Lifeloc (LCTC) 10-K 20 Mar 15 2014 FY Annual report Financial data

Document_and_Entity_Informatio

Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2014	Mar. 10, 2015	Jun. 30, 2014
Document And Entity Information
Entity Registrant Name	Lifeloc Technologies, Inc
Entity Central Index Key	1493137
Document Type	10-K
Document Period End Date	31-Dec-14
Amendment Flag	FALSE
Current Fiscal Year End Date	-19
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$1,298,493
Entity Common Stock, Shares Outstanding		0
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2014

Condensed_Balance_Sheets

Condensed Balance Sheets (USD $)	Dec. 31, 2014	Dec. 31, 2013
ASSETS
Cash	$2,749,254	$3,357,260
Accounts receivable, net	855,452	426,248
Inventories, net	945,425	736,697
Income taxes receivable	83,275	131,577
Deferred taxes	120,392	87,940
Prepaid expenses and other	48,101	67,700
Total current assets	4,801,899	4,807,422
PROPERTY AND EQUIPMENT, at cost:
Land	317,932	0
Building	1,631,207	0
Training courses	432,375	0
Production equipment	401,030	363,370
Office equipment	237,724	189,472
Sales and marketing equipment	236,722	211,427
Less accumulated depreciation	-650,576	-473,538
Total property and equipment, net	2,606,414	290,731
OTHER ASSETS:
Patents, net	80,356	40,812
Deposits and other	69,687	12,514
Deferred taxes, long term	7,504	4,762
Technology licenses, net	0	3,333
Total other assets	157,547	61,421
Total assets	7,565,860	5,159,574
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	469,570	149,949
First mortgage payable, current portion	35,262
Customer deposits	16,018	186,682
Accrued expenses	232,130	321,692
Deferred revenue, current portion	86,493	69,603
Reserve for warranty expense	33,100	23,100
Total current liabilities	872,573	751,026
FIRST MORTGAGE PAYABLE, net of current portion	1,540,154	0
DEFERRED REVENUE, net of current portion	19,746	12,532
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, no par value; 50,000,000 shares authorized, 2,447,416 shares outstanding (2,432,416 at December 31, 2013)	4,517,468	4,385,093
Retained earnings (deficit)	615,919	10,923
Total stockholders' equity	5,133,387	4,396,016
Total liabilities and stockholders' equity	$7,565,860	$5,159,574

Condensed_Balance_Sheets_Paren

Condensed Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2014	Dec. 31, 2013
STOCKHOLDERS' EQUITY:
Common stock, par value	$0	$0
Common stock, authorized shares	50,000,000	50,000,000
Common stock, issued shares	2,447,416	2,432,416
Common stock, outstanding shares	2,447,416	2,432,416

Condensed_Statements_of_Income

Condensed Statements of Income (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
REVENUES:
Product sales	$9,023,804	$8,043,538
Royalties	300,533	382,128
Rental income	17,647	0
Total sales	9,341,984	8,425,666
COST OF SALES	4,874,127	4,379,053
GROSS PROFIT	4,467,857	4,046,613
OPERATING EXPENSES:
Research and development	1,000,266	929,517
Sales and marketing	1,433,839	1,151,235
General and administrative	1,239,238	1,283,918
Total	3,673,343	3,364,670
OPERATING INCOME	794,514	681,943
OTHER INCOME (EXPENSE):
Interest income	24,132	19,069
Bad debt recovery	12,000	12,000
Interest expense	-11,913	0
Total	24,219	31,069
NET INCOME BEFORE PROVISION FOR TAXES	818,733	713,012
PROVISION FOR FEDERAL AND STATE INCOME TAXES	-213,737	-138,257
NET INCOME	$604,996	$574,755
NET INCOME PER SHARE, BASIC	$0.25	$0.24
NET INCOME PER SHARE, DILUTED	$0.24	$0.24
WEIGHTED AVERAGE SHARES, BASIC	2,433,690	2,431,484
WEIGHTED AVERAGE SHARES, DILUTED	2,497,502	2,431,484

Statement_of_Stockholders_Equi

Statement of Stockholders' Equity (USD $)	Common Stock	Accumulated Deficit	Total
Beginning Balance, Amount at Dec. 31, 2012	$4,309,697	($563,832)	$3,745,865
Beginning Balance, Shares at Dec. 31, 2012	2,422,416
Sale of common stock, Shares	10,000
Sale of common stock, Amount	15,200		15,200
Compensation expense related to stock options	60,196		60,196
Net income		574,755	574,755
Ending Balance, Amount at Dec. 31, 2013	4,385,093	10,923	4,396,016
Ending Balance, Shares at Dec. 31, 2013	2,432,416
Common stock issued in connection with business combination, Shares	15,000
Common stock issued in connection with business combination, Amount	132,375		132,375
Net income		604,996	604,996
Ending Balance, Amount at Dec. 31, 2014	$4,517,468	$615,919	$5,133,387
Ending Balance, Shares at Dec. 31, 2014	2,447,416

Condensed_Statements_of_Cash_F

Condensed Statements of Cash Flows (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$604,996	$574,755
Adjustments to reconcile net income to net cash provided by operating activities-
Depreciation and amortization	205,094	199,011
Provision for bad debt	49,796	0
Deferred taxes	-35,194	39,582
Compensation expense related to stock options	0	60,196
Changes in operating assets and liabilities-
Accounts receivable	-479,000	-20,927
Inventories	-208,728	95,973
Income taxes receivable	48,302	42,552
Prepaid expenses and other	19,599	-36,171
Deposits and other	-57,173	42,190
Accounts payable	319,621	67,153
Customer deposits	-170,664	186,388
Accrued expenses	-89,562	43,368
Reserve for warranty expense	10,000	0
Deferred income	24,104	-81,951
Net cash provided from operating activities	241,191	1,212,119
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for property acquired in business combination	-368,033	0
Cash paid for training courses acquired in business combination	-300,000	0
Purchases of property and equipment	-132,461	-176,439
Purchase of patent	-43,205	-31,632
Net cash (used in) investing activities	-843,699	-208,071
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments made on first mortgage	-5,498	0
Sale of common stock	0	15,200
Net cash provided from financing activities	-5,498	15,200
NET INCREASE (DECREASE) IN CASH	-608,006	1,019,248
CASH, BEGINNING OF PERIOD	3,357,260	2,338,012
CASH, END OF PERIOD	2,749,254	3,357,260
Supplemental cash flow disclosure:
Cash paid for interest	11,913	0
Cash paid for income tax	248,930	83,455
Non cash investing and financing activities:
Mortgage issued for property and equipment acquired in business combinations	1,581,106	0
Stock issued for property and equipment acquired in business combinations	$132,275	$0

1_ORGANIZATION_AND_NATURE_OF_B

1. ORGANIZATION AND NATURE OF BUSINESS	12 Months Ended
	Dec. 31, 2014
Notes to Financial Statements
ORGANIZATION AND NATURE OF BUSINESS	Lifeloc Technologies, Inc. ("Lifeloc" or the "Company") is a Colorado based developer, manufacturer and marketer of portable hand-held and fixed station breathalyzers and related accessories, supplies and education.  We design, produce and sell fuel-cell based breath alcohol testing equipment.  We compete in all major segments of the breath alcohol testing instrument market, including law enforcement, workplace, corrections, original equipment manufacturing ("OEM") and consumer markets. In addition, we offer a line of supplies, accessories, services, and training to support customers' alcohol testing programs. We sell globally through distributors  as well as directly to users.

