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Lifeloc Technologies, Inc. (OTC:LCTC), a global leader in the development and manufacturing of breath alcohol testing devices, has announced financial results for the third quarter ended September 30, 2018.

Third Quarter Financial Highlights

We posted quarterly net revenue of$2.06 millionresulting in quarterly net income after taxes of$58 thousand, or$0.02per diluted share. These results compare to net revenue of$2.00 millionfor quarterly net income of$190, or$0.00per diluted share, in the second quarter of 2017. Revenue for the quarter grew 3% versus the third quarter last year and year to date revenue grew for the first nine months of 2018 6% versus the first nine months last year.

This quarter was the fourth consecutive quarter with year over year growth as our distribution channels improve. Gross margin on net revenue improved in the current quarter to 46% versus 44% in the same quarter last year primarily due modestly better volume and a better product mix.

Strategic Highlights

Our vision is that Lifeloc becomes the world’s leading company in real-time alcohol and drug abuse detection and monitoring. To that effect, we continue to invest aggressively in research and development. This investment amounted to 13% of revenue for the first 9 months of the year. Lifeloc has focused product development on three specific fronts.

— We will continue to push the bounds on our core portable breathalyzer business as we build a completely new breathalyzer platform with features that customers have demanded. Keeping our core business at the leading technical edge is critical as the core business allows us to fund our growth opportunities. This new breathalyzer platform is expected to begin limited production before the end of this year, with full scale production in the first quarter 2019.

— We will build our alcohol monitoring business utilizing the Real-time Alcohol Detection and Recognition or R.A.D.A.R.(R) device product line acquired last year. R.A.D.A.R. devices are alcohol monitoring units with biometrics which can be used as a tool to supervise offenders as an alternative to incarceration. The upgraded R.A.D.A.R. device – with a more robust design and better communications – is expected to relaunch in the first quarter of 2019.

— The marijuana breathalyzer took a step closer to realization with the detection of delta-9-THC (the psychoactive agent) captured from a vapor sample. The ability of our technology to detect delta-9-THC down to a concentration of 5 nanograms per milliliter has been demonstrated in our laboratories. Detection 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. The next step is human testing of the collection and detection mechanism.

“We are working hard to improve the business through investment both in infrastructure and new product development,” commented Dr. Wayne Willkomm, President and CEO. “We are nearing the end of the investment cycle in infrastructure with the winding down of implementation expenses of this year’s new ERP (Enterprise Resource Planning) system. Likewise, we expect to start to realize benefits from the heavy product investments of the last few years.”

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.(R) is a registered trademark of Lifeloc Technologies, Inc.

SpinDx(TM) is a trademark of Sandia Corporation.

