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WHEAT RIDGE, Colo.–()–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, 2020.

First Quarter Financial Highlights

We posted quarterly net revenue of $2.018 million resulting in a quarterly net loss of $165 thousand, or $(0.07) per diluted share. These results compare to net revenue of $2.069 million for the first quart of 2019. and quarterly net income of $31 thousand, or $0.01 per diluted share in the first quarter of 2019. Revenue for the quarter declined 2% versus the first quarter last year.

This sales decline appears to be a direct result of the global Covid-19 pandemic. Sales in January were higher than the prior year but declined in February and March when many important markets began imposing travel bans and social lockdowns. The quarter resulted in a loss as a result of the reduced sales and ongoing expenses including the cost of product launches and investment in our workforce in the form of option grants to key employees.

Product Pipeline

Our vision is that Lifeloc becomes the world’s leading company in real-time alcohol and drug abuse detection and monitoring. We have been investing strongly in product development to achieve this vision, focusing on a few major product developments that we expect to have a significant impact on our performance. We believe we are now at the point where we will start to reap the benefit of these investments.

Some of our new products are entering the market now. Our new breath alcohol testers, the LX9 and LT7 have been released and are starting to find adoption both in the U.S. and internationally. These units are on the U.S. Department of Transportation Conforming Products List. With a highly flexible configuration, multiple language capability and a wide temperature use range these units are expected to facilitate future sales growth. Our automated calibration has been broadened with the Easycal® G2, which is compatible with our existing installed base of professional breathalyzers as well as the new platform units. The G2 model includes RFID (Radio Frequency Identification) reading of calibration standard data, which further automates the calibration process.

Likewise, the R.A.D.A.R.® (Real-time Alcohol Detection and Reporting) model 200 has been released to manufacturing. This new model has updated communication, improved GPS accuracy and mechanical reliability and is currently in final testing. R.A.D.A.R. devices are alcohol monitoring units which can be used as a tool to supervise offenders as an alternative to incarceration. Onboard biometrics automatically verify the identity of the test subject. R.A.D.A.R. devices are a critical step in moving our business towards a recurring revenue model.

Our marijuana breathalyzer remains a key target for product development. The continued broader legalization of marijuana only increases the need for a rapid, quantitative roadside test to identify drivers under the influence of marijuana. The ability of our technology to detect delta-9-THC down to a concentration of 5 nanograms per milliliter and to collect a testable sample from a vapor stream has already been demonstrated in our laboratories. Detection of THC is accomplished through the SpinDx technology, licensed exclusively by Lifeloc Technologies for drugs of abuse from Sandia National Laboratory. More work is needed to convert this technology into a simple-to-operate device suitable for roadside testing.

“Our new products have been gaining traction and the availability of the R.A.D.A.R. model 200 will be very timely because of the greater need for more automated offender supervision,” reports CEO Dr. Wayne Willkomm. “At Lifeloc, like at most small Colorado companies, we have been strongly impacted by the COVID-19 pandemic. We are an essential business and, as such, have remained open throughout the COVID-19 outbreak to support public safety and the transportation industry. While our sales have suffered, our overhead has remained constant. In response to this downturn we have applied for and received funding from the Paycheck Protection Program. It is important to note that while Lifeloc is a publicly traded company, we are also significantly smaller with a smaller market capitalization than most publicly traded companies. In the face of our narrowing margins, we believe the PPP loan is necessary to help us continue to support our 36 full-time workers and keep good manufacturing jobs here in the U.S. Lifeloc is currently in the middle of two major product launches and is also investing substantially in developing a marijuana breathalyzer, which, if successful, will contribute powerfully to societal needs for safety. With the help of the PPP loan, we are grateful to be able to keep our full workforce employed and fully engaged in our mission during this difficult time.”

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

SpinDx™ is a trademark of Sandia Corporation.

LIFELOC TECHNOLOGIES, INC.
Condensed Balance Sheets
ASSETS
 

March 31,

 

 

 

2020

 

 

December 31,

CURRENT ASSETS:

(Unaudited)

 

 

2019

Cash

$

2,913,332

$

3,185,996

Accounts receivable, net

638,038

641,239

Inventories, net

2,236,331

1,986,299

Income taxes receivable

41,305

6,750

Prepaid expenses and other

139,772

18,857

Total current assets

5,968,778

5,839,141

 
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

976,621

Training courses

432,375

432,375

Office equipment, software and space modifications

218,074

208,986

Sales and marketing equipment and space modifications

232,600

232,600

Research and development equipment, software and space modifications

172,429

172,429

Less accumulated depreciation

(2,053,197)

(1,959,541)

