Lifeloc Reports First Quarter 2019 and Shareholder Vote Results

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, 2019, as well as the results for the 2019 annual shareholder meeting.

First Quarter Financial Highlights

We posted quarterly net revenue of $2.07 million resulting in quarterly net income after taxes of $31 thousand, or $0.01 per diluted share. These results compare to net revenue of $2.20 million and quarterly net income of $11 thousand, or $0.00 per diluted share in the first quarter of 2018. Revenue for the quarter declined 6% versus the first quarter last year. This decline appears to have coincided with the federal government shutdown which adversely affected buying in regulated testing areas as well as local law enforcement purchases. Even though revenue declined, earnings improved through lower operating expenses. Gross margin on total revenue remained unchanged in the current quarter 45% versus 45% in the same quarter last year.

Shareholder Meeting

Lifeloc conducted its annual shareholder meeting May 6th at the companys headquarters in Wheat Ridge, CO. The proposed slate of directors was elected with over 99% of the votes cast and the appointment of auditors was ratified, also by more than 99% of the votes cast. Following the business portion of the meeting, a brief company status report was presented, and these slides are available on our website, www.lifeloc.com/shareholderMeeting.

Product Pipeline

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

The premier breathalyzer model of our new platform, the Lifeloc LX9, went into production during the quarter. The LX9 satisfies many market needs for performance and connectivity and combines these features in one easy to use package. To support the new platform, our patented Easycal calibration station has been upgraded to the Easycal G2 second generation calibration station. This model is compatible with our existing installed base of professional breathalyzers as well as the new platform. The G2 model includes RFID (Radio Frequency Identification) reading of calibration standard data, which further automates the calibration process.

Likewise, the new model of the R.A.D.A.R. (Real-time Alcohol Detection and Reporting) device is moving forward. Prototype devices are in testing, with production expected later this year. 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 completion of other projects will allow resources to be redirected towards accelerating this effort. 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.

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,  
2019 December 31,
CURRENT ASSETS: (Unaudited) 2018
Cash $ 2,799,153 $ 2,788,327
Accounts receivable, net 548,008 675,136
Inventories, net 1,673,740 1,290,607
Income taxes receivable 35,522 90,629
Prepaid expenses and other   135,144   35,155
Total current assets 5,191,567 4,879,854
 
PROPERTY AND EQUIPMENT, at cost:
Land 317,932 317,932
Building 1,941,414 1,928,795
Real-time Alcohol Detection And Recognition equipment and software 569,448 569,448
Production equipment and software 911,454 800,569
Training courses 432,375 432,375
Office equipment and software 246,946 241,836
Sales and marketing equipment 219,797 219,797
Research and development equipment and software 159,810 159,810
Less accumulated depreciation   (1,748,775 )   (1,649,203

)

Total property and equipment, net 3,050,401 3,021,359
 
OTHER ASSETS:
Patents, net 154,943 158,147
Deposits and other 53,967 140,452
Deferred taxes   134,477   79,869
Total other assets   343,387   378,468
Total assets $ 8,585,355 $ 8,279,681
 

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:
Accounts payable $ 654,623 $ 343,783
Term loan payable, current portion 43,498 43,207
Customer deposits 21,513 19,265
Accrued expenses 216,658 250,912
Deferred revenue, current portion 49,047 44,218
Reserve for warranty expense   40,000   40,000
Total current liabilities 1,025,339 741,385
 
TERM LOAN PAYABLE, net of current portion and
debt issuance costs 1,358,226 1,369,347
 
DEFERRED REVENUE, net of current portion 7,927 8,212
 
COMMITMENTS AND CONTINGENCIES
 
STOCKHOLDERS’ EQUITY:
Common stock, no par value; 50,000,000 shares
authorized, 2,454,116 shares outstanding 4,599,808 4,597,646
Retained earnings   1,594,055   1,563,091
Total stockholders’ equity   6,193,863   6,160,737
Total liabilities and stockholders’ equity $ 8,585,355 $ 8,279,681
 
 

LIFELOC TECHNOLOGIES, INC.

