Focus Universal(FCUV) - 2023 Q3 - Quarterly Report

Revenue and Financial Performance - Total revenue for Q3 2023 was $318,370, a significant increase of $257,716 compared to $60,654 in Q3 2022 [213]. - Total revenue for the nine months ended September 30, 2023, was $769,856, compared to $282,463 for the same period in 2022, representing an increase of $487,393 [226]. - Gross profit for Q3 2023 rose to $116,976, up from $18,213 in Q3 2022, reflecting improved margins from IoT Installation Services [213][217]. - Gross profit increased to $238,459 for the nine months ended September 30, 2023, from $39,459 in 2022, reflecting a significant improvement [227]. - Operating expenses for Q3 2023 totaled $1,147,275, an increase of $155,096 compared to $992,179 in Q3 2022 [218]. - Operating expenses decreased to $3,581,218 for the nine months ended September 30, 2023, down from $4,142,634 in 2022, a reduction of $561,416 [228]. - Research and development expenses increased to $305,872 in Q3 2023 from $133,109 in Q3 2022, driven by a higher headcount in R&D [220]. - Research and development costs rose to $925,345 for the nine months ended September 30, 2023, compared to $862,214 in 2022, an increase of $63,131 [230]. - Net losses for Q3 2023 were $968,033, slightly higher than the $942,020 loss in Q3 2022 [225]. - Net losses for the nine months ended September 30, 2023, were $3,100,442, compared to $3,872,247 for the same period in 2022 [234]. - The company had an accumulated deficit of $20,964,470 as of September 30, 2023, compared to $17,864,028 as of December 31, 2022 [243]. - The company has substantial doubt about its ability to continue as a going concern due to recurring losses and negative cash flows [242]. Product Development and Innovation - For the nine months ended September 30, 2023, the company generated significant revenue from agricultural sensors and measurement equipment, which is its primary business [140]. - The company plans to phase out traditional lower-margin products and launch a new line of technology products that have been in development for several years [143]. - The company has completed the designs for several new sensors, including a TDS meter, CO2 sensor, and quantum PAR sensor, which are expected to be cost-effective compared to competitors [147]. - The Ubiquitor device integrates multiple digital sensors and measurement tools into one platform, representing a technological advancement in the IoT marketplace [160]. - The Ubiquitor is designed to connect up to thousands of sensor nodes and is capable of real-time data collection at up to 100 Hz per second [169]. - The Ubiquitor device is designed to cut production costs and reduce the effort required for new sensor product development by utilizing smartphone technology [172]. - Focus Universal Inc. aims to enhance the Ubiquitor by leveraging PLC technology to control hundreds of devices in near real-time for smart home and gardening systems [198]. - The company is developing a 5G wireless communication technology that can achieve low band coverage and an estimated 1 Gbps high band speed using its ultra-narrowband technology [199]. - The company has 18 pending U.S. nonprovisional patent applications and 9 issued U.S. patents, reflecting ongoing innovation efforts [205]. Market Strategy and Sales - The company plans to reveal its Ubiquitor products at the MJBizCon from November 28 to December 1, 2023, and at the California School Business Expo from April 7 to April 10, 2024 [148]. - The company is building a U.S. sales team to market its product lines, including Smart AVX-branded multimedia touch screens and surveillance systems [144]. - Focus Universal Inc. is focusing on IoT installations for both residential and commercial sectors, providing customized solutions for various industries [192]. - The company aims to provide integrated VOIP services to its existing commercial customer base, enhancing communication solutions for small businesses [175]. - The acquisition of AT Tech Systems is expected to enhance the company's IoT Installation Services segment and overall market presence [212]. Financial Technology and Automation - The company has developed a Microsoft-based add-on software to streamline SEC reporting processes, with plans to commercialize it in Q4 2023 or Q1 2024 [150]. - Focus Universal Inc. plans to commercialize its financial reporting automation software by the end of 2023, allowing users to subscribe for a monthly fee [190]. - The company’s automated software solutions include data entry automation, validation checks, and formatted table creation to improve financial reporting accuracy and compliance [185]. Industry Trends and Projections - The IoT sensors market is projected to reach $26 billion by 2026, up from $11.1 billion in 2022, indicating strong growth potential [211]. - The overall enterprise IoT spending increased to $201 billion in 2022, with an expected growth rate of 18.5% in 2023 [211].