Lifeloc Reports Third Quarter 2024 Results

Rhea-AI Summary

Lifeloc Technologies (LCTC) reported Q3 2024 financial results with net revenue of $2.087 million, down 23% from $2.696 million in Q3 2023. The company posted a quarterly net loss of $(158) thousand, or $(0.06) per share, compared to a profit of $110 thousand, or $0.04 per share in Q3 2023. Gross margin improved to 43.7% from 41.5% year-over-year. The company secured a $750,000 line of credit and raised $798,000 through a private placement of 210,000 shares at $3.80 per share. Lifeloc plans to launch its SpinDx saliva testing system for drug detection in late 2025.

Positive

• Gross margin improved to 43.7% in Q3 2024 from 41.5% in Q3 2023
• Secured $750,000 line of credit from Citywide Banks
• Raised $798,000 through private placement at $3.80 per share
• SpinDx technology successfully validated against LCMS standard for drug detection

Negative

• Q3 2024 revenue decreased 23% to $2.087M from $2.696M in Q3 2023
• Q3 2024 net loss of $(158,000) compared to $110,000 profit in Q3 2023
• Nine-month 2024 net loss of $(740,000) vs profit of $111,000 in 2023
• Shareholder dilution from private placement of 210,000 shares
• High R&D costs impacting profitability

WHEAT RIDGE, CO / ACCESSWIRE / November 12, 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 September 30, 2024.

Third Quarter Financial Highlights

Lifeloc posted quarterly net revenue of $2.087 million in the third quarter of 2024, resulting in a quarterly net loss of $(158) thousand, or $(0.06) per diluted share. These results compare to net revenue of $2.696 million and quarterly net profit of $110 thousand, or $0.04 per diluted share in the third quarter of 2023. Revenue for the quarter decreased 23% versus the third quarter last year. This decrease year-over-year was caused in part by sales in the third quarter last year benefitting from the relief of supply constraints, which allowed completion of order backlogs. Nine-month 2024 net revenues of $6.628 million and a net loss of $(740) thousand, or $(0.30) per diluted share, compared to net revenue of $7.140 million and a net profit of $111 thousand, or $0.05 per diluted share, for the same nine months of 2023. Total gross margin in the third quarter improved to 43.7% versus 41.5% for the same quarter last year. For the first nine months of 2024 gross margin was 41.4% versus 43.4% for the same period last year.

The gross margin improvement in the third quarter was primarily a result of product sales mix. The margin decline for the nine months of 2024 was a result of general cost inflation which the company is working to address through pricing. The losses for the quarter and year to date were caused primarily by the high research and development costs with the push to SpinDx commercialization.

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 smart phone pairing, wider temperature use ranges and fast customization that incorporates local languages. 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 are currently performing validation testing of the microfluidic action and full drug assay within the current disk design before this transitions into production tooling. We plan to start beta testing of our SpinDx saliva testing system utilizing the delta-9-THC disks later this quarter using prototype readers as shown in the photograph below. Commercial launch of our first SpinDx application is projected to occur later 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.

"We believe we are getting close to validating and launching our device into rapid drug testing," said Dr. Wayne Willkomm, Lifeloc's chief executive officer. "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."

In anticipation of declining cash because of the high research and development investment in SpinDx, 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.

"The small private placement was very efficient," said Dr. Willkomm, "with no underwriting costs and minimizing shareholder dilution."

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.