2_SUMMARY_OF_SIGNIFICANT_ACCOU

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
	Dec. 31, 2014
Notes to Financial Statements
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Use of Estimates in the Preparation of Financial Statements.   The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions. Such estimates and assumptions affect the reported amounts of assets and liabilities as well as disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and expense during the reporting period. Actual results could differ from those estimates.
	Fair Value Measurement.
	ASC Topic 820, Fair Value Measurements and Disclosures ("ASC 820"), provides a comprehensive framework for measuring fair value and expands disclosures which are required about fair value measurements. Specifically, ASC 820 sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. ASC 820 defines the hierarchy as follows:
	Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equity securities listed on the New York Stock Exchange.
	Level 2 - Pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs.
	Level 3 - Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of financial transmission rights.
	Cash and Cash Equivalents.   For purposes of reporting cash flows, we consider all cash and highly liquid investments with an original maturity of three months or less to be cash equivalents.  There were no cash equivalents as of December 31, 2014 and 2013.
	Fair Value of Financial Instruments.   Our financial instruments consist of cash, short-term trade receivables, payables and a first mortgage.  The carrying values of cash and cash equivalents, short-term receivables, and payables approximate their fair value due to their short term maturities.  The carrying value of the first mortgage approximates its fair value based on interest rates currently obtainable.
	Concentration of Credit Risk.   Financial instruments with significant credit risk include cash and accounts receivable.  The amount of cash on deposit with three financial institutions exceeded the $250,000 federally insured limit at December 31, 2014 by $1,998,626.  However, we believe that the financial institutions are financially sound and the risk of loss is minimal.
	We have no significant off-balance sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements.
	Note Receivable.  We made a loan of $62,500 to Tipping Point, Inc. ("TPI"), an early stage company, during the second quarter of 2011.  Although the loan has been paid down by $46,000, including a repayment of $3,000 in the fourth quarter of 2014, we do not expect to realize any significant sales to TPI in the near term.  We have provided a reserve against the loan for the full amount, leaving a net amount of $0, which is not included in our balance sheet at December 31, 2014. TPI was considered a related party at the time the loan was made, as certain of our board members were also TPI board members during a portion of 2011.
	Accounts Receivable.  Accounts receivable are typically unsecured and are derived from transactions with and from entities primarily located in the United States or from international distributors with a proven payment history; we require pre-payment for most international orders.  Accordingly, we may be exposed to credit risks generally associated with the alcohol monitoring industry.  Our credit policy calls for payment in accordance with prevailing industry standards, generally 30 days with occasional exceptions of up to 60 days for large established international customers.  We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments.  A summary of the activity in our allowance for doubtful accounts is as follows:
	Years Ended December 31	2014			2013
	Balance, beginning of year	$	26,267		$	40,000
	Provision for estimated losses		49,796			-
	Write-off of uncollectible accounts		(36,063	)		(13,733	)
	Balance, end of year	$	40,000		$	26,267
	The net accounts receivable balance at December 31, 2014 of $855,452 included an account from one customer of $156,701 (18%) and no more than 12% from any one other single customer. The net accounts receivable balance at December 31, 2013 of $426,248 included an account from one customer of $152,855 (36%) and no more than 7% from any one other customer.
	Inventories.   Inventories are stated at the lower of cost (first-in, first-out basis) or market. We reduce inventory for estimated obsolete or unmarketable inventory equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required.  At December 31, 2014 and 2013, inventory consisted of the following:
		2014			2013
	Raw materials & deposits	$	476,941		$	283,865
	Work-in process		132,029			87,374
	Finished goods		428,955			440,458
	Total gross inventories		1,037,925			811,697
	Less reserve for obsolescence		(92,500	)		(75,000	)
	Total net inventories	$	945,425		$	736,697
	A summary of the activity in our inventory reserve for obsolescence is as follows:
	Years Ended December 31	2014			2013
	Balance, beginning of year	$	75,000		$	45,000
	Provision for estimated obsolescence		43,894			61,538
	Write-off of obsolete inventory		(26,394	)		(31,538	)
	Balance, end of year	$	92,500		$	75,000
	Property and Equipment. Property and equipment are stated at cost, with depreciation computed over the estimated useful lives of the assets, generally five years; three years for software and technology licenses; 15 years for training courses; 39 years for the cost of the building we purchased in October 2014.  We utilize the double-declining method of depreciation for property and equipment, and the straight-line method of depreciation for software, training courses, and the building, due to the expected usage of these assets over time. These methods are expected to continue throughout the life of the assets.  Maintenance and repairs are expensed as incurred and major additions, replacements and improvements are capitalized.  Depreciation expense for the years ended December 31, 2014 and 2013 was $198,100 and $144,432 respectively.
	Long-Lived Assets.   Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. A long-lived asset is considered impaired when estimated future cash flows related to the asset, undiscounted and without interest, are insufficient to recover the carrying amount of the asset. If deemed impaired, the long-lived asset is reduced to its estimated fair value. Long-lived assets to be disposed of are reported at the lower of their carrying amount or estimated fair value less cost to sell.  Impairments of $1,796 and $0 were recorded for the years ended December 31, 2014 and 2013 respectively.
	Technology Licenses.  In 2010 we entered into a technology transfer agreement with an unrelated third-party manufacturer of fuel cells, pursuant to which we acquired a perpetual-term license to technology for the manufacture of fuel cells.  We made three equal lump-sum payments of $40,000 each, based on achievement of milestones related to our establishment of successful production facilities.  The total, $120,000, is being amortized over three years commencing in 2011, using the straight line method, with amortization expense of $3,333 for the year 2014 and $40,000 for the year 2013.
	In 2011 we acquired a software license relating to Kiosk software technology for $25,000, which we amortized over 2 years ending in 2013, using the straight line method. Amortization expense was $0 for the year 2014 and $11,806 for the year 2013.
	Patents.   The costs of applying for patents are capitalized and amortized on a straight-line basis over the lesser of the patent's economic or legal life (20 years for utility patents in the United States, and 14 years for design patents).  Amortization expense for the year ended December 31, 2014 was $3,661 and for the year ended December 31, 2013 it was $2,773.  Capitalized costs are expensed if patents are not granted.  We review the carrying value of our patents periodically to determine whether the patents have continuing value and such reviews could result in the conclusion that the recorded amounts have been impaired.  A summary of our patents at December 31, 2014 and 2013 is as follows:
		2014			2013
	Patents issued	$	22,775		$	22,775
	Patent applications		74,634			31,632
	Accumulated amortization		(17,053	)		(13,595	)
	Total net patents	$	80,356		$	40,812
	Accrued Expenses.  We have accrued various expenses in our December 31 balance sheets, as follows:
		2014			2013
	Compensation	$	157,888		$	230,032
	Rebates		21,280			68,325
	Property and other taxes		44,810			7,844
	401(k) plan and health insurance		8,152			8,078
	Lease normalization		-			7,413
	Total accrued expenses	$	232,130		$	321,692
	Product Warranty Reserve.  We provide for the estimated cost of product warranties at the time sales are recognized. Our warranty obligation is based upon historical experience and will be affected by product failure rates and material usage incurred in correcting a product failure. Should actual product failure rates or material usage costs differ from our estimates, revisions to the estimated warranty liability would be required.  A summary of the activity in our product warranty reserve is as follows:
	Years Ended December 31	2014			2013
	Balance, beginning of year	$	23,100		$	23,100
	Provision for estimated warranty claims		14,425			19,080
	Claims made		(4,425	)		(19,080	)
	Balance, end of year	$	33,100		$	23,100
	Income Taxes.  We account for income taxes under the provisions of Accounting Standards Codification Topic 740, "Accounting for Income Taxes" ("ASC 740"). ASC 740 requires recognition of deferred income tax assets and liabilities for the expected future income tax consequences, based on enacted tax laws, of temporary differences between the financial reporting and tax bases of assets and liabilities. ASC 740 also requires recognition of deferred tax assets for the expected future tax effects of all deductible temporary differences, loss carryforwards and tax credit carryforwards.  Deferred tax assets are then reduced, if deemed necessary, by a valuation allowance for the amount of any tax benefits which, more likely than not based on current circumstances, are not expected to be realized.
	ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements, uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.  For the years ended December 31, 2014 and 2013, we did not have any interest or penalties or any significant uncertain tax positions.
	Revenue Recognition.   Revenue from product sales is generally recorded when we ship the product and title has passed to the customer, provided that we have evidence of a customer arrangement and can conclude that collection is probable.  The prices at which we sell our products are fixed and determinable at the time we accept a customer's order. We recognize revenue from sales to stocking distributors when there is no right of return, other than for normal warranty claims, and generally have no ongoing obligations related to product sales, except for normal warranty.
	Deferred revenues arising from service and extended warranty contracts are booked as sales over their life on a straight-line basis. Supplies are recognized as sales when they are shipped.  Training revenues are recognized at the time the training occurs.  We have discontinued arranging for customer financing and leasing through unrelated third parties and instead are providing for customer financing and leasing ourselves which we recognize as revenue over the applicable lease term.  Occasionally, we rent used equipment to customers, and in those cases, we recognize the revenues as they are earned over the life of the contract.
	Royalty income is recognized in accordance with agreed upon terms, when performance obligations are satisfied, the amount is fixed or determinable and collectability is reasonably assured.
	The sales of licenses to our training courses are recognized as revenue at the time of sale.
	Rental income from space leased to our tenants is recognized in the month in which it is due.
	On occasion we receive customer deposits for future product orders.  Customer deposits are initially recorded as a liability and recognized as revenue when the product is shipped and title has passed to the customer.
Deferred Revenue.  Deferred revenues arise from service contracts and from development contracts.  Revenues from service contracts are recognized on a straight-line basis over the life of the contract, generally one year.  However, there are occasions when they are written for longer terms up to four years.  The revenues from that portion of the contract that extend beyond one year are shown in our balance sheet as long term.  Deferred revenues also result from progress payments received on development contracts; those revenues are recognized when the contract is complete.  All development contracts are for less than one year and all deferred revenues from this source are shown in our balance sheet as short term.
Grants.  We apply for and receive job training and other grants.  In September 2014 we were notified that we had been awarded a $250,000 grant from the Colorado Office of Economic Development to accelerate development of a marijuana breathalyzer that is currently under development.  Grants are recognized as reductions of expense when received.  In 2014 and 2013, we received expense reimbursement grants of $45,868 and $24,981 respectively.
Rebates.  Our rebate program is available to certain of our North American workplace distributors in good standing who are responsible for sales equaling at least $30,000 in one calendar year.  Distributors who meet the required sales threshold automatically earn a rebate equal to between 1 and 10 percent of that distributor's total sales of the Company's products.  We accrue for these rebates monthly; they are shown in the our balance sheets as accrued expenses and are included in sales and marketing expense in our statements of income.
Rent Expense.  We recognize rent expense on a straight-line basis over the reasonably assured lease term as defined in ASC Topic 840, Leases ("ASC 840"). As a result of purchasing our building, we did not incur rent expense after October 31, 2014.
Research and Development Expenses.  We expense research and development costs for products and processes as incurred.
Medical Device Tax.  In March 2010, the Patient Protection and Affordable Care Act was enacted in the United States. This legislation includes a provision that imposes a 2.3% excise tax on the sale of certain medical devices by a manufacturer, producer or importer of such devices in the United States after December 31, 2012.  We expense the medical device tax in General and Administrative Expense.
Stock-Based Compensation.  Stock-based compensation is presented in accordance with the guidance of ASC Topic 718, Compensation – Stock Compensation ("ASC 718").  Under the provisions of ASC 718, companies are required to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model.  The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in our statement of income.
ASC 718 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model.  The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the accompanying statement of income.
Stock-based compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period.  We used the Black-Scholes option-pricing model ("Black-Scholes model") to determine fair value. Our determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to our expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. Although the fair value of employee stock options is determined in accordance with ASC 718 using an option-pricing model, that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction.
Stock-based compensation expense recognized under ASC 718 for fiscal years 2014 and 2013 was $0 and $60,196, respectively, which consisted of stock-based compensation expense related to employee stock options.  Stock-based compensation expense related to employee stock options under ASC 718 for 2013 was allocated to General and Administrative Expense.
Segment Reporting.   We have concluded that we have two operating segments, including our primary business which is as a developer, manufacturer and marketer of portable hand-held breathalyzers and related accessories, supplies and education.  As a result of purchasing our building on October 31, 2014, we have a second segment consisting of renting portions of our building to existing tenants, whose leases expire at various times until December 31, 2017.
Basic and Diluted Income and Loss per Common Share.  Net income or loss per share is calculated in accordance with ASC Topic 260, Earnings Per Share ("ASC 260").  Under the provisions of ASC 260, basic net income or loss per common share is computed by dividing net income or loss for the period by the weighted average number of common shares outstanding for the period.  Diluted net income or loss per share is computed by dividing the net income or loss for the period by the weighted average number of common and potential common shares outstanding during the period if the effect of the potential common shares is dilutive.  Dilution from potential common shares outstanding at December 31, 2014 was $0.01 per share.  There was no dilution from potential common shares outstanding at December 31, 2013 because the market price of our shares was less than the exercise price of the stock options outstanding.
Recent Accounting Pronouncements.  We have reviewed all recently issued, but not yet effective, accounting pronouncements.  The Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09 (Revenue from Contracts with Customers), which is effective for annual reporting periods beginning after December 15, 2016.  We have not yet assessed the impact, if any, of adopting this standard.

