What changed in this filing

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Item 1. Financial Statements

2021-05-10 compared with 2020-11-12 · 573 added, 805 removed, 279 unchanged (83% of the section changed)

3 unchanged sentences

Index to the Financial Statements

Condensed Consolidated Balance Sheets as of September 30, 2020 (unaudited) and December 31, 2019

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2020 and 2019 (unaudited)

Condensed Consolidated Statement of Changes in Stockholder’s Equity for the Three and Nine Months Ended September 30, 2020 and 2019 (unaudited)

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2020 and 2019 (unaudited)

Condensed Consolidated Balance Sheets as of March 31, 2021 (unaudited) and December 31, 2020

Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2021 and 2020 (unaudited)

Condensed Consolidated Statement of Changes in Stockholder’s Equity for the Three Months Ended March 31, 2021 and 2020 (unaudited)

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 2020 (unaudited)

Notes to the Condensed Consolidated Financial Statements (unaudited)

FOCUS UNIVERSAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

CONDENSED CONSOLIDATED BALANCE

Current Assets:

Accounts receivable, net

Accounts receivable - related party

Inventories, net

Other receivables

Prepaid expenses

6 unchanged sentences

Accounts payable and accrued liabilities

Accounts payable - related party

Other current liabilities

Interest payable - related party

Customer deposit

1 unchanged sentence

Lease liability, current portion

Promissory note short term - related party

Total Current Liabilities

8 unchanged sentences

Common stock, par value $0.001 per share, 75,000,000 shares authorized;

40,959,741 shares

issued and outstanding as of September 30, 2020 and December 31,2019, respectively

40,959,741 shares issued and

outstanding as of March 31, 2021 and December 31, 2020, respectively

Additional paid-in capital

1 unchanged sentence

Accumulated deficit

(10,398,630 )

Total Stockholders' Equity

Total Liabilities and Stockholders' Equity

The accompanying notes are an integral

part of these unaudited condensed consolidated financial statements

The accompanying notes are an integral part

of these unaudited condensed consolidated financial statements

FOCUS UNIVERSAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF

Three months ended September 30,

Nine months ended September 30,

CONDENSED CONSOLIDATED STATEMENTS

OF OPERATIONS

Three Months Ended March 31,

Revenue - related party

16 unchanged sentences

Income tax expense

$ (1,988,333 )

$ (1,905,117 )

Weighted Average Number of Common Shares Outstanding:

Weight Average Number of Common Shares Outstanding:

Basic and Diluted

1 unchanged sentence

Basic and Diluted

The accompanying notes are an integral

part of these unaudited condensed consolidated financial statements

FOCUS UNIVERSAL INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS'

Stockholders'

Balance - June 30, 2020

$ (8,728,974 )

Stock options issued for services

Common stock to be issued for services

Balance - September 30, 2020

$ (9,167,334 )

Stockholders'

Balance - June 30, 2019

$ (4,958,476 )

Stock options issued for services

Common stock to be issued for services

Balance - September 30, 2019

$ (5,908,575 )

The accompanying notes are an integral part

of these unaudited condensed consolidated financial statements

FOCUS UNIVERSAL INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS'

Stockholders'

CONSOLIDATED STATEMENTS

OF STOCKHOLDERS' EQUITY

Additional Paid-In

Shares to be issued Common

Total Stockholders'

Balance - December 31, 2020

$ (9,716,114 )

Stock options issued for services

Stock based compensation - options

Common stock to be issued for services

Balance - September 30, 2020

Balance - March 31, 2021

(10,398,630 )

Stockholders'

Additional Paid-In

Shares to be issued

Total Stockholders'

Common Shares

Balance - December 31, 2019

$ (7,179,001 )

Stock options issued for services

Common stock issued for compensation

Stock based compensation - options

Common stock to be issued for services

Common stock issued for acquisition

Balance - September 30, 2019

$ (5,908,575 )

The accompanying notes are an integral

part of these unaudited condensed consolidated financial statements

Balance - March 31, 2020

The accompanying notes are an integral part

of these unaudited condensed consolidated financial statements

FOCUS UNIVERSAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF

Nine Months Ended September 30,

CONDENSED CONSOLIDATED STATEMENTS

OF CASH FLOWS

Three Months Ended March 31,

Cash flows from operating activities:

$ (1,988,333 )

$ (1,905,117 )

Adjustments to reconcile net loss to net cash from operating activities:

2 unchanged sentences

Depreciation expense

Amortization of intangible assets

Amortization of right-of-use assets

Stock-based compensation

Stock option compensation

Stock option compensation - options

Changes in operating assets and liabilities:

1 unchanged sentence

Accounts receivable - related party

Other receivable

Prepaid expenses

Deposit –

Current portion

Accounts payable and accrued liabilities

3 unchanged sentences

Customer deposit

Other liabilities

Net cash flows used in operating activities

Cash flows from investing activities:

Cash from acquisition

Purchase of property and equipment

Cash paid for acquisition

Net cash flows used in investing activities

Cash flows from financing activities:

1 unchanged sentence

Payment on promissory note

Net cash flows provided by financing activities

Proceeds from bank loan

Prepayment on bank loan

Net cash flows provided by (used in) financing activities

Net change in cash

4 unchanged sentences

Cash paid for interest

Supplemental disclosures of non-cash investing and financing activities:

Promissory note issued for acquisition

Shares issued for acquisition

Shares issued to reduce notes payable

The accompanying notes are an integral

part of these unaudited condensed consolidated financial statements

The accompanying notes are an integral part

of these unaudited condensed consolidated financial statements

FOCUS UNIVERSAL INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

NOTES TO THE CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

Note 1 –

1 unchanged sentence

Focus Universal Inc.

(“Focus”)

was incorporated under the laws of the state of Nevada on December 4, 2012 (“Inception”).

It is a universal smart

instrument developer and manufacturer, headquartered in the Los Angeles, California metropolitan area, specializing in the development

and commercialization of novel and proprietary universal smart technologies and instruments.

Universal smart technology is an off-the-shelf

technology utilizing an innovative hardware integrated platform.

The Focus platform provides a unique and universal combined wired

and wireless solution for embedded design, industrial control, functionality testing, and parameter measurement instruments and

Our smart technology software utilizes a smartphone, computer, or a mobile device as an interface platform and display

that communicates and works in tandem with a group of external sensors or probes, or both.

The external sensors and probes may

be manufactured by different vendors, but the universal smart technology functions in a manner that does not require the user to

have extensive knowledge of the unique characteristics of the function of each of the sensors and probes.

The universal smart instrument

Focus developed (the “Ubiquitor”) consists of a reusable foundation component which includes a wireless gateway (which

allows the instrument to connect to the smartphone via Bluetooth and WiFi technology), universal smart application software (“Application”)

which is installed on the user’s smartphone or other mobile device and allows monitoring of the sensor readouts on the smartphone’s

The Ubiquitor also connects to a variety of individual scientific sensors that collect data, from moisture, light, airflow,

voltage, and a wide variety of applications.

