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What changed in FOCUS UNIVERSAL INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of FOCUS UNIVERSAL INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+230 added−202 removedSource: 10-K (2026-03-31) vs 10-K (2025-02-28)

Top changes in FOCUS UNIVERSAL INC.'s 2025 10-K

230 paragraphs added · 202 removed · 165 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

63 edited+15 added−19 removed69 unchanged
Biggest changeA World Economic Forum report stated that by 2035 5G networks would contribute $13.2 trillion in economic value globally and generate 22.3 million jobs in the 5G global value chain from direct network investments and residual services [1] . 5G networks and their related applications are expected to add three million jobs and $1.2 trillion to the economy in the U.S. [2] ____________________ [1] World Economic Forum, January 2020 “The Impact of 5G: Creating New Value across Industries and Society,” available at: http://www3.weforum.org/docs/WEF_The_Impact_of_5G_Report.pdf (last accessed March 6, 2023). [2] https://www.marketsandmarkets.com/Market-Reports/power-line-communication-plc-market-912.html (last accessed on March 6, 2023). 3 Though 5G offers a significant increase in speed and bandwidth over previous generation telecommunication networks, its more limited range for high-speed internet will require further infrastructure investments.
Biggest changeA World Economic Forum report stated that by 2035 5G networks would contribute $13.2 trillion in economic value globally and generate 22.3 million jobs in the 5G global value chain from direct network investments and residual services. 5G networks and their related applications are expected to add three million jobs and $1.2 trillion to the economy in the U.S.
Our Ubiquitor also controls two lights in this configuration, which it can control by turning the lights on or off (including on a schedule) or by using a light sensor to control the lights’ output intensity. 9 Figure 9. Our USIP simultaneously monitors and controls 72 different devices and 95 sensors.
Our Ubiquitor also controls two lights in this configuration, which it can control by turning the lights on or off (including on a schedule) or by using a light sensor to control the lights’ output intensity. Figure 9. Our USIP simultaneously monitors and controls 72 different devices and 95 sensors.
From USIP to device level integrated circuits (“IC”). 5G Ultra-narrowband Technology Fifth generation (“5G”) telecommunications networks are expected to revolutionize the digital economy by enabling new applications that depend on ultra-fast communications on an industrial scale. 5G promises to deliver an improved end-user experience by offering new applications and services through gigabit speeds and significantly improved performance and reliability.
From USIP to device level integrated circuits (“IC”). 2 5G Ultra-narrowband Technology Fifth generation (“5G”) telecommunications networks are expected to revolutionize the digital economy by enabling new applications that depend on ultra-fast communications on an industrial scale. 5G promises to deliver an improved end-user experience by offering new applications and services through gigabit speeds and significantly improved performance and reliability.
Despite this forward technological momentum, a sector-wide study conducted by Cisco showed that 60 percent of IoT initiatives stalled at the very-early Proof of Concept (PoC) stage and only 26% of companies have had an IoT initiative that they considered a complete success. Herein lies both the key advantage of the platforms of the Company and the opportunities and strengths.
Despite this forward technological momentum, a sector-wide study conducted by Cisco showed that 60 percent of IoT initiatives stalled at the very-early Proof of Concept (PoC) stage and only 26% of companies have had an IoT initiative that they considered a complete success. Herein lies both the key advantage of the platforms of the Company and its opportunities and strengths.
Leveraging the same technical principles discussed above, we can simplify the smart control and monitoring in this and related industries (including agriculture and aquaculture) with a platform that requires little design work for interoperability between sensors and control devices. Figure 10. Traditional horticulture measurement and control devices. 10 Figure 11. Ubiquitor, Universal Smart Device.
Leveraging the same technical principles discussed above, we can simplify the smart control and monitoring in this and related industries (including agriculture and aquaculture) with a platform that requires little design work for interoperability between sensors and control devices. Figure 10. Traditional horticulture measurement and control devices. 8 Figure 11. Ubiquitor, Universal Smart Device.
Our ultra-narrowband (UNB) wireless communication 5G+ technology aims to achieve both low band 5G coverage and 1 Gbps high-band speed because we employ an ultra-narrow spectrum channel ( UNB allows for long-range coverage, making it an optimal low-power wide-area network solution for industrial IoT systems.
Our ultra-narrowband (UNB) wireless communication 5G+ technology aims to achieve both low band 5G coverage and 1 Gbps high-band speed because we employ an ultra-narrow spectrum channel ( 3 UNB allows for long-range coverage, making it an optimal low-power wide-area network solution for industrial IoT systems.
We believe this strategy will allow for accelerated growth and maximize investor returns. One of our key strategies to grow through M&A is to acquire smaller businesses that focus on IoT installation technology (industrial or residential) and in the USIP or PLC industries.
We believe this strategy will allow for accelerated growth and maximize investor returns. 12 One of our key strategies to grow through M&A is to acquire smaller businesses that focus on IoT installation technology (industrial or residential) and in the USIP or PLC industries.
It would also mean that we could reduce the number of subcarriers and reduce the overall costs of the 5G networks infrastructure. Ultra-narrowband Power Line Communication (“PLC”) Technology Our patented PLC is innovative communication technology that enables sending data over existing power cables in the electric grid.
It would also mean that we could reduce the number of subcarriers and reduce the overall costs of the 5G networks infrastructure. 4 Ultra-narrowband Power Line Communication (“PLC”) Technology Our patented PLC is innovative communication technology that enables sending data over existing power cables in the electric grid.
A computer or smartphone can also be used for display. 8 As illustrated below, when a light sensor is also plugged into our Ubiquitor using a three-way splitter, the Ubiquitor becomes a three-sensor device. Figure 7. A pH sensor, a CO2 sensor, and a light sensor are connected to the Ubiquitor , and the device changes into a three-sensor device.
As illustrated below, when a light sensor is also plugged into our Ubiquitor using a three-way splitter, the Ubiquitor becomes a three-sensor device. Figure 7. A pH sensor, a CO2 sensor, and a light sensor are connected to the Ubiquitor , and the device changes into a three-sensor device. A computer or smartphone can also be used for display.
Software is a critical component in electronics, and the more tightly integrated the software, the better the power and performance. Software also adds an element of flexibility and allows multiple discrete ICs to be integrated into a single IC. 2 Figure 1.
Software is a critical component in electronics, and the more tightly integrated the software, the better the power and performance. Software also adds an element of flexibility and allows multiple discrete ICs to be integrated into a single IC. Figure 1.
A blood pressure sensor is connected to our universal device, which we call the Ubiquitor, and changes our device into a blood pressure measurement instrument. Similarly, if we remove the blood pressure sensor and connect our Ubiquitor to both a pH sensor and a CO2 sensor, the Ubiquitor changes to a two-sensor device capable of measuring pH and CO2 concentration.
A blood pressure sensor is connected to our universal device, which we call the Ubiquitor, and changes our device into a blood pressure measurement instrument. 6 Similarly, if we remove the blood pressure sensor and connect our Ubiquitor to both a pH sensor and a CO2 sensor, the Ubiquitor changes to a two-sensor device capable of measuring pH and CO2 concentration.
This automation is designed to create an error-free, seamless process. Focus Universal expect to showcase the software to public in 2024. 13 Strategy and Marketing Plan The Company plans to market the USIP to the industrial sector first, including key growth industries such as indoor agriculture.
This automation is designed to create an error-free, seamless process. Focus Universal expect to showcase the software to public in 2026. Strategy and Marketing Plan The Company plans to market the USIP to the industrial sector first, including key growth industries such as indoor agriculture.
The UIMAGP and user interface specification codes work collectively to perform the function of traditional customized software, enabling UIMAGP to be shared by the estimated 20 billion IoT devices worldwide, [15][16] a feat that to our knowledge, current manual software designs have not been able not achieve.
The UIMAGP and user interface specification codes work collectively to perform the function of traditional customized software, enabling UIMAGP to be shared by the estimated 20 billion IoT devices worldwide, [7][8] a feat that to our knowledge, current manual software designs have not been able not achieve.
The development of USIP is closely associated with the development and proliferation of computers and mobile devices that provide the foundation and technical support to the universal smart instrument such as an attractive graphical user touch screen interface, data processing and analysis capabilities, video and audio, cameras, GPS, ubiquitous wireless connectivity, artificial intelligence, cloud-based communications and a diverse number of functions and software available to users that are not contained in traditional instruments.
We believe our USIP will revolutionize the field of instrumentation, measurement, control, and automation. 5 The development of USIP is closely associated with the development and proliferation of computers and mobile devices that provide the foundation and technical support to the universal smart instrument such as an attractive graphical user touch screen interface, data processing and analysis capabilities, video and audio, cameras, GPS, ubiquitous wireless connectivity, artificial intelligence, cloud-based communications and a diverse number of functions and software available to users that are not contained in traditional instruments.
Our goals over the next three years include: · Raise capital to move into full sales and marketing team for our Ubiquitor device and growing product lines; · Partner with manufacturers and promote the adoption of our Ubiquitor device in a USIP; · Acquire a stable market share of the sensor device market; · Continue performing research and development on PLC technology; · Focus on building our smart home offerings so that we can reduce the cost of smart home implementation to expand smart home installation and implementation beyond luxury homes; · File additional patents to expand our intellectual property portfolio related to the many uses of our Ubiquitor device; · Commercialize our financial reporting software under a SaaS model; and · File patents to protect our PLC technology.
However, promoting universal smart technology and universal smart IoT devices to our customers, including traditional instrument manufacturers, will be the central focus of our future business. 11 Our goals over the next three years include: · Raise capital to move into full sales and marketing team for our Ubiquitor device and growing product lines; · Partner with manufacturers and promote the adoption of our Ubiquitor device in a USIP; · Acquire a stable market share of the sensor device market; · Continue performing research and development on PLC technology; · Focus on building our smart home offerings so that we can reduce the cost of smart home implementation to expand smart home installation and implementation beyond luxury homes; · File additional patents to expand our intellectual property portfolio related to the many uses of our Ubiquitor device; · Commercialize our financial reporting software under a SaaS model; and · File patents to protect our PLC technology.
The Ubiquitor is a handheld, fully modular system with a universal sensor node and gateway system that uses a smartphone as the output display module that displays the readings of various probe modules. We implemented our Ubiquitor in the configuration pictured in Figure 9.
A computer or smartphone can also be used for the display. 7 The Ubiquitor is a handheld, fully modular system with a universal sensor node and gateway system that uses a smartphone as the output display module that displays the readings of various probe modules. We implemented our Ubiquitor in the configuration pictured in Figure 9.
Because of the greater spectrum width, speed is increased, and transmission latency is reduced. However, the drawback is that high-band spectrum does not propagate over a large coverage area. For example, a 28 GHz mmWave spectrum can only travel 500 feet. [10] Low-band frequencies can travel long distances and penetrate buildings but can only carry a limited amount of data.
However, the drawback is that high-band spectrum does not propagate over a large coverage area. For example, a 28 GHz mmWave spectrum can only travel 500 feet. Low-band frequencies can travel long distances and penetrate buildings but can only carry a limited amount of data.
This platform is used to build IoT user interfaces. The natural integrated programming language we have developed is like the language humans use to communicate with each other, which makes it is easy for humans to learn, while still being understood by a machine.
The natural integrated programming language we have developed is like the language humans use to communicate with each other, which makes it is easy for humans to learn, while still being understood by a machine.
Key Competitive Advantages and Opportunities and Strengths Across the world, everyday internet connected devices are getting incorporated in tandem, including thermostats, water meters, home alarms, kitchen gadgets, medical equipment, factory machinery and even vehicles. Collectively, this ecosystem represents the next frontier in the digital revolution.
Our quantum light meters and handheld sensors are also manufactured in our Ontario, California facility. Key Competitive Advantages and Opportunities and Strengths Across the world, everyday internet connected devices are getting incorporated in tandem, including thermostats, water meters, home alarms, kitchen gadgets, medical equipment, factory machinery and even vehicles. Collectively, this ecosystem represents the next frontier in the digital revolution.
A computer or smartphone can also be used for display. As illustrated in Figure 8, the Ubiquitor can connect any number of sensors in any combination. Figure 8. Any number of sensors in any combination can be connected to the Ubiquitor and changed it into a multiple sensor device. A computer or smartphone can also be used for the display.
As illustrated in Figure 8, the Ubiquitor can connect any number of sensors in any combination. Figure 8. Any number of sensors in any combination can be connected to the Ubiquitor and changed it into a multiple sensor device.
Each sensor has its own user interface automatically generated based on the user interface specification code saved in each sensor. Figure 6. A pH sensor and a CO2 sensor are connected to our universal device, and our device changes into a two-sensor device.
Each sensor has its own user interface automatically generated based on the user interface specification code saved in each sensor. Figure 6. A pH sensor and a CO2 sensor are connected to our universal device, and our device changes into a two-sensor device. A computer or smartphone can also be used for display.
Notwithstanding the foregoing, should we be unable to successfully integrate the Ubiquitor into our smart installations, the Ubiquitor will continue to be a flagship product of our Company that can be applied to various other industrial and commercial purposes.
The Ubiquitor’s connectivity capabilities will allow our systems to be expanded and customized in the future. Notwithstanding the foregoing, should we be unable to successfully integrate the Ubiquitor into our smart installations, the Ubiquitor will continue to be a flagship product of our Company that can be applied to various other industrial and commercial purposes.
