Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 16, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2021 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-55247 | |
Entity Registrant Name | FOCUS UNIVERSAL INC. | |
Entity Central Index Key | 0001590418 | |
Entity Tax Identification Number | 46-3355876 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 2311 E. Locust St. | |
Entity Address, City or Town | Ontario | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 91761 | |
City Area Code | (626) | |
Local Phone Number | 272-3883 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 40,959,741 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash | $ 1,381,435 | $ 583,325 |
Accounts receivable, net | 144,588 | 190,556 |
Accounts receivable - related party | 5,016 | 0 |
Inventories, net | 11,577 | 42,496 |
Other receivables | 2,400 | 0 |
Prepaid expenses | 190,074 | 91,253 |
Deposit - current portion | 0 | 100,000 |
Total Current Assets | 1,735,090 | 1,007,630 |
Property and equipment, net | 4,411,638 | 4,492,510 |
Operating lease right-of-use asset | 63,005 | 86,558 |
Deposits | 6,630 | 6,630 |
Total Assets | 6,216,363 | 5,593,328 |
Current Liabilities: | ||
Accounts payable and accrued liabilities | 231,270 | 198,870 |
Accounts payable - related party | 0 | 17,471 |
Other current liabilities | 6,496 | 6,332 |
Customer deposit | 4,626 | 57,377 |
Loan, current portion | 271,085 | 194,125 |
Lease liability, current portion | 58,491 | 53,384 |
Total Current Liabilities | 571,968 | 527,559 |
Non-Current Liabilities: | ||
Lease liability, less current portion | 10,952 | 41,287 |
Loan, less current portion | 1,736,682 | 202,735 |
Other liability | 17,135 | 17,135 |
Total Non-Current Liabilities | 1,764,769 | 261,157 |
Total Liabilities | 2,336,737 | 788,716 |
Contingencies (Note 13) | ||
Stockholders' Equity: | ||
Common stock, par value $0.001 per share, 75,000,000 shares authorized; 40,959,741 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively | 40,959 | 40,959 |
Additional paid-in capital | 14,594,733 | 14,381,058 |
Shares to be issued, common shares | 122,709 | 98,709 |
Accumulated deficit | (10,878,775) | (9,716,114) |
Total Stockholders' Equity | 3,879,626 | 4,804,612 |
Total Liabilities and Stockholders' Equity | $ 6,216,363 | $ 5,593,328 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, issued | 40,959,741 | 40,959,741 |
Common stock, outstanding | 40,959,741 | 40,959,741 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Total Revenue | $ 261,680 | $ 434,548 | $ 625,143 | $ 745,157 |
Cost of Revenue | 208,583 | 313,157 | 500,846 | 651,229 |
Gross Profit (Loss) | 53,097 | 121,391 | 124,297 | 93,928 |
Operating Expenses: | ||||
Selling expense | 446 | 1,949 | 958 | 17,019 |
Compensation - officers | 34,000 | 34,000 | 73,100 | 68,000 |
Research and development | 47,222 | 61,797 | 110,372 | 132,193 |
Professional fees | 293,603 | 394,031 | 671,150 | 827,570 |
General and administrative | 341,361 | 289,517 | 651,445 | 679,330 |
Total Operating Expenses | 716,632 | 781,294 | 1,507,025 | 1,724,112 |
Loss from Operations | (663,535) | (659,903) | (1,382,728) | (1,630,184) |
Other Income (Expense): | ||||
Interest income (expense), net | (15,223) | (1,240) | (22,756) | 35 |
Interest (expense) - related party | 0 | 0 | 0 | (81) |
Other income | 198,613 | 33,476 | 242,823 | 80,257 |
Total other income | 183,390 | 32,236 | 220,067 | 80,211 |
Loss before income taxes | (480,145) | (627,667) | (1,162,661) | (1,549,973) |
Income tax expense | 0 | 0 | 0 | 0 |
Net Loss | $ (480,145) | $ (627,667) | $ (1,162,661) | $ (1,549,973) |
Weight Average Number of Common Shares Outstanding: Basic and Diluted | 40,959,741 | 40,959,741 | 40,959,741 | 40,959,741 |
Net Loss per common share: Basic and Diluted | $ (0.01) | $ (0.02) | $ (0.03) | $ (0.04) |
Revenue [Member] | ||||
Total Revenue | $ 256,730 | $ 427,953 | $ 610,002 | $ 723,890 |
Revenue Related Party [Member] | ||||
Total Revenue | $ 4,950 | $ 6,595 | $ 15,141 | $ 21,267 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Shares To Be Issued Common Shares [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2019 | $ 40,959 | $ 13,775,908 | $ 50,709 | $ (7,179,001) | $ 6,688,575 |
Beginning balance, shares at Dec. 31, 2019 | 40,959,741 | ||||
Stock based compensation - options | 518,700 | 518,700 | |||
Common stock to be issued for services | 24,000 | 24,000 | |||
Net loss | (1,549,973) | (1,549,973) | |||
Ending balance, value at Jun. 30, 2020 | $ 40,959 | 14,294,608 | 74,709 | (8,728,974) | 5,681,302 |
Ending balance, shares at Jun. 30, 2020 | 40,959,741 | ||||
Beginning balance, value at Mar. 31, 2020 | $ 40,959 | 14,035,258 | 62,709 | (8,101,307) | 6,037,619 |
Beginning balance, shares at Mar. 31, 2020 | 40,959,741 | ||||
Stock based compensation - options | 259,350 | 259,350 | |||
Common stock to be issued for services | 12,000 | 12,000 | |||
Net loss | (627,667) | (627,667) | |||
Ending balance, value at Jun. 30, 2020 | $ 40,959 | 14,294,608 | 74,709 | (8,728,974) | 5,681,302 |
Ending balance, shares at Jun. 30, 2020 | 40,959,741 | ||||
Beginning balance, value at Dec. 31, 2020 | $ 40,959 | 14,381,058 | 98,709 | (9,716,114) | 4,804,612 |
Beginning balance, shares at Dec. 31, 2020 | 40,959,741 | ||||
Stock based compensation - options | 213,675 | 213,675 | |||
Common stock to be issued for services | 24,000 | 24,000 | |||
Net loss | (1,162,661) | (1,162,661) | |||
Ending balance, value at Jun. 30, 2021 | $ 40,959 | 14,594,733 | 122,709 | (10,878,775) | 3,879,626 |
Ending balance, shares at Jun. 30, 2021 | 40,959,741 | ||||
Beginning balance, value at Mar. 31, 2021 | $ 40,959 | 14,487,896 | 110,709 | (10,398,630) | 4,240,934 |
Beginning balance, shares at Mar. 31, 2021 | 40,959,741 | ||||
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) | |||
Ending balance, value at Jun. 30, 2021 | $ 40,959 | $ 14,594,733 | $ 122,709 | $ (10,878,775) | $ 3,879,626 |
Ending balance, shares at Jun. 30, 2021 | 40,959,741 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash flows from operating activities: | ||
Net Loss | $ (1,162,661) | $ (1,549,973) |
Adjustments to reconcile net loss to net cash from operating activities: | ||
Bad debt expense | 5,749 | 3,954 |
Inventories reserve | (1,329) | 4,113 |
Depreciation expense | 80,872 | 81,125 |
SBA loan forgiveness | (151,500) | |
Amortization of right-of-use assets | (1,675) | (755) |
Stock-based compensation | 24,000 | 24,000 |
Stock based compensation - options | 213,675 | 518,700 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 40,219 | (123,035) |
