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].

Revenue and Financial Performance - Consolidated gross revenue for Q1 2023 was $236,095, an increase of $78,928 from $157,167 in Q1 2022, primarily due to sales from the acquisition of AT Tech[164]. - Gross profit for Q1 2023 increased to $55,351 compared to $13,644 in Q1 2022, reflecting higher margin contracts for IoT Installation Services[165]. - Total operating expenses decreased to $1,296,325 in Q1 2023 from $1,937,505 in Q1 2022, a reduction of $641,180[167]. - Research and development expenses dropped to $276,481 in Q1 2023 from $561,744 in Q1 2022, due to a decrease in headcount[168]. - For the three months ended March 31, 2023, the company incurred a net loss of $1,114,243, compared to a net loss of $1,868,930 for the same period in 2022, representing a decrease in losses of approximately 40.2%[172]. - Current assets as of March 31, 2023, were $2,999,834, down from $4,807,830 as of December 31, 2022, indicating a decrease of approximately 37.5%[173]. - The company's working capital decreased to $2,597,386 as of March 31, 2023, from $3,420,591 as of December 31, 2022, reflecting a decline of about 24.1%[173]. - Net cash used in operating activities for the three months ended March 31, 2023, was $838,535, a slight improvement from $902,283 in the same period of 2022, showing a reduction of approximately 7.1%[174]. - Cash inflow from investing activities for the three months ended March 31, 2023, was $61,824, compared to an outflow of $31,470 in the same period of 2022, indicating a positive shift in cash flow[178]. - The company reported a net change in cash of $(1,772,951) for the three months ended March 31, 2023, compared to $(933,729) for the same period in 2022, indicating a significant increase in cash outflow[174]. - Other income for the three months ended March 31, 2023, totaled $210,431, which included interest income of $14,436 and a gain on bargain purchase of $61,747[171]. - The company expects fluctuations in cash flows from operating activities in future periods due to various factors, including changes in net revenues and collection of accounts receivable[177]. - The company had cash outflows of $1,000,000 for the purchase of treasury stock during the three months ended March 31, 2023, with no financing activities reported for the same period in 2022[179]. - As of March 31, 2023, the company did not have any off-balance-sheet arrangements[180]. Product Development and Technology - For the three months ended March 31, 2023, the company generated significant revenue from agricultural sensors and measurement equipment, which is its primary business[118]. - 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[120]. - The Ubiquitor device is being developed to integrate multiple digital sensors and measurement tools into a single platform, enhancing functionality and reducing costs[130]. - The Ubiquitor is expected to connect up to thousands of sensor nodes and provide real-time data collection at rates of up to 100 Hz per second[138]. - The company has completed 80% of the development for a complementary office automation software designed to streamline financial reporting processes[125]. - The patented Power Line Communication (PLC) technology enables data transmission over existing power lines, potentially offering a cost-effective solution for IoT connectivity[140]. - The ultra-narrowband PLC technology operates on a spectrum channel of less than 1 KHz, providing a promising alternative to traditional wireless networks[141]. - The Ubiquitor's modular design allows for easy integration of new sensor nodes, reducing the need for extensive research and development by device manufacturers[143]. - The company aims to launch a proprietary PLC microchip in 2023, following promising internal testing results[144]. - The ultra-narrowband technology is anticipated to enable 5G wireless communication with estimated speeds of 1 Gbps[148]. - The company currently holds 24 patents and patent applications, with ongoing efforts to expand its intellectual property portfolio[155]. Market and Business Strategy - The IoT sensors market is projected to grow from $11.1 billion in 2022 to $26 billion by 2026, indicating significant market potential[162]. - The company signed 13 new contracts in the IoT Installation Services segment, with an average value of $13,355, totaling $485,618 in signed contracts to date[163]. - The acquisition of AT Tech Systems is expected to enhance the AVX Design and Integration business and related IoT installation services[163]. - The company is building a U.S. sales team to market its current AVX branded surveillance camera system and other products[121]. - The company has developed a range of products for the hydroponics segment, including a patented honeycomb activated carbon filter ready for nationwide marketing[121].

