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 May 9, 2023, Lifeloc Technologies, Inc. (the “Company”) issued a press release announcing its operating results for the quarter ended March 31, 2023. This press release was made available on the Company’s website as of May 9, 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 May 9, 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: May 9, 2023 | LIFELOC TECHNOLOGIES, INC. | |
| By: | /s/ Vern D. Kornelsen | |
| Chief Financial Officer and Secretary | ||
Exhibit 99.1
Lifeloc Reports First Quarter 2023 Results
WHEAT RIDGE, Colo., May 09, 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 first quarter ended March 31, 2023.
First Quarter Financial Highlights
Lifeloc posted quarterly net revenue of $2.165 million resulting in a quarterly net loss of $(54) thousand, or $(0.02) per diluted share. These results compare to net revenue of $2.161 million and quarterly net loss of ($145) thousand, or ($0.06) per diluted share in the first quarter of 2022. Revenue change for the quarter was flat, increasing just $4 thousand versus the first quarter last year. Sales were moderately constrained by supply shortages in both quarters. Gross margin in the first quarter improved to 43.2% versus 39.0% last year, due primarily to price increases and lower depreciation.
Increased research and development investment for SpinDx, combined with increased sales and marketing expense, somewhat offset by lower general and administrative expenses, contributed to the net loss in this quarter. Supply chain delays added some costs, and component inflation added more. The company implemented price increases last year in response to rising costs, with additional increases planned and some already implemented for 2023.
Our product line-up is strong. The new platforms LX9 and LT7 have features and performance that have driven 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 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. Our FC-series devices remain favored in many law enforcement and international organizations. The workplace Phoenix® 6.0 BT and EV30 models have been gaining market share. And our Easycal® automated calibration station builds important protection around our brand with the only automated calibration available for portable breath alcohol testers.
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 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 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 and convenience of operation. Following the release of our SpinDx saliva testing system, which is expected this year and is projected to result in commercialization in 2024, we expect to accelerate development on combining our LX9 breathalyzer with the THC SpinDx detection unit, to produce our roadside marijuana breathalyzer system.
“Our first quarter sales were held back by continued supply constraints. We expect to be nearing the end of these constraints with quoted lead times for components now shortening. We expect much of our backlog to be fulfilled in the second quarter,” commented Dr. Wayne Willkomm, President and CEO. “We rely on growing sales of our current products to fund our biggest opportunity, 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. With the U.S. Department of Transportation recently issuing their rule change allowing oral fluid drug testing, the timing of SpinDx coming to market as an oral fluid tester becomes more urgent and valuable.”
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 Phoenix® 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
| March 31, 2023 (Unaudited) | December 31, 2022 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash | $ | 2,052,444 | $ | 2,352,754 | ||||
| Accounts receivable, net | 543,830 | 627,919 | ||||||
| Inventories, net | 2,862,879 | 2,732,463 | ||||||
| Employee retention credit receivable | 107,575 | 107,575 | ||||||
| Prepaid expenses and other | 214,066 | 58,203 | ||||||
| Total current assets | 5,780,794 | 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 | 1,147,992 | 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 | (3,142,707 | ) | (3,072,961 | ) | ||||
| Total property and equipment, net | 2,177,493 | 2,247,239 | ||||||
| OTHER ASSETS: | ||||||||
| Patents, net | 69,415 | 69,679 | ||||||
| Deposits and other | 500 | 500 | ||||||
| Deferred taxes | 336,613 | 321,429 | ||||||
| Total other assets | 406,528 | 391,608 | ||||||
| Total assets | $ | 8,364,815 | $ | 8,517,761 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 502,763 | $ | 413,957 | ||||
| Term loan payable, current portion | 50,285 | 50,028 | ||||||
| Customer deposits | 189,147 | 201,031 | ||||||
| Accrued expenses | 187,377 | 344,944 | ||||||
| Deferred revenue, current portion | 75,317 | 80,222 | ||||||
| Reserve for warranty expense | 46,500 | 46,500 | ||||||
| Total current liabilities | 1,051,389 | 1,136,682 | ||||||
| TERM LOAN PAYABLE, net of current portion and debt issuance costs | 1,207,596 | 1,219,677 | ||||||
| DEFERRED REVENUE, net of current portion | 4,407 | 6,191 | ||||||
| Total liabilities | 2,263,392 | 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 | 1,433,409 | 1,487,197 | ||||||
| Total stockholders' equity | 6,101,423 | 6,155,211 | ||||||
| Total liabilities and stockholders' equity | $ | 8,364,815 | $ | 8,517,761 | ||||
LIFELOC TECHNOLOGIES, INC.
