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.
