Focus Universal(FCUV) - 2019 Q3 - Quarterly Report

Financial Performance - Consolidated gross revenue for Q3 2019 was $332,170, up from $139,102 in Q3 2018, representing a 138% increase[156] - Consolidated cost of revenues for Q3 2019 was $348,371, compared to $81,330 in Q3 2018, leading to a gross profit of ($16,201) in Q3 2019 versus $57,772 in Q3 2018[156] - For the nine months ended September 30, 2019, the company reported a consolidated gross revenue of $995,245, a significant increase of 302% from $247,434 in the same period of 2018[165] - The net loss for the nine months ended September 30, 2019 was $1,820,002, compared to a net loss of $1,641,641 for the same period in 2018, reflecting an increase in losses[172] - Operating expenses for the nine months ended September 30, 2019 totaled $2,074,072, an increase of 55% from $1,338,357 in the same period of 2018[166] Operating Expenses - Total operating expenses for Q3 2019 were $874,702, an increase of $473,083 from $401,619 in Q3 2018[157] - Professional fees rose significantly from $157,013 in Q3 2018 to $399,650 in Q3 2019, an increase of $242,637[161] - Professional fees rose to $971,789 for the nine months ended September 30, 2019, up 35% from $720,910 in 2018, primarily due to legal and consulting expenses related to acquisitions[170] Research and Development - Research and development expenses increased to $66,282 in Q3 2019 from $58,930 in Q3 2018, primarily due to higher personnel salaries[160] Assets and Cash Flow - Current assets decreased to $3,080,972 as of September 30, 2019, down from $4,691,904 as of December 31, 2018, indicating a decline in liquidity[173] - The company’s working capital as of September 30, 2019 was $2,743,347, a decrease from $4,479,928 at the end of 2018[173] - The company incurred net cash used in operating activities of $1,077,666 for the nine months ended September 30, 2019, a slight improvement from $1,139,589 in 2018[175] - Cash outflows from investing activities were $770,793 for the nine months ended September 30, 2019, significantly lower than $4,524,944 in the same period of 2018, reflecting reduced investment activity[177] - The company expects fluctuations in cash flows from operating activities in future periods due to various factors, including revenue changes and accounts receivable collection[176] Intellectual Property and Technology - The company has filed three patents related to the Ubiquitor device and quantum PAR photo sensor technology, enhancing its intellectual property portfolio[127][148][149] - The acquisition of AVX Design and Integration in March 2019 allows the company to integrate the Ubiquitor device into IoT installations, aiming to reduce costs and enhance capabilities[126] - The company plans to focus on developing its universal smart instrumentation technology, which aims to replace traditional measurement instruments at lower costs[125] - The Ubiquitor device can connect up to 2,500 sensor instruments and is designed to collect data in real time at a rate of up to 100Hz per second[141] Business Focus - The company generated significant revenue from agricultural sensors and measurement equipment, which remains its primary business focus[128] - The company has an accumulated deficit of $5,823,460 as of September 30, 2019, raising concerns about its ability to continue as a going concern[179]