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08-Aug-2024

Lifeloc Reports Second Quarter 2024 Results

WHEAT RIDGE, CO / ACCESSWIRE / August 8, 2024 / Lifeloc Technologies, Inc. (OTC PINK: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.

LIFELOC TECHNOLOGIES, INC.
Condensed Balance Sheets (Unaudited)

ASSETS

CURRENT ASSETS:


June 30, 2024

December 31, 2023

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


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

$

-

CONTACT:

Amy Evans
Lifeloc Technologies, Inc.
http://www.lifeloc.com
(303) 431-9500

SOURCE: Lifeloc Technologies, Inc.



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Last Updated: 08-Aug-2024