Accounts receivable - related party | (5,016) | (22,410) |
Inventories | 32,248 | (10,117) |
Other receivable | (2,400) | (900) |
Prepaid expenses | (98,821) | 18,356 |
Deposit | 100,000 | 0 |
Accounts payable and accrued liabilities | 32,400 | (20,041) |
Accounts payable - related party | (17,471) | 0 |
Other current liabilities | 164 | (12,334) |
Interest payable - related party | 0 | (1,750) |
Customer deposit | (52,751) | (92,419) |
Net cash flows used in operating activities | (964,297) | (1,183,486) |
Cash flows from financing activities: | ||
Proceeds from SBA loan | 267,297 | 405,860 |
Payment on SBA loan | (227) | 0 |
Payment on promissory note | 0 | (50,000) |
Proceeds from bank loan | 1,500,000 | 0 |
Prepayment on bank loan | (4,663) | 0 |
Net cash flows provided by financing activities | 1,762,407 | 355,860 |
Net change in cash | 798,110 | (827,626) |
Cash beginning of period | 583,325 | 2,192,870 |
Cash end of period | 1,381,435 | 1,365,244 |
Supplemental cash flow disclosure: | ||
Cash paid for income taxes | 0 | 0 |
Cash paid for interest | $ 19,267 | $ 1,831 |
Organization and Operations
Organization and Operations | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Organization and Operations | Note 1 – Organization and Operations Focus Universal Inc. (“Focus”) was incorporated under the laws of the state of Nevada on December 4, 2012 (“Inception”). It is a universal smart instrument developer and manufacturer, headquartered in the Los Angeles, California metropolitan area, specializing in the development and commercialization of novel and proprietary universal smart technologies and instruments. 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, and parameter measurement instruments and functions. Our 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 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. Perfecular Inc. (“Perfecular”) 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”) 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Focus and its wholly-owned subsidiaries, Perfecular, Inc. and AVX Design & Integration, Inc. (collectively, the “Company”, “we”, “our”, or “us”). All intercompany balances and transactions have been eliminated upon consolidation. The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Going Concern 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 six months ended June 30, 2021, the Company had a net loss of $ 1,162,661 964,297 1,500,000 1,500,000 10 March 15, 2022 With the January 1, 2021 beginning cash amount of $583,325 and the loan of $1,500,000, the Company will have enough cash to cover its projected annual cash burn rate of $1,967,074. With the additional $1,500,000 related party loan, the Company will have adequate reserves to continue operations in 2021 and 2022. The related party which provided the loan to the Company is owned by a director of the Company, which we have evaluated to be a reliable source of cashflow. The $10 million planned public offering will contribute to a projected December 31, 2021 cash balance of $11,000,000. Historically, the Company has been successful in reaching its planned fund-raising targets. 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 is completed in Q2 2021. The ultra-narrowband power line communication products will launch in Q4, 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 Q4 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 Q2 of 2022. Overall, we expect that with the loan we obtained, along with the committed related-party loan, and planned capital raising will provide 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, the previous factors raising substantial doubt to continue as a going concern have been alleviated. Principles of Consolidation The accompanying consolidated financial statements include 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. Segment Reporting The Company currently has two operating segments. In accordance with ASC 280, Segment Reporting 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. Use of Estimates The preparation of 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 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, allowance for doubtful accounts, inventory reserves, and the valuation allowance on deferred tax assets. The Company regularly evaluates its estimates and assumptions. Cash 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. There were no Accounts Receivable 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. Allowance for Doubtful Accounts 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 estimate of the allowance for doubtful accounts will change. As of June 30, 2021 and December 31, 2020, allowance for doubtful accounts amounted to $ 50,268 44,519 Concentrations of Credit Risk 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 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 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 June 30, 2021 and December 31, 2020, inventory reserve amounted to $ 69,233 70,562 Property and Equipment 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: Schedule of estimated useful lives of property, plant and equipment Fixed assets Useful life Furniture 5 Equipment 5 Warehouse 39 Improvement 5 Construction in progress – Land – Long-Lived Assets 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 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 June 30, 2021 and December 31, 2020, the Company believes there was no Share-based Compensation 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. Fair Value of Financial Instruments 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: ☐ Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. ☐ Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. ☐ Level 3: Pricing inputs that are generally unobservable inputs and not corroborated by market data. Financial assets are considered Level 2 when their 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. The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses, accounts payable, and accrued expenses, 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 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 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. Revenue Recognition 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: ☐ executed contracts with the Company’s customers that it believes are legally enforceable; ☐ identification of performance obligations in the respective contract; ☐ determination of the transaction price for