Revenue and Financial Performance - Consolidated gross revenue for the year ended December 31, 2022, was $353,619, a decrease of $1,080,827 from $1,434,446 in 2021[313]. - Cost of revenue for 2022 was $330,899, down from $1,137,287 in 2021, resulting in a gross profit of $22,720 compared to $297,159 in 2021[314]. - Total operating expenses increased to $5,228,366 in 2022 from $3,313,746 in 2021, with significant increases in selling expenses and research and development costs[315]. - Net losses for the year ended December 31, 2022, were $4,926,937, compared to $3,220,977 in 2021[320]. - Current assets decreased to $4,807,830 in 2022 from $9,214,340 in 2021, resulting in working capital of $3,420,591 compared to $8,642,898 in 2021[321]. - Net cash used in operating activities for 2022 was $2,957,983, primarily due to the net loss and changes in operating assets and liabilities[322]. - Cash outflow from investing activities for 2022 was $211,257, mainly from the purchase of marketable securities totaling $768,949[326]. - Cash outflows from financing activities in 2022 were $1,158,547, primarily due to the purchase of treasury stock of $1,000,000[327]. Product Development and Innovation - The company plans to expand the assembly of the Ubiquitor device in 2023 and aims to introduce it in smart home and commercial installations[281]. - The Ubiquitor device can connect up to thousands of sensor nodes and has been tested with up to 256 sensor instrument readouts[284]. - The company has achieved a bandwidth of 4 megabits per second in preliminary internal testing of its ultra-narrowband PLC technology, with plans for a proprietary PLC microchip launch in 2023[291]. - The Ubiquitor-powered gardening system aims to replace dozens of standalone devices, enhancing efficiency in the gardening industry[286]. - The company is not competing with traditional instrument manufacturers but is leveraging its Ubiquitor device in conjunction with a smartphone application to create a new product category[305]. Market Trends and Opportunities - The global industrial air filtration market is projected to grow from $23.83 billion by 2029, with a CAGR of 7.2% from 2022 to 2029[307]. - The IoT sensors market is projected to grow from $11.1 billion in 2022 to $26 billion by 2026, indicating a significant growth opportunity[310]. - The overall enterprise IoT spending increased to $201 billion in 2022, with an expected growth rate of 18.5% in 2023[310]. Intellectual Property and Manufacturing - The company has filed 18 domestic patents in 2022 and 3 patents in 2023, indicating a strong focus on intellectual property protection[301]. - The company has established a manufacturing office in China to support procurement and R&D activities, which has grown to a double-digit headcount by the end of 2022[294]. Competitive Positioning - The company distinguishes itself in the smart home installation market by offering significantly lower installation costs compared to competitors, with installations ranging from $5,000 to $100,000[306].

Revenue and Business Performance - For the three and nine months ended September 30, 2022, the company generated significant revenue from agricultural sensors and measurement equipment, which is its primary business [138]. - Consolidated gross revenue for the three months ended September 30, 2022, was $60,654, a decrease of $574,123 compared to $634,777 for the same period in 2021 [190]. - Consolidated gross revenue for the nine months ended September 30, 2022, was $282,463, a decrease of $977,457 from $1,259,920 in 2021 [200]. - The company is shifting towards higher technology products and diversifying away from generalized hydroponic equipment due to competitive pressures in the Los Angeles area [190]. Product Development and Innovation - 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 [140]. - The honeycomb activated carbon filter product received a patent in October 2022, with production completed and ready for nationwide marketing in the USA [142]. - The Ubiquitor device is being developed to integrate multiple digital sensors and measurement tools into a single platform, enhancing functionality and reducing costs [151]. - The Ubiquitor is expected to connect up to thousands of sensor nodes, allowing real-time data collection at rates of up to 100 Hz per second [162]. - The company has completed 80% of the development for a complementary office automation software designed to streamline financial reporting processes [146]. - The patented Power Line Communication (PLC) technology enables data transmission over existing power cables, potentially reducing infrastructure costs for IoT connectivity [168]. - The Ubiquitor's initial production run of prototypes has been completed, with plans for full-scale production in 2023 [158]. - The company aims to enhance its intellectual property protection and continue developing technologies for long-term growth [140]. Financial Performance - Cost of revenue for the three months ended September 30, 2022, was $42,441, down from $521,334 in the same period in 2021 [192]. - Gross profit for the three months ended September 30, 2022, decreased to $18,213 from $113,443 in 2021 [192]. - Research and development costs increased to $133,109 for the three months ended September 30, 2022, compared to $55,525 in 2021, reflecting higher employee compensation and operational costs [194]. - Total operating expenses for the three months ended September 30, 2022, were $992,179, an increase of $121,182 from $870,997 in 2021 [193]. - Net losses for the three months ended September 30, 2022, were $942,020, compared to $1,337,754 in the same period in 2021 [198]. - Cost of revenue for the nine months ended September 30, 2022, was $243,004, down from $1,022,666 in 2021 [201]. - Gross profit for the nine months ended September 30, 2022, decreased to $39,459 from $237,254 in 2021 [201]. - Selling expenses for the nine months ended September 30, 2022, increased to $132,871 from $15,734 in the same period of 2021, reflecting a rise of $117,137 due to increased marketing fees [206]. - Research and development costs surged to $862,214 for the nine months ended September 30, 2022, compared to $165,897 in 2021, marking an increase of $696,317 attributed to higher employee compensation and costs from the Chinese subsidiary [203][206]. - General and administrative expenses rose to $2,317,359 in the nine months ended September 30, 2022, up from $1,286,943 in 2021, an increase of $1,030,416 primarily due to higher stock-based compensation for directors [205][206]. - The total operating expenses for the nine months ended September 30, 2022, were $4,142,634, an increase of $1,765,098 from $2,377,536 in the same period of 2021 [206]. - The company incurred net losses of $3,872,247 for the nine months ended September 30, 2022, compared to $2,500,415 in 2021, reflecting a loss increase of $1,371,832 [209]. Cash Flow and Assets - Cash outflows from operating activities were $2,435,157 for the nine months ended September 30, 2022, compared to $1,496,812 in 2021, indicating a rise in cash used of $938,345 [211][214]. - Cash outflow from investing activities was $177,738 for the nine months ended September 30, 2022, significantly higher than $6,875 in 2021, primarily due to marketable securities transactions [216]. - The company had no financing activities for the nine months ended September 30, 2022, while in 2021, it reported cash inflows of $10,455,528 from various loan proceeds and an underwritten public offering [217]. - Current assets decreased to $6,591,072 as of September 30, 2022, from $9,214,340 on December 31, 2021, while current liabilities increased to $2,278,440 from $571,442, resulting in a working capital decline to $4,312,632 [210]. - The company expects fluctuations in cash flows from operating activities in future periods due to various factors, including revenue streams and accounts receivable collection [215].

Revenue and Financial Performance - Consolidated gross revenue for the three months ended June 30, 2022, was $64,642, a decrease of $197,038 from $261,680 in the same period of 2021 [186]. - Revenue for the six months ended June 30, 2022, was $221,809, down $403,334 from $625,143 in the same period of 2021 [196]. - Total other income decreased to $198,982 for the six months ended June 30, 2022, down from $220,067 in the same period of 2021, primarily due to SBA PPP loan forgiveness and debt cancellation [204]. - Net losses increased significantly to $2,930,227 for the six months ended June 30, 2022, compared to $1,162,661 for the same period in 2021 [205]. - The company incurred net losses of $1,061,297 for the three months ended June 30, 2022, compared to $480,145 in the same period of 2021 [195]. Costs and Expenses - Research and development costs increased to $167,361 for the three months ended June 30, 2022, compared to $47,222 in 2021, reflecting a rise in employee compensation and R&D costs in China [191]. - Total costs and operating expenses for the three months ended June 30, 2022, were $1,269,990, an increase of $344,775 from $925,215 in 2021 [187]. - General and administrative expenses for the six months ended June 30, 2022, were $1,720,216, up $855,096 from $865,120 in 2021 [197]. Cash Flow and Assets - Current assets decreased to $7,339,735 as of June 30, 2022, from $9,214,340 as of December 31, 2021, while working capital fell to $7,025,452 from $8,642,898 [206]. - Net cash used in operating activities was $1,749,492 for the six months ended June 30, 2022, compared to $964,297 for the same period in 2021 [208]. - Cash outflow from investing activities was $267,537 for the six months ended June 30, 2022, primarily due to purchases of property and equipment and marketable securities [212]. - The company reported a negative cash flow from operating activities of $1,749,492 and