3_BUSINESS_COMBINATIONS

3. BUSINESS COMBINATIONS	12 Months Ended
	Dec. 31, 2014
Business Combinations [Abstract]
BUSINESS COMBINATIONS	Building and land.  On October 31, 2014 we purchased the building formerly leased by us for a total price of $1,949,139, of which $317,932 was allocated to land.  The allocation between building and land was based on Level 3 inputs and was determined by management based on estimates of rent and return on investment analyses.  Based on a third party analysis, we allocated a portion of the building cost to its components.  The components are depreciated over 5 and 15 years, using double declining depreciation methods, and the building is depreciated over 39 years using the straight line method.
	Approximately 48% of the building is leased to third party tenants pursuant to lease agreements expiring on various dates ranging to December 31, 2017.  Rental revenue and operating income included in our statement of income for the year ended December 31, 2014 were $17,647 and $9,873 respectively.
	We estimate that net earnings from rental units as though the combination took place at the beginning of the years ended December 31, 2014 and 2013 are as follows.
		2014		2013
		(Unaudited)		(Unaudited)
	Rental income	$	105,880	$	105,880
	Expenses:
	Depreciation		59,150		59,150
	Maintenance		20,000		20,000
	Property taxes		18,000		18,000
	Insurance		4,800		4,800
	Total expenses		101,950		101,950
	Net profit	$	3,930	$	3,930
	Future rental income and related expenses will depend on whether existing leases are renewed.
	The purpose of this acquisition was to provide for potential growth and the need for additional space.
	Training Courses.  On December 1, 2014 we acquired all of the assets of Superior Training Solutions, Inc. ("STS") for $300,000 cash plus 15,000 shares of our common stock valued at $132,375, reflecting a total purchase price of $432,375.  In accordance with the purchase agreement between Lifeloc and STS, the value of the stock was based on the closing quote on our stock price for a specified period prior to closing.  Based on Level 3 inputs which consisted of estimates of future cash flows, the entire purchase price was allocated to training courses, which will be depreciated over 15 years using the straight line method.   Revenues are generated by selling licenses to direct customers as well as resellers, and are recognized as earned revenue at the time of sale.
	Data that would enable us to present the amounts of revenue and earnings of STS as though the combination took place at the beginning of the years ended December 31, 2014 and 2013 are unavailable to us.
	The purpose of this acquisition is to expand our offering of online substance abuse training courses and of online reasonable suspicion training courses.
	Estimated future annual amortization relating to the training courses is $28,825.