Additionally, we plan to continue to increase our efforts in protecting more intellectual property rights. We have developed products in both the controlled agriculture industry and home automation industries, taking advantage of our existing relationships in both sectors. We are building a U.S. sales team to market our product lines.
We have developed products in both the controlled agriculture industry and home automation industries, taking advantage of our existing relationships in both sectors. We are building a U.S. sales team to market our product lines.
Many of Monnit’s products are web-based wireless sensors that usually are not portable because of their power consumption. Also, the sensors’ real-time updates are slow; and we believe security of the web-based sensor data acquisition may be a concern. In addition to purchasing the device, consumers usually have to pay a monthly fee for using web-based services.
Also, the sensors’ real-time updates are slow; and we believe security of the web-based sensor data acquisition may be a concern. In addition to purchasing the device, consumers usually have to pay a monthly fee for using web-based services.
A comparison of our ultra-narrowband technology with 4G and 5G is illustrated in the table below: Technology Bandwidth No. of subcarriers Operating Frequency Speed Spectral MHz GHz Mbps Bits/s/Hz 4G 20 1200 6 4-60 6 5G 100 3276 Up to 300 40-1100 10 UNB (finished) 0.001 1 0.004 4 ~4000 UNB (in development) 0.001 1 0.064 64-256 >4000 ____________________ [12] THALES, Dec 29,2022, A 5G PROGRESS REPORT: LAUNCHES, SUBSCRIBERS, DEVICES & MORE, https://www.thalesgroup.com/en/worldwide/digital-identity-and-security/magazine/5g-progress-report-launches-subscribers-devices, (last accessed March 7, 2023) 5 As shown by the above table, our internal testing shows that our finished ultra-narrowband technology can achieve speeds of 4 Mbps per second at a bandwidth of less than 1000 Hz.
A comparison of our ultra-narrowband technology with 4G and 5G is illustrated in the table below: Technology Bandwidth No. of subcarriers Operating Frequency Speed Spectral MHz GHz Mbps Bits/s/Hz 4G 20 1200 6 4-60 6 5G 100 3276 Up to 300 40-1100 10 UNB (finished) 0.001 1 0.004 4 ~4000 UNB (in development) 0.001 1 0.064 64-256 >4000 As shown by the above table, our internal testing shows that our finished ultra-narrowband technology can achieve speeds of 4 Mbps per second at a bandwidth of less than 1000 Hz.
By comparison, a single hair dryer will render our competitors’ legacy PLC technology completely useless. We have completed the development of our 4Mbps PLC modules and the printed circuit board layout.
By comparison, a single hair dryer will render our competitors’ legacy PLC technology completely useless. We have completed the development of our 4Mbps PLC modules and the printed circuit board layout. These modules will be used for IoT systems involving over 1,000 sensors.
In an effort to continually develop our product lines, we plan to phase out the traditional, lower-margin products and are preparing to launch a new line of products that have been in development for several years. These newer technology products will be released in phases, and we intend that increasing amounts of technology will be layered upon these products.
Current Product Offering In an effort to continually develop our product lines, we plan to phase out the traditional, lower-margin products and are preparing to launch a new line of products that have been in development for several years.
Wireless carriers still need to bid for the costly higher spectrum bands, as they build and roll out their respective 5G networks. Adding the hardware required for 5G networks can significantly increase operating expenses.
Wireless carriers still need to bid for the costly higher spectrum bands, as they build and roll out their respective 5G networks. Adding the hardware required for 5G networks can significantly increase operating expenses. According to THALES, total global spending on 5G is set to reach $620 billion by 2025.
Our combined platforms are able to eliminate redundant work and production costs in the early stage development in the IoT sector, whereby project developers do not need to begin from scratch each time they develop a new IoT product, eliminating a significant part of their workload. 16 Competitors Sensor Node Industry There are several competitors we have identified in the sensor node industry, including traditional instruments or devices manufacturers such as Hanna Instruments or Extech Instruments.
Our combined platforms are able to eliminate redundant work and production costs in the early-stage development in the IoT sector, whereby project developers do not need to begin from scratch each time they develop a new IoT product, eliminating a significant part of their workload.
Currently, we have completed the SEC financial reporting software in a Microsoft Word format. Our team is focused on streamlining the entire SEC financial reporting process for SEC attorneys, PCAOB accounting firms, and other financial reporting professionals.
Our team is focused on streamlining the entire SEC financial reporting process for SEC attorneys, PCAOB accounting firms, and other financial reporting professionals.
We believe smart installation based on the USIP, and our Ubiquitor together will include more functionalities than the current systems offered by our competitors. It is our goal that our smart systems would integrate, exchange data, interact and connect utilizing our forthcoming PLC technology. As a result, the installation process would be simplified, and its costs would be reduced.
It is our goal that our smart systems would integrate, exchange data, interact and connect utilizing our forthcoming PLC technology. As a result, the installation process would be simplified, and its costs would be reduced. The Ubiquitor will be central to our smart installation systems.
They are ready for marketing and have garnered significant interest at CES 2025 in Las Vegas. These sensors can be sold individually with Ubiquitors or bundled together to form an integrated IoT solution. SEC Financial Reporting Software Our subsidiary Lusher Inc. is developing and designing a software to streamline SEC financial reporting for financial reporting and tax firms.
They are ready for marketing and have garnered significant interest at CES 2026 in Las Vegas. These sensors can be sold individually with Ubiquitors or bundled together to form an integrated IoT solution.
On January 31, 2025, we effected a 10 for 1 reverse stock split of the Company’s authorized stock and issued and outstanding shares of Common Stock by filing a Certificate of Change pursuant to pursuant to Nevada Revised Statutes (“NRS”) Section 78.209.
On January 28, 2025, the Company filed a Certificate Change pursuant to Nevada Revised Statutes (“NRS”) 78.209 with the Secretary of State of the State of Nevada to effect a 1-for-10 reverse stock split of the Company’s (i) authorized Common Stock shares and (ii) issued and outstanding Common Stock shares. The reverse stock split became effective on January 31, 2025.
As the sophistication of both hardware and software in the consumer electronics industry skyrockets, an increasing share of the electronic devices produced around the world are manufactured with internet connectivity.
The IoT refers to the overarching network created by billions of internet-compatible devices and machines that share data and information worldwide. As the sophistication of both hardware and software in the consumer electronics industry skyrockets, an increasing share of the electronic devices produced around the world are manufactured with internet connectivity.
The cheapest competitor we can identify in this sector is Vivint Smart Home, which costs less than $5,000 to install; however, we understand that the Vivint Smart Home focuses on security systems only and that users have no other smart applications, which our smart home product line would include.
The cheapest competitor we can identify in this sector is Vivint Smart Home, which costs less than $5,000 to install; however, we understand that the Vivint Smart Home focuses on security systems only and that users have no other smart applications, which our smart home product line would include. 14 Patent, Trademark, License and Franchise Restrictions and Contractual Obligations and Concessions On November 4, 2016, we filed a U.S. patent application number 15/344,041 with the USPTO.
We have finished designing smart devices for lighting control, air conditioner control, sprinkler control, garden light control, garage door control, and heating control and are in the process of developing a swimming pool control device, smoke detector, and carbon monoxide monitor.
We have finished designing smart devices for lighting control, air conditioner control, sprinkler control, garden light control, garage door control, and heating control and are in the process of developing a swimming pool control device, smoke detector, and carbon monoxide monitor. 10 We believe smart installation based on the USIP, and our Ubiquitor together will include more functionalities than the current systems offered by our competitors.
We plan to utilize our universal smart technology for smart meters and automation systems, which will be incorporated into IoT devices. To generate revenues, we will focus on product development, technological upgrades, technical service and customer data collection. We believe this technology has applications in several industries and have completed the development of a system for horticulture applications.
Our current focus is on commercializing our universal smart technology and financial reporting software. We plan to utilize our universal smart technology for smart meters and automation systems, which will be incorporated into IoT devices. To generate revenues, we will focus on product development, technological upgrades, technical service and customer data collection.
The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
Employees As of the date of this report we have a total of 46 employees, with 46 full-time employees. The Company’s Chief Executive Officer and Secretary is Dr. Desheng Wang, and our Chief Financial Officer is Irving Kau. We have 34 full-time electrical and computer engineers working on the research and development of our products.
The Company’s Chief Executive Officer and Secretary is Dr. Desheng Wang, and our Chief Financial Officer is Irving Kau. We have 29 full-time electrical and computer engineers (and engineering management staff) working on the research and development of our products. We have six full-time marketing employees and three full-time employees are working on administrative tasks.
Our financial reporting software is an artificial intelligence (AI) enabled software designed to aid accounting professional with the preparation of reports based on financial statements, such reports on Form 10-Q and Form 10-K. We intend to commercialize this product under a software as a service (SaaS) model.
We believe this technology has applications in several industries and have completed the development of a system for horticulture applications. Our financial reporting software is an artificial intelligence (AI) enabled software designed to aid accounting professional with the preparation of reports based on financial statements, such reports on Form 10-Q and Form 10-K.
Ubiquitor - Universal Smart Device The initial, simplified version of universal smart IoT technology is our universal smart device, the Ubiquitor. The Ubiquitor’s efficient and cost-effective approach to the cost of connected sensors is illustrated above.
Ubiquitor - Universal Smart Device The initial, simplified version of universal smart IoT technology is our universal smart device, the Ubiquitor. The Ubiquitor’s efficient and cost-effective approach to the cost of connected sensors is illustrated above. The Ubiquitor was first showcased at the Consumer Technology Association’s CES 2024 trade show, which attracted significant interest from potential customers.
Comparison between (a) a traditional machine to machine IoT and (b) a shared distributed universal IoT, which depicts a USIP and sensors forming a local network through PLC technology.
Comparison between (a) a traditional machine to machine IoT and (b) a shared distributed universal IoT, which depicts a USIP and sensors forming a local network through PLC technology. The platform communicates with the cloud to form a remote cloud-based system. 9 Figure 14. Comparison between (a) a traditional wireless network and (b) Focus Universal Inc.’s PLC network.
To achieve these goals, we intend to focus on the following initiatives: · Position the Ubiquitor device as the industry standard in universal sensor reading technology; · Establish strategic supply chain channels to facilitate efficient production operations; and · Communicate the product and service differentiation through direct networking and effective marketing. 14 Growth Strategy Growth through Mergers and Acquisitions Mergers and acquisitions (“M&A”) represent a significant part of our growth strategy because M&A can fill business gaps or add key business operations without requiring us to wait years for marketing and sales cycles to materialize.
To achieve these goals, we intend to focus on the following initiatives: · Position the Ubiquitor device as the industry standard in universal sensor reading technology; · Establish strategic supply chain channels to facilitate efficient production operations; and · Communicate the product and service differentiation through direct networking and effective marketing.
Licensing may also allow us to rely on the expertise, capacity, and skill of a licensee to commercialize our IP, which is especially valuable if we lack the infrastructure, financial resources, and know-how to bring a product to market independently. 15 Distribution Method We intend to engage in relationships predominantly with standard U.S. component manufacturers and similar electronics providers for the manufacturing of unassembled parts of the Ubiquitor and its sensor nodes, and to then ship such parts to our Ontario, California facility where we assemble the Ubiquitor devices and sensor nodes.
Distribution Method We intend to engage in relationships predominantly with standard U.S. component manufacturers and similar electronics providers for the manufacturing of unassembled parts of the Ubiquitor and its sensor nodes, and to then ship such parts to our Ontario, California facility where we assemble the Ubiquitor devices and sensor nodes.
High-band frequencies can carry a substantial amount of data, but due to their shorter wavelength, they travel shorter distances and are more susceptible to buildings and trees blocking the signal. [11] ____________________ [3] Horwitz, Jeremy (December 10, 2019).
High-band frequencies can carry a substantial amount of data, but due to their shorter wavelength, they travel shorter distances and are more susceptible to buildings and trees blocking the signal. Unlike 4G LTE, which operates on established frequency bands below 6GHz, 5G requires frequencies up to 300GHz.
Research and Development Activities For the year ended December 31, 2024, we spent a total of $1,381,937 on research and development activities; and for the year ended December 31, 2023, we spent a total of $1,324,438.
Research and Development Activities For the year ended December 31, 2025, we spent a total of $919,965 on research and development activities; and for the year ended December 31, 2024, we spent a total of $1,381,937. A significant portion of our research and development activities are conducted in China by Focus Shenzhen.
Our telephone number is (626) 272-3883, and our website is www.focusuniversal.com. Our website and the information contained therein, or connected thereto, are not intended to be incorporated into this Annual Report. Our current focus is on commercializing our universal smart technology and financial reporting software.
Our principal executive offices are located at 1515 W Cameron Avenue, Ste. 210, West Covina, CA 91790. Our telephone number is (626) 272-3883, and our website is www.focusuniversal.com. Our website and the information contained therein, or connected thereto, are not intended to be incorporated into this Annual Report.
A significant portion of our research and development activities are conducted in China by Focus Shenzhen. 18 Compliance with Environmental Laws We are not aware of any environmental laws that have been enacted, nor are we aware of any such laws being contemplated for the future, that impact issues specific to our business.
Compliance with Environmental Laws We are not aware of any environmental laws that have been enacted, nor are we aware of any such laws being contemplated for the future, that impact issues specific to our business. 15 Employees As of the date of this report we have a total of 37 full-time employees. We do not have any part-time employees.
