Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly period ended June 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 000-40770 FOCUS UNIVERSAL INC. (Exact Name of Small Business Issuer as specified in its charter) (State or other jurisdiction (IRS Employer File Number) of incorporat ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly period ended March 31, 2025 Table of Contents ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 000-40770 FOCUS UNIVERSAL INC. (Exact Name of Small Business Issuer as specified in its charter) of incorporation) Nevada 46-3355876 (State or other jurisdiction (IR ...

Revenue and Profitability - Revenue for the year ended December 31, 2024, was $398,137, a decrease of $42,406 from $440,543 in 2023, primarily due to a decline in construction contracts [246]. - Gross profit for 2024 was $10,201, down from $59,659 in 2023, reflecting increased costs associated with inventory reserves [246]. - Net losses for the year ended December 31, 2024, were $3,200,138, compared to $4,718,142 in 2023, indicating an improvement in financial performance [254]. - The company reported a net loss of $3,200,138 for the year ended December 31, 2024, compared to a net loss of $4,718,142 for 2023, indicating an improvement in financial performance [263]. - As of December 31, 2024, the company had an accumulated deficit of $25,782,308, up from $22,582,170 in 2023 [263]. Expenses - Operating expenses increased to $6,210,452 in 2024 from $5,011,445 in 2023, with significant rises in professional fees and general administrative expenses [247]. - Research and development expenses rose to $1,381,937 in 2024, up from $1,324,438 in 2023, driven by an increase in headcount [249]. - Negative cash flow from operating activities was $4,656,754 for the year ended December 31, 2024, compared to $3,528,762 for 2023, highlighting ongoing operational challenges [263]. Assets and Liabilities - Current assets increased significantly to $3,846,363 in 2024 from $1,028,278 in 2023, while current liabilities decreased [256]. - The company had cash and cash equivalents, and short-term investments amounting to $3,613,978 as of December 31, 2024 [264]. Cash Flow - Cash inflow from investing activities for 2024 was $7,127,121, primarily due to proceeds from the sale of property [261]. - For the year ended December 31, 2024, cash inflows from financing activities totaled $706,094, primarily from a third-party loan of $350,000 and a related party loan of $1,101,000 [262]. Future Plans and Concerns - The company plans to commercialize its financial reporting software in Q1 2025, which aims to streamline the preparation of financial documents [239]. - The Ubiquitor device is set for full-scale production in 2025, following successful prototype runs and positive reception at trade shows [240]. - There are substantial doubts about the company's ability to continue as a going concern due to recurring losses and negative cash flow from operations [263]. Other Information - The company did not have any off-balance-sheet arrangements as of December 31, 2024 [265]. - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures [266].

Technology and Product Development - Focus Universal Inc. holds 28 patents and patents pending in various phases of the patent process, focusing on proprietary technologies in the IoT industry[94] - The company plans to phase out traditional lower-margin products and launch a new line of products that have been in development for several years, targeting controlled agriculture and home automation industries[97] - The U.S.-based sales team has begun marketing Smart AVX-branded product lines, including large format multimedia touch screens and surveillance camera systems[99] - Production for home automation products, such as smart wall touch light switches and smart controllers, is underway, with sourcing and cost analysis completed[100] - The Shenzhen subsidiary has completed designs for several sensors, including a TDS meter and carbon dioxide sensor, which are expected to be cost-effective compared to existing market options[101] - The Ubiquitor device integrates multiple digital sensors into one platform, representing a technological advancement in the IoT marketplace[109] - The USIP technology enables the Ubiquitor to cut production costs and reduce the effort required to develop new sensor products[110] - Smart AVX-branded products are integrated across various sectors, including LED audio-visual panel products and VOIP phone services, enhancing customer experience and operational efficiency[114] Financial Performance - Revenue for the three