FOCUS UNIVERSAL INC.
For the period ended Sep 30, 2026. Filed Nov 10, 2026.
View on SEC.govAbout this filing
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 Risk Factors?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-14.
0001683168-26-006446
Item 1A. Risk FactorsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-10.
0001683168-26-008451
Item 1A. Risk FactorsThe 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 39 previous paragraphs and 68 current paragraphs.
33 unchanged; 5 reworded; 30 added; 1 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 1 previous and 1 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 (30)
Current report
Our Deterministic AI technology may not achieve commercial acceptance or generate material revenue.
Current report
The Company is developing Deterministic AI software for SEC financial reporting, financial auditing automation, business document processing and other potential enterprise applications. Although the Company believes these technologies may provide opportunities to automate certain rule-driven business processes, the Company’s ability to commercialize them remains subject to significant uncertainty.
Current report
The Company may be unable to convert product development, demonstrations or customer testing into paid contracts or recurring revenue. Potential customers may be reluctant to adopt new software for financial reporting, auditing or other business-critical processes because of concerns regarding accuracy, reliability, regulatory requirements, data security, confidentiality, integration with existing systems, or the need for human review. Customers may also require customization, testing or support that increases the Company’s costs or delays deployment.
Current report
The Company’s technology may not perform as expected in all customer environments or with all document types, source data, accounting systems, regulatory requirements or business workflows. Errors in data extraction, reconciliation, document processing, XBRL taxonomy selection or output generation could require additional review and correction and could expose the Company or its customers to financial, operational, reputational or legal risks. The Company’s products may also face competition from established software providers, specialized service firms, generative AI providers and other automation technologies.
Current report
The Company’s potential expansion into accounting, tax preparation, medical billing, freight forwarding, insurance and other industries may require additional product development, industry-specific expertise, customer relationships, regulatory analysis and capital. The Company may not have sufficient resources to pursue all of these opportunities, and it may not achieve commercial adoption in any particular market.
Current report
Accordingly, there can be no assurance that the Company’s Deterministic AI products will achieve broad customer adoption, generate significant or recurring revenue, reduce costs as anticipated, or become profitable. If commercialization is delayed or unsuccessful, the Company may not recover its development and marketing expenditures, and its business, financial condition and results of operations could be materially adversely affected.
Current report
On October 30, 2026, we filed Amendment No. 1 to our Current Report on Form 8-K originally filed on April 27, 2026, regarding our acquisition of the Property. The amendment included the Property’s audited financial statements for the year ended December 31, 2025 and the period from January 1, 2026 through April 16, 2026, together with unaudited pro forma condensed consolidated financial information. The pro forma information is presented for informational purposes only and does not represent actual results that would have occurred had the acquisition taken place on the dates assumed or project future operating results.
Current report
Risks Related to Our Acquisition and Ownership of 901 Corporate Center Drive
Current report
The Property may not generate the rental income or operating cash flow we currently anticipate.
Current report
The value of the Property and the cash flow generated from its operations depend upon numerous factors, many of which are beyond our control, including market rental rates, occupancy levels, tenant demand, operating expenses, property taxes, insurance costs, economic conditions, and competition from other office properties. If the Property fails to generate anticipated rental income or incurs higher-than-expected operating expenses, our financial condition and results of operations could be adversely affected.
Current report
Our rental revenue is dependent upon the continued occupancy and financial condition of our tenants.
Current report
The Property is currently leased to multiple tenants (16). While many of the tenants are quite stable and many are government related entities, if one or more significant tenants fail to renew their leases, default on lease obligations, become insolvent, reduce their leased space, or otherwise terminate occupancy, rental revenue may decline. Replacing tenants may require substantial leasing commissions, tenant improvements, rent concessions, and extended vacancy periods.
Current report
The commercial office market continues to experience uncertainty.
Current report
Overall demand for office space in the region has been affected by evolving workplace trends, including remote and hybrid work arrangements. Reduced demand for traditional office space may result in lower occupancy rates, downward pressure on rental rates, longer leasing periods, and decreased property values. These trends could adversely affect the operating performance and valuation of the Property.
Current report
The Property is subject to refinancing and interest rate risks.