The data is then sent through a wired or wireless connection, or a combination thereof

to the smartphone or other mobile device, and the data is organized and displayed on the smartphone screen.

The smartphone or other

mobile device, foundation, and sensor readouts together perform the functions of many traditional scientific and engineering instruments

and are intended to replace the traditional, wired stand-alone instruments at a fraction of their cost.

(“Focus”) was

incorporated under the laws of the state of Nevada on December 4, 2012 (“Inception”).

It is a universal smart instrument developer

and manufacturer, headquartered in the Los Angeles, California metropolitan area, specializing in the research and development and commercialization

of novel and proprietary universal smart technologies and instruments related to the internet of things (“IoT”) and telecommunications

Focus is researching and developing novel and proprietary ultra-narrowband powerline communication (“PLC”) technology

that allows users to send data over existing electricity power cables without the noise problems that have plagued PLC for decades.

smart technology is an off-the-shelf technology utilizing an innovative hardware integrated platform.

The Focus platform provides a unique

and universal combined wired and wireless solution for embedded design, industrial control, functionality testing, and parameter measurement

instruments and functions.

Our smart technology software utilizes a smartphone, computer, or a mobile device as an interface platform

and display that communicates and works in tandem with a group of external sensors or probes, or both.

The external sensors and probes

may be manufactured by different vendors, but the universal smart technology functions in a manner that does not require the user to have

extensive knowledge of the unique characteristics of the function of each of the sensors and probes.

The universal smart instrument Focus

developed (called the “Ubiquitor”) consists of a reusable foundation component which includes a wireless gateway (which allows

the instrument to connect to the smartphone via Bluetooth and WiFi technology), universal smart application software (“Application”)

which is installed on the user’s smartphone or other mobile device and allows monitoring of the sensor readouts on the smartphone

The Ubiquitor also connects to a variety of individual scientific sensors that collect data, from moisture, light, airflow, voltage,

and a wide variety of applications.

The data then sent through a wired or wireless connection, or a combination thereof to the smartphone

or other mobile device and the data is organized and displayed on the smartphone screen.

The smartphone or other mobile device, foundation,

and sensor readouts together perform the functions of many traditional scientific and engineering instruments and are intended to replace

the traditional, wired stand-alone instruments at a fraction of their cost.

Perfecular Inc.

(“Perfecular”)

was founded in September 2009 and is headquartered in Ontario, California, and is engaged in designing certain digital sensor products

and sells a broad selection of horticultural sensors and filters in North America and Europe.

(“Perfecular”) was

founded in September 2009 and is headquartered in Ontario, California, and is engaged in designing certain digital sensor products and

sells a broad selection of horticultural sensors and filters in North America and Europe.

AVX Design & Integration, Inc.

1 unchanged sentence

was incorporated on June 16, 2000 in the state of California.

AVX is an internet of things (“IoT”) installation and

management company specializing in high performance and easy to use audio/video, home theater, lighting control, automation, and

Services provided by AVX include full integration of houses, apartments, commercial complexes, office spaces with

audio, visual, and control systems to fully integrate devices in the low voltage field.

AVX’s services also include partial

equipment upgrade and installation.

Note 2 –

Revision of Prior Period

Financial Statements

The Company corrected certain errors in

its 2019 financial statements.

In accordance with ASC 50-10-S99 and S55 (formerly Staff Accounting Bulletins (“SAB”)

108), Accounting Changes and Error Corrections, the Company concluded that these errors were not, individually,

and in the aggregate, quantitatively or qualitatively, material to the financial statements in these periods.

On March 15, 2019, the Company acquired

AVX Design & Integration Inc.

Upon further review, we noticed that some revenue recognized immediately after the acquisition

and before the financial statement reporting period were recognized prematurely.

There were also some expense reclassifications

between expense items.

Consequently, for the three months ended September 30, 2019 revenue was understated by $107,118, cost of

revenue was understated by $211,104, selling expenses were overstated by $81,637, compensation - officers was overstated by $4,905,

professional fees were overstated by $1,700, and general and administrative expenses were understated by $52,840.

The Company had

accounted for these errors correctly on the audited year end financials.

For the nine months ended September 30, 2019 revenue was

understated by $116,445, cost of revenue was understated by $315,495, selling expenses were overstated by $159,547, compensation

- officers was understated by $3,420, professional fees were overstated by $13,452, and general and administrative expenses were

understated by $56,804.

The Company had accounted for these errors correctly on the audited year end financials.

The below discloses the effects of the

revisions on the financial statements for the period reported.

Condensed consolidated statement of operations

for the three months ended September 30, 2019

Previously reported

For the three months ended

Revenue - related party

Total revenue

Cost of Revenue

Operating Expenses:

Compensation - officers

Research and development

Professional fees

General and administrative

Total Operating Expenses

Loss from Operations

Other Income (Expense):

Interest income (expense), net

Total other expense

Loss before income taxes

Condensed consolidated statement

of operations for the nine months ended September 30, 2019

Previously reported

For the nine months ended

Revenue - related party

Total revenue

Cost of Revenue

Operating Expenses:

Compensation - officers

Research and development

Professional fees

General and administrative

Total Operating Expenses

Loss from Operations

Other Income (Expense):

Interest income (expense), net

Total other expense

Loss before income taxes

$ (1,820,002 )

$ (1,905,117 )

Condensed consolidated statement of cash

Previously reported

For the nine months ended

Cash flows from operating activities:

$ (1,820,002 )

$ (1,905,117 )

Adjustments to reconcile net loss to net cash from operating activities:

Inventories reserve

Depreciation expense

Amortization of intangible assets

Amortization of right-of-use assets

Stock-based compensation

Stock option compensation

Changes in operating assets and liabilities:

Accounts receivable

Accounts receivable - related party

Other receivable

Prepaid expenses

Accounts payable and accrued liabilities

Accounts payable - related party

Other liabilities

Customer deposit

Net cash flows used in operating activities

Cash flows from investing activities:

Cash from acquisition

Purchase of property and equipment

Cash paid for acquisition

Net cash flows used in investing activities

Cash flows from financing activities:

Payment on long term debt and finance lease obligation

Net cash flows used in financing activities

Net change in cash

Cash beginning of period

Cash end of period

There was no impact on the Company’s

consolidated balance sheet.

AVX is an internet of things (“IoT”) installation and management

company specializing in high performance and easy to use Audio/Video, Home Theater, Lighting Control, Automation and Integration.

provided by AVX include full integration of houses, apartment, commercial complex, office spaces with audio, visual and control systems

to fully integrate devices in the low voltage field.

AVX’s services also include partial equipment upgrade and installation.

Note 2 –

Summary of Significant Accounting Policies

Summary of Significant Accounting

Basis of Presentation

3 unchanged sentences

(collectively, the “Company”, “we”, “our”, or “us”).

All intercompany balances

and transactions have been eliminated upon consolidation.