each performance obligation in the respective contract; ☐ allocation of the transaction price to each performance obligation; and ☐ recognition of revenue only when the Company satisfies each performance obligation. These five elements, as applied to each of the Company’s revenue categories, is summarized below: ☐ Product sales – revenue is recognized at the time of sale of equipment to the customer. ☐ Service sales – revenue is recognized based on the service been provided to the customer. Revenue from 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 Cost of revenue includes the cost of services, labor, and product incurred to provide product sales, service sales, and project sales. Research and Development 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. Related Parties 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 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 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 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. Commitments and Contingencies The Company follows ASC 450-20 to report accounting for contingencies. Certain conditions may exist as of the date the 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’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. Income Tax Provision The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes (ASC 740). 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 than 50% likely to be 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 As of June 30, 2021 and December 31, 2020, the Company did no Basic and Diluted Net Income (Loss) Per Share 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. Schedule of antidilutive shares Six months ended June 30, 2021 2020 Stock options 262,500 192,500 Total 262,500 192,500 Subsequent Events 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. Reclassification Certain reclassifications have been made to the condensed consolidated financial statements for prior years to the current year’s presentation. Such reclassifications have no effect on net income as previously reported. |
Recent Accounting Pronouncement
Recent Accounting Pronouncement | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recent Accounting Pronouncement | Note 3 – Recent Accounting Pronouncement Recently Adopted Accounting Standards 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, the FASB issued ASU 2018-07, Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments granted to nonemployees for goods and services 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. In December 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 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 of the effective dates for implementing previously issued ASU 606 and ASU 842 to give some relief to businesses considering the difficulties they are facing during the pandemic. These entities may defer application to fiscal years beginning after December 15, 2019, and interim periods within 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. Recently Issued Accounting Standards Not Yet Adopted 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. The Company believes the adoption will modify the way the Company analyzes financial instruments, but it does not anticipate a material impact on 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. |
Inventory, net
Inventory, net | 6 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Inventory, net | Note 4 – Inventory, net At June 30, 2021 and December 31, 2020, inventory consisted of the following: Schedule of Inventory June 30, December 31, Parts $ 28,961 $ 45,509 Finished goods 51,849 67,549 Total 80,810 113,058 Less inventory reserve (69,233 ) (70,562 ) Inventory, net $ 11,577 $ 42,496 |
Deposit
Deposit | 6 Months Ended |
Jun. 30, 2021 | |
Deposit Assets [Abstract] | |
Deposit | Note 5 – Deposit Deposit balance as of June 30, 2021 amounted to $ 6,630 6,630 100,000 100,000 |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 6 – Property and Equipment At June 30, 2021 and December 31, 2020, property and equipment consisted of the following: Schedule of property and equipment June 30, December 31, Warehouse $ 3,789,773 $ 3,789,773 Land 731,515 731,515 Building Improvement 238,666 238,666 Furniture and fixture 27,631 27,631 Equipment 48,378 48,378 Software 1,995 1,995 Total cost 4,837,958 4,837,958 Less accumulated depreciation (426,320 ) (345,448 ) Property and equipment, net $ 4,411,638 $ 4,492,510 Depreciation expense for the six months ended June 30, 2021 and 2020 amounted to $ 80,872 81,125 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 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 7 – Related Party Transactions Revenue generated from Vitashower Corp., a company owned by the CEO’s wife, amounted to $ 15,141 21,267 5,016 0 3,379 0 0 17,471 Compensation for services provided by the President and Chief Executive Officer for the six months ended June 30, 2021 and 2020 amounted to $ 60,000 60,000 |
Business Concentration and Risk
Business Concentration and Risks | 6 Months Ended |
Jun. 30, 2021 | |
Risks and Uncertainties [Abstract] | |
Business Concentration and Risks | Note 8 – Business Concentration and Risks Major customers One customer accounted for 0 17 78 42 Major vendors One vendor accounted for 0 0 77 47 |
Operating Lease Right-of-use As
Operating Lease Right-of-use Asset and Operating Lease Liability | 6 Months Ended |
Jun. 30, 2021 | |
Operating Lease Right-of-use Asset And Operating Lease Liability | |
Operating Lease Right-of-use Asset and Operating Lease Liability | 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 32,590 32,590 The Company currently has a lease agreement for AVX’s operation for a monthly payment of $5,258 and shall increase by 3% every year. The lease commenced July 1, 2015 and expires on August 31, 2022 5,968 In adopting ASC Topic 842, Leases (Topic 842), the Company has elected the ‘package of practical expedients,’ which permit 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 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. Right-of-use asset is summarized below: Schedule of operating Right-of-use asset and liability June 30, 2021 December 31, 2020 Office lease $ 157,213 $ 157,213 Less: accumulated amortization (94,208 ) (70,655 ) Right-of-use asset, net $ 63,005 $ 86,558 Operating Lease liability is summarized below: June 30, 2021 December 31, 2020 Office lease $ 69,443 $ 94,671 Less: current portion (58,491 ) (53,384 ) Long-term portion $ 10,952 $ 41,287 Maturity of lease liability is as follows: Schedule of maturity of lease liabilities Year ending December 31, 2021 $ 32,497 Year ending December 31, 2022 43,655 Total future minimum lease payment 76,152 Imputed interest (6,709 ) Lease Obligation, net $ 69,443 |
