~~(Former name or former address and former fiscal year, if changed since last report)~~

Indicate by check mark whether the registrant: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files. Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated ~~filer”,~~filer,” “smaller reporting ~~company”,~~company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ~~(Check one~~

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒

As of ~~November 15, 2021,~~August 12, 2022, registrant had ~~outstanding~~ ~~43,259,741~~43,423,517 shares outstanding of the registrant's common stock at a par value of $0.001 per share.

References in this document to ~~“us,” “we,”~~"us," "we," or ~~“Company”~~"Company" refer to ~~FOCUS UNIVERSAL INC.~~Focus Universal Inc.


	September 30,			December 31,			June 30,			December 31,
	2021			2020			2022			2021
	(Unaudited)						(Unaudited)
ASSETS
Current Assets:
Cash	$	9,535,166		$	583,325		$	6,660,408		$	8,678,665
Accounts receivable, net		303,265			190,556			167,622			177,315
Inventories, net		19,838			42,496
Accounts receivable – related party								88,270			15,176
Inventory								56,258			22,889
Other receivables								0			13,057
Prepaid expenses		146,533			91,253			197,719			301,270
Marketable equity securities								163,490			0
Deposit - current portion		5,968			100,000			5,968			5,968
Total Current Assets		10,010,770			1,007,630			7,339,735			9,214,340

Property and equipment, net		4,377,453			4,492,510			4,310,125			4,353,340
Operating lease right-of-use asset		50,499			86,558			215,750			420,137
Deposits		662			6,630			36,235			33,933

Total Assets	$	14,439,384		$	5,593,328		$	11,901,845		$	14,021,750

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts payable and accrued liabilities	$	371,344		$	198,870		$	187,266		$	293,354
Accounts payable - related party		0			17,471
Other current liabilities		23,631			6,332			12,898			23,902
Customer deposit		271			57,377
Loan, current portion		178,639			194,125			0			132,618
Lease liability, current portion		55,627			53,384			114,119			121,568
Total Current Liabilities		629,512			527,559			314,283			571,442

Non-Current Liabilities:
Lease liability, less current portion		–			41,287			231,271			302,387
Loan, less current portion		88,658			202,735			0			25,929
Other liability		–			17,135			14,735			0
Total Non-Current Liabilities		88,658			261,157			246,006			328,316

Total Liabilities		718,170			788,716			560,289			899,758

Contingencies (Note 13)		–			–

Stockholders' Equity:
Common stock, par value $0.001 per share, 75,000,000 shares authorized; 43,259,741 and 40,959,741 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively		43,259			40,959
Common stock, par value $0.001 per share, 75,000,000 shares authorized; 43,413,517 shares issued and outstanding as of June 30, 2022 and 43,259,741 shares issued and outstanding as of December 31, 2021								43,413			43,259
Additional paid-in capital		23,983,731			14,381,058			26,480,424			24,093,075
Shares to be issued, common shares		1,910,753			98,709			684,920			1,922,753
Accumulated deficit		(12,216,529	)		(9,716,114	)		(15,867,318	)		(12,937,091	)
Accumulated other comprehensive income (loss)								117			(4	)
Total Stockholders' Equity		13,721,214			4,804,612			11,341,556			13,121,992

Total Liabilities and Stockholders' Equity	$	14,439,384		$	5,593,328		$	11,901,845		$	14,021,750

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020			2022			2021			2022			2021
Revenue	$	634,777		$	544,003		$	1,244,779		$	1,267,893		$	62,364		$	256,730		$	187,989		$	610,002
Revenue - related party		0			–			15,141			21,267			2,278			4,950			33,820			15,141
Total Revenue		634,777			544,003			1,259,920			1,289,160			64,642			261,680			221,809			625,143

Cost of Revenue		521,091			384,371			1,021,937			1,035,600

Gross Profit		113,686			159,632			237,983			253,560

Operating Expenses:
Cost and Operating Expenses:
Cost of revenue, excluding depreciation & amortization														57,472			208,583			200,563			500,846
Selling expense		14,776			677			15,734			17,696			17,548			446			55,887			958
Compensation - officers		34,600			34,000			107,700			102,000			34,000			34,000			110,040			73,100
Research and development		55,525			62,039			165,897			194,232			167,361			47,222			729,105			110,372
Professional fees		450,624			243,799			1,121,774			1,071,369			174,341			186,765			535,207			457,475
General and administrative		315,715			294,795			967,160			974,125			819,268			448,199			1,720,216			865,120
Total Operating Expenses		871,240			635,310			2,378,265			2,359,422			1,269,990			925,215			3,351,018			2,007,871

Loss from Operations		(757,554	)		(475,678	)		(2,140,282	)		(2,105,862	)		(1,205,348	)		(663,535	)		(3,129,209	)		(1,382,728	)

Other Income (Expense):
Interest income (expense), net		(14,069	)		(1,878	)		(36,825	)		(1,843	)		256			(15,223	)		250			(22,756	)
Interest (expense) - related party		0			0			0			(81	)
Gain on extinguishment of debt		107,460			0			260,450			0
Change in fair value of warrant liability		(1,284,780	)		0			(1,284,780	)		0
Gain on settlement of derivative liability		550,406			0			550,406			0
Other income		60,783			39,196			150,616			119,453
Unrealized loss on marketable equity securities														(74,626	)		0			(74,626	)		0
Realized gain on marketable equity securities														0			0			10,281			0
Other income (expense), net														218,421			198,613			263,077			242,823
Total other income (expense)		(580,200	)		37,318			(360,133	)		117,529			144,051			183,390			198,982			220,067

Loss before income taxes		(1,337,754	)		(438,360	)		(2,500,415	)		(1,988,333	)		(1,061,297	)		(480,145	)		(2,930,227	)		(1,162,661	)

Income tax expense		0			0			0			0			0			0			0			0

Net Loss	$	(1,337,754	)	$	(438,360	)	$	(2,500,415	)	$	(1,988,333	)	$	(1,061,297	)	$	(480,145	)	$	(2,930,227	)	$	(1,162,661	)

Other comprehensive items
Foreign currency translation gain and (loss)														(431	)		0			121			0

Total comprehensive loss													$	(1,061,728	)	$	(480,145	)	$	(2,930,106	)	$	(1,162,661	)

Weight Average Number of Common Shares Outstanding: Basic and Diluted		43,259,741			40,959,741			43,259,741			40,959,741			43,396,719			40,959,741			43,328,608			40,959,741

Net Loss per common share: Basic and Diluted	$	(0.03	)	$	(0.01	)	$	(0.06	)	$	(0.05	)	$	(0.02	)	$	(0.01	)	$	(0.07	)	$	(0.03	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

CONDENSED CONSOLIDATED STATEMENTS OF ~~CHANGES IN STOCKHOLDERS’~~STOCKHOLDERS' EQUITY

FOR THE THREE AND ~~NINE~~SIX MONTHS ENDED ~~SEPTEMBER~~JUNE 30, ~~2021~~2022 AND ~~2020~~2021

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements


	Nine Months Ended September 30,						Six Months Ended June 30,
	2021			2020			2022			2021
Cash flows from operating activities:
Net Loss	$	(2,500,415	)	$	(1,988,333	)	$	(2,930,227	)	$	(1,162,661	)
Adjustments to reconcile net loss to net cash from operating activities:
Bad debt expense		7,794			6,927			57,147			5,749
Inventories reserve		1,689			(3,853	)
Inventory fair value adjustments								(25,617	)		(1,329	)
Depreciation expense		121,932			121,684			82,063			80,872
Gain on extinguishment of debt		(258,960	)		0
Change in fair value of warrant liability		1,284,780			0
Gain on settlement of derivative liability		(550,406	)		0
Amortization of right-of-use assets		(2,985	)		(1,593	)
Stock-based compensation		36,000			36,000
Stock based compensation - options		320,512			605,150
Unrealized loss on marketable equity securities								74,626			0
Realized gain on marketable equity securities								(10,281	)		0
Gain on forgiveness of debt								(158,547	)		(151,500	)
Stock-based compensation – shares								692,920			0
Stock-based compensation – services								0			24,000
Stock option compensation – options								456,750			213,675
Changes in operating assets and liabilities:
Accounts receivable		(120,503	)		(179,041	)		(47,454	)		40,219
Accounts receivable - related party		0			(22,410	)		(73,094	)		(5,016	)
Inventories		20,969			788			(7,752	)		32,248
Other receivable		0			(200	)		13,057			(2,400	)
Prepaid expenses		(55,280	)		(30,689	)		103,083			(98,821	)
Deposit		100,000			(100,000	)		(4,008	)		100,000
Operating lease right-of-use asset								190,790			23,553
Accounts payable and accrued liabilities		172,474			(34,006	)		(106,104	)		32,400
Accounts payable - related party		(17,471	)		0			0			(17,471	)
Other current liabilities		17,299			(12,334	)		(17,135	)		164
Interest payable - related party		0			(1,750	)
Customer deposit		(57,106	)		(121,852	)		6,131			(52,751	)
Lease liabilities								(60,576	)		(25,228	)
Other liabilities		(17,135	)		0			14,736			0
Net cash flows used in operating activities		(1,496,812	)		(1,725,512	)		(1,749,492	)		(964,297	)

Cash flows from investing activities:
Purchase of property and equipment		(6,875	)		(1,314	)		(39,702	)		0
Purchase of marketable securities								(708,359	)		0
Proceeds from sale of marketable securities								480,524			0
Net cash flows used in investing activities		(6,875	)		(1,314	)		(267,537	)		0

Cash flows from financing activities:
Proceeds from SBA loan		267,297			405,860			0			267,297
Repayment on SBA loan		(137,900	)		0			0			(227	)
Repayment on promissory note		0			(50,000	)
Proceeds from bank loan		1,500,000			0			0			1,500,000
Repayment on bank loan		(1,500,000	)		0
Proceeds from IPO, net		10,326,131			0
Prepayment on bank loan								0			(4,663	)
Net cash flows provided by financing activities		10,455,528			355,860			0			1,762,407

Effect of exchange rate								(1,228	)		0

Net change in cash		8,951,841			(1,370,966	)		(2,018,257	)		798,110

Cash beginning of period		583,325			2,192,870			8,678,665			583,325

Cash end of period	$	9,535,166		$	821,904		$	6,660,408		$	1,381,435

Supplemental cash flow disclosure:
Cash paid for income taxes	$	0		$	0		$	0		$	0
Cash paid for interest	$	42,968		$	1,831		$	6,153		$	19,267

Supplemental disclosure of non-cash financing activities
Cashless warrant	$	1,776,044		$	0

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

Focus Universal Inc. (“Focus”) was incorporated under the laws of the ~~state~~State of Nevada on December 4, 2012 (“Inception”). ItFocus Universal Inc. is a universal smart instrument developer and manufacturer focused on the internet of things (“IoT”) industry, headquartered in ~~the Los Angeles,~~Ontario, California, ~~metropolitan area,~~ specializing in the development and commercialization of novel and proprietary universal smart technologies and ~~instruments.~~instruments that solve problems plaguing the internet of things (“IoT”) industry by: (1) increasing overall chip integration by shifting it to the device level; (2) creating a faster 5G cellular technology by using Ultra-narrowband technology; (3) leveraging ultra-narrowband power line communication (“PLC”) technology; and (4) User Interface Machine auto generation technology. Universal smart technology is an off-the-shelf technology utilizing an innovative hardware integrated platform. The Focus platform provides a unique and universal combined wired and wireless solution for embedded design, industrial control, functionality ~~testing,~~test, and parameter measurement instruments and functions. ~~Our~~The Company’s smart technology software utilizes a smartphone, computer, or a mobile device as an interface platform and display that communicates and works in tandem with a group of external sensors or probes, or both. The external sensors and probes may be manufactured by different vendors, but the universal smart technology functions in a manner that does not require the user to have extensive knowledge of the unique characteristics of the function of each of the sensors and probes. The universal smart instrument Focus developed (the “Ubiquitor”) consists of a reusable foundation component which includes a wireless gateway (which allows the instrument to connect to the smartphone via Bluetooth and WiFi technology), universal smart application software (“Application”) which is installed on the user’s smartphone or other mobile device and allows monitoring of the sensor readouts on the smartphone screen. The Ubiquitor also connects to a variety of individual scientific sensors that collect data, from moisture, light, airflow, voltage, and a wide variety of applications. The data is then sent through a wired or wireless connection, or a combination thereof to the smartphone or other mobile device and the data is organized and displayed on the smartphone screen. The smartphone or other mobile device, foundation, and sensor readouts together perform the functions of many traditional scientific and engineering instruments and are intended to replace the traditional, wired stand-alone instruments at a fraction of their cost. Focus Universal is also developing ultra-narrow band technology that is hopefully capable of overcoming the noise problems communicating through power lines that have hindered the industry for over a century. Focus Universal’s wireless communication technology may allow for longer-range coverage, might be more energy effective and management believes has much faster data sending speeds than the current 5G technology speeds being used.

Perfecular Inc. (“Perfecular”), a wholly-owned subsidiary of Focus, was founded in September 2009 and is headquartered in Ontario, California, and is engaged in designing certain digital sensor products and sells a broad selection of horticultural sensors and filters in North America and Europe.

AVX Design & Integration, Inc. (“AVX”) was incorporated on June 16, 2000 in the state of California. AVX is an ~~internet of things (“IoT”)~~IoT installation and management company specializing in high performance and easy to use Audio/Video, Home Theater, Lighting Control, Automation and Integration. Services provided by AVX include full integration of houses, apartment, commercial complex, office spaces with audio, visual and control systems to fully integrate devices in the low voltage field. AVX’s services also include partial equipment upgrade and installation.