Hach developed and launched the SC1000 Multi-parameter Universal Controller, a probe module for connecting to 32 digital sensors or analyzers. However, their products are not compatible with smart phones yet; and we believe their price point is still prohibitive to consumers. Monnit Corporation offers a range of wireless and remote sensors.
However, their products are not compatible with smart phones yet; and we believe their price point is still prohibitive to consumers. Monnit Corporation offers a range of wireless and remote sensors. Many of Monnit’s products are web-based wireless sensors that usually are not portable because of their power consumption.
A 5G network requires spectrum across low, mid, and high spectrum bands to deliver widespread coverage and support a wide range of use cases [3] . High band, mmWave spectrum is used primarily for urban and dense urban markets. The characteristics of high band, mmWave spectrum is that it is very wide and provides a significant increase in capacity.
High band, mmWave spectrum is used primarily for urban and dense urban markets. The characteristics of high band, mmWave spectrum is that it is very wide and provides a significant increase in capacity. Because of the greater spectrum width, speed is increased, and transmission latency is reduced.
According to THALES, total global spending on 5G is set to reach $620 billion by 2025. [12] A typical 5G base station consumes up to twice or more power than a 4G base station. Energy costs increase at higher frequencies due to a need for more antennas and a denser layer of small cells.
A typical 5G base station consumes up to twice or more power than a 4G base station. Energy costs increase at higher frequencies due to a need for more antennas and a denser layer of small cells. Edge computing facilities needed to support local processing and new IoT services will also add to overall network power usage.
We will continue to design, manufacture, market, and distribute our electronic measurement devices, such as temperature humidity meters, digital meters, quantum PAR meters, pH meters, TDS meters, and CO2 monitors. Over the years, Hydrofarm has developed a broad and loyal customer base that buys our existing products on a repeat basis.
We will continue to design, manufacture, market, and distribute our electronic measurement devices, such as temperature humidity meters, digital meters, quantum PAR meters, pH meters, TDS meters, and CO2 monitors. The universal smart technology has been applied to our existing traditional devices and demonstrated significant functional improvement and hardware cost savings.
The public may read and copy any materials that we file with the Securities and Exchange Commission at the SEC’s Public Reference Room at 100 F Street NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.
We do not intend to voluntarily file the above reports in the event that our obligation to file such reports is suspended under the Exchange Act. The public may read and copy any materials that we file with the Securities and Exchange Commission at the SEC’s Public Reference Room at 100 F Street NE, Washington, DC 20549.
These features embody the advantages of USIP, which are lacking in stand-alone instrument systems. When compared with traditional instrument systems, USIP’s biggest advantage is cost savings.
These features embody the advantages of USIP, which are lacking in stand-alone instrument systems. When compared with traditional instrument systems, USIP’s biggest advantage is cost savings. Other distinctive features include universality, interoperability, flexibility, compatibility, upgradeability, expandability, scalability, security, modularity, fast prototyping, reducing inventory, plug-and-play operation, remote accessibility, simplification, standardization, and cloud instrumentation.
We make our financial information equally available to any interested parties or investors through compliance with the disclosure rules for a small business issuer under the Exchange Act. We are subject to disclosure filing requirements including filing Form 10-K annually and Form 10-Q quarterly.
We also have a full-time accounting manager/controller. Reports to Securities Holders We provide an annual report that includes audited financial information to our shareholders. We make our financial information equally available to any interested parties or investors through compliance with the disclosure rules for a small business issuer under the Exchange Act.
We intend to market the Ubiquitor to industrial end-users through direct business-to-business sales channels and also directly to consumers via e-commerce internet platforms. For our quantum light meters and air filtration products, we intend to implement a direct sales method via Amazon.com and other online retailers.
Afterwards, we intend to distribute our Ubiquitor devices to distributors and retailers directly and ship directly to traditional industrial instrument manufacturers. We have a sales department operating out of our Ontario, California office. We intend to market the Ubiquitor to industrial end-users through direct business-to-business sales channels and also directly to consumers via e-commerce internet platforms.
Raw Materials The electronic components used in the Ubiquitor are common and can be easily purchased through a variety of suppliers with little advanced notice. We predominantly use large-scale manufacturers in the United States such as Texas Instruments and Intel for the major components.
For our quantum light meters, we intend to implement a direct sales method via Amazon.com and other online retailers. Raw Materials The electronic components used in the Ubiquitor are common and can be easily purchased through a variety of suppliers with little advanced notice.
The Ubiquitor was first showcased at the Consumer Technology Association’s CES 2024 trade show, which attracted significant interest from potential customers. 12 Smart Home Installation Our Ubiquitor device will be used to offer residential customers an entire smart home product line.
Smart Home Installation Our Ubiquitor device will be used to offer residential customers an entire smart home product line.
Other than our financial reporting software, the technologies, products and services that we have developed, and are currently developing have significant applications on the IoT. The IoT refers to the overarching network created by billions of internet-compatible devices and machines that share data and information worldwide.
We intend to commercialize this product under a software as a service (SaaS) model. Other than our financial reporting software, the technologies, products and services that we have developed, and are currently developing, we believe will have significant applications in the IoT industry.
For most instruments, 90% of the design, parts, and firmware are the same. These parts can be replaced by USIP.
We subdivide instruments into a reusable foundation component to the maximum extent possible, architecture-specific components, and sensor modules, which perform traditional instruments’ functions at a fraction of their cost. For most instruments, 90% of the design, parts, and firmware are the same. These parts can be replaced by USIP.
Other key suppliers we could consider include Analog Devices, Skyworks Solutions, Infineon, STMicroelectronics, NXP Semiconductors, Maxim Integrated, On Semiconductor, and Microchip Technology. Production and assembly lines are also available worldwide if we needed to outsource or increase our capacity, though we intend to complete our assembly in our Ontario, California facility.
Production and assembly lines are also available worldwide if we needed to outsource or increase our capacity, though we intend to complete our assembly in our Ontario, California facility. 13 Manufacturing and Assembly We have an assembly facility in Ontario, California where we assemble the Ubiquitor from parts sourced predominantly in the United States.
In addition, we will file Form 8-K and other proxy and information statements from time to time as required. We do not intend to voluntarily file the above reports in the event that our obligation to file such reports is suspended under the Exchange Act.
We are subject to disclosure filing requirements including filing Form 10-K annually and Form 10-Q quarterly. In addition, we will file Form 8-K and other proxy and information statements from time to time as required.
These modules will be used for IoT systems involving over 1,000 sensors. ____________________ [14] “How much does it cost to build a 5G base station?” Phate Zhang, April 7, 2020, CNTechPost (available at: https://cntechpost.com/2020/04/07/how-much-does-it-cost-to-build-a-5g-base-station/ (last accessed March 7, 2023)). 6 Natural Integrated Programming Language (“NIPL”) We have developed a patented “user interface machine auto generation platform” (“UIMAGP”) to replace manual software design.
Natural Integrated Programming Language (“NIPL”) We have developed a patented “user interface machine auto generation platform” (“UIMAGP”) to replace manual software design. This platform is used to build IoT user interfaces.
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As a result of the reverse split, the Company is authorized to issue 15,000,000 common shares (the Company’s authorized common shares were reduced in the same ratio (10-for-1) as its outstanding Common Stock shares were reduced). 1 Our principal executive offices are located at 2311 East Locust Court, Ontario, CA 91761.
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All shares of Common Stock, options, warrants and securities convertible or exercisable into Common Stock have been adjusted to give retroactive effect to this reverse stock split for all periods presented. As a result of the reverse split, the Company was authorized to issue 15,000,000 shares of Common Stock.
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“The definitive guide to 5G low, mid, and high band speeds.” VentureBeat online magazine (available at: https://venturebeat.com/2019/12/10/the-definitive-guide-to-5g-low-mid-and-high-band-speeds/ (Last accessed March 7, 2023)). [4] Id. [5] Id. [6] Id. [7] See “5G Rollout—Beyond the Hype.” Parsons Cyber Blog, June 16, 2020 (“As a result, 5G base stations must be positioned as close as a third of a mile, whereas 4G base stations can provide coverage of 20 to 45 miles.
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On September 8, 2025, the Company filed its Second Amendment and Restatement to its Articles of Incorporation to increase the total number of its authorized capital stock to 30,000,000 shares with 25,000,000 shares designated as Common Stock and 5,000,000 shares designated as preferred stock.
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This limitation becomes especially acute in more rural and/or remote areas, wherein 5G networks become impractical”) (available at: https://www.parsons.com/2020/06/5g-rollout-beyond-the-hype/ (last accessed, March 7, 2023)). [8] Id. [9] https://www.t-mobile.com/business/resources/articles/benefits-of-the-5g-spectrum-for-businesses (last accessed March 7, 2023). [10] https://dgtlinfra.com/american-tower-5g-deployed-in-layers-different-spectrum-bands/ (last accessed March 7, 2023). [11] https://www.md7.com/perspectives/infrastructure-challenges-of-5g-frequency/ (last accessed March 7, 2023). 4 Unlike 4G LTE, which operates on established frequency bands below 6GHz, 5G requires frequencies up to 300GHz.
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On October 20, 2025, the Company filed a Certificate of Designation of Series B Preferred Stock (the “Series B Designation”) that had the effect of designating 15,000 shares of its 5,000,000 authorized shares of preferred stock as Series B Convertible Preferred Stock.
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Edge computing facilities needed to support local processing and new IoT services will also add to overall network power usage.
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On October 21, 2025, the Company filed a Certificate of Designation of Series A Preferred Stock (the “Series A Designation”) that had the effect of designating 1,000,000 shares of its 5,000,000 authorized shares of preferred stock as Series A Preferred Stock.
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We believe our USIP will revolutionize the field of instrumentation, measurement, control, and automation.
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On November 17, 2025, the Company increased the total number of authorized capital stock from 30,000,000 shares to 1,100,000,000 shares and designated 1,000,000,000 shares as Common Stock and designated 100,000,000 shares as preferred stock by filing a Third Amendment and Restatement to the Articles of Incorporation.
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Other distinctive features include universality, interoperability, flexibility, compatibility, upgradeability, expandability, scalability, security, modularity, fast prototyping, reducing inventory, plug-and-play operation, remote accessibility, simplification, standardization, and cloud instrumentation. ____________________ [15] Environmental Health Trust, https://ehtrust.org/science/reports-on-power-consumption-and-increasing-energy-use-of-wireless-systems-and-digital-ecosystem/, (last accessed March 7, 2023) [16] Gartner Insights “Leading the IoT,” available at: https://www.gartner.com/imagesrv/books/iot/iotEbook_digital.pdf (last accessed March 7, 2023). 7 We subdivide instruments into a reusable foundation component to the maximum extent possible, architecture-specific components, and sensor modules, which perform traditional instruments’ functions at a fraction of their cost.
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On December 5, 2025, the Company filed an amendment and restatement to the Series B Designation (the “Amended Series B Designation”) that provided for (i) a fixed floor price, adjusted in the event if reverse splits and/or subdivisions, (ii) the method of calculating the conversion price in the event of a reverse splits and/or subdivisions and (iii) grant of redemption rights to the holders of Series B Convertible Preferred Stock. 1 On February 9, 2026, the Company effected a reverse stock split of its outstanding common stock on a 1-for-10 basis.
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The platform communicates with the cloud to form a remote cloud-based system. ____________________ [17] Statista Report “Number of internet of things (IoT) connected devices worldwide in 2018, 2025 and 2030” available at https://www.statista.com/statistics/802690/worldwide-connected-devices-by-access-technology/ (last accessed March 7, 2023). 11 Figure 14. Comparison between (a) a traditional wireless network and (b) Focus Universal Inc.’s PLC network.
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No adjustment was made to the Company’s authorized shares of capital stock. As such, the Company’s authorized capital stock consists of 1,000,000,000 shares of Common Stock and 100,000,000 shares of preferred stock with 1,000,000 shares of preferred stock designated as Series A Preferred Stock and 15,000 shares of preferred stock designated as Series B Convertible Preferred Stock.
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Product Line We are a wholesaler of various digital, analog, and quantum light meters and filtration products, including fan speed adjusters, carbon filters and HEPA filtration systems.
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Though 5G offers a significant increase in speed and bandwidth over previous generation telecommunication networks, its more limited range for high-speed internet will require further infrastructure investments. A 5G network requires spectrum across low, mid, and high spectrum bands to deliver widespread coverage and support a wide range of use cases.
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We source these products from various manufacturers in China and then sell them to a major U.S. distributor, Hydrofarm, who resells our products directly to consumers through retail distribution channels and, in some cases, places its own branding on our products.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeComplying with these reporting and other regulatory requirements is time-consuming and may result in increased costs to us and could have a negative effect on our business, results of operations and financial condition. 29 As a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and requirements of the Sarbanes-Oxley Act of 2002, as amended, or SOX.
Biggest changeWe are required to comply with various regulatory and reporting requirements, including those required by the Securities and Exchange Commission. Complying with these reporting and other regulatory requirements is time-consuming and may result in increased costs to us and could have a negative effect on our business, results of operations and financial condition.
This, in turn, will depend on several factors, including: · Our ability to generate significant sales and profit margin from the Ubiquitor device; · Worldwide market conditions and demand for sensor devices and other products we may continue to add as we move forward; · Our success in meeting targeted availability dates for our products and services; · Our ability to develop and commercialize new intellectual property and to protect existing intellectual property; · Our ability to maintain profitable relationships with our distributors, retailers and other resellers; · Our ability to maintain an appropriate cost structure; · Our ability to attract and retain competent, motivated employees; · Our ability to comply with applicable legal requirements throughout the world; and · Our ability to successfully manage litigation, including enforcing our rights, protecting our interests, and defending claims made against us.