The Company’s condensed consolidated financial statements have

been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

All intercompany balances and

transactions have been eliminated upon consolidation.

The Company’s condensed consolidated financial statements have been prepared

in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”).

Going Concern

The accompanying condensed consolidated

financial statements have been prepared assuming that the Company will continue as a going concern basis, which assumes the Company

will continue to realize its assets and discharge its liabilities in the normal course of business.

The continuation of the Company

as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to repay

its debt obligations, to obtain necessary equity financing to continue operations, and the attainment of profitable operations.

Recently, the Company has devoted a substantial amount of resources to research and development to bring the Ubiquitor and its

mobile application to full production and distribution.

For the nine months ended September 30, 2020, the Company had a net loss

of $1,988,333 and negative cash flow from operating activities of $1,725,512.

As of September 30, 2020, the Company also had an

accumulated deficit of $9,167,334.

These factors raise certain doubts regarding the Company’s ability to continue as a going

There are no assurances, however, that the Company will be successful in obtaining an adequate level of financing for

the long-term development and commercialization of its Ubiquitor product.

In the long term, the continuation of the Company

as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to repay its debt

obligations, to obtain necessary equity financing to continue operations, and the attainment of profitable operations.

For the period

ended March 31, 2021, the Company had a net loss of $682,516 and negative cash flow from operating activities of $438,775.

the Company has obtained a $1,500,000 loan from a financial institution and has a $1,500,000 loan commitment from a private related party.

The loan from the financial institution requires monthly payments with the final payment due in 2026.

The related party loan will accrue

interest at 10% until March 15, 2022, or six months from the date the loan is funded, whichever is later (the “Initial Interest

Accrual Date”).

Interest on any unpaid principal after Initial Interest Accrual Date shall accrue at a fixed rate of 12% per annum

The Company reserves the right to prepay this loan agreement (in whole or in part) after 6 months of the first day with no

prepayment penalty.

The Company may make, in its sole discretion, payments of interest only, or interest and principal, provided that

the principal is not paid in full prior to six months from the date the loan is funded.

The Company also plans to raise $10 million through

an underwritten public offering in 2021.

With the January 1, 2021 beginning cash amount

of $585,325 and the loan of $1,500,000, the Company will have enough cash to cover its projected annual cash burn rate of $1,967,074.

With the additional $1,500,000 related party loan, the Company will have adequate reserves to continue operations in 2021 and 2022.

related party which will provide the loan to the Company is owned by a director of the Company, which we have evaluated to be a reliable

source of cashflow.

The $10 million planned public offering will contribute to a projected December 31, 2021 cash balance of $11,000,000.

Historically, the Company has been successful in reaching planned its fund-raising targets.

In 2020 the Company had negative operating cashflow

of approximately $1.96 million, mainly resulting from net loss.

The Company is currently developing its products and licenses and expects

to generate profit once the products and licenses are available for the market, which will begin to alleviate the negative cashflow.

the Company is testing 4 Mbps ultra-narrowband power line communication printed circuit boards, the testing is expected to complete in

The ultra-narrowband power line communication products will launch in Q4, 2021.

The portable universal smart device is also in

the final printed circuit board layout stage, the Company is planning to launch this product in Q4 2021.

Initially, new products would

require cash to manufacture and promote.

The Company expects to begin generating positive cashflow with the launch of above-mentioned

products from Q2 of 2022.

Overall, we expect that with the loan we obtained,

along with the committed related-party loan, and planned capital raising will provide adequate cash for the Company to continue operation

as a going concern throughout 2021 and 2022.

The Company expects the loans and offering will generate cash for 2021’s operation

and be able to pay off the loans obtained through the offering with sufficient cashflow for 2021 and 2022.

Thus, the previous factors

raising substantial doubt to continue as a going concern have been alleviated.

Principles of Consolidation

The accompanying consolidated financial

statements include the accounts of the Company and its wholly-owned subsidiaries, Perfecular Inc.

The accompanying consolidated financial statements

include the accounts of the Company and its wholly-owned subsidiaries, Perfecular Inc.

and AVX Design & Integration.

Focus and Perfecular, collectively “the entities”

Focus and Perfecular,

collectively “the entities”

were under common control;

therefore, in accordance with Financial

Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805-50-45, the acquisition

of Perfecular was accounted for as a business combination between entities under common control and treated similar to a pooling

of interest transaction.

On March 15, 2019, Focus entered into a stock purchase agreement with AVX whereby Focus purchased 100%

of the outstanding stock of AVX.

All significant intercompany transactions and balances have been eliminated.

therefore, in accordance with Financial Accounting Standards Board

(“FASB”) Accounting Standards Codification (“ASC”) 805-50-45, the acquisition of Perfecular was accounted for

as a business combination between entities under common control and treated similar to a pooling of interest transaction.

2019, Focus entered into a stock purchase agreement with AVX whereby Focus purchased 100% of the outstanding stock of AVX.

All significant

intercompany transactions and balances have been eliminated.

Segment Reporting

The Company currently has two operating

In accordance with ASC 280, Segment Reporting (“ASC 280”), the Company considers operating segments

to be components of the Company’s business for which separate financial information is available and evaluated regularly

by management in deciding how to allocate resources and to assess performance.

Management reviews financial information presented

on a consolidated basis for purposes of allocating resources and evaluating financial performance.

Accordingly, the Company has

determined that it has two operating and reportable segments.

Asset information by operating segment

is not presented as the chief operating decision maker does not review this information by segment.

The reporting segments follow

the same accounting policies used in the preparation of the Company’s unaudited condensed consolidated financial statements.

The Company currently has two operating segments.

In accordance with ASC 280, Segment Reporting (“ASC 280”), the Company considers operating segments to be components

of the Company’s business for which separate financial information is available and evaluated regularly by management in deciding

how to allocate resources and to assess performance.

Management reviews financial information presented on a consolidated basis for purposes

of allocating resources and evaluating financial performance.

Accordingly, the Company has determined that it has two operating and reportable

Asset information by operating segment is not

presented as the chief operating decision maker does not review this information by segment.

The reporting segments follow the same accounting

policies used in the preparation of the Company’s unaudited condensed consolidated financial statements.

Use of Estimates

The preparation of consolidated financial

statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts

of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the accompanying consolidated

financial statements, and the reported amounts of revenues and expenses during the reporting period.

The Company bases its estimates

and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances,

the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of

costs and expenses that are not readily apparent from other sources.

actual results experienced by the Company may differ materially and adversely from the Company’s estimates.

To the extent

there are material differences between the estimates and the actual results, future results of operations will be affected.

estimates in the accompanying financial statements include the lease term impacting right-of use asset and lease liability, useful

lives of property and equipment, useful lives of intangible assets, allowance for doubtful accounts, inventory reserves, debt

discounts, valuation of derivatives, and the valuation allowance on deferred tax assets.

The Company regularly evaluates its estimates

and assumptions.

The Company considers all highly liquid

investments with a maturity of three months or less to be cash.

