Lifeloc (LCTC) 10-Q 10 Nov 22 2022 Q3 Quarterly report Financial data

Cover

Cover	9 Months Ended
	Sep. 30, 2022 shares
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2022
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2022
Current Fiscal Year End Date	--12-31
Entity File Number	000-54319
Entity Registrant Name	LIFELOC TECHNOLOGIES, INC.
Entity Central Index Key	0001493137
Entity Tax Identification Number	84-1053680
Entity Incorporation, State or Country Code	CO
Entity Address, Address Line One	12441 West 49th Ave.
Entity Address, Address Line Two	Unit 4
Entity Address, City or Town	Wheat Ridge
Entity Address, State or Province	CO
Entity Address, Postal Zip Code	80033
City Area Code	(303)
Local Phone Number	431-9500
Title of 12(b) Security	Common Stock
Trading Symbol	LCTC
Entity Current Reporting Status	No
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	2,454,116

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
CURRENT ASSETS:
Cash	$ 2,124,531	$ 2,571,668
Accounts receivable, net	658,322	562,092
Inventories, net	2,694,957	2,668,789
Prepaid expenses and other	115,938	56,897
Total current assets	5,593,748	5,859,446
PROPERTY AND EQUIPMENT, at cost:
Land	317,932	317,932
Building	1,928,795	1,928,795
Real-time Alcohol Detection And Recognition equipment and software	569,448	569,448
Production equipment, software and space modifications	1,149,855	958,785
Training courses	432,375	432,375
Office equipment, software and space modifications	216,618	216,618
Sales and marketing equipment and space modifications	226,356	226,356
Research and development equipment, software and space modifications	467,485	456,685
Less accumulated depreciation	(2,898,763)	(2,518,966)
Total property and equipment, net	2,410,101	2,588,028
OTHER ASSETS:
Patents, net	80,591	134,428
Deposits and other	500	163,480
Deferred taxes	345,228	204,449
Total other assets	426,319	502,357
Total assets	8,430,168	8,949,831
CURRENT LIABILITIES:
Accounts payable	442,855	445,985
Term loan payable, current portion	49,645	48,513
Customer deposits	180,560	170,952
Accrued expenses	234,613	298,530
Deferred revenue, current portion	58,173	71,604
Reserve for warranty expense	46,500	46,500
Total current liabilities	1,012,346	1,082,084
TERM LOAN PAYABLE, net of current portion and debt issuance costs	1,231,790	1,267,551
DEFERRED REVENUE, net of current portion	8,074	6,430
Total liabilities	2,252,210	2,356,065
STOCKHOLDERS' EQUITY:
Common stock, no par value; 50,000,000 shares authorized, 2,454,116 shares outstanding	4,668,014	4,650,812
Retained earnings	1,509,944	1,942,954
Total stockholders' equity	6,177,958	6,593,766
Total liabilities and stockholders' equity	$ 8,430,168	$ 8,949,831

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Common stock, par value	$ 0	$ 0
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares outstanding	2,454,116	2,454,116

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
REVENUES:
Product sales	$ 2,007,652	$ 1,855,308	$ 6,264,222	$ 5,304,800
Royalties	1,225	9,941	40,437	56,157
Rental income	22,989	22,239	67,867	65,710
Total	2,031,866	1,887,488	6,372,526	5,426,667
COST OF SALES	1,263,951	953,437	4,099,087	3,063,321
GROSS PROFIT	767,915	934,051	2,273,439	2,363,346
OPERATING EXPENSES:
Research and development	313,092	299,653	1,056,026	873,498
Sales and marketing	268,515	306,664	821,821	751,266
General and administrative	296,806	245,970	943,060	852,998
Total	878,413	852,287	2,820,907	2,477,762
OPERATING INCOME (LOSS)	(110,498)	81,764	(547,468)	(114,416)
OTHER INCOME (EXPENSE):
Forgiveness of Paycheck Protection loan		471,347		936,444
Interest income	4,508	1,347	6,130	2,659
Interest expense	(10,724)	(13,568)	(32,451)	(40,629)
Total	(6,216)	459,126	(26,321)	898,474
NET INCOME (LOSS) BEFORE PROVISION FOR TAXES	(116,714)	540,890	(573,789)	784,058
BENEFIT FROM (PROVISION FOR) FEDERAL AND STATE INCOME TAXES	29,742	(18,230)	140,779	32,361
NET INCOME (LOSS)	$ (86,972)	$ 522,660	$ (433,010)	$ 816,419
NET INCOME (LOSS) PER SHARE, BASIC	$ (0.04)	$ 0.21	$ (0.18)	$ 0.33
NET INCOME (LOSS) PER SHARE, DILUTED	$ (0.04)	$ 0.21	$ (0.18)	$ 0.33
WEIGHTED AVERAGE SHARES, BASIC	2,454,116	2,454,116	2,454,116	2,454,116
WEIGHTED AVERAGE SHARES, DILUTED	2,454,116	2,501,034	2,454,116	2,493,492

