157 | 1,509,944 | 1,598,157 | 1,509,944 | ||||||||||||
| Total stockholders' equity, ending balances | $ | 6,266,171 | $ | 6,177,958 | $ | 6,266,171 | $ | 6,177,958 | ||||||||
LIFELOC TECHNOLOGIES, INC
Condensed Statements of Cash Flows (Unaudited)
| Nine Months Ended September 30, | ||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | 2023 | 2022 | ||||||
| Net income (loss) | $ | 110,960 | $ | (433,010 | ) | |||
| Adjustments to reconcile net income to net cash provided from (used in) operating activities- | ||||||||
| Depreciation and amortization | 198,471 | 438,549 | ||||||
| Provision for inventory obsolescence, net change | — | 154,367 | ||||||
| Deferred taxes, net change | (114,116 | ) | (140,779 | ) | ||||
| Stock based compensation expense related to stock options | — | 17,202 | ||||||
| Changes in operating assets and liabilities- | ||||||||
| Accounts receivable | (81,388 | ) | (96,230 | ) | ||||
| Inventories | (179,943 | ) | (180,535 | ) | ||||
| Employee retention credit and income taxes receivable | 107,575 | — | ||||||
| Prepaid expenses and other | (207,149 | ) | (59,041 | ) | ||||
| Deposits and other | — | 162,980 | ||||||
| Accounts payable | 87,870 | (3,130 | ) | |||||
| Income taxes payable | 36,476 | — | ||||||
| Customer deposits | (16,557 | ) | 9,608 | |||||
| Accrued expenses | (82,738 | ) | (63,917 | ) | ||||
| Deferred revenue | (13,339 | ) | (11,787 | ) | ||||
| Net cash provided from (used in) operating activities | (153,878 | ) | (205,723 | ) | ||||
| CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES: | ||||||||
| Purchases of property and equipment | (21,611 | ) | (201,870 | ) | ||||
| Patent filing expense | (1,404 | ) | (1,687 | ) | ||||
| Net cash (used in) investing activities | (23,015 | ) | (203,557 | ) | ||||
| CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES: | ||||||||
| Principal payments made on term loan | (38,988 | ) | (37,857 | ) | ||||
| Net cash provided from (used in) financing activities | (38,988 | ) | (37,857 | ) | ||||
| NET (DECREASE) IN CASH | (215,881 | ) | (447,137 | ) | ||||
| CASH, BEGINNING OF PERIOD | 2,352,754 | 2,571,668 | ||||||
| CASH, END OF PERIOD | $ | 2,136,873 | $ | 2,124,531 | ||||
| SUPPLEMENTAL INFORMATION: | ||||||||
| Cash paid for interest | $ | 28,091 | $ | 29,223 | ||||