4_STOCKHOLDERS_EQUITY

4. STOCKHOLDERS' EQUITY	12 Months Ended
	Dec. 31, 2014
Notes to Financial Statements
STOCKHOLDERS' EQUITY	Stock Option Plan.   We adopted our now-expired 2002 Stock Option Plan (the "2002 Plan") to promote the Company's and its stockholders' interests by helping us to attract, retain and motivate our key employees and associates. Under the terms of the 2002 Plan, our Board of Directors (the "Board") may grant either "nonqualified" or "incentive" stock options, as defined by the Internal Revenue Code and related regulations. The purchase price of the shares subject to a stock option will be the fair market value of our common stock on the date the stock option is granted.  Generally, vesting of stock options occurs immediately at the time of the grant of such option and all stock options must be exercised within five years from the date granted. The number of common shares reserved for issuance under the Plan is 375,000 shares of common stock, subject to adjustment for dividend, stock split or other relevant changes in our capitalization.  The Plan expired March 4, 2012.  In January 2013 our board of directors adopted a new Plan (the "2013 Plan"), which was approved by our shareholders at their regular annual meeting on April 1, 2013. The 2013 Plan provides for 150,000 shares to be reserved for issuance under the new Plan on terms similar to those of the expired Plan.
	Under ASC 718, the value of each employee stock option was estimated on the date of grant using the Black-Scholes model for the purpose of financial information in accordance with ASC 718. The use of a Black-Scholes model requires the use of actual employee exercise behavior data and the use of a number of assumptions including expected volatility, risk-free interest rate and expected dividends. Employee stock options for 0  and 69,000 shares of stock were granted during fiscal years 2014 and 2013, respectively.  The assumptions for employee stock options granted in 2013 are summarized as follows:
	Risk-free interest rate		1.40%
	Expected life (in years)		5
	Expected volatility		41%
	Expected dividend		0%
	Cumulative compensation cost recognized in net income or loss with respect to options that are forfeited prior to vesting is adjusted as a reduction of compensation expense in the period of forfeiture. The volatility of the stock is based on a comparable public company's historical volatility since our stock is rarely traded.  Fair value computations are highly sensitive to the volatility factor; the greater the volatility, the higher the computed fair value of options granted.
	The total fair value of options granted was computed to be approximately $0 and $60,196 for the years ended December 31, 2014 and 2013, respectively.  Effects of stock-based compensation, net of the effect of forfeitures, totaled $0 and $60,196 for the years 2014 and 2013, respectively.
	The Black-Scholes model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the use of assumptions, including the expected stock price volatility. Because our employee stock options have characteristics significantly different than those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of our employee stock options. A summary of our stock option activity and related information for equity compensation plans approved by security holders for each of the fiscal years ended December 31, 2014 and 2013 is as follows:
	A summary of our stock option activity and related information for each of the fiscal years ended December 31, 2014 and 2013 is as follows:
			STOCK OPTIONS OUTSTANDING
			Number				Weighted-Average
			Outstanding				Exercise Price per Share
	BALANCE AT DECEMBER 31, 2012			23,000			$	3.69
	Granted			69,000			$	2.32
	Exercised			-				-
	Forfeited/expired			-				-
	BALANCE AT DECEMBER 31, 2013			92,000			$	2.66
	Granted			-				-
	Exercised			-				-
	Forfeited/expired			-				-
	BALANCE AT DECEMBER 31, 2014			92,000			$	2.66
	The following table summarizes information about employee stock options outstanding and exercisable at December 31, 2014:
					STOCK OPTIONS OUTSTANDING								STOCK OPTIONS EXERCISABLE
	Range of Exercise Prices				Number				Weighted-Average		Weighted-Average		Number		Weighted-Average
					Outstanding				Remaining Contractual		Exercise Price		Exercisable		Exercise Price
									Life (in Years)		per Share				per Share
		$3.69				23,000				1.9		$3.69		23,000		$3.69
		$2.32				69,000				3.75		$2.32		69,000		$2.32
						92,000								92,000
	Of the 92,000 options exercisable as of December 31, 2014, all are incentive stock options. The exercise price of all options granted through December 31, 2014 has been equal to or greater than the fair market value, as determined by the Board.  As of December 31, 2014, 81,000 options exercisable for our common stock remain available for grant under the 2013 Plan.

5_RELATED_PARTY_TRANSACTIONS

5. RELATED PARTY TRANSACTIONS	12 Months Ended
	Dec. 31, 2014
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	During the year ended December 31, 2013, we paid a consulting fee of $15,000 to a director.  No consulting fee was paid during the year ended December 31, 2014.

6_COMMITMENTS_AND_CONTINGENCIE

6. COMMITMENTS AND CONTINGENCIES	12 Months Ended
	Dec. 31, 2014
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	Mortgage Expense. We purchased our facilities in Wheat Ridge, Colorado on October 31, 2014 for $1,949,139 and executed a first mortgage on all assets in the amount of $1,581,106 with Bank of America for a portion of the purchase price.  The note bears interest at 4.45% per annum, and is payable in 120 equal monthly installments of $8,801 including interest.  Our minimum future principal payments on this first mortgage, by year, are as follows:
	Year	Amount
	2015	$	35,262
	2016		36,689
	2017		35,576
	2018		40,353
	2019		42,211
	2020 - 2024		1,385,325
	Total		1,575,416
	Less current portion		(35,262	)
	Long term portion	$	1,540,154
	Rent Expense. Rent expense for our facilities for the 10 months ended December 31, 2014 was $88,131 and for the year ended December 31, 2013 it was $106,653.  As a result of purchasing our building, we did not incur rent expense after October 31, 2014.
	Employee Severance Benefits. Our obligation with respect to employee severance benefits is minimized by the "at will" nature of the employee relationships.  As of December 31, 2014 we had no obligation with respect to contingent severance benefit obligations.
	Purchase Orders. Outstanding purchase orders issued to vendors in the ordinary course of business totaled $937,932 at December 31, 2014.
	Other Material Contractual Commitments. Aside from the credit facility commitments, we do not have any material contractual commitments requiring settlement in the future.
	Regulatory Commitments. With respect to our LifeGuard product, we are subject to regulation by the United States Food and Drug Administration ("FDA").  The FDA provides regulations governing the manufacture and sale of our LifeGuard product, and we are subject to inspections by the FDA to determine our compliance with these regulations.  FDA inspections are conducted periodically at the discretion of the FDA.  As of December 31, 2014, we had not been inspected by the FDA; however, we believe we are in substantial compliance with all known regulations. We are also subject to regulation by the DOT and by various state departments of transportation so far as our other products are concerned.  We believe that we are in substantial compliance with all known applicable regulations.

7_LINE_OF_CREDIT

7. LINE OF CREDIT	12 Months Ended
	Dec. 31, 2014
Notes to Financial Statements
LINE OF CREDIT	As part of the long-term financing of our property purchased on October 31, 2014, we obtained a one-year $250,000 revolving line of credit facility with Bank of America, which matures on October 31, 2015 and bears interest at a rate equal to the LIBOR daily floating rate plus 2.5%.  The revolving line of credit facility is secured by all personal property and assets, whether now owned or hereafter acquired, wherever located.  There was no balance due on the line of credit as of December 31, 2014.

8_INCOME_TAXES

8. INCOME TAXES	12 Months Ended
	Dec. 31, 2014
Notes to Financial Statements
INCOME TAXES	We account for income taxes under ASC 740, which requires the use of the liability method.  ASC 740 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences.  Deferred tax assets and liabilities at the end of each period are determined using the currently enacted tax rates applied to taxable income in the periods in which the deferred tax assets and liabilities are expected to be settled or realized.
	Our income tax provision is summarized below:
	Years Ended	December 31,			December 31,
		2014			2013
	Current:
	Federal	$	208,081		$	158,101
	State		40,849			32,972
	Total current		248,930			191,073
	Deferred:
	Federal		(30,905	)		34,759
	State		(4,288	)		4,823
	Total deferred		(35,193	)		39,582
	Refunds from amending prior years:
	Federal		-			(80,852	)
	State		-			(11,546	)
	Total refunds		-			(92,398	)
	Total	$	213,737		$	138,257
	The refunds from amending prior years arose as a result of an additional deduction for domestic production activities.
	The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for income taxes consists of the following:
	Years Ended	December 31,			December 31,
		2014			2013
	Federal statutory rate	$	286,086		$	242,424
	Effect of:
	State taxes, net of federal tax benefit		36,561			37,795
	Research & development credit		(78,005	)		(72,814	)
	Other		(30,905	)		(69,148	)
	Total	$	213,737		$	138,257
	The components of the deferred tax asset are as follows:
	Years Ended	December 31,			December 31,
		2014			2013
	Current Deferred Tax Assets:
	Deferred income	$	32,867		$	26,449
	Bad debt reserve		21,470			20,811
	Accrued vacation		18,327			16,702
	Inventory reserve		35,150			15,200
	Warranty reserve		12,578			8,778
	Total current deferred tax assets		120,392			87,940
	Long Term Deferred Tax Assets:
	Deferred income		7,504			4,762
		$	127,896		$	92,702

9_LEGAL_PROCEEDINGS

9. LEGAL PROCEEDINGS	12 Months Ended
	Dec. 31, 2014
Commitments and Contingencies Disclosure [Abstract]
LEGAL PROCEEDINGS	We were not involved or party to any legal proceedings at December 31, 2013 or December 31, 2014, and therefore made no accruals for legal proceedings in either 2013 or 2014.