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Retained Earnings [Member]	Total
Beginning balance, amount at Dec. 31, 2020	$ 4,633,655	$ 1,266,987	$ 5,900,642
Stock based compensation expense related to stock options	17,157
Net income (loss)		816,419	816,419
Ending balance, amount at Sep. 30, 2021	4,650,812	2,083,406	6,734,218
Beginning balance, amount at Jun. 30, 2021	4,650,812	1,560,746	6,211,558
Stock based compensation expense related to stock options
Net income (loss)		522,660	522,660
Ending balance, amount at Sep. 30, 2021	4,650,812	2,083,406	6,734,218
Beginning balance, amount at Dec. 31, 2021	4,650,812	1,942,954	6,593,766
Stock based compensation expense related to stock options	17,202
Net income (loss)		(433,010)	(433,010)
Ending balance, amount at Sep. 30, 2022	4,668,014	1,509,944	6,177,958
Beginning balance, amount at Jun. 30, 2022	4,668,014	1,596,916	6,264,930
Stock based compensation expense related to stock options
Net income (loss)		(86,972)	(86,972)
Ending balance, amount at Sep. 30, 2022	$ 4,668,014	$ 1,509,944	$ 6,177,958

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ (433,010)	$ 816,419
Adjustments to reconcile net income to net cash provided from (used in) operating activities-
Forgiveness of Paycheck Protection loans		(936,444)
Depreciation and amortization	438,549	206,222
Provision for doubtful accounts, net change		(49,000)
Provision for inventory obsolescence, net change	154,367	(5,000)
Deferred taxes, net change	(140,779)	12,927
Stock based compensation expense related to stock options	17,202	17,157
Changes in operating assets and liabilities-
Accounts receivable	(96,230)	(27,465)
Inventories	(180,535)	(82,991)
Income taxes receivable		175,369
Prepaid expenses and other	(59,041)	(11,430)
Deposits and other	162,980	1,318
Accounts payable	(3,130)	(103,279)
Customer deposits	9,608	3,080
Accrued expenses	(63,917)	(71,780)
Deferred revenue	(11,787)	6,458
Net cash provided from (used in) operating activities	(205,723)	(48,439)
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES:
Purchases of property and equipment	(201,870)	(64,254)
Patent filing expense	(1,687)	(661)
Net cash (used in) investing activities	(203,557)	(64,915)
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES:
Principal payments made on term loan	(37,857)	(1,328,625)
Proceeds from refinancing term loan		1,350,000
Cost of refinancing term loan		(18,156)
Proceeds from Paycheck Protection loan (round 2)		471,347
Net cash provided from (used in) financing activities	(37,857)	474,566
NET INCREASE (DECREASE) IN CASH	(447,137)	361,212
CASH, BEGINNING OF PERIOD	2,571,668	2,195,070
CASH, END OF PERIOD	2,124,531	2,556,282
SUPPLEMENTAL INFORMATION:
Cash paid for interest	29,223	39,815
Cash paid for income tax

