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Lifeloc Technologies (LCTC) takes $500,000 secured insider loan for SpinDetect™

Filing Impact
(Moderate)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

Lifeloc Technologies, Inc. entered into a related-party loan transaction with its Chief Financial Officer and Chairman, Vern Kornelsen. The company issued a $500,000 Promissory Note dated May 1, 2026 to fund continued development of its SpinDetect™ product.

The Note carries an initial interest rate of 10.5% per annum, with interest-only payments through December 31, 2026. Starting January 31, 2027, it converts to sixty equal monthly payments of principal and interest, with final maturity on December 31, 2031, and an interest rate that may increase with changes in the prime rate.

The Note may be prepaid at any time without penalty and is secured by a Deed of Trust on Lifeloc’s principal office at 12441 West 49th Avenue, Wheat Ridge, Colorado, and by a security interest in substantially all company assets, both subordinated to existing senior indebtedness to Citywide Banks.

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Insights

Lifeloc adds a secured $500,000 insider loan to fund SpinDetect™ development on subordinated terms.

Lifeloc Technologies has arranged a $500,000 Promissory Note with its CFO and Chairman to support SpinDetect™ product development. The loan bears a relatively high initial interest rate of 10.5% with interest-only payments until December 31, 2026, easing near-term cash outflows.

From January 31, 2027, repayment shifts to sixty equal monthly installments, with final maturity on December 31, 2031. The Note is secured by a Deed of Trust on the company’s principal office and a security interest in substantially all assets, but remains subordinate to senior debt owed to Citywide Banks, preserving the senior lender’s priority.

The insider nature of the transaction highlights reliance on a key executive for financing, but subordination and the ability to prepay without penalty provide flexibility. The floating feature tied to the prime rate introduces some interest cost variability over the life of the loan.

Item 1.01 Entry into a Material Definitive Agreement Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement Financial
The company incurred a new significant debt or off-balance-sheet obligation.
Item 9.01 Financial Statements and Exhibits Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Promissory Note principal $500,000 Principal amount of insider loan dated May 1, 2026
Initial interest rate 10.5% per annum Interest rate on Note, adjustable upward with prime
Interest-only period end December 31, 2026 Date through which only interest payments are required
Installment schedule 60 monthly payments Equal principal and interest installments beginning January 31, 2027
Maturity date December 31, 2031 Final due date for remaining Note balance
Promissory Note financial
"The transaction consists of a Promissory Note dated May 1, 2026"
A promissory note is a written IOU in which one party promises to pay a specific sum, often with interest, to another party by a set date or on demand. Investors care because it functions like a loan: it creates a legal claim on future cash flows, carries credit and timing risk, and can affect valuation or liquidity—think of it as a formal, tradable promise to be repaid that can be assessed like any other debt investment.
Deed of Trust financial
"The Note is secured by a Deed of Trust on the Company’s principal office"
security interest financial
"and by a security interest in substantially all of the Company’s assets"
A security interest is a legal claim a lender or creditor holds on a borrower's asset as collateral to secure repayment; if the borrower fails to pay, the creditor can seize or sell that asset to recover money owed. Think of it like a pawnshop tag on an item that gives the pawnbroker the right to sell it if the loan isn't repaid. For investors, security interests matter because they change how safely lenders and bondholders can recover funds and affect the hierarchy of claims if a company faces financial trouble.
senior indebtedness financial
"in each case subordinate to the Company’s existing senior indebtedness to Citywide Banks"
Senior indebtedness is the portion of a company’s debt that must be repaid before other debts if the company runs into trouble or is liquidated. Think of it like having first dibs on a limited pot of money — lenders holding senior debt are paid first, so their loans are less risky but may carry lower interest. Investors watch senior indebtedness to judge recovery chances and relative risk in a default.
Emerging growth company regulatory
"Emerging growth company"
An emerging growth company is a recently public or smaller public firm that qualifies for temporary, lighter regulatory and disclosure rules to reduce the cost and effort of being public. For investors, it means the company may provide less historical financial detail and face fewer reporting requirements than larger firms, so it can grow more quickly but also carries higher uncertainty—like buying a promising early-stage product with fewer user reviews.
Understanding 8-K Material Events →
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UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549

 

 

FORM 8-K

 

 CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): May 8, 2026 (May 4, 2026)

 

LIFELOC TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

 

Colorado   000-54319   84-1053680
(State or other jurisdiction of incorporation)   (Commission File Number)   (IRS Employer Identification Number)

 

12441 West 49th Ave., Unit 4    
Wheat Ridge, CO   80033
(Address of Principal Executive Offices)   (Zip Code)

 

(303) 431-9500

(Registrant’s telephone number, including area code)

   

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: 

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act: None

  

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 
 

 

Item 1.01Entry into a Material Definitive Agreement.