At times, such investments may be in excess of Federal Deposit

Insurance Corporation (FDIC) insurance limit.

There were no cash equivalents held by the Company at September 30, 2020 and December

The preparation of consolidated financial statements

in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities

and the disclosure of contingent assets and liabilities as of the date of the accompanying consolidated financial statements, and the

reported amounts of revenues and expenses during the reporting period.

The Company bases its estimates and assumptions on current facts,

historical experience, and various other factors that it believes to be reasonable under the circumstances, the results of which form

the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not

readily apparent from other sources.

The actual results experienced by the Company

may differ materially and adversely from the Company’s estimates.

To the extent there are material differences between the estimates

and the actual results, future results of operations will be affected.

Significant estimates in the accompanying financial statements

include the lease term impacting right-of use asset and lease liability, useful lives of property and equipment, useful lives of intangible

assets, allowance for doubtful accounts, inventory reserves, debt discounts, valuation of derivatives, and the valuation allowance on

deferred tax assets.

The Company regularly evaluates its estimates and assumptions.

The Company considers all highly liquid investments

with a maturity of three months or less to be cash.

At times, such investments may be in excess of Federal Deposit Insurance Corporation

(FDIC) insurance limit.

There were no cash equivalents held by the Company at March 31, 2021 and December 31, 2020.

Accounts Receivable

The Company grants credit to clients that

sell the Company’s products or engage in construction service under credit terms that it believes are customary in the industry

and do not require collateral to support customer receivables.

The accounts receivable balances are generally collected within

30 to 90 days of the product sale.

The Company grants credit to clients that sell

the Company’s products or engage in construction service under credit terms that it believes are customary in the industry and do

not require collateral to support customer receivables.

The accounts receivable balances are generally collected within 30 to 90 days

of the product sale.

Allowance for Doubtful Accounts

The Company estimates an allowance for

doubtful accounts based on historical collection trends and review of the current status of trade accounts receivable.

It is reasonably

possible that the Company's estimate of the allowance for doubtful accounts will change.

As of September 30, 2020 and December

31, 2019, allowance for doubtful accounts amounted to $29,539 and $22,612, respectively.

Company estimates an allowance for doubtful accounts based on historical collection trends and review of the current status of trade

accounts receivable.

It is reasonably possible that the Company's estimate of the allowance for doubtful accounts will change.

March 31, 2021 and December 31, 2020, allowance for doubtful accounts amounted to $52,876 and $44,519, respectively.

Concentrations of Credit Risk

Financial instruments that potentially

subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents.

The Company limits its exposure

to credit loss by investing its cash with high credit quality financial institutions.

Inventory consists primarily of parts

and finished goods and is valued at the lower of the inventory’s cost or net realizable value under the

first-in-first-out method.

Management compares the cost of inventory with its market value and an allowance is made to write

down inventory to market value, if lower.

Inventory allowances are recorded for obsolete or slow-moving inventory based on

assumptions about future demand and marketability of products, the impact of new product introductions and specific

identification of items, such as discontinued products.

These estimates could vary significantly from actual requirements,

for example, if future economic conditions, customer inventory levels, or competitive conditions differ from expectations.

The Company regularly reviews the value of inventory based on historical usage and estimated future usage.

realized value of our inventory is less than cost, we make provisions in order to reduce its carrying value to its estimated

market value.

As of September 30, 2020 and December 31, 2019, inventory reserve amounted to $67,561 and $71,414,

respectively.

Financial instruments that potentially subject

the Company to concentrations of credit risk consist primarily of cash and cash equivalents.

The Company limits its exposure to credit

loss by investing its cash with high credit quality financial institutions.

consists primarily of parts and finished goods and is valued at the lower of the inventory’s cost or net realizable value under

the first-in-first-out method.

Management compares the cost of inventory with its market value and an allowance is made to write down

inventory to market value, if lower.

Inventory allowances are recorded for obsolete or slow-moving inventory based on assumptions about

future demand and marketability of products, the impact of new product introductions and specific identification of items, such as discontinued

These estimates could vary significantly from actual requirements, for example, if future economic conditions, customer inventory

levels, or competitive conditions differ from expectations.

The Company regularly reviews the value of inventory based on historical usage

and estimated future usage.

If estimated realized value of our inventory is less than cost, we make provisions in order to reduce its

carrying value to its estimated market value.

As of March 31, 2021 and December 31, 2020, inventory reserve amounted to $67,275

and $70,562, respectively.

Property and Equipment

Property and equipment are stated at cost.

The cost and accumulated depreciation of assets sold or retired are removed from the respective accounts and any gain or loss is

included in earnings.

cost and accumulated depreciation of assets sold or retired are removed from the respective accounts and any gain or loss is included

Maintenance and repairs are expensed currently.

Major renewals and betterments are capitalized.

is computed using the straight-line method.

Depreciation is computed

using the straight-line method.

Estimated useful lives are as follows:

1 unchanged sentence

Long-Lived Assets

The Company applies the provisions of FASB

ASC Topic 360, Property, Plant, and Equipment, which addresses financial accounting and reporting for the impairment or disposal

of long-lived assets.

ASC 360 requires impairment losses to be recorded on long-lived assets used in operations when indicators

of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’

The Company applies the provisions of FASB ASC

Topic 360, Property, Plant, and Equipment, which addresses financial accounting and reporting for the impairment or disposal of long-lived

ASC 360 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present

and the undiscounted cash flows estimated to be generated by those assets are less than the assets’

carrying amounts.

In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of

the long-lived assets.

Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair values are

reduced for the cost of disposal.

Long-term assets of the Company are reviewed when circumstances warrant as to whether their carrying

value has become impaired.

The Company considers assets to be impaired if the carrying value exceeds the future projected cash

flows from related operations.

The Company also re-evaluates the periods of amortization to determine whether subsequent events

and circumstances warrant revised estimates of useful lives.

Based on its review at September 30, 2020 and December 31, 2019, the

Company believes there was no impairment of its long-lived assets.

Intangible Assets

The Company’s intangible assets were

acquired from AVX.

Amortization is computed using the straight-line method, and the Company evaluates for impairments annually.

During the year ended December 31, 2019, the Company determined that the intangible assets associated with the acquisition of AVX

were fully impaired.

During the year ended December 31, 2019, impairment for intangible assets amounted to $47,975.

Estimated useful

lives of intangible assets are as follows:

Intangible assets

Market related intangible assets

Goodwill represents the excess of the purchase

price over the fair value of net assets acquired in a business combination.

Goodwill with indefinite useful lives are tested for

impairment at least annually at December 31 and whenever triggering events or changes in circumstances indicate its carrying value

may not be recoverable.

Assessment of the potential impairment of goodwill is an integral part of the Company’s normal ongoing

review of operations.

Testing for potential impairment of these assets is significantly dependent on numerous assumptions and reflects

management’s best estimates at a particular point in time.