ORGANIZATION AND NATURE OF BUSI

ORGANIZATION AND NATURE OF BUSINESS	9 Months Ended
	Sep. 30, 2022
Accounting Policies [Abstract]
ORGANIZATION AND NATURE OF BUSINESS	1. 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. We define our business as providing "near and remote sensing" products and solutions. Today, the majority of our revenues are derived from products and services for alcohol detection and measurement. We remain committed to growing our breath alcohol testing business. In the future, we anticipate the commercialization of new sensing and measurement products that may allow Lifeloc to successfully expand our business into new growth areas where we do not presently compete or where no satisfactory product solutions exist today. Lifeloc incorporated in Colorado in December 1983. We filed a registration statement on Form 10 with the Securities and Exchange Commission, which became effective on May 31, 2011. Our fiscal year end is December 31. Our principal executive offices are located at 12441 West 49th Avenue, Unit 4, Wheat Ridge, Colorado 80033-3338. Our telephone number is (303) 431-9500. Our websites are www.lifeloc.com, www.lifeguardbreathtester.com, and www.stsfirst.com. Information contained on our websites does not constitute part of this Form 10-Q.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Sep. 30, 2022
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation Use of Estimates in the Preparation of Financial Statements Fair Value Measurement Fair Value Measurements and Disclosures 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. Inventories Schedule of Inventories 2022 2021 Raw materials & deposits $ 2,400,590 $ 2,179,332 Work-in-process 44,497 84,963 Finished goods 559,237 559,494 Total gross inventories 3,004,324 2,823,789 Less reserve for obsolescence (309,367 ) (155,000 ) Total net inventories $ 2,694,957 $ 2,668,789 Income Taxes Accounting for Income Taxes The estimated annual effective tax rate is applied to the year-to-date ordinary income (loss) at the end of the interim period. ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This pronouncement also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. Revenue Recognition Revenue from Contracts with Customers (Topic 606). Revenue from product sales and supplies 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. The sales of licenses to our training courses are recognized as revenue at the time of sale. Training and certification revenues are recognized at the time the training and certification occurs. Data recording revenue is recognized based on each day’s usage of enrolled devices. Revenues arising from extended warranty contracts are booked as sales over their life on a straight-line basis. 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. Rental income from space leased to our tenants is recognized in the month in which it is due, which approximates if it were recognized on a straight-line basis over the term of the related lease. On occasion we receive customer deposits for future product orders and product developments. Customer deposits are initially recorded as a liability and recognized as revenue when the product is shipped and title has passed to the customer, or when agreed milestones are met in the case of product developments. Topic 606 requires the disaggregation of revenue into broad categories, which we have defined as shown below for the three months ended September 30, 2022 and September 30, 2021. Schedule of Disaggregation of revenue Three Months Ended September 30, Product sales: 2022 2021 Product sales and supplies $ 1,832,037 $ 1,677,666 Training, certification and data recording 159,052 164,158 Service plans and equipment rental 16,563 13,484 Products subtotal 2,007,652 1,855,308 Royalties 1,225 9,941 Building rentals 22,989 22,239 Total revenues $ 2,031,866 $ 1,887,488 Nine months Ended September 30, Product sales: 2022 2021 Product sales and supplies $ 5,720,479 $ 4,794,804 Training, certification and data recording 489,033 466,218 Service plans and equipment rental 54,710 43,778 Products subtotal 6,264,222 5,304,800 Royalties 40,437 56,157 Building rentals 67,867 65,710 Total revenues $ 6,372,526 $ 5,426,667 Deferred Revenue Recent Accounting Pronouncements Stock-Based Compensation Compensation – Stock Compensation 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 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 the three months ended September 30, 2022 and 2021 was $ 0 0 17,202 17,157 Segment Reporting Wholly Owned Subsidiary On June 1, 2022, we formed a wholly-owned subsidiary, Probation Tracker, Inc., a Colorado corporation (“PTI”) and capitalized it with $ 61,353 613,530 613,530 61,353

BASIC AND DILUTED INCOME (LOSS)

BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE	9 Months Ended
	Sep. 30, 2022
Earnings Per Share [Abstract]
BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE	3. BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE We report both basic and diluted net income (loss) per common share. Basic net income (loss) per common share is computed by dividing net income (loss) for the period by the weighted average number of common shares outstanding for the period. Diluted net income (loss) per common share is computed by dividing the net income (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. The shares used in the calculation of dilutive potential common shares exclude options to purchase shares where the exercise price was greater than the average market price of common shares for the period. The shares used in the calculation of dilutive potential common shares exclude options to purchase shares in loss periods since they are anti-dilutive. The following table presents the calculation of basic and diluted net income (loss) per common share for three months ended September 30, 2022 and September 30, 2021: Schedule of Calculation of basic and diluted net income per common share Three Months Ended September 30, 2022 2021 Net income (loss) $ (86,972 ) $ 522,660 Weighted average shares-basic 2,454,116 2,454,116 Effect of dilutive potential common shares — 46,918 Weighted average shares-diluted 2,454,116 2,501,034 Net income (loss) per share-basic $ (0.04 ) $ 0.21 Net income (loss) per share-diluted $ (0.04 ) $ 0.21 Antidilutive employee stock options — — Nine months Ended September 30, 2022 2021 Net income (loss) $ (433,010 ) $ 816,419 Weighted average shares-basic 2,454,116 2,454,116 Effect of dilutive potential common shares — 39,376 Weighted average shares-diluted 2,454,116 2,493,492 Net income (loss) per share-basic $ (0.18 ) $ 0.33 Net income (loss) per share-diluted $ (0.18 ) $ 0.33 Antidilutive employee stock options — —

