Lifeloc Reports 2020 Full Year Results

WHEAT RIDGE, Colo., March 30, 2021 /PRNewswire/ — Lifeloc Technologies, Inc. (OTC: LCTC), a global leader in the development and manufacturing…

WHEAT RIDGE, Colo., March 30, 2021 /PRNewswire/ — Lifeloc Technologies, Inc. (OTC: LCTC), a global leader in the development and manufacturing of breath alcohol testing devices, has announced financial results for the 2020 fiscal year ended December 31, 2020.

2020 Financial Highlights

Lifeloc Technologies posted annual net revenue of $6.357 million resulting in 2020 after tax net loss of $922 thousand, or a loss of $0.38 per diluted share.  These results compare to net revenue of $8.752 million for 2019, with net income of $626 thousand, or $0.26 per diluted share.  The 2019 results included a one-time gain of $225 thousand from a licensing settlement. 

The COVID-19 global pandemic and the government ordered shutdowns that came along with the pandemic significantly impacted our business.  These unprecedented circumstances caused a departure from Lifeloc’s consistent annual profitability and resulted in a 27% decline in revenues for 2020.  This pandemic has impacted operations, adding costs while suppressing our workplace, law enforcement and international markets.  Ironically, a recent study published online in the Journal of the American Medical Association Network shows an average increase in heavy alcohol drinking days of 19% during the pandemic and lockdown, indicating a greater need for Lifeloc products and potentially a pent-up market demand.  On top of the pandemic, extended protests across the country impacted domestic law enforcement, diverting attention and funding.  On a brighter note, with a greater emphasis on workplace hygiene, the pandemic did create openings and demonstrated the value of our hands-free Sentinel™ access control unit.

The Federal government’s response to the pandemic included efforts to stabilize the economy and employment.  The most relevant program to Lifeloc was the Paycheck Protection Program (PPP).  As previously reported in 2020, Lifeloc received a $465 thousand SBA guaranteed loan, which could be completely forgiven by the SBA if the proceeds were spent in accordance with the program rules.  Lifeloc complied with this program and applied for forgiveness in 2020, which was granted by the SBA in early 2021.  The financial impact of the forgiveness will be realized in the first quarter of 2021.  The PPP program was quite successful in mitigating the negative effect of the significant demand suppression on cash flow from the pandemic while allowing Lifeloc to carefully reduce structural costs and retain critical personnel, thus enabling us to continue our product development efforts. 

Lifeloc qualified for and received a round two PPP loan of $471 thousand in Q1 of 2021.  As with the first loan, Lifeloc intends to comply with all requirements and will apply for forgiveness of this loan when the program conditions are satisfied and the opportunity to apply becomes available. 

Despite all the challenges of 2020, Lifeloc has made substantial progress on several fronts toward our vision of becoming the leading company in real-time drug and alcohol detection and monitoring.  In 2020, Lifeloc was audited and achieved first time accreditation under the ISO 17034 standards.  As a result, our Plus 4™ alcohol simulator solution can now be called Certified Reference Solution.  As a result, we now have a few additional state governments evaluating Lifeloc as a preferred vendor of these solutions to their various facilities.  We believe we can manufacture and distribute this product more cost effectively than can the individual states. 

Concerns over virus spread led to significant attention to the hygiene and safety of every activity in the marketplace, including breath alcohol testing.  As previously reported, Lifeloc commissioned an independent third-party laboratory to test for any potential of viral cross contamination of test subjects using Lifeloc brand breath alcohol testers.  The conclusion was there is no risk of viral cross contamination using Lifeloc brand breath alcohol testers, which has increased confidence in the Lifeloc brand.

Our new platform LX9 and LT7 devices were introduced late in 2019.  Even in the difficult market conditions of 2020, the features and performance of the new L-series products has driven penetration and opened previously unaddressable market needs, such as requirements for a wide temperature range and fast customization in local languages.  We expect that most L-series sales will be incremental to FC-series devices rather than replacing FC-series sales. 

We continue to invest in the significant growth opportunities of alcohol monitoring and drug detection.  The monitoring opportunity will be addressed primarily through the redesigned Real-Time Alcohol Detection and Reporting (R.A.D.A.R.®) device.  Manufacture of the second generation R.A.D.A.R. 200 protype devices began in early 2020.  Testing of these redesigned R.A.D.A.R. devices and integration with the monitoring system has been extensive, requiring additional modification before final release.  This design has been finalized with several devices now in field testing and sales release planned very soon. 

Rapid detection of drugs of abuse is the best convergence of current market need and Lifeloc’s capabilities, and therefore this is our most important goal.  Additional resources are being deployed to finalizing the development of the SpinDx™ technology and the rapid, quantitative marijuana breathalyzer built on that platform.  We have improved the detection sensitivity for delta-9-THC as well as the device robustness.  Work continues to build this system into a device that can be used for roadside testing.

«2020 was a difficult year with the global pandemic adding costs and impacting demand and the way that we work,» commented Dr. Wayne Willkomm, President and CEO.  «We hope to see the continued pickup of our general business conditions as well as the broader adoption of the new LX platform and the imminent release of the redesigned R.A.D.A.R 200 devices return Lifeloc to growth and profitability.  Following the release of the R.A.D.A.R. 200 device, the next big milestone for Lifeloc will be the commercialization of the SpinDx platform.  Speeding the SpinDx commercialization will be prioritized even at the expense of short-term profitability.»

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.

Sentinel™ and Plus 4™ are 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.