10_MAJOR_CUSTOMERSSUPPLIERS

10. MAJOR CUSTOMERS/SUPPLIERS	12 Months Ended
	Dec. 31, 2014
Risks and Uncertainties [Abstract]
MAJOR CUSTOMERS/SUPPLIERS	We depend on sales that are generated from our customers' ongoing usage of alcohol testing instruments.  One customer contributed 8% ($736,458 to our total sales in 2014, a second customer contributed 6% ($549,867), a third customer contributed 5% ($471,432), and no other customer contributed more than 5%.  Two customers each contributed 7% ($599,712) to our total sales in 2013, with no other customer contributing more than 4% ($325,236).  In making this determination, we considered the federal government, state governments, local governments, and foreign governments each as a single customer.  In 2014, we depended upon three vendors for approximately 24% of our purchases (three vendors and 28% respectively in 2013).

11_DEFINED_CONTRIBUTION_EMPLOY

11. DEFINED CONTRIBUTION EMPLOYEE BENEFIT PLAN	12 Months Ended
	Dec. 31, 2014
Compensation and Retirement Disclosure [Abstract]
DEFINED CONTRIBUTION EMPLOYEE BENEFIT PLAN	We have adopted a 401(k) Profit Sharing Plan ("401(k) Plan") which covers all full-time employees who have completed 3 months of full-time continuous service and are age eighteen or older. Participants may defer up to 100% of their gross pay up to 401(k) Plan limits.  Participants are immediately vested in their contributions.  We may make discretionary matching contributions based on corporate financial results for the year, which was determined to be 3% of the total payroll of the participating employees in 2014 and 2013.  In 2014 and 2013 we contributed $46,766 and $38,966 respectively.  The participants vest in Company contributions based on years of service, with a participant fully vested after six years of credited service.

12_LICENSE_OF_SOFTWARE

12. LICENSE OF SOFTWARE	12 Months Ended
	Dec. 31, 2014
Notes to Financial Statements
LICENSE OF SOFTWARE	In 2012 we granted a non-exclusive license to Smart Start Inc. for the use of our patented breath alcohol testing algorithms.  The agreement provides for termination with 6 months notice, and further provides for royalties based on the number of units sold which incorporate our software.  The transaction is being accounted for under the guidance of ASC 605-10, Revenue Recognition, which states, in part, revenue can be recognized when collection of the fee agreement can be reasonably assured.

13_BUSINESS_SEGMENTS

13. BUSINESS SEGMENTS	12 Months Ended
	Dec. 31, 2014
Segment Reporting [Abstract]
BUSINESS SEGMENTS	We currently have two business segments:  (i) the sale of physical products ("Products", including portable hand-held breathalyzers and related accessories, supplies, education, training, and royalties from development contracts with OEM manufacturers), and (ii) rental of a portion of our building ("Rentals").  There was only one business segment, Products, in the year ended December 31, 2013.  The accounting policies of the segments are the same as those described in the summary of significant accounting policies.
	Operating profits for these segments excludes unallocated corporate items.  Administrative and staff costs were commonly used by all business segments and were indistinguishable.
	The following sets forth information about the operations of the business segments:
		Year Ended
		December 31,
		2014
	Revenue:
	Products	$	9,324,337
	Rentals		17,647
	Total	$	9,341,984
	Gross profit:
	Products	$	4,457,984
	Rentals		9,873
	Total	$	4,467,857
	Interest expense:
	Products	$	6,195
	Rentals		5,718
	Total	$	11,913
	There were no intersegment revenues.
	As of December 31, 2014, $935,587 of our assets were used in the Rentals segment, with the remainder, $6,630,273, used in the Products and unallocated segments.

14_SUBSEQUENT_EVENTS

14. SUBSEQUENT EVENTS	12 Months Ended
	Dec. 31, 2014
Notes to Financial Statements
SUBSEQUENT EVENTS	We evaluated subsequent events through the date the financial statements were issued and determined that none have occurred that would require recognition in the financial statements or disclosure in the notes to the financial statements except that we revised a development agreement which will, in the ordinary course of business, require additional payments by us of $99,615 during the year ending December 31, 2015.  In addition, 6,700 stock options were exercised at $2.32 apiece in the first quarter of 2015.