On December 23, 2021, Focus set up a branch in Shenzhen China, Focus Universal (Shenzhen) Technology Company LTD. The subsidiary was registered to be engaged in IoT research and development, equipment sales, and application services, software development and sales, software outsourcing, intelligent agricultural management, intelligent instrumentation sales, and information consulting services. This excludes any projects subject to approval or that require a separate business license in accordance with the local laws. China allows foreign entities to setup wholly owned limited liability companies in China, also known as Wholly Foreign Owned Enterprises (WFOEs), in non “restricted” or “prohibited” industries and business activities. The subsidiary’s business operation has been approved by the local government in Shenzhen to be qualified as a WFOE entity in China. The entity is 100% owned by Focus Universal, Inc.

On January 5, 2022, the Company founded a wholly owned subsidiary named Lusher Bioscientific, Inc. (“Lusher”) Lusher Bioscientific was founded to market to the hydroponic and controlled agriculture market and to assist in the product development of IoT technology products within this sector. As of the date of this filing, the Company has only founded the subsidiary and activities are in the introductory phase.

The accompanying unaudited condensed consolidated financial statements include the accounts of Focus and its wholly-owned subsidiaries, Perfecular Inc. ~~and~~, AVX Design & Integration, Inc., Focus Universal (Shenzhen) Technology Co., LTD and Lusher Bioscientific (collectively, the “Company”, ~~��we”~~“we”, “our”, or “us”). All intercompany balances and transactions have been eliminated upon consolidation. The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

In the long term, the continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to repay its debt obligations, to obtain necessary equity financing to continue operations, and the attainment of profitable operations. For the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, the Company had a net loss of $2,930,227~~2,500,415~~ and negative cash flow from operating activities of $~~1,496,812~~1,749,492. ~~In February, 2021 the Company had obtained a $1,500,000~~ ~~loan from a financial institution and a $1,500,000~~ loan commitment from a private related party. The loan from the financial institution requires monthly payments starting February 2021 and with the final payment due in 2026. The related party loan will accrue interest at 10~~% until~~ ~~March 15, 2022~~, or six months from the date the loan is funded, whichever is later (the “Initial Interest Accrual Date”). Interest on any unpaid principal after Initial Interest Accrual Date shall accrue at a fixed rate of 12% per annum until paid. The Company reserves the right to prepay this loan agreement (in whole or in part) after 6 months of the first day with no prepayment penalty. The Company may make, in its sole discretion, payments of interest only, or interest and principal, provided that the principal is not paid in full prior to six months from the date the loan is funded.

~~The Company raised $11.5 million through an underwritten public offering in September 2021.~~ With the January 1, ~~2021~~2022 beginning cash amount of ~~$583,325 and the loan of $1,500,000,~~$8,678,665, the Company will have enough cash to cover its projected annual cash burn rate of ~~$1,967,074. With~~$3,152,618 which is an ~~underwritten public offering $11.5 million~~increase from the previous year. This is a result of coming off of a year where the company completed an uplisting transaction causing a greater than normal amount of expenditure, especially in ~~September 2021,~~professional fees. Overall, the Company ~~will have adequate reserves to continue operations in 2021 and 2022.~~

~~In 2020 the Company had negative operating cashflow of approximately~~ $1.96 million, mainly resulting from net loss. The Company is currently developing its products and licenses and expects to generate profit once the products and licenses are available for the market, which will begin to alleviate the negative cashflow. Currently, the Company is testing 4 Mbps ultra-narrowband power line communication printed circuit boards, the testing was completed in second quarter of 2021. The ultra-narrowband power line communication products will launch in fourth quarter of 2021. The portable universal smart device is also in the final printed circuit board layout stage, the Company is planning to launch this product in fourth quarter of 2021. Initially, new products would require cash to manufacture and promote. The Company expects to begin generating positive cashflow with the launch of above-mentioned products from second quarter of 2022.

~~Overall, we have~~has adequate cash for the Company to continue operation as a going concern throughout ~~2021 and~~ 2022 ~~with~~without any additional capital ~~raising. Thus,~~raise. As a result, the previous factors raising substantial doubt to continue as a going concern have been ~~alleviated.~~

~~The accompanying consolidated financial statements include~~alleviated for the accounts of the Company and its wholly-owned subsidiaries, Perfecular Inc. and AVX Design & Integration. Focus and Perfecular, collectively “the entities” were under common control; therefore, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805-50-45, the acquisition of Perfecular was accounted for as a business combination between entities under common control and treated similar to a pooling of interest transaction. On March 15, 2019, Focus entered into a stock purchase agreement with AVX whereby Focus purchased 100% of the outstanding stock of AVX. All significant intercompany transactions and balances have been eliminated.following year.

The Company currently has two operating segments. In accordance with ASC 280, Segment Reporting (“ASC 280”), the Company considers operating segments to be components of the Company’s business for which separate financial information is available and evaluated regularly by ~~management~~Management in deciding how to allocate resources and to assess performance. Management reviews financial information presented on aan unaudited condensed consolidated basis for purposes of allocating resources and evaluating financial performance. Accordingly, the Company has determined that it has two operating and reportable segments.

Asset information by operating segment is not presented as the chief operating decision maker does not review this information by segment. The reporting segments follow the same accounting policies used in the preparation of the Company’s unaudited condensed consolidated financial statements.

The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the accompanying unaudited condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources.

The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. Significant estimates in the accompanying financial statements include the lease term impacting right-of use asset and lease liability, useful lives of property and equipment, useful lives of intangible assets, allowance for doubtful accounts, inventory reserves, debt discounts, valuation of derivatives, and the valuation allowance on deferred tax assets. The Company regularly evaluates its estimates and assumptions.

The Company considers all highly liquid investments with a maturity of three months or less to be cash. At times, such investments may be in excess of Federal Deposit Insurance Corporation (FDIC) insurance limit. As of June 30, 2022 and December 31, 2021, approximately $5,719,087 and $7,464,846 of the Company’s cash was not insured by the FDIC. There were no cash equivalents held by the Company ~~at September~~as of June 30, ~~2021~~2022 and December 31, ~~2020.~~2021.

The Company grants credit to clients that sell the Company’s products or engage in construction service under credit terms that it believes are customary in the industry and do not require collateral to support customer receivables. The accounts receivable balances are generally collected within 30 to 90 days of the product sale.

The Company estimates an allowance for doubtful accounts based on historical collection trends and review of the current status of trade accounts receivable. It is reasonably possible that the ~~Company's~~Company’s estimate of the allowance for doubtful accounts will change. As of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, allowance for doubtful accounts amounted to $~~52,313~~143,782 and $~~44,519~~86,635, respectively.

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company limits its exposure to credit loss by investing its cash with high credit quality financial institutions.

Inventory consists primarily of parts and finished goods and is valued at the lower of the inventory’s cost or net realizable value under the first-in-first-out method. Management compares the cost of inventory with its market value and ~~an allowance~~a fair value adjustment is made to write down inventory to market value, if lower. Inventory allowances are recorded for obsolete or slow-moving inventory based on assumptions about future demand and marketability of products, the impact of new product introductions and specific identification of items, such as discontinued products. These estimates could vary significantly from actual requirements, for example, if future economic conditions, customer inventory levels or competitive conditions differ from expectations. The Company regularly reviews the value of inventory based on historical usage and estimated future usage. If estimated realized value of our inventory is less than cost, we make provisions in order to reduce its carrying value to its estimated market value. As of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, inventory ~~reserve~~fair value adjustments amounted to $~~72,251~~43,323 and $~~70,562~~68,940, respectively.

The Company invests part of its excess treasury cash in equity securities and money market funds according to company treasury and investment policies. Marketable securities represent trading securities bought and held primarily for sale in the near-term to generate income on short-term price differences and are stated at fair value. Realized and unrealized gains and losses are recorded in other income (expense), net.

Property and equipment are stated at cost. The cost and accumulated depreciation of assets sold or retired are removed from the respective accounts and any gain or loss is included in earnings. Maintenance and repairs are expensed currently. Major renewals and betterments are capitalized. Depreciation is computed using the straight-line method. Estimated useful lives are as follows:

The Company applies the provisions of FASB ASC Topic 360, Property, Plant, and Equipment, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. ASC 360 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that those fair values are reduced for the cost of disposal. Long-term assets of the Company are reviewed when circumstances warrant as to whether their carrying value has become impaired. The Company considers assets to be impaired if the carrying value exceeds the future projected cash flows from related operations. The Company also re-evaluates the periods of amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. Based on its review at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company believes there was 0 impairment of its long-lived assets.

The Company accounts for stock-based compensation to employees in conformity with the provisions of ASC Topic 718, Stock-Based Compensation. Stock-based compensation to employees consist of stock options, grants, and restricted shares that are recognized in the statement of operations based on their fair values at the date of grant.

The measurement of stock-based compensation is subject to periodic adjustments as the underlying equity instruments vest and is recognized as an expense over the period during which services are received.

The Company calculates the fair value of option grants utilizing the Black-Scholes pricing model and estimates the fair value of the stock based upon the estimated fair value of the common stock. The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest.

The resulting stock-based compensation expense for both employee and non-employee awards is generally recognized on a straight- line basis over the requisite service period of the award.

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value of the warrants was estimated using a Black-Scholes pricing model (see Note 11). The Company does not have any outstanding warrants as of June 30, 2022 and December 31, 2021, respectively.

The Company follows paragraph ASC 825-10-50-10 for disclosures about fair value of its financial instruments and paragraph ASC 820-10-35-37 (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements.

To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

~~Financial~~The following table summarize financial assets ~~are considered Level 2 when their~~and liabilities measured at fair ~~values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.~~value on a recurring basis as of June 30, 2022:

The carrying amount of the Company’s financial assets and liabilities, such as cash, accounts receivable, inventories, other receivable, prepaid expenses, deposit, accounts payable and accrued expenses, other current liabilities, customer deposit, approximate their fair value because of the short maturity of those instruments.

Transactions involving related parties cannot be presumed to be carried out on an ~~arm's-length~~arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in ~~arm's-length~~arm’s-length transactions unless such representations can be substantiated.

However, it is not practical to determine the fair value of advances from stockholders, if any, due to their related party nature.

Other comprehensive income (loss) refers to revenues, expenses, gains and losses that under generally accepted accounting principles are included in comprehensive income but are excluded from net income (loss) as these amounts are recorded directly as an adjustment to stockholders’ equity. The Company’s other comprehensive loss for the six months ended June 30, 2022 and for the years ended December 31, 2021 was comprised of foreign currency translation adjustments.

On September 1, 2018, the Company adopted ASC 606 – Revenue from Contracts with Customers using the modified retrospective transition approach. The core principle of ASC 606 is that revenue should be recognized in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled for exchange of those goods or services. The Company’s updated accounting policies and related disclosures are set forth below, including the disclosure for disaggregated revenue. The impact of adopting ASC 606 was not material to the ~~Condensed~~ Consolidated Financial Statements.

Revenue from the Company is recognized under Topic 606 in a manner that reasonably reflects the delivery of its services and products to customers in return for expected consideration and includes the following elements:

These five elements, as applied to each of the Company’s revenue ~~categories,~~category, is summarized below:

Revenue from our project construction ~~projects~~ is recognized over time using the percentage-of-completion method under the cost approach. The percentage of completion is determined by estimating stage of work completed. Under this approach, recognized contract revenue equals the total estimated contract revenue multiplied by the percentage of completion. Our construction contracts are unit priced, and an account receivable is recorded for amounts invoiced based on actual units produced.

Cost of revenue includes the cost of services, labor and product incurred to provide product sales, service sales and project sales.

Research and development costs are expensed as incurred. Research and development costs primarily consist of efforts to refine existing product models and develop new product models.

The Company follows ASC 850-10 for the identification of related parties and disclosure of related party transactions. Pursuant to ASC 850-10-20 the related parties include: a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of ASC 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The unaudited condensed consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of unaudited condensed consolidated financial statements is not required in those statements. The disclosures shall include: (a) the nature of the relationship(s) involved; (b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the unaudited condensed consolidated financial statements; (c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

The Company follows ASC 450-20 to report accounting for contingencies. Certain conditions may exist as of the date the unaudited condensed consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’sunaudited condensed consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

The Company accounts for income taxes in accordance with ASC Topic 740, Income ~~Taxes (ASC 740).~~Taxes. ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, the Company does not foresee generating taxable income in the near future and utilizing its deferred tax asset, therefore, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is ~~more~~greater than 50% likely ~~to be~~of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax positions for any of the reporting periods presented.

Income taxes are accounted for using the asset and liability method. Deferred income taxes are provided for temporary differences in recognizing certain income, expense and credit items for financial reporting purposes and tax reporting purposes. Such deferred income taxes primarily relate to the difference between the tax basis of assets and liabilities and their financial reporting amounts. Deferred tax assets and liabilities are measured by applying enacted statutory tax rates applicable to the future years in which deferred tax assets or liabilities are expected to be settled or realized. There was no material deferred tax asset or liabilities as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020.~~2021.

As of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company did 0t identify any material uncertain tax positions.

Net income (loss) per share is computed pursuant to ASC 260-10-45. Basic net income (loss) per share (“EPS”) is computed by dividing net income (loss) by the weighted average number of shares outstanding during the period.

Diluted EPS is computed by dividing net income (loss) by the weighted average number of shares of stock and potentially outstanding shares of stock during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants.

Due to the net loss incurred by the Company, potentially dilutive instruments would be anti-dilutive. Accordingly, diluted loss per share is the same as basic loss for all periods presented. The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive.

The Company follows the guidance in ASC 855-10-50 for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR. Based upon the review, other than described in Note 14 – Subsequent Events, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the condensed consolidated financial statements.

Certain reclassifications have been made to the unaudited condensed consolidated financial statements for prior years to the current year’s presentation. Such reclassifications have no effect on net income as previously reported.

The reporting and functional currency of Focus is the USD. The functional currency of Focus Universal (Shenzhen) Technology Co. LTD, a wholly owned subsidiary of Focus located in China, is the Renminbi (“RMB”).