Balance Sheets


ASSETS















December 31,

CURRENT ASSETS:


2020



2019


Cash

$

2,195,070


$

3,185,996


Accounts receivable, net


523,603



641,239


Inventories, net


2,498,126



1,986,299


Income taxes receivable


220,657



6,750


Prepaid expenses and other


77,962



18,857


      Total current assets


5,515,418



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


958,785



976,621


Training courses


432,375



432,375


Office equipment, software and space modifications


216,618



208,986


Sales and marketing equipment and space modifications


226,356



232,600


Research and development equipment, software and space modifications


190,818



172,429


Less accumulated depreciation


(2,277,839)



(1,959,541)


     Total property and equipment, net


2,563,288



2,879,645








OTHER ASSETS:







Patents, net


144,702



145,323


Deposits and other


164,798



74,027


Deferred taxes


148,142



86,658


     Total other assets


457,642



306,008









     Total assets

$

8,536,348


$

9,024,794








LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:







Accounts payable

$

333,851


$

261,798


Term loan payable, current portion


46,936



44,879


Paycheck Protection loan payable


465,097




Customer deposits


155,295



214,031


Accrued expenses


266,266



290,458


Deferred revenue, current portion


41,053



45,874


Reserve for warranty expense


46,500



45,000


      Total current liabilities


1,354,998



902,040








TERM LOAN PAYABLE, net of current portion and







debt issuance costs


1,277,531



1,324,467








DEFERRED REVENUE, net of current portion


3,177



6,066


      Total liabilities


2,635,706



2,232,573








COMMITMENTS AND CONTINGENCIES













STOCKHOLDERS’ EQUITY:







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







  authorized, 2,454,116 shares outstanding


4,633,655



4,603,304


Retained earnings


1,266,987



2,188,917


      Total stockholders’ equity


5,900,642



6,792,221









      Total liabilities and stockholders’ equity

$

8,536,348


$

9,024,794

 

LIFELOC TECHNOLOGIES, INC.

Statements of Income






Years Ended December 31,

REVENUES:


2020



2019


Product sales

$

6,122,348


$

8,251,570


Royalties


148,398



411,111


Rental income


85,956



89,142


Total


6,356,702



8,751,823








COST OF SALES


4,176,156



4,815,820








GROSS PROFIT


2,180,546



3,936,003








OPERATING EXPENSES:







Research and development


1,007,297



1,038,227


Sales and marketing


1,074,249



1,240,773


General and administrative


1,254,503



1,175,788


Total


3,336,049



3,454,788








OPERATING INCOME (LOSS)


(1,155,503)



481,215








OTHER INCOME (EXPENSE):







Settlement proceeds




225,199


Interest income


14,294



38,750


Interest expense


(56,129)



(57,802)


Total 


(41,835)



206,147








NET INCOME (LOSS) BEFORE PROVISION FOR TAXES


(1,197,338)



687,362








BENEFIT FROM (PROVISION FOR) FEDERAL AND STATE INCOME TAXES  


275,408



(61,536)








NET INCOME (LOSS)

$

(921,930)


$

625,826








NET INCOME (LOSS) PER SHARE, BASIC

$

(0.38)


$

0.26








NET INCOME (LOSS) PER SHARE, DILUTED

$

(0.38)


$

0.26








WEIGHTED AVERAGE SHARES, BASIC


2,454,116



2,454,116








WEIGHTED AVERAGE SHARES, DILUTED


2,454,116



2,454,116

 

Lifeloc Technologies, Inc.

Statements of Stockholders’ Equity

















Years Ended December 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


30,351



5,658


Ending balances


4,633,655



4,603,304








Retained earnings:







Beginning balances


2,188,917



1,563,091


Net income (loss)


(921,930)



625,826


Ending balances


1,266,987



2,188,917








Total stockholders’ equity, ending balances

$

5,900,642


$

6,792,221

 

LIFELOC TECHNOLOGIES, INC.

Statements of Cash Flows












Years  Ended December 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

2020


2019


Net income (loss)

$

(921,930)


$

625,826


Adjustments to reconcile net income (loss) to net cash







 provided from operating activities-







   Depreciation and amortization


364,336



412,529



  Provision for doubtful accounts, net change

24,000




   Provision for inventory obsolescence, net change


20,000



20,000


   Deferred taxes, net change


(61,484)



(6,789)


   Reserve for warranty expense, net change


1,500



5,000


   Stock based compensation expense related to







     stock options


30,351



5,658


Changes in operating assets and liabilities-







   Accounts receivable


93,636



33,897


   Inventories 


(531,827)



(715,692)


   Income taxes receivable 


(213,907)



83,879


   Prepaid expenses and other 


(59,105)



16,298


   Deposits and other 


(90,771)



66,425


   Accounts payable 


72,053



(81,985)


   Customer deposits 


(58,736)



194,766


   Accrued expenses 


(24,192)



39,546


   Deferred revenue 


(7,710)



(490)



           Net cash provided from (used in)








            operating activities


(1,363,786)



698,868









CASH FLOWS FROM INVESTING ACTIVITIES:







Purchases of property, equipment and space modifications


(27,477)



(256,906)


Patent filing expense


(18,796)





           Net cash (used in) investing activities


(46,273)



(256,906)









CASH FLOWS FROM FINANCING ACTIVITIES:







Proceeds from Paycheck Protection loan


465,097




Principal payments made on term loan


(45,964)



(44,293)



           Net cash provided from (used in) 








            financing activities


419,133



(44,293)









NET INCREASE (DECREASE) IN CASH


(990,926)



397,669









CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD


3,185,996



2,788,327









CASH AND CASH EQUIVALENTS, END OF PERIOD

$

2,195,070


$

3,185,996









SUPPLEMENTAL INFORMATION:







Cash paid for interest

$

55,045


$

56,717










Cash paid for income tax

$


$

38,000

 

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SOURCE Lifeloc Technologies