The dynamic economic environments in which the Company’s

businesses operate and key economic and business assumptions related to projected selling prices, market growth, inflation rates,

and operating expense ratios, can significantly affect the outcome of impairment tests.

Estimates based on these assumptions may

differ significantly from actual results.

Changes in factors and assumptions used in assessing potential impairments can have a

significant impact on the existence and magnitude of impairments, as well as the time in which such impairments are recognized.

The management tests for impairment annually at year end.

During the year ended December 31, 2019, the Company determined that

the goodwill associated with the acquisition of certain AVX assets was impaired and took a charge to earnings of $458,490.

In that event,

a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived assets.

Loss on long-lived

assets to be disposed of is determined in a similar manner, except that fair values are reduced for the cost of disposal.

Long-term assets

of the Company are reviewed when circumstances warrant as to whether their carrying value has become impaired.

The Company considers

assets to be impaired if the carrying value exceeds the future projected cash flows from related operations.

The Company also re-evaluates

the periods of amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives.

on its review at March 31, 2021 and December 31, 2020, the Company believes there was no impairment of its long-lived assets.

Share-based Compensation

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to employees in conformity with the provisions of ASC Topic 718, Stock-Based Compensation.

Stock-based compensation to employees

consist of stock options grants and restricted shares that are recognized in the statement of operations based on their fair values

at the date of grant.

The measurement of stock-based

compensation is subject to periodic adjustments as the underlying equity instruments vest and is recognized as an expense

over the period during which services are received.

The Company calculates the fair value of

option grants utilizing the Black-Scholes pricing model and estimates the fair value of the stock based upon the estimated fair

value of the common stock.

The amount of stock-based compensation recognized during a period is based on the value of the portion

of the awards that are ultimately expected to vest.

The resulting stock-based compensation

expense for both employee and non-employee awards is generally recognized on a straight- line basis over the requisite service

period of the award.

Stock-based compensation to employees consist

of stock options grants and restricted shares that are recognized in the statement of operations based on their fair values at the date

The measurement of stock-based compensation is

subject to periodic adjustments as the underlying equity instruments vest and is recognized as an expense over the period during which

services are received.

The Company calculates the fair value of option

grants utilizing the Black-Scholes pricing model and estimates the fair value of the stock based upon the estimated fair value of the

common stock.

The amount of stock-based compensation recognized during a period is based on the value of the portion of the awards that

are ultimately expected to vest.

The resulting stock-based compensation expense

for both employee and non-employee awards is generally recognized on a straight- line basis over the requisite service period of the award.

Fair Value of Financial Instruments

The Company follows paragraph ASC 825-10-50-10

for disclosures about fair value of its financial instruments and paragraph ASC 820-10-35-37 (“Paragraph 820-10-35-37”)

to measure the fair value of its financial instruments.

Paragraph 820-10-35-37 establishes a framework for measuring fair value

in accounting principles generally accepted in the United States of America (U.S.

GAAP), and expands disclosures about fair value

measurements.

To increase consistency and comparability

in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes

the inputs to valuation techniques used to measure fair value into three (3) broad levels.

The fair value hierarchy gives the highest

priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable

The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

for disclosures about fair value of its financial instruments and paragraph ASC 820-10-35-37 (“Paragraph 820-10-35-37”) to

measure the fair value of its financial instruments.

Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting

principles generally accepted in the United States of America (U.S.

GAAP), and expands disclosures about fair value measurements.

To increase consistency and comparability in fair

value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to

valuation techniques used to measure fair value into three (3) broad levels.

The fair value hierarchy gives the highest priority to quoted

prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.

The three (3)

levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:

Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

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Pricing inputs that are generally unobservable inputs and not corroborated by market data.

Financial assets are considered Level 2

when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least

one significant model assumption or input is unobservable.

The carrying amount of the Company’s

financial assets and liabilities, such as cash, prepaid expenses, accounts payable, and accrued expenses, approximate their fair

value because of the short maturity of those instruments.

Transactions involving related parties

cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings

may not exist.

Representations about transactions with related parties, if made, shall not imply that the related party transactions

were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.

However, it is not practical to determine

the fair value of advances from stockholders, if any, due to their related party nature.

Financial assets are considered Level 2 when their

fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant

model assumption or input is unobservable.

The carrying amount of the Company’s financial

assets and liabilities, such as cash, prepaid expenses, accounts payable, and accrued expenses, approximate their fair value because of

the short maturity of those instruments.

Transactions involving related parties cannot

be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist.

Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated

on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.

However, it is not practical to determine the

fair value of advances from stockholders, if any, due to their related party nature.

Revenue Recognition

On September 1, 2018, the Company adopted

ASC 606 –

On September 1, 2018, the Company adopted ASC

Revenue from Contracts with Customers using the modified retrospective transition approach.

The core principle

of ASC 606 is that revenue should be recognized in a manner that depicts the transfer of promised goods or services to customers

in an amount that reflects the consideration to which the entity expects to be entitled for exchange of those goods or services.

The Company’s updated accounting policies and related disclosures are set forth below, including the disclosure for disaggregated

The impact of adopting ASC 606 was not material to the Condensed Consolidated Financial Statements.

Revenue from the Company is recognized

under Topic 606 in a manner that reasonably reflects the delivery of its services and products to customers in return for expected

consideration and includes the following elements:

The core principle of ASC 606

is that revenue should be recognized in a manner that depicts the transfer of promised goods or services to customers in an amount that

reflects the consideration to which the entity expects to be entitled for exchange of those goods or services.

The Company’s updated

accounting policies and related disclosures are set forth below, including the disclosure for disaggregated revenue.

The impact of adopting

ASC 606 was not material to the Condensed Consolidated Financial Statements.

Revenue from the Company is recognized under Topic

606 in a manner that reasonably reflects the delivery of its services and products to customers in return for expected consideration and

includes the following elements:

executed contracts with the Company’s customers that it believes are legally enforceable;

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determination of the transaction price for each performance obligation in the respective contract;

allocation of the

transaction price to each performance obligation;

allocation of the transaction price to each performance obligation;

recognition of revenue only when the Company satisfies each performance obligation.

These five elements, as applied to each

of the Company’s revenue categories, is summarized below:

These five elements, as applied to each of the

Company’s revenue categories, is summarized below:

Product sales –

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stage of work completed.

Under this approach, recognized contract revenue equals the total estimated contract revenue multiplied

by the percentage of completion.

Our construction contracts are unit priced, and an account receivable is recorded for amounts

invoiced based on actual units produced.

Under this approach, recognized contract revenue equals the total estimated contract revenue multiplied by the

percentage of completion.

Our construction contracts are unit priced, and an account receivable is recorded for amounts invoiced based

on actual units produced.

Cost of Revenue

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Research and Development

Research and development costs are expensed

Research and development costs primarily consist of efforts to refine existing product models and develop new product

Research and development costs are expensed as

Research and development costs primarily consist of efforts to refine existing product models and develop new product models.

