FOCUS UNIVERSAL INC.
For the period ended Sep 30, 2026. Filed Nov 10, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 10, 2026
FCUV$2.93+4.6%Stored close · as of Nov 10, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-14.
0001683168-26-006446
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-10.
0001683168-26-008451
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 115 previous paragraphs and 173 current paragraphs.
66 unchanged; 31 reworded; 76 added; 16 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (76)
Current report
Our common stock is listed on the Nasdaq Capital Market.
Current report
Certification of Universal Smart IoT Devices and Sensors
Current report
On August 20, 2026, the Company announced that its Universal Smart device and associated industrial sensors had completed certification testing by GRG Metrology & Test Group Co., Ltd. and Centre Testing International Group Co., Ltd. The products identified in the announcement include pH, total dissolved solids (TDS), oxidation-reduction potential (ORP), dissolved oxygen, and turbidity sensors. Management believes these certifications represent a step toward broader commercialization of the Company’s Universal Smart IoT platform and may facilitate marketing of the applicable products in domestic and international markets. Certification, however, does not establish customer demand or guarantee product sales, revenue, or profitability. The Company’s ability to commercialize these products will depend on factors including customer adoption, pricing, production capabilities, distribution, competition, and applicable market requirements.
Current report
Strategic Partnerships, Commercial Pathways and Potential Financing Activities
Current report
During August 2026, the Board adopted a unanimous written consent addressing the Company’s strategic partnership program, potential financing pathways, and use of the Company’s proprietary deterministic artificial intelligence technology (“Deterministic AI”) across additional commercial applications. The consent authorizes management, subject to applicable law, definitive agreements, available capital, and any required Board, stockholder, Nasdaq or regulatory approvals, to continue evaluating (i) a potential PIPE financing or strategic placement, including a transaction that may exceed the applicable 19.99% issuance threshold where permitted and approved, and (ii) multiple strategic partnership transactions structured, where practicable and legally permissible, below that threshold. No financing or securities issuance should be understood to have been completed solely as a result of the Board’s authorization.
Current report
The Board-authorized commercial pathways include domestic credit-card processing (which management has described as completed), international credit-card processing, vehicle financing, vehicle-dealer financing, crypto integration with equity financing subject to applicable securities, financial-services and digital-asset requirements, IoT product sales and financing, and freight-forwarding and logistics applications using Deterministic AI. The Company expects to pursue these opportunities through a partner-led “flywheel” model that seeks to use established counterparties’ customer relationships, operational infrastructure and distribution capabilities to accelerate technology adoption and expand software and related product sales. These initiatives remain subject to due diligence, definitive agreements, required approvals, execution and market acceptance; there can be no assurance that any proposed partnership or financing will be consummated or generate material revenue.
Current report
Management is also authorized under the Board consent, subject to applicable restrictions and approvals, to evaluate and make investments, expenditures, advances, deposits, capital contributions, loans, securities acquisitions, licensing arrangements, revenue-sharing arrangements and other commercially reasonable commitments in connection with these pathways. Such activities may require capital and may expose the Company to investment, counterparty, liquidity, regulatory, valuation and execution risks. The Company’s objective is to use its Deterministic AI platform as a common technology layer across partner channels, with the potential both to expand sales and licensing of the Company’s software and IoT products and to realize gains from investments or securities transactions. Any capital gains are uncertain, depend on the performance and disposition of investments, and should not be viewed as recurring operating revenue.
Current report
The Board consent also approved and recommended, subject to stockholder approval and applicable Nasdaq Listing Rules, an amendment to increase the aggregate shares reserved under the Company’s 2018 Stock Incentive Plan to 10,000,000 shares and to preserve the intended size of that pool notwithstanding a reverse stock split, to the maximum extent permitted by law and the governing plan. The consent further recommended a bylaw amendment to establish a stockholder-meeting quorum of 33 1/3% of outstanding shares entitled to vote, present in person, by remote communication or represented by proxy. These matters are not effective merely by virtue of the Board’s recommendation and remain subject to the required stockholder vote and other applicable requirements. The Board also authorized calling a special meeting of stockholders.
Current report
Deterministic AI and Enterprise Workflow Automation
Current report
Through its Perfecular subsidiaries, the Company is developing and seeking to commercialize software designed to automate complex business processes using what the Company refers to as “Deterministic AI.” The Company’s approach is focused on workflows in which information must be processed according to defined business rules, accounting requirements, regulatory standards or other predetermined constraints. The objective is to automate the execution, validation and completion of these workflows with greater consistency, repeatability and efficiency than traditional manual processes.
Current report
The Company views Deterministic AI as complementary to generative artificial intelligence. Generative AI is commonly used to interpret information, create content and support tasks with multiple possible answers. The Company’s Deterministic AI technology is designed to address process-oriented tasks in which information must be reconciled, validated, formatted or processed according to defined requirements. The Company believes that combining these approaches may provide opportunities to automate portions of complex enterprise workflows that have historically required substantial manual intervention.