a net loss of $2,930,227 for the six months ended June 30, 2022, raising concerns about its ability to continue as a going concern [214]. - The company had a beginning cash amount of $8,678,665 on January 1, 2022, sufficient to cover its projected annual cash burn rate of $3,152,618 [214]. Product Development and Technology - The company has developed ultra-narrowband Power Line Communication (PLC) technology that can achieve data transfer speeds of 4 Mbps at a bandwidth of less than 1000 Hz, successfully tested under conditions with six industrial fans running simultaneously [167]. - The Ubiquitor device is designed to integrate multiple digital sensors and measurement tools into a single platform, aiming to reduce costs and increase functionality in smart home installations and agricultural environments [148][153]. - The Ubiquitor's sensor analytics system will provide a cohesive package for event-monitoring, storage, and analytics, allowing for real-time data collection up to 100 Hz per second [155][158]. - The company has completed the development of its 4 Mbps PLC modules and printed circuit board layout, which will be used for IoT systems involving over 1,000 sensors [167]. - The Ubiquitor aims to address the limitations of traditional instrumentation systems by providing a modular design that can connect thousands of different sensors or probes [149][157]. Strategic Plans and Market Position - The company plans to expand the assembly of the Ubiquitor prototypes in 2023 and hire new sales and marketing employees to support its market introduction [151][153]. - The company anticipates that the Ubiquitor will be particularly useful in commercial networks that require reliable data transmission through physical barriers [168]. - The company plans to leverage PLC technology to enhance the Ubiquitor, aiming to integrate it into smart home and gardening systems [172]. - The company is developing a full line of products for the gardening industry, integrating multiple sensors into a single Ubiquitor device [173]. - The company aims to establish five divisions to unify its technology, including AVX, IT, Universal Smart Instrumentation, PLC, and IoT [175]. Intellectual Property - The company has filed a total of 24 patents and patent applications with the US Patent and Trademark Office, indicating a strong focus on intellectual property protection [180].

Technology Development - The company has developed four proprietary technologies aimed at solving key issues in the IoT industry, including ultra-narrowband technology and power line communication (PLC) technology[136] - The ultra-narrowband PLC technology allows data transmission over existing power lines, potentially offering a cost-effective solution for IoT connectivity[158] - PLC technology is expected to provide a reliable communication infrastructure for IoT devices, overcoming challenges faced by traditional wireless networks[160] - The company has developed ultra-narrow band PLC technology that achieves noise rejection and interference suppression five orders of magnitude better than traditional PLC technology, with a bandwidth of 4 megabits per second[163] - The company has filed multiple patent applications to protect its innovations, including a patent for its PLC technology, which is expected to be issued soon[173] Product Development - The company plans to introduce the Ubiquitor device in smart home installations and agricultural warehouses to optimize conditions for growth by regulating light, humidity, and moisture[147] - The Ubiquitor device is designed to connect potentially thousands of sensor nodes and can display data in real-time, achieving up to 100 Hz per second[153] - The Ubiquitor's sensor analytics system integrates monitoring, storage, and analytics software, providing a comprehensive view of sensor data[150] - The company has created prototype models of the Ubiquitor and plans to expand assembly in late 2022, moving towards full-scale production[146] - The company aims to reduce production costs and development efforts for new sensor products by utilizing smartphone technology in the Ubiquitor[154] - The company plans to enhance the Ubiquitor to serve as a central component in smart home and gardening systems, aiming for near real-time control of hundreds of devices[165] Financial Performance - Total revenue for the three months ended March 31, 2022, was $157,167, a decrease of $206,296 compared to $363,463 for the same period in 2021[183] - Research and development costs increased significantly to $561,744 for the three months ended March 31, 2022, compared to $63,150 for the same period in 2021, reflecting a focus on innovation[187] - The company incurred net losses of $1,868,930 for the three months ended March 31, 2022, compared to $682,516 for the same period in 2021[190] - Current assets as of March 31, 2022, were $8,274,005, down from $9,214,340 as of December 31, 2021[192] - For