Current report
A substantial portion of the acquisition was financed through indebtedness. The East West Bank loan bears a fixed interest rate for an initial period and subsequently converts to a floating rate based upon the Wall Street Journal Prime Rate plus an applicable margin. Increases in interest rates could increase our debt service obligations and reduce cash flow available for operations and future investments. In addition, there can be no assurance that future refinancing will be available on favorable terms, if at all.
Current report
The acquisition has increased our leverage and debt obligations.
Current report
The acquisition required us to incur significant indebtedness. Increased leverage may limit our financial flexibility, reduce funds available for research and development and other corporate initiatives, increase vulnerability to adverse economic conditions, and require a substantial portion of future cash flow to be dedicated to debt service obligations.
Current report
The Property may require capital expenditures greater than currently anticipated.
Current report
Commercial real estate assets require ongoing maintenance, repairs, renovations, tenant improvements, and capital expenditures. Unexpected structural issues, deferred maintenance, environmental conditions, building system failures, code compliance requirements, or other unforeseen matters could require substantial expenditure beyond those currently anticipated.
Current report
Commercial real estate values are influenced by numerous factors, including interest rates, capitalization rates, economic conditions, local market dynamics, tenant demand, operating performance, and investor sentiment. A decline in the value of the Property could adversely affect our financial condition and ability to obtain financing.
Current report
Property is subject to environmental and regulatory risks.
Current report
Owners of commercial real estate may be liable for environmental conditions existing on a property, regardless of whether the owner caused such conditions. The discovery of hazardous substances, environmental contamination, or non-compliance with applicable environmental laws could result in significant remediation costs, penalties, litigation, and limitations on the use or sale of the Property.
Current report
Natural disasters and other catastrophic events could adversely affect Property.
Current report
The Property is in Southern California, a region susceptible to earthquakes, wildfires, flooding, and other natural disasters. Although we maintain insurance coverage that it believes is appropriate, certain losses may be uninsured or underinsured. Significant damage to the Property could result in substantial repair costs, business interruption, tenant losses, and reduced rental income.
Current report
The Property is subject to competition from other commercial properties.
Current report
The Property competes with numerous offices and mixed-use properties in the greater Los Angeles region. Competing properties may offer lower rental rates, more attractive amenities, newer facilities, or more favorable lease terms. Increased competition may adversely affect occupancy levels and rental income.
Current report
Our ability to realize the anticipated benefits of the acquisition is subject to execution risks.
Current report
We expect the acquisition to provide recurring rental income, long-term appreciation potential, and a strategic corporate location. There can be no assurance that these anticipated benefits will be realized within the expected timeframe or at all. If the Property does not perform as expected, our investment may not generate the returns anticipated by management.
Removed paragraphs (1)
Previous report
We are not able to obtain financial information sufficient to be able to provide the S-X financial information. Therefore, there is limited public information regarding the operations of the Property and we are not in compliance with the requirements of Rule 3-14 of Regulation S-X. We have requested a waiver from the Securities and Exchange Commission with respect to such requirements, but there is no assurance that our request will be granted. Unless we file the S-X financial information, the Securities and Exchange Commission will not declare effective registration statements or post-effective amendments filed by us until twelve months following the date on which we have filed a periodic report with the Securities and Exchange Commission that meets the requirements of Regulation S-X, and affiliates will be not be permitted to make sales of securities pursuant to Rule 144 pursuant to the Securities Act of 1933, as amended.
Reworded paragraphs (5)
Previous wording
We were incorporated on December 4, 2012, and as of June 30, 2026, we had an accumulated deficit of $34,015,113. Our current liquidity position raises substantial doubt about our ability to continue as a going concern. We have assessed our ability to continue as a going concern for a period of one year from the date of the issuance of this Quarterly Report. We had a net loss of $2,765,036 and $2,757,026 for the six months ended June 30, 2026 and June 30, 2025, respectively and a net loss of $4,787,769 and $3,200,138 for the years ended December 31, 2025 and 2024, respectively. In addition, we 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. If we are not successful in growing revenues and controlling costs, we will not achieve profitable operations or positive cash flow, and even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods.