Current report
The Company’s initial applications focus on SEC financial reporting automation. The platform is designed to support financial reporting professionals by automating portions of the preparation and formatting of SEC filings, including EDGARization and XBRL tagging. As described in the Company’s public announcements, the technology is designed to identify financial reporting concepts within disclosures, select corresponding XBRL taxonomy elements, format documents for EDGAR submission and generate structured outputs. The Company is also developing financial auditing automation capabilities intended to support the review and validation of financial information.
Current report
In July 2026, the Company announced its Deterministic AI Forms Auto-Populate Engine, designed to process business documents from multiple sources, identify and extract relevant information, validate and correlate information across documents, and populate downstream business forms. Potential document inputs identified by the Company include purchase orders, invoices, contracts, bills of lading, shipping documents and customs documentation. Potential outputs include commercial invoices, packing lists, customs declarations, shipping instructions and other business documents. The commercial scope, supported document types and performance of these capabilities remain subject to the applicable product configuration, testing and customer requirements.
Current report
The Company believes the underlying technology may have applications beyond SEC financial reporting, including accounting, tax preparation, medical billing, freight forwarding, insurance and other business processes that rely on structured information and defined rules. These applications represent potential areas of expansion and should not be interpreted as indicating that the Company has completed commercial deployment, secured customers or generated material revenue in each of these markets.
Current report
The Company’s strategy is to develop its initial financial reporting applications while evaluating opportunities to apply its technology to additional enterprise workflows. The timing and extent of commercialization will depend on product readiness, testing, customer acceptance, pricing, distribution, integration requirements, competition, available resources and the Company’s ability to establish commercially viable sales and service arrangements.
Current report
Deterministic AI Platform — Development and Commercialization Strategy
Current report
During 2026, the Company publicly described additional capabilities of its proprietary Deterministic AI technology and its intended application to enterprise workflow automation. The Company’s announced development areas include SEC financial reporting automation, financial auditing automation and the Deterministic AI Forms Auto-Populate Engine.
Current report
SEC financial reporting automation. The Company’s software is designed to automate portions of the preparation of SEC filings, including document formatting, EDGARization and XBRL tagging. The Company believes that reducing manual document preparation, taxonomy selection and formatting work may improve workflow efficiency and reduce the time required to prepare filings. The extent of any improvement will depend on the complexity of the filing, the quality and completeness of the source information, the applicable reporting requirements and the need for review by management and professional advisers.
Current report
Financial auditing automation. The Company has identified financial auditing automation as another application of its Deterministic AI technology. This application is intended to support the identification and validation of financial information and inconsistencies. The Company should describe specific functions as commercially available only to the extent that those functions have been developed, tested and made available for customer use.
Current report
Forms Auto-Populate Engine. In July 2026, the Company announced a document-processing engine designed to extract and correlate information from multiple business documents and populate downstream forms. The Company believes this technology may be applicable to workflows in accounting, logistics, freight forwarding, customs documentation and other areas where information is transferred among related documents. The extent of the potential commercial opportunity will depend on the system’s performance in actual customer environments, the complexity of customer workflows, integration requirements and customer willingness to pay.
Current report
Potential market expansion. The Company believes its technology may be applicable to additional industries that depend on rule-driven document processing, including tax preparation, medical billing and insurance. The Company is evaluating the potential to extend the technology to additional applications. Such expansion may require further development, testing, customer-specific configuration, integration work, sales and marketing expenditures, and the establishment of appropriate commercial relationships.
Current report
Commercialization and operating results. The Company’s ability to realize revenue from Deterministic AI will depend on its ability to convert development activities and product demonstrations into paying customers, execute customer agreements, deliver products that meet customer requirements, establish pricing and distribution arrangements, and provide ongoing support. Development announcements and descriptions of potential product capabilities do not, by themselves, establish customer adoption, recurring revenue or commercial profitability.
Current report
Commercialization remains at a development, testing and early customer-engagement stage.
Current report
The Company expects that further development and commercialization may require additional financial and personnel resources. There can be no assurance that the Company will successfully commercialize the technology, obtain a sufficient number of customers, achieve anticipated productivity improvements, or generate revenue sufficient to recover its development and commercialization costs.
Current report
Product Pipeline and Deterministic AI Development
Current report
The Company is pursuing the development and commercialization of a portfolio of software and technology products based on its proprietary technologies, including its Deterministic AI platform and Universal Smart Internet of Things (“IoT”) platform. The Company’s product development strategy is focused on automating structured business processes, reducing manual data entry and document preparation, improving the consistency of information processing, and expanding the commercial applications of its existing technology platforms.