the three months ended March 31, 2022, the company reported net cash outflows from operating activities of $902,283, primarily due to a net loss of $1,868,930[194] - The company had a net loss of $1,868,930 for the three months ended March 31, 2022, with a projected annual cash burn rate of $3,152,618[199] - As of January 1, 2022, the company had a beginning cash amount of $8,678,665, sufficient to cover its projected cash burn rate without additional capital raise[199] Operational Changes - The company anticipates that the sales and marketing efforts for the Ubiquitor will require hiring new employees to gain market traction[147] - Selling expenses increased to $38,339 for the three months ended March 31, 2022, from $512 in the same period in 2021, primarily due to increased advertising fees[186] - The company experienced an increase in accounts receivable of $96,258 and an increase in inventories of $5,067 during the same period[194] - Non-cash expenses for the three months ended March 31, 2022 included $656,370 in stock-based compensation and $40,165 in depreciation expense[194] - Cash outflow from investing activities for the three months ended March 31, 2022 was $31,470 for the purchase of property and equipment[198] - The company expects fluctuations in cash flows from operating activities in future periods due to various factors including net revenues and collection of accounts receivable[196] Strategic Planning - The company aims to unify universal smart instruments and IoT into a single system, charging monthly subscription fees for connectivity[168] - The company plans to establish five divisions to integrate its technology, including AVX, IT, Universal Smart Instrumentation, PLC, and IoT divisions[169] - There were no off-balance-sheet arrangements as of March 31, 2022[200] - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[201]

Technology Development - The company has developed five proprietary platform technologies aimed at solving fundamental issues in the IoT industry, including enhanced chip integration and ultra-narrowband 5G technology [350]. - The proprietary ultra-narrowband PLC technology has achieved preliminary internal testing results of 4 megabits per second bandwidth efficiency, with a target launch date set for 2022 [373]. - The Ubiquitor device can connect up to thousands of sensor nodes and has been tested with up to 256 sensor instrument readouts, showcasing its scalability [362]. - The company intends to design a comprehensive gardening system integrating the Ubiquitor with various sensors, potentially replacing numerous standalone devices [368]. - Competitors in the wireless sensor node industry include Hanna Instruments and Monnit Corporation, but the company differentiates itself by integrating its Ubiquitor with smartphone applications [383]. Business Performance - For the years ended December 31, 2021, and 2020, the company generated significant revenue from agricultural sensors and measurement equipment, which remains its primary business [352]. - Consolidated gross revenue for the year ended December 31, 2021 was $1,434,446, a decrease of $244,521 from $1,678,967 in 2020 [388]. - Cost of revenue, excluding depreciation and amortization, decreased to $1,136,315 in 2021 from $1,395,187 in 2020, reflecting a decrease of $258,872 [394]. - Selling expenses increased to $39,821 in 2021 from $22,590 in 2020, an increase of $17,231 primarily due to higher advertising fees [390]. - Research and development costs decreased to $220,469 in 2021 from $256,636 in 2020, a decrease of $36,167 as the company completed the development stage of new products [391]. - Professional fees rose significantly to $1,030,159 in 2021 from $607,010 in 2020, an increase of $423,149 attributed to the uplisting in 2021 [392]. - Net losses for the year ended December 31, 2021 were $3,220,977, compared to $2,537,113 in 2020 [396]. Financial Position - Working capital improved to $8,642,898 as of December 31, 2021, compared to $480,071 in 2020 [397]. - Net cash used in operating activities was $2,228,405 for the year ended December 31, 2021, an increase from $1,955,091 in 2020 [398]. - Cash inflows from financing activities for 2021 totaled $10,346,778, primarily from share issuance [404]. - The company raised $10.3 million through an underwritten public offering in September 2021, alleviating concerns about its ability to continue as a going concern [405]. Manufacturing and R&D - Focus Universal (Shenzhen) Technology Co. LTD was established to enhance manufacturing procurement and R&D capabilities in China [377]. - The company has filed multiple patent applications, including one for its PLC technology, which is expected to provide strong global protections upon issuance [380]. - The Ubiquitor device aims to reduce production costs by leveraging widely used smartphone technology, enhancing functionality while minimizing manufacturing expenses [364].