This, in turn, will depend on several factors, including: · Our ability to generate significant sales and profit margin from the Ubiquitor device; · Worldwide market conditions and demand for sensor devices and other products we may continue to add as we move forward; · Our success in meeting targeted availability dates for our products and services; · Our ability to develop and commercialize new intellectual property and to protect existing intellectual property; · Our ability to maintain profitable relationships with our distributors, retailers and other resellers; · Our ability to maintain an appropriate cost structure; 20 · Our ability to attract and retain competent, motivated employees; · Our ability to comply with applicable legal requirements throughout the world; and · Our ability to successfully manage litigation, including enforcing our rights, protecting our interests, and defending claims made against us.
In addition, if a dispute over product claims cannot be settled, arbitration or litigation may result, requiring us to incur attorneys’ fees and exposing us to the potential of damage awards against us. Only two officers have public company experience on our management team which could adversely impact our ability to comply with the reporting requirements of U.S. securities laws.
In addition, if a dispute over product claims cannot be settled, arbitration or litigation may result, requiring us to incur attorneys’ fees and exposing us to the potential of damage awards against us. 23 Only two officers have public company experience on our management team which could adversely impact our ability to comply with the reporting requirements of U.S. securities laws.
These factors are difficult to manage, satisfy and influence and we cannot provide any assurance that we will be able to generate significant demand for and sales of our products. 24 The Ubiquitor device could fail to gain traction in the marketplace for several reasons that would adversely impact our financial results and cause our investors to lose money.
These factors are difficult to manage, satisfy and influence and we cannot provide any assurance that we will be able to generate significant demand for and sales of our products. The Ubiquitor device could fail to gain traction in the marketplace for several reasons that would adversely impact our financial results and cause our investors to lose money.
Because we do not intend to declare cash dividends, any gain on an investment in Focus Universal Inc. will need to come through appreciation of the stock’s price. 31 Sales of a substantial number of shares of our common stock in the public market by certain of our shareholders could cause our stock price to fall.
Because we do not intend to declare cash dividends, any gain on an investment in Focus Universal Inc. will need to come through appreciation of the stock’s price. Sales of a substantial number of shares of our common stock in the public market by certain of our shareholders could cause our stock price to fall.
If the demand is smaller than we have estimated, it may impair our projected sales growth and have an adverse impact on our business. If we are unable to properly forecast future demand of our products, our production levels may not meet demands, which could negatively impact our operating results.
If the demand is smaller than we have estimated, it may impair our projected sales growth and have an adverse impact on our business. 17 If we are unable to properly forecast future demand of our products, our production levels may not meet demands, which could negatively impact our operating results.
If any of our directors and officers choose to leave the company, we will face significant difficulties in attracting potential candidates for replacement of our key personnel due to our limited financial resources and operating history. Regulatory actions could limit our ability to market and sell our products.
If any of our directors and officers choose to leave the company, we will face significant difficulties in attracting potential candidates for replacement of our key personnel due to our limited financial resources and operating history. 16 Regulatory actions could limit our ability to market and sell our products.
If we are unable to report financial information timely and accurately or to maintain effective disclosure controls and procedures, we could be subject to, among other things, regulatory or enforcement actions by the SEC, any one of which could adversely affect our business prospects. 28 Our executive officers and directors collectively have the power to control our management and operations and have a significant majority in voting power on all matters submitted to the stockholders of the Company.
If we are unable to report financial information timely and accurately or to maintain effective disclosure controls and procedures, we could be subject to, among other things, regulatory or enforcement actions by the SEC, any one of which could adversely affect our business prospects. 24 Our executive officers and directors collectively have the power to control our management and operations and have a significant majority in voting power on all matters submitted to the stockholders of the Company.
It is our management’s position that these handheld battery-operated products do not carry substantial product liability risk and to the extent there are any product liability risks, such risks are born by Hydrofarm, who does carry product liability insurance coverage for the products we provide to them, and they sell to their customers.
It is our management’s position that these handheld battery-operated products do not carry substantial product liability risk and to the extent there are any product liability risks, such risks are born by the distributor, who does carry product liability insurance coverage for the products we provide to them, and they sell to their customers.
If Hydrofarm changes the term to CIF (Cost, Insurance, and Freight) United States, then we would be responsible for the shipping costs and the tariff costs, which may reduce our gross margin, specially now that new tariffs may be imposed on goods imported from China.
If our customers changes the term to CIF (Cost, Insurance, and Freight) United States, then we would be responsible for the shipping costs and the tariff costs, which may reduce our gross margin, specially now that new tariffs may be imposed on goods imported from China.
We have concluded that we have not maintained effective internal control over financial reporting through the years ended December 31, 2024, and December 31, 2023. Significant deficiencies and material weaknesses in our internal control could have material adverse effects on us.
We have concluded that we have not maintained effective internal control over financial reporting through the years ended December 31, 2025, and December 31, 2024. Significant deficiencies and material weaknesses in our internal control could have material adverse effects on us.
Only the cost of delivering the goods to the nearest port is included and Hydrofarm is responsible for the shipping from China and responsible for all other fees, including tariffs, associated with delivering the goods to the ultimate destination.
Only the cost of delivering the goods to the nearest port is included and the customer is responsible for the shipping from China and responsible for all other fees, including tariffs, associated with delivering the goods to the ultimate destination.
Changes in tariffs, import or export restrictions, Chinese regulations or other trade barriers may reduce gross margins. We currently source products from manufacturers in China, including digital, analog, and quantum light meters, filtration products and certain components for our Ubiquitor device. Currently, the prices we offer to Hydrofarm are FOB (Free on Board) China.
Changes in tariffs, import or export restrictions, Chinese regulations or other trade barriers may reduce gross margins. We currently source products from manufacturers in China, including digital, analog, and quantum light meters and certain components for our Ubiquitor device. Currently, the prices we offer to our U.S. customers are FOB (Free on Board) China.
For example, our filtration products or Ubiquitor devices obtain raw materials, machined parts and other product components from suppliers who provide certifications of quality which we rely on.
For example, our Ubiquitor devices obtain raw materials, machined parts and other product components from suppliers who provide certifications of quality which we rely on.
Moreover, even if we can obtain adequate insurance, any claim against us could generate negative publicity, which could impair our reputation and adversely affect the demand for our products, our ability to generate sales and our profitability. For the products we sell through Hydrofarm, we also do not carry product liability insurance.
Moreover, even if we can obtain adequate insurance, any claim against us could generate negative publicity, which could impair our reputation and adversely affect the demand for our products, our ability to generate sales and our profitability. For the products we sell in the U.S., we also do not carry product liability insurance.
If the result of these efforts are not successful, or if material weaknesses are identified in our internal control over financial reporting, our management will be unable to report favorably as to the effectiveness of our internal control over financial reporting and/or our disclosure controls and procedures, and we could be required to further implement expensive and time-consuming remedial measures and potentially lose investor confidence in the accuracy and completeness of our financial reports which could have an adverse effect on our stock price and potentially subject us to litigation.
If the result of these efforts are not successful, or if material weaknesses are identified in our internal control over financial reporting, our management will be unable to report favorably as to the effectiveness of our internal control over financial reporting and/or our disclosure controls and procedures, and we could be required to further implement expensive and time-consuming remedial measures and potentially lose investor confidence in the accuracy and completeness of our financial reports which could have an adverse effect on our stock price and potentially subject us to litigation. 25 The requirements of being a public company may strain our resources and distract our management.
Item 1A. RISK FACTORS Risks Related to our Business and Industry We have a history of operating losses and going concern basis, and we may not be able to sustain profitability. We were incorporated on December 4, 2012; and as of December 31, 2024, we had an accumulated deficit of $25,782,308.
Item 1A. RISK FACTORS Risks Related to our Business and Industry We have a history of operating losses and going concern basis, and we may not be able to sustain profitability. We were incorporated on December 4, 2012; and as of December 31, 2025, we had an accumulated deficit of $31,023,411.
There is no guarantee that additional funding can be obtained on favorable terms, if at all. 19 We depend on key personnel. Our future success will depend in part on the continued service of key personnel, particularly, Desheng Wang, our Chief Executive Officer, and Edward Lee, the Chairman of our Board.
There is no guarantee that additional funding can be obtained on favorable terms, if at all. We depend on key personnel. Our future success will depend in part on the continued service of key personnel, particularly, Desheng Wang, our Chief Executive Officer and Irving Kau, our Chief Financial Officer.
The Internet may ultimately prove not to be a viable commercial marketplace for IoT applications for several reasons, including: · unwillingness of consumers to shift to and use other such next-generation Internet-based, smartphone-assisted applications; · refusal to purchase our products and services; · perception by end-users with respect to the quality of our wireless sensors in an industry historically dominated by wired sensors; competition; · inadequate development of smartphone infrastructure to keep pace with increased levels of use; and · increased government regulations in a relatively unregulated marketplace.
The Internet may ultimately prove not to be a viable commercial marketplace for IoT applications for several reasons, including: · unwillingness of consumers to shift to and use other such next-generation Internet-based, smartphone-assisted applications; · refusal to purchase our products and services; · perception by end-users with respect to the quality of our wireless sensors in an industry historically dominated by wired sensors; competition; · inadequate development of smartphone infrastructure to keep pace with increased levels of use; and · increased government regulations in a relatively unregulated marketplace. 21 There is a risk that the market will not adapt to using the smartphone readout as a substitute platform for sensor devices, causing our products to fail in the marketplace.
In the event of a delisting, we would take actions to restore our compliance with NASDAQ’s continued listing standards, but we can provide no assurance that any such action taken by us would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the NASDAQ minimum bid price requirement or prevent future non-compliance with NASDAQ’s continued listing requirements. 32 Risks Related to AVX Increasing competition within our industry could have an impact on our business prospects.
In the event of a delisting, we would take actions to restore our compliance with NASDAQ’s continued listing standards, but we can provide no assurance that any such action taken by us would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the NASDAQ minimum bid price requirement or prevent future non-compliance with NASDAQ’s continued listing requirements.
The number of shares of our common stock issued in connection with a capital raise or acquisition could constitute a material portion of our then-outstanding shares of our common stock and have a dilutive effect on our shareholders which could have a material negative effect on our stock price.
The number of shares of our common stock issued in connection with a capital raise or acquisition could constitute a material portion of our then-outstanding shares of our common stock and have a dilutive effect on our shareholders which could have a material negative effect on our stock price. 27 Future sales of our common stock by existing stockholders could cause our stock price to decline.
There is no guarantee that using smartphone technology will cut production costs and be well received. If our USIP using smartphone technology is not well received, there is a risk that device manufacturers will develop new monitoring and operating components that are incompatible with our current platform instead of developing the traditional sensors that are compatible with our technology.
If our USIP using smartphone technology is not well received, there is a risk that device manufacturers will develop new monitoring and operating components that are incompatible with our current platform instead of developing the traditional sensors that are compatible with our technology. Updating our platform to stay compatible with new components could increase our costs unexpectedly.
The Company has a net loss of $3,200,138 and $4,718,142 for the years ended December 31, 2024 and 2023, respectively.
The Company has a net loss of $4,787,769 and $3,200,138 for the years ended December 31, 2025 and 2024, respectively.
These requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual, quarterly, and current reports with respect to our business and financial condition. SOX requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting.
The Exchange Act requires that we file annual, quarterly, and current reports with respect to our business and financial condition. SOX requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting.
If we overestimate or underestimate demand for any of our products during a given season, we may not maintain appropriate inventory levels, which could negatively impact our net sales or working capital, hinder our ability to meet customer demand, or cause us to incur excess and obsolete inventory charges. 21 Demand for our Ubiquitor product may be affected by new entrants who copy our products and/or infringe on our intellectual property.
If we overestimate or underestimate demand for any of our products during a given season, we may not maintain appropriate inventory levels, which could negatively impact our net sales or working capital, hinder our ability to meet customer demand, or cause us to incur excess and obsolete inventory charges.
Our failure to do so would lead to a material adverse impact on our business. 23 Since wireless networks are susceptible to interference and other limitations, and one advantage of our Ubiquitor device and our USIP platform is that it can connect to wireless networks as one way to transmit data, wireless network limitations may reduce the competitive advantage of the Ubiquitor and USIP platform in the marketplace.
Since wireless networks are susceptible to interference and other limitations, and one advantage of our Ubiquitor device and our USIP platform is that it can connect to wireless networks as one way to transmit data, wireless network limitations may reduce the competitive advantage of the Ubiquitor and USIP platform in the marketplace.
These factors could also make it more difficult for us to attract and retain qualified members of our Board of Directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers. Risks Related to the Ownership of our Common Stock Our shares may be affected by short selling practices which may decrease the stock price.
These factors could also make it more difficult for us to attract and retain qualified members of our Board of Directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers. Risks Related to the Ownership of our Common Stock Our common stock is subordinated to our preferred stock.
Any governmental or regulatory action that restricts the ability of investors to effect short sales of our common stock, borrow our common stock or enter into swaps on our common stock could adversely affect the trading price and liquidity of our shares. 30 An increase of free trading shares of our common stock could result in substantial sales of common stock on the open market which could cause our stock price to fall substantially.
