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WHEAT RIDGE, Colo.–()–Lifeloc Technologies, Inc. (OTC: LCTC), a global leader in the development and manufacturing of breath alcohol testing devices, has announced financial results for the 2019 fiscal year ended December 31, 2019.

2019 Financial Highlights

Lifeloc Technologies posted annual net revenue of $8.752 million resulting in 2019 after tax net income of $626 thousand, or $0.26 per diluted share. These results compare to net revenue of $8.438 million for 2018, with net income of $217 thousand, or $0.09 per diluted share. The 2019 results include a one-time gain of $225 thousand from a licensing settlement. Without this one-time gain, pretax net income would have been $462 thousand. Without this one-time gain, revenue for 2019 grew 4% over the prior year. Our balance sheet grew stronger as well, with a growth in cash of $398 thousand and debt reduction of $43 thousand.

In 2019 Lifeloc released its second generation, patent protected EasyCal® calibration station. This new model is now capable of calibrating the entire line of Lifeloc professional breath alcohol testers. New features of our automated calibration station include RFID (radio frequency identification) registration of calibration gas standards. These features further automate the calibration process and increase the separation between Lifeloc and its competitors.

Also in 2019, Lifeloc began the targeted release of our new platform breath alcohol testers, the LX9 and LT7. The LX9 adds new modes of communication while both the LX9 and LT7 have wide temperature use ranges and are readily configurable for custom usages. Both the LX9 and LT7 models were added to the U.S. Department of Transportation’s conforming product list in November 2019. Both models are receiving positive customer reviews.

The release of these new products represents the completion of multiyear research and development investments to offer leading technology to our industry. With these projects winding down, our R&D decreased to 12% of revenue in 2019. However, we expect R&D spending to increase in 2020 as we invest for the significant growth opportunities of alcohol monitoring and drug detection. In the first quarter of 2020, we expect to release the redesigned Real-Time Alcohol Detection and Reporting (R.A.D.A.R.®) device. We also plan to deploy additional resources toward the development of our rapid drug detection system based on the SpinDx™ technology. It is anticipated that our rapid drug detection system will include a rapid, quantitative marijuana breathalyzer. This remains our most critical goal, but there is still substantial work to be done.

“Our new product releases contributed to the growth experienced in 2019 and are expected to continue to drive growth in 2020. We proceed toward our strategic objectives, which are to gain market share with superior products, add value to our breath alcohol testers via automation and monitoring capability, and ultimately leverage the ease-of-use of our breath testers to develop drug testing devices,” commented Dr. Wayne Willkomm, President and CEO. “Looking forward, we see the Coronavirus COVID-19 as a significant risk and disruption for early 2020, both for the supply chain and customer demand. We have taken steps intended to keep our workers safe and to secure the necessary raw materials to keep production running. We hope the broader adoption of the new LX platform as well as the release of the redesigned R.A.D.A.R devices will outweigh the short-term demand disruption during this early 2020 challenge.”

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.

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 R.A.D.A.R.® are registered trademarks of Lifeloc Technologies, Inc.

SpinDx™ is a trademark of Sandia Corporation.

LIFELOC TECHNOLOGIES, INC.
Balance Sheets
ASSETS
 
 

December 31,

CURRENT ASSETS:

2019

 

 

 

2018

 

Cash

$

3,185,996

 

$

2,788,327

 

Accounts receivable, net

641,239

 

675,136

 

Inventories, net

1,986,299

 

1,290,607

 

Income taxes receivable

6,750

 

90,629

 

Prepaid expenses and other

18,857

 

35,155

 

Total current assets

5,839,141

 

4,879,854

 

 
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

976,621

 

800,569

 

Training courses

432,375

 

432,375

 

Office equipment, software and space modifications

208,986

 

241,836

 

Sales and marketing equipment, and space modifications

232,600

 

219,797

 

Research and development equipment, software and space modifications

172,429

 

159,810

 

Less accumulated depreciation

(1,959,541

)

(1,649,203

)

Total property and equipment, net

2,879,645

 

3,021,359

 

 
OTHER ASSETS:
Patents, net

145,323

 

158,147

 

Deposits and other

74,027

 

140,452

 

Deferred taxes

86,658

 

79,869

 

Total other assets

306,008

 

378,468

 

 
Total assets

$

9,024,794

 

$

8,279,681

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable

$

261,798

 

$

343,783

 

Term loan payable, current portion

44,879

 

43,207

 

Customer deposits

214,031

 

19,265

 

Accrued expenses

290,458

 

250,912

 