For financial reporting purposes, the financial statements of the Company’s Chinese subsidiary, which are prepared using the RMB, are translated into the Company’s reporting currency, USD. Assets and liabilities are translated using the exchange rate on the balance sheet date. Revenue and expenses are translated using average exchange rates prevailing during each reporting period. Stockholders’ equity is translated at historical exchange rates. Adjustments resulting from the translation are recorded as a separate component of accumulated other comprehensive loss in stockholders’ equity.

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transactions. The resulting exchange difference, presented as foreign currency transaction loss, is included in the accompanying unaudited condensed consolidated statements of operations. The exchange rates used for unaudited condensed consolidated financial statements are as follows:

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-02, Leases (Topic 842) (“Topic 842”), which requires lessees to recognize leases on the balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU 2018-10, Codification Improvements to Topic 842, Leases; ASU 2018-11, Targeted Improvements; and ASU 2019-01, Codification Improvements. The new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of income.

The new standard was effective for the Company on January 1, 2019. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company adopted the new standard on January 1, 2019 and used the effective date as its date of initial application. Consequently, prior period financial information has not been recast and the disclosures required under the new standard have not been provided for dates and periods before January 1, 2019.

The new standard provides a number of optional practical expedients in transition. The Company elected the “package of practical expedients,” which permits it not to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements, the latter not being applicable to the Company. The new standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, it has not recognized ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. The Company also elected the practical expedient to not separate lease and non-lease components for all of its leases.

The Company believes the most significant effects of the adoption of this standard relate to (1) the recognition of new ROU assets and lease liabilities on its consolidated balance sheet for its office operating leases and (2) providing new disclosures about its leasing activities. There was no change in its leasing activities as a result of adoption.

In June ~~2018,~~2016, the FASB issued ASU ~~2018-07, Stock Compensation~~No. 2016-13, (Topic ~~718): Improvements~~326), Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments which amends the current accounting guidance and requires the use of the new forward-looking “expected loss” model, rather than the “incurred loss” model, which requires all expected losses to ~~Nonemployee Share-Based Payment Accounting, which simplifies~~be determined based on historical experience, current conditions and reasonable and supportable forecasts. This guidance amends the accounting for ~~share-based payments granted to nonemployees~~credit losses for ~~goods~~most financial assets and ~~services~~certain other instruments including trade and aligns most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees. ASU 2018-07 is effective on January 1, 2019. Early adoption is permitted. The adoption of this ASU did not have a material impact on the Company’s condensed consolidated financial statements.

other receivables, held-to-maturity debt securities, loans and other instruments. In ~~December~~November 2019, FASB issued ASU 2019-12, Income Taxes, which provides for certain updates to reduce complexity in the accounting for income taxes, including the utilization of the incremental approach for intra-period tax allocation, among others. The amendments in ASU 2019-12 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The adoption of this ASU did not have a material effect on its condensed consolidated financial statements.

~~In June 2020,~~ the FASB issued ASU ~~2020-05 in response~~No. 2019-10 to the ongoing impacts to U.S. businesses in response to the COVID-19 pandemic. ASU 2020-05, Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842) Effective Dates for Certain Entities provide a limited deferral ofpostpone the effective ~~dates~~date of ASU No. 2016-13 for ~~implementing previously issued ASU 606 and ASU 842~~public business entities eligible to ~~give some relief to businesses considering~~be smaller reporting companies defined by the ~~difficulties they are facing during the pandemic. These entities may defer application~~SEC to fiscal years beginning after December 15, ~~2019, and~~2022, including interim periods within those fiscal ~~years beginning after December 15, 2020. As the Company has already adopted ASU 606 and ASU 842, the Company does not anticipate any effect on its financial statements.~~

In June 2016, FASB issued ASU 2016-13, Financial Instruments - Credit Losses, which changes the accounting for recognizing impairments of financial assets. Under the new guidance, credit losses for certain types of financial instruments will be estimated based on expected losses. The new guidance also modifies the impairment models for available-for-sale debt securities and for purchased financial assets with credit deterioration since their origination. In February 2020, the FASB issued ASU 2020-02, Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842), which amends the effective date of the original pronouncement for smaller reporting companies. ASU 2016-13 and its amendments will be effective for the Company for interim and annual periods in fiscal years beginning after December 15, 2022.years. The Company believes the adoption of ASU No. 2016-13 will ~~modify the way the Company analyzes financial instruments, but it does~~ not ~~anticipate~~have a material impact on its financial position and results of operations. ~~The Company is in the process of determining the effects the adoption will have on its condensed consolidated financial statements.~~

Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.

At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, inventory consisted of the following:

Schedule of Inventory

	September 30, 2021			December 31, 2020			June 30, 2022		December 31, 2021
Parts	$	42,110		$	45,509		$	21,480	$	12,470
Finished goods		49,979			67,549			34,778		10,419
Total		92,089			113,058
Less inventory reserve		(72,251	)		(70,562	)
Inventory, net	$	19,838		$	42,496
Inventory							$	56,258	$	22,889

Deposit balance as of ~~September~~June 30, ~~2021~~2022 amounted to $~~6,630~~ ~~for lease agreement and utility deposit. Deposit balance as of December 31, 2020 amounted to $106,630, including $6,630~~42,203 for lease agreement and utility deposit and third-party payroll service deposit. Deposit balance as of December 31, 2021 amounted to $~~100,000~~39,901 for payment made into an escrow account for purchasing a target company. On March 26, 2021, the management of target company decided to terminate the LOI. The LOI was terminated effective as of March 29, 2021lease agreement and $~~100,000~~ ~~was returned on March 29, 2021.~~utility deposit.

At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, property and equipment consisted of the following:

Schedule of property and equipment

	September 30, 2021			December 31, 2020			June 30, 2022			December 31, 2021
Warehouse	$	3,789,773		$	3,789,773		$	3,789,773		$	3,789,773
Land		731,515			731,515			731,515			731,515
Building Improvement		238,666			238,666
Building improvement								240,256			238,666
Furniture and fixture		27,631			27,631			38,103			27,631
Equipment		55,253			48,378			98,109			71,368
Software		1,995			1,995			1,995			1,995
Total cost		4,844,833			4,837,958			4,899,751			4,860,948
Less accumulated depreciation		(467,380	)		(345,448	)		(589,626	)		(507,608	)
Property and equipment, net	$	4,377,453		$	4,492,510		$	4,310,125		$	4,353,340

Depreciation expense for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 amounted to $~~121,932~~82,063 and $~~121,684~~80,872, respectively.

The Company purchased a warehouse in Ontario, California in September 2018 and leased an unused portion to a third party. The tenant paid $12,335 as a security deposit, ~~included in~~shown as non-current liabilities as of June 30, 2022 and other liability in other current ~~liabilities as of September 30, 2021 and non-current liabilities~~liability as of December 31, ~~2020.~~2021.

Revenue generated from Vitashower Corp., a company owned by the ~~CEO’s~~Chief Executive Officer’s wife, amounted to $~~15,141~~31,542 and $~~21,267~~15,141 for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively. Account receivable balance due from Vitashower Corp. amounted to $085,992 and $015,176 as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. Purchases generated from Vitashower Corp. amounted to $~~3,379~~0 and $0 for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and 2021, respectively. There were accounts payable balances of $0 and $~~17,371~~0 due to Vitashower Corp. as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

Service revenue generated from one of the Company’s directors, amounted to $2,278 and $0 for the six months ended June 30, 2022 and 2021, respectively. Account receivable balance due from this director amounted to $2,278 and $0 as of June 30, 2022 and December 31, 2021, respectively.

Compensation for services provided by the President and Chief Executive Officer for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 amounted to $~~90,000~~60,000 and $~~90,000~~60,000, respectively. Of subsequent note, Tianjin Guanglee was once owned by the Chief Executive Officer Desheng Wang, as fully disclosed in the annual report in 2017. Since then, during 2018, the entity was transferred to another individual and was not considered a related party transaction per guidelines, and further subsequent changes to the vendor are noted in Note 8 found below.

~~One customer~~Three customers accounted for 39~~% and~~ 034% of the total accounts receivable as of ~~September~~June 30, ~~2021~~2022 and ~~December 31, 2020, respectively. This~~one customer accounted for 8148% ~~and~~of the total accounts receivable as of December 31, 2021, respectively. These three customers accounted for 5054% of the total revenue for the ~~period~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~one customer accounted for 78% of total revenue for the six months ended June 30, 2021, respectively.

One vendor, Tianjin Guanglee, accounted for ~~100~~0% and 0% of total accounts payable at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively. This same vendor, Tianjin Guanglee, accounted for 8324% and 6177% of the total purchases for the ~~period~~six months ended ~~September~~June 30, 2022 and 2021, ~~and 2020,~~ respectively. Of subsequent note, Tianjin Guanglee was once owned by the Chief Executive Officer Desheng Wang, as fully disclosed in the annual report in 2017. In 2018, Dr. Wang transferred the ownership of the entity to an unrelated third party in a transaction not considered a related party transaction per the guidelines.

Note 9 – ~~Operating~~ Lease ~~Right-of-use Asset and Operating Lease Liability~~

Operating lease right-of-use assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value is our incremental borrowing rate, estimated to be 15%, as the interest rate implicit in our lease is not readily determinable. During the nine months ended September 30, 2021 and 2020, the Company recorded $48,885 and $48,885, respectively as operating lease expense.

The Company ~~currently has~~recorded its operating lease expense of $237,045 and $32,590 for the six months ended June 30, 2022 and 2021, respectively.

On April 8, 2015, AVX Design & Integration Inc. entered an eighty-six month commercial lease with a ~~lease agreement~~third party for ~~AVX’s operation for a monthly payment of $5,258 and shall increase by 3% every year.~~an approximately 2,592 square foot office space. The lease commenced on July 1, 2015, and ~~expires~~will end on August 31, 2022. ~~A security deposit~~The monthly rent is $4,536 with approximately a 3% increase rate in each additional year. The incremental borrowing rate for a lease is the rate of ~~$5,968 was also held~~interest the Company would have to pay on a collateralized basis to borrow an amount equal to the lease payments for the ~~duration~~asset under similar term, which is 15%. Lease expense for the lease is recognized on a straight-line basis over the lease term. As of August, the company has not entered into any new commercial lease for AVX Design & Integration Inc.

On December 7, 2021, Focus Universal (Shenzhen) Technology Co. LTD entered into a thirty-eight month commercial lease with a third party for an approximately 5,895 square foot office space. The lease commenced on December 25, 2021 and will end on February 28, 2025. The monthly rent is RMB70,097 (approximately $11,053) with approximately an 11.1% to 12.5% increase rate in each additional year. The incremental borrowing rate for a lease is the rate of interest the Company would have to pay on a collateralized basis to borrow an amount equal to the lease payments for the asset under similar term, which is 10%. Lease expense for the lease is recognized on a straight-line basis over the lease term.

~~In adopting ASC Topic 842, Leases (Topic 842),~~Operating lease right-of-use assets represent the ~~Company has elected~~Company’s right to use an underlying asset for the ~~‘package~~lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. As of ~~practical expedients,’ which permit it not to reassess under the new standard its prior conclusions about~~June 30, 2022 and December 31, 2021, operating lease ~~identification,~~right-of use assets and lease classification and initial direct costs. The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements; the latter is not applicable to the Company. In addition, the Company elected not to apply ASC Topic 842 to arrangements with lease terms of 12 months or less. On March 15, 2019 when AVX was acquired, upon adoption of ASC Topic 842, the Company recorded a right-of-use asset.

~~Maturity of~~The minimum future lease ~~liability is~~payments are as follows:

On April 24, 2020, AVX Design & Integration, Inc. entered into an agreement to receive a U.S. Small Business Administration Loan (“SBA Loan”) from JPMorgan Chase Bank, N.A. related to the COVID-19 pandemic in the amount of $~~107,460, which we received on May 1, 2020. The SBA Loan has a fixed interest rate of~~ ~~0.98~~ ~~percent per annum and a maturity date two years from the date the loan was issued. On July 8, 2021, SBA authorized full forgiveness of this loan and the Company recognized principal amount of $107,460~~ ~~and $1,267~~ ~~interest to other income.~~

~~On May 4, 2020, Perfecular Inc. entered into an agreement to receive a U.S. Small Business Administration Loan (“SBA Loan”) from Bank of America related to the COVID-19 pandemic in the amount of $151,500, which we received on May 4, 2020. The SBA Loan has a fixed interest rate of~~ 1 ~~percent per annum and a maturity date two years from the date loan was issued. On April 28, 2021, SBA authorized full forgiveness of this loan and the Company recognized principal amount of $151,500~~ ~~and $1,490~~ ~~interest to other income.~~

On March 2, 2021, Perfecular Inc. entered into an agreement to receive a U.S. Small Business Administration Loan (“SBA Loan”) from Wells Fargo related to the COVID-19 pandemic in the amount of $158,547, which we received on March 3, 2021. The SBA Loan has a fixed interest rate of 1percent per annum and a maturity date two years from the date loan was issued. ~~The balance~~On April 4, 2022, the SBA authorized full forgiveness of this loan principal ~~and interest were~~amount of $158,547 and $~~927, respectively, due as of September 30, 2021. There were no principal and interest due as of December 31, 2020.~~

~~On March 10, 2021, AVX Design & Integration, Inc. entered into an agreement to receive an SBA Loan from Chase Bank related to the COVID-19 pandemic in the amount of $108,750. The SBA Loan has a fixed interest rate of~~ ~~0.98~~ ~~percent per annum and a maturity date five years from the date loan was issued. The balance of principal and interest were $108,750~~ ~~and $623, respectively, due as of September 30, 2021. There were no principal and interest due as of December 31, 2020~~

On June 4, 2020, Perfecular Inc. entered into an agreement to receive a U.S. Small Business Administration Loan (“SBA Loan”) from Bank of America related to the COVID-19 pandemic in the amount of $~~81,100, which we received on June 4, 2020. The SBA Loan has a fixed interest rate of~~ ~~3.75~~ ~~percent per annum and a maturity date thirty years from the date loan was issued. On September 13, 2021, the Company paid this loan off with loan principal amount of $81,100~~ ~~and $3,624~~ ~~interest.~~

On June 5, 2020, AVX Design & Integration, Inc. entered into an agreement to receive a U.S. Small Business Administration Loan (“SBA Loan”) from JPMorgan Chase Bank, N.A. related to the COVID-19 pandemic in the amount of $~~56,800, which we received on June 5, 2020. The SBA Loan has a fixed interest rate of~~ ~~3.75~~ ~~percent per annum and a maturity date thirty years from the date loan was issued. On September 22, 2021, the Company paid this loan off with loan principal amount of $56,800~~ ~~and $2,743~~1,570 interest.