Condensed Statements of Income (Unaudited)
| Three Months Ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| REVENUES: | ||||||||
| Product sales | $ | 2,133,359 | $ | 2,111,757 | ||||
| Royalties | 8,206 | 26,640 | ||||||
| Rental income | 22,989 | 22,239 | ||||||
| Total | 2,164,554 | 2,160,636 | ||||||
| COST OF SALES | 1,229,127 | 1,318,747 | ||||||
| GROSS PROFIT | 935,427 | 841,889 | ||||||
| OPERATING EXPENSES: | ||||||||
| Research and development | 396,766 | 390,024 | ||||||
| Sales and marketing | 287,883 | 276,637 | ||||||
| General and administrative | 319,015 | 352,833 | ||||||
| Total | 1,003,664 | 1,019,494 | ||||||
| OPERATING INCOME (LOSS) | (68,237 | ) | (177,605 | ) | ||||
| OTHER INCOME (EXPENSE): | ||||||||
| Interest income | 9,800 | 432 | ||||||
| Interest expense | (10,535 | ) | (10,910 | ) | ||||
| Total | (735 | ) | (10,478 | ) | ||||
| NET INCOME (LOSS) BEFORE PROVISION FOR TAXES | (68,972 | ) | (188,083 | ) | ||||
| BENEFIT FROM FEDERAL AND STATE INCOME TAXES | 15,184 | 43,575 | ||||||
| NET INCOME (LOSS) | $ | (53,788 | ) | $ | (144,508 | ) | ||
| NET INCOME (LOSS) PER SHARE, BASIC | $ | (0.02 | ) | $ | (0.06 | ) | ||
| NET INCOME (LOSS) PER SHARE, DILUTED | $ | (0.02 | ) | $ | (0.06 | ) | ||
| 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 March 31, | ||||||||
| 2023 | 2022 | |||||||
| Total stockholders' equity, beginning balances | $ | 6,155,211 | $ | 6,593,766 | ||||
| Common stock (no shares issued during periods): | ||||||||
| Beginning balances | 4,668,014 | 4,650,812 | ||||||
| Stock based compensation expense related to stock options | — | 17,202 | ||||||
| Ending balances | 4,668,014 | 4,668,014 | ||||||
| Retained earnings: | ||||||||
| Beginning balances | 1,487,197 | 1,942,954 | ||||||
| Net income (loss) | (53,788 | ) | (144,508 | ) | ||||
| Ending balances | 1,433,409 | 1,798,446 | ||||||
| Total stockholders' equity, ending balances | $ | 6,101,423 | $ | 6,466,460 | ||||
LIFELOC TECHNOLOGIES, INC.
Condensed Statements of Cash Flows (Unaudited)
| Three Months Ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income (loss) | $ | (53,788 | ) | $ | (144,508 | ) | ||
| Adjustments to reconcile net income to net cash provided from (used in) operating activities- | ||||||||
| Depreciation and amortization | 72,490 | 129,088 | ||||||
| Provision for inventory obsolescence, net change | — | 34,789 | ||||||
| Deferred taxes, net change | (15,184 | ) | (43,575 | ) | ||||
| Stock based compensation expense related to stock options | — | 17,202 | ||||||
| Changes in operating assets and liabilities- | ||||||||
| Accounts receivable | 84,089 | (236,656 | ) | |||||
| Inventories | (130,416 | ) | 119,888 | |||||
| Prepaid expenses and other | (155,863 | ) | (110,109 | ) | ||||
| Accounts payable | 88,806 | (150,462 | ) | |||||
| Customer deposits | (11,884 | ) | (4,852 | ) | ||||
| Accrued expenses | (157,567 | ) | (143,231 | ) | ||||
| Deferred revenue | (6,689 | ) | 2,912 | |||||
| Net cash provided from (used in) operating activities | (286,006 | ) | (529,514 | ) | ||||
| CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES: | ||||||||
| Purchases of property and equipment | — | (10,800 | ) | |||||
| Patent filing expense | (1,404 | ) | — | |||||
| Net cash (used in) investing activities | (1,404 | ) | (10,800 | ) | ||||
| CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES: | ||||||||
| Principal payments made on term loan | (12,900 | ) | (12,526 | ) | ||||
| Net cash provided from (used in) financing activities | (12,900 | ) | (12,526 | ) | ||||
| NET INCREASE (DECREASE) IN CASH | (300,310 | ) | (552,840 | ) | ||||
| CASH, BEGINNING OF PERIOD | 2,352,754 | 2,571,668 | ||||||
| CASH, END OF PERIOD | $ | 2,052,444 | $ | 2,018,828 | ||||
| SUPPLEMENTAL INFORMATION: | ||||||||
| Cash paid for interest | $ | 9,459 | $ | 9,834 | ||||