months ended September 30, 2024, was $74,215, compared to $71,854 for the same period in 2023, representing an increase of $2,361[149] - Cost of revenue decreased to $42,530 in Q3 2024 from $44,386 in Q3 2023, resulting in a gross profit increase to $31,685 from $27,468[149] - Selling expenses rose to $30,936 in Q3 2024 from $25,193 in Q3 2023, an increase of $5,743 attributed to higher advertising fees[150] - Compensation for officers and directors increased significantly to $575,255 in Q3 2024 from $267,002 in Q3 2023[151] - Other income surged to $3,215,560 in Q3 2024 compared to $62,050 in Q3 2023, primarily due to a gain on the sale of property[155] - Research and development expenses were relatively stable, at $308,516 in Q3 2024 compared to $305,872 in Q3 2023[151] - General and administrative expenses increased to $585,491 in Q3 2024 from $387,764 in Q3 2023, mainly due to a rise in office employees[153] - For the nine months ended September 30, 2024, the company's revenue was $264,954, an increase of $26,151 (approximately 10.9%) compared to $238,803 for the same period in 2023[156] - Gross profit for the nine months ended September 30, 2024 was $137,268, up $72,555 (approximately 112.1%) from $64,713 in 2023, attributed to higher sales of LED products[156] - Total operating expenses increased to $4,329,474 for the nine months ended September 30, 2024, up $819,082 (approximately 23.3%) from $3,510,392 in 2023[157] - The company incurred a net loss of $1,238,776 for the nine months ended September 30, 2024, a significant improvement compared to a net loss of $3,100,442 in 2023[163] Market Insights - The IoT sensors market is projected to grow from $11.1 billion in 2022 to $26 billion by 2026, indicating significant market potential[147] - The overall enterprise IoT spending increased to $201 billion in 2022, reflecting a growth of 21.5%[147] Cash Flow and Assets - Current assets as of September 30, 2024 were $5,971,500, a substantial increase from $1,028,278 as of December 31, 2023[163] - Cash inflow from investing activities for the nine months ended September 30, 2024 was $3,950,852, a significant increase from $54,472 in 2023[169] - Cash used in operating activities was $477,195 for the nine months ended September 30, 2024, a decrease of $2,126,350 (approximately 81.7%) compared to $2,603,545 in 2023[165] - The company reported other income of $3,231,253 for the nine months ended September 30, 2024, compared to $240,360 in 2023, primarily due to a gain on the sale of property[162] - The accumulated deficit increased to $23,820,946 as of September 30, 2024, compared to $22,582,170 as of December 31, 2023[172] - The company had cash and cash equivalents of $5,368,273 as of September 30, 2024, indicating a need for future capital to meet obligations[173] Future Plans - The company has developed a Microsoft®-based add-on software to streamline SEC reporting processes, with plans to commercialize it in Q4 2024 or Q1 2025[102] - A complementary office automation software product is 80% complete, aimed at assisting in faster and more accurate financial report preparation[103] - The company plans a roadshow in Q3 2024 to update the community on new software developments[130]

Company Overview - Focus Universal Inc. (NASDAQ: FCUV) specializes in patented hardware and software design technologies for Internet of Things (IoT) and 5G, holding 28 patents and patents pending across five disruptive technology platforms [6] - The company's technologies aim to address significant challenges in hardware and software design and production, potentially reducing costs, development timelines, and energy usage while enhancing range, speed, efficiency, and security [6] Offering Details - Univest Securities, LLC announced the closing of a registered direct offering for Focus Universal Inc., involving the sale of 3,750,000 shares priced at $0.32 per share, resulting in gross proceeds of approximately $1.2 million [1][2] - The offering was conducted under a shelf registration statement filed with the SEC, which was declared effective on November 16, 2021 [3] Financial Services Provider - Univest Securities, LLC, established in 1994 and a member of FINRA and SIPC, offers a range of financial services including brokerage, investment banking, and wealth management, focusing on long-term client relationships [5]