Any governmental or regulatory action that restricts the ability of investors to effect short sales of our common stock, borrow our common stock or enter into swaps on our common stock could adversely affect the trading price and liquidity of our shares.
In addition, the Company had an accumulated deficit of $25,782,308 and $22,582,170 as of December 31, 2024 and 2023, respectively, and negative cash flow from operating activities of $4,656,754 and $3,528,762 for the years ended December 31, 2024 and 2023, respectively.
In addition, the Company had an accumulated deficit of $31,023,411 and $25,782,308 as of December 31, 2025 and 2024, respectively, and negative cash flow from operating activities of $5,102,771 and $4,656,754 for the years ended December 31, 2025 and 2024, respectively.
You could be diluted from our future issuance of capital stock and derivative securities. As of December 31, 2024, we had 7,153,647 shares of common stock outstanding and no shares of preferred stock outstanding. We are authorized to issue up to 15,000,000 shares of common stock and no shares of preferred stock.
You could be diluted from our future issuance of capital stock and derivative securities. As of December 31, 2025, we had 915,097 shares of common stock outstanding and 7,263 shares of Series B Preferred Stock outstanding. We are authorized to issue up to 1,000,000,000 shares of common stock and 100,000,000 shares of preferred stock.
If, at any time before the Compliance Date, the bid price of the Company’s security is at least $1 for a minimum of ten consecutive days then this matter should be closed with respect to the Bid Price Rule.
If, at any time before the Compliance Date, the bid price of the Company’s security is at least $1 for a minimum of ten consecutive days then this matter should be closed with respect to the Bid Price Rule. On February 9, 2026, the Company effected a reverse stock split of its outstanding common stock on a 1-for-10 basis.
Even if we can obtain and maintain product liability insurance, if a successful claim in excess of our insurance coverage is made, then we may have to indemnify some or all of our manufacturers or distributors for their losses, which could materially deplete our assets. 26 We may not be able to identify suitable acquisition targets or otherwise successfully implement a growth strategy reliant on mergers and acquisitions.
Even if we can obtain and maintain product liability insurance, if a successful claim in excess of our insurance coverage is made, then we may have to indemnify some or all of our manufacturers or distributors for their losses, which could materially deplete our assets.
We may be required to pay substantial damages if it is determined our products infringe on their intellectual property. We may also be required to develop an alternative, non-infringing product that could be costly and time-consuming, or acquire a license on terms that are not favorable to us.
We may also be required to develop an alternative, non-infringing product that could be costly and time-consuming, or acquire a license on terms that are not favorable to us.
Although our portfolio of products and related revenue stream sources are broad, increasing competition may have a negative impact on our profit margins. The success of our smart home installation business will depend upon the efforts of management of our subsidiary AVX. We can offer no assurance that we will be able to retain or effectively recruit new additional personnel.
Although our portfolio of products and related revenue stream sources are broad, increasing competition may have a negative impact on our profit margins. 29 The success of our smart home installation business will depend upon the efforts of management of our subsidiary AVX.
Alternatively, we may not be able to achieve a smart home installation at a cost-effective price that is sufficient to distinguish us from amongst the competition in this market segment.
If we are unable to integrate the Ubiquitor device into smart home installations, we will not be able to achieve the competitive price and performance we anticipate achieving success. Alternatively, we may not be able to achieve a smart home installation at a cost-effective price that is sufficient to distinguish us from amongst the competition in this market segment.
Future sales of our common stock by existing stockholders could cause our stock price to decline. If our existing stockholders sell substantial shares of our common stock in the public market, then the market price of our common stock could decrease significantly.
If our existing stockholders sell substantial shares of our common stock in the public market, then the market price of our common stock could decrease significantly. The perception in the public market that our stockholders might sell shares of common stock also could depress the market price of our common stock.
Accordingly, we cannot assure you that our assessment of these individuals will prove to be correct and that they will have the skills, abilities, and qualifications we expect.
Moreover, to the extent that we will rely upon their management team to operate AVX, we will be subject to risks regarding their managerial competence. Accordingly, we cannot assure you that our assessment of these individuals will prove to be correct and that they will have the skills, abilities, and qualifications we expect.
Our CEO and one of our directors, Dr. Desheng Wang, owns 32% of the outstanding shares of our common stock as of the date of this report. Two of our directors together own over 50% of the outstanding shares of our common stock.
Our CEO, Dr. Desheng Wang, owns approximately 22% of the outstanding shares of our common stock as of the date of this report. Our executive officers, directors, and 5% stockholders together own 39.7% of the outstanding shares of our common stock.
The IoT market is a growing industry where new competitors are entering the market frequently. These competing companies may have significantly greater financial and other resources than we have and may have been developing their products and services longer than we have been developing ours.
These competing companies may have significantly greater financial and other resources than we have and may have been developing their products and services longer than we have been developing ours.
We may not be able to maintain the continued NASDAQ listing standards. NASDAQ requires companies to fulfill specific requirements in order for their shares to continue to be listed. There is no guarantee that our common stock will maintain NASDAQ continued listing standards and we may be delisted.
No adjustment was made to the Company’s authorized shares of capital stock. 28 We may not be able to maintain the continued NASDAQ listing standards. NASDAQ requires companies to fulfill specific requirements in order for their shares to continue to be listed.
To expand our business, we hope to pursue mergers and acquisitions to acquire new or complementary businesses, services or technologies. We expect to continue evaluating potential strategic acquisitions of businesses, services, and technologies.
We may not be able to identify suitable acquisition targets or otherwise successfully implement a growth strategy reliant on mergers and acquisitions. To expand our business, we hope to pursue mergers and acquisitions to acquire new or complementary businesses, services or technologies. We expect to continue evaluating potential strategic acquisitions of businesses, services, and technologies.
If we were to fail to fulfill those obligations, our ability to continue as a U.S. public company would be in jeopardy in which event you could lose your entire investment in our Company. 27 Some of our officers, directors, consultants, and advisors are involved in other businesses and not obligated to commit their time and attention exclusively to our business and therefore they may encounter conflicts of interest with respect to the allocation of time and business opportunities between our operations and those of other businesses.
Some of our officers, directors, consultants, and advisors are involved in other businesses and not obligated to commit their time and attention exclusively to our business and therefore they may encounter conflicts of interest with respect to the allocation of time and business opportunities between our operations and those of other businesses.
If there is instability in a wireless network, Bluetooth sensor, or other network problems that are out of our control, our new platform may not be well received. Our smartphone platform relies on the wireless transmission of data through Wi-Fi networks and Bluetooth sensors. These networks are often deemed less secure than a hard-wired network.
Using wireless transmission technologies such as Wi-Fi and Bluetooth may create security risks. There is also a risk of failure based on the wireless transmission of data used by our smartphone platform. If there is instability in a wireless network, Bluetooth sensor, or other network problems that are out of our control, our new platform may not be well received.
Some of the agreements that we may enter with manufacturers or distributors of our products and components of our products may require us: · to obtain product liability insurance; or · to indemnify manufacturers against liabilities resulting from the sale of our products.
However, it is possible that we could face liability in a products liability lawsuit for manufacturing defects or defective design since we design or manufacture the products sold by certain U.S. distributors. 22 Some of the agreements that we may enter with manufacturers or distributors of our products and components of our products may require us: · to obtain product liability insurance; or · to indemnify manufacturers against liabilities resulting from the sale of our products.
Our delay or failure to develop or acquire technological improvements, adapt our products to technological changes or provide technology that appeals to our customers may cause us to lose customers and may prevent us from generating revenue which could ultimately cause us to cease operations.
Our delay or failure to develop or acquire technological improvements, adapt our products to technological changes or provide technology that appeals to our customers may cause us to lose customers and may prevent us from generating revenue which could ultimately cause us to cease operations. 19 Our business depends on our ability to keep manufacturing costs low; and we may lack the expertise necessary to negotiate and maintain favorable pricing, supply, business and credit terms with our potential vendors.
If our common stock is delisted from NASDAQ, our shareholders could find it difficult to sell their common stock.
There is no guarantee that our common stock will maintain NASDAQ continued listing standards and we may be delisted. If our common stock is delisted from NASDAQ, our shareholders could find it difficult to sell their common stock.
The security of a wireless network is often out of our control. However, any breach of security could result in the market and sensor device manufacturers to fail to embrace our platform. Our business involves the use, transmission and storage of confidential information, and the failure to properly safeguard such information could result in significant reputational harm.
Our business involves the use, transmission and storage of confidential information, and the failure to properly safeguard such information could result in significant reputational harm.
As of January 31, 2025, we had 3,378,104 freely trading shares, after the Company’s Board of Directors approved a 10 to 1 reverse stock split. Any increase in freely trading shares, or the perception that such shares will or could come onto the market could have an adverse effect on the trading price of the stock.
Any increase in freely trading shares, or the perception that such shares will or could come onto the market could have an adverse effect on the trading price of the stock.
Along with new marketing efforts, we need to continue to cater to the needs of these new customers or the business may fluctuate or vanish. Our air filtration business segment could experience price fluctuations in raw materials, availability problems, and volatile demand.
Along with new marketing efforts, we need to continue to cater to the needs of these new customers or the business may fluctuate or vanish. 18 Prices and availability for the electronic parts and plastics we need to assemble the Ubiquitor could fluctuate.
There is a risk that the market will not adapt to using the smartphone readout as a substitute platform for sensor devices, causing our products to fail in the marketplace. Most products on the small sensor device market do not currently use smartphones to collect and analyze sensor data.
Most products on the small sensor device market do not currently use smartphones to collect and analyze sensor data. There is no guarantee that using smartphone technology will cut production costs and be well received.
In addition, product manufacturing costs may increase if we fail to achieve anticipated volumes. There can be no assurance that we will be able to successfully manage these risks. In summary, we can offer no assurance that we will be able to obtain a sufficient (but not excess) supply of products on a timely and cost-effective basis.
In summary, we can offer no assurance that we will be able to obtain a sufficient (but not excess) supply of products on a timely and cost-effective basis. Our failure to do so would lead to a material adverse impact on our business.
The departure of any key members of AVX’s management team could make it more difficult to operate AVX. Moreover, to the extent that we will rely upon their management team to operate AVX, we will be subject to risks regarding their managerial competence.
We can offer no assurance that we will be able to retain or effectively recruit new additional personnel. The departure of any key members of AVX’s management team could make it more difficult to operate AVX.
The ability to protect and enforce intellectual property rights varies across jurisdictions. An inability to preserve our intellectual property rights may adversely affect our financial performance. Competitors and others may also initiate litigation to challenge the validity of our intellectual property or allege that we infringe their intellectual property.
Demand for our Ubiquitor product may be affected by new entrants who copy our products and/or infringe on our intellectual property. The ability to protect and enforce intellectual property rights varies across jurisdictions. An inability to preserve our intellectual property rights may adversely affect our financial performance.
Our business depends on our ability to keep manufacturing costs low; and we may lack the expertise necessary to negotiate and maintain favorable pricing, supply, business and credit terms with our potential vendors. It may be difficult to negotiate or maintain favorable pricing, supply, business or credit terms with our potential vendors, suppliers and service providers.
It may be difficult to negotiate or maintain favorable pricing, supply, business or credit terms with our potential vendors, suppliers and service providers. In addition, product manufacturing costs may increase if we fail to achieve anticipated volumes. There can be no assurance that we will be able to successfully manage these risks.
The requirements of being a public company may strain our resources and distract our management. We are required to comply with various regulatory and reporting requirements, including those required by the Securities and Exchange Commission.
As a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and requirements of the Sarbanes-Oxley Act of 2002, as amended, or SOX. These requirements may place a strain on our systems and resources.
The perception in the public market that our stockholders might sell shares of common stock also could depress the market price of our common stock. There are approximately 7,153,647 shares of our common stock outstanding as of December 31, 2024, of which approximately 3,417,793 shares are freely tradable.
There are approximately 915,097 shares of our common stock outstanding as of December 31, 2025, of which approximately 480,006 shares are freely tradable.
Although we continue to operate under the terms of an oral agreement, and we believe there are a multitude of manufacturers that could quickly replace Tianjin Guanglee, our manufacturing operations could be adversely impacted if we are unable to enforce Tianjin Guanglee’s performance. 20 Our potential inability to adequately protect our intellectual property during the outsource manufacturing of our quantum light meters and filtration products in China could negatively impact our performance.
Our potential inability to adequately protect our intellectual property during the outsource manufacturing of n products in China could negatively impact our performance.
Removed
We outsource the manufacturing of key elements of our quantum light meters and air filters to a single manufacturing partner, with whom we do not have a formal contractual relationship. We outsource the manufacture of our quantum light meter and air filtration devices to a single contract manufacturer, Tianjin Guanglee Technologies Ltd. (“Tianjin Guanglee”).
Added
Competitors and others may also initiate litigation to challenge the validity of our intellectual property or allege that we infringe their intellectual property. We may be required to pay substantial damages if it is determined our products infringe on their intellectual property.
Removed
If Tianjin Guanglee’s operations are interrupted or if Tianjin Guanglee is unable to meet our delivery requirements due to capacity limitations or other constraints, we may be limited in our ability to fulfill new customer orders, and we may be required to seek new manufacturing partners in the future.
Added
Our smartphone platform relies on the wireless transmission of data through Wi-Fi networks and Bluetooth sensors. These networks are often deemed less secure than a hard-wired network. The security of a wireless network is often out of our control. However, any breach of security could result in the market and sensor device manufacturers to fail to embrace our platform.