Loans
Loans | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Loans | Note 10 – Loans Paycheck Protection Program 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 0.98 2 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 1 2 151,500 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 1 2 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 0.98 5 Economic Injury Disaster Loan 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 3.75 30 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 3.75 30 Bank Loan 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 0.25 1,357,178 January 22, 2026 Borrower will use all of the proceeds from this Loan solely as working capital to alleviate economic injury caused by disaster occurring in the month of January 31, 2020 and continuing thereafter. Economic Injury Disaster Loan June 30, December 31, SBA Loan $ 512,430 $ 396,860 Bank Loan 1,495,337 – Total 2,007,767 396,860 Less: current portion (271,085 ) (194,125 ) Long term portion $ 1,736,682 $ 202,735 Interest expense incurred from the loans amounted to $ 22,827 868 |
Stockholders_ Equity
Stockholders’ Equity | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Stockholders’ Equity | Note 11 – Stockholders’ Equity Shares authorized 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 0.001 Common stock As of June 30, 2021 the Company had 40,959,741 During the six months ended June 30, 2021, the Company did not issue common stock. Shares to be issued for compensation The Company entered into agreements with third party consultants for financing and management consultation. The Company has incurred consulting service fees not paid in cash amounting to $ 24,000 122,709 98,709 Stock options On January 4, 2021, each member of the Board was granted 15,000 3.00 On August 6, 2019, each member of the Board was granted 30,000 5.70 As of June 30, 2021, there were 315,000 52,500 315,000 For the six months ended June 30, 2021 and 2020, the Company’s stock option compensation expenses amounted to $ 213,675 518,700 The fair value of the warrants listed above was determined using the Black-Scholes option pricing model with the following assumptions: Schedule of assumptions June 30, June 30, 2021 2020 Risk-free interest rate 0.93% 1.71% Expected life of the options 10 10 Expected volatility 122.93% 158.86% Expected dividend yield 0% 0% The following is a summary of options activity from December 31, 2020 to June 30, 2021: 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 – $ – – – Forfeited or expired – $ – – – Outstanding at June 30, 2021 315,000 $ 4.80 8.83 336,000 Vested as of June 30, 2021 262,500 $ 5.16 8.64 84,000 Exercisable at June 30, 2021 315,000 $ 5.16 8.64 84,000 The exercise price for options outstanding and exercisable at June 30, 2021: 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 reporting
Segment reporting | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment reporting | Note 12 – Segment reporting The Company consists of two types of operations. Focus Universal, Inc. and Perfecular Inc. (“Focus”) involve wholesale, research and development of universal smart instrument and farming devices. 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. Segment information table Six months ended June 30, 2021 Focus AVX Total Revenue $ 526,161 $ 83,841 $ 610,002 Revenue - related party 15,141 – 15,141 Total revenue 541,302 83,841 625,143 Cost of Revenue 422,663 78,183 500,846 Gross Profit 118,639 5,658 124,297 Operating Expenses: Selling 332 626 958 Compensation - officers 73,100 – 73,100 Research and development 110,372 – 110,372 Professional fees 669,679 1,471 671,150 General and administrative 519,574 131,871 651,445 Total Operating Expenses 1,373,057 133,968 1,507,025 Loss from Operations (1,254,418 ) (128,310 ) (1,382,728 ) Other Income (Expense): Interest income (expense), net (20,715 ) (2,041 ) (22,756 ) Other income (expense), net 245,241 (2,418 ) 242,823 Total other income (expense) 224,526 (4,459 ) 220,067 Loss before income taxes (1,029,892 ) (132,769 ) (1,162,661 ) Tax expense – – – Net Loss $ (1,029,892 ) $ (132,769 ) $ (1,162,661 ) |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13 – Commitments and Contingencies 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 reasonable 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 June 30, 2021 and December 31, 2020. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14 – Subsequent Events On July 8, 2021, SBA authorized full forgiveness of AVX Design & Integration, Inc. PPP loan principal amount of $107,460 and $1,267 interest. The Company has evaluated all other subsequent events through the date these condensed consolidated financial statements were issued and determined that there were no subsequent events or transactions that require recognition or disclosures in the condensed consolidated financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Focus and its wholly-owned subsidiaries, Perfecular, Inc. and AVX Design & Integration, Inc. (collectively, the “Company”, “we”, “our”, or “us”). All intercompany balances and transactions have been eliminated upon consolidation. The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Going Concern | Going Concern 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 six months ended June 30, 2021, the Company had a net loss of $ 1,162,661 964,297 1,500,000 1,500,000 10 March 15, 2022 With the January 1, 2021 beginning cash amount of $583,325 and the loan of $1,500,000, the Company will have enough cash to cover its projected annual cash burn rate of $1,967,074. With the additional $1,500,000 related party loan, the Company will have adequate reserves to continue operations in 2021 and 2022. The related party which provided the loan to the Company is owned by a director of the Company, which we have evaluated to be a reliable source of cashflow. The $10 million planned public offering will contribute to a projected December 31, 2021 cash balance of $11,000,000. Historically, the Company has been successful in reaching its planned fund-raising targets. 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 is completed in Q2 2021. The ultra-narrowband power line communication products will launch in Q4, 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 Q4 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 Q2 of 2022. Overall, we expect that with the loan we obtained, along with the committed related-party loan, and planned capital raising will provide 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, the previous factors raising substantial doubt to continue as a going concern have been alleviated. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include 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. |