~~On January 8, 2021, Focus Universal Inc. entered into a secured promissory note agreement with East West Bank in the amount of $1,500,000. The note has a variable interest rate of~~ ~~0.25% above Wall Street Journal Prime Rate. The note requires monthly payments with the final payment of $1,357,178~~ ~~due on~~ ~~January 22, 2026. On September 22, 2021, the Company paid this loan off with loan principal amount of $1,500,000~~ ~~and $32,366~~ ~~interest.~~

Economic Injury Disaster Loan

Schedule of debt
	September 30, 2021			December 31, 2020			June 30, 2022		December 31, 2021
SBA Loan	$	267,297		$	396,860		$	0	$	158,547
Less: current portion		(178,639	)		(194,125	)		0		(132,618	)
Long term portion	$	88,658		$	202,735		$	0	$	25,929

Interest expense incurred from the loans amounted to $~~37,238~~288 and $~~2,290~~22,827 for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021, ~~and 2020,~~ respectively.

Upon formation, the total number of shares of all classes of stock that the Company is authorized to issue is seventy-five million (75,000,000) shares of common stock, par value $0.001 per share.

During the ~~nine~~six months ended June 30, 2022, the Company issued 153,776 shares of common stock.

On April 4, 2022, the Company issued 121,149 shares of its Common Stock to Boustead Securities LLC. (“Boustead”), which is the warrants exercised by Boustead on September ~~30,~~7, 2021 with the exercise price $6.25 and the shares were valued at $1,776,044 upon cashless exercise option of warrants related to completion of the Company’s public offering.

On May 2, 2022, the Company issued 32,627 shares to consultants in exchange for professional services rendered. The shares were valued at $154,709 based on the closing price of the Company’s common stock on the dates that the shares were deemed earned, according to the agreements.

During the year ended December 31, 2021, the Company issued 2,300,000 shares of common stock.

On September 2, 2021, the Company closed its initial public offering (“IPO”) under a registration statement effective August 30, 2021, in which it issued and sold 2,000,000 shares of its Common Stock at a purchase price of $5.00 per share.

On September 2, 2021, the Company closed on the IPO’s overallotment option, selling an additional 300,000 shares of Common Stock to the IPO’s underwriters at the public offering price of $5.00 per share. The Company received net proceeds of approximately $10.3 million from the IPO after deducting underwriting fee and offering expenses.

As of ~~September~~June 30, ~~2021~~2022 and December 31, 2021 and 2020, the Company had 43,413,517 shares and 43,259,741 ~~and~~ ~~40,959,741~~shares of common stock issued and outstanding, respectively.

The Company entered into agreements with third party consultants for financing and management consulting. The Company has incurred consulting service fees not paid in cash amounting to $~~36,000~~8,000 for the ~~nine~~three months ended ~~September~~June 30, ~~2021,~~2022, which the Company intends to issue stock as compensation for services rendered. Expenses incurred ~~but not yet~~and paid in shares as of ~~September~~June 30, ~~2021 and December 31, 2020~~2022 amounted to $~~134,709~~154,709 ~~and $98,709, respectively.~~.

On August 30, 2021, the Company entered into a Representative Common Stock Purchase Warrant agreement (“Warrant Agreement”) with its placement agent, Boustead ~~Securities LLC. (“Boustead”)~~ for 161,000 shares and the exercise price is $6.25. Boustead exercised the warrants on September 7, 2021. The fair value of the warrants was ~~$1,041,670~~$1,041,670 and ~~$2,326,450~~$2,326,450 as of August 30 and September 7, 2021, respectively. For the ~~nine months~~year ended ~~September 30,~~December 31, 2021, the Company recorded a loss from change in the fair value of warrant liability which amounted to a difference of $1,284,780~~$1,284,780.~~.

These warrants were valued using a Black-Scholes pricing model with the following assumptions:

	August 30,
Schedule of assumptions
	2021 (Initial		September 7,		August 30, 2021 (Initial		September 7,
	Measurement)		2021		Measurement)		2021
Risk-free interest rate		0.77%		0.82%		0.77%		0.82%
Expected term		5 years		5 years		5 years		5 years
Expected volatility		194.37%		204.27%		194.37%		204.27%
Expected dividend yield		0%		0%		0%		0%
Fair value of units (using Black-Scholes)	$	6.47	$	14.45	$	6.47	$	14.45

This Warrant Agreement allowed for cashless exercise option, which is calculated by the percentage difference between exercise and trading price, which resulted in a reduced number of warrants being exercisable. On September 7, 2021, Boustead exercised 121,149 ~~shares~~warrants with fair value of $1,776,044 upon cashless exercise option of warrants related to completion of the Company’s public offering. The shares will be issued six months after these warrants have been exercised. For the ~~nine months~~year ended ~~September 30,~~December 31, 2021, the Company has a gain on settlement of derivative liability which amounted to $550,406. ~~Shares~~121,149 shares were issued to ~~be issued~~Boustead which amounted to $17,776,044 as of ~~September~~June 30, 2022.

On February 11, 2022 (“Vesting Date”), the Company entered into a Restricted Stock Award Agreement (“Award Agreement”) with nine employees for 290,000 shares of the $0.001 par value voting common stock subject to the terms and to the fulfillment of the conditions set in the plan. The first 20% of the restricted shares was granted and vested on February 11, 2022. 20% of the restricted shares will vest on each anniversary of the Vesting Date until fourth anniversary of the Vesting Date. There were 58,000 shares granted as of March 31, 2022. The fair value of above employee compensation was $609,580 as of June 30, 2022.

In November 2021, the Company entered into a one-year employment agreement with VP of Finance and ~~December 31, 2020 amounted~~Head of Investor Relations of the Company, pursuant to ~~$1,776,044~~which the Company rewards 10,000-share bonus consisting of shares of $0.001 par value voting common stock, which will be granted in 2,500 blocks every quarter based on certain performance metrics.

During the six months ended June 30, 2022, the Company recognized VP of Finance and ~~$0,~~Head of Investor Relations of the Company employee compensation amount of $75,340. During the six months ended June 30, 2022 and 2021, the Company total employee compensation amount were $684,920 and $0, respectively.

On August 6, 2019, each member of the Board was granted 30,000 options to purchase shares at $5.70 per share.

On January 4, 2021, each member of the Board was granted 15,000 options to purchase shares at $3.00per share.

On ~~August 6, 2019,~~December 31, 2021, each member of the Board was granted ~~30,000~~ 15,000options to purchase shares at $~~5.70~~8.86 per share.

As of ~~September 30,~~December 31, 2021, there were ~~315,000~~420,000 options granted, ~~288,750~~315,288 options vested, ~~26,250~~104,713 options unvested, and ~~315,000~~420,000 outstanding stock options.

For the ~~nine~~six months ended ~~September 30,~~June 31, 2022 and 2021, ~~and 2020,~~ the Company’s stock option compensation expenses amounted to $~~320,512~~456,750 and $~~605,150~~213,675, respectively.

The fair value of the stock options listed above was determined using the Black-Scholes option pricing model with the following assumptions:

Schedule of assumptions

	September 30,		September 30,
Schedule of option activity
	2021		2020		June 30, 2022		June 30, 2021
Risk-free interest rate		0.93%		1.71%		0.93 – 1.52%		0.93%
Expected life of the options		10 years		10 years		10 years		10 years
Expected volatility		122.93%		158.86%		122.93 – 148.18%		122.93%
Expected dividend yield		0%		0%		0%		0%

The following is a summary of ~~options~~the option activity from December 31, ~~2020~~2021 to ~~September~~June 30, ~~2021:~~2022:

~~The exercise price for options outstanding and exercisable at September 30, 2021:~~

The Company consists of two types of operations. Focus Universal, Inc. (“Corporate”) involves operations related to research and development of technology products, non-specific financing, executive expense, operations and investor relations of the public entity, and general shared management and costs across subsidiary units which spread across all functional categories. Perfecular Inc. (“~~Focus”~~Perfecular”) involve wholesale, ~~research~~marketing, and ~~development~~production of universal smart instrument and ~~farming devices.~~devices in the hydroponic and controlled agricultural segments. AVX Design & Integration, Inc. (“AVX”) is an IoT installation and management company specializing in high performance and easy to use audio/video, home theater, lighting control, automation, and integration. The table below discloses income statement information by segment.

In the normal course of business or otherwise, the Company may become involved in legal proceedings. The Company will accrue a liability for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated. When only a range of possible loss can be established, the most probable amount in the range is accrued. The accrual for a litigation loss contingency might include, for example, estimates of potential damages, outside legal fees, and other directly related costs expected to be incurred. There were no recorded litigation loss contingencies as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020.~~2021.

~~On October 22, 2021, SBA authorized~~Regarding election of directors, on August 10, 2022, the Board of Directors appointed Sean Warren to serve on the Board of Directors as an independent director. The appointment of Mr. Warren fills a board seat previously vacated by Mr. Greg Butterfield. As a director, Mr. Warren’s term begins August 10, 2022, and expires at the annual meeting of the stockholders to be held in 2023. It has been determined and accepted that Mr. Warren will serve as a member on the audit and compensation committees of the Board of Directors. Mr. Warren will have the same compensation arrangement for his service as the other independent directors. That compensation currently consists of cash compensation and an option grant.

Mr. Sean Warren is a seasoned executive with over 25 years of experience in technology and enterprise technology systems and has previously served on Focus Universal’s board of directors beginning on June 8, 2018. His areas of expertise include software development, cloud management, enterprise infrastructure development and full ~~forgiveness~~spectrum of ~~AVX Design & Integration,~~IT compliance. Mr. Warren currently serves as the Vice President of OPSA Change Delivery for Wells Fargo and has since 2019. From 2016 to 2018, he served as Director of IT Operations at Domo, Inc. ~~PP loan principal amount~~Mr. Warren has also previous served as the CIO of ~~$108,750~~Mountain Medical, Veyo Medical and ~~$651 interest~~Vice President of IT at Larry Miller. He has also worked for technology companies including Omniture, Adobe. Mr. Warren graduated from Florida State University with a degree in accounting. He is qualified to serve as a director because of his accounting experience, his experience serving on public company boards and experience with the financial industry and information technology.

The Company has evaluated other subsequent events through the date these unaudited condensed consolidated financial statements were issued and determined that there were no other subsequent events or transactions other than this election of director event that require recognition or disclosures in the unaudited condensed consolidated financial statements.

ITEM 2. ~~MANAGEMENT’S~~MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF ~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~OPERATION

The following discussion of our financial condition and results of operations should be read in conjunction with, ~~our audited~~and is qualified in its entirety by, the consolidated financial statements and notes thereto included ~~herein. In connection with, and because we desire to take advantage of, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, we caution readers regarding certain~~in, Item 1 in this Quarterly Report on Form 10-Q. This item contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those indicated in such forward-looking statements.

This Quarterly Report on Form 10-Q and the ~~following discussion~~documents incorporated herein by reference contain forward-looking statements. Such forward-looking statements are based on current expectations, estimates, and ~~elsewhere~~projections about our industry, management beliefs, and certain assumptions made by our management. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” variations of such words, and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict; therefore, actual results may differ materially from those expressed or forecasted in ~~this report~~any such forward-looking statements. Unless required by law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. However, readers should carefully review the risk factors set forth herein and in ~~any~~ other ~~statement made by, or on our behalf, whether or not in future filings~~reports and documents that we file from time to time with the Securities and Exchange ~~Commission. Forward-looking statements are statements not based~~Commission, particularly the Report on ~~historical information~~Form 10-K, Form 10-Q and which relate to future operations, strategies, financial results, or other developments. Forward-looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any ~~forward-looking statements made by, or~~Current Reports on ~~our behalf. We disclaim any obligation to update forward-looking statements.~~Form 8-K.

Focus Universal Inc. (the “Company,” “we,” “us,” or “our”) is a Nevada corporation. We have developed ~~four fundamental disruptive~~five proprietary technologies ~~that~~utilizing our patent portfolio which we believe solve the most fundamental problems plaguing the internet of things (“IoT”) industry through: (1) increasing overall chip integration by shifting itintegration from the component level to the device level; (2) creating a faster 5G cellular technology by using ultra-narrowband technology; (3) leveraging ultra-narrowband power line communication (“PLC”) technology; ~~and~~ (4) proprietary User Interface Machine auto generation ~~technology.~~

technology; and (5) incorporating all our core technologies into a single chip. Our Universal Smart Technology is designed to overcome instrumentation interoperability and interchangeability. The electronic design starts from a 90% completed common foundation we call our universal smart instrumentation platform (“USIP”), instead of the current method of building each stand-alone instrument from scratch. Our method eliminates redundant hardware and software and results in significant cost savings and production efficiency. We have developed software machine auto generation technology to replace the manual software designs which are currently in use and cannot satisfy the exponential growth of future IoT industry demand. Our ultra-narrowband PLC enables our users to send data over existing electricity power cables and immediately establish a ubiquitous data network without substantial new investment for a dedicated wiring infrastructure. Our ultra-narrow band technology is capable of overcoming the noise problems communicating through power lines that have hindered our competitors for over a century. Our wireless communication technology allows for longer-range coverage, is more energy effective and has much faster data sending speeds than the current 5G technology speeds being used. We also ~~manufacture and sell~~provide sensor devices and are a wholesaler of various air filters and digital, analog, and quantum light meter systems.