LIFELOC TECHNOLOGIES, INC.                                           Condensed Balance Sheets                                                    ASSETS-----------------------------------------------------------------------------------------------------                                                                        September 30,                                                                            2018                December 31,CURRENT ASSETS:                                                          (Unaudited)                2017                                                                     ------------------      ------------------Cash                                                                      $  2,657,328            $  2,669,455Accounts receivable, net                                                       724,221                 593,326Inventories, net                                                             1,354,768               1,175,103Income taxes receivable                                                         53,089                 121,401Prepaid expenses and other                                                      85,486                  21,804                                                                            ----------              ----------      Total current assets                                                   4,874,892               4,581,089PROPERTY AND EQUIPMENT, at cost: Land                                                                          317,932                 317,932Building                                                                     1,928,795               1,928,795Real-time Alcohol Detection And Recognition equipment and software             569,448                 569,448Production equipment and software                                              783,490                 556,025Training courses                                                               432,375                 432,375Office equipment and software                                                  270,241                 204,282Sales and marketing equipment                                                  273,433                 216,330Research and development equipment and software                                159,810                 131,770Less accumulated depreciation                                               (1,658,104 )            (1,349,499                                                                            ----------              ----------     Total property and equipment, net                                       3,077,420               3,007,458OTHER ASSETS:Patents, net                                                                   174,045                 177,244Deposits and other                                                               5,144                 259,037Deferred taxes                                                                  77,782                  66,531                                                                            ----------              ----------     Total other assets                                                        256,971                 502,812                                                                            ----------              ----------     Total assets                                                         $  8,209,283            $  8,091,359                                                                     ====== ==========       ====== ==========                                     LIABILITIES AND STOCKHOLDERS' EQUITY-----------------------------------------------------------------------------------------------------CURRENT LIABILITIES:Accounts payable                                                          $    315,219            $    297,096Term loan payable, current portion                                              42,757                  42,101Customer deposits                                                               15,941                  48,763Accrued expenses                                                               272,085                 264,290Deferred revenue, current portion                                               45,027                  53,137Reserve for warranty expense                                                    41,000                  40,000                                                                            ----------              ----------      Total current liabilities                                                732,029                 745,387TERM LOAN PAYABLE, net of current portion anddebt issuance costs                                                          1,380,201               1,410,185DEFERRED REVENUE, net of current portion                                        10,354                   9,683COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS' EQUITY:Common stock, no par value; 50,000,000 shares  authorized, 2,454,116 shares outstanding                                   4,593,279               4,580,177Retained earnings                                                            1,493,420               1,345,927                                                                            ----------              ----------      Total stockholders' equity                                             6,086,699               5,926,104                                                                            ----------              ----------      Total liabilities and stockholders' equity                          $  8,209,283            $  8,091,359                                                                     ====== ==========       ====== ==========
LIFELOC TECHNOLOGIES, INC.                            Condensed Statements of Income (Unaudited)                                                                       Three Months Ended                                                                          September 30,                                                              ------------------------------REVENUES:                                                          2018                  2017                                                              ---------------       ---------------Product sales                                                    $ 1,985,520           $ 1,944,734Royalties                                                             46,417                43,785Rental income                                                         23,822                12,160                                                                   ---------             ---------Total                                                              2,055,759             2,000,679COST OF SALES                                                      1,111,067             1,118,203                                                                   ---------             ---------GROSS PROFIT                                                         944,692               882,476OPERATING EXPENSES:Research and development                                             249,092               242,005Sales and marketing                                                  331,505               367,101General and administrative                                           271,172               268,667                                                                   ---------             ---------Total                                                                851,769               877,773                                                                   ---------             ---------OPERATING INCOME                                                      92,923                 4,703OTHER INCOME (EXPENSE):Interest income                                                        7,676                 1,036Interest expense                                                     (14,957 )             (15,261 )                                                                   ---------             ---------Total                                                                 (7,281 )             (14,225 )                                                                   ---------             ---------NET INCOME (LOSS) BEFORE PROVISION FOR TAXES                          85,642                (9,522 )(PROVISION FOR) BENEFIT FROM FEDERAL AND STATE INCOME TAXES          (27,478 )               9,712                                                                   ---------             ---------NET INCOME                                                       $    58,164           $       190                                                              ==== =========        ==== =========NET INCOME PER SHARE, BASIC                                      $      0.02           $         -                                                              ==== =========        ==== =========NET INCOME PER SHARE, DILUTED                                    $      0.02           $         -                                                              ==== =========        ==== =========WEIGHTED AVERAGE SHARES, BASIC                                     2,454,116             2,454,116                                                                   =========             =========WEIGHTED AVERAGE SHARES, DILUTED                                   2,504,116             2,511,925                                                                   =========             =========