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

LIFELOC TECHNOLOGIES, INC.
Condensed Balance Sheets

ASSETS
		September 30, 2024 (Unaudited)				December 31, 2023
CURRENT ASSETS:
Cash		$	841,621			$	1,766,621
Accounts receivable, net			611,439				812,126
Inventories, net			3,160,200				3,024,834
Federal and state income taxes receivable			60,420				-
Prepaid expenses and other			89,049				105,967
Total current assets			4,762,729				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 Recognition equipment and software			569,448				569,448
Production equipment, software and space modifications			1,349,839				1,154,803
Training courses			432,375				432,375
Office equipment, software and space modifications			254,333				216,618
Sales and marketing equipment and space modifications			226,356				226,356
Research and development equipment, software and space modifications			725,556				480,684
Research and development equipment, software and space modifications not in service			147,615				-
Less accumulated depreciation			(3,511,125	)			(3,326,837	)
Total property and equipment, net			2,441,124				2,000,174
OTHER ASSETS:
Patents, net			80,517				64,439
Deposits and other			12,261				111,157
Deferred taxes			1,046,493				806,652
Total other assets			1,139,271				982,248
Total assets		$	8,343,124			$	8,691,970
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable		$	328,528			$	402,231
Term loan payable, current portion			52,789				51,588
Income taxes payable			-				44,952
Customer deposits			28,940				195,719
Accrued expenses			270,932				329,311
Deferred revenue, current portion			56,090				79,036
Reserve for warranty expense			46,500				46,500
Total current liabilities			783,779				1,149,337
TERM LOAN PAYABLE, net of current portion and
debt issuance costs			1,132,066				1,170,243
DEFERRED REVENUE, net of current portion			8,575				11,565
Total liabilities			1,924,420				2,331,145
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, no par value; 50,000,000 shares authorized, 2,664,116
shares outstanding (2,454,116 outstanding at December 31, 2023)			5,466,014				4,668,014
Retained earnings			952,690				1,692,811
Total stockholders' equity			6,418,704				6,360,825
Total liabilities and stockholders' equity		$	8,343,124			$	8,691,970

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

		Three Months Ended September 30,
REVENUES:		2024				2023
Product sales		$	2,075,994			$	2,676,872
Royalties			3,016				5,063
Rental income			8,316				13,573
Total			2,087,326				2,695,508
COST OF SALES			1,175,374				1,576,117
GROSS PROFIT			911,952				1,119,391
OPERATING EXPENSES:
Research and development			521,107				516,174
Sales and marketing			329,716				309,898
General and administrative			269,450				269,593
Total			1,120,273				1,095,665
OPERATING INCOME (LOSS)			(208,321	)			23,726
OTHER INCOME (EXPENSE):
Interest income			9,525				17,678
Interest expense			(10,019	)			(10,494	)
Total			(494	)			7,184
NET INCOME (LOSS) BEFORE PROVISION FOR TAXES			(208,815	)			30,910
BENEFIT FROM FEDERAL AND STATE INCOME TAXES			50,488				78,693
NET INCOME (LOSS)		$	(158,327	)		$	109,603
NET INCOME (LOSS) PER SHARE, BASIC		$	(0.06	)		$	0.04
NET INCOME (LOSS) PER SHARE, DILUTED		$	(0.06	)		$	0.04
WEIGHTED AVERAGE SHARES, BASIC			2,611,616				2,454,116
WEIGHTED AVERAGE SHARES, DILUTED			2,611,616				2,454,116

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

	Nine Months Ended September 30,
REVENUES:		2024			2023
Product sales	$	6,580,861		$	7,056,638
Royalties		22,776			23,419
Rental income		24,462			60,351
Total		6,628,099			7,140,408
COST OF SALES		3,887,244			4,043,146
GROSS PROFIT		2,740,855			3,097,262
OPERATING EXPENSES:
Research and development		1,738,982			1,308,721
Sales and marketing		1,040,099			897,856
General and administrative		947,384			872,724
Total		3,726,465			3,079,301
OPERATING INCOME (LOSS)		(985,610)			17,961
OTHER INCOME (EXPENSE):
Interest income		35,874			46,678
Interest expense		(30,226)			(31,319)
Total		5,648			15,359
NET INCOME (LOSS) BEFORE PROVISION FOR TAXES		(979,962)			33,320
BENEFIT FROM FEDERAL AND STATE INCOME TAXES		239,841			77,640
NET INCOME (LOSS)	$	(740,121)		$	110,960
NET INCOME (LOSS) PER SHARE, BASIC	$	(0.30)		$	0.05
NET INCOME (LOSS) PER SHARE, DILUTED	$	(0.30)		$	0.05
WEIGHTED AVERAGE SHARES, BASIC		2,506,999			2,454,116
WEIGHTED AVERAGE SHARES, DILUTED		2,506,999			2,454,116