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	9 Months Ended
	Sep. 30, 2022
Equity [Abstract]
STOCKHOLDERS' EQUITY	4. STOCKHOLDERS' EQUITY The following table summarizes information about employee stock options outstanding and exercisable at September 30, 2022: Schedule of Stock options outstanding and exercisable STOCK OPTIONS OUTSTANDING STOCK OPTIONS EXERCISABLE Range of Exercise Prices Number Outstanding Weighted Average Remaining Contractual Life (in Years) Weighted Average Exercise Price per Share Number Exercisable Weighted Average Exercise Price per Share $3.80 123,000 2.8 $3.80 123,000 $3.80 The exercise price of all options granted through September 30, 2022 has been equal to or greater than the fair market value of the Company's common stock at the time the options were issued. As of September 30, 2022, 20,300 We granted 50,000 25,000 No 15,000 A total of 20,500 16,000 4,500 No The total number of authorized shares of common stock continues to be 50,000,000

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	9 Months Ended
	Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	5. COMMITMENTS AND CONTINGENCIES Mortgage Expense 1,949,139 1,581,106 1,350,000 September, 2031 Schedule of Minimum future lease payments 2022 $ 12,806 2023 52,178 2024 53,738 2025 55,345 2026 57,000 2027 – 2031 1,068,641 Total 1,299,708 Less financing cost (18,273 ) Net term loan payable 1,281,435 Less current portion (49,645 ) Long term portion $ 1,231,790 Employee Severance Benefits Contractual Commitments and Purchase Orders 441,270 Regulatory Commitments

LINE OF CREDIT AND PAYCHECK PRO

LINE OF CREDIT AND PAYCHECK PROTECTION LOAN	9 Months Ended
	Sep. 30, 2022
Line Of Credit And Paycheck Protection Loan
LINE OF CREDIT AND PAYCHECK PROTECTION LOAN	6. LINE OF CREDIT AND PAYCHECK PROTECTION LOAN 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 matured on October 31, 2015 and was extended to September 30, 2018. The agreement was amended to increase the amount of the line to $ 750,000 September 28, 2021 The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act allocated $350 billion to help small businesses keep workers employed amid the pandemic and economic downturn. Known as the Paycheck Protection Program (“PPP”), the initiative provides federally guaranteed loans to small businesses. A portion or all of these loans may be forgiven if borrowers comply with certain PPP guidelines including spending the funds on authorized expenses and maintaining their payrolls during the crisis or restore their payrolls afterward. On May 4, 2020, the Company received proceeds of $ 465,097 471,347

INCOME TAXES

INCOME TAXES	9 Months Ended
	Sep. 30, 2022
Income Tax Disclosure [Abstract]
INCOME TAXES	7. INCOME TAXES The items accounting for the difference between income taxes computed at the federal statutory rate and the provision for (benefit from) income taxes consists of the following: Schedule of income tax reconciliation Three Months Ended September 30, 2022 2021 Federal statutory rate $ (24,510 ) $ 113,587 Effect of: State taxes, net of federal tax benefit 5,255 (3,407 ) Other (10,487 ) (91,950 ) Total $ (29,742 ) $ 18,230 Nine months Ended September 30, 2022 2021 Federal statutory rate $ (120,495 ) $ 164,653 Effect of: State taxes, net of federal tax benefit 25,224 6,070 Other (45,508 ) (203,084 ) Total $ (140,779 ) $ (32,361 )