Current report
The Company’s current product pipeline includes the following principal areas:
Current report
Deterministic AI – SEC Financial Reporting Automation
Current report
Through its Perfecular subsidiary, the Company is developing software designed to automate portions of the preparation of public-company financial reports and SEC filings. The intended functionality includes the processing of financial information, preparation and formatting of financial statements and related filing documents, EDGARization and XBRL tagging.
Current report
The Company has previously completed a Microsoft Word-based version of its SEC financial reporting software, and customer testing of the automated financial reporting software began in July 2025. The Company is continuing to develop and refine the platform with the objective of automating additional portions of the financial reporting workflow and supporting the generation of filing documents in formats including Word, PDF, HTML and XBRL.
Current report
The Company believes that the platform may reduce the time and manual effort required to prepare financial reports. Actual results will depend on the completeness and accuracy of source information, the complexity of the applicable filing, software functionality, and review by management and other responsible professionals. The software is intended to support the financial reporting process and does not eliminate the responsibility of public companies, their management, auditors or legal advisers to review and approve required disclosures.
Current report
Deterministic AI – Financial Auditing Automation
Current report
The Company has identified financial auditing automation as an additional application of its Deterministic AI technology. The planned application is intended to assist with the organization, comparison and validation of financial information and the identification of inconsistencies among financial records and supporting documents.
Current report
The Company is evaluating the development and integration of these capabilities with its financial reporting software. The extent to which these functions can be incorporated into a commercial product will depend on further development, testing, validation and customer requirements. The Company has not assumed that planned auditing functionality will be commercially available until the applicable capabilities have been sufficiently developed and tested.
Current report
Deterministic AI – Forms Auto-Populate Engine
Current report
In July 2026, the Company announced a document-processing engine designed to extract and correlate information from multiple business documents and use the extracted information to populate related forms and documents. The Company is evaluating applications of this technology in workflows that involve the transfer of information among related documents, including accounting, logistics, freight forwarding and customs documentation.
Current report
The Company believes that this technology may provide a basis for additional industry-specific software applications. Commercial deployment may require further development, testing, integration with customer systems and configuration to accommodate individual customer workflows. The Company’s ability to commercialize these applications will depend on product performance, customer demand, pricing and the development of appropriate sales and distribution channels.
Current report
Deterministic AI – Additional Industry Applications
Current report
The Company is evaluating additional potential applications of its Deterministic AI technology in business processes involving structured information, document processing and rule-based workflows. Potential areas of application include tax preparation, medical billing, insurance documentation and other administrative and financial processes.
Current report
These areas represent potential extensions of the Company’s technology and are not necessarily separate completed or commercially available products. Any expansion into these markets may require additional product development, testing, regulatory or industry-specific review, customer integration and commercial investment. There can be no assurance that the Company will successfully develop or commercialize products for these additional applications.
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Removed paragraphs (16)
Previous report
Our securities are currently traded on Nasdaq Capital Market effective as of September 23, 2024.
Previous report
Acquisition of Office and Commercial Building
Previous report
On April 17, 2026, our wholly owned subsidiary, Lusher Holding LLC (the “Lusher Holding”), closed the acquisition of a Class A office and commercial building along with a four-level parking structure, located at 901 Corporate Center Drive, Monterey Park, California 91754 (the “Property”). The Seller of the Property was 901 Corporate Center, LP (the “Seller”).
Previous report
The aggregate purchase price of the Property was $17,700,000, exclusive of closing costs (the “Purchase Price”). We made an initial down payment of $525,000 on January 26, 2026. On April 17, 2026, we funded the Purchase Price with a loan of $11,050,000 facilitated by a term loan agreement with East West Bank and $5,797,152 in cash as a downpayment to close escrow. The Purchase Price was discounted approximately $419,153 due to rent prorations, security deposits, and other such pre-paid amounts which resulted in the Company receiving a balance of $2,434 after closing costs. The surveyed aggregate land area of the Property amounts to approximately 464,955 useable square feet or 10.73 acres, which is comprised of four parcels (i.e., Parcel Numbers, 5237-022-014, 046, 047, and 5237-002-021) (the “Parcels”). The Parcels, including its land and improvements, have an aggregate value of approximately $28,424,982 in 2026 according to the Los Angeles County Assessor.
Previous report
The Property provides approximately 100,743 sq. ft. in rentable Class A office space and has a parking ratio of 4.1/1,000, offering a blend of surface parking and adjacent four-level parking structure with a canopy of solar panels that are currently leased. Currently, the Property is 99.2% occupied by approximately 16 tenants. The Company does not intend to alter the terms of lease agreements in place with the current tenants, most of which have a term of 5 to 8 years. The Company plans to occupy approximately 2,000 square feet of space.
Previous report
Loan with East West Bank
Previous report
Lusher Holding entered into a loan with East West Bank to borrow $11,050,000 to pay the Purchase Price, at 6.25% interest for the first 3 years, then floating at the Wall Street Journal Prime Rate plus (+) 0.25% for the remaining term, with a floor interest rate at 6.25% to facilitate the purchase of the Property (“East West Loan”).