Technology and Innovation - Focus Universal Inc. has developed five proprietary technologies aimed at solving fundamental issues in the IoT industry, including a faster 5G cellular technology and ultra-narrowband power line communication[78]. - The company holds 28 patents and patents pending, focusing on increasing chip integration and reducing production costs through its Universal Smart Technology[78]. - The Shenzhen subsidiary has completed designs for several sensors, including a TDS meter and carbon dioxide sensor, which are expected to be cost-effective compared to existing market options[81]. - The Ubiquitor device integrates multiple digital sensors into one platform, aiming to reduce production costs and development efforts for new sensor products[86]. - The company’s proprietary ultra-narrowband PLC technology aims to provide a cost-effective communication infrastructure for IoT devices[104]. - The company has 18 pending U.S. nonprovisional patent applications and 9 issued U.S. patents, indicating a strong focus on intellectual property development[108]. Product Development and Marketing - A new line of products is set to be launched, phasing out traditional lower-margin products, with a focus on controlled agriculture and home automation industries[79]. - The U.S.-based sales team is actively marketing Smart AVX-branded products, including large format multimedia touch screens and surveillance camera systems[80]. - Smart AVX-branded products include LED audio-visual panel products and VOIP phone services, targeting various commercial applications[90][94]. - The company aims to enhance its product offerings by integrating core technologies across its Smart AVX-branded equipment, facilitating unified collaboration across different technologies[89]. - The company is developing a Microsoft-based software to automate SEC reporting processes, with plans to commercialize it in Q4 2024 or Q1 2025[82]. - A complementary office automation software product is 80% complete, designed to streamline financial report preparation for CPAs and auditors[83]. Financial Performance - Consolidated gross revenue for the three months ended June 30, 2024, was $19,753, a decrease of $195,638 compared to $215,391 for the same period in 2023[118]. - Cost of revenue for the three months ended June 30, 2024, was $31,834, down from $149,259 in 2023, resulting in a decrease of $117,425[118]. - Gross profit for the three months ended June 30, 2024, was a loss of $12,081, compared to a profit of $66,132 in 2023, reflecting a decrease of $78,213[118]. - Revenue for the six months ended June 30, 2024 was $238,911, a decrease of $212,575 compared to $451,486 for the same period in 2023[127]. - Cost of revenue for the six months ended June 30, 2024 was $251,191, down from $330,003 in 2023, resulting in a gross loss of $(12,280) compared to a profit of $121,483 in 2023[127]. - Net losses for the six months ended June 30, 2024 were $2,680,703, compared to $2,132,409 for the same period in 2023[132]. Operating Expenses - Total operating expenses for the six months ended June 30, 2024 were $2,686,667, an increase of $252,724 from $2,433,943 in 2023[129]. - Selling expenses for the six months ended June 30, 2024 were $74,925, nearly unchanged from $74,934 in 2023[129]. - Research and development costs increased to $639,525 for the six months ended June 30, 2024, compared to $619,473 in 2023[130]. - Professional fees rose significantly to $707,032 in the six months ended June 30, 2024, up from $373,964 in 2023, attributed to increased legal fees[130]. - General and administrative expenses increased to $1,153,137 for the six months ended June 30, 2024, compared to $804,635 in 2023[130]. Market Trends and Projections - The IoT installation service experienced a reduction in the number of projects in 2024, contributing to the decline in revenue[118]. - The IoT sensors market is projected to reach $26 billion by 2026, up from $11.1 billion in 2022, indicating significant growth potential[115]. - Overall enterprise IoT spending increased to $201 billion in 2022, reflecting a growth rate of 21.5%[115]. - The rising need for reliable high bandwidth communication for IoT devices is expected to grow to $664.75 billion by 2028, driven by 5G services[115]. Financial Position - Current assets as of June 30, 2024 were $654,329, down from $1,028,278 as of December 31, 2023, resulting in negative working capital of $(3,009,412)[133]. - Cash outflows from operating activities for the six months ended June 30, 2024 were $(1,721,946), compared to $(1,606,739) in 2023[135]. - As of June 30, 2024, there were no off-balance-sheet arrangements reported by the company[141]. - The company qualifies as a smaller reporting company under Rule 12b-2 of the Exchange Act[141]. - The company is not required to provide quantitative and qualitative disclosures about market risk[141].