BUSINESS SEGMENTS

BUSINESS SEGMENTS	9 Months Ended
	Sep. 30, 2022
Segment Reporting [Abstract]
BUSINESS SEGMENTS	8. BUSINESS SEGMENTS We currently have two business segments: (i) the sale of physical products, including portable hand-held breathalyzers and related accessories, supplies, education, training ("Product Sales"), and royalties from development contracts with OEM manufacturers ("Royalties" and, together with Product Sales, the "Products" segment), and (ii) rental of a portion of our building (the "Rentals" segment). The accounting policies of the segments are the same as those described in the summary of significant accounting policies in Note 2. Operating profits for these segments exclude 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 for the three months ended September 30, 2022 and 2021: Schedule of Operations of business segments 2022 2021 Product sales $ 2,007,652 $ 1,855,308 Royalties 1,225 9,941 Products subtotal 2,008,877 1,865,249 Rentals 22,989 22,239 Total $ 2,031,866 $ 1,887,488 Gross profit: Product sales $ 775,122 $ 914,458 Royalties 1,225 9,941 Products subtotal 776,347 924,399 Rentals (8,432 ) 9,652 Total $ 767,915 $ 934,051 Interest expense: Product sales $ 7,344 $ 8,914 Royalties — — Products subtotal 7,344 8,914 Rentals 3,380 4,654 Total $ 10,724 $ 13,568 Net income (loss) before taxes: Product sales $ 117,474 $ 525,951 Royalties 12,572 9,941 Products subtotal 104,902 535,892 Rentals (11,812 ) 4,998 Total $ (116,714 ) $ 540,890 The following sets forth information about the operations of the business segments for the nine months ended September 30, 2022 and 2021. 2022 2021 Product sales $ 6,264,222 $ 5,304,800 Royalties 40,437 56,157 Products subtotal 6,304,659 5,360,957 Rentals 67,867 65,710 Total $ 6,372,526 $ 5,426,667 Gross profit: Product sales $ 2,205,376 $ 2,276,049 Royalties 40,437 56,157 Products subtotal 2,245,813 2,332,206 Rentals 27,626 31,140 Total $ 2,273,439 $ 2,363,346 Interest expense: Product sales $ 22,223 $ 26,694 Royalties — — Products subtotal 22,223 26,694 Rentals 10,228 13,935 Total $ 32,451 $ 40,629 Net income (loss) before taxes: Product sales $ (631,624 ) $ 710,696 Royalties 40,437 56,157 Products subtotal (591,187 ) 766,853 Rentals 17,398 17,205 Total $ (573,789 ) $ 784,058 There were no intersegment revenues. At September 30, 2022, $ 575,671 7,854,497

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Sep. 30, 2022
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	9. SUBSEQUENT EVENTS We evaluated all of our activity and concluded that no subsequent events have occurred that would require recognition in our financial statements or disclosure in the notes to our financial statements.

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 30, 2022
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation
Use of Estimates in the Preparation of Financial Statements	Use of Estimates in the Preparation of Financial Statements
Fair Value Measurement	Fair Value Measurement Fair Value Measurements and Disclosures 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.
Inventories	Inventories Schedule of Inventories 2022 2021 Raw materials & deposits $ 2,400,590 $ 2,179,332 Work-in-process 44,497 84,963 Finished goods 559,237 559,494 Total gross inventories 3,004,324 2,823,789 Less reserve for obsolescence (309,367 ) (155,000 ) Total net inventories $ 2,694,957 $ 2,668,789
Income Taxes	Income Taxes Accounting for Income Taxes The estimated annual effective tax rate is applied to the year-to-date ordinary income (loss) at the end of the interim period. ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This pronouncement also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.
Revenue Recognition	Revenue Recognition Revenue from Contracts with Customers (Topic 606). Revenue from product sales and supplies 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. The sales of licenses to our training courses are recognized as revenue at the time of sale. Training and certification revenues are recognized at the time the training and certification occurs. Data recording revenue is recognized based on each day’s usage of enrolled devices. Revenues arising from extended warranty contracts are booked as sales over their life on a straight-line basis. 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. Rental income from space leased to our tenants is recognized in the month in which it is due, which approximates if it were recognized on a straight-line basis over the term of the related lease. On occasion we receive customer deposits for future product orders and product developments. Customer deposits are initially recorded as a liability and recognized as revenue when the product is shipped and title has passed to the customer, or when agreed milestones are met in the case of product developments. Topic 606 requires the disaggregation of revenue into broad categories, which we have defined as shown below for the three months ended September 30, 2022 and September 30, 2021. Schedule of Disaggregation of revenue Three Months Ended September 30, Product sales: 2022 2021 Product sales and supplies $ 1,832,037 $ 1,677,666 Training, certification and data recording 159,052 164,158 Service plans and equipment rental 16,563 13,484 Products subtotal 2,007,652 1,855,308 Royalties 1,225 9,941 Building rentals 22,989 22,239 Total revenues $ 2,031,866 $ 1,887,488 Nine months Ended September 30, Product sales: 2022 2021 Product sales and supplies $ 5,720,479 $ 4,794,804 Training, certification and data recording 489,033 466,218 Service plans and equipment rental 54,710 43,778 Products subtotal 6,264,222 5,304,800 Royalties 40,437 56,157 Building rentals 67,867 65,710 Total revenues $ 6,372,526 $ 5,426,667
Deferred Revenue	Deferred Revenue
Recent Accounting Pronouncements	Recent Accounting Pronouncements
Stock-Based Compensation	Stock-Based Compensation Compensation – Stock Compensation 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 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 the three months ended September 30, 2022 and 2021 was $ 0 0 17,202 17,157
Segment Reporting	Segment Reporting
Wholly Owned Subsidiary	Wholly Owned Subsidiary On June 1, 2022, we formed a wholly-owned subsidiary, Probation Tracker, Inc., a Colorado corporation (“PTI”) and capitalized it with $ 61,353 613,530 613,530 61,353