Previous report
The East West Loan provides for 83 consecutive monthly principal and interest payments of approximately $68,698.64, beginning on May 1, 2026, and subsequently, 83 consequent instalments of principal and interest payments of an estimated amount of approximately $73,917.99 (subject to change based on Wall Street Journal Prime Rate plus 0.25%) each beginning May 1, 2029. A final principal and interest payment of approximately $9,533,143.67 is due on April 1, 2036 (subject to change based on Wall Street Journal Prime Rate plus 0.25%).
Previous report
We are listed as the primary guarantor of the East West Loan and our Chief Executive Officer, Dr. Desheng Wang, is listed as a secondary guarantor.
Previous report
Research and development costs were $362,165 and $467,297 for the three months ended June 30, 2026 and 2025, respectively. The decrease was primarily due to a reduction in the number of research and development employees during the current year.
Previous report
General and administrative expenses for the three months ended June 30, 2026 was $515,193 compared to $495,613 during the three months ended June 30, 2025. The increase in general and administrative expenses was primarily due to the Company having received its employee retention credit from the Internal Revenue Service in 2025, which reduced that year’s comparable expenses.
Previous report
Other income for the three months ended June 30, 2026 was $30,617, compared to $37,112 for the three months ended June 30, 2025.
Previous report
For the six months ended June 30, 2026 compared to the six months ended June 30, 2025
Previous report
Research and development costs were $626,962 and $839,555 for the six months ended June 30, 2026 and 2025, respectively. The decrease was due to software costs being capitalized in the current year.
Previous report
General and administrative expenses for the six months ended June 30, 2026 was $995,025 compared to $772,615 during the six months ended June 30, 2025. The increase in general and administrative expenses was primarily due to the Company having received its employee retention credit from the Internal Revenue Service in 2025, which reduced that year’s comparable expenses.
Previous report
Other income for the six months ended June 30, 2026 was $56,250, compared to $57,261 for the six months ended June 30, 2025.
Reworded paragraphs (31)
Previous wording
Focus Universal Inc. (the “Company,” “we,” “us,” or “our”) is a Nevada corporation. Prior to our acquisition of the Property (as defined below), we had two sources of revenue: generated from our Universal Smart Technology and our software to streamline SEC financial reporting.: Upon our acquisition of the Property in April 2026, our primary source of revenue shifted to revenue generated from rental of our Property. Accordingly, periods prior to the acquisition reflect the historical financial statements of the Company, and the results of operations of the Property are included beginning on the acquisition date. As a result, the results of operations, liquidity and capital resources information for the six months ended June 30, 2026 is not directly comparable to the prior-year period.
Current wording
Focus Universal Inc. (the “Company,” “we,” “us,” or “our”) is a Nevada corporation. Prior to our acquisition of the commercial property located at 901 Corporate Center Drive, Monterey Park, California (the “Property”), we had two sources of revenue: generated from our Universal Smart Technology and our software to streamline SEC financial reporting.: Upon our acquisition of the Property in April 2026, our primary source of revenue shifted to revenue generated from rental of our Property. Accordingly, periods prior to the acquisition reflect the historical financial statements of the Company, and the results of operations of the Property are included beginning on the acquisition date. As a result, the results of operations, liquidity and capital resources information for the nine months ended September 30, 2026 is not directly comparable to the prior-year period.
Previous wording
During the six months ended June 30, 2026, we generated $651,950 from rental income from the Property. We currently have executed leases for rental of 91,366 space through December 31, 2026 from 12 tenants and anticipate generating $1,464,523 of revenue through December 31, 2026 from the rental income derived from the Property assuming no current leases are terminated.
Current wording
During the nine months ended September 30, 2026, we generated $1,441,078 from rental income from the Property. We currently have executed leases for rental of 97,931 square feet of space through December 31, 2026 from 12 tenants and anticipate generating $1,464,523 of revenue for the period from April 17, 2026 through December 31, 2026 from the rental income derived from the Property assuming no current leases are terminated.
Previous wording
We have developed five proprietary technologies utilizing our patent portfolio which we believe solve the most fundamental problems plaguing the internet of things (“IoT”) industry through: (1) increasing overall chip integration by shifting integration from the component level to the device level; (2) creating a faster 5G cellular technology by using ultra-narrowband technology; (3) leveraging ultra-narrowband power line communication (“PLC”) technology; (4) proprietary User Interface Machine auto generation technology; and (5) incorporating all our core technologies into a single chip. Our Universal Smart Technology is designed to overcome instrumentation interoperability and interchangeability. The electronic design starts from a 90% completed common foundation we call our universal smart instrumentation platform (“USIP”), instead of the current method of building each stand-alone instrument from scratch. Our method has the potential to eliminates redundant hardware and software and results in significant cost savings and production efficiency. We also provide sensor devices and are a wholesaler of various air filters and digital, analog, and quantum light meter systems. We holds 28 patents and patents pending in various phases of the patent process.