Technology Development - Focus Universal Inc. has developed five proprietary technologies aimed at solving fundamental issues in the IoT industry, including a faster 5G cellular technology and ultra-narrowband power line communication [94]. - The company holds 28 patents and patents pending, focusing on increasing chip integration and reducing production costs through its Universal Smart Technology [94]. - The Shenzhen subsidiary has completed designs for several sensors, including a TDS meter and carbon dioxide sensor, which are expected to be cost-effective compared to existing market options [99]. - The Ubiquitor device integrates multiple digital sensors into a single platform, aiming to reduce production costs and development efforts for new sensor products [108]. - The company's patented ultra-narrowband PLC technology is expected to provide a promising alternative to wireless networks, enhancing IoT connectivity [126]. - The company aims to leverage ultra-narrowband technology to create a type of 5G wireless communication technology capable of achieving low band coverage and estimated speeds of 1 Gbps [129]. Product Development and Marketing - New product lines are being developed, with plans to phase out lower-margin products and introduce advanced technology products in controlled agriculture and home automation sectors [96]. - The U.S. sales team has begun marketing Smart AVX-branded multimedia touch screens, surveillance camera systems, and VOIP phone services [97]. - Production for home automation products, including smart wall touch light switches and smart controllers, is ready to commence, with sourcing and cost analysis completed [98]. - Focus Universal Inc. is integrating its Smart AVX-branded IoT equipment to enhance collaboration across various technologies, including audiovisual and security systems [111]. Financial Performance - Revenue for the three months ended March 31, 2024, was $219,158, a decrease of $16,937 compared to $236,095 for the same period in 2023, representing a decline of approximately 7.2% [142]. - Cost of revenue increased to $219,357 for the three months ended March 31, 2024, up by $38,613 from $180,744 in the same period in 2023, indicating a rise of approximately 21.4% [142]. - Gross profit for the three months ended March 31, 2024, was a loss of $199, a decrease of $55,550 compared to a gross profit of $55,351 for the same period in 2023 [142]. - Consolidated gross revenue for Q1 2024 was $219,158, a decrease of $16,937 from $236,095 in Q1 2023 [145]. - Cost of revenue for Q1 2024 increased to $219,357 from $180,744 in Q1 2023, resulting in a gross profit decrease to $199 from $55,351 [146]. - Net losses for Q1 2024 were $1,315,597, compared to $1,114,243 in Q1 2023, reflecting ongoing operational challenges [152]. Cash Flow and Financial Position - Current assets decreased to $715,853 as of March 31, 2024, from $1,028,278 at the end of 2023, while current liabilities increased to $(2,548,448) from $(1,657,646) [153]. - Net cash used in operating activities for Q1 2024 was $(892,089), compared to $(838,535) in Q1 2023, indicating worsening cash flow issues [154]. - Cash inflows from financing activities in Q1 2024 were $550,000, primarily from loans, contrasting with cash outflows of $(1,000,000) in Q1 2023 due to treasury stock purchases [159]. - The company had an accumulated deficit of $23,897,767 as of March 31, 2024, up from $22,582,170 at the end of 2023, highlighting ongoing financial strain [160]. - As of March 31, 2024, the company had cash and cash equivalents of $114,096, raising concerns about its ability to meet future obligations [161]. - The company expects fluctuations in cash flows from operating activities due to various factors, including revenue changes and accounts receivable collection [157]. - The company has entered into a letter of intent to sell land and buildings, which could provide additional working capital, though the outcome is uncertain [161]. Market Insights - The IoT sensors market is projected to reach $26 billion by 2026, growing from $11.1 billion in 2022, indicating a compound annual growth rate (CAGR) of approximately 19.5% [139]. - Overall enterprise IoT spending increased to $201 billion in 2022, reflecting a growth of 21.5% compared to the previous year, with an expected growth rate of 18.5% in 2023 [139]. - The company has identified competitors in the wireless sensor node industry, including Hach and Monnit Corporation, highlighting the competitive landscape [136]. Intellectual Property - The company has 18 pending U.S. nonprovisional patent applications and 9 issued U.S. patents, indicating a strong focus on intellectual property development [134]. - The company is optimistic about the patentability of its PLC technology, as indicated by a favorable International Preliminary Report of Patentability issued in September 2022 [133].

