Lifeloc Reports Second Quarter 2022 Results

(PRNewsfoto/Lifeloc Technologies)

WHEAT RIDGE, Colo.,  Aug. 9, 2022 /PRNewswire/ — 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 second quarter ended June 30, 2022.

First Quarter Financial Highlights

Lifeloc posted quarterly net revenue of $2.180 million in the second quarter of 2022, resulting in a quarterly net loss of $(202) thousand, or $(0.08) per diluted share. These results compare to net revenue of $1.730 million and quarterly net loss of $(110) thousand, or $(0.04) per diluted share in the second quarter of 2021. Revenue for the quarter increased 26% versus the second quarter last year, as demand continued to recover from the impact of the COVID-19 global pandemic and the government ordered shutdowns. Six-month net revenue of $4.341 million and a net loss of $(346) thousand, or $(0.14) per diluted share, compare to net revenue of $3.539 million and a net profit of $294 thousand, or $0.12 per diluted share, for the same six months of 2021. The income for the first six months of 2021 includes the benefit from the forgiveness of the first round SBA Paycheck Protection Program (PPP) loan of $465 thousand.   

Increasing research and development investment as well as supply chain disruption contributed to the net loss in this quarter despite increased revenue. Supply chain delays have added some costs, and component inflation has added more. The company implemented a broad price increase during the quarter in response to rising costs.

New platform LX9 and LT7 devices are producing strong sales growth. The L-series devices feature a high-resolution color display with a highly customizable user interface. Their features and performance 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.

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, emergency rooms and in 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.  We are also developing a device based on our recently updated LX9 breathalyzer that, when coupled with the SpinDx technology, will be our first marijuana breathalyzer system. In anticipation of possible SpinDx supply chain delays, we’ve already begun purchasing small quantities of components ahead of the initial production builds.

Our R.A.D.A.R.® 200 device has been introduced to the market, and the market feedback is that the device needs a few additional specific upgrades to gain widespread acceptance. The R.A.D.A.R. device promises to address a critical and valuable market need for self-administered alcohol monitoring. However, in late 2021, we determined that Lifeloc’s full research and development resources must remain focused on completing the SpinDx development and bringing it to market. To maximize shareholder value, Lifeloc has created a new wholly owned subsidiary, Probation Tracker Inc. (PTI), to focus exclusively on development of R.A.D.A.R.® 300.  We intend to distribute the shares of PTI to our shareholders as a stock dividend once we’ve received the required regulatory approvals and expect PTI to work independently to develop R.A.D.A.R.® 300 and raise additional funds as needed to commercialize it. More details are available in our 10-Q for the second quarter of 2022 and will be forthcoming in subsequent filings.

“Our sales continue to recover well in 2022,” commented Dr. Wayne Willkomm, President and CEO. “The new L-series devices have grown from a small base to become a significant contributor to revenue and profit margin. Revenue from these is expected to provide the continued funding to push the SpinDx product platform across the finish line to commercialization. We expect research and development expenses to remain high in this push to complete the first of many products built on the SpinDx platform, prioritizing substantial value creation over short-term profitability.  We are working toward the goal of initial SpinDx sales this year.”

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.

R.A.D.A.R.® is a registered trademark 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

















June 30, 2022

(Unaudited)



December 31,

2021

CURRENT ASSETS:





Cash

$

2,251,315


$

2,571,668


Accounts receivable, net


735,675



562,092


Inventories, net


2,300,987



2,668,789


Prepaid expenses and other


124,781



56,897


      Total current assets


5,412,758



5,859,446








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


988,738



958,785


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


467,485



456,685


Less accumulated depreciation


(2,747,253)



(2,518,966)


     Total property and equipment, net


2,400,494



2,588,028








OTHER ASSETS:







Patents, net


97,412



134,428


Deposits and other


163,480



163,480


Deferred taxes


315,486



204,449


     Total other assets


576,378



502,357









     Total assets

$

8,389,630


$

8,949,831








LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:







Accounts payable

$

299,663


$

445,985


Term loan payable, current portion


49,265



48,513


Customer deposits


171,228



170,952


Accrued expenses


240,193



298,530


Deferred revenue, current portion


67,238



71,604


Reserve for warranty expense


46,500



46,500


      Total current liabilities


874,087



1,082,084








TERM LOAN PAYABLE, net of current portion and







debt issuance costs


1,243,807



1,267,551








DEFERRED REVENUE, net of current portion


6,806



6,430


      Total liabilities


2,124,700



2,356,065















COMMITMENTS AND CONTINGENCIES













STOCKHOLDERS’ EQUITY:







Common stock, no par value; 50,000,000 shares







  authorized, 2,454,116 shares outstanding


4,668,014



4,650,812


Retained earnings


1,596,916



1,942,954


      Total stockholders’ equity


6,264,930



6,593,766









      Total liabilities and stockholders’ equity

$

8,389,630


$

8,949,831















LIFELOC TECHNOLOGIES, INC.