Related Parties

The Company follows ASC 850-10 for the

identification of related parties and disclosure of related party transactions.

The Company follows ASC 850-10 for the identification

of related parties and disclosure of related party transactions.

Pursuant to ASC 850-10-20 the related parties include:

a) affiliates of the Company;

b) entities for which investments in their equity securities would be required, absent the election

of the fair value option under the Fair Value Option Subsection of ASC 825–10–15, to be accounted for by the equity

method by the investing entity;

c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed

by or under the trusteeship of management;

a) affiliates

of the Company;

b) entities for which investments in their equity securities would be required, absent the election of the fair value

option under the Fair Value Option Subsection of ASC 825–10–15, to be accounted for by the equity method by the investing

c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship

of management;

d) principal owners of the Company;

e) management of the Company;

f) other parties with

which the Company may deal if one party controls or can significantly influence the management or operating policies of the other

to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests;

parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership

interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting

f) other parties with which the Company may deal if one

party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting

parties might be prevented from fully pursuing its own separate interests;

and g) other parties that can significantly influence the management

or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly

influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The condensed consolidated financial statements

shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and

other similar items in the ordinary course of business.

However, disclosure of transactions that are eliminated in the preparation

of consolidated financial statements is not required in those statements.

shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other

similar items in the ordinary course of business.

However, disclosure of transactions that are eliminated in the preparation of consolidated

financial statements is not required in those statements.

The disclosures shall include:

(a) the nature of the

relationship(s) involved;

(b) a description of the transactions, including transactions to which no amounts or nominal amounts

were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to

an understanding of the effects of the transactions on the consolidated financial statements;

for each of the periods for which income statements are presented and the effects of any change in the method of establishing the

terms from that used in the preceding period;

and (d) amounts due from or to related parties as of the date of each balance sheet

presented and, if not otherwise apparent, the terms and manner of settlement.

(a) the nature of the relationship(s) involved;

(b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods

for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions

on the consolidated financial statements;

presented and the effects of any change in the method of establishing the terms from that used in the preceding period;

and (d) amounts

due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of

Commitments and Contingencies

The Company follows ASC 450-20 to report

accounting for contingencies.

Certain conditions may exist as of the date the consolidated financial statements are issued, which

may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur.

Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment.

In assessing loss

contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings,

the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the

amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates

that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated

liability would be accrued in the Company’s consolidated financial statements.

If the assessment indicates that a potential

material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of

the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

Loss contingencies considered remote are

generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

Management does not believe,

based upon information available at this time that these matters will have a material adverse effect on the Company’s financial

position, results of operations or cash flows.

However, there is no assurance that such matters will not materially and adversely

affect the Company’s business, financial position, and results of operations or cash flows.

The Company follows ASC 450-20 to report accounting

for contingencies.

Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a

loss to the Company, but which will only be resolved when one or more future events occur or fail to occur.

The Company assesses such

contingent liabilities, and such assessment inherently involves an exercise of judgment.

In assessing loss contingencies related to legal

proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived

merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be

sought therein.

If the assessment of a contingency indicates that

it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would

be accrued in the Company’s consolidated financial statements.

If the assessment indicates that a potential material loss contingency

is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an

estimate of the range of possible losses, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally

not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.

Management does not believe, based upon

information available at this time that these matters will have a material adverse effect on the Company’s financial position, results

of operations or cash flows.

However, there is no assurance that such matters will not materially and adversely affect the Company’s

business, financial position, and results of operations or cash flows.

Income Tax Provision

The Company accounts for income taxes in

accordance with ASC Topic 740, Income Taxes (ASC 740).

ASC 740 requires a company to use the asset and liability method of accounting

for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities

are recognized for taxable temporary differences.

Temporary differences are the differences between the reported amounts of assets

and liabilities and their tax bases.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management,

the Company does not foresee generating taxable income in the near future and utilizing its deferred tax asset, therefore, it is

more likely than not that some portion, or all of, the deferred tax assets will not be realized.

Deferred tax assets and liabilities

are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Under ASC 740, a tax position is recognized

as a benefit only if it is “more likely than not”

that the tax position would be sustained in a tax examination, with

a tax examination being presumed to occur.

The amount recognized is the largest amount of tax benefit that is more than 50% likely

to be realized on examination.

The Company accounts for income taxes in accordance

with ASC Topic 740, Income Taxes (ASC 740).

ASC 740 requires a company to use the asset and liability method of accounting for income

taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for

taxable temporary differences.

Temporary differences are the differences between the reported amounts of assets and liabilities and their

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, the Company does not foresee generating

taxable income in the near future and utilizing its deferred tax asset, therefore, it is more likely than not that some portion, or all

of, the deferred tax assets will not be realized.

Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws

and rates on the date of enactment.

Under ASC 740, a tax position is recognized as

a benefit only if it is “more likely than not”

that the tax position would be sustained in a tax examination, with a tax examination

being presumed to occur.

The amount recognized is the largest amount of tax benefit that is more than 50% likely to be realized on examination.

For tax positions not meeting the “more likely than not”

test, no tax benefit is recorded.

The Company has no material uncertain tax positions for any of the reporting periods presented.

Income taxes are accounted for using the

asset and liability method.

Deferred income taxes are provided for temporary differences in recognizing certain income, expense,

and credit items for financial reporting purposes and tax reporting purposes.

Such deferred income taxes primarily relate to the

difference between the tax basis of assets and liabilities and their financial reporting amounts.

Deferred tax assets and liabilities

are measured by applying enacted statutory tax rates applicable to the future years in which deferred tax assets or liabilities

are expected to be settled or realized.

The Company has no material uncertain

tax positions for any of the reporting periods presented.

Income taxes are accounted for using the asset

and liability method.

Deferred income taxes are provided for temporary differences in recognizing certain income, expense, and credit

items for financial reporting purposes and tax reporting purposes.

Such deferred income taxes primarily relate to the difference between

the tax basis of assets and liabilities and their financial reporting amounts.

Deferred tax assets and liabilities are measured by applying

enacted statutory tax rates applicable to the future years in which deferred tax assets or liabilities are expected to be settled or realized.

There was no material deferred tax asset or liabilities as of September 30, 2020 and December 31, 2019.

As of September 30, 2020 and December 31,

2019, the Company did not identify any material uncertain tax positions.

As of March 31, 2021 and December 31, 2020, the

Company did not identify any material uncertain tax positions.

Basic and Diluted Net Income (Loss) Per Share

Net income (loss) per share is computed

pursuant to ASC 260-10-45.

Basic net income (loss) per share (“EPS”) is computed by dividing net income (loss) by the

weighted average number of shares outstanding during the period.

Diluted EPS is computed by dividing net

income (loss) by the weighted average number of shares of stock and potentially outstanding shares of stock during the period to

reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock

options or warrants.

Due to the net loss incurred by the Company,

potentially dilutive instruments would be anti-dilutive.