Lifeloc Technologies, Inc.
Statements of Stockholders' Equity

		Three Months Ended September 30,								Nine Months Ended September 30,
		2024				2023				2024				2023
Total stockholders' equity, beginning balances		$	5,779,031			$	6,156,568			$	6,360,825			$	6,155,211
Common stock:
Beginning balances			4,668,014				4,668,014				4,668,014				4,668,014
Issuance of 210,000 shares at $3.80 per share			798,000				-				798,000				-
Ending balances			5,466,014				4,668,014				5,466,014				4,668,014
Retained earnings:
Beginning balances			1,111,017				1,488,554				1,692,811				1,487,197
Net income (loss)			(158,327	)			109,603				(740,121	)			110,960
Ending balances			952,690				1,598,157				952,690				1,598,157
Total stockholders' equity, ending balances		$	6,418,704			$	6,266,171			$	6,418,704			$	6,266,171

LIFELOC TECHNOLOGIES, INC.
Condensed Statements of Cash Flows (Unaudited)

		Nine Months Ended September 30,
CASH FLOWS FROM OPERATING ACTIVITIES:		2024				2023
Net income (loss)		$	(740,121	)		$	110,960
Adjustments to reconcile net income (loss) to net cash
(used in) operating activities-
Depreciation and amortization			193,096				198,471
Provision for doubtful accounts, net change			1,000				-
Provision for inventory obsolescence, net change			52,500				-
Deferred taxes, net change			(239,841	)			(114,116	)
Changes in operating assets and liabilities-
Accounts receivable			199,687				(81,388	)
Inventories			(187,866	)			(179,943	)
Employee retention credit and income taxes receivable			(60,420	)			107,575
Prepaid expenses and other			16,918				(207,149	)
Deposits and other			98,896				-
Accounts payable			(73,703	)			87,870
Income taxes payable			(44,952	)			36,476
Customer deposits			(166,779	)			(16,557	)
Accrued expenses			(58,379	)			(82,738	)
Deferred revenue			(25,936	)			(13,339	)
Net cash (used in)
operating activities			(1,035,900	)			(153,878	)
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Purchases of property and equipment			(477,623	)			(21,611	)
Purchase of research and development equipment, software, and
space modifications, not in service			(147,615	)
Patent filing expense			(21,708	)			(1,404	)
Net cash (used in) investing activities			(646,946	)			(23,015	)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Principal payments made on term loan			(40,154	)			(38,988	)
Proceeds from issuance of 210,000 shares at $3.80 per share			798,000				-
Net cash provided by (used in) financing
activities			757,846				(38,988	)
NET (DECREASE) IN CASH			(925,000	)			(215,881	)
CASH, BEGINNING OF PERIOD			1,766,621				2,352,754
CASH, END OF PERIOD		$	841,621			$	2,136,873
SUPPLEMENTAL INFORMATION:
Cash paid for interest		$	27,048			$	28,091
Cash paid for income tax		$	60,420			$	-

SOURCE: Lifeloc Technologies, Inc.

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FAQ

What was Lifeloc Technologies (LCTC) revenue in Q3 2024?

Lifeloc Technologies reported Q3 2024 revenue of $2.087 million, representing a 23% decrease from $2.696 million in Q3 2023.

When will Lifeloc Technologies (LCTC) launch its SpinDx drug testing system?

Lifeloc Technologies projects to commercially launch its SpinDx saliva testing system later in 2025.

How much capital did Lifeloc Technologies (LCTC) raise in Q3 2024?

Lifeloc Technologies secured a $750,000 line of credit and raised $798,000 through a private placement of 210,000 shares at $3.80 per share.

What was Lifeloc Technologies (LCTC) gross margin in Q3 2024?

Lifeloc Technologies reported a gross margin of 43.7% in Q3 2024, up from 41.5% in Q3 2023.