2_SUMMARY_OF_SIGNIFICANT_ACCOU1

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Dec. 31, 2014
Summary Of Significant Accounting Policies Policies
Use of Estimates	The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions. Such estimates and assumptions affect the reported amounts of assets and liabilities as well as disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and expense during the reporting period. Actual results could differ from those estimates.
Fair Value Measurement	ASC Topic 820, Fair Value Measurements and Disclosures ("ASC 820"), provides a comprehensive framework for measuring fair value and expands disclosures which are required about fair value measurements. Specifically, ASC 820 sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. ASC 820 defines the hierarchy as follows:
	Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equity securities listed on the New York Stock Exchange.
	Level 2 - Pricing inputs are other than quoted prices in active markets, but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs.
	Level 3 - Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value of financial transmission rights.
Cash and Cash Equivalents	For purposes of reporting cash flows, we consider all cash and highly liquid investments with an original maturity of three months or less to be cash equivalents.  There were no cash equivalents as of December 31, 2014 and 2013.
Fair Value of Financial Instruments	Our financial instruments consist of cash, short-term trade receivables, payables and a first mortgage.  The carrying values of cash and cash equivalents, short-term receivables, and payables approximate their fair value due to their short term maturities.  The carrying value of the first mortgage approximates its fair value based on interest rates currently obtainable.
Concentration of Credit Risk	Financial instruments with significant credit risk include cash and accounts receivable.  The amount of cash on deposit with three financial institutions exceeded the $250,000 federally insured limit at December 31, 2014 by $1,998,626.  However, we believe that the financial institutions are financially sound and the risk of loss is minimal.
	We have no significant off-balance sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements.
Note Receivable	We made a loan of $62,500 to Tipping Point, Inc. ("TPI"), an early stage company, during the second quarter of 2011.  Although the loan has been paid down by $46,000, including a repayment of $3,000 in the fourth quarter of 2014, we do not expect to realize any significant sales to TPI in the near term.  We have provided a reserve against the loan for the full amount, leaving a net amount of $0, which is not included in our balance sheet at December 31, 2014. TPI was considered a related party at the time the loan was made, as certain of our board members were also TPI board members during a portion of 2011.
Accounts Receivable	Accounts receivable are typically unsecured and are derived from transactions with and from entities primarily located in the United States or from international distributors with a proven payment history; we require pre-payment for most international orders.  Accordingly, we may be exposed to credit risks generally associated with the alcohol monitoring industry.  Our credit policy calls for payment in accordance with prevailing industry standards, generally 30 days with occasional exceptions of up to 60 days for large established international customers.  We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments.  A summary of the activity in our allowance for doubtful accounts is as follows:
	Years Ended December 31	2014			2013
	Balance, beginning of year	$	26,267		$	40,000
	Provision for estimated losses		49,796			-
	Write-off of uncollectible accounts		(36,063	)		(13,733	)
	Balance, end of year	$	40,000		$	26,267
	The net accounts receivable balance at December 31, 2014 of $855,452 included an account from one customer of $156,701 (18%) and no more than 12% from any one other single customer. The net accounts receivable balance at December 31, 2013 of $426,248 included an account from one customer of $152,855 (36%) and no more than 7% from any one other customer.
Inventories	Inventories are stated at the lower of cost (first-in, first-out basis) or market. We reduce inventory for estimated obsolete or unmarketable inventory equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required.  At December 31, 2014 and 2013, inventory consisted of the following:
		2014			2013
	Raw materials & deposits	$	476,941		$	283,865
	Work-in process		132,029			87,374
	Finished goods		428,955			440,458
	Total gross inventories		1,037,925			811,697
	Less reserve for obsolescence		(92,500	)		(75,000	)
	Total net inventories	$	945,425		$	736,697
	A summary of the activity in our inventory reserve for obsolescence is as follows:
	Years Ended December 31	2014			2013
	Balance, beginning of year	$	75,000		$	45,000
	Provision for estimated obsolescence		43,894			61,538
	Write-off of obsolete inventory		(26,394	)		(31,538	)
	Balance, end of year	$	92,500		$	75,000
Property and Equipment	Property and equipment are stated at cost, with depreciation computed over the estimated useful lives of the assets, generally five years; three years for software and technology licenses; 15 years for training courses; 39 years for the cost of the building we purchased in October 2014.  We utilize the double-declining method of depreciation for property and equipment, and the straight-line method of depreciation for software, training courses, and the building, due to the expected usage of these assets over time. These methods are expected to continue throughout the life of the assets.  Maintenance and repairs are expensed as incurred and major additions, replacements and improvements are capitalized.  Depreciation expense for the years ended December 31, 2014 and 2013 was $198,100 and $144,432 respectively.
Long-Lived Assets	Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. A long-lived asset is considered impaired when estimated future cash flows related to the asset, undiscounted and without interest, are insufficient to recover the carrying amount of the asset. If deemed impaired, the long-lived asset is reduced to its estimated fair value. Long-lived assets to be disposed of are reported at the lower of their carrying amount or estimated fair value less cost to sell.  Impairments of $1,796 and $0 were recorded for the years ended December 31, 2014 and 2013 respectively.
Technology Licenses	In 2010 we entered into a technology transfer agreement with an unrelated third-party manufacturer of fuel cells, pursuant to which we acquired a perpetual-term license to technology for the manufacture of fuel cells.  We made three equal lump-sum payments of $40,000 each, based on achievement of milestones related to our establishment of successful production facilities.  The total, $120,000, is being amortized over three years commencing in 2011, using the straight line method, with amortization expense of $3,333 for the year 2014 and $40,000 for the year 2013.
	In 2011 we acquired a software license relating to Kiosk software technology for $25,000, which we amortized over 2 years ending in 2013, using the straight line method. Amortization expense was $0 for the year 2014 and $11,806 for the year 2013.
Patents	The costs of applying for patents are capitalized and amortized on a straight-line basis over the lesser of the patent's economic or legal life (20 years for utility patents in the United States, and 14 years for design patents).  Amortization expense for the year ended December 31, 2014 was $3,661 and for the year ended December 31, 2013 it was $2,773.  Capitalized costs are expensed if patents are not granted.  We review the carrying value of our patents periodically to determine whether the patents have continuing value and such reviews could result in the conclusion that the recorded amounts have been impaired.  A summary of our patents at December 31, 2014 and 2013 is as follows:
		2014			2013
	Patents issued	$	22,775		$	22,775
	Patent applications		74,634			31,632
	Accumulated amortization		(17,053	)		(13,595	)
	Total net patents	$	80,356		$	40,812
Accrued Expenses	We have accrued various expenses in our December 31 balance sheets, as follows:
		2014			2013
	Compensation	$	157,888		$	230,032
	Rebates		21,280			68,325
	Property and other taxes		44,810			7,844
	401(k) plan and health insurance		8,152			8,078
	Lease normalization		-			7,413
	Total accrued expenses	$	232,130		$	321,692
Product Warranty Reserve	We provide for the estimated cost of product warranties at the time sales are recognized. Our warranty obligation is based upon historical experience and will be affected by product failure rates and material usage incurred in correcting a product failure. Should actual product failure rates or material usage costs differ from our estimates, revisions to the estimated warranty liability would be required.  A summary of the activity in our product warranty reserve is as follows:
	Years Ended December 31	2014			2013
	Balance, beginning of year	$	23,100		$	23,100
	Provision for estimated warranty claims		14,425			19,080
	Claims made		(4,425	)		(19,080	)
	Balance, end of year	$	33,100		$	23,100
Income Taxes	We account for income taxes under the provisions of Accounting Standards Codification Topic 740, "Accounting for Income Taxes" ("ASC 740"). ASC 740 requires recognition of deferred income tax assets and liabilities for the expected future income tax consequences, based on enacted tax laws, of temporary differences between the financial reporting and tax bases of assets and liabilities. ASC 740 also requires recognition of deferred tax assets for the expected future tax effects of all deductible temporary differences, loss carryforwards and tax credit carryforwards.  Deferred tax assets are then reduced, if deemed necessary, by a valuation allowance for the amount of any tax benefits which, more likely than not based on current circumstances, are not expected to be realized.
	ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements, uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.  For the years ended December 31, 2014 and 2013, we did not have any interest or penalties or any significant uncertain tax positions.
Revenue Recognition	Revenue from product sales is generally recorded when we ship the product and title has passed to the customer, provided that we have evidence of a customer arrangement and can conclude that collection is probable.  The prices at which we sell our products are fixed and determinable at the time we accept a customer's order. We recognize revenue from sales to stocking distributors when there is no right of return, other than for normal warranty claims, and generally have no ongoing obligations related to product sales, except for normal warranty.
	Deferred revenues arising from service and extended warranty contracts are booked as sales over their life on a straight-line basis. Supplies are recognized as sales when they are shipped.  Training revenues are recognized at the time the training occurs.  We have discontinued arranging for customer financing and leasing through unrelated third parties and instead are providing for customer financing and leasing ourselves which we recognize as revenue over the applicable lease term.  Occasionally, we rent used equipment to customers, and in those cases, we recognize the revenues as they are earned over the life of the contract.
	Royalty income is recognized in accordance with agreed upon terms, when performance obligations are satisfied, the amount is fixed or determinable and collectability is reasonably assured.
	The sales of licenses to our training courses are recognized as revenue at the time of sale.
	Rental income from space leased to our tenants is recognized in the month in which it is due.
	On occasion we receive customer deposits for future product orders.  Customer deposits are initially recorded as a liability and recognized as revenue when the product is shipped and title has passed to the customer.
Deferred Revenue	Deferred revenues arise from service contracts and from development contracts.  Revenues from service contracts are recognized on a straight-line basis over the life of the contract, generally one year.  However, there are occasions when they are written for longer terms up to four years.  The revenues from that portion of the contract that extend beyond one year are shown in our balance sheet as long term.  Deferred revenues also result from progress payments received on development contracts; those revenues are recognized when the contract is complete.  All development contracts are for less than one year and all deferred revenues from this source are shown in our balance sheet as short term.
	Grants.  We apply for and receive job training and other grants.  In September 2014 we were notified that we had been awarded a $250,000 grant from the Colorado Office of Economic Development to accelerate development of a marijuana breathalyzer that is currently under development.  Grants are recognized as reductions of expense when received.  In 2014 and 2013, we received expense reimbursement grants of $45,868 and $24,981 respectively.
Rebates	Our rebate program is available to certain of our North American workplace distributors in good standing who are responsible for sales equaling at least $30,000 in one calendar year.  Distributors who meet the required sales threshold automatically earn a rebate equal to between 1 and 10 percent of that distributor's total sales of the Company's products.  We accrue for these rebates monthly; they are shown in the our balance sheets as accrued expenses and are included in sales and marketing expense in our statements of income.
Rent Expense	We recognize rent expense on a straight-line basis over the reasonably assured lease term as defined in ASC Topic 840, Leases ("ASC 840"). As a result of purchasing our building, we did not incur rent expense after October 31, 2014.
Research and Development Expenses	We expense research and development costs for products and processes as incurred.
Medical Device Tax	In March 2010, the Patient Protection and Affordable Care Act was enacted in the United States. This legislation includes a provision that imposes a 2.3% excise tax on the sale of certain medical devices by a manufacturer, producer or importer of such devices in the United States after December 31, 2012.  We expense the medical device tax in General and Administrative Expense.
Stock-Based Compensation	Stock-based compensation is presented in accordance with the guidance of ASC Topic 718, Compensation – Stock Compensation ("ASC 718").  Under the provisions of ASC 718, companies are required to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model.  The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in our statement of income.
	ASC 718 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model.  The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the accompanying statement of income.
	Stock-based compensation expense recognized during the period is based on the value of the portion of share-based payment awards that is ultimately expected to vest during the period.  We used the Black-Scholes option-pricing model ("Black-Scholes model") to determine fair value. Our determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to our expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. Although the fair value of employee stock options is determined in accordance with ASC 718 using an option-pricing model, that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction.
	Stock-based compensation expense recognized under ASC 718 for fiscal years 2014 and 2013 was $0 and $60,196, respectively, which consisted of stock-based compensation expense related to employee stock options.  Stock-based compensation expense related to employee stock options under ASC 718 for 2013 was allocated to General and Administrative Expense.
Segment Reporting	We have concluded that we have two operating segments, including our primary business which is as a developer, manufacturer and marketer of portable hand-held breathalyzers and related accessories, supplies and education.  As a result of purchasing our building on October 31, 2014, we have a second segment consisting of renting portions of our building to existing tenants, whose leases expire at various times until December 31, 2017.
Basic and Diluted Income and Loss per Common Share	Net income or loss per share is calculated in accordance with ASC Topic 260, Earnings Per Share ("ASC 260").  Under the provisions of ASC 260, basic net income or loss per common share is computed by dividing net income or loss for the period by the weighted average number of common shares outstanding for the period.  Diluted net income or loss per share is computed by dividing the net income or loss for the period by the weighted average number of common and potential common shares outstanding during the period if the effect of the potential common shares is dilutive.  Dilution from potential common shares outstanding at December 31, 2014 was $0.01 per share.  There was no dilution from potential common shares outstanding at December 31, 2013 because the market price of our shares was less than the exercise price of the stock options outstanding.
Recent Accounting Pronouncements	We have reviewed all recently issued, but not yet effective, accounting pronouncements.  The Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09 (Revenue from Contracts with Customers), which is effective for annual reporting periods beginning after December 15, 2016.  We have not yet assessed the impact, if any, of adopting this standard.