Revenue and Financial Performance - Total revenue for the year ended December 31, 2023, was $1,052,198, a significant increase of $698,579 compared to $353,619 in 2022[312]. - Revenue from IoT products was $742,706 for 2023, up from $260,781 in 2022, indicating strong growth in this segment[312]. - Gross profit for 2023 increased to $93,785, compared to $22,720 in 2022, reflecting improved margins from higher-value contracts[314]. - Operating expenses decreased to $5,056,592 in 2023 from $5,228,366 in 2022, primarily due to reduced general and administrative costs[316]. - Research and development expenses rose to $1,386,810 in 2023, up from $1,060,385 in 2022, highlighting the company's commitment to innovation[317]. - The net loss for the year ended December 31, 2023, was $4,718,142, slightly improved from a net loss of $4,926,937 in 2022[321]. - The company had an accumulated deficit of $22,582,170 as of December 31, 2023, up from $17,864,028 as of December 31, 2022[329]. - Cash outflows from financing activities for the year ended December 31, 2023, were $434,048, primarily due to treasury stock purchases of $1,434,048[328]. - The company had negative cash flow from operating activities of $3,528,762 for the year ended December 31, 2023, compared to $2,957,983 for the year ended December 31, 2022[329]. - As of December 31, 2023, the company had cash and cash equivalents, and short-term investments totaling $464,989[330]. - The company is dependent on raising additional capital to meet its obligations and repay liabilities arising from normal business operations[330]. - The company has not completed efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period[329]. Technology and Product Development - The Ubiquitor device can connect up to thousands of potential sensor nodes and has been tested with up to 256 sensor instrument readouts, displaying data on a digital screen[282]. - The Company plans to introduce the Ubiquitor in smart home and commercial installations, aiming to reduce costs and increase functionality in environments such as greenhouses[280]. - The ultra-narrowband PLC technology is expected to achieve a bandwidth of 4 megabits per second, with potential for more, while effectively managing electrical noise and interference[288]. - The Ubiquitor-powered gardening system aims to replace dozens of standalone devices, integrating multiple sensors for optimal growing conditions[284]. - The Ubiquitor's sensor analytics system integrates event-monitoring, storage, and analytics software, providing a holistic view of sensor data[281]. - The Company intends to leverage PLC technology to enhance the Ubiquitor, aiming for real-time control of hundreds of devices in smart home and commercial applications[291]. - The Company has filed 18 domestic patents in 2022 and 3 patents in 2023, indicating a strong focus on intellectual property development[300]. Market Trends and Opportunities - The global industrial air filtration market is projected to be valued at $23.83 billion by 2029, with a CAGR of 7.2%, driven by stricter regulations on air quality[306]. - The IoT sensors market is projected to grow from $11.1 billion in 2022 to $26 billion by 2026, indicating significant market potential for the company's products[308]. - The overall enterprise IoT spending increased to $201 billion in 2022, with an expected growth rate of 18.5% in 2023, underscoring the expanding market[308]. Corporate Developments - The Company has established a branch office in China to enhance manufacturing procurement and support research and development activities[292]. - The company entered into a loan agreement for $1,000,000 with Golden Sunrise Investment LLC, secured against property with a net book value of $4.5 million[331]. - The loan has an annual interest rate of 12%, increasing to 15% on any unpaid principal balance after the due date of September 7, 2024[331]. - As of December 31, 2023, the company did not have any off-balance-sheet arrangements[332].