For the ~~years~~three and six months ended ~~December 31, 2020~~June 30, 2022 and ~~2019,~~2021, we generated significant amount of our revenue from sales of a broad selection of agricultural sensors and measurement equipment which is currently our primary ~~revenue generating business segment.~~business.

We are a wholesaler of various digital, analog, and quantum light meters and filtration products, including fan speed adjusters, carbon filters and HEPA filtration systems. We source these products from various manufacturers in China and then sell them to a major U.S. distributor, Hydrofarm, who resells our products directly to consumers through retail distribution channels and in some cases, places its own branding on our products.

~~Strategy behind~~Specifically, we sell the ~~AVX Acquisition~~following products through Hydrofarm:

Fan speed adjuster device. We provide a fan speed adjuster device to our client Hydrofarm. Designed specifically for centrifugal fans with brushless motors, our adjuster device helps ensure longer life by preventing damage to fan motors by adjusting the ~~Company completed~~speed of centrifugal fans without causing the motor to hum. These devices are rated for 350 watts max, have 120VAC voltage capacity and feature an internal, electronic auto-resetting circuit breaker.

Carbon filter devices. We sell two types of carbon filter devices to our client Hydrofarm. These carbon filter devices are professional grade filters specifically designed and used to filter air in greenhouses that might be polluted by fermenting organics. One of these filters can be attached to a ~~transaction with Patrick Calderone~~centrifugal fan to ~~purchase 100%~~scrub the air in a constant circle or can be attached to an exhaust line as a single pass filter, which moves air out of the ~~outstanding stock of AVX, an IoT installation~~growing area and ~~management company based~~filters unwanted odors and removes pollens, dust, and other debris in ~~southern California.~~the air. The other filter is designed to be used with fans from 0-6000 C.F.M.

~~Through~~HEPA filtration device. We provide a high-efficiency particulate arrestance (“HEPA”) filtration device at wholesale prices to our ~~acquisition~~client Hydrofarm. Manufactured, tested, certified, and labeled in accordance with current HEPA filter standards, this device is targeted towards greenhouses and grow rooms and designed to keep insects, bacteria, and mold out of ~~AVX, and implementation of our~~grow rooms. We sell these devices ~~into AVX’s installation business, we are planning~~in various sizes.

Digital light meter. We provide a handheld digital light meter that is used to ~~offer ordinary families an entire smart home product line at~~measure luminance in fc units, or foot-candles.

Quantum par meter. We provide a fraction of the current market price. We have finished the design of smart lighting control, air conditioner, sprinkler, garden light control, garage door control and heating control. We are developing a swimming pool control device, smoke detector and carbon monoxide monitor. We believe these product lines could be completed by the end of 2021.handheld quantum par meter used to measure photosynthetically active radiation (“PAR”). This fully portable handheld PAR meter is designed to measure PAR flux in wavelengths ranging from 400 to 700 nm. It is designed to measure up to 10,000 µmol.

We are developing a device we call the Ubiquitor, which replaces the functions of traditional digital measurement and sensing products by integrating many digital sensors and measurement tools into one single digital device. We believe the platform represents a technological advancement in the IoT marketplace by integrating large numbers of technologies, including cloud technology, wired and wireless communication technology, software programming, instrumentation technology, artificial intelligence, PLC, and sensor networking into a single platform. The result of such integration is a smaller, cheaper and faster circuit system design than those currently offered in the instrumentation market.

Our USIP technology that will make the Ubiquitor possible is an advanced software and hardware integrated instrumentation platform that uses a large-scale modular design approach. The large-scale modular design approach subdivides instruments into a foundation component (a USIP) and architecture-specific components (sensor nodes), which together replaces the functions of traditional instruments at a fraction of their cost. The USIP has an open architecture, incorporating a variety of individual instrument functions, sensors, and probes from different industries and vendors. The platform features the ability to connect potentially thousands of different sensors or probes, addressing major limitations present in traditional instrumentation systems.

The USIP, which is compatible with a significant percentage of the instruments currently manufactured, consists of universal and reusable hardware and software. The universal hardware in the USIP is (i) a smartphone, computer, or any mobile device capable of running our software that includes a display and either hardware controls or software control surfaces, and (ii) our Ubiquitor, which is designed to be the universal data logger that acts as a bridge between the computer or mobile device and the sensor nodes. We call our flagship USIP device the “Ubiquitor” due to its ability to measure and test a variety of electrical and physical phenomena such as voltage, current, temperature, pressure, sound, light, and humidity—both wired and wirelessly.

We have created and assembled prototype models of the Ubiquitor in limited quantities and plan to expand our assembly in 2023. Our prototype Ubiquitor is compatible with standard desktop computers running either Windows OS or MacOS and Android- or iOS-based mobile devices and acts as a conduit that communicates with a group of sensors or probes manufactured by different vendors in a manner that requires the ~~second half~~user to have little or no knowledge of ~~2021.~~their unique specifications. The data readout is displayed on the computer or mobile device display in application software we have created for use with a Windows PC and are creating for use with a Mac. We are designing the application software (the “App”) to have a graphical representation of control and indicator elements common in traditional tangible instruments, such as knobs, buttons, dials, and graphs, etc. Utilizing the Ubiquitor and the App, users and instrument manufacturers will be free to add, remove or change a sensor module for their special industrial or educational application without needing to create their own application software and design their own hardware. Our developers are designing and implementing a soft control touch screen interface that supports real-time data monitoring and facilitates instrument control and operation.

Recently, the Company has devoted a substantial number of resources to research and development in both the US and China to bring the Ubiquitor and its App to full production and distribution. We anticipate that the sales and marketing involved with bringing the Ubiquitor to market will require us to hire a number of new sales and marketing employees in order to gain traction in the market. We expect to continue this process throughout 2023. We intend to introduce the Ubiquitor in smart home installations to reduce costs and increase functionality, as well as implement the Ubiquitor device in greenhouses and other agricultural warehouses that require regulation of light, humidity, ~~moisture,~~temperature, and other measurable scientific units required to create optimal growing conditions.

WeOur universal smart development protocol focuses not only on the design of the hardware and software modules but also ~~offer an array~~on the design of ~~traditional handheld measurement~~the overall universal smart instruments system, guided by the principles of structure, universality and ~~control meters through our wholesale distribution platform.~~modularity. As mentioned, we believe we address the core and fundamental issues facing the IoT marketplace.

~~Filter~~Our Ubiquitor device is a fully modular system with a universal sensor node and ~~Handheld Meter Wholesaler~~gateway system that uses a computer or mobile device as the output display module responsible for displaying the readings of various sensor nodes. We have completed an initial production run of prototype Ubiquitor devices and intend to proceed into full-scale production. The Ubiquitor’s sensor analytics system integrates event-monitoring, storage and analytics software in a cohesive package that provides a holistic view of the sensor data it is reading.

We believe the Ubiquitor device can connect up to thousands of potential sensor nodes, and integrate data using embedded software to display the data and all analytics onto a digital screen (desktop, smartphone or mobile device displays) using a Wi-Fi connection. As disclosed in our patent application, we have already tested up to 256 sensor instrument readouts. Most types of nodes and probes can connect to the hardware. If the sensor size is bigger than the standard probe size, it is possible to simply use a USB cable to connect the probe and the hub. All data and analytics are displayed on a ~~wholesaler~~single screen, with tools that record and keep track of ~~various filtration products~~all measurements, and ~~digital meters. We source our products from manufacturers~~sort and display analytic information in ~~China~~easy-to-read charts.

The Ubiquitor will be a general platform that collects data in real time, up to 100 Hz per second; and ~~then sell~~thus, is intended to ~~a major U.S. distributor who resells our products directly~~be adapted to ~~consumers through retail distribution channels. Specifically,~~many industrial uses.

By using the universal hardware or USIP, we ~~sell~~believe we could achieve the following ~~products:~~

~~Fan Speed Adjuster device~~. We provide a fan speed adjuster device to retailers and distributors. Designed specifically for centrifugal fans with brushless motors, our adjuster device helps ensure longer life by preventing damage to fan motors by adjusting the speed of centrifugal fans without causing the motor to hum. These devices are rated for 350 watts max, have 120VAC voltage capacity and feature an internal, electronic auto-resetting circuit breaker.efficiencies in instrumentation systems:

We ~~also sell two types~~have not yet started research and development of ~~carbon filter devices~~a second generation Ubiquitor device, but once we demonstrate the market for this product, we intend to ~~distributors. These Carbon filter devices are professional grade filters specifically designed~~begin such research and ~~used to filter air in greenhouses that might be polluted by fermenting organics. One of these filters~~development. Currently our research and development is focused on concepts we can be attached to a centrifugal fan to scrub the air in a constant circle or can be attached to an exhaust line as a single pass filter, which moves air out of the growing area and filters unwanted odors and removes pollens, dust, and other debrisimplement in the ~~air. The other filter is designed to be used with fans from 0-6000 C.F.M.~~

~~HEPA filtration device~~. We provide an organic air high efficiency particulate arrestance (“HEPA”) filtration device at wholesale prices to distributors and retailers. Manufactured, tested, certified, and labeled in accordance with current ~~HEPA filter standards, this device is targeted towards greenhouses and grow rooms and designed to keep insects, bacteria, and mold out of grow rooms. We sell these devices in various sizes.~~

~~Digital light meter~~. We provide a handheld digital light meter that is used to measure luminance in FC units, or foot-candles. The meter we sell is designed to be full cosine corrected for the angular incidence of light (meaning if you are not holding the sensor perpendicular to the light source, the sensor will still read the light correctly). The meter has a built-in low battery indicator and is designed to accurately measure to 40,000 FC.

~~Quantum par meter~~. We provide a handheld quantum par meter used to measure photosynthetically active radiation (“PAR”). This fully portable handheld PAR meter is designed to measure PAR flux in wavelengths ranging from 400 to 700 nm. It is designed to measure up to 10,000 umol.first generation Ubiquitor device.

Power Line Communication (“PLC”) is a communication technology that enables sending data over existing power cables. One advantage of this technology is that PLC does not require substantial new investment for its communications ~~infrastructure, it~~infrastructure. Rather, PLC utilizes existing power ~~lines. These power~~ lines, ~~form~~thereby forming a distribution network that already penetrates ~~in to every~~all residential, commercial and industrial premises. ~~Ideally, the power lines could be used to carry voice, data and video traffic. Given that the power grid is an established ubiquitous network,~~Accordingly, connectivity via PLC is potentially the most cost-effective, scalable interconnectivity approach for the ~~internet of things.~~IoT. We believe PLC can be an integral part of our communication infrastructure for the IoT, which enables reliable, real-time measurements, monitoring and control. A large variety of appliances may be interconnected by transmitting data through the same wires that provide electrical energy.

~~Wireless networks allow multiple users~~Our patented PLC is an innovative communication technology that enables sending data over existing power cables in the electric grid. Because PLC uses the existing power lines, it does not require substantial new investment for a dedicated wiring infrastructure. Existing power lines already form a distribution network that penetrates most residential, commercial, and industrial properties. Given that the power grid is, for the most part, an established ubiquitous network, we believe that PLC is potentially the most cost-effective, scalable interconnectivity approach for the backbone communication infrastructure required for the IoT. PLC allows IoT devices to ~~access large~~be plugged into power outlets to establish a connection using the existing electrical wiring, permitting data sharing without the inconvenience of running dedicated network cables.

Historically, the primary design goal of the power line network was electric power distribution. The power line network was not originally designed to function as a communication channel. Consequently, while PLC has been around for many years, the harsh electrical noise present on power lines and variations in equipment and standards make communications over the power grid difficult and present several challenges for data transfer. Signals propagating along the power line are subjected to substantial amounts of ~~information~~noise, attenuation, and distortion. PLC is susceptible to noise from devices linked to the power supply infrastructure. Because of these factors, previous attempts at implementing PLC technology resulted in power companies and internet service providers deciding that the technology is not a viable means of delivering data or broadband internet access.

We have successfully developed ultra-narrowband PLC technology that we believe can transfer readable data through the power grid. According to our internal testing, our ultra-narrowband PLC technology can send and receive data without the ~~hassle~~customary interference that occurs in standard office and residential environments, achieving speeds of ~~running wires~~4 Mbps at a bandwidth of less than 1000 Hz. To test noise interference and disturbance we utilized six industrial fans simultaneously, and no significant interference was found. By comparison, a single hair dryer will render legacy PLC technology completely useless. We have completed the development of our 4Mbps PLC modules and the printed circuit board layout. These modules will be used for IoT systems involving over 1,000 sensors.

Penetrating physical barriers like walls within a single floor or reaching out to different floors in a single building is a challenge for the wireless technology that current IoT systems are using. Moreover, wireless networks often face performance issues due to radio-frequency interference caused by microwave ovens, cordless telephones, or even Bluetooth devices at home. However, our PLC technology can reach every node connected via the power lines. Our technology converts virtually every standard wall socket into an access point, making it a more consistent and ~~from each IoT device. However,~~reliable system for crucial and sensitive operations. Our ultra-narrowband PLC technology’s ability to reach long distances via power lines becomes especially useful in commercial networks that require the ability to avoid physical barriers like walls, underground structures, and hills. We believe that our PLC technology can be an integral part of any smart city, community, or campus.