Condensed Statements of Income (Unaudited)






Three Months Ended June 30,

REVENUES:


2022



2021


Product sales

$

2,144,813


$

1,674,045


Royalties


12,572



33,652


Rental income


22,639



21,939


Total


2,180,024



1,729,636








COST OF SALES


1,516,389



1,124,218








GROSS PROFIT


663,635



605,418








OPERATING EXPENSES:







Research and development


352,910



266,633


Sales and marketing


276,669



214,124


General and administrative


293,421



256,908


Total


923,000



737,665








OPERATING INCOME (LOSS)


(259,365)



(132,247)








OTHER INCOME (EXPENSE):







Interest income


1,190



813


Interest expense


(10,817)



(13,544)


Total 


(9,627)



(12,731)








NET INCOME (LOSS) BEFORE PROVISION FOR TAXES


(268,992)



(144,978)








BENEFIT FROM (PROVISION FOR) FEDERAL AND STATE INCOME TAXES


67,462



35,266








NET INCOME (LOSS)

$

(201,530)


$

(109,712)








NET INCOME (LOSS) PER SHARE, BASIC

$

(0.08)


$

(0.04)








NET INCOME (LOSS) PER SHARE, DILUTED

$

(0.08)


$

(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)






Six Months Ended June 30,

REVENUES:


2022



2021


Product sales

$

4,256,570


$

3,449,492


Royalties


39,212



46,216


Rental income


44,878



43,471


Total


4,340,660



3,539,179








COST OF SALES


2,835,136



2,109,884








GROSS PROFIT


1,505,524



1,429,295








OPERATING EXPENSES:







Research and development


742,934



573,845


Sales and marketing


553,306



444,602


General and administrative


646,254



607,028


Total


1,942,494



1,625,475








OPERATING INCOME (LOSS)


(436,970)



(196,180)








OTHER INCOME (EXPENSE):







Forgiveness of Paycheck Protection loan




465,097


Interest income


1,622



1,312


Interest expense


(21,727)



(27,061)


Total 


(20,105)



439,348








NET INCOME (LOSS) BEFORE PROVISION FOR TAXES


(457,075)



243,168








BENEFIT FROM (PROVISION FOR) FEDERAL AND STATE INCOME TAXES


111,037



50,591








NET INCOME (LOSS)

$

(346,038)


$

293,759








NET INCOME (LOSS) PER SHARE, BASIC

$

(0.14)


$

0.12








NET INCOME (LOSS) PER SHARE, DILUTED

$

(0.14)


$

0.12








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,



2022


2021


2022


2021

Total stockholders’ equity, beginning balances

$

6,466,460


$

6,321,270


$

6,593,766


$

5,900,642














Common stock (no shares issued during periods):













Beginning balances


4,668,014



4,650,812



4,650,812



4,633,655


Stock based compensation expense related













 to stock options






17,202



17,157


Ending balances


4,668,014



4,650,812



4,668,014



4,650,812














Retained earnings:













Beginning balances


1,798,446



1,670,458



1,942,954



1,266,987


Net income (loss)


(201,530)



(109,712)



(346,038)



293,759


Ending balances


1,596,916



1,560,746



1,596,916



1,560,746














Total stockholders’ equity, ending balances

$

6,264,930


$

6,211,558


$

6,264,930


$

6,211,558

 

LIFELOC TECHNOLOGIES, INC.

Condensed Statements of Cash Flows (Unaudited)












Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

2022


2021


Net income (loss)

$

(346,038)


$

293,759


Adjustments to reconcile net income to net cash







 provided from (used in) operating activities-








 Forgiveness of Paycheck Protection loan (round 1)




(465,097)


   Depreciation and amortization


267,455



133,657


   Provision for doubtful accounts, net change




(49,000)


   Provision for inventory obsolescence, net change


94,578



(5,000)


   Deferred taxes, net change


(111,037)



10,648


   Stock based compensation expense related to







     stock options


17,202



17,157


Changes in operating assets and liabilities-







   Accounts receivable


(173,583)



73,553


   Inventories 


273,224



7,166


   Income taxes receivable 




(54,506)


   Prepaid expenses and other 


(67,884)



(12,804)


   Deposits and other 




966


   Accounts payable 


(146,322)



(101,836)


   Customer deposits 


276



8,130


   Accrued expenses 


(58,337)



(54,102)


   Deferred revenue 


(3,990)



3,930



           Net cash provided from (used in)








            operating activities


(254,456)



(193,379)









CASH FLOWS FROM INVESTING ACTIVITIES:







Purchases of property and equipment


(40,753)



(58,461)


Patent filing expense






           Net cash (used in) investing activities


(40,753)



(58,461)









CASH FLOWS FROM FINANCING ACTIVITIES:







Principal payments made on term loan


(25,144)



(23,986)


Proceeds from Paycheck Protection loan (round 2)





471,347



           Net cash provided from (used in)








            financing activities


(25,144)



447,361









NET INCREASE (DECREASE) IN CASH


(320,353)



195,521









CASH, BEGINNING OF PERIOD


2,571,668



2,195,070









CASH, END OF PERIOD

$

2,251,315


$

2,390,591









SUPPLEMENTAL INFORMATION:







Cash paid for interest

$

19,575


$

 

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SOURCE Lifeloc Technologies

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