Segment Reporting | Segment Reporting The Company currently has two operating segments. In accordance with ASC 280, Segment Reporting 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. |
Use of Estimates | Use of Estimates The preparation of 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 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, allowance for doubtful accounts, inventory reserves, and the valuation allowance on deferred tax assets. The Company regularly evaluates its estimates and assumptions. |
Cash | Cash 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. There were no |
Accounts Receivable | Accounts Receivable 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. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts 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 estimate of the allowance for doubtful accounts will change. As of June 30, 2021 and December 31, 2020, allowance for doubtful accounts amounted to $ 50,268 44,519 |
Concentrations of Credit Risk | Concentrations of Credit Risk 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 | Inventory 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 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 June 30, 2021 and December 31, 2020, inventory reserve amounted to $ 69,233 70,562 |
Property and Equipment | Property and Equipment 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: Schedule of estimated useful lives of property, plant and equipment Fixed assets Useful life Furniture 5 Equipment 5 Warehouse 39 Improvement 5 Construction in progress – Land – |
Long-Lived Assets | Long-Lived Assets 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 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 June 30, 2021 and December 31, 2020, the Company believes there was no |
Share-based Compensation | Share-based Compensation 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. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments 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: ☐ Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. ☐ Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. ☐ Level 3: Pricing inputs that are generally unobservable inputs and not corroborated by market data. Financial assets are considered Level 2 when their 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. The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses, accounts payable, and accrued expenses, 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 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 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. |
Revenue Recognition | Revenue Recognition 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: ☐ executed contracts with the Company’s customers that it believes are legally enforceable; ☐ identification of performance obligations in the respective contract; ☐ determination of the transaction price for each performance obligation in the respective contract; ☐ allocation of the transaction price to each performance obligation; and ☐ recognition of revenue only when the Company satisfies each performance obligation. These five elements, as applied to each of the Company’s revenue categories, is summarized below: ☐ Product sales – revenue is recognized at the time of sale of equipment to the customer. ☐ Service sales – revenue is recognized based on the service been provided to the customer. Revenue from 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 | Cost of Revenue Cost of revenue includes the cost of services, labor, and product incurred to provide product sales, service sales, and project sales. |
Research and Development | Research and Development 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. |
Related Parties | Related Parties 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 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 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 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. |
Commitments and Contingencies | Commitments and Contingencies The Company follows ASC 450-20 to report accounting for contingencies. Certain conditions may exist as of the date the 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’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. |
Income Tax Provision | Income Tax Provision The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes (ASC 740). 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 than 50% likely to be 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 As of June 30, 2021 and December 31, 2020, the Company did no |
Basic and Diluted Net Income (Loss) Per Share | Basic and Diluted Net Income (Loss) Per Share 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. Schedule of antidilutive shares Six months ended June 30, 2021 2020 Stock options 262,500 192,500 Total 262,500 192,500 |
Subsequent Events | Subsequent Events 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. |
Reclassification | Reclassification Certain reclassifications have been made to the condensed consolidated financial statements for prior years to the current year’s presentation. Such reclassifications have no effect on net income as previously reported. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful lives of property, plant and equipment | Schedule of estimated useful lives of property, plant and equipment Fixed assets Useful life Furniture 5 Equipment 5 Warehouse 39 Improvement 5 Construction in progress – Land – |
Schedule of antidilutive shares | Schedule of antidilutive shares Six months ended June 30, 2021 2020 Stock options 262,500 192,500 Total 262,500 192,500 |
Inventory, net (Tables)
Inventory, net (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Schedule of Inventory June 30, December 31, Parts $ 28,961 $ 45,509 Finished goods 51,849 67,549 Total 80,810 113,058 Less inventory reserve (69,233 ) (70,562 ) Inventory, net $ 11,577 $ 42,496 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Schedule of property and equipment June 30, December 31, Warehouse $ 3,789,773 $ 3,789,773 Land 731,515 731,515 Building Improvement 238,666 238,666 Furniture and fixture 27,631 27,631 Equipment 48,378 48,378 Software 1,995 1,995 Total cost 4,837,958 4,837,958 Less accumulated depreciation (426,320 ) (345,448 ) Property and equipment, net $ 4,411,638 $ 4,492,510 |
