Focus Universal(FCUV) - 2018 Q4 - Annual Report

Financial Performance - Consolidated gross revenue for the year ended December 31, 2018 was $308,129, a decrease of 65.7% compared to $898,084 for 2017[246] - Gross profit for the year ended December 31, 2018 was $170,232, slightly down from $171,832 in 2017[246] - Net losses for the year ended December 31, 2018 were $2,024,664, compared to a loss of $626,361 in 2017[252] - For the year ended December 31, 2018, the company reported a net loss of $2,024,665 and negative cash flow from operating activities of $1,411,703[260] Operating Expenses - Operating expenses increased significantly to $1,753,953 in 2018 from $692,362 in 2017, primarily due to a rise in professional fees from $107,899 to $960,846[248][249] - Research and development expenses were $221,510 in 2018, up from $208,238 in 2017, reflecting ongoing investment in product development[248] Cash Flow and Liquidity - Current assets as of December 31, 2018 were $4,691,904, up from $476,985 in 2017, indicating improved liquidity[253] - Working capital increased to $4,479,928 in 2018 from a negative working capital of $(4,805) in 2017[253] - Net cash used in operating activities for the year ended December 31, 2018 was $(1,411,703), compared to $(445,673) in 2017[254] - Net cash outflows from operating activities were $445,673 for the year ended December 31, 2017, primarily due to a net loss of $626,361[255] - The company expects fluctuations in cash flows from operating activities in future periods due to various factors including net revenues and collection of accounts receivable[256] Financing Activities - Net cash provided by financing activities was $10,072,848 in 2018, a significant increase from $500,000 in 2017[254] - The company had net cash inflows from financing activities of $10,072,848 for the year ended December 31, 2018, primarily from the sale of common stocks through private placement[259] Investment Activities - Cash outflow from investing activities amounted to $4,599,792 due to the purchase and improvement of a warehouse in September 2018[258] - The company did not incur any cash flow from investing activities for the year ended December 31, 2017[258] Product Development - The Ubiquitor device has completed an initial production run of 1,000 units, aimed at generating demand from large distributors and consumers[231][232] - The company has devoted substantial resources to research and development for the Ubiquitor and its mobile application[260] Concerns and Classifications - As of December 31, 2018, the company had an accumulated deficit of $4,003,458, raising concerns about its ability to continue as a going concern[260] - There were no off-balance-sheet arrangements as of December 31, 2018[261] - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[262]