SUMMARY OF SIGNIFICANT ACCOUN_3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	9 Months Ended
	Sep. 30, 2022
Accounting Policies [Abstract]
Schedule of Inventories	Schedule of Inventories 2022 2021 Raw materials & deposits $ 2,400,590 $ 2,179,332 Work-in-process 44,497 84,963 Finished goods 559,237 559,494 Total gross inventories 3,004,324 2,823,789 Less reserve for obsolescence (309,367 ) (155,000 ) Total net inventories $ 2,694,957 $ 2,668,789
Schedule of Disaggregation of revenue	Schedule of Disaggregation of revenue Three Months Ended September 30, Product sales: 2022 2021 Product sales and supplies $ 1,832,037 $ 1,677,666 Training, certification and data recording 159,052 164,158 Service plans and equipment rental 16,563 13,484 Products subtotal 2,007,652 1,855,308 Royalties 1,225 9,941 Building rentals 22,989 22,239 Total revenues $ 2,031,866 $ 1,887,488 Nine months Ended September 30, Product sales: 2022 2021 Product sales and supplies $ 5,720,479 $ 4,794,804 Training, certification and data recording 489,033 466,218 Service plans and equipment rental 54,710 43,778 Products subtotal 6,264,222 5,304,800 Royalties 40,437 56,157 Building rentals 67,867 65,710 Total revenues $ 6,372,526 $ 5,426,667

BASIC AND DILUTED INCOME (LOS_2

BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE (Tables)	9 Months Ended
	Sep. 30, 2022
Earnings Per Share [Abstract]
Schedule of Calculation of basic and diluted net income per common share	Schedule of Calculation of basic and diluted net income per common share Three Months Ended September 30, 2022 2021 Net income (loss) $ (86,972 ) $ 522,660 Weighted average shares-basic 2,454,116 2,454,116 Effect of dilutive potential common shares — 46,918 Weighted average shares-diluted 2,454,116 2,501,034 Net income (loss) per share-basic $ (0.04 ) $ 0.21 Net income (loss) per share-diluted $ (0.04 ) $ 0.21 Antidilutive employee stock options — — Nine months Ended September 30, 2022 2021 Net income (loss) $ (433,010 ) $ 816,419 Weighted average shares-basic 2,454,116 2,454,116 Effect of dilutive potential common shares — 39,376 Weighted average shares-diluted 2,454,116 2,493,492 Net income (loss) per share-basic $ (0.18 ) $ 0.33 Net income (loss) per share-diluted $ (0.18 ) $ 0.33 Antidilutive employee stock options — —

STOCKHOLDERS' EQUITY (Tables)

STOCKHOLDERS' EQUITY (Tables)	9 Months Ended
	Sep. 30, 2022
Equity [Abstract]
Schedule of Stock options outstanding and exercisable	Schedule of Stock options outstanding and exercisable STOCK OPTIONS OUTSTANDING STOCK OPTIONS EXERCISABLE Range of Exercise Prices Number Outstanding Weighted Average Remaining Contractual Life (in Years) Weighted Average Exercise Price per Share Number Exercisable Weighted Average Exercise Price per Share $3.80 123,000 2.8 $3.80 123,000 $3.80

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	9 Months Ended
	Sep. 30, 2022
Commitments and Contingencies Disclosure [Abstract]
Schedule of Minimum future lease payments	Schedule of Minimum future lease payments 2022 $ 12,806 2023 52,178 2024 53,738 2025 55,345 2026 57,000 2027 – 2031 1,068,641 Total 1,299,708 Less financing cost (18,273 ) Net term loan payable 1,281,435 Less current portion (49,645 ) Long term portion $ 1,231,790

INCOME TAXES (Tables)

INCOME TAXES (Tables)	9 Months Ended
	Sep. 30, 2022
Income Tax Disclosure [Abstract]
Schedule of income tax reconciliation	Schedule of income tax reconciliation Three Months Ended September 30, 2022 2021 Federal statutory rate $ (24,510 ) $ 113,587 Effect of: State taxes, net of federal tax benefit 5,255 (3,407 ) Other (10,487 ) (91,950 ) Total $ (29,742 ) $ 18,230 Nine months Ended September 30, 2022 2021 Federal statutory rate $ (120,495 ) $ 164,653 Effect of: State taxes, net of federal tax benefit 25,224 6,070 Other (45,508 ) (203,084 ) Total $ (140,779 ) $ (32,361 )

BUSINESS SEGMENTS (Tables)