Current wording
We have developed five proprietary technologies utilizing our patent portfolio which we believe solve the most fundamental problems plaguing the internet of things (“IoT”) industry through: (1) increasing overall chip integration by shifting integration from the component level to the device level; (2) creating a faster 5G cellular technology by using ultra-narrowband technology; (3) leveraging ultra-narrowband power line communication (“PLC”) technology; (4) proprietary User Interface Machine auto generation technology; and (5) incorporating all our core technologies into a single chip. Our Universal Smart Technology is designed to overcome instrumentation interoperability and interchangeability. The electronic design starts from a 90% completed common foundation we call our universal smart instrumentation platform (“USIP”), instead of the current method of building each stand-alone instrument from scratch. Our method has the potential to eliminates redundant hardware and software and results in significant cost savings and production efficiency. We also provide sensor devices and are a wholesaler of various air filters and digital, analog, and quantum light meter systems. We holds 27 patents and patents pending in various phases of the patent process.
Previous wording
Our Lusher subsidiary is developing and designing a software to streamline SEC financial reporting for financial reporting and tax firms. 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 goal is that with a single click, our software automatically retrieves financial data from external accounting systems and generates consolidated financial statements and SEC reports in WORD, PDF, HTML, and XBRL formats—all within just a few minutes. Our developers are trying to eliminate human involvement when it comes to manually updating the numbers. This automation is designed to create an error-free, seamless process. Customer testing of the fully automated SEC financial reporting software began in July 2025.
Current wording
Our Perfecular subsidiary is developing and designing a software to streamline SEC financial reporting for financial reporting and tax firms. 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 goal is that with a single click, our software automatically retrieves financial data from external accounting systems and generates consolidated financial statements and SEC reports in WORD, PDF, HTML, and XBRL formats—all within just a few minutes. Our developers are trying to eliminate human involvement when it comes to manually updating the numbers. This automation is designed to create an error-free, seamless process. Customer testing of the fully automated SEC financial reporting software began in July 2025.
Previous wording
Our USIP technology that will make the Ubiquitor possible is an advanced software and hardware integrated instrumentation platform that uses a large-scale modular design approach. The large-scale modular design approach subdivides instruments into a foundation component (a USIP) and architecture-specific components (sensor nodes), which together are intended to replaces the functions of traditional instruments at a fraction of their cost. The USIP has an open architecture, incorporating a variety of individual instrument functions, sensors, and probes from different industries and vendors. The platform features the ability to connect potentially thousands of different sensors or probes, addressing major limitations present in traditional instrumentation systems.
Current wording
Our USIP technology that will make Ubiquitor possible is an advanced software and hardware integrated instrumentation platform that uses a large-scale modular design approach. The large-scale modular design approach subdivides instruments into a foundation component (a USIP) and architecture-specific components (sensor nodes), which together are intended to replace the functions of traditional instruments at a fraction of their cost. The USIP has an open architecture, incorporating a variety of individual instrument functions, sensors, and probes from different industries and vendors. The platform features the ability to connect potentially thousands of different sensors or probes, addressing major limitations present in traditional instrumentation systems.
Previous wording
**Additional Focus Universal Inc. IoT Products under Smart AVX.**We also sell integrated IoT equipment under the Smart AVX brand to connect devices across platform systems and to facilitate unified collaboration across audio-visual technologies, digital media technologies, security and surveillance technologies and communication technologies. This approach allows us to provide customers ease of use, design and integration, and installation and maintenance by utilizing technology that integrates our five core technologies.
Current wording
**Additional Focus Universal Inc. IoT Products under Smart AVX.**We also sell integrated IoT equipment under the Smart AVX brand to connect devices across platform systems and to facilitate unified collaboration across audio-visual technologies, digital media technologies, security and surveillance technologies and communication technologies. This approach allows us to provide customers with ease of use, design and integration, and installation and maintenance by utilizing technology that integrates our five core technologies.
Previous wording
Lusher Corporate Services, One Touch Financial Software
Current wording
Perfecular Corporate Services, One Touch Financial Software
Previous wording
Currently, several companies offer semi-automated solutions that address only part of the tagging process. We have developed a fully automated, end-to-end solution powered by both automation and Variegated AI. We believe the technology enables the computer to conduct the activities for which the computer is designed and optimal, while allowing humans to remain in the decision loop and center upon what they excel at.
Current wording
Currently, several companies offer semi-automated solutions that address only part of the tagging process. We have developed a fully automated, end-to-end solution powered by both automation and Variegated AI. We believe technology enables the computer to conduct the activities for which the computer is designed and optimal, while allowing humans to remain in the decision loop and center upon what they excel at.
