WHEAT RIDGE, CO / ACCESSWIRE / March 14, 2023 / Lifeloc Technologies, Inc. (OTC PINK:LCTC), a global leader in the development and manufacturing of breath alcohol testing devices, has announced financial results for the 2022 fiscal year ended December 31, 2022.
2022 Financial Highlights
Lifeloc Technologies posted annual net revenue of $8.482 million resulting in a net loss of $456 thousand in 2022, or ($0.19) per diluted share. These results compare to net revenue of $7.054 million for 2021, with net profit of $676 thousand, or $0.27 per diluted share. The 2022 results included a one-time gain of $108 thousand from the employee retention tax credit, while the 2021 results included a one-time gain of $936 thousand from the forgiveness of both the 2020 and 2021 Paycheck Protection Program loans through the SBA. Revenues for 2022 grew by 20% over 2021 sales, returning to pre-pandemic sales levels.
Increasing research and development investment for SpinDx 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 price increases during the year in response to rising costs, with additional increases planned for 2023.
After releasing the R.A.D.A.R.® 200 device we found several features that needed additional refinement. Since they would require significant development time and staff commitments, we elected to arrange with a third party to work on proof of concept, which if successful, will result in the R.A.D.A.R. 300 device. This allows us to continue our focus on SpinDx and reduces the expense we were incurring to support R.A.D.A.R. development.
New platform LX9 and LT7 devices are making significant contributions to revenue, as demonstrated by their 360% sales growth in 2022 versus 2021. The features and performance of the new L-series products 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 and in emergency rooms, forensic labs and 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. Testing has commenced to validate the SpinDx technology against the definitive standard liquid chromatography-mass spectroscopy (LCMS) measurement utilizing human samples. The LCMS data are validating the SpinDx test results on real-world human saliva tests at a limit of detection of approximately 10 ng/ml. Work continues to improve the robustness and convenience of operation. Following the release of the SpinDx saliva testing system, which is expected this year and is projected to result in commercialization in 2024, development will accelerate on combining our LX9 breathalyzer with the THC SpinDx detection unit with their coupling to be our marijuana breathalyzer system.
"We saw sales recover in 2022 back to pre-pandemic levels, even though a few sales were pushed into 2023 because of component delays," commented Dr. Wayne Willkomm, President and CEO. "We are excited to see substantial sales growth with the L-series products. These sales are expected to continue to grow with additional certifications and expanded features, and to provide the continued funding to accelerate the SpinDx product platform across the finish line to commercialization. We expect our research and development expenses will continue to rise in this final push. Accurate and rapid drug screening continues to be an unmet market need and, we believe, our best opportunity for significant, long term value creation."
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.
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. | ||||||
| Balance Sheets | ||||||
| ASSETS | ||||||
| December 31, 2022 | December 31, 2021 | |||||
CURRENT ASSETS: | ||||||
Cash | $ | 2,352,754 | $ | 2,571,668 | ||
Accounts receivable, net | 627,919 | 562,092 | ||||
Inventories, net | 2,732,463 | 2,668,789 | ||||
Employee retention credit receivable | 107,575 | - | ||||
Prepaid expenses and other | 58,203 | 56,897 | ||||
Total current assets | 5,878,914 | 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 | 1,147,992 | 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 | 480,684 | 456,685 | ||||
Less accumulated depreciation | (3,072,961) | (2,518,966) | ||||
Total property and equipment, net | 2,247,239 | 2,588,028 | ||||
OTHER ASSETS: | ||||||
Patents, net | 69,679 | 134,428 | ||||
Deposits and other | 500 | 163,480 | ||||
Deferred taxes | 321,429 | 204,449 | ||||
Total other assets | 391,608 | 502,357 | ||||
Total assets | $ | 8,517,761 | $ | 8,949,831 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
CURRENT LIABILITIES: | ||||||
Accounts payable | $ | 413,957 | $ | 445,985 | ||
Term loan payable, current portion | 50,028 | 48,513 | ||||
Customer deposits | 201,031 | 170,952 | ||||
Accrued expenses | 344,944 | 298,530 | ||||
Deferred revenue, current portion | 80,222 | 71,604 | ||||
Reserve for warranty expense | 46,500 | 46,500 | ||||
Total current liabilities | 1,136,682 | 1,082,084 | ||||
TERM LOAN PAYABLE, net of current portion and | ||||||