2_SUMMARY_OF_SIGNIFICANT_ACCOU2

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	12 Months Ended
	Dec. 31, 2014
Summary Of Significant Accounting Policies Tables
Schedule of allowance for doubtful accounts	Years Ended December 31	2014			2013
	Balance, beginning of year	$	26,267		$	40,000
	Provision for estimated losses		49,796			-
	Write-off of uncollectible accounts		(36,063	)		(13,733	)
	Balance, end of year	$	40,000		$	26,267
Inventories		2014			2013
	Raw materials & deposits	$	476,941		$	283,865
	Work-in process		132,029			87,374
	Finished goods		428,955			440,458
	Total gross inventories		1,037,925			811,697
	Less reserve for obsolescence		(92,500	)		(75,000	)
	Total net inventories	$	945,425		$	736,697
Inventory reserve	Years Ended December 31	2014			2013
	Balance, beginning of year	$	75,000		$	45,000
	Provision for estimated obsolescence		43,894			61,538
	Write-off of obsolete inventory		(26,394	)		(31,538	)
	Balance, end of year	$	92,500		$	75,000
Patents		2014			2013
	Patents issued	$	22,775		$	22,775
	Patent applications		74,634			31,632
	Accumulated amortization		(17,053	)		(13,595	)
	Total net patents	$	80,356		$	40,812
Accrued Expenses		2014			2013
	Compensation	$	157,888		$	230,032
	Rebates		21,280			68,325
	Property and other taxes		44,810			7,844
	401(k) plan and health insurance		8,152			8,078
	Lease normalization		-			7,413
	Total accrued expenses	$	232,130		$	321,692
Product warranty reserve	Years Ended December 31	2014			2013
	Balance, beginning of year	$	23,100		$	23,100
	Provision for estimated warranty claims		14,425			19,080
	Claims made		(4,425	)		(19,080	)
	Balance, end of year	$	33,100		$	23,100

3_BUSINESS_COMBINATIONS_Tables

3. BUSINESS COMBINATIONS (Tables)	12 Months Ended
	Dec. 31, 2014
Business Combinations [Abstract]
Estimate from net earnings from rental units		2014		2013
		(Unaudited)		(Unaudited)
	Rental income	$	105,880	$	105,880
	Expenses:
	Depreciation		59,150		59,150
	Maintenance		20,000		20,000
	Property taxes		18,000		18,000
	Insurance		4,800		4,800
	Total expenses		101,950		101,950
	Net profit	$	3,930	$	3,930

4_STOCKHOLDERS_EQUITY_Tables

4. STOCKHOLDERS' EQUITY (Tables)	12 Months Ended
	Dec. 31, 2014
Stockholders Equity Tables
Schedule of assumptions for employee stock options	Risk-free interest rate		1.40%
	Expected life (in years)		5
	Expected volatility		41%
	Expected dividend		0%
Summary of our stock option activity			STOCK OPTIONS OUTSTANDING
			Number				Weighted-Average
			Outstanding				Exercise Price per Share
	BALANCE AT DECEMBER 31, 2012			23,000			$	3.69
	Granted			69,000			$	2.32
	Exercised			-				-
	Forfeited/expired			-				-
	BALANCE AT DECEMBER 31, 2013			92,000			$	2.66
	Granted			-				-
	Exercised			-				-
	Forfeited/expired			-				-
	BALANCE AT DECEMBER 31, 2014			92,000			$	2.66
Stock options outstanding and exercisable					STOCK OPTIONS OUTSTANDING								STOCK OPTIONS EXERCISABLE
	Range of Exercise Prices				Number				Weighted-Average		Weighted-Average		Number		Weighted-Average
					Outstanding				Remaining Contractual		Exercise Price		Exercisable		Exercise Price
									Life (in Years)		per Share				per Share
		$3.69				23,000				1.9		$3.69		23,000		$3.69
		$2.32				69,000				3.75		$2.32		69,000		$2.32
						92,000								92,000

6_COMMITMENTS_AND_CONTINGENCIE1

6. COMMITMENTS AND CONTINGENCIES (Tables)	12 Months Ended
	Dec. 31, 2014
Commitments and Contingencies Disclosure [Abstract]
Minimum future lease payments	Year	Amount
	2015	$	35,262
	2016		36,689
	2017		35,576
	2018		40,353
	2019		42,211
	2020 - 2024		1,385,325
	Total		1,575,416
	Less current portion		(35,262	)
	Long term portion	$	1,540,154

8_INCOME_TAXES_Tables

8. INCOME TAXES (Tables)	12 Months Ended
	Dec. 31, 2014
Income Taxes Tables
Schedule of income tax provision	Years Ended	December 31,			December 31,
		2014			2013
	Current:
	Federal	$	208,081		$	158,101
	State		40,849			32,972
	Total current		248,930			191,073
	Deferred:
	Federal		(30,905	)		34,759
	State		(4,288	)		4,823
	Total deferred		(35,193	)		39,582
	Refunds from amending prior years:
	Federal		-			(80,852	)
	State		-			(11,546	)
	Total refunds		-			(92,398	)
	Total	$	213,737		$	138,257
Schedule of income tax reconciliation	Years Ended	December 31,			December 31,
		2014			2013
	Federal statutory rate	$	286,086		$	242,424
	Effect of:
	State taxes, net of federal tax benefit		36,561			37,795
	Research & development credit		(78,005	)		(72,814	)
	Other		(30,905	)		(69,148	)
	Total	$	213,737		$	138,257
Schedule of components of the deferred tax asset	Years Ended	December 31,			December 31,
		2014			2013
	Current Deferred Tax Assets:
	Deferred income	$	32,867		$	26,449
	Bad debt reserve		21,470			20,811
	Accrued vacation		18,327			16,702
	Inventory reserve		35,150			15,200
	Warranty reserve		12,578			8,778
	Total current deferred tax assets		120,392			87,940
	Long Term Deferred Tax Assets:
	Deferred income		7,504			4,762
		$	127,896		$	92,702