Revenue and Financial Performance - Total revenue for Q3 2023 was $318,370, a significant increase of $257,716 compared to $60,654 in Q3 2022 [213]. - Total revenue for the nine months ended September 30, 2023, was $769,856, compared to $282,463 for the same period in 2022, representing an increase of $487,393 [226]. - Gross profit for Q3 2023 rose to $116,976, up from $18,213 in Q3 2022, reflecting improved margins from IoT Installation Services [213][217]. - Gross profit increased to $238,459 for the nine months ended September 30, 2023, from $39,459 in 2022, reflecting a significant improvement [227]. - Operating expenses for Q3 2023 totaled $1,147,275, an increase of $155,096 compared to $992,179 in Q3 2022 [218]. - Operating expenses decreased to $3,581,218 for the nine months ended September 30, 2023, down from $4,142,634 in 2022, a reduction of $561,416 [228]. - Research and development expenses increased to $305,872 in Q3 2023 from $133,109 in Q3 2022, driven by a higher headcount in R&D [220]. - Research and development costs rose to $925,345 for the nine months ended September 30, 2023, compared to $862,214 in 2022, an increase of $63,131 [230]. - Net losses for Q3 2023 were $968,033, slightly higher than the $942,020 loss in Q3 2022 [225]. - Net losses for the nine months ended September 30, 2023, were $3,100,442, compared to $3,872,247 for the same period in 2022 [234]. - The company had an accumulated deficit of $20,964,470 as of September 30, 2023, compared to $17,864,028 as of December 31, 2022 [243]. - The company has substantial doubt about its ability to continue as a going concern due to recurring losses and negative cash flows [242]. Product Development and Innovation - For the nine months ended September 30, 2023, the company generated significant revenue from agricultural sensors and measurement equipment, which is its primary business [140]. - The company plans to phase out traditional lower-margin products and launch a new line of technology products that have been in development for several years [143]. - The company has completed the designs for several new sensors, including a TDS meter, CO2 sensor, and quantum PAR sensor, which are expected to be cost-effective compared to competitors [147]. - The Ubiquitor device integrates multiple digital sensors and measurement tools into one platform, representing a technological advancement in the IoT marketplace [160]. - The Ubiquitor is designed to connect up to thousands of sensor nodes and is capable of real-time data collection at up to 100 Hz per second [169]. - The Ubiquitor device is designed to cut production costs and reduce the effort required for new sensor product development by utilizing smartphone technology [172]. - Focus Universal Inc. aims to enhance the Ubiquitor by leveraging PLC technology to control hundreds of devices in near real-time for smart home and gardening systems [198]. - The company is developing a 5G wireless communication technology that can achieve low band coverage and an estimated 1 Gbps high band speed using its ultra-narrowband technology [199]. - The company has 18 pending U.S. nonprovisional patent applications and 9 issued U.S. patents, reflecting ongoing innovation efforts [205]. Market Strategy and Sales - The company plans to reveal its Ubiquitor products at the MJBizCon from November 28 to December 1, 2023, and at the California School Business Expo from April 7 to April 10, 2024 [148]. - The company is building a U.S. sales team to market its product lines, including Smart AVX-branded multimedia touch screens and surveillance systems [144]. - Focus Universal Inc. is focusing on IoT installations for both residential and commercial sectors, providing customized solutions for various industries [192]. - The company aims to provide integrated VOIP services to its existing commercial customer base, enhancing communication solutions for small businesses [175]. - The acquisition of AT Tech Systems is expected to enhance the company's IoT Installation Services segment and overall market presence [212]. Financial Technology and Automation - The company has developed a Microsoft-based add-on software to streamline SEC reporting processes, with plans to commercialize it in Q4 2023 or Q1 2024 [150]. - Focus Universal Inc. plans to commercialize its financial reporting automation software by the end of 2023, allowing users to subscribe for a monthly fee [190]. - The company’s automated software solutions include data entry automation, validation checks, and formatted table creation to improve financial reporting accuracy and compliance [185]. Industry Trends and Projections - The IoT sensors market is projected to reach $26 billion by 2026, up from $11.1 billion in 2022, indicating strong growth potential [211]. - The overall enterprise IoT spending increased to $201 billion in 2022, with an expected growth rate of 18.5% in 2023 [211].

