Vern Kornelsen
About Vern Kornelsen
Vern D. Kornelsen is Chairman of the Board, Secretary, and Chief Financial Officer of Lifeloc Technologies (LCTC). He joined the board in 1991 and has served as Chairman, Secretary, and CFO since 2001; he is 92 and holds a BS in business from the University of Kansas, with prior experience as a Certified Public Accountant and financial consultant . Company TSR since 12/31/20 rose from 100.00 to 127.91 by 12/31/24; net income was positive in 2023 but negative in 2024, and revenues declined year-over-year in 2024 .
Company performance (recent fiscal years):
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues ($USD) | $8,481,993* | $9,329,566 | $8,538,145 |
| EBITDA ($USD) | $85,344* | $69,385* | $(1,114,178)* |
| Net Income ($USD) | $(455,757) | $205,614 | $(1,052,948) |
Values with asterisks (*) retrieved from S&P Global.
Total Shareholder Return (Value of initial $100 investment at 12/31):
| Metric | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| TSR ($) | $220.92 | $100.00 | $102.77 | $127.91 |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Lifeloc Technologies | Director; Chairman, Secretary & CFO | Director since 1991; C-Suite since 2001 | Long-tenured financial steward; board leadership |
| Valleylab (electrosurgical units) | Director | 10 years | Led investor group providing initial funding; finance and governance expertise |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Encision Inc. (public) | Director; Audit Committee member | Current | Financial oversight and audit governance |
| Electronic Systems Technology, Inc. (public) | Secretary; Director | Current | Operational governance; potential interlocks with LCTC |
Fixed Compensation
| Year | Base Salary ($) | Target Bonus (%) | Actual Bonus ($) | Stock & Option Awards ($) | All Other ($) |
|---|---|---|---|---|---|
| 2024 | $96,000 | Not disclosed | $0 | $0 | $0 |
| 2023 | $90,000 | Not disclosed | $0 | $0 | $0 |
Performance Compensation
- No performance-based incentives, RSUs/PSUs, or option awards were disclosed for the CFO in 2023–2024; executive cash bonuses apply to the CEO (renewal bonus and 10% plan), not the CFO .
Equity Ownership & Alignment
Beneficial ownership (Vern D. Kornelsen):
| Metric | 2024 (Record 4/24/24) | 2025 (Record 3/31/25) |
|---|---|---|
| Total shares beneficially owned | 1,889,445 | 2,134,245 |
| Percent of class | 75.2% | 77.5% |
| Direct shares | 34,126 | 34,126 |
| EDCO Partners LLLP beneficial shares | 1,855,319 | 2,100,119 |
Notes:
- EDCO Partners LLLP is controlled by Kornelsen (general partner). EDCO holds 57,478 shares on behalf of Mr. Kornelsen and 227,399 shares on behalf of Enroxtech, Inc., of which Mr. Kornelsen is president and has a beneficial interest .
- EDCO purchased 210,000 LCTC shares in a private placement at $3.80 on July 23, 2024 (proceeds: $798,000) .
- On Feb 28, 2025, options exercised by the CEO (37,500) and Controller (3,500) resulted in underlying shares being sold to EDCO Partners LLLP (aggregate 41,000 shares) .
- Anti-hedging: Company discloses no explicit anti-hedging policy; insider trading policy exists with trading windows and preclearance requirements for officers/directors .
Employment Terms
| Provision | Term | Source |
|---|---|---|
| Employment agreement | Not disclosed for CFO | |
| Severance provisions | None; Company discloses no contracts or plans for payments at, following, or in connection with termination or change-in-control for Named Executive Officers | |
| Change-of-control trigger | None disclosed (no single/double trigger; no accelerated vesting terms reported for CFO) | |
| Clawback provisions | Not disclosed | |
| Insider trading controls | Trading windows and preclearance; Section 16 compliance; no short sales permitted |
Board Governance
- Roles: Kornelsen serves as Chairman of the Board and CFO; CEO role is separate (board prefers separation of Chairman and CEO) .