The 5G cellular network, for example, promises exciting advances for telecommunication service providers, but the implementation of the 5G network will be challenging. The implementation will require building out dense, low-latency edge networks in ways that are affordable, secure and easily maintainable. 5G antennas will be able to handle more users and to transmit more data, but they will have a shorter transmission range. 5G networks will also require frequencies of up to 300 GHz. This requirement means wireless carriers will need to bid for the costly higher spectrum bands to roll out their respective 5G networks. Generally speaking, wireless networks are ~~far~~typically slower and more expensive than existing wired networks and extremely susceptible to interference from ~~perfect;~~radio signals, radiation, walls and ~~there are a number~~other forms of ~~disadvantages that an individual or organization~~interference. Additionally, wireless networks may ~~face when using~~be accessed by any device within range of the network’s signal, making the information transmitted on a wireless ~~network.~~network susceptible to access by unauthorized recipients. We are currently developing a wired alternative to wireless networks that utilizes installed power lines to transmit information. Our PLC technology uses an ultra-narrow band spectrum channel of less than 1 KHz to establish a long-distance link between transmitter and receiver. Thus, we ~~hope~~believe that our proprietary ~~power line communication~~ultra-narrow band PLC technology ~~could potentially~~will offer a promising alternative to wireless ~~networks.~~networks and provide the backbone communication infrastructure for IoT devices.

We believe that because residential and commercial structures already include multiple power outlets, the power line infrastructure represents an excellent network to share data among intelligent devices, ~~specifically~~particularly in the smart home installations that we are currently ~~performing.~~performing through AVX. Using PLC technology would mean that the requirement for costly ethernet cable networks to carry network information could be eliminated, as the same signals may be carried on the existing power lines.

We plan to leverage the communications technology of PLC to enhance the Ubiquitor and make the Ubiquitor a central component of the smart home and gardening systems we are currently developing. The goal would be that our Ubiquitor would be used to send or receive control signals from a smart device, and control hundreds of devices in near real time. We intend to apply the same concept to commercial and industrial applications.

Also, we plan to design a full line of products for the gardening industry by integrating the Ubiquitor device into a gardening system. The system would include a light control node, temperature sensor, humidity sensor, digital light sensor, quantum PAR sensor, pH sensor, total dissolved solids (“TDS”) sensor and carbon dioxide sensor design. We believe the combination of these sensors would offer the same features as a combination of dozens or even hundreds of different instruments in the gardening industry. The Ubiquitor would be used to replace these devices and could offer another case study of the effectiveness of the application of universal smart technology to such systems.

The development of universal smart instruments and the IoT have a considerable amount of overlap, with the only difference being the number of sensor nodes involved. We plan to take advantage of this overlap and unify universal smart instruments and the IoT into a single system, building the IoT infrastructure for both residential and commercial uses and charging monthly subscription fees. End users will be able to plug any peripheral devices into the power outlet and enjoy the IoT connectivity throughout their home.

Eventually, we hope to establish five divisions to bring our technology together: 1) AVX with new shared distributed smart home products powered by the Ubiquitor; 2) an IT division in software machine design; 3) Universal Smart Instrumentation; 4) PLC; and 5) an IoT division.

On November 4, 2016, we filed a U.S. patent application number 15/344,041 with the USPTO. On March 5, 2018, we issued a press release announcing that the USPTO published an Issue Notification for U.S. Patent Application No. 9924295 entitled “Universal Smart Device,” which covers a patent application regarding the Company’s Universal Smart Device. The patent was issued on March 20, 2018.

~~Pursuant~~Subsequent to ~~recent~~our internal research and development efforts, we ~~recently received an issue notification from~~filed with the USPTO ~~for an application filed~~ on June 2, 2017 ~~that is~~a patent application regarding a process for improving a spectral response curve of a photo sensor. The small and cost-effective multicolor sensor and its related software protected by the ~~potential~~ patent we believe could achieve a spectral response that approximates an ideal photo response to take optical measurement. The patent was issued on February 26, 2019.

In addition, we have been notified that the USPTO published a notice of allowance for a patent application we filed on March 12, 2018 as application No. 15/925,400. The patent title is a “Universal Smart ~~Device”~~Device,” which is a universal smart instrument that unifies heterogeneous measurement probes into a single device that can analyze, publish, and share the data analyzed. The issue fee was paid on March 14, 2019.

On November 29, 2019, the Company filed an international utility patent application filed through the patent cooperation treaty as application PCT/US2019/63880. ~~On in late~~In April 2020, the Company was notified that it received a favorable international search report from the International Searching Authority regarding this patent application, which patents the Company’s ~~powerline communication~~PLC technology. The World International Property Organization report cited only three category “A” documents, indicating that the Company’s application met both the novelty and non-obviousness patentability requirements. Consequently, the Company is optimistic that the patent covering the claims for its PLC technology will be issued in due course and will allow the Company to implement strong protections on the PLC technology worldwide.

In the fourth quarter of 2021, we hired the law firm of Knobbe Martens, Olson & Bear, LLP to serve as outside intellectual property counsel for the Company. The firm is working on further transferring the Company’s provisional patent applications to formal patent applications which should number 13 according if all proceed according to plan. In addition, Knobbe Martens is also working on further filing four previously unfiled patents during the same timeframe and extending an existing patent application into Europe and Australia. In addition, in May 2022, the Company also engaged Chang & Hale, LLP law firm as suggested by our counsel at Knobbe, Martens, Olsen & Bear, LLP to assist with two new patents, however Knobbe Martens still remains our main IP counsel. In all, the company now has 24 total patents and patent applications in various phases with the US Patent and Trademark Office.

There are several competitors we have identified, specifically in the wireless sensor node industry, including traditional instruments or devices manufacturers such as Hanna Instruments and Extech Instruments.

Hach developed and launched the SC1000 Multi-parameter Universal Controller, a probe module for connecting up to 32 digital sensors or analyzers. However, their products are not compatible with smart phones yet; and we believe their price point is still prohibitive to consumers.

Monnit Corporation offers a range of wireless and remote sensors. Many of Monnit’s products are web-based wireless sensors that usually are not portable because of their power consumption. Also, the sensors’ real-time updates are slow; and we believe security of the ~~Covid-19 pandemic on our operations~~web-based sensor data acquisition also may be a concern. In addition to purchasing the device, consumers usually have to pay monthly fees for using web-based services.

~~During 2020,~~We are not trying to compete with traditional instruments or device manufacturers because we utilize our ~~subsidiary AVX was negatively impacted by COVID-19 pandemic. AVX encountered delays~~Ubiquitor device in ~~certain projects due~~conjunction with our smartphone application, which we believe will be a completely different product category.

We believe that wireless universal smart technology will play a critical role for traditional instrument manufacturers, as it is too expensive and difficult to develop for medium or smaller companies. The cost factor is the ~~pandemic’s restriction~~first consideration when deciding whether a company wants to develop smart wireless technologies and ~~access control at job sites as well as halts~~implement them in ~~projects due to confirmed cases at the clients’ sites.~~their products or use them in their field testing. We also ~~had employees contract the virus. We were also negatively impacted due~~hope to ~~delay~~play a role in ~~research and development work due~~academic laboratories, particularly with smaller academic laboratories who are sensitive to confirmed COVID-19 cases in the office. In 2021, we had delays in receiving inventory for Perfecular to fulfill our sales order due to shortage of shipment containers caused by the pandemic, which resulted in delays in completing our sales cycles.price.

For the three months ended ~~September~~June 30, ~~2021~~2022 compared to the three months ended ~~September~~June 30, ~~2020~~2021

Our consolidated gross revenue for the three months ended ~~September~~June 30, 2022 and 2021 was $64,642 and ~~2020 was $634,777 and $544,003,~~$261,680, respectively, which included revenue from related parties of $0$2,278 and ~~$0, respectively. Cost of revenue for the three months ended September 30, 2021 and 2020 were $521,091 and $384,371,~~$4,950, respectively. Revenue for the three months ended ~~September~~June 30, ~~2021 increased $90,774~~2022 decreased $197,038 due to sales decrease from major customer of Perfecular and AVX Design & Integration Inc. ~~prior quarter’s order was arrived~~being unable to generate more service work or develop a big project of high competitive environment in ~~this quarter due to shipping container was not available before, resulting~~Los Angeles area. Additionally, the company is midstream in ~~gross profit~~shifting toward more higher technology products and revenues, and diversifying away from more generalized hydroponic equipment of ~~$113,686 and $159,632 for~~which remain in higher inventory levels within the ~~three months ended September 30, 2021 and 2020, respectively.~~industry.

The major components of our cost and operating expenses for the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 are outlined in the table below:

	For the three months ended September 30, 2021		For the three months ended September 30, 2020		Increase (Decrease) $			For the three months ended June 30, 2022		For the three months ended June 30, 2021		Increase (Decrease) $
Cost of revenue, excluding depreciation & amortization									57,472	$	208,583	$	(151,111	)
Selling expense	$	14,776	$	677	$	14,099			17,548		446		17,102
Officer compensation		34,600		34,000		600
Compensation – officers and directors									34,000		34,000		–
Research and development		55,525		62,039		(6,514	)		167,361		47,222		120,139
Professional fees		450,624		243,799		206,825			174,341		186,765		(12,424	)
General and administrative		315,715		294,795		20,920			819,268		448,199		371,069
Total operating expenses	$	871,240	$	635,310	$	235,930
Total costs and operating expenses								$	1,269,990	$	925,215	$	344,775

Cost of revenue, excluding depreciation and amortization for the three months ended June 30, 2022 was $57,472, compared to $208,583 for the three months ended June 30, 2021. This decrease in cost of revenue was related to the decrease in revenues.

Selling expense for the three months ended ~~September~~June 30, ~~2021~~2022 was ~~$14,776,~~$17,548, compared to ~~$677~~$446 for the three months ended ~~September~~June 30, ~~2020.~~2021. Selling expense incurred was mainly from third party advertising fees. The increase of selling expense was due to an increase in advertising fees.

~~Officer compensation was $34,600~~Compensation – officers and directors were $34,000 and $34,000 for the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively.

Research and development costs were ~~$55,525~~$167,361 and ~~$62,039~~$47,222 for the three months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively. The ~~decrease in 2021 is accounted for by decreased spending on supplies in 2021. The decrease of~~increase was due to an increase research and development ~~costs was due to the fact that our newly developed products have completed the~~employee compensation and China research and development ~~stage and entered the testing phase.~~costs.

Professional fees were ~~$450,624~~$174,341during the three months ended June 30, 2022, compared to $186,765 during the three months ended ~~September 30, 2020 compared to $243,799 during the three months ended September~~June 30, 2021. The ~~increase~~decrease in ~~professional fees mainly resulted for initial public offering.~~third party consulting fee compared to the prior period.

General and administrative expenses of ~~$315,715~~$819,268 incurred during the three months ended ~~September~~June 30, ~~2021~~2022 primarily consisted of stock-based compensation of $228,375, salaries of ~~$82,382,~~$178,530, rent of $161,448, insurance expense of ~~$116,546~~$81,579, and depreciation expense of ~~$41,062.~~$41,899. General and administrative expenses of ~~$294,795~~$448,199 incurred during the three months ended ~~September~~June 30, ~~2020~~2021 primarily consisted of stock-based compensation of $106,838, salaries of ~~$115,155,~~$75,845, insurance expense of ~~$56,168,~~$86,309 and depreciation expense of ~~$40,559. The increase was mainly due to increased insurance premiums because~~$39,156.

Other income of $144,051 incurred during the ~~Company’s uplist to NASDAQ. Salaries decreased due to a decrease in~~three months ended June 30, 2022 primarily consisted of SBA PPP forgiveness loan of $158,547, unrealized loss on marketable equity securities of $74,626 and cancellation of debt of $20,000. Other income of $183,390 incurred during the ~~number~~three months ended June 30, 2021 primarily consisted of ~~employees.~~SBA PPP forgiveness loan of $151,500.

During the three months ended ~~September~~June 30, 2022 and 2021, we incurred net losses of $1,061,297 and ~~2020,~~$480,145 respectively, due to the factors discussed ~~above we incurred net losses of $1,337,754 and $438,360 respectively.~~above.

For the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 compared to the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021

Our consolidated gross revenue for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021 was $221,809 and ~~2020 was $1,259,920 and $1,289,160,~~$625,143, respectively, which included revenue from related parties of ~~$15,141~~$33,820 and ~~$21,267, respectively. Cost of revenue for the nine months ended September 30, 2021 and 2020 were $1,021,937 and $1,035,600,~~$15,141, respectively. Revenue for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 decreased ~~$29,240~~$403,334 due to ~~an inability~~sales decrease from Hydrofarm to ~~ship goods sold by~~ Perfecular and AVX Design & Integration Inc. ~~because~~being unable to generate more service work or develop a big project in the ~~required shipping container was not available. In addition to~~highly competitive environment of the ~~decrease~~Los Angeles area. As mentioned, the company is midstream in ~~revenue, gross profit decreased to $237,983 compared to $253,560 for the nine months ended September 30, 2021~~shifting toward more higher technology products and ~~2020, respectively.~~revenues and diversifying away from generalized hydroponic equipment.

The major components of our cost and operating expenses for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 are outlined in the table below:

	For the nine months ended September 30, 2021		For the nine months ended September 30, 2020		Increase (Decrease) $			For the six months ended June 30, 2022		For the six months ended June 30, 2021		Increase (Decrease) $
Cost of revenue, excluding depreciation & amortization									200,563	$	500,846	$	(300,283	)
Selling expense	$	15,734	$	17,696	$	(1,962	)		55,887		958		54,929
Officer compensation		107,700		102,000		5,700
Compensation – officers and directors									110,040		73,100		36,940
Research and development		165,897		194,232		(28,335	)		729,105		110,372		618,733
Professional fees		1,121,774		1,071,369		50,405			535,207		457,475		77,732
General and administrative		967,160		974,125		(6,965	)		1,720,216		865,120		855,096
Total operating expenses	$	2,378,265	$	2,359,422	$	18,843
Total costs and operating expenses								$	3,351,018	$	2,007,871	$	1,343,147

Cost of revenue, excluding depreciation & amortization for the six months ended June 30, 2022 was $200,563, compared to $500,846 for the six months ended June 30, 2021. This decrease in cost of revenue was related to the decrease in revenues.