Condensed Statements of Income (Unaudited)
 
Three Months Ended September 30,
REVENUES: 2018   2017
Product sales $ 1,970,101 $ 2,122,243
Royalties 72,838 65,065
Rental income   25,822   14,601
Total 2,068,761 2,201,909
 
COST OF SALES   1,136,559   1,201,746
 
GROSS PROFIT 932,202 1,000,163
 
OPERATING EXPENSES:
Research and development 245,799 338,326
Sales and marketing 316,383 335,401
General and administrative   325,175   297,333
Total   887,357   971,060
 
OPERATING INCOME 44,845 29,103
 
OTHER INCOME (EXPENSE):
Interest income 9,422 2,184
Interest expense   (14,423 )   (14,714 )
Total   (5,001 )   (12,530 )
 
NET INCOME (LOSS) BEFORE PROVISION FOR TAXES 39,844 16,573
 
(PROVISION FOR) BENEFIT FROM FEDERAL AND STATE INCOME TAXES   (8,880 )   (5,373 )
 
NET INCOME $ 30,964 $ 11,200
 
NET INCOME PER SHARE, BASIC $ 0.01 $
 
NET INCOME PER SHARE, DILUTED $ 0.01 $
 
WEIGHTED AVERAGE SHARES, BASIC   2,454,116   2,454,116
 
WEIGHTED AVERAGE SHARES, DILUTED   2,504,116   2,510,699
 
             

Lifeloc Technologies, Inc.

Condensed Statement of Stockholders’ Equity (Unaudited)

 
Common Stock

 

Retained

Shares       Amount

Earnings

Total
BALANCES, DECEMBER 31, 2018 2,454,116 $ 4,597,646

 

$

1,563,091 $ 6,160,737
 
Net income 30,964 30,964
Stock based compensation expense
related to stock options 2,162 2,162
 
BALANCES, MARCH 31, 2019 2,454,116 $ 4,599,808

 

$

1,594,055 $ 6,193,863
 
Common Stock

 

Retained

Shares Amount

Earnings

Total
BALANCES, DECEMBER 31, 2017 2,454,116 $ 4,580,177

 

$

1,345,927 $ 5,926,104
 
Net income 11,200 11,200
Stock based compensation expense
related to stock options 5,714 5,714
 
BALANCES, MARCH 31, 2018 2,454,116 $ 4,585,891

 

$

1,357,127 $ 5,943,018
 
   

LIFELOC TECHNOLOGIES, INC.

Condensed Statements of Cash Flows (Unaudited)

 
Three Months Ended March 31,
CASH FLOWS FROM OPERATING ACTIVITIES: 2019   2018
Net income $ 30,964 $ 11,200
Adjustments to reconcile net income to net cash
provided from (used in) operating activities-
Depreciation and amortization 103,047 107,878
Provision for doubtful accounts, net change 1,500
Provision for inventory obsolescence, net change 27,500
Deferred taxes, net change (54,608 ) 935
Reserve for warranty expense, net change 1,500
Stock based compensation expense related to
stock options 2,162 5,714
Changes in operating assets and liabilities-
Accounts receivable 127,128 (165,780 )
Inventories (383,133 ) (34,908 )
Income taxes receivable 55,107 4,438
Prepaid expenses and other (99,989 ) (82,032 )
Deposits and other 86.485 256,853
Accounts payable 310,840 242,673
Customer deposits 2,248 (4,144 )
Accrued expenses (34,254 ) 36,406
Deferred revenue   4,544   (6,648 )
Net cash provided from (used in) operating activities 150,541 403,085
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment   (128,614 )   (355,512 )
Net cash (used in) investing activities (128,614 ) (355,512 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments made on term loan   (11,101 )   (10,673 )
Net cash (used in) financing activities   (11,101 )   (10,673 )
 
NET (DECREASE) IN CASH 10,826 36,900
 
CASH, BEGINNING OF PERIOD   2,788,327   2,669,455
 
CASH, END OF PERIOD   2,799,153 $ 2,706,355
 
SUPPLEMENTAL INFORMATION:
Cash paid for interest $ 14,152 $ 14,579
 
Cash paid for income tax $ $
 

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