Current wording
We were incorporated on December 4, 2012, and as of September 30, 2026, we had an accumulated deficit of $35,404,538. Our current liquidity position raises substantial doubt about our ability to continue as a going concern. We have assessed our ability to continue as a going concern for a period of one year from the date of the issuance of this Quarterly Report. We had a net loss of $4,154,461 and $3,923,401 for the nine months ended September 30, 2026 and nine months ended September 30, 2025, respectively and a net loss of $4,787,769 and $3,200,138 for the years ended December 31, 2025 and 2024, respectively. In addition, we 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. If we are not successful in growing revenues and controlling costs, we will not achieve profitable operations or positive cash flow, and even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods.
Previous wording
Our failure to file certain financial statements in connection with the Property acquisition pursuant to Rule 3-14 of Regulation S-X and Item 9.01 of Form 8-K will limit our ability to raise capital.
Current wording
The late filing of certain financial statements in connection with the Property acquisition pursuant to Rule 3-14 of Regulation S-X and Item 9.01 of Form 8-K may limit our ability to raise capital.
Previous wording
We have concluded that we have not maintained effective internal control over financial reporting through the six months ended June 30, 2026 or 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.
Current wording
We have concluded that we have not maintained effective internal control over financial reporting through the nine months ended September 30, 2026 or 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.
Previous wording
Unless we generate significant revenue from operations, we will need to raise additional capital to fund our operations, and we cannot be certain that funding will be available to us on acceptable terms on a timely basis, or at all. Unless our revenue increases from past historical revenue, our current cash, including proceeds from our recent completed public offerings and debt issuances, is anticipated to be sufficient to fund operations less than a year. To meet our financing needs, we are considering multiple alternatives, including, but not limited to, additional equity financings, which we expect will include sales of common stock, debt financings, equipment sale leasebacks, and/or funding from partnerships or collaborations. Our ability to raise capital through the sale of securities may be limited by our inability to utilize a registration statement to raise capital due to the late filing of a Current Report on Form 8-K disclosing certain financial statements related to the Property. In addition, even if we are able to disclose the required financial information, we will not be able to use a registration statement on Form S-3 until August 2027. In addition, our current outstanding debt holders have certain covenants restricting our ability to raise capital. Any debt financing, if available, may involve restrictive covenants (such as those in our current debt financing) that may impact our ability to conduct our business.
Current wording
Unless we generate significant revenue from operations, we will need to raise additional capital to fund our operations, and we cannot be certain that funding will be available to us on acceptable terms on a timely basis, or at all. Unless our revenue increases from past historical revenue, our current cash, including proceeds from our recent completed public offerings and debt issuances, is anticipated to be sufficient to fund operations less than a year. To meet our financing needs, we are considering multiple alternatives, including, but not limited to, additional equity financings, which we expect will include sales of common stock, debt financings, equipment sale leasebacks, and/or funding from partnerships or collaborations. Our ability to raise capital through the sale of securities may be limited by our inability to utilize a registration statement on Form S-3 to raise capital due to the late filing of certain Current Reports on Form 8-K. We will not be eligible to use a registration statement on Form S-3 again until we have timely filed all materials and reports required to be filed pursuant to Section 13, 14 or 15(d) of the Securities Exchange Act of 1934 for a period of at least twelve (12) calendar months immediately preceding the filing of a new registration statement on Form S-3. In addition, our current outstanding debt holders have certain covenants restricting our ability to raise capital. Any debt financing, if available, may involve restrictive covenants (such as those in our current debt financing) that may impact our ability to conduct our business.
Previous wording
For the six months ended June 30,2026, we derived 35% and 26% of our revenue and accounts receivable from one customer. The loss of such customer would have a material adverse effect on us. A significant portion of our revenue for the six months ended Juen 30, 2026 was derived from rental income from our new Property. There can be no guarantee that we will be successful in operating the Property or that our expenses will not increase in the future beyond the revenue derived from the Property
Current wording
A significant portion of our revenue for the nine months ended September 30, 2026 was derived from rental income from our new Property. There can be no guarantee that we will be successful in operating the Property or that our expenses will not increase in the future beyond the revenue derived from the Property.