Revenue and Profitability - For the six months ended June 30, 2023, the company generated significant revenue from agricultural sensors and measurement equipment, which is its primary business [125]. - Total revenue for the three months ended June 30, 2023, was $215,391, a significant increase of $150,749 compared to $64,642 for the same period in 2022 [172]. - Gross profit for the three months ended June 30, 2023, rose to $66,132, compared to $6,866 for the same period in 2022, reflecting a substantial increase of $59,266 [172]. - Total revenue for the six months ended June 30, 2023 was $451,486, an increase of $229,677 compared to $221,809 for the same period in 2022 [183]. - Gross profit for the six months ended June 30, 2023 was $121,483, up from $20,638 in 2022, reflecting a significant increase of $100,845 [184]. Expenses and Losses - Total operating expenses for the six months ended June 30, 2023 were $2,433,943, a decrease of $715,904 from $3,149,847 in 2022 [185]. - Research and development costs for the six months ended June 30, 2023 were $619,473, down from $729,105 in 2022, a decrease of $109,632 [186]. - Selling expenses for the six months ended June 30, 2023 were $74,934, an increase of $19,047 from $55,887 in 2022 [185]. - Net losses for the six months ended June 30, 2023 were $2,132,409, compared to $2,930,227 for the same period in 2022 [190]. - The Company reported a net loss of $2,132,409 for the six months ended June 30, 2023, compared to a net loss of $2,930,227 for the same period in 2022, indicating a reduction in losses of approximately 27% [200]. Cash Flow and Assets - Current assets as of June 30, 2023 were $1,796,226, down from $4,807,830 as of December 31, 2022 [191]. - Net cash used in operating activities for the six months ended June 30, 2023 was $1,606,739, compared to $1,749,492 in 2022 [192]. - Cash inflow from investing activities for the six months ended June 30, 2023 was $40,889, contrasting with an outflow of $267,537 in 2022 [197]. - Cash outflows from financing activities for the six months ended June 30, 2023 were $1,420,686 due to the purchase of treasury stock [198]. - Negative cash flow from operating activities was $1,606,739 for the six months ended June 30, 2023, compared to $1,749,492 for the same period in 2022, showing a decrease in negative cash flow of approximately 8.1% [200]. Business Development and Strategy - The company plans to phase out traditional lower-margin products and launch a new line of technology products, with increasing technology layers [127]. - The Ubiquitor device, which integrates multiple digital sensors and measurement tools, is under development and aims to reduce costs and increase functionality in smart home and agricultural applications [141][145]. - The company expects to complete its entire smart home and hydroponic IoT product lines by the end of 2023 [135]. - The company expects to establish five divisions to integrate its technology, including a PLC technology division and an IoT division [160]. - The acquisition of AT Tech Systems is expected to bolster the company's IoT Installation Services segment [171]. Innovation and Technology - The Ubiquitor device is designed to connect up to thousands of sensor nodes and display data in real-time, with a testing capacity of up to 256 sensor readouts [148][149]. - The company has developed a Microsoft-based software to automate SEC reporting processes, which is expected to be commercialized in Q3 or Q4 of 2023 [132]. - The company has completed 80% of the development of a complementary office automation software product aimed at streamlining financial report preparation [136]. - The first version of the Universal Smart Instrumentation Platform (USIP) for IoT is expected to be demonstrated in Q1 2024 [131]. - The company aims to launch a proprietary PLC microchip in 2023, following promising internal testing that increased bandwidth to 4 megabits per second [154]. Market and Contracts - The IoT sensors market is projected to reach $26 billion by 2026, up from $11.1 billion in 2022, indicating a strong growth trajectory [170]. - The overall enterprise IoT spending increased to $201 billion in 2022, reflecting a growth of 21.5% [170]. - The company signed 17 new contracts with an average value of $32,225, totaling $547,825 in signed contracts to date, with $281,717 already collected [171]. - The company has 28 total patents and patent applications in various phases with the USPTO, with three more provisional patents filed this quarter [165]. - The company has received a patent for its honeycomb activated carbon filter product, which is ready for nationwide marketing [128]. Financial Health and Concerns - The accumulated deficit as of June 30, 2023, was $19,996,437, up from $17,864,028 as of December 31, 2022, reflecting an increase of about 11.9% [200]. - The Company has substantial doubt about its ability to continue as a going concern, dependent on its ability to raise additional capital [200]. - As of June 30, 2023, the Company did not have any off-balance-sheet arrangements [201]. - The Company is classified as a smaller reporting company and is not required to provide certain market risk disclosures [202].