Focus Universal(FCUV) - 2019 Q2 - Quarterly Report

Financial Performance - Consolidated gross revenue for Q2 2019 was $420,337, a significant increase from $39,780 in Q2 2018, resulting in a gross profit of $138,385 compared to $30,019 in the prior year[140]. - The company incurred net losses of $490,044 in Q2 2019, down from $1,095,278 in Q2 2018, indicating improved financial performance[145]. - Consolidated gross revenue for the six months ended June 30, 2019, was $663,075, an increase of $554,743 compared to $108,332 for the same period in 2018, primarily due to the acquisition of AVX Design & Integration, Inc. which generated $451,237 in revenue[146]. - Net losses for the six months ended June 30, 2019, were $937,327, a decrease from $1,299,111 in the same period of 2018[151]. - Current assets as of June 30, 2019, were $3,846,077, down from $4,691,904 as of December 31, 2018, resulting in working capital of $3,377,291[152]. - Net cash used in operating activities for the six months ended June 30, 2019, was $(450,906), an improvement from $(528,660) in the same period of 2018[154]. - The company has an accumulated deficit of $4,940,785 as of June 30, 2019, raising concerns about its ability to continue as a going concern[159]. Operating Expenses - Operating expenses for Q2 2019 totaled $630,752, a decrease from $736,381 in Q2 2018, primarily due to a reduction in professional fees from $513,736 to $216,865[142]. - Total operating expenses for the six months ended June 30, 2019, were $1,199,370, an increase of $262,647 from $936,723 in the same period of 2018[148]. - General and administrative expenses rose to $349,170 for the six months ended June 30, 2019, primarily due to increased salaries and depreciation expenses[150]. - Research and development expenses increased to $64,716 in Q2 2019 from $56,771 in Q2 2018, reflecting ongoing product development efforts[143]. - Research and development expenses increased to $126,720 for the six months ended June 30, 2019, from $107,789 in the same period of 2018[149]. Product Development and Innovation - The Ubiquitor device has completed an initial production run of 1,000 units, aimed at demonstrating capabilities to large distributors and consumers[125][126]. - The Ubiquitor is designed to connect up to 2,500 sensor instruments and can operate over 256 different types of sensor heads simultaneously[128][130]. - Focus Universal Inc. is developing an anti-counterfeit authentication technology to address counterfeit production issues in consumer goods[111]. - The company has filed multiple patent applications, including a patent for a "Universal Smart Device" granted on March 20, 2018, enhancing its intellectual property portfolio[131][134]. Market Expansion and Strategy - The company plans to expand its market reach in home automation and installation services following the acquisition of AVX, which has over 20 years of experience in the industry[114]. - The company aims to diversify its marketing initiatives and increase the budget to attract new customers in the home automation sector[114].