Removed
Tianjin Guanglee has limited manufacturing capacity, is itself dependent upon third-party suppliers and is dependent on trained technical labor to effectively create components making up our devices or to repair special tooling. In addition, as of the date of this report, we do not have a formal development and manufacturing agreement that regulates our business relationship with Tianjin Guanglee.
Added
If we were to fail to fulfill those obligations, our ability to continue as a U.S. public company would be in jeopardy in which event you could lose your entire investment in our Company.
Removed
The principal raw materials that we use are filter media, activated charcoal, perforated metal sheet, and certain other petroleum-based products, like plastics, rubber, and adhesives. Our cost of filter media can experience price fluctuations. Larger competitors can enter selective supply arrangements with major suppliers that reduce medium-to-long-term volatility in costs.
Added
As described in the Certificate of Designations, Preferences and Rights of the Series A Preferred Stock and Series B Preferred Stock, shares of Series A and Series B Preferred Stock rank senior to shares of Common Stock, with respect to rights on the distribution of assets in any voluntary or involuntary liquidation, dissolutions or winding up of the affairs of the Company.
Removed
We cannot guarantee purchases in the volume that justifies such selective supply arrangements. Thus, we could be subject to price volatility. 22 Prices and availability for the electronic parts and plastics we need to assemble the Ubiquitor could fluctuate.
Added
Starting on January 19, 2026, the outstanding shares of Series B Preferred Stock will be redeemable at the holder of such shares option. Beginning on January 19, 2026, the outstanding shares of Series B Preferred Stock is redeemable at the Series B holder’s option during certain periods over two (2) years.
Removed
Updating our platform to stay compatible with new components could increase our costs unexpectedly. 25 Using wireless transmission technologies such as Wi-Fi and Bluetooth may create security risks. There is also a risk of failure based on the wireless transmission of data used by our smartphone platform.
Added
Redemption of the Series B Preferred Stock would result in the Company to meet such redemption obligations in cash or by finding a third party to purchase such shares of Series B Preferred Stock.
Removed
However, it is possible that we could face liability in a products liability lawsuit for manufacturing defects or defective design since we design or manufacture the products sold by Hydrofarm.
Added
No assurances can be given that we will have the funds available in the event a holder of Series B Preferred Stock elects to exercise the redemption rights nor that any third party will be willing to purchase such shares of Series B Preferred Stock. Our ability to meet such redemption obligations will depend on our earnings and cash flow.
Removed
In an effort to regain compliance with Nasdaq’s Bid Price Rule, on January 31, 2025, the Company effected a 1 for 10 reverse stock split pursuant to Nevada Revised Statutes (“NRS”) Section 78.207 which also caused a decrease of the Company’s authorized shares of common stock by the same ratio from 150,000,000 to 15,000,000.
Added
Furthermore, in the event of a redemption, the Company’s requirement to meet such redemption obligations could reduce funds available to further our business and business strategy. On January 19, 2026, the holders of the Series B Preferred Stock provided the Company with Redemption Notices requesting the Company to redeem all of their outstanding shares of Series B Preferred Stock.
Removed
If we are unable to integrate the Ubiquitor device into smart home installations, we will not be able to achieve the competitive price and performance we anticipate achieving success in AVX’s future smart home installations.
Added
While the allotted time period for redemption (20 days), has passed, the Company and the Series B Holders remain engaged in negotiations to find an amicable solution. On February 19,2026, the Series B investors sent a redemption demand letter for 3,716 outstanding Series B Preferred shares, totaling $3,158,600.
Added
This demand letter was subsequently rescinded by the Series B holders while the Series B holders and management attempted to negotiate a settlement. On March 17, 2026, after the parties could not negotiate a successful settlement, the Series B investors renewed their redemption requests by emailing Company management a notice of default.
Added
The Company has engaged external advisors to assist in discussions with the holders of the Series B Preferred Stock and is currently engaged in ongoing negotiations to determine the most appropriate resolution that maximizes value for all stockholders, including the Series B shareholders. 26 Our shares may be affected by short selling practices which may decrease the stock price.
Added
An increase of free trading shares of our common stock could result in substantial sales of common stock on the open market which could cause our stock price to fall substantially. As of March 25, 2026, we had 561,765 freely trading shares, after the Company’s Board of Directors approved a 10 to 1 reverse stock split.
Added
As previously disclosed, on June 30, 2025, we received a letter from Nasdaq’s Listing Qualifications Department (the “Staff”) that said our Market Value of Listed Securities had fallen below $35,000,000, and therefore, we no longer satisfy the requirements under Nasdaq Listing Rule 5550(b)(2) (the “MVLS Rule”).
Added
The Company has been provided an initial period of 180 calendar days, or until December 29, 2025 (the “Compliance Date”), to regain compliance with the MVLS Rule. If at any time before the Compliance Date, the Company’s MVLS closes at $35,000,000 or more for a minimum of ten consecutive business days, then this matter will be closed.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThey also track how we prevent, identify, lessen, and address cybersecurity issues. This is done through regular checks of our systems, tests to identify security weaknesses, and maintaining an incident response plan. In addition to such regular system checks, our Vice President of Operations, together with the board, regularly discuss active, emerging and potential cybersecurity risks.
Biggest changeThey also track how we prevent, identify, lessen, and address cybersecurity issues. This is done through checks of our systems, tests to identify security weaknesses, and encouraging management to maintain an incident response plan. 30
Our Vice President of Operations , who has over 30 years of experience in IT and marketing, works with our board of directors to manage our cybersecurity policies and processes , including those described in the “Risk Management and Strategy” section above. Together, they stay informed and manage how we identify, address, prevent and resolve cybersecurity issues and related matters.
Our board of directors monitors and assesses strategic risk exposure, and our executive officers manage the material risks we face. Our board of directors manages our cybersecurity policies and processes, including those described in the “Risk Management and Strategy” section above. Together, they stay informed and manage how we identify, address, prevent and resolve cybersecurity issues and related matters.
Removed
Our board of directors monitors and assesses strategic risk exposure, and our executive officers manage the material risks we face.
Removed
They keep each other informed about significant changes affecting cybersecurity, and they periodically update management with these changes, as well as our cybersecurity risks, so that management can administer its oversight function as a part of its broader oversight and risk management.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. PROPERTIES We currently lease our offices located at 2311 East Locust Court, Ontario, CA, 91761 on a month to month basis. The property consists of an industrial type, two-story building, with a total building area of 30,740 square feet. Ten thousand square feet will be utilized for office space; and 20,000 square feet for warehouse space.
Biggest changeItem 2. PROPERTIES We currently lease our offices located at 1515 W. Cameron Avenue, Ste. 210 West Covina, CA 91790 on a month-to-month basis. The property consists of commercial offices with a total office area of 3,546 square feet. Focus Universal (Shenzhen) Technology Co.
The property includes 58 parking spaces. Focus Universal (Shenzhen) Technology Co. LTD entered into two separate thirty-six-month commercial leases with a third party for office spaces of approximately 2,017 and 3,449 square feet. 34
LTD entered into two separate thirty-six-month commercial leases with a third party for office spaces of approximately 2,017 and 3,449 square feet. These two leases ended in January and February 2026, respectively. In January 2026, Focus Universal (Shenzhen) Technology Co.
Added
LTD entered into another two separate thirty-six-month commercial lease with a third party for office space of approximately 3,700 and 4,230 square feet.
Added
On January 21, 2026, we entered into a purchase, sale, and escrow agreement with 901 Corporate Center, LP to acquire a 100,743 sq. ft. office and commercial building, along with a four-level parking structure, located in Monterey Park, California.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe Company does possess EPLI insurance, and the legal team as selected by the insurance company is currently handling the matter. The Company vigorously disputes these allegations. On October 28, 2024, MGR Real Estate, Inc. a California corporation, filed an action in the Superior Court of the State of California, County of San Bernardino, against the Company.
Biggest changeOn October 28, 2024, MGR Real Estate, Inc. a California corporation, filed an action in the Superior Court of the State of California, County of San Bernardino, against the Company. The complaint alleges a variety of things including breach of contract and declaratory relief.
The complaint alleges claims including discrimination, wrongful termination, retaliation and various other provisions of the California Labor Code, and various other claims under California state law. The complaint seeks unspecified economic and non-economic losses, as well as attorneys’ fees. We have conducted written discovery, depositions, and expert discovery.
The complaint alleges claims including discrimination, wrongful termination, retaliation and various other provisions of the California Labor Code, and various other claims under California state law. The complaint seeks unspecified economic and non-economic losses, as well as attorneys’ fees.
On August 26, 2024, a former software engineer filed an action against Perfecular Inc., a wholly owned subsidiary of the Company, in the Superior Court for the County of San Bernardino, State of California alleging wrongful termination and other violations of the California Labor Code. The complaint seeks unspecified economic and non-economic losses, as well as attorneys’ fees.
On August 26, 2024, a former software engineer filed an action against Perfecular Inc., a wholly owned subsidiary of the Company, in the Superior Court for the County of San Bernardino, State of California alleging wrongful termination and other violations of the California Labor Code.
However, litigation and investigations are inherently uncertain, but the outcome could have a material impact on the Company. Similarly, on or about April 14, 2020, Devesa Sarria, the Sales and Marketing Director, was terminated. On May 13, 2020, she filed an action in the Superior Court for the County of Los Angeles, State of California.
Similarly, on or about April 14, 2020, Devesa Sarria, the Sales and Marketing Director, was terminated. On May 13, 2020, she filed an action in the Superior Court for the County of Los Angeles, State of California.
The complaint alleges a variety of things including breach of contract and declaratory relief. The complaint is in connection with a listing agreement executed between the Company and the plaintiff, which plaintiff alleges gave it exclusive rights to list and sale the property located at 2311 E. Locust St., Ontario, CA 91761 (the “Premises”).
The complaint is in connection with a listing agreement executed between the Company and the plaintiff, which plaintiff alleges gave it exclusive rights to list and sale the property located at 2311 E. Locust St., Ontario, CA 91761 (the “Premises”). The complaint seeks damages in a minimum amount of $373,025, plus interest at a rate of 10% per annum.
The Complaint alleges claims including discrimination, wrongful termination, retaliation and various other provisions of the California Labor Code, and various other claims under California state law. The complaint seeks unspecified economic and non-economic losses, as well as attorneys’ fees. We have conducted written discovery, depositions, and expert discovery. Trial for this matter is set for August 13, 2025.
The Complaint alleges claims including discrimination, wrongful termination, retaliation and various other provisions of the California Labor Code, and various other claims under California state law. On August 29, 2025, the Company and Former Sales and Marketing Director entered into a confidential settlement agreement which concluded this matter and releases all claims against the Company.
Removed
We have a motion for summary judgment set to be heard on June 17, 2025. Trial for this matter is set for August 6, 2025. AVX intends to vigorously contest this matter. Further, AVX disputes that the other defendants are proper parties to the litigation.
Added
On August 29, 2025, the Company and Former COO entered into a confidential settlement agreement which concluded this matter and releases all claims against the Company. This settlement has been accounted for in these financial statements and is scheduled to be executed and concluded in early August.
Removed
AVX intends to vigorously contest this matter. Further, AVX disputes that the other defendants are proper parties to the litigation. However, litigation and investigations are inherently uncertain, but the outcome could have a material impact on the Company.
Added
This settlement has been accounted for in these financial statements and this is scheduled to be executed and concluded in early August as well. The conclusion on these two related matters would mark the conclusion of all legal matters with respect to Focus Universal Inc.
Removed
The Company is investigating and intends to vigorously defend itself in the foregoing matters. The case has currently been stayed until a status conference on September 17, 2025, which is when the expected trial date will be set. However, litigation and investigations are inherently uncertain.
Added
This case was settled for $130,000 plus legal fees, and its impact recorded in the accompanying financial statements. The Company has EPLI insurance with a deductible amount of $100,000. During the quarter, Focus Universal settled and this matter was finally executed and concluded on April 25, 2025.
Removed
The complaint seeks damages in a minimum amount of $373,025, plus interest at a rate of 10% per annum. The Company is negotiating a resolution and if such resolution falls through then the Company intends to contest this matter. However, since litigation and investigations are inherently uncertain, the outcome may have a material impact on the Company.
Added
On April 10, 2025, the Company, Mr. Kau, and MGR Real Estate, Inc. entered into a confidential settlement agreement which concluded this matter and releases all claims against the Company.
Added
This reduced impact has been accounted for in these financial statements. 31 On January 19, 2026, the Company received requests for redemption (the “Redemption Notices”) from the holders of the outstanding shares of Series B Convertible Preferred Stock (“Series B Preferred Stock”).
Added
Pursuant to the Certificate of Designation of Series B Preferred Stock, as amended, the holders of the outstanding shares of Series B Preferred Stock have the option to require the Company, to redeem all or less than all of the outstanding shares of Series B Preferred Stock.
Added
From the date the Company receives the Redemption Notice, the Company had 20 trading days (the “Time Period”) to redeem the shares of Series B Preferred Stock set forth in the notice for a price equal to the Purchase Price multiplied by the number of shares of Series B Preferred Stock subject to such redemption.
Added
Since the Company has received the Redemption Notice, the Time Period the Company had to redeem the shares of Series B Preferred Stock has since lapsed. As provided in the Certificate of Designation, with respect to redemption, the Company must comply with Nevada state law which prohibits certain distributions or redemptions.