Operating Lease Right-of-use _2
Operating Lease Right-of-use Asset and Operating Lease Liability (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Operating Lease Right-of-use Asset And Operating Lease Liability | |
Schedule of operating Right-of-use asset and liability | Schedule of operating Right-of-use asset and liability June 30, 2021 December 31, 2020 Office lease $ 157,213 $ 157,213 Less: accumulated amortization (94,208 ) (70,655 ) Right-of-use asset, net $ 63,005 $ 86,558 Operating Lease liability is summarized below: June 30, 2021 December 31, 2020 Office lease $ 69,443 $ 94,671 Less: current portion (58,491 ) (53,384 ) Long-term portion $ 10,952 $ 41,287 |
Schedule of maturity of lease liabilities | Schedule of maturity of lease liabilities Year ending December 31, 2021 $ 32,497 Year ending December 31, 2022 43,655 Total future minimum lease payment 76,152 Imputed interest (6,709 ) Lease Obligation, net $ 69,443 |
Loans (Tables)
Loans (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Economic Injury Disaster Loan | Economic Injury Disaster Loan June 30, December 31, SBA Loan $ 512,430 $ 396,860 Bank Loan 1,495,337 – Total 2,007,767 396,860 Less: current portion (271,085 ) (194,125 ) Long term portion $ 1,736,682 $ 202,735 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Schedule of assumptions | Schedule of assumptions June 30, June 30, 2021 2020 Risk-free interest rate 0.93% 1.71% Expected life of the options 10 10 Expected volatility 122.93% 158.86% Expected dividend yield 0% 0% |
Schedule of option activity | 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 – $ – – – Forfeited or expired – $ – – – Outstanding at June 30, 2021 315,000 $ 4.80 8.83 336,000 Vested as of June 30, 2021 262,500 $ 5.16 8.64 84,000 Exercisable at June 30, 2021 315,000 $ 5.16 8.64 84,000 |
Schedule of options by exercise price | 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 reporting (Tables)
Segment reporting (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment information table | Segment information table Six months ended June 30, 2021 Focus AVX Total Revenue $ 526,161 $ 83,841 $ 610,002 Revenue - related party 15,141 – 15,141 Total revenue 541,302 83,841 625,143 Cost of Revenue 422,663 78,183 500,846 Gross Profit 118,639 5,658 124,297 Operating Expenses: Selling 332 626 958 Compensation - officers 73,100 – 73,100 Research and development 110,372 – 110,372 Professional fees 669,679 1,471 671,150 General and administrative 519,574 131,871 651,445 Total Operating Expenses 1,373,057 133,968 1,507,025 Loss from Operations (1,254,418 ) (128,310 ) (1,382,728 ) Other Income (Expense): Interest income (expense), net (20,715 ) (2,041 ) (22,756 ) Other income (expense), net 245,241 (2,418 ) 242,823 Total other income (expense) 224,526 (4,459 ) 220,067 Loss before income taxes (1,029,892 ) (132,769 ) (1,162,661 ) Tax expense – – – Net Loss $ (1,029,892 ) $ (132,769 ) $ (1,162,661 ) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details - Estimated useful lives) | 6 Months Ended |
Jun. 30, 2021 | |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property | 5 years |
Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property | 5 years |
Manufacturing Facility [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property | 39 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property | 5 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details - Antidilutive shares) - shares | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares | 262,500 | 192,500 |
Equity Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive shares | 262,500 | 192,500 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
AccountingPoliciesLineItems [Line Items] | |||||
Net loss | $ 480,145 | $ 627,667 | $ 1,162,661 | $ 1,549,973 | |
Net cash flows used in operating activities | 964,297 | 1,183,486 | |||
Cash equivalents | 0 | 0 | $ 0 | ||
Allowance for doutful accounts | 50,268 | 50,268 | 44,519 | ||
Inventory reserve | 69,233 | 69,233 | 70,562 | ||
Impairment of long-lived assets | 0 | $ 0 | |||
Deferred tax assets or liabilities | 0 | 0 | 0 | ||
Uncertain tax positions | 0 | 0 | $ 0 | ||
Financial Institution [Member] | |||||
AccountingPoliciesLineItems [Line Items] | |||||
Bank loan | (1,500,000) | (1,500,000) | |||
Private Related Party [Member] | |||||
AccountingPoliciesLineItems [Line Items] | |||||
Note payable - related party | $ 1,500,000 | $ 1,500,000 | |||
Interest rate | 10.00% | ||||
Debt maturity date | Mar. 15, 2022 |
Inventory, net (Details)
Inventory, net (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Parts | $ 28,961 | $ 45,509 |
Finished goods | 51,849 | 67,549 |
Total | 80,810 | 113,058 |
Less inventory reserve | (69,233) | (70,562) |
Inventory, net | $ 11,577 | $ 42,496 |
Deposit (Details Narrative)
Deposit (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | |
DepositsLineItems [Line Items] | ||
Deposits | $ 6,630 | $ 6,630 |
Deposit - current portion | 0 | 100,000 |
Escrow For Purchase [Member] | ||
DepositsLineItems [Line Items] | ||
Proceeds from deposit | 100,000 | |
Lease Agreement Deposit [Member] | ||
DepositsLineItems [Line Items] | ||
Deposits | $ 6,630 | 6,630 |
Escrow For Purchase [Member] | ||
DepositsLineItems [Line Items] | ||
Deposit - current portion | $ 100,000 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 4,837,958 | $ 4,837,958 |
Less accumulated depreciation | (426,320) | (345,448) |
Property and equipment, net | 4,411,638 | 4,492,510 |
Manufacturing Facility [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,789,773 | 3,789,773 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 731,515 | 731,515 |
Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 238,666 | 238,666 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 27,631 | 27,631 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 48,378 | 48,378 |
Software Development [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,995 | $ 1,995 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 80,872 | $ 81,125 |
Security deposit from tenant | $ 12,335 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||||
Accounts payable - related party | $ 0 | $ 0 | $ 17,471 | ||
Compensation for services | 293,603 | $ 394,031 | 671,150 | $ 827,570 | |