Selling expense for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 was ~~$15,734,~~$55,887, compared to ~~$17,696~~$958 for the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021. Selling expense incurred ~~were~~was mainly ~~third-party~~from third party advertising fees. The ~~decrease~~increase of selling expense was due to ~~a decrease~~an increase in advertising fees.

~~Officer compensation was $107,700~~Compensation – officers and ~~$102,000~~directors were $110,040 and $73,100 for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively. The increase was due to ~~an adjustment of the Chief Financial Officer’s~~granting equity compensation.

Research and development costs were ~~$165,897~~$729,105 and ~~$194,232~~$110,372 for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively. The ~~decrease~~increase was due to ~~a decrease~~an increase in ~~the supplies needed for the~~ research and ~~development. The decrease of~~development employee compensation; and on research and development costs ~~was due to the fact that we completed the development stage and~~incurred by our ~~newly developed products entered the testing phase.~~Chinese subsidiary.

Professional fees were ~~$1,121,774~~$535,207 during the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2022 compared to ~~$1,071,369~~$457,475 during the ~~nine~~six months ended ~~September~~June 30, 2021. The increase in professional fees mainly resulted from the ~~IPO in 2021~~pending litigation compared to the prior period.

General and administrative expenses of ~~$967,160~~$1,720,216 incurred during the ~~nine~~six months ended ~~September~~June 30, 2022 primarily consisted of stock-based compensation of $456,750, salaries of $469,934, rent of $237,045, insurance expense of $258,494, and depreciation expense of $82,062. General and administrative expenses of $865,120 incurred during the six months ended June 30, 2021 primarily consisted of stock-based compensation of $213,675, salaries of ~~$344,133,~~$261,751, insurance expense of $135,144, depreciation expense of ~~$121,933,~~$80,872, and ~~insurance expense~~rent of ~~$251,690. General and administrative expenses of $974,125 incurred during~~$32,590.

During the ~~nine~~six months ended ~~September~~June 30, ~~2020 primarily consisted~~2022 and 2021, we incurred total other income of ~~salaries~~$198,982 and $220,067, respectively. The decrease in other income was due to SBA PPP forgiveness loan and cancellation of ~~$377,929, insurance expense~~debt in the current period. The majority of ~~$188,202 and depreciation expense~~the other income was incurred from lease payments from tenants at our facility in Ontario, California. Also of ~~$121,684.~~note, the market value of our facility has increased substantially due to the general rise in Southern California industrial real estate market conditions over the past 5 years.

During the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021, ~~and 2020, the company~~we incurred net losses of ~~$2,500,415~~$2,930,227 and ~~$1,988,333~~$1,162,661 respectively, due to the factors discussed above.

The table below, for the periods indicated, provides selected cash flow information:

	For the nine months ended September 30, 2021			For the nine months ended September 30, 2020			For the six months ended June 30, 2022			For the six months ended June 30, 2021
Net cash used in operating activities	$	(1,496,812	)	$	(1,725,512	)	$	(1,749,492	)	$	(964,297	)
Net cash used in investing activities		(6,875	)		(1,314	)		(267,537	)		–
Net cash provided by financing activities		10,455,528			355,860			–			1,762,407
Effect of exchange rate								(1,228	)		–
Net change in cash	$	8,951,841		$	(1,370,966	)	$	(2,018,257	)	$	798,110

Our net cash outflows from operating activities of ~~$1,496,812~~$1,749,492 for the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022 was primarily the result of our net loss of ~~$2,500,415~~$2,930,227 and changes in our operating assets and liabilities offset by the add-back of non-cash expenses. The change in operating assets and liabilities includes an increase in accounts receivable of ~~$120,503,~~$47,454, an increase in accounts receivable – related party of $73,094, an increase in inventories of $7,752, a decrease in ~~inventory~~other receivable of ~~$20,969,~~$13,057, a decrease in prepaid expense of $103,083, an increase in ~~prepaid expenses~~deposit of ~~$55,280,~~$4,008, a decrease in ~~deposits~~operating lease right-of-use asset of ~~$100,000,~~$190,790, an ~~increase~~decrease in accounts payable and accrued liabilities of ~~$172,474,~~$106,104, a decrease ~~in accounts payable – related party of $17,471, an increase~~ in other current liabilities of ~~$17,299,~~$17,135, an increase in customer deposit of $6,131, a decrease in ~~customer deposits~~lease liabilities of ~~$57,106, and a decrease~~$60,576, an increase in other liabilities of ~~$17,135.~~$14,736. Non-cash expense ~~includes~~included add-backs of ~~$7,794~~$57,147 in bad debt expense, ~~$1,689~~$25,617 in reduction of inventory ~~reserve reductions, $121,932~~fair value adjustments, $82,065 in depreciation expense, ~~$258,960~~$74,626 in unrealized loss on marketable equity securities, $10,281 in realized gain on marketable securities, $158,547 in gain on ~~extinguishment~~forgiveness of debt, ~~$1,284,780 in change in fair value of warrant liability, $550,406 in gain on settlement of derivative liability, $2,985 in amortization of right-of-use assets, $36,000~~$692,920 in stock-based compensation - shares, and ~~$320,512~~$456,750 in stock option compensation.

Our net cash outflows from operating activities of ~~$1,725,512~~$964,297 for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021, was primarily the result of our net loss of ~~$1,998,333~~$1,162,661 and changes in our operating assets and liabilities offset by the add-back of non-cash expenses. The change in operating assets and liabilities includes ~~an increase~~a decrease in accounts receivable of ~~$179,041,~~$40,219, an increase of accounts receivable – related party of ~~$22,410,~~$5,016, a decrease in inventory of ~~$788,~~$32,248, an increase in other receivables of ~~$200,~~$2,400, an increase in prepaid expenses of ~~$30,689, an increase~~$98,821, a decrease in deposits of $100,000, a decrease in operating lease right-of-use asset of $23,553, an increase in accounts payable and accrued liabilities of ~~$34,006,~~$32,400, a decrease in accounts payable – related party of $17,471, an increase in other current liabilities of ~~$12,334, decrease in interest payable – related party of $1,750, and~~$164, a decrease in customer ~~deposit~~deposits of ~~$121,852.~~$52,751, and a decrease lease liabilities of $25,228. Non-cash expense ~~included~~includes add-backs of ~~$6,927~~$5,749 in bad debt expense, ~~$3,853~~$1,329 in inventory reserve ~~$121,684~~reductions, $80,872 in depreciation expense, ~~$36,000~~$151,500 in gain on forgiveness of debt, $24,000 in stock-based compensation, ~~$605,150~~and $213,675 in stock option ~~compensation, and $1,593 in amortization of right-of-use assets.~~compensation.

We expect that cash flows from operating activities may fluctuate in future periods as a result of a number of factors, including fluctuations in our net revenues and operating results, utilization of new revenue streams, in line with our shifting revenue streams, collection of accounts receivable, and timing of billings and payments.

For the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 we had cash outflow from investing activities of ~~$6,875~~$267,537. That was primarily the result from the purchase of property and ~~equipment. For~~equipment of $39,702, purchase of marketable securities of $708,359, and proceeds from sales of marketable securities of $480,524. There were no investing activities for the ~~nine~~six months ended ~~September~~June 30, ~~2020 we had cash outflow from investing activities of $1,314 from the purchase of property and equipment.~~2021

There were no financing activities for the six months ended June 30, 2022. For the ~~nine~~six months ended ~~September~~June 30, 2021, cash inflows of ~~$10,455,528~~$1,762,407 were due to proceeds of SBA loans of $267,297, ~~repayment~~payment of an SBA ~~loans~~loan of ~~$137,900,~~$227, proceeds from bank loan of $1,500,000, and repayment of the bank loan of $1,500,000, proceeds from IPO, net of $10,326,131. For the nine months ended September 30, 2020 the Company paid off a promissory note, resulting in cash outflows of $355,860 were due to repayment on promissory note of $50,000 and obtained loans from the SBA in the amount of $405,860.$4,663.

In the long term, the continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to repay its debt obligations, to obtain necessary equity financing to continue operations, and the attainment of profitable operations. For the ~~period~~six months ended ~~September~~June 30, ~~2021,~~2022, the Company had a net loss of ~~$2,500,415~~$2,930,227 and negative cash flow from operating activities of ~~$1,496,812. In February 2021, the Company has obtained~~$1,749,492. With a $1,500,000 loan from a financial institution and has a $1,500,000 loan commitment from a private related party. The loan from the financial institution requires monthly payments with the final payment due in 2026. The related party loan will accrue interest at 10% until March 15, 2022, or nine months from the date the loan is funded, whichever is later (the “Initial Interest Accrual Date”). Interest on any unpaid principal after Initial Interest Accrual Date shall accrue at a fixed rate of 12% per annum until paid. The Company reserves the right to prepay this loan agreement (in whole or in part) after 6 months of the first day with no prepayment penalty. The Company may make, in its sole discretion, payments of interest only, or interest and principal, provided that the principal is not paid in full prior to nine months from the date the loan is funded. The Company raised $11.5 million through an underwritten public offering in September 2021.

~~With the~~ January 1, ~~2021~~2022 beginning cash amount of ~~$583,325 and the loan of $1,500,000,~~$8,678,665, the Company will have enough cash to cover its projected annual cash burn rate of ~~$1,967,074. With IPO $11.5 million,~~$3,152,618 which is an increase from the previous year. This is a result of coming off of a year where the company completed an uplisting transaction causing a greater than normal amount of expenditure, especially in professional service fees. Overall, the Company ~~will have adequate reserves to continue operations in 2021 and 2022.~~

~~In 2020 the Company had negative operating cashflow of approximately $1.96 million~~, mainly resulting from net loss. The Company is currently developing its products and licenses and expects to generate profit once the products and licenses available for the market, which will begin to alleviate the negative cashflow. Currently, the Company is testing 4 Mbps ultra-narrowband power line communication printed circuit boards. The testing is completed in second quarter of 2021. The ultra-narrowband power line communication products will launch in fourth quarter of 2021. A portable universal smart device is also in the final printed circuit board layout stage. The Company is planning to launch this product in fourth quarter of 2021. Initially, new products would require cash to manufacture and promote. The Company expects to begin generating positive cashflow with the launch of above-mentioned products from second quarter of 2022.

~~Overall, with the capital raising in September 2021, the Company will have an~~has adequate cash for the Company to continue operation as a going concern throughout 2021 and 2022. The Company expects the loans and offering will generate cash for 2021’s operation and be able to pay off the loans obtained through the offering with sufficient cashflow for 2021 and 2022. Thus,2022 without any additional capital raise. As a result, the previous factors raising substantial doubt to continue as a going concern have been ~~alleviated.~~alleviated for the following year.

As of ~~September~~June 30, ~~2021,~~2022, we did not have any off-balance-sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation SK.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a15(e) and 15d15(e) under the Securities and Exchange Act of 1934, at the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were effective such that the material information required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our ~~company,~~Company, particularly during the period when this report was being prepared.

Our management concluded we did not maintain effective controls over the Company’s financial reporting. The material weaknesses in our internal control over financial reporting, caused principally by inadequate staffing and technical expertise in key positions, resulted in overly relying on outside consultants to make numerous adjustments to our financial statements. Additionally, the significant deficiencies or material weaknesses could result in future material misstatement of the consolidated financial statements that would not be prevented or detected. Management has concluded that the identified control deficiencies ~~constitutes~~constitute a material weakness.

There were no changes in our internal control over financial reporting during our most recent fiscal quarter that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

Disclosure controls and procedures, no matter how well designed and implemented, can provide only reasonable assurance of achieving an entity's disclosure objectives. The likelihood of achieving such objectives is affected by limitations inherent in disclosure controls and procedures. These include the fact that human judgment in decision-making can be faulty and that breakdowns in internal control can occur because of human failures such as simple errors or mistakes or intentional circumvention of the established process.

We were not subject to any new legal proceedings during the ~~nine~~six months ended ~~September 30, 2021~~June 30,2022 and there are currently no new legal proceedings, to which we are a party, which could have a material adverse effect on our business, financial condition or operating results.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

No shares ofor common stock were sold during the ~~nine~~six months ended ~~September~~June 30, ~~2021 or 2020, respectively.~~2022.

No senior securities were issued and outstanding during the ~~nine-month~~six-month periods ended ~~September~~June 30, ~~2021~~2022 or ~~2020.~~2021.

Our common stock has been quoted on the OTCQB and on the OTC Link since July 31, 2014 under the symbol “FCUV” and now trades on the Nasdaq Global Market under the same symbol “FCUV”.