 

On May 4, 2026, Lifeloc Technologies, Inc. (the “Company”) entered into a loan transaction with Vern Kornelsen, the Company’s Chief Financial Officer and Chairman of the Board. The transaction consists of a Promissory Note dated May 1, 2026 (the “Note”) in the principal amount of $500,000. The proceeds will be used to fund the continued development of the Company’s SpinDetect™ product.

 

The Note bears interest at an initial rate of 10.5% per annum, with interest-only payments through December 31, 2026. Beginning January 31, 2027, the Note is payable in sixty (60) equal monthly installments of principal and interest, with the entire unpaid balance due and payable on December 31, 2031. The interest rate is subject to upward adjustment based on changes in the prime rate. The Note may be prepaid at any time without penalty.

 

The Note is secured by a Deed of Trust on the Company’s principal office located at 12441 West 49th Avenue, Wheat Ridge, Colorado, and by a security interest in substantially all of the Company’s assets, in each case subordinate to the Company’s existing senior indebtedness to Citywide Banks.

 

The foregoing description of the Note does not purport to be complete and is qualified in its entirety by reference to the full text of the Note, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

 

Item 2.03Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

The information set forth under Item 1.01 above is incorporated herein by reference.

 

Item 9.01Financial Statements and Exhibits.

(d) Exhibits.

   

Exhibit No. Description
   
10.1

Promissory Note, dated May 1, 2026, by Lifeloc Technologies, Inc. in favor of Vern Kornelsen

   
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
   

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date:  May 8, 2026 LIFELOC TECHNOLOGIES, INC.
     
  By:   /s/ Wayne Willkomm
    Chief Executive Officer and President

 

 

 

 

Source: View Original Filing on SEC EDGAR

FAQ

What loan did Lifeloc Technologies (LCTC) enter into on May 4, 2026?

Lifeloc Technologies entered into a Promissory Note for $500,000 with its CFO and Chairman, Vern Kornelsen. The funds are designated to support continued development of the company’s SpinDetect™ product, providing additional internal financing for this technology initiative.

What are the key terms of Lifeloc Technologies’ $500,000 Promissory Note?

The Promissory Note carries an initial interest rate of 10.5% per annum with interest-only payments through December 31, 2026. Beginning January 31, 2027, it is repayable in sixty equal monthly installments, with final maturity on December 31, 2031 and no prepayment penalty.

How is the Lifeloc Technologies (LCTC) insider loan secured?

The Note is secured by a Deed of Trust on Lifeloc’s principal office at 12441 West 49th Avenue, Wheat Ridge, Colorado, and by a security interest in substantially all company assets, subordinated to senior indebtedness owed to Citywide Banks.

Who provided the $500,000 financing to Lifeloc Technologies?

The financing was provided by Vern Kornelsen, Lifeloc Technologies’ Chief Financial Officer and Chairman of the Board. This insider loan establishes a related-party transaction documented through a Promissory Note dated May 1, 2026, with terms detailed in the company’s current report.

How will Lifeloc Technologies (LCTC) use the proceeds of the $500,000 Note?

Lifeloc Technologies plans to use the $500,000 loan proceeds to fund continued development of its SpinDetect™ product. This allocation focuses the borrowed capital on advancing the company’s product pipeline in this specific technology area.

Can Lifeloc Technologies prepay the insider Promissory Note?

Yes, the company may prepay the Promissory Note at any time without penalty. This flexibility allows Lifeloc Technologies to reduce interest costs or adjust its capital structure if future cash flows or alternative financing options become available.

Filing Exhibits & Attachments

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