Lifeloc Technologies, Inc. (OTCID: LCTC) reported a narrowing net loss and rising revenue for the second quarter ended June 30, 2026, driven by product sales growth and improved gross margins.

The company posted quarterly net revenue of $2.445 million, up 10% from $2.219 million in the same quarter of 2025. The net loss contracted to $134 thousand ($0.05 per diluted share), compared to a $394 thousand ($0.14 per diluted share) loss in the prior-year period.

Financial Performance

Revenue growth was accompanied by an expansion in gross margins, which rose to 45% in the second quarter of 2026 from 42% a year earlier. For the first six months of 2026, total net revenues reached $4.739 million against $4.496 million in the corresponding period of 2025. The six-month gross margin was 44%, up from 41% previously.

Operating expenses remained a significant factor, with research and development (R&D) investment totaling $560 thousand for the quarter. Management attributed the current period loss primarily to these high R&D costs, which are focused on the development of the SpinDetect analyzer platform.

Product and Pipeline Updates

The company highlighted its core alcohol detection lineup, noting that newer L-series devices (LX9 and LT7) are driving market penetration through features such as smartphone pairing and local language customization. These devices are expected to be incremental to existing FC-series sales rather than displacing them. The Easycal automated calibration station continues to support market share gains for workplace testing devices.

Regarding long-term opportunities, Lifeloc is advancing its SpinDetect Centrifugal Drug Analyzer. The platform has demonstrated the ability to detect multiple substances, including delta-9-THC and fentanyl, from oral fluid with a limit of detection of approximately 10 ng/ml. Beta testing for the oral-fluid analyzer is set to begin under a signed agreement, with a limited commercial launch targeted for the first quarter of 2027.

Balance Sheet and Financing

During the quarter, Lifeloc secured a $500 thousand loan from its Chairman and Chief Financial Officer. The financing carries a 10.5% interest rate, adjustable based on the prime rate, with interest-only payments in 2026 followed by monthly payments over five years. The loan is secured by all company assets.

As of June 30, 2026, total assets stood at $7.08 million, while total liabilities were $3.26 million. Cash and cash equivalents increased to $908 thousand from $746 thousand at the end of December 2025. Total stockholders' equity decreased slightly to $3.82 million from $4.10 million at the start of the fiscal year.

Lifeloc Technologies, Inc. has completed the production mold for the consumable test disks of its SpinDetect Centrifugal Drug Analyzer and commissioned a cleanroom to support validation and early manufacturing. The company announced on June 15, 2026, that it has produced first-article disks and completed minor mold modifications identified during initial testing. This transition moves the SpinDetect program from the development phase into validation and early production.

Lifeloc intends to commercialize the SpinDetect platform in deliberate stages. The initial rollout will target the U.S. forensic testing market and international markets where permitted. Access to the U.S. workplace testing market will follow receipt of FDA clearance. The first commercial product will be a qualitative pass/fail test for delta-9-THC, the primary psychoactive component of marijuana. Quantitative delta-9-THC disks and a multi-drug panel are expected to follow. Preliminary testing may also support an earlier release into selected lower-complexity, non-forensic applications such as veterinary testing.

The company currently anticipates a commercial launch in late 2026 or early 2027. The SpinDetect reader is expected to be offered at an initial U.S. list price of approximately $7,495, with single-use test disks priced separately. Reflecting feedback from law enforcement customers, the initial delta-9-THC product is expected to launch at a detection threshold above the 4 ng/mL oral-fluid cutoff referenced in certain federal guidelines. Lifeloc intends to pursue lower detection limits following the launch.

Key Product Details

Lifeloc believes the SpinDetect analyzer's ability to isolate psychoactive delta-9-THC from its inactive metabolites is a key differentiator. This capability distinguishes recent use from prior use, which the company views as critical for defensible results. While the SpinDetect platform is designed to support a range of future assays, the current development focus is on drugs of abuse. Lifeloc views performance-enhancing drug testing as a natural adjacency for future expansion.

In its core breath alcohol business, Lifeloc continues to invest in its L-series platform. This includes the development of an OIML-variant of its LX9 device intended to broaden addressable international markets while incorporating cost-of-goods improvements.