Deferred revenue, current portion

45,874

 

44,218

 

Reserve for warranty expense

45,000

 

40,000

 

Total current liabilities

902,040

 

741,385

 

 
TERM LOAN PAYABLE, net of current portion and
debt issuance costs

1,324,467

 

1,369,347

 

 
DEFERRED REVENUE, net of current portion

6,066

 

8,212

 

Total liabilities

2,232,573

 

2,118,944

 

 
COMMITMENTS AND CONTINGENCIES
 
STOCKHOLDERS’ EQUITY:
Common stock, no par value; 50,000,000 shares
authorized, 2,454,116 shares outstanding

4,603,304

 

4,597,646

 

Retained earnings

2,188,917

 

1,563,091

 

Total stockholders’ equity

6,792,221

 

6,160,737

 

 
Total liabilities and stockholders’ equity

$

9,024,794

 

$

8,279,681

 

 
 
LIFELOC TECHNOLOGIES, INC.
Statements of Income
 

Years Ended December 31,

REVENUES:

 

2019

 

 

 

2018

 

Product sales

$

8,251,570

 

$

8,104,003

 

Royalties

411,111

 

247,765

 

Rental income

89,142

 

85,886

 

Total

8,751,823

 

8,437,654

 

 
COST OF SALES

4,815,820

 

4,628,403

 

 
GROSS PROFIT

3,936,003

 

3,809,251

 

 
OPERATING EXPENSES:
Research and development

1,038,227

 

1,121,827

 

Sales and marketing

1,240,773

 

1,251,388

 

General and administrative

1,175,788

 

1,165,413

 

Total

3,454,788

 

3,538,628

 

 
OPERATING INCOME

481,215

 

270,623

 

 
OTHER INCOME (EXPENSE):
Settlement proceeds

225,199

 

 

Interest income

38,750

 

25,624

 

Interest expense

(57,802

)

(61,650

)

Total

206,147

 

(36,026

)

 
NET INCOME BEFORE PROVISION FOR TAXES

687,362

 

234,597

 

 
(PROVISION FOR) FEDERAL AND STATE INCOME TAXES

(61,536

)

(17,433

)

 
NET INCOME

$

625,826

 

$

217,164

 

 
NET INCOME PER SHARE, BASIC

$

0.26

 

$

0.09

 

 
NET INCOME PER SHARE, DILUTED

$

0.26

 

$

0.09

 

 
WEIGHTED AVERAGE SHARES, BASIC

2,454,116

 

2,454,116

 

 
WEIGHTED AVERAGE SHARES, DILUTED

2,454,116

 

2,512,445

 

LIFELOC TECHNOLOGIES, INC.
Statements of Cash Flows
 

Years Ended December 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

2019

 

 

2018

 

Net income

$

625,826

 

$

217,164

 

Adjustments to reconcile net income to net cash
provided from operating activities-
Depreciation and amortization

412,529

 

416,896

 

Provision for doubtful accounts, net change

 

(5,000

)

Provision for inventory obsolescence, net change

20,000

 

60,000

 

Deferred taxes, net change

(6,789

)

(13,338

)

Reserve for warranty expense, net change

5,000

 

 

Stock based compensation expense related to

stock options

5,658

 

17,469

 

Changes in operating assets and liabilities-
Accounts receivable

33,897

 

(76,810

)

Inventories

(715,692

)

(175,504

)

Income taxes receivable

83,879

 

30,772

 

Prepaid expenses and other

16,298

 

(13,351

)

Deposits and other

66,425

 

118,585

 

Accounts payable

(81,985

)

46,687

 

Customer deposits

194,766

 

(29,498

)

Accrued expenses

39,546

 

(13,378

)

Deferred revenue

(490

)

(10,390

)

Net cash provided from
operating activities

698,868

 

570,304

 

 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, equipment and space modifications

(256,906

)

(402,147

)

Patent filing expense

 

(6,750

)

Net cash (used in) investing activities

(256,906

)

(408,897

)

 
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments made on term loan

(44,293

)

(42,535

)

Net cash (used in) financing
activities

(44,293

)

(42,535

)

 
NET INCREASE IN CASH

397,669

 

118,872

 

 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

2,788,327

 

2,669,455

 

 
CASH AND CASH EQUIVALENTS, END OF PERIOD

$

3,185,996

 

$

2,788,327

 

 
SUPPLEMENTAL INFORMATION:
Cash paid for interest

$

56,717

 

$

58,847

 

 
Cash paid for income tax

$

38,000

 

$

 

 

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