Previous wording
Power Line Communication (“PLC”) technology is a communication technology that enables sending data over existing power cables. One advantage of this technology is that PLC does not require substantial new investment for its communications infrastructure. Rather, PLC utilizes existing power lines, thereby utilizing a distribution network that already penetrates all residential, commercial and industrial premises. Accordingly, connectivity via PLC technology is potentially the most cost-effective, scalable interconnectivity approach for the IoT. We believe PLC technology can be an integral part of our communication infrastructure for the IoT, which enables reliable, real-time measurements, monitoring, and control. A large variety of appliances may be interconnected by transmitting data through the same wires that provide electrical energy.
Current wording
Power Line Communication (“PLC”) technology is a communication technology that enables sending data over existing power cables. One advantage of this technology is that PLC does not require substantial new investment for its communications infrastructure. Rather, PLC utilizes existing power lines, thereby utilizing a distribution network that already penetrates all residential, commercial and industrial premises. Accordingly, connectivity via PLC technology is potentially the most cost-effective, scalable interconnectivity approach for IoT. We believe PLC technology can be an integral part of our communication infrastructure for the IoT, which enables reliable, real-time measurements, monitoring, and control. A large variety of appliances may be interconnected by transmitting data through the same wires that provide electrical energy.
Previous wording
Our results of operations for the three and six months ended June 30, 2026 include the revenue generated from the Property and related expenses from April 17, 2026 through June 30, 2026 which is not included in our results of operations for the three and six months ended June 30, 2025. Accordingly, the results of operations for the three and six months ended June 30, 2026 is not directly comparable to the prior-year periods.
Current wording
Our results of operations for the three and nine months ended September 30, 2026, include the revenue generated from the Property and related expenses from April 17, 2026, through September 30, 2026 which is not included in our results of operations for the three and nine months ended September 30, 2025. Accordingly, the results of operations for the three and nine months ending September 30, 2026 is not directly comparable to the prior-year periods.
Previous wording
Our consolidated gross revenue for the three months ended June 30, 2026 and 2025 was $675,170 and $35,330, respectively. The increase in revenue was primarily attributable to an increase in rental revenue from Lusher Holding LLC.
Current wording
Our consolidated gross revenue for the three months ended September 30, 2026 and 2025 was $802,428 and $28,689, respectively. The increase in revenue was primarily attributable to an increase in rental revenue from Lusher Holding LLC.
Previous wording
Property operating expense for the three months ended June 30, 2026 were $259,663, compared to $0 for the three months ended June 30, 2025. The increase in property operating expenses was primarily due to the acquisition of the commercial property during the quarter.
Current wording
Property operating expense for the three months ended September 30, 2026 were $400,655, compared to $0 for the three months ended September 30, 2025. The increase in property operating expenses was primarily due to the acquisition of the commercial property on April 17, 2026.
Previous wording
Cost of other revenue for the six months ended June 30, 2026 were $49,956, compared to $207,453 for the six months ended June 30, 2025. The decrease in the cost of other revenue was primarily due to a decrease in the number and quantity of other revenue-generating transactions.
Current wording
Cost of other revenue for the three months ended September 30, 2026 were $57,869, compared to $30,301 for the three months ended September 30, 2025. The increase in the cost of other revenue was primarily due to an increase in the number and quantity of other revenue-generating transactions.
Previous wording
Depreciation and amortization for the three months ended June 30, 2026 were $201,024, compared to $5,506 for the three months ended June 30, 2025. The increase in depreciation and amortization expense was primarily due to depreciation expense recognized on the commercial property acquired during the quarter.
Current wording
Depreciation and amortization for the three months ended September 30, 2026 were $235,838, compared to $6,272 for the three months ended September 30, 2025. The increase in depreciation and amortization expense was primarily due to depreciation expense recognized on the commercial property acquired on April 17, 2026.
Previous wording
Selling expenses for the three months ended June 30, 2026 were $691, compared to $7,420 for the three months ended June 30, 2025. Selling expenses were mainly from third party advertising fees and marketing related fees. The decrease in selling expenses was due to a decrease in advertising fees.
Current wording
Selling expenses for the three months ended September 30, 2026 were $2,199, compared to $2,374 for the three months ended September 30, 2025. Selling expenses were mainly from third party advertising fees and marketing related fees. The decrease was primarily attributable to lower advertising and marketing expenses.
Previous wording
Compensation – officers and directors were $117,638 and $125,357 for the three months ended June 30, 2026 and 2025, respectively. The decrease in cost was a result of the decrease in the share price, which reduced the stock-based compensation expense for the associated directors.
Current wording
Compensation – officers and directors were $117,642 and $124,981 for the three months ended September 30, 2026 and 2025, respectively. The decrease in cost was a result of the decrease in the share price, which reduced the stock-based compensation expense for the associated directors.
Previous wording
During the three months ended June 30, 2026 and 2025, we incurred net loss of $1,518,958 and $1,505,648 respectively, due to the factors discussed above.