Vitashower [Member] | |||||
Related Party Transaction [Line Items] | |||||
Revenue from related parties | 15,141 | 21,267 | |||
Account receivable, Related Parties | 5,016 | 5,016 | 0 | ||
Purchases from related party | 3,379 | 0 | |||
Accounts payable - related party | $ 0 | 0 | $ 17,471 | ||
President and CEO [Member] | |||||
Related Party Transaction [Line Items] | |||||
Compensation for services | $ 60,000 | $ 60,000 |
Business Concentration and Ri_2
Business Concentration and Risks (Details Narrative) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Accounts Receivable [Member] | One Customer [Member] | Customer Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 0.00% | 17.00% | |
Revenue Benchmark [Member] | One Customer [Member] | Customer Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 78.00% | 42.00% | |
Accounts Payable [Member] | One Vendor [Member] | Product Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 0.00% | 0.00% | |
Revenue [Member] | One Vendor [Member] | Product Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 77.00% | 47.00% |
Operating Lease Right-of-use _3
Operating Lease Right-of-use Assets and Operating Lease Liability (Details - Operating lease asset and liability) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Operating Lease Right-of-use Asset And Operating Lease Liability | ||
Office lease | $ 157,213 | $ 157,213 |
Less: accumulated amortization | (94,208) | (70,655) |
Right-of-use asset, net | 63,005 | 86,558 |
Office lease | 69,443 | 94,671 |
Less: current portion | (58,491) | (53,384) |
Long-term portion | $ 10,952 | $ 41,287 |
Operating Lease Right-of-use _4
Operating Lease Right-of-use Assets and Operating Lease Liability (Details - Lease maturity) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Operating Lease Right-of-use Asset And Operating Lease Liability | ||
Year ending December 31, 2021 | $ 32,497 | |
Year ending December 31, 2022 | 43,655 | |
Total future minimum lease payment | 76,152 | |
Imputed interest | (6,709) | |
Lease Obligation, net | $ 69,443 | $ 94,671 |
Operating Lease Right-of-use _5
Operating Lease Right-of-use Asset and Operating Lease Liability (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Operating Lease Right-of-use Asset And Operating Lease Liability | ||
Lease borrowing rate | 15.00% | |
Operating lease expense | $ 32,590 | $ 32,590 |
Lease expiration date | Aug. 31, 2022 | |
Security deposit | $ 5,968 |
Loans (Details - Economic Injur
Loans (Details - Economic Injury Disaster Loan) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
SBA Loan | $ 512,430 | $ 396,860 |
Bank Loan | 1,495,337 | 0 |
Total | 2,007,767 | 396,860 |
Less: current portion | (271,085) | (194,125) |
Long term portion | $ 1,736,682 | $ 202,735 |
Loans (Details Narrative)
Loans (Details Narrative) - USD ($) | Jan. 08, 2021 | Mar. 10, 2021 | Mar. 02, 2021 | May 04, 2020 | Apr. 24, 2020 | Jun. 05, 2020 | Jun. 04, 2020 | Jun. 30, 2021 | Jun. 30, 2020 |
Line of Credit Facility [Line Items] | |||||||||
Interest expense incurred from loans amount | $ 22,827 | $ 868 | |||||||
A V X Design And Integration [Member] | Ppp Loan [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Proceeds from loans | $ 108,750 | ||||||||
Interest rate | 0.98% | ||||||||
Term | 5 years | ||||||||
A V X Design And Integration [Member] | Ppp Loan [Member] | J P Morgan Chase Bank [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Proceeds from loans | $ 107,460 | ||||||||
Interest rate | 0.98% | ||||||||
Term | 2 years | ||||||||
A V X Design And Integration [Member] | S B A Loan [Member] | J P Morgan Chase Bank [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Proceeds from loans | $ 56,800 | ||||||||
Interest rate | 375.00% | ||||||||
Term | 30 years | ||||||||
Perfecular [Member] | Ppp Loan [Member] | Bank Of America [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Proceeds from loans | $ 151,500 | ||||||||
Interest rate | 1.00% | ||||||||
Term | 2 years | ||||||||
Other income | $ 151,500 | ||||||||
Perfecular [Member] | Ppp Loan [Member] | Wells Fargo Bank [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Proceeds from loans | $ 158,547 | ||||||||
Interest rate | 1.00% | ||||||||
Term | 2 years | ||||||||
Perfecular [Member] | S B A Loan [Member] | Wells Fargo Bank [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Proceeds from loans | $ 81,100 | ||||||||
Interest rate | 3.75% | ||||||||
Term | 30 years | ||||||||
Focus [Member] | Bank Loan [Member] | East West Bank [Member] | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Proceeds from loans | $ 1,500,000 | ||||||||
Interest rate | 0.25% | ||||||||
Periodic payment | $ 1,357,178 | ||||||||
Due date | Jan. 22, 2026 |
Stockholders' Equity (Details -
Stockholders' Equity (Details - Options by exercise price (Details - Assumptions) - Equity Option [Member] | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 0.93% | 1.71% |
Expected life | 10 years | 10 years |
Expected volatility | 122.93% | 158.86% |
Expected dividend yield | 0.00% | 0.00% |
Stockholders' Equity (Details_2
Stockholders' Equity (Details - Option Activity) - Equity Option [Member] - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Options Outstanding, Beginning | 210,000 | |
Weighted Average Exercise Price Outstanding, Beginning | $ 9.61 | |
Options Outstanding | 8 years 9 months 29 days | 9 years 7 months 9 days |
Number of Options Granted | 105,000 | |
Weighted Average Exercise Price Granted | $ 3 | |
Number of Options Exercised | 0 | |
Weighted Average Exercise Price Exercised | ||
Number of Options Forfeited | 0 | |
Weighted Average Exercise Price Forfeited | ||
Number of Options Outstanding, Ending | 315,000 | 210,000 |
Weighted Average Exercise Price Outstanding, Ending | $ 4.80 | $ 9.61 |
Aggregate intrinsic value options outstanding | $ 336,000 | |
Number of Options Vested | 262,500 | |
Weighted Average Exercise Price Vested | $ 5.16 | |
Options Vested | 8 years 7 months 20 days | |
Aggregate intrinsic value options vested | $ 84,000 | |
Number of Options Exercisable, Ending | 315,000 | |
Weighted Average Exercise Price Exercisable, Ending | $ 5.16 | |
Options Exercisable | 8 years 7 months 20 days | |
Aggregate intrinsic value options exercisable | $ 84,000 |
Stockholders' Equity (Details_3
Stockholders' Equity (Details - Options by exercise price (Details - Options Outstanding and Exercisable) - Equity Option [Member] - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options Outstanding | 315,000 | 210,000 |
Options outstanding, exercise price | $ 4.80 | $ 9.61 |
