Focus Universal’s Buyback for One Executed At 66% Discount
IoT firm provided little additional detail in what it thought would be a belatedly filed report.
November 15, 2022
Fifteen minutes after saying it would not be able to file its latest quarterly report on time, Focus Universal (FCUV), a developer of IoT sensor technology, filed the report on time. In the nine months ended September 30, 2022, Focus Universal’s cash burn (Op cash flow less CapEx) increased approximately 71% to $2.4 million.
Part of the cash burn was to provide an exit to a private shareholder.
In a stock buyback for one, Focus Universal agreed to purchase 400,000 shares for $2 million. The implied repurchase price of $5 per share is noteworthy since on the date the agreement was made, August 10, 2022, Focus Universal’s shares were trading more than 3x higher at $15.25.
Even after a sharp decline, half the repurchase was made October 6, 2022 while shares traded at approximately $9.50. Notably, the company received all 400,000 shares yet paid just half the agreed upon price. The other $1 million owed the private shareholder is due by February 6, 2023.
Since it does not appear the company provided the repurchase agreement as an exhibit, DuDil has contacted Focus Universal to better understand why a shareholder might voluntarily sell company stock at a 66% discount and why half the payment was withheld. We’ll update members when new information is developed.
Related: VVNT, DCI
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