Accordingly, diluted loss per share is the same as basic loss for all

periods presented.

The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per

share as their inclusion would be anti-dilutive.

Nine months ended September 30,

Net income (loss) per share is computed pursuant

to ASC 260-10-45.

Basic net income (loss) per share (“EPS”) is computed by dividing net income (loss) by the weighted average

number of shares outstanding during the period.

Diluted EPS is computed by dividing net income

(loss) by the weighted average number of shares of stock and potentially outstanding shares of stock during the period to reflect the

potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, stock options or warrants.

Due to the net loss incurred by the Company, potentially

dilutive instruments would be anti-dilutive.

Accordingly, diluted loss per share is the same as basic loss for all periods presented.

The following potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion

would be anti-dilutive.

Three months ended March 31,

Stock options

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for the disclosure of subsequent events.

The Company will evaluate subsequent events through the date when the financial

statements were issued.

Pursuant to ASU 2010-09, the Company as an SEC filer considers its financial statements issued when they

are widely distributed to users, such as through filing them on EDGAR.

The Company will evaluate subsequent events through the date when the financial statements were

Pursuant to ASU 2010-09, the Company as an SEC filer considers its financial statements issued when they are widely distributed

to users, such as through filing them on EDGAR.

Based upon the review, other than described in Note 14 –

Subsequent Events, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment

or disclosure in the condensed consolidated financial statements.

Subsequent Events, the

Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the condensed

consolidated financial statements.

Reclassification

Certain reclassifications have been made

to the condensed consolidated financial statements for prior years to the current year’s presentation.

Such reclassifications

have no effect on net income as previously reported.

Certain reclassifications have been made to the

condensed consolidated financial statements for prior years to the current year’s presentation.

Such reclassifications have no effect

on net income as previously reported.

Note 3 –

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Recently Adopted Accounting Standards

In February 2016, the Financial Accounting

Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-02, Leases (Topic 842) (“Topic

842”), which requires lessees to recognize leases on the balance sheet and disclose key information about leasing arrangements.

Topic 842 was subsequently amended by ASU 2018-01, Land Easement Practical Expedient for Transition to Topic 842;

Codification Improvements to Topic 842, Leases;

In February 2016, the Financial Accounting Standards

Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-02, Leases (Topic 842) (“Topic 842”),

which requires lessees to recognize leases on the balance sheet and disclose key information about leasing arrangements.

Topic 842 was

subsequently amended by ASU 2018-01, Land Easement Practical Expedient for Transition to Topic 842;

ASU 2018-10, Codification Improvements

to Topic 842, Leases;

ASU 2018-11, Targeted Improvements;

and ASU 2019-01, Codification Improvements.

The new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize ROU asset and lease

liability on the balance sheet for all leases with a term longer than 12 months.

Leases are classified as finance or operating,

with classification affecting the pattern and classification of expense recognition in the statement of income.

The new standard was effective for the

Company on January 1, 2019.

A modified retrospective transition approach is required, applying the new standard to all leases existing

at the date of initial application.

An entity may choose to use either (1) its effective date or (2) the beginning of the earliest

comparative period presented in the financial statements as its date of initial application.

The Company adopted the new standard

on January 1, 2019 and used the effective date as its date of initial application.

Consequently, prior period financial information

has not been recast and the disclosures required under the new standard have not been provided for dates and periods before January

The new standard establishes a right-of-use

model (“ROU”) that requires a lessee to recognize ROU asset and lease liability on the balance sheet for all leases with a

term longer than 12 months.

Leases are classified as finance or operating, with classification affecting the pattern and classification

of expense recognition in the statement of income.

The new standard was effective for the Company

on January 1, 2019.

A modified retrospective transition approach is required, applying the new standard to all leases existing at the

date of initial application.

An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative

period presented in the financial statements as its date of initial application.

The Company adopted the new standard on January 1, 2019

and used the effective date as its date of initial application.

Consequently, prior period financial information has not been recast

and the disclosures required under the new standard have not been provided for dates and periods before January 1, 2019.

The new standard provides a number of optional

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The Company elected the “package of practical expedients,”

which permits it not

to reassess under the new standard its prior conclusions about lease identification, lease classification and initial direct costs.

The Company did not elect the use-of-hindsight or the practical expedient pertaining to land easements, the latter not being applicable

to the Company.

which permits it not to reassess

under the new standard its prior conclusions about lease identification, lease classification and initial direct costs.

The Company did

not elect the use-of-hindsight or the practical expedient pertaining to land easements, the latter not being applicable to the Company.

The new standard also provides practical expedients for an entity’s ongoing accounting.

The Company elected

the short-term lease recognition exemption for all leases that qualify.

This means, for those leases that qualify, it has not recognized

ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases

of those assets in transition.

The Company also elected the practical expedient to not separate lease and non-lease components

for all of its leases.

The Company believes the most significant

effects of the adoption of this standard relate to (1) the recognition of new ROU assets and lease liabilities on its consolidated

balance sheet for its office operating leases and (2) providing new disclosures about its leasing activities.

There was no change

in its leasing activities as a result of adoption.

In June 2018, the FASB issued ASU 2018-07,

Stock Compensation (Topic 718):

Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for

share-based payments granted to nonemployees for goods and services and aligns most of the guidance on such payments to nonemployees

with the requirements for share-based payments granted to employees.

The Company elected the short-term lease

recognition exemption for all leases that qualify.

This means, for those leases that qualify, it has not recognized ROU assets or lease

liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition.

The Company also elected the practical expedient to not separate lease and non-lease components for all of its leases.

The Company believes the most significant effects

of the adoption of this standard relate to (1) the recognition of new ROU assets and lease liabilities on its consolidated balance sheet

for its office operating leases and (2) providing new disclosures about its leasing activities.

There was no change in its leasing activities

as a result of adoption.

In June 2018, the FASB issued ASU 2018-07, Stock

Compensation (Topic 718):

Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based

payments granted to nonemployees for goods and services and aligns most of the guidance on such payments to nonemployees with the requirements

for share-based payments granted to employees.

ASU 2018-07 is effective on January 1, 2019.

Early adoption

is permitted.

The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

In June 2020, the FASB issued ASU 2020-05

in response to the ongoing impacts to U.S.

Early adoption is permitted.

of this ASU did not have a material impact on the Company’s consolidated financial statements.

In June 2020, the FASB issued ASU 2020-05 in response

to the ongoing impacts to U.S.

businesses in response to the COVID-19 pandemic.

ASU 2020-05, Revenue from Contracts

with Customers (Topic 606) and Leases (Topic 842) Effective Dates for Certain Entities provide a limited deferral of the effective

dates for implementing previously issued ASU 606 and ASU 842 to give some relief to businesses considering the difficulties they

are facing during the pandemic.

These entities may defer application to fiscal years beginning after December 15, 2019, and interim

periods within fiscal years beginning after December 15, 2020.

As the Company has already adopted ASU 606 and ASU 842, the Company

does not anticipate any effect on its financial statements.