13_BUSINESS_SEGMENTS_Tables

13. BUSINESS SEGMENTS (Tables)	12 Months Ended
	Dec. 31, 2014
Segment Reporting [Abstract]
Operations of business segments		Year Ended
		December 31,
		2014
	Revenue:
	Products	$	9,324,337
	Rentals		17,647
	Total	$	9,341,984
	Gross profit:
	Products	$	4,457,984
	Rentals		9,873
	Total	$	4,467,857
	Interest expense:
	Products	$	6,195
	Rentals		5,718
	Total	$	11,913

2_SUMMARY_OF_SIGNIFICANT_ACCOU3

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Notes to Financial Statements
Allowance for doubtful accounts	$40,000	$26,267	$40,000
Provision for estimated losses	49,796	0
Write-off of uncollectible accounts	($36,063)	($13,733)

2_SUMMARY_OF_SIGNIFICANT_ACCOU4

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) (USD $)	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Inventories
Raw materials & deposits	$476,941	$283,865
Work-in-process	132,029	87,374
Finished goods	428,955	440,458
Total gross inventories	1,037,925	811,697
Less reserve for obsolescence	-92,500	-75,000	-45,000
Total net inventories	$945,425	$736,697

2_SUMMARY_OF_SIGNIFICANT_ACCOU5

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Notes to Financial Statements
Inventory reserve for obsolescence, beginning of year	$75,000	$45,000
Provision for estimated obsolescence	43,894	61,538
Write-off of obsolete inventory	-26,394	-31,538
Inventory reserve for obsolescence, end of year	$92,500	$75,000

2_SUMMARY_OF_SIGNIFICANT_ACCOU6

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Notes to Financial Statements
Patents issued	$22,775	$22,775
Patent applications	74,634	31,632
Accumulated amortization	-17,053	-13,595
Total net patents	$80,356	$40,812

2_SUMMARY_OF_SIGNIFICANT_ACCOU7

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Notes to Financial Statements
Compensation	$157,888	$230,032
Rebates	21,280	68,325
Property and other taxes	44,810	7,844
401(k) plan	8,152	8,078
Lease normalization	0	7,413
Total accrued expenses	$232,130	$321,692

2_SUMMARY_OF_SIGNIFICANT_ACCOU8

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 5) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Notes to Financial Statements
Product warranty reserve, beginning of year	$23,100	$23,100
Provision for estimated warranty claims	14,425	19,080
Claims made	-4,425	-19,080
Product warranty reserve, end of year	$33,100	$23,100

3_BUSINESS_COMBINATIONS_Detail

3. BUSINESS COMBINATIONS (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Business Combinations [Abstract]
Rental income	$105,880	$105,880
Expenses:
Depreciation	59,150	59,150
Maintenance	20,000	20,000
Property taxes	18,000	18,000
Insurance	4,800	4,800
Total expenses	101,950	101,950
Net profit	$3,930	$3,930

4_STOCKHOLDERS_EQUITY_Details

4. STOCKHOLDERS' EQUITY (Details)	12 Months Ended
	Dec. 31, 2014
Stockholders Equity Tables
Risk-free interest rate	1.40%
Expected life (in years)	5 years
Expected volatility	41.00%
Expected dividend	0.00%

4_STOCKHOLDERS_EQUITY_Details_

4. STOCKHOLDERS' EQUITY (Details 1) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Notes to Financial Statements
Option Outstanding, beginning	92,000	23,000
Option Granted	0	69,000
Option Exercised	0	0
Option Forfeited/expired	0	0
Option Outstanding, ending	92,000	92,000
Option Outstanding, Weighted-Average Exercise Price per Share, beginning	$2.66	$3.69
Option Granted, Weighted-Average Exercise Price per Share	$0	$2.32
Option Exercised, Weighted-Average Exercise Price per Share	$0	$0
Option Forfeited/expired, Weighted-Average Exercise Price per Share	$0	$0
Option Outstanding, Weighted-Average Exercise Price per Share, ending	$2.66	$2.66

4_STOCKHOLDERS_EQUITY_Details_1

4. STOCKHOLDERS' EQUITY (Details 2) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Option Outstanding	92,000	92,000	23,000
Weighted Average Exercise Price per Share	$2.66	$2.66	$3.69
Number Exercisable	92,000
Price range $3.69
Range of Exercise Prices	$3.69
Option Outstanding	23,000
Weighted Average Remaining Contractual Life (in Years)	1 year 10 months 24 days
Weighted Average Exercise Price per Share	$3.69
Number Exercisable	23,000
Weighted Average Exercise Price per Share	$3.69
Price range $2.32
Range of Exercise Prices	$2.32
Option Outstanding	69,000
Weighted Average Remaining Contractual Life (in Years)	3 years 9 months
Weighted Average Exercise Price per Share	$2.32
Number Exercisable	69,000
Weighted Average Exercise Price per Share	$2.32

4_STOCKHOLDERS_EQUITY_Details_2

4. STOCKHOLDERS' EQUITY (Details Narrative) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Stockholders Equity Details Narrative
Fair value of options granted	$0	$60,196
Common stock available for grant under the new Plan adopted in 2013	81,000

6_COMMITMENTS_AND_CONTINGENCIE2

6. COMMITMENTS AND CONTINGENCIES (Details) (USD $)	Dec. 31, 2014
Commitments and Contingencies Disclosure [Abstract]
2015	$35,262
2016	36,689
2017	35,576
2018	40,353
2019	42,211
2020-2024	1,385,325
Total	1,575,416
Less current portion	-35,262
Long term portion	$1,540,154

6_COMMITMENTS_AND_CONTINGENCIE3

6. COMMITMENTS AND CONTINGENCIES (Details Narrative) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Commitments and Contingencies Disclosure [Abstract]
Rent expense	$88,131	$106,653

7_LINE_OF_CREDIT_Details_Narra

7. LINE OF CREDIT (Details Narrative) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Line Of Credit Details Narrative
Line of Credit Facility	$0	$0

8_INCOME_TAXES_Details

8. INCOME TAXES (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Current:
Federal	$208,081	$158,101
State	40,849	32,972
Total current	248,930	191,073
Deferred:
Federal	-30,905	34,759
State	-4,288	4,823
Total deferred	-35,194	39,582
Total	213,737	138,257
Refunds from amending prior years:
Federal	0	-80,852
State	0	-11,546
Total refunds	0	-92,398
Total	$213,737	$138,257

8_INCOME_TAXES_Details_1

8. INCOME TAXES (Details 1) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Income Tax Disclosure [Abstract]
Federal statutory rate	$286,086	$242,424
State taxes, net of federal tax benefit	36,561	37,795
Research & development credit	-78,005	-72,814
Other	-30,905	-69,148
Total	$213,737	$138,257

8_INCOME_TAXES_Details_2

8. INCOME TAXES (Details 2) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Current Deferred Tax Assets:
Deferred income	$32,867	$26,449
Bad debt reserve	21,470	20,811
Accrued vacation	18,327	16,702
Inventory reserve	35,150	15,200
Warranty reserve	12,578	8,778
Total current deferred tax assets	120,392	87,940
Long Term Deferred Tax Assets:
Deferred income	7,504	4,762
Deferred Tax Assets	$127,896	$92,702

10_DEFINED_CONTRIBUTION_EMPLOY

10. DEFINED CONTRIBUTION EMPLOYEE BENEFIT PLAN (Details Narrative) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Accounting Policies [Abstract]
Percentage of payroll to discretionary contribution	3.00%	3.00%
Discretionary contributions amount	$46,766	$38,966

13_BUSINESS_SEGMENTS_Details

13. BUSINESS SEGMENTS (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Revenue	$9,341,984	$8,425,666
Gross profit	4,467,857	4,046,613
Interest expense	11,913	0
Products
Revenue	9,324,337
Gross profit	4,457,984
Interest expense	6,195
Rentals
Revenue	17,647
Gross profit	9,873
Interest expense	$5,718