Debt issuance costs | 1,219,677 | 1,267,551 | ||||
DEFERRED REVENUE, net of current portion | 6,191 | 6,430 | ||||
Total liabilities | 2,362,550 | 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 | 1,487,197 | 1,942,954 | ||||
Total stockholders' equity | 6,155,211 | 6,593,766 | ||||
Total liabilities and stockholders' equity | $ | 8,517,761 | $ | 8,949,831 | ||
| LIFELOC TECHNOLOGIES, INC. | |||||||
| Statements of Income | |||||||
| Years Ended December 31, | |||||||
REVENUES: | 2022 | 2021 | |||||
Product sales | $ | 8,350,463 | $ | 6,898,955 | |||
Royalties | 40,674 | 67,526 | |||||
Rental income | 90,856 | 87,949 | |||||
Total | 8,481,993 | 7,054,430 | |||||
COST OF SALES | 5,407,042 | 3,994,334 | |||||
GROSS PROFIT | 3,074,951 | 3,060,096 | |||||
OPERATING EXPENSES: | |||||||
Research and development | 1,385,927 | 1,213,482 | |||||
Sales and marketing | 1,122,526 | 1,003,983 | |||||
General and administrative | 1,216,843 | 1,111,544 | |||||
Total | 3,725,296 | 3,329,009 | |||||
OPERATING INCOME (LOSS) | (650,345) | (268,913) | |||||
OTHER INCOME (EXPENSE): | |||||||
Forgiveness of Paycheck Protection loan | - | 936,444 | |||||
Employee retention credit | 107,575 | - | |||||
Interest income | 13,114 | 3,401 | |||||
Interest expense | (43,081) | (51,272) | |||||
Total | 77,608 | 888,573 | |||||
NET INCOME (LOSS) BEFORE PROVISION FOR TAXES | (572,737) | 619,660 | |||||
BENEFIT FROM FEDERAL AND STATE INCOME TAXES | 116,980 | 56,307 | |||||
NET INCOME (LOSS) | $ | (455,757) | $ | 675,967 | |||
NET INCOME (LOSS) PER SHARE, BASIC | $ | (0.19) | $ | 0.28 | |||
NET INCOME (LOSS) PER SHARE, DILUTED | $ | (0.19) | $ | 0.27 | |||
WEIGHTED AVERAGE SHARES, BASIC | 2,454,116 | 2,454,116 | |||||
WEIGHTED AVERAGE SHARES, DILUTED | 2,454,116 | 2,518,895 | |||||
| Lifeloc Technologies, Inc. | ||||||
| Statements of Stockholders' Equity | ||||||
| Years Ended December 31, | ||||||
| 2022 | 2021 | |||||
Total stockholders' equity, beginning balances | $ | 6,593,766 | $ | 5,900,642 | ||
Common stock (no shares issued during periods): | ||||||
Beginning balances | 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 | ||||
Retained earnings: | ||||||
Beginning balances | 1,942,954 | 1,266,987 | ||||
Net income (loss) | (455,757) | 675,967 | ||||
Ending balances | 1,487,197 | 1,942,954 | ||||
Total stockholders' equity, ending balances | $ | 6,155,211 | $ | 6,593,766 | ||
| LIFELOC TECHNOLOGIES, INC. | ||||||||
| Statements of Cash Flows | ||||||||
| Years Ended December 31, | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | 2022 | 2021 | ||||||
Net income (loss) | $ | (455,757) | $ | 675,967 | ||||
Adjustments to reconcile net income to net cash | ||||||||
provided from (used in) operating activities- | ||||||||
Forgiveness of Paycheck Protection loans | - | (936,444) | ||||||
Depreciation and amortization | 632,418 | 254,823 | ||||||
Provision for doubtful accounts, net change | - | (49,000) | ||||||
Provision for inventory obsolescence, net change | 214,156 | (5,000) | ||||||
Deferred taxes, net change | (116,980) | (56,307) | ||||||
Stock based compensation expense related to | ||||||||
stock options | 17,202 | 17,157 | ||||||
Changes in operating assets and liabilities- | ||||||||
Accounts receivable | (65,827) | 10,511 | ||||||
Inventories | (277,830) | (165,663) | ||||||
Employee retention credit and income taxes receivable | (107,575) | 220,657 | ||||||
Prepaid expenses and other | (1,306) | 21,065 | ||||||
Deposits and other | 162,980 | 1,318 | ||||||
Accounts payable | (32,028) | 112,134 | ||||||
Customer deposits | 30,079 | 15,657 | ||||||
Accrued expenses | 46,414 | 32,264 | ||||||
Deferred revenue | 8,379 | 33,804 | ||||||
Net cash provided from (used in) | ||||||||
operating activities | 54,325 | 182,943 | ||||||
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES: | ||||||||
Purchases of property and equipment | (213,206) | (265,867) | ||||||
Patent filing expense | (9,370) | (2,609) | ||||||
Net cash (used in) investing activities | (222,576) | (268,476) | ||||||
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES: | ||||||||
Principal payments made on term loan | (50,663) | (1,341,059) | ||||||
Proceeds from refinancing term loan | - | 1,350,000 | ||||||
Cost of refinancing term loan | - | (18,157) | ||||||
Proceeds from Paycheck Protection loan (round 2) | - | 471,347 | ||||||
Net cash provided from (used in) financing | ||||||||
activities | (50,663) | 462,131 | ||||||
NET INCREASE (DECREASE) IN CASH | (218,914) | 376,598 | ||||||
CASH, BEGINNING OF PERIOD | 2,571,668 | 2,195,070 | ||||||
CASH, END OF PERIOD | $ | 2,352,754 | $ | 2,571,668 | ||||
SUPPLEMENTAL INFORMATION: | ||||||||
Cash paid for interest | $ | 38,777 | $ | 39,815 | ||||
Cash paid for income tax | $ | - | $ | - | ||||
SOURCE: Lifeloc Technologies, Inc.