- Committees: Full board acts as compensation and nominating committee; audit committee comprises independent directors (Donald Siecke and Adam Kashenberg), both designated “financial experts” .
- Meetings/attendance: In 2024, board met 4 times in person/by phone and acted by written consent 3 times; directors participated in ≥75% of meetings, and all directors attended all board meetings .
- Independence: Board determined Siecke and Kashenberg are independent under NASDAQ and SEC rules; Kornelsen is not identified as independent .
- Family relationship: Michael J. Kornelsen (non-management director) is Vern Kornelsen’s son .
Director compensation (non-employee; FY 2024):
| Name | Fees Earned ($) | Total ($) |
|---|---|---|
| Robert D. Greenlee | $750 | $750 |
| Michael J. Kornelsen | $1,500 | $1,500 |
| Donald E. Siecke | $1,500 | $1,500 |
| Adam Kashenberg | $750 | $750 |
Related-Party Transactions and Interlocks
- EDCO Partners LLLP (controlled by Kornelsen) purchased 210,000 shares directly from Lifeloc in July 2024 at $3.80; no underwriter/placement agent; proceeds used by Lifeloc .
- EDCO acquired shares from employee option exercises on Feb 28, 2025 (CEO 37,500; Controller 3,500) .
- Merger agreement: Lifeloc and Electronic Systems Technology, Inc. entered into an Agreement and Plan of Merger dated Oct 9, 2025; Kornelsen executed the related Form 8-K as CFO/Secretary . The agreement describes option assumption/conversion mechanics at closing for outstanding company options (not directly applicable to Kornelsen as CFO given no disclosed options) .
Performance & Track Record
- Pay-versus-performance: Reported net income (loss) of $(1,052,948) for 2024; $205,614 in 2023; $(455,757) in 2022; TSR rose to 127.91 by 12/31/24 from 100.00 at 12/31/22 (2021 was 220.92) .
- Operating focus: Continued investment in SpinDx™ drug testing platform with 2024 equipment purchases of $667,738 and commercialization targeting 2026 .
- R&D spend: $2,242,869 in 2024 (vs. $1,835,164 in 2023) to advance SpinDx and sustaining engineering .
Compensation Structure Analysis
- Cash pay concentration: CFO compensation is entirely fixed cash salary in 2023–2024; no equity awards, options, or variable pay reported for CFO .
- No guaranteed severance/COC: Company discloses no severance or change-of-control payments to NEOs, limiting “golden parachute” risk .
- Governance of pay decisions: Full board oversees compensation; Kornelsen excluded from deliberations regarding his own pay .
Risk Indicators & Red Flags
- Control risk: Kornelsen beneficially owns 77.5% of outstanding shares; risk factor notes principal stockholder can control board composition and strategic decisions .
- Dual roles: CFO + Chairman + controlling shareholder; only two independent directors; nominating/compensation handled by full board — independence/oversight considerations .
- Anti-hedging policy gap: Company states it has no explicit anti-hedging policy, which can weaken alignment safeguards despite high ownership .
- Interlocks/M&A: Electronic Systems Technology, Inc. board role and LCTC-EST Merger Agreement indicate potential conflict-of-interest risks that require robust independent oversight and disclosures .
Investment Implications
- Alignment: Kornelsen’s very high ownership (77.5%) and continued accumulation via EDCO indicate strong economic alignment and low sell-pressure from the CFO/chairman; however, concentration of control elevates governance risk for minorities (board independence and related-party scrutiny paramount) .
- Retention: No employment agreement or severance paired with advanced age (92) suggests succession planning and key-person risk considerations; trading windows/preclearance mitigate insider timing risks but not retirement/transition risk .
- Trading signals: EDCO’s private placement and subsequent share purchases from option exercises reflect insider-linked accumulation; the announced EST merger underscores strategic pivot potential with interlock oversight importance .
Values with asterisks (*) retrieved from S&P Global.