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a party of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Nevada	46-3355876
(State or other jurisdiction	(IRS Employer File Number)
of incorporation)


2311 E. Locust StCourt., Ontario, CA	91761
(Address of principal executive offices)	(~~zip code)~~Zip Code)

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated ~~Filer~~filer ~~☐ (Do not check if a smaller reporting company)~~☒	Smaller reporting company ☒
Emerging growth company ☐

PART I FINANCIAL INFORMATION	3

Item 1. ~~Unaudited~~ Condensed Consolidated Financial Statements (Unaudited)	3

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	4

Item 3. Quantitative and Qualitative Disclosures About Market Risk	1213

Item 4. Controls and Procedures	1213

PART II OTHER INFORMATION	1314

Item 1. Legal Proceedings	1314

Item 1A. Risk Factors	1314

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	13

~~Item 3. Defaults Upon Senior Securities~~	13

~~Item 4. Mine Safety Disclosures~~	13

~~Item 5. Other Information~~	13

~~Item 6. Exhibits~~	14

Item 3. Defaults Upon Senior Securities	14

~~Signatures~~Item 4. Mine Safety Disclosures	14

Item 5. Other Information	14

Item 6. Exhibits	15

Signatures	16

Contents	Page

Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2021 (Unaudited)~~2022 (unaudited) and December 31, ~~2020~~2021	F-1

Condensed Consolidated Statements of Operations ~~(Unaudited)~~ for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, 2022 and 2021 ~~and 2020~~(unaudited)	F-2

Condensed Consolidated ~~Statements~~Statement of Changes in ~~Stockholders’~~Stockholder’s Equity ~~(Unaudited)~~ for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, 2022 and 2021 ~~and 2020~~(unaudited)	F-3

Condensed Consolidated Statements of Cash Flows ~~(Unaudited)~~ for the ~~Nine~~Six Months Ended ~~September~~June 30, 2022 and 2021 ~~and 2020~~(unaudited)	F-4

Notes to the Unaudited Condensed Consolidated Financial Statements	F-5


	Common stock				Additional Paid-In		Shares to be issued Common		Accumulated			Total Stockholders'
Description	Shares		Amount		Capital		Shares		Deficit			Equity
Balance- June 30, 2021		40,959,741	$	40,959	$	14,594,733	$	122,709	$	(10,878,775	)	$	3,879,626

Issuance of common stock		2,300,000		2,300		9,282,161		1,776,044		–			11,060,505

Stock based compensation - options		–		–		106,837		–		–			106,837

Common stock to be issued for services		–		–		–		12,000		–			12,000

Net loss		–		–		–		–		(1,337,754	)		(1,337,754	)

Balance - September 30, 2021		43,259,741	$	43,259	$	23,983,731	$	1,910,753	$	(12,216,529	)	$	13,721,214

Balance - June 30, 2020		40,959,741	$	40,959	$	14,294,608	$	74,709	$	(8,728,974	)	$	5,681,302

Stock based compensation - options		–		–		86,450		–		–			86,450

Common stock to be issued for services		–		–		–		12,000		–			12,000

Net loss		–		–		–		–		(438,360	)		(438,360	)

Balance - September 30, 2020		40,959,741	$	40,959	$	14,381,058	$	86,709	$	(9,167,334	)	$	5,341,392



	Common stock				Additional		Shares to be Issued						Accumulated Other			Total
Description	Shares		Amount		Paid-In Capital		Common Shares			Accumulated Deficit			Comprehensive Income (Loss)			Stockholders’ Equity
Balance - March 31, 2022		43,259,741	$	43,259	$	24,321,450	$	2,587,123		$	(14,806,021	)	$	548		$	12,146,359

Stock based compensation -options		–		–		228,375		–			–			–			228,375

Stock based compensation - shares		–		–		–		28,550			–			–			28,550

Common stock to be issued for services		153,776		154		1,930,599		(1,930,753	)		–			–			–

Other comprehensive loss		–		–		–		–			–			(431	)		(431	)

Net loss		–		–		–		–			(1,061,297	)		–			(1,061,297	)

Balance – June 30, 2022		43,413,517	$	43,413	$	26,480,424	$	684,920		$	(15,867,318	)	$	117		$	11,341,556

Balance - March 31, 2021		40,959,741	$	40,959	$	14,487,896	$	110,709		$	(10,398,630	)	$	–		$	4,240,934

Stock based compensation -options		–		–		106,837		–			–			–			106,837

Common stock to be issued for services		–		–		–		12,000			–			–			12,000

Net loss		–		–		–		–			(480,145	)		–			(480,145	)

Balance – June 30, 2021		40,959,741	$	40,959	$	14,594,733	$	122,709		$	(10,878,775	)	$	–		$	3,879,626

	Common stock				Additional Paid-In		Shares to be issued Common			Accumulated			Total Stockholders'
Description	Shares		Amount		Capital		Shares			Deficit			Equity
Balance December 31, 2020		40,959,741	$	40,959	$	14,381,058	$	98,709		$	(9,716,114	)	$	4,804,612

Issuance of common stock		2,300,000		2,300		9,282,161		1,776,044			–			11,060,505

Stock based compensation - options		–		–		320,512		–			–			320,512

Common stock to be issued for services		–		–		–		36,000	��		–			36,000

Net loss		–		–		–		–			(2,500,415	)		(2,500,415	)

Balance September 30, 2021		43,259,741		43,259		23,983,731		1,910,753			(12,216,529	)		13,721,214

Balance December 31, 2019		40,959,741	$	40,959	$	13,775,908	$	50,709		$	(7,179,001	)	$	6,688,575

Stock based compensation - options		–		–		605,150		–			–			605,150

Common stock to be issued for services		–		–		–		36,000			–			36,000

Net loss		–		–		–		–			(1,988,333	)		(1,988,333	)

Balance September 30, 2020		40,959,741	$	40,959	$	14,381,058	$	86,709		$	(9,167,334	)	$	5,341,392

Schedule of estimated useful lives of property, plant and equipment

Fixed assets	Useful life
Furniture	5 years
Equipment	5 years
Warehouse	39 years
Improvement	5 years
~~Construction in progress~~	–
Land	–N/A

Schedule of Fair Value Assets And Liabilities Measured On Recurring Basis
	June 30, 2022 (unaudited)
	Fair Value						Carrying
	Level 1		Level 2		Level 3		Value
Assets
Marketable securities:
Stock	$	163,490	$	0	$	0	$	163,490
Total assets measured at fair value	$	163,490	$	0	$	0	$	163,490

Schedule of anti dilutive shares

Nine months ended September 30,	2021		2020
Stock options		288,750		210,000
Total		288,750		210,000

Schedule Of Intercompany Foreign Currency Balances
	Average Rate for the Six Months Ended June 30,
	2022 (Unaudited)		2021 (Unaudited)
China Yuan (RMB)	RMB	6.4749	RMB	6.4721
United States Dollar ($)	$	1.0000	$	1.0000

	Exchange Rate at
	June 30, 2022 (Unaudited)		December 31, 2021
China Yuan (RMB)	RMB	6.6964	RMB	6.3641
United States Dollar ($)	$	1.0000	$	1.0000

Schedule of operating Right-of-use asset and liability

	September 30, 2021			December 31, 2020
Office lease	$	157,213		$	157,213
Less: accumulated amortization		(106,714	)		(70,655	)
Right-of-use asset, net	$	50,499		$	86,558

Schedule Lease term and discount rate
	June 30, 2022	December 31, 2021
Weighted average remaining lease term
Operating lease	0.17 to 2.67 years	0.67 to 3.17 years
Weighted average discount rate
Operating lease	10% - 15%	10% - 15%

Schedule of maturity of lease liabilities

Year ending December 31, 2021	$	16,249
Year ending December 31, 2022		43,654
Total future minimum lease payment		59,903
Imputed interest		(4,276	)
Lease Obligation, net	$	55,627

Schedule of option activity

Options	Shares		Weighted average exercise price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Outstanding at December 31, 2020		210,000	$	9.61		9.61		–
Granted		105,000		3.00		–		–
Exercised		0	$	0		–		–
Forfeited or expired		0	$	0		–		–
Outstanding at September 30, 2021		315,000	$	4.80		8.33		594,300
Vested as of September 30, 2021		288,750	$	4.96		8.24		148,575
Exercisable at September 30, 2021		315,000	$	4.96		8.24		148,575

Schedule of options by exercise price
Options	Shares		Weighted average exercise price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Outstanding at December 31, 2021		420,000	$	5.82		8.56		–
Granted		0	$	0		–		–
Exercised		0	$	0		–		–
Forfeited or expired		0	$	0		–		–
Outstanding at June 30, 2022		420,000	$	5.82		8.56		2,354,100
Vested as of June 30, 2022		367,787	$	5.38		8.35		2,220,435
Exercisable at June 30, 2022		367,787	$	5.38		8.35		2,220,435

Schedule of options by exercise price
Outstanding				Exercisable
Number of		Exercise		Number of		Exercise
Options		Price		Options		Price
	30,000	$	5.70		30,000	$	5.70
	30,000		5.70		30,000		5.70
	30,000		5.70		30,000		5.70
	30,000		5.70		30,000		5.70
	30,000		5.70		30,000		5.70
	30,000		5.70		30,000		5.70
	30,000		5.70		30,000		5.70
	15,000		3.00		15,000		3.00
	15,000		3.00		15,000		3.00
	15,000		3.00		15,000		3.00
	15,000		3.00		15,000		3.00
	15,000		3.00		15,000		3.00
	15,000		3.00		15,000		3.00
	15,000		3.00		15,000		3.00
	315,000				315,000

Segment information table
	Nine months ended September 30, 2021
	Focus			AVX			Total

Revenue	$	1,071,695		$	173,084		$	1,244,779
Revenue - related party		15,141			0			15,141
Total revenue		1,086,836			173,084			1,259,920

Cost of Revenue		861,033			160,904			1,021,937

Gross Profit		225,803			12,180			237,983

Operating Expenses:
Selling expense		8,967			6,767			15,734
Compensation - officers		107,700			0			107,700
Research and development		165,897			0			165,897
Professional fees		1,118,130			3,644			1,121,774
General and administrative		786,982			180,178			967,160
Total Operating Expenses		2,187,676			190,589			2,378,265

Loss from Operations		(1,961,873	)		(178,409	)		(2,140,282	)

Other Income (Expense):
Interest income (expense), net		(35,405	)		(1,420	)		(36,825	)
Gain on extinguishment of debt		152,990			107,460			260,450
Change in fair value of warrant liability		(1,284,780	)		–			(1,284,780	)
Gain on settlement of derivative liability		550,406			–			550,406
Other income (expense), net		153,623			(3,007	)		150,616
Total other income (expense)		(463,166	)		103,033			(360,133	)

Loss before income taxes		(2,425,039	)		(75,376	)		(2,500,415	)

Tax expense		0			0			0

Net Loss	$	(2,425,039	)	$	(75,376	)	$	(2,500,415	)

Segment Reporting
	Six Months Ended June 30, 2022
	Corporate			Perfecular			AVX			Total

Revenue	$	0		$	47,650		$	140,339		$	187,989
Revenue - related party		0			31,542			2,278			33,820
Total revenue		0			79,192			142,617			221,809

Cost and Operating Expenses
Cost of Revenue, excluding depreciation & amortization		0			60,702			139,861			200,563
Selling expense		0			48,085			7,802			55,887
Compensation - officers and directors		110,040			0			0			110,040
Research and development		729,105			0			0			729,105
Professional fees		522,546			0			12,661			535,207
General and administrative		446,576			1,141,522			132,118			1,720,216
Total Cost and Operating Expenses		1,808,267			1,250,309			292,442			3,351,018

Loss from Operations		(1,808,267	)		(1,171,117	)		(149,825	)		(3,129,209	)

Other Income (Expense):
Interest income (expense), net		490			(288	)		48			250
Unrealized loss on marketable equity securities		(74,626	)		0			0			(74,626	)
Realized gain on marketable equity securities		10,281			–			–			10,281
Other income (expense), net		105,560			160,117			(3,600	)		263,077
Total other income (expense)		42,705			159,829			(3,552	)		198,982

Loss before income taxes		(1,765,562	)		(1,011,288	)		(153,377	)		(2,930,227	)

Tax expense		0			0			0			0

Net Loss	$	(1,765,562	)	$	(1,011,288	)	$	(153,377	)	$	(2,930,227	)

	June 30, 2022			December 31, 2021
Current Assets	$	7,339,735		$	9,214,340
Current Liabilities		(314,283	)		(571,442	)
Working Capital	$	7,025,452		$	8,642,898

(a)	(1) FINANCIAL STATEMENTS

	(2) SCHEDULES

	(3) EXHIBITS. The following exhibits required by Item 601 to be filed herewith are incorporated by reference to previously filed documents:

Exhibit Number		Description

10.1		Promissory Note with Chase Bank, dated March 10, 2021 for $108,750 SBA Loan, as filed with the SEC on March 23, 2021.
10.2		Secured Promissory Note with East West Bank, dated January 8, 2021 for $1,500,000, as filed with the SEC on March 23, 2021.
10.3		Loan Agreement with Golden Sunrise Investment LLC, dated March 15, 2021 for $1,500,000, as filed with the SEC on March 23, 2021.
10.4		Company Guarantee Agreement with Golden Sunrise Investment LLC dated March 15, 2021, as filed with the SEC on March 23, 2021.
10.5		Secured Promissory Note with Golden Sunrise Investment LLC dated March 15, 2021 for $1,500,000, as filed with the SEC on March 23, 2021.
31.1		Certification of ~~Chief Executive Officer~~CEO pursuant to ~~Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section~~Sec. 302 ~~of the Sarbanes-Oxley Act of 2002~~.*
31.2		Certification of ~~Chief Financial Officer~~CFO pursuant to ~~Rules 13a-14(a) and 15(d)-14(a), as adopted pursuant to Section~~Sec. 302 ~~of the Sarbanes-Oxley Act of 2002.~~*
32.1		Certification of ~~Chief Executive Officer~~CEO pursuant to ~~18 U.S.C. Section 1350, as adopted pursuant to Section~~Sec. 906 ~~of the Sarbanes-Oxley Act of 2002~~.*
32.2		Certification of ~~Chief Financial Officer~~CFO pursuant to ~~18 U.S.C. Section 1350, as adopted pursuant to Section~~Sec. 906 ~~of the Sarbanes Oxley Act of 2002~~.*

101.INS		~~Inline~~ XBRL ~~Instance~~Instances Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)**
101.SCH		~~Inline~~ XBRL Taxonomy Extension Schema Document**Document
101.CAL		~~Inline~~ XBRL Taxonomy Extension Calculation Linkbase Document**Document
101.DEF		~~Inline~~ XBRL Taxonomy Extension Definition Linkbase Document**Document
101.LAB		~~Inline~~ XBRL Taxonomy Extension Label Linkbase Document**Document
101.PRE		~~Inline~~ XBRL Taxonomy Extension Presentation Linkbase Document**
~~104~~	Cover Page Interactive Data File (formatted in IXBRL, and included in exhibit 101).**Document

	Focus Universal Inc.

Dated: ~~November 15, 2021~~August 12, 2022	By:	/s/ Desheng Wang Desheng Wang Chief Executive Officer

Dated: ~~November 15, 2021~~August 12, 2022	By:	/s/ Duncan Lee Duncan Lee Chief Financial Officer ~~Principal Accounting Officer~~