Added
Therefore, management of the Company took the position that under Nevada state law, the Series B Transaction documents do not require the Company to redeem the Series B holders under the specific conditions demanded by the investors.
Added
As of March 16, 2026, a total of 6,447 shares of Series B Preferred Stock or an aggregate of $5,479,950 remain subject to redemption. On February 19, 2026, the Series B investors sent a redemption demand letter for 3,716 outstanding Series B Preferred shares, totaling $3,158,600.
Added
This demand letter was subsequently rescinded by the Series B holders while the Series B holders and management attempted to negotiate a settlement. On March 17, 2026, after the parties could not successfully negotiate a settlement, the Series B investors renewed their redemption requests by emailing Company management a notice of default.
Added
The Company has engaged external advisors to assist in discussions with the holders of the Series B Preferred Stock and is currently engaged in ongoing negotiations to determine the most appropriate resolution that maximizes value for all stockholders, including the Series B shareholders.
Added
In addition, management is actively working to identify potential buyers to purchase the Series B Preferred Stock from holders seeking redemption on mutually acceptable terms.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePeriod (a) Total number of shares (or units) purchased (b) Average price paid per share (or unit) (c) Total number of shares (or units) purchased as part of publicly announced plans or programs ( d) Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs April 2023 4,399 $19.92 4,399 – May 2023 11,305 $18.71 15,704 – June 2023 7,600 $15.99 23,304 – November 2023 1,900 $16.35 25,204 – December 2023 1,100 $15.72 26,304 – October 2024 40,983 $2.58 67,287 – November 2024 19,217 $2.59 86,504 – December 2024 45,464 $2.74 131,968 –
Biggest changePeriod (a) Total number of shares (or units) purchased (b) Average price paid per share (or unit) (c) Total number of shares (or units) purchased as part of publicly announced plans or programs (d) Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs October 2024 4,098 $ 25.79 6,729 – November 2024 1,922 $ 25.92 8,651 – December 2024 4,546 $ 27.36 13,197 – January 2025 321 $ 61.12 13,518 – February 2025 20 $ 42.25 13,538 – March 2025 2,826 $ 43.92 16,364 – April 2025 77 $ 18.75 16,441 – June 2025 713 $ 39.00 17,154 – July 2025 1,846 $ 41.07 19,000 – November 2025 2,430 $ 31.03 21,430 – December 2025 8,851 $ 19.13 30,281 – 34 Item 6. [RESERVED]
Any future determination to declare cash dividends will be made at the discretion of our Board of Directors, subject to applicable laws, and will depend on our financial condition, results of operations, capital requirements, general business conditions and other factors that our Board of Directors may deem relevant. 36 Securities Authorized for Issuance Under Equity Compensation Plans On December 15, 2018, our Board of Directors presented the 2018 Equity Incentive Plan to the shareholders.
Any future determination to declare cash dividends will be made at the discretion of our Board of Directors, subject to applicable laws, and will depend on our financial condition, results of operations, capital requirements, general business conditions and other factors that our Board of Directors may deem relevant. 33 Securities Authorized for Issuance Under Equity Compensation Plans On December 15, 2018, our Board of Directors presented the 2018 Equity Incentive Plan to the shareholders.
The following table sets forth for the indicated periods the high and low intra-day sales price per share for our common stock on the Nasdaq Global Market (as applicable) for the four quarters of 2023 and 2024. As of September 23, 2024, our common stock trades upon the Nasdaq Capital Market.
The following table sets forth for the indicated periods the high and low intra-day sales price per share for our common stock on the Nasdaq Global Market and Nasdaq Capital Market (as applicable) for the four quarters of 2024 and 2025. As of September 23, 2024, our common stock trades upon the Nasdaq Capital Market.
The transfer agent of our common stock is VStock Transfer, LLC. Dividends. The Company has not paid any cash dividends to date and does not anticipate or contemplate paying dividends in the foreseeable future. It is the present intention of management to utilize all available funds for the development of the Company’s business.
Dividends The Company has not paid any cash dividends to date and does not anticipate or contemplate paying dividends in the foreseeable future. It is the present intention of management to utilize all available funds for the development of the Company’s business.
The Board of Directors determines the vesting schedule of the grants with broad discretion. On August 6, 2019, each member of the Board was granted 4,500 options to purchase shares at $38.00 per share. On December 11, 2020, each member of the Board was granted 2,250 options to purchase shares at $20.00 per share.
The Board of Directors determines the vesting schedule of the grants with broad discretion. On August 6, 2019, each member of the Board was granted 450 options to purchase shares at $380.00 per share. On December 11, 2020, each member of the Board was granted 225 options to purchase shares at $200.00 per share.
Starting on September 23, 2024, our securities were transferred for trading in the Nasdaq Capital Market. On February 3, 2025, the last reported sale price of our common stock as reported on the Nasdaq Capital Market was $6.09 per share.
Starting on September 23, 2024, our securities were transferred for trading in the Nasdaq Capital Market. On March 24, 2026, the last reported sale price of our common stock as reported on the Nasdaq Capital Market was $4.58 per share.
On December 31, 2021, each member of the Board was granted 2,250 options to purchase shares at $59.10 per share. On December 30, 2022, each member of the Board was granted 2,250 options to purchase shares at $42.70 per share. On January 2, 2024, each member of the Board was granted 2,250 options to purchase shares at $15.00 per share.
On December 31, 2021, each member of the Board was granted 225 options to purchase shares at $591.00 per share. On December 30, 2022, each member of the Board was granted 225 options to purchase shares at $427.00 per share. On January 2, 2024, each member of the Board was granted 225 options to purchase shares at $150.00 per share.
As of December 31, 2024, there were 355 record holders of 7,153,647 shares of the Company’s common stock. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of common stock whose shares are held in the names of various security brokers, dealers, and registered clearing agencies.
The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of common stock whose shares are held in the names of various security brokers, dealers, and registered clearing agencies. The transfer agent of our common stock is VStock Transfer, LLC.
Recent sales of unregistered securities. None. Issuer Purchases of Equity Securities The following table shows the repurchases made in 2023 and 2024.
On January 2, 2025, each member of the Board was granted 225 options to purchase shares at $34.55 per share. Recent sales of unregistered securities None. Issuer Purchases of Equity Securities The following table shows the repurchases made in 2024 and 2025.
Removed
High Low 2023: First Quarter $ 47.10 $ 23.70 2023: Second Quarter $ 24.60 $ 14.50 2023: Third Quarter $ 19.70 $ 15.00 2023: Fourth Quarter $ 21.70 $ 13.70 2024: First Quarter $ 17.90 $ 3.40 2024: Second Quarter $ 4.30 $ 2.30 2024: Third Quarter $ 4.70 $ 1.80 2024: Fourth Quarter $ 4.90 $ 2.10 Holders.
Added
High Low 2024: First Quarter $ 179.00 $ 34.10 2024: Second Quarter $ 42.79 $ 23.20 2024: Third Quarter $ 47.00 $ 17.89 2024: Fourth Quarter $ 48.50 $ 21.23 2025: First Quarter $ 97.00 $ 33.40 2025: Second Quarter $ 59.80 $ 32.00 2025: Third Quarter $ 41.10 $ 18.20 2025: Fourth Quarter $ 52.50 $ 7.53 Holders As of March 25, 2026, there were 328 record holders of 1,025,135 shares of the Company’s common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeNet Losses During the years ended December 31, 2024, and 2023, we incurred net losses of $3,200,138 and $4,718,142 respectively, due to the factors discussed above. 41 Liquidity and Capital Resources Working Capital December 31, 2024 December 31, 2023 Current Assets $ 3,846,363 $ 1,028,278 Current Liabilities (876,975 ) (1,657,646 ) Working Capital $ 2,969,388 $ (629,368 ) Cash Flows The table below, for the periods indicated, provides selected cash flow information: For the year ended December 31, 2024 For the year ended December 31, 2023 Net cash used in operating activities $ (4,656,754 ) $ (3,528,762 ) Net cash provided by investing activities 7,127,121 54,146 Net cash provided by (used in) financing activities 706,094 (434,048 ) Effect of exchange rate (15,397 ) (6,508 ) Net change in cash $ 3,161,064 $ (3,915,172 ) Cash Flows from Operating Activities Our net cash outflows from operating activities of $4,656,754 for the year ended December 31, 2024, was primarily the result of our net loss of $3,200,138 and changes in our operating assets and liabilities offset by the add-back of non-cash expenses, and operating activities from discontinued operations.
Biggest changeLiquidity and Capital Resources Working Capital December 31, 2025 December 31, 2024 Current Assets $ 8,647,129 $ 3,846,363 Current Liabilities (366,471 ) (876,975 ) Working Capital $ 8,280,658 $ 2,969,388 38 Cash Flows The table below, for the periods indicated, provides selected cash flow information: For the year ended December 31, 2025 For the year ended December 31, 2024 Net cash used in operating activities $ (5,102,771 ) $ (4,656,754 ) Net cash provided by (used in) investing activities (185,760 ) 7,127,121 Net cash provided by financing activities 9,648,113 706,094 Effect of exchange rate (13,942 ) (15,397 ) Net change in cash $ 4,345,640 $ 3,161,064 Cash Flows from Operating Activities Our net cash outflows from operating activities of $5,102,771 for the year ended December 31, 2025, was primarily the result of our net loss of $4,787,769 and changes in our operating assets and liabilities offset by the add-back of non-cash expenses, and operating activities from discontinued operations.
We have completed an initial production run of prototype Ubiquitor devices and intend to proceed into full-scale production during 2025. During 2024, we presented the Ubiquitor several trade shows including CES 2023 and 2024.
We have completed an initial production run of prototype Ubiquitor devices and intend to proceed into full-scale production during 2025. During 2025, we presented the Ubiquitor at several trade shows including CES 2024 and 2025.
Off-Balance Sheet Arrangements As of December 31, 2024, we did not have any off-balance-sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation SK.
Off-Balance Sheet Arrangements As of December 31, 2025, we did not have any off-balance-sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation SK.
Having the mathematical and graphical environments created, our team is focused on developing the 3D-user interface machine auto design. Our public reporting automation software is completed and currently undergoing extensive testing. We have developed a Microsoft®-based add-on software that aims to streamline and automate the financial reporting preparation process.
Having the mathematical and graphical environments created, our team is focused on developing an automated 3D user interface design. Our public reporting automation software is completed and currently undergoing extensive testing. We have developed a Microsoft®-based add-on software that aims to streamline and automate the financial reporting preparation process.
Other Income Other income of $3,278,375 incurred during the year ended December 31, 2024, primarily consisted of gain on sale of property of $3,181,706, interest income of $40,852, interest expense – related party of $89,098, unrealized loss on marketable equity securities of $12,075, rental income of $96,541 and other income of $60,449.
Other income of $3,278,376 incurred during the year ended December 31, 2024, primarily consisted of gain on sale of property of $3,181,706, interest income of $40,853, interest expense – related party of $89,098, unrealized loss on marketable equity securities of $12,075, rental income of $96,541 and other income of $60,449.
These are our financial reporting software and universal smart technology for smart meters and automation. We are currently looking for distribution partners for both products.
These are our financial reporting software, One Touch Financial, and universal smart technology for smart meters and automation. We are currently looking for distribution partners for both products.
Loss from discontinued operations, net of tax Loss from discontinued operations, net of tax was $278,263 during the year ended December 31,2024, compared to $7,907 during the year ended December 31,2023. The decrease was due to the discontinued operations of AT Tech Systems LLC in August 2024.
Loss from discontinued operations, net of tax Loss from discontinued operations, net of tax was $0 during the year ended December 31,2025, compared to $278,263 during the year ended December 31,2024. The decrease was due to the discontinued operations of AT Tech Systems LLC in August 2024.
These consolidated financial statements do not include adjustments relating to the recoverability and classification of reported asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. At December 31, 2024, the Company had cash and cash equivalents, and short-term investments, in the amount of $3,613,978.
These consolidated financial statements do not include adjustments relating to the recoverability and classification of reported asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. At December 31, 2025, the Company had cash and cash equivalents, and short-term investments, in the amount of $7,957,845.
Our testing against the state-of-the-art sensors on the market suggests to us that the new sensors are at least as good as the best quality sensors on the market. However, we believe that our sensors are much more cost effective. 38 Our software machine auto design team has also made significant progress during 2024.
Our testing against the state-of-the-art sensors on the market suggests to us that the new sensors are at least as good as the best quality sensors on the market. However, we believe that our sensors are much more cost effective. 35 Our financial software design team has also made significant progress during 2025 to our One Touch Financial software product.
We believe the software will significantly simplify the Form 10-Q and Form 10-K preparation processes and make creating, editing and managing documents both simple and accurate. We are planning to commercialize this software in the first quarter of 2025. A cloud-based version of this software is currently under the development.
We believe the software will significantly simplify the Form 10-Q and Form 10-K preparation processes and make creating, editing and managing documents both simple and accurate. We believe our financial software is ready to commercialize. A cloud-based version of this software is currently under the development.
Our net cash outflows from operating activities of $3,528,762 for the year ended December 31, 2023, was primarily the result of our net loss of $4,718,142 and changes in our operating assets and liabilities offset by the add-back of non-cash expenses, and operating activities from discontinued operations.