Current wording
During the three months ended September 30, 2026 and 2025, we incurred net loss of $1,389,425 and $1,166,375 respectively, due to the factors discussed above.
Previous wording
Our consolidated gross revenue for the six months ended June 30, 2026 and 2025 was $723,143 and $225,585, respectively. The increase in revenue was primarily attributable to an increase in rental revenue from Lusher Holding LLC.
Current wording
Our consolidated gross revenue for the nine months ended September 30, 2026 and nine months ended September 30, 2025 was $1,525,571 and $254,274, respectively. The increase in revenue was primarily attributable to an increase in rental revenue from Lusher Holding LLC.
Previous wording
The major components of our cost and operating expenses for the six months ended June 30, 2026 and 2025 are outlined in the table below:
Current wording
The major components of our cost and operating expenses for the nine months ended September 30, 2026 and nine months ended September 30, 2025 are outlined in the table below:
Previous wording
Property operating expense for the six months ended June 30, 2026 were $259,663, compared to $0 for the six months ended June 30, 2025. The increase in property operating expenses was primarily due to the acquisition of the commercial property during the quarter.
Current wording
Property operating expense for the nine months ended September 30, 2026 were $660,318, compared to $0 for the nine months ended September 30, 2025. The increase in property operating expenses was primarily due to the acquisition of the commercial property on April 17, 2026.
Previous wording
Cost of other revenue for the three months ended June 30, 2026 were $17,227, compared to $47,742 for the three months ended June 30, 2025. The decrease in the cost of other revenue was primarily due to a decrease in the number and quantity of other revenue-generating transactions.
Current wording
Cost of other revenue for the nine months ended September 30, 2026 were $107,825, compared to $237,754 for the nine months ended September 30, 2025. The decrease in the cost of other revenue was primarily due to a decrease in the number and quantity of other revenue-generating transactions.
Previous wording
Depreciation and amortization for the six months ended June 30, 2026 were $207,746, compared to $10,959 for the six months ended June 30, 2025. The increase in depreciation and amortization expense was primarily due to depreciation expense recognized on the commercial property acquired during the quarter.
Current wording
Depreciation and amortization for the nine months ended September 30, 2026 were $443,584, compared to $17,231 for the nine months ended September 30, 2025. The increase in depreciation and amortization expense was primarily due to depreciation expense recognized on the commercial property acquired on April 17, 2026.
Previous wording
Selling expenses for the six months ended June 30, 2026 were $33,539, compared to $56,400 for the six months ended June 30, 2025. Selling expenses were mainly from third party advertising fees and marketing related fees. The decrease in selling expenses was due to a decrease in advertising fees.
Current wording
Selling expenses for the nine months ended September 30, 2026 were $35,738, compared to $58,774 for the nine months ended September 30, 2025. Selling expenses were mainly from third party advertising fees and marketing related fees. The reason for the decrease is mainly due to decrease in sales related to Focus Shenzhen Office.
Previous wording
Professional fees were $751,144 during the three months ended June 30, 2026, compared to $429,155 during the three months ended June 30, 2025. The increase in these professional fees compared to the prior period was primarily due to an increase in legal advisory fees related to preferred stock and other securities matters.
Current wording
Professional fees were $1,440,110 during the nine months ended September 30, 2026, compared to $1,224,063 during the nine months ended September 30, 2025. The increase in these professional fees compared to the prior period was primarily due to an increase in legal advisory fees related to preferred stock and other securities matters.
Previous wording
During the six months ended June 30, 2026 and 2025, we incurred net loss of $2,765,036 and $2,757,026 respectively, due to the factors discussed above.
Current wording
During the nine months ended September 30, 2026 and nine months ended September 30, 2025, we incurred net loss of $4,154,461 and $3,923,401 respectively, due to the factors discussed above.
Previous wording
Our net cash outflows from operating activities of $1,889,277 for the six months ended June 30, 2026 was primarily the result of our net loss of $2,765,036 and changes in our operating assets and liabilities offset by the add-back of non-cash expenses.
Current wording
Our net cash outflows from operating activities of $2,742,684 for the nine months ended September 30, 2026 was primarily the result of our net loss of $4,154,461 and changes in our operating assets and liabilities offset by the add-back of non-cash expenses.
Previous wording
Our net cash outflows from operating activities of $2,648,288 for the six months ended June 30, 2025 was primarily the result of our net loss of $2,757,026 and changes in our operating assets and liabilities offset by the add-back of non-cash expenses.
Current wording
Our net cash outflows from operating activities of $3,709,104 for the nine months ended September 30, 2025 was primarily the result of our net loss of $3,923,401 and changes in our operating assets and liabilities offset by the add-back of non-cash expenses.