BUSINESS SEGMENTS (Tables)	9 Months Ended
	Sep. 30, 2022
Segment Reporting [Abstract]
Schedule of Operations of business segments	Schedule of Operations of business segments 2022 2021 Product sales $ 2,007,652 $ 1,855,308 Royalties 1,225 9,941 Products subtotal 2,008,877 1,865,249 Rentals 22,989 22,239 Total $ 2,031,866 $ 1,887,488 Gross profit: Product sales $ 775,122 $ 914,458 Royalties 1,225 9,941 Products subtotal 776,347 924,399 Rentals (8,432 ) 9,652 Total $ 767,915 $ 934,051 Interest expense: Product sales $ 7,344 $ 8,914 Royalties — — Products subtotal 7,344 8,914 Rentals 3,380 4,654 Total $ 10,724 $ 13,568 Net income (loss) before taxes: Product sales $ 117,474 $ 525,951 Royalties 12,572 9,941 Products subtotal 104,902 535,892 Rentals (11,812 ) 4,998 Total $ (116,714 ) $ 540,890 The following sets forth information about the operations of the business segments for the nine months ended September 30, 2022 and 2021. 2022 2021 Product sales $ 6,264,222 $ 5,304,800 Royalties 40,437 56,157 Products subtotal 6,304,659 5,360,957 Rentals 67,867 65,710 Total $ 6,372,526 $ 5,426,667 Gross profit: Product sales $ 2,205,376 $ 2,276,049 Royalties 40,437 56,157 Products subtotal 2,245,813 2,332,206 Rentals 27,626 31,140 Total $ 2,273,439 $ 2,363,346 Interest expense: Product sales $ 22,223 $ 26,694 Royalties — — Products subtotal 22,223 26,694 Rentals 10,228 13,935 Total $ 32,451 $ 40,629 Net income (loss) before taxes: Product sales $ (631,624 ) $ 710,696 Royalties 40,437 56,157 Products subtotal (591,187 ) 766,853 Rentals 17,398 17,205 Total $ (573,789 ) $ 784,058

SUMMARY OF SIGNIFICANT ACCOUN_4

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Accounting Policies [Abstract]
Raw materials & deposits	$ 2,400,590	$ 2,179,332
Work-in-process	44,497	84,963
Finished goods	559,237	559,494
Total gross inventories	3,004,324	2,823,789
Less reserve for obsolescence	(309,367)	(155,000)
Total net inventories	$ 2,694,957	$ 2,668,789

SUMMARY OF SIGNIFICANT ACCOUN_5

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Product Information [Line Items]
Total revenues	$ 2,031,866	$ 1,887,488	$ 6,372,526	$ 5,426,667
Product Sales And Supplies [Member]
Product Information [Line Items]
Total revenues	1,832,037	1,677,666	5,720,479	4,794,804
Training Certification And Data Recording [Member]
Product Information [Line Items]
Total revenues	159,052	164,158	489,033	466,218
Service Plans And Equipment Rental [Member]
Product Information [Line Items]
Total revenues	16,563	13,484	54,710	43,778
Product Sales Subtotal [Member]
Product Information [Line Items]
Total revenues	2,007,652	1,855,308	6,264,222	5,304,800
Royalties [Member]
Product Information [Line Items]
Total revenues	1,225	9,941	40,437	56,157
Rental Income [Member]
Product Information [Line Items]
Total revenues	$ 22,989	$ 22,239	$ 67,867	$ 65,710

SUMMARY OF SIGNIFICANT ACCOUN_6

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)		1 Months Ended	3 Months Ended		9 Months Ended
	Jun. 02, 2022	Aug. 31, 2022	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Accounting Policies [Abstract]
Stock-based compensation expense			$ 0	$ 0	$ 17,202	$ 17,157
Number of exchange	$ 61,353
Number of shares exchange	613,530
Stock dividend, shares		613,530
Cash withdrawn					$ 61,353

BASIC AND DILUTED INCOME (LOS_3

BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Earnings Per Share [Abstract]
Net income (loss)	$ (86,972)	$ 522,660	$ (433,010)	$ 816,419
Weighted average shares-basic	2,454,116	2,454,116	2,454,116	2,454,116
Effect of dilutive potential common shares		46,918		39,376
Weighted average shares-diluted	2,454,116	2,501,034	2,454,116	2,493,492
Net income (loss) per share-basic	$ (0.04)	$ 0.21	$ (0.18)	$ 0.33
Net income (loss) per share-diluted	$ (0.04)	$ 0.21	$ (0.18)	$ 0.33
Antidilutive employee stock options

STOCKHOLDERS' EQUITY (Details)