Our net cash outflows from operating activities of $4,656,754 for the year ended December 31, 2024, was primarily the result of our net loss of $3,200,138 and changes in our operating assets and liabilities offset by the add-back of non-cash expenses, and operating activities from discontinued operations.
Professional fees were $1,660,590 during the year ended December 31, 2024 compared to $767,606 during the year ended December 31, 2023. The increase in these professional fees compared to the prior period was due to an increase in legal fees for employment litigation defense.
Professional fees were $1,302,800 during the year ended December 31, 2025 compared to $1,660,590 during the year ended December 31, 2024. The decrease in these professional fees compared to the prior period was due to a decrease in legal fees for employment litigation defense.
Selling expense incurred was mainly from third party advertising fees. The decrease of selling expense was due to a decrease in advertising fees and trade show expenses. Compensation – officers and directors were $951,845 and $1,082,775 for the years ended December 31, 2024 and 2023, respectively. The decrease was attributed to a decline in stock prices during the current year.
Selling expense incurred was mainly from third party advertising fees. The decrease of selling expense was due to a decrease in advertising fees and trade show expenses. Compensation – officers and directors were $499,852 and $951,845 for the years ended December 31, 2025 and 2024, respectively.
In addition, the Company had an accumulated deficit of $25,782,308 and $22,582,170 as of December 31, 2024 and 2023, respectively, and negative cash flow from operating activities of $4,656,754 and $3,528,762 for the years ended December 31, 2024 and 2023, respectively.
In addition, the Company had an accumulated deficit of $31,023,411 and $25,782,308 as of December 31, 2025 and 2024, respectively, and negative cash flow from operating activities of $5,102,771 and $4,656,754 for the years ended December 31, 2025 and 2024, respectively.
Cash Flows from Investing Activities For the year ended December 31, 2024, we had cash inflow from investing activities of $7,127,121. That was primarily the result from the purchase of property and equipment of $18,687, and proceeds from sales of property of $7,145,808. For the year ended December 31, 2023, we had cash inflow from investing activities of $54,146.
That was primarily the result from the purchase of property and equipment of $18,687 and proceeds from sales of property of $7,145,808. Cash Flows from Financing Activities For the year ended December 31, 2025, cash inflows from financing activities of $9,648,113.
That was primarily the result proceeds from third party loan of $350,000, proceeds from related party loan of $1,101,000, repayment on related party loan of $2,101,000, repayment on third party loan of $350,000, stock issued for placement agent 1,086,000, stock issued for private placement of $1,290,000 and purchases of treasury stock of $669,906.
That was primarily the result proceeds from third party loan of $350,000, proceeds from related party loan of $1,101,000, repayment on related party loan of $2,101,000, repayment on third party loan of $350,000, common stock issued for placement agent $1,086,000, common stock issued for private placement of $1,290,000 and purchases of treasury stock of $669,906. 39 Going Concern The Company has assessed its ability to continue as a going concern for a period of one year from the date of the issuance of these consolidated financial statements.
Business ” above. 39 Results of Operations For the year ended December 31, 2024 compared to the year ended December 31, 2023 Revenue, cost of revenue and gross profit For the year ended December 31, 2024 For the year ended December 31, 2023 Increase (Decrease) $ Revenue $ 398,137 $ 440,543 $ (42,406 ) Cost of revenue 387,936 380,884 7,052 Gross Profit $ 10,201 $ 59,659 $ (49,458 ) A summary of our revenue by product type for the fiscal years ended December 31, 2024 and 2023 is as follows: December 31, 2024 December 31, 2023 IoT Products $ 398,137 $ 384,168 IoT Project Construction and Installation Services – 56,375 Total $ 398,137 $ 440,543 Our consolidated gross revenue for the years ended December 31, 2024, and 2023 was $398,137 and $440,543, respectively.
Business ” above. 36 Results of Operations For the year ended December 31, 2025 compared to the year ended December 31, 2024 Revenue, cost of revenue and gross profit For the year ended December 31, 2025 For the year ended December 31, 2024 Increase (Decrease) $ Revenue $ 255,023 $ 398,137 $ (143,114 ) Cost of revenue 290,275 387,936 (97,661 ) Gross Profit (Loss) $ (35,252 ) $ 10,201 $ (45,453 ) A summary of our revenue by product type for the fiscal years ended December 31, 2025 and 2024 is as follows: December 31, 2025 December 31, 2024 IoT Products $ 255,023 $ 398,137 Total $ 255,023 $ 398,137 Our consolidated gross revenue for the years ended December 31, 2025 and 2024 was $255,023 and $398,137, respectively.
Operating Expenses The major components of our operating expenses for the years ended December 31, 2024 and 2023 are outlined in the table below: For the year ended December 31, 2024 For the year ended December 31, 2023 Increase (Decrease) $ Selling expense $ 100,189 $ 118,762 $ (18,573 ) Compensation – officers and directors 951,845 1,082,775 (130,930 ) Research and development 1,381,937 1,324,438 57,499 Professional fees 1,660,590 767,606 892,984 General and administrative 2,115,891 1,717,864 398,027 Total operating expenses $ 6,210,452 $ 5,011,445 $ 1,199,007 40 Selling expense for the year ended December 31, 2024 was $100,189, compared to $118,762 for the year ended December 31, 2023.
Operating Expenses The major components of our operating expenses for the years ended December 31, 2025 and 2024 are outlined in the table below: For the year ended December 31, 2025 For the year ended December 31, 2024 Increase (Decrease) $ Selling expense $ 60,289 $ 100,189 $ (39,900 ) Compensation – officers and directors 499,852 951,845 (451,993 ) Research and development 919,965 1,381,937 (461,972 ) Professional fees 1,302,800 1,660,590 (357,790 ) General and administrative 2,075,107 2,115,891 (40,784 ) Total operating expenses $ 4,858,013 $ 6,210,452 $ (1,352,439 ) 37 Selling expense for the year ended December 31, 2025 was $60,289, compared to $100,189 for the year ended December 31, 2024.
Revenue for the year ended December 31, 2024, decreased $42,406 due to a sales decrease from construction contracts. Cost of revenue for the year ended December 31, 2024, was $387,936, compared to $380,884 for the year ended December 31, 2023.
Revenue for the year ended December 31, 2025 decreased $143,114 due to a lower number of sales in the current year. Cost of revenue for the year ended December 31, 2025 was $290,275, compared to $387,936 for the year ended December 31, 2024.
The overall increase in the cost of revenue was due to inventory reserve for the base LED panel products sold in the current year. This, combined with a decrease in gross profit, brought the total to $10,201 for the year ended December 31, 2024, compared to $59,659 for the year ended December 31, 2023.
The decrease in cost of revenue was due to higher cost of the LED materials for installation during this time period, though increases were somewhat nominal. This, combined with a decrease in gross profit (loss), brought the total to $(35,252) for the year ended December 31, 2025, compared to $10,201 for the year ended December 31, 2024.
Going Concern The Company has assessed its ability to continue as a going concern for a period of one year from the date of the issuance of these consolidated financial statements. The Company has a net loss of $3,200,138 and $4,718,142 for the years ended December 31, 2024 and 2023, respectively.
The Company has a net loss of $4,787,769 and $3,200,138 for the years ended December 31, 2025 and 2024, respectively.
General and administrative expenses for the year ended December 31, 2024 was $2,115,891, compared to $1,717,864 for the year ended December 31, 2023. The increase of general and administrative expenses was primarily due to an increase in the number of office employees and rent expenses in 2024.
General and administrative expenses for the year ended December 31, 2025 was $2,075,107, compared to $2,115,891 for the year ended December 31, 2024. Overall, general and administrative expenses did not vary significantly between 2025 and 2024.
Other income of $241,551 incurred during the year ended December 31, 2023, primarily consisted of interest income of $38,339, interest expense – related party of $38,333, unrealized gain on marketable equity securities of $8,033, realized loss on marketable equity securities of $2,002, rental income of $160,910 and other income of $74,604.
Other Income Other income of $105,496 incurred during the year ended December 31, 2025, primarily consisted of interest income of $70,024, unrealized loss on marketable equity securities of $1,773, and other income of $37,245.
For the year ended December 31, 2023, cash outflows from financing activities of $434,048. That was primarily the result from related party loan of $1,000,000, and purchases of treasury stock of $1,434,048.
That was primarily the result proceeds from sales of Series B Preferred Stock, net of $6,320,000, sales of Series A Preferred Stock issued for cash of $3,000,000, stock issued for placement agent $822,502, and purchases of treasury stock of $494,389. For the year ended December 31, 2024, cash inflows from financing activities of $706,094.
That was primarily the result from the purchase of property and equipment of $20,620, purchase of marketable securities of $43,644 and proceeds from sales of marketable securities of $118,410. 42 Cash Flows from Financing Activities For the year ended December 31, 2024, cash inflows from financing activities of $706,094.
Cash Flows from Investing Activities For the year ended December 31, 2025, we had cash outflow from investing activities of $185,760. That was primarily the result from the purchase of property and equipment of $28,106, and capitalized software costs of $157,654. For the year ended December 31, 2024, we had cash inflow from investing activities of $7,127,121.
Research and development costs were $1,381,937 and $1,324,438 for the years ended December 31, 2024 and 2023, respectively. The increase was due to an increase in total number of research and development employee headcount in the Ontario, California headquarters and the Shenzhen, China subsidiary.
The decrease in cost was a result in the decrease in the share price, resulting in a larger stock-based compensation for the directors associated. Research and development costs were $919,965 and $1,381,937 for the years ended December 31, 2025 and 2024, respectively. The decrease was due to software costs being capitalized in the current year.
Removed
Our main sources of revenue are derived from our sales of sensor devices and our wholesaling of various digital, analog, and quantum light meters and filtration products, including fan speed adjusters, carbon filters and HEPA filtration systems.
Added
On January 21, 2026, the Company entered into a purchase, sale, and escrow agreement with 901 Corporate Center, LP to acquire a 100,743 sq. ft. office and commercial building, along with a four-level parking structure, located in Monterey Park, California.
Removed
We source these products from manufacturers in China and then sell them to a major U.S. distributor, Hydrofarm, which resells our products directly to consumers through its established retail distribution channels and, in some cases, places its own branding on our products. Hydrofarm was not our primary source of revenue for the years ended December 31, 2024 and 2023.
Added
While investment in a building is not a core business activity for the Company, the planned acquisition of a new office building does present the Company with a very low real estate expense, in addition to a conservative 9-10% cap rate with a desirable location and market, based on industry professional analysis.
Added
The additional cash flow shall be used to offset corporate and general costs while the company continues to expect the IoT and financial software divisions to be able to generate revenues soon to bear those associated expenses.
Added
Net Losses During the years ended December 31, 2025 and 2024, we incurred net losses of $4,787,769 and $3,200,138 respectively, due to the factors discussed above.
Added
On January 21, 2026, the Company entered into a purchase, sale, and escrow agreement with 901 Corporate Center, LP to acquire a 100,743 sq. ft. office and commercial building, along with a four-level parking structure, located in Monterey Park, California. The purchase price is $17,700,000, with an escrow deposit of $525,000.
Added
The escrow was initially scheduled to close within sixty days of opening escrow. The $525,000 deposit was placed into the escrow account on January 26, 2026. Both parties have executed several amendments to extend the closing date from February to March 2026.
Added
Subsequently, on March 20, 2026, the parties entered into a fifth amendment extending the contingency period to April 10, 2026. At this point in time, the Company has made significant progress towards financing, however there is no assurance that the financing will be completed or that it will be on terms acceptable to the Company.
Added
On January 19, 2026, the Company received requests for redemption (the “Redemption Notices”) from the holders of the outstanding shares of Series B Convertible Preferred Stock (“Series B Preferred Stock”).
Added
Pursuant to the Certificate of Designation of Series B Preferred Stock, as amended, the holders of the outstanding shares of Series B Preferred Stock have the option to require the Company, to redeem all or less than all of the outstanding shares of Series B Preferred Stock.
Added
From the date the Company receives the Redemption Notice, the Company had 20 trading days (the “Time Period”) to redeem the shares of Series B Preferred Stock set forth in the notice for a price equal to the Purchase Price multiplied by the number of shares of Series B Preferred Stock subject to such redemption.
Added
Since the Company has received the Redemption Notice, the Time Period the Company had to redeem the shares of Series B Preferred Stock has since lapsed. As provided in the Certificate of Designation, with respect to redemption, the Company must comply with Nevada state law which prohibits certain distributions or redemptions.
Added
Therefore, management of the Company took the position that under Nevada law, the Series B Transaction documents do not require the Company to redeem the Series B holders under the specific conditions demanded by the investors. As of March 16, 2026, a total of 6,447 shares of Series B Preferred Stock or an aggregate of $5,479,950 remain subject to redemption.
Added
On February 19, 2026, the Series B investors sent a redemption demand letter for 3,716 outstanding Series B Preferred shares, totaling $3,158,600. This demand letter was subsequently rescinded by the Series B holders while the investors and management attempted to negotiate a settlement.
Added
On March 17, 2026, after the parties could not successfully negotiate a settlement, the Series B holders renewed their redemption requests by emailing Company management a notice of default.
Added
The Company has engaged external advisors to assist in discussions with the holders of the Series B Preferred Stock and is currently engaged in ongoing negotiations to determine the most appropriate resolution that maximizes value for all stockholders.
Added
In addition, management is actively working to identify potential buyers to purchase the Series B Preferred Stock from holders seeking redemption on mutually acceptable terms.

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