LIFELOC TECHNOLOGIES, INC.                     Condensed Statements of Income (Unaudited)                                                         Nine Months Ended                                                           September 30,                                               ------------------------------REVENUES:                                           2018                  2017                                               ---------------       ---------------Product sales                                     $ 6,121,553           $ 5,706,328Royalties                                             207,840               268,127Rental income                                          57,524                57,075                                                    ---------             ---------Total                                               6,386,917             6,031,530COST OF SALES                                       3,446,592             3,171,449                                                    ---------             ---------GROSS PROFIT                                        2,940,325             2,860,081OPERATING EXPENSES:Research and development                              840,647               690,198Sales and marketing                                   997,563             1,074,219General and administrative                            864,629               858,987                                                    ---------             ---------Total                                               2,702,839             2,623,404                                                    ---------             ---------OPERATING INCOME                                      237,486               236,677OTHER INCOME (EXPENSE):Interest income                                        14,113                 4,682Interest expense                                      (47,045 )             (45,572 )                                                    ---------             ---------Total                                                 (32,932 )             (40,890 )                                                    ---------             ---------NET INCOME BEFORE PROVISION FOR TAXES                 204,554               195,787PROVISION FOR FEDERAL AND STATE INCOME TAXES          (57,061 )             (49,736 )                                                    ---------             ---------NET INCOME                                        $   147,493           $   146,051                                               ==== =========        ==== =========NET INCOME PER SHARE, BASIC                       $      0.06           $      0.06                                               ==== =========        ==== =========NET INCOME PER SHARE, DILUTED                     $      0.06           $      0.06                                               ==== =========        ==== =========WEIGHTED AVERAGE SHARES, BASIC                      2,454,116             2,454,116                                                    =========             =========WEIGHTED AVERAGE SHARES, DILUTED                    2,504,116             2,520,414                                                    =========             =========
LIFELOC TECHNOLOGIES, INC.                                    Condensed Statements of Cash Flows                                                (Unaudited)                                                                            Nine Months Ended                                                                              September 30,                                                                   ----------------------------CASH FLOWS FROM OPERATING ACTIVITIES:                                   2018                2017Net income                                                           $   147,493         $    146,051Adjustments to reconcile net income to net cash provided from (used in) operating activities-   Depreciation and amortization                                         320,983              225,310   Provision for inventory obsolescence, net change                       42,500               37,500   Deferred taxes, net change                                            (11,251 )             12,836   Reserve for warranty expense, net change                                1,000                1,000   Stock based compensation expense related to     stock options                                                        13,102               18,494Changes in operating assets and liabilities-   Accounts receivable                                                  (130,895 )           (228,666 )   Inventories                                                          (222,165 )           (414,648 )   Income taxes receivable                                                68,312               16,134   Prepaid expenses and other                                            (63,682 )               (204 )   Deposits and other                                                    253,893             (145,010 )   Accounts payable                                                       18,123               96,348   Customer deposits                                                     (32,822 )             14,423   Accrued expenses                                                        7,795               20,889   Deferred revenue                                                       (7,439 )             (6,861 )                                                                       ---------           ----------           Net cash provided from (used in) operating activities         404,947             (206,404 )CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment                                     (378,567 )           (139,736 )Cash paid for software acquired in asset acquisition                           -             (396,948 )Cash paid for equipment acquired in asset acquisition                          -             (351,250 )Reclassification of equipment and software acquired inasset acquisition as inventory                                                 -              178,750Cash paid for patents and patent applications acquiredin asset acquisition                                                           -             (100,000 )Patent filing expense                                                     (6,648 )            (17,217 )                                                                       ---------           ----------           Net cash (used in) investing activities                      (385,215 )           (826,401 )CASH FLOWS FROM FINANCING ACTIVITIES:Principal payments made on term loan                                     (31,859 )            (30,335 )                                                                       ---------           ----------           Net cash (used in) financing activities                       (31,859 )            (30,335 )                                                                       ---------           ----------NET (DECREASE) IN CASH                                                   (12,127 )         (1,063,140 )CASH, BEGINNING OF PERIOD                                              2,669,455            3,772,064                                                                       ---------           ----------CASH, END OF PERIOD                                                    2,657,328         $  2,708,924                                                                       =========       === ==========SUPPLEMENTAL INFORMATION:Cash paid for interest                                               $    44,270         $     30,040                                                                   === =========       === ==========Cash paid for income tax                                             $         -         $     13,844                                                                   === =========       === ==========

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SOURCE: Lifeloc Technologies, Inc.

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