STOCKHOLDERS' EQUITY (Details) - Price Range 1 [Member]	9 Months Ended
	Sep. 30, 2022 $ / shares shares
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Range of Exercise Prices	$ 3.80
Option outstanding | shares	123,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	2 years 9 months 18 days
Weighted average exercise price per share	$ 3.80
Number exercisable | shares	123,000
Weighted average exercise price per share	$ 3.80

STOCKHOLDERS' EQUITY (Details N

STOCKHOLDERS' EQUITY (Details Narrative) - shares	3 Months Ended	9 Months Ended		12 Months Ended
	Sep. 30, 2022	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2019	Dec. 31, 2016	Dec. 31, 2021
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options, granted			20,500
Options, exercised		0	0
Common stock, authorized shares	50,000,000	50,000,000				50,000,000
Officer [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options, granted				25,000	50,000
Two Employees [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options, granted	0	15,000	4,500
Two Officers [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options, granted			16,000
N 2013 Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Options available for grant	20,300	20,300

COMMITMENTS AND CONTINGENCIES_2

COMMITMENTS AND CONTINGENCIES (Details)	Sep. 30, 2022 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2022	$ 12,806
2023	52,178
2024	53,738
2025	55,345
2026	57,000
2027 - 2031	1,068,641
Total	1,299,708
Less financing cost	(18,273)
Net term loan payable	1,281,435
Less current portion	(49,645)
Long term portion	$ 1,231,790

COMMITMENTS AND CONTINGENCIES_3

COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)	1 Months Ended	10 Months Ended
	Sep. 30, 2021	Oct. 31, 2014	Sep. 30, 2022
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Facilities Purchased		$ 1,949,139
Proceeds from term loan	$ 1,350,000
Debt instrument maturity date	September, 2031
Outstanding purchase orders issued to vendors			$ 441,270
Bank Of America [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Term Loan		$ 1,581,106

LINE OF CREDIT AND PAYCHECK P_2

LINE OF CREDIT AND PAYCHECK PROTECTION LOAN (Details Narrative) - USD ($)		9 Months Ended
	May 04, 2020	Sep. 30, 2022
Line Of Credit And Paycheck Protection Loan
Line of credit		$ 750,000
Maturity date		Sep. 28, 2021
Proceeds from loans	$ 465,097	$ 471,347

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Tax Disclosure [Abstract]
Federal statutory rate	$ (24,510)	$ 113,587	$ (120,495)	$ 164,653
State taxes, net of federal tax benefit	5,255	(3,407)	25,224	6,070
Other	(10,487)	(91,950)	(45,508)	(203,084)
Total	$ (29,742)	$ 18,230	$ (140,779)	$ (32,361)

BUSINESS SEGMENTS (Details)

BUSINESS SEGMENTS (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Segment Reporting Information [Line Items]
Revenues	$ 2,031,866	$ 1,887,488	$ 6,372,526	$ 5,426,667
Gross profit	767,915	934,051	2,273,439	2,363,346
Interest expense	10,724	13,568	32,451	40,629
Net income (loss) before taxes	(116,714)	540,890	(573,789)	784,058
Product Sales [Member]
Segment Reporting Information [Line Items]
Revenues	2,007,652	1,855,308	6,264,222	5,304,800
Gross profit	775,122	914,458	2,205,376	2,276,049
Interest expense	7,344	8,914	22,223	26,694
Net income (loss) before taxes	117,474	525,951	(631,624)	710,696
Royalties [Member]
Segment Reporting Information [Line Items]
Revenues	1,225	9,941	40,437	56,157
Gross profit	1,225	9,941	40,437	56,157
Interest expense
Net income (loss) before taxes	12,572	9,941	40,437	56,157
Products Subtotal [Member]
Segment Reporting Information [Line Items]
Revenues	2,008,877	1,865,249	6,304,659	5,360,957
Gross profit	776,347	924,399	2,245,813	2,332,206
Interest expense	7,344	8,914	22,223	26,694
Net income (loss) before taxes	104,902	535,892	(591,187)	766,853
Rentals [Member]
Segment Reporting Information [Line Items]
Revenues	22,989	22,239	67,867	65,710
Gross profit	(8,432)	9,652	27,626	31,140
Interest expense	3,380	4,654	10,228	13,935
Net income (loss) before taxes	$ (11,812)	$ 4,998	$ 17,398	$ 17,205

BUSINESS SEGMENTS (Details Narr

BUSINESS SEGMENTS (Details Narrative)	Sep. 30, 2022 USD ($)
Segment Reporting [Abstract]
Rentals segment	$ 575,671
Rentals segment remainder	$ 7,854,497