Options Exercisable | 315,000 | |
Range 1 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options Outstanding | 30,000 | |
Options outstanding, exercise price | $ 5.70 | |
Options Exercisable | 30,000 | |
Range 2 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options Outstanding | 30,000 | |
Options outstanding, exercise price | $ 5.70 | |
Options Exercisable | 30,000 | |
Range 3 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options Outstanding | 30,000 | |
Options outstanding, exercise price | $ 5.70 | |
Options Exercisable | 30,000 | |
Range 4 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options Outstanding | 30,000 | |
Options outstanding, exercise price | $ 5.70 | |
Options Exercisable | 30,000 | |
Range 5 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options Outstanding | 30,000 | |
Options outstanding, exercise price | $ 5.70 | |
Options Exercisable | 30,000 | |
Range 6 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options Outstanding | 30,000 | |
Options outstanding, exercise price | $ 5.70 | |
Options Exercisable | 30,000 | |
Range 7 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options Outstanding | 30,000 | |
Options outstanding, exercise price | $ 5.70 | |
Options Exercisable | 30,000 | |
Range 8 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options Outstanding | 15,000 | |
Options outstanding, exercise price | $ 3 | |
Options Exercisable | 15,000 | |
Range 9 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options Outstanding | 15,000 | |
Options outstanding, exercise price | $ 3 | |
Options Exercisable | 15,000 | |
Range 10 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options Outstanding | 15,000 | |
Options outstanding, exercise price | $ 3 | |
Options Exercisable | 15,000 | |
Range 11 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options Outstanding | 15,000 | |
Options outstanding, exercise price | $ 3 | |
Options Exercisable | 15,000 | |
Range 12 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options Outstanding | 15,000 | |
Options outstanding, exercise price | $ 3 | |
Options Exercisable | 15,000 | |
Range 13 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options Outstanding | 15,000 | |
Options outstanding, exercise price | $ 3 | |
Options Exercisable | 15,000 | |
Range 14 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options Outstanding | 15,000 | |
Options outstanding, exercise price | $ 3 | |
Options Exercisable | 15,000 |
Stockholders_ Equity (Details N
Stockholders’ Equity (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jan. 04, 2021 | Dec. 31, 2020 | Aug. 06, 2019 | |
Class of Stock [Line Items] | |||||||
Common stock, shares authorized | 75,000,000 | 75,000,000 | 75,000,000 | ||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Common stock, issued | 40,959,741 | 40,959,741 | 40,959,741 | ||||
Common stock, outstanding | 40,959,741 | 40,959,741 | 40,959,741 | ||||
Consulting fees | $ 293,603 | $ 394,031 | $ 671,150 | $ 827,570 | |||
Stock compensation expense | $ 24,000 | 24,000 | |||||
Equity Option [Member] | |||||||
Class of Stock [Line Items] | |||||||
Options granted | 315,000 | 315,000 | 15,000 | 30,000 | |||
Share price | $ 3 | $ 5.70 | |||||
Options nonvested | 52,500 | 52,500 | |||||
Options outstanding | 315,000 | 315,000 | 210,000 | ||||
Stock compensation expense | $ 213,675 | 518,700 | |||||
Consultants [Member] | |||||||
Class of Stock [Line Items] | |||||||
Consulting fees | 24,000 | ||||||
Consulting services incurred but not yet paid in shares | $ 122,709 | $ 98,709 |
Segment reporting (Details)
Segment reporting (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 261,680 | $ 434,548 | $ 625,143 | $ 745,157 |
Cost of Revenue | 208,583 | 313,157 | 500,846 | 651,229 |
Gross profit | 53,097 | 121,391 | 124,297 | 93,928 |
Selling expense | 446 | 1,949 | 958 | 17,019 |
Compensation - officers | 34,000 | 34,000 | 73,100 | 68,000 |
Research and development | 47,222 | 61,797 | 110,372 | 132,193 |
Professional fees | 293,603 | 394,031 | 671,150 | 827,570 |
General and administrative | 341,361 | 289,517 | 651,445 | 679,330 |
Total Operating Expenses | 716,632 | 781,294 | 1,507,025 | 1,724,112 |
Loss from Operations | (663,535) | (659,903) | (1,382,728) | (1,630,184) |
Interest income (expense), net | (15,223) | (1,240) | (22,756) | 35 |
Other income (expense), net | 198,613 | 33,476 | 242,823 | 80,257 |
Total other income (expense) | 183,390 | 32,236 | 220,067 | 80,211 |
Loss before income taxes | (480,145) | (627,667) | (1,162,661) | (1,549,973) |
Income tax expense | 0 | 0 | 0 | 0 |
Net Loss | (480,145) | (627,667) | (1,162,661) | (1,549,973) |
Revenue [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 256,730 | 427,953 | 610,002 | 723,890 |
Revenue Related Party [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 4,950 | $ 6,595 | 15,141 | $ 21,267 |
Focus [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 541,302 | |||
Cost of Revenue | 422,663 | |||
Gross profit | 118,639 | |||
Selling expense | 332 | |||
Compensation - officers | 73,100 | |||
Research and development | 110,372 | |||
Professional fees | 669,679 | |||
General and administrative | 519,574 | |||
Total Operating Expenses | 1,373,057 | |||
Loss from Operations | (1,254,418) | |||
Interest income (expense), net | (20,715) | |||
Other income (expense), net | 245,241 | |||
Total other income (expense) | 224,526 | |||
Loss before income taxes | (1,029,892) | |||
Income tax expense | 0 | |||
Net Loss | (1,029,892) | |||
Focus [Member] | Revenue [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 526,161 | |||
Focus [Member] | Revenue Related Party [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 15,141 | |||
Avx [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 83,841 | |||
Cost of Revenue | 78,183 | |||
Gross profit | 5,658 | |||
Selling expense | 626 | |||
Compensation - officers | 0 | |||
Research and development | 0 | |||
Professional fees | 1,471 | |||
General and administrative | 131,871 | |||
Total Operating Expenses | 133,968 | |||
Loss from Operations | (128,310) | |||
Interest income (expense), net | (2,041) | |||
Other income (expense), net | (2,418) | |||
Total other income (expense) | (4,459) | |||
Loss before income taxes | (132,769) | |||
Income tax expense | 0 | |||
Net Loss | (132,769) | |||
Avx [Member] | Revenue [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 83,841 | |||
Avx [Member] | Revenue Related Party [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 0 |