Previous wording
For the six months ended June 30, 2026 we had cash outflow from investing activities of $6,632,052 from the proceed from sale of marketable securities of $121,823 offset by the purchase of property and equipment of $6,656,031 and capitalized software cost of $97,844. For the six months ended June 30, 2025 we had cash outflow from investing activities of $25,091 from the purchase of property and equipment of $25,091.
Current wording
For the nine months ended September 30, 2026 we had cash outflow from investing activities of $6,632,412 from the proceed from sale of marketable securities of $121,823 offset by the purchase of property and equipment of $6,656,391 and capitalized software cost of $97,844. For the nine months ended September 30, 2025 we had cash outflow from investing activities of $27,318 from the purchase of property and equipment of $27,318.
Previous wording
For the six months ended June 30, 2026, we had cash inflows of $2,180,050, consisting of $3,547,348 in gross proceeds from the sale of pre-funded units in a private placement offering, offset by $961,861 of redemption of preferred stock, $51,294 of repayment on a bank loan, and $354,143 spent on the purchase of treasury stock. For the six months ended June 30, 2025, we had cash inflows of $207,387, consisting of $381,224 of gross proceeds from the sale of stock issued in a private placement offering and offset by $173,837 spent on the purchase of treasury stock.
Current wording
For the nine months ended September 30, 2026, we had cash inflows of $5,870,130, consisting of $3,547,348 in proceeds from the sale of pre-funded units in a private placement offering and $3,720,676 in proceeds from stock issuance and warrant exercises, offset by $961,860 of redemption of preferred stock, $81,891 of repayment on a bank loan, and $354,143 spent on the purchase of treasury stock. For the nine months ended September 30, 2025, we had cash inflows of $572,826, consisting of $822,501 of gross proceeds from the sale of stock issued in a private placement offering and offset by $249,675 spent on the purchase of treasury stock.
Previous wording
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 condensed consolidated financial statements. The Company has a net loss of $2,765,036 for the six months ended June 30, 2026. In addition, the Company had an accumulated deficit of $34,015,113 as of June 30, 2026, and negative cash flow from operating activities of $1,889,277 for the six months ended June 30, 2026. Substantial doubt about the Company’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the Company will be unable to meet its obligations as they become due within one year from the financial statement issuance date. The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern. The Company currently suffered recurring losses from operations, generated negative cash flow from operating activities, has an accumulated deficit and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. These conditions raise substantial doubt as to its ability to continue as a going concern. These condensed 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. The Company’s independent registered public accounting firm, in its report on the Company’s consolidated financial statements for the year ended December 31, 2025, has also expressed substantial doubt about the Company’s ability to continue as a going concern.
Current wording
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 condensed consolidated financial statements. The Company incurred a net loss of $4,154,461 for the nine months ended September 30, 2026. In addition, the Company had an accumulated deficit of $35,404,538 as of September 30, 2026 and negative cash flow from operating activities of $2,742,684 for the nine months ended September 30, 2026. Substantial doubt about the Company’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the Company will be unable to meet its obligations as they become due within one year from the financial statement issuance date. The Company believes its current cash position will be able to fund its operations through the second quarter of 2027. The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern. The Company currently suffered recurring losses from operations, generated negative cash flow from operating activities, has an accumulated deficit and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. These conditions raise substantial doubt as to its ability to continue as a going concern. These condensed 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. The Company’s independent registered public accounting firm, in its report on the Company’s consolidated financial statements for the year ended December 31, 2025, has also expressed substantial doubt about the Company’s ability to continue as a going concern.
Previous wording
At June 30, 2026, the Company had cash, and short-term investments, in the amount of $1,600,258. The ability to continue as a going concern is dependent on the Company attaining and maintaining profitable operations in the future and raising additional capital to meet its obligations and repay its liabilities arising from normal business operations when they come due. Since inception, the Company has funded its operations primarily through equity and debt financings, and it expects to continue to rely on these sources of capital in the future. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in case of equity financing, or grant unfavorable terms in future licensing agreements. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company.
Current wording
At September 30, 2026, the Company had cash, and short-term investments, in the amount of $4,440,231. The ability to continue as a going concern is dependent on the Company attaining and maintaining profitable operations in the future and raising additional capital to meet its obligations and repay its liabilities arising from normal business operations when they come due. Since inception, the Company has funded its operations primarily through equity and debt financings, and it expects to continue to rely on these sources of capital in the future. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in case of equity financing, or grant unfavorable terms in future licensing agreements. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Compensation – officers and directors were $235,189 and $250,744 for the six months ended June 30, 2026 and 2025, respectively. The decrease in cost was a result of the decrease in the share price, which reduced the stock-based compensation expense for the associated directors.
Previous report — wording carried elsewhere
Professional fees were $1,136,349 during the six months ended June 30, 2026, compared to $902,146 during the six months ended June 30, 2025. The increase in these professional fees compared to the prior period was primarily due to an increase in legal advisory fees related to preferred stock and other securities matters.