Total property and equipment, net

2,795,077

2,879,645

 
OTHER ASSETS:
Patents, net

160,823

145,323

Deposits and other

74,027

74,027

Deferred taxes

96,007

86,658

Total other assets

330,857

306,008

 
Total assets

$

9,094,712

$

9,024,794

 
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable

$

480,361

$

261,798

Term loan payable, current portion

45,494

44,879

Customer deposits

184,332

214,031

Accrued expenses

319,366

290,458

Deferred revenue, current portion

42,849

45,874

Reserve for warranty expense

46,000

45,000

Total current liabilities

1,118,402

902,040

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

1,312,732

1,324,467

 
DEFERRED REVENUE, net of current portion

4,552

6,066

Total liabilities

2,435,686

2,232,573

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

4,635,415

4,603,304

Retained earnings

2,023,611

2,188,917

Total stockholders’ equity

6,659,026

6,792,221

 
Total liabilities and stockholders’ equity

$

9,094,712

$

9,024,794

 
 
LIFELOC TECHNOLOGIES, INC.
Condensed Statements of Income (Unaudited)
 

Three Months Ended March 31,

REVENUES:

2020

2019

Product sales

$

1,937,866

$

1,970,101

Royalties

59,281

72,838

Rental income

21,189

25,822

Total

2,018,336

2,068,761

 
COST OF SALES

1,240,260

1,136,559

 
GROSS PROFIT

778,076

932,202

 
OPERATING EXPENSES:
Research and development

296,897

245,799

Sales and marketing

326,564

316,383

General and administrative

356,887

325,175

Total

980,348

887,357

 
OPERATING INCOME (LOSS)

(202,272)

44,845

 
OTHER INCOME (EXPENSE):
Interest income

7,176

9,422

Interest expense

(14,131)

(14,423)

Total other income (expense)

(6,955)

(5,001)

 
NET INCOME (LOSS) BEFORE PROVISION FOR TAXES

(209,227)

39,844

 
BENEFIT FROM (PROVISION FOR) FEDERAL AND STATE INCOME TAXES

43,921

(8,880)

 
NET INCOME (LOSS)

$

(165,306)

$

30,964

 
NET INCOME (LOSS) PER SHARE, BASIC

$

(0.07)

$

0.01

 
NET INCOME (LOSS) PER SHARE, DILUTED

$

(0.07)

$

0.01

 
WEIGHTED AVERAGE SHARES, BASIC

2,454,116

2,454,116

 
WEIGHTED AVERAGE SHARES, DILUTED

2,454,116

2,504,116

 

Lifeloc Technologies, Inc.

Statements of Stockholders’ Equity (Unaudited)

 

 

 

Three Months Ended March 31,

2020

2019

Total stockholders’ equity, beginning balances

$

6,792,221

$

6,160,737

 
Common stock (no shares issued during periods):
Beginning balances

4,603,304

4,597,646

Stock based compensation expense related
to stock options

32,111

2,162

Ending balances

4,635,415

4,599,808

 
Retained earnings:
Beginning balances

2,188,917

1,563,091

Net income (loss)

(165,306)

30,964

Ending balances

2,023,611

1,594,055

 
Total stockholders’ equity, ending balances

$

6,659,026

6,193,863

 
 

LIFELOC TECHNOLOGIES, INC.

Condensed Statements of Cash Flows (Unaudited)

 

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

2020

2019

Net income (loss)

$

(165,306)

$

30,964

Adjustments to reconcile net income to net cash
provided from (used in) operating activities-
Depreciation and amortization

97,199

103,047

Provision for doubtful accounts, net change

2,000

Provision for inventory obsolescence, net change

36,765

Deferred taxes, net change

(9,349)

(54,608)

Reserve for warranty expense, net change

1,000

Stock based compensation expense related to
stock options

32,111

2,162

Changes in operating assets and liabilities-
Accounts receivable

1,201

127,128

Inventories

(286,797)

(383,133)

Income taxes receivable

(34,555)

55,107

Prepaid expenses and other

(120,915)

(99,989)

Deposits and other

86,485

Accounts payable

218,563

310,840

Customer deposits

(29,699)

2,248

Accrued expenses

28,908

(34,254)

Deferred revenue

(4,539)

4,544

Net cash provided from (used in)
operating activities

(233,413)

150,541

 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment

(9,088)

(128,614)

Patent filing expense

(18,772)

Net cash (used in) investing activities

(27,860)

(128,614)

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

(11,391)

(11,101)

Net cash (used in) financing
activities

(11,391)

(11,101)

 
NET INCREASE (DECREASE) IN CASH

(272,664)

10,826

 
CASH, BEGINNING OF PERIOD

3,185,996

2,788,327

 
CASH, END OF PERIOD

$

2,913,332

$

2,799,153

 
SUPPLEMENTAL INFORMATION:
Cash paid for interest

$

13,860

$

14,152

 
Cash paid for income tax

$

20,063

$

 

 

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