ASU 2020-05, Revenue from Contracts with Customers (Topic

606) and Leases (Topic 842) Effective Dates for Certain Entities provide a limited deferral of the effective dates for implementing previously

issued ASU 606 and ASU 842 to give some relief to businesses considering the difficulties they are facing during the pandemic.

These entities

may defer application to fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December

As the Company has already adopted ASU 606 and ASU 842, the Company does not anticipate any effect on its financial statements.

Recently Issued Accounting Standards Not Yet Adopted

In June 2016, FASB issued ASU 2016-13,

Financial Instruments - Credit Losses, which changes the accounting for recognizing impairments of financial assets.

new guidance, credit losses for certain types of financial instruments will be estimated based on expected losses.

The new guidance

also modifies the impairment models for available-for-sale debt securities and for purchased financial assets with credit deterioration

since their origination.

In February 2020, the FASB issued ASU 2020-02, Financial Instruments-Credit Losses (Topic 326) and Leases

(Topic 842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No.

119 and Update to SEC Section on Effective

Date Related to Accounting Standards Update No.

2016-02, Leases (Topic 842), which amends the effective date of the original pronouncement

for smaller reporting companies.

ASU 2016-13 and its amendments will be effective for the Company for interim and annual periods

in fiscal years beginning after December 15, 2022.

The Company believes the adoption will modify the way the Company analyzes financial

instruments, but it does not anticipate a material impact on results of operations.

The Company is in the process of determining

the effects the adoption will have on its consolidated financial statements.

In December 2019, FASB issued ASU 2019-12,

Income Taxes, which provides for certain updates to reduce complexity in the accounting for income taxes, including the utilization

of the incremental approach for intra-period tax allocation, among others.

The amendments in ASU 2019-12 are effective for fiscal

years, and interim periods within those fiscal years, beginning after December 15, 2020.

The Company does not expect the implementation

of ASU 2019-12 to have a material effect on its consolidated financial statements.

In June 2016, FASB issued ASU 2016-13, Financial

Instruments - Credit Losses, which changes the accounting for recognizing impairments of financial assets.

Under the new guidance, credit

losses for certain types of financial instruments will be estimated based on expected losses.

The new guidance also modifies the impairment

models for available-for-sale debt securities and for purchased financial assets with credit deterioration since their origination.

February 2020, the FASB issued ASU 2020-02, Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC

Paragraphs Pursuant to SEC Staff Accounting Bulletin No.

119 and Update to SEC Section on Effective Date Related to Accounting Standards

2016-02, Leases (Topic 842), which amends the effective date of the original pronouncement for smaller reporting companies.

ASU 2016-13 and its amendments will be effective for the Company for interim and annual periods in fiscal years beginning after December

The Company believes the adoption will modify the way the Company analyzes financial instruments, but it does not anticipate

a material impact on results of operations.

The Company is in the process of determining the effects the adoption will have on its consolidated

financial statements.

In December 2019, FASB issued ASU 2019-12, Income

Taxes, which provides for certain updates to reduce complexity in the accounting for income taxes, including the utilization of the incremental

approach for intra-period tax allocation, among others.

The amendments in ASU 2019-12 are effective for fiscal years, and interim periods

within those fiscal years, beginning after December 15, 2020.

The Company does not expect the implementation of ASU 2019-12 to have a

material effect on its consolidated financial statements.

Management does not believe that any recently

issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements.

accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.

As new accounting

pronouncements are issued, we will adopt those that are applicable under the circumstances.

Note 4 –

Inventory, net

At September 30, 2020 and December 31,

2019, inventory consisted of the following:

September 30,

At March 31, 2021 and December 31, 2020, inventory

consisted of the following:

Finished goods

2 unchanged sentences

Note 5 –

Deposit balance as of September 30, 2020

amounted to $106,630, including $6,630 for lease agreement deposit and $100,000 for payment made into an escrow account.

as of December 31, 2019 amounted to $6,630 for lease agreement deposit.

On August 31, 2020, the Company executed

a binding letter of intent with Communication Wiring Specialists, Inc., a California S-Corporation (“CWS”) whereby

the Company will purchase one hundred percent (100%) of the issued and outstanding common stock of CWS for five million dollars

($5,000,000).

When the transaction closes, CWS will be capitalized with one million dollars ($1,000,000).

The purchase price structure

included a refundable deposit amount of $100,000 to be held in an escrow account upon execution of the letter of intent.

of intent may be terminated by mutual written consent by the Company and CWS, or on November 30, 2020 if the Closing has not occurred.

Note 7 –

On March 15, 2019, the Company entered

into and closed an asset purchase agreement with AVX Design & Integration, Inc.

(“AVX”) as stated in Note 1.

summary of the purchase price and the purchase price allocations at fair value is below.

Purchase price

29,286 shares of common stock (1)

Secured promissory note

Total purchase price

Allocation of purchase price

Accounts receivable

Property and equipment

Operating lease right-of-use assets

Intangible assets

Accounts payable and accrued liabilities

Operating lease liability

Purchase price

the fair value of the common

stock was calculated based on the closing market price of the Company’s common stock at the date of acquisition.

Deposit balance as of March 31, 2021 amounted

to $6,630 for lease agreement deposit.

Deposit balance as of December 31, 2020 amounted to $106,630, including $6,630 for lease agreement

deposit and $100,000 for payment made into an escrow account for purchasing a target company.

On March 26, 2021, the management of CWS

decided to terminate the LOI.

The LOI was terminated effective as of March 29, 2021 and $100,000 was returned on March 29, 2021.

Note 6 –

Property and Equipment

At September 30, 2020 and December 31, 2019, property and equipment

consisted of the following:

At March 31, 2020 and December 31, 2019, property and equipment consisted

of the following:

Building Improvement

2 unchanged sentences

Property and equipment, net

Depreciation expense for the nine months

ended September 30, 2020 and 2019 amounted to $121,684 and $112,107, respectively.

The Company purchased a warehouse in

Ontario, California in September 2018 and leased an unused portion to a third party.

The tenant paid $12,335 as a security

deposit, shown as other liability in non-current liability.

Note 9 –

Promissory Note - Related Party

On March 15, 2019, when the Company

purchased AVX Design & Integration, Inc.

the Company agreed to pay the predecessor owner with a promissory note as one of

the forms of consideration.

The note was $50,000 with a fixed interest rate of 6% per annum payable in 12 equal monthly

payments commencing on June 1 , 2019 with interest calculated from the initial payment date through the date in

which all amount due under the note is paid off.

As of December 31, 2019, the balance of the promissory note was $50,000 and

$1,750 accrued interest incurred for the nine months and 15 days ended December 31, 2019.

The note and interest amount of

$50,000 and $1,831 were paid off on January 10, 2020.

Depreciation expense for the three months ended

March 31, 2021 and 2020 amounted to $40,537 and $40,598, respectively.

The Company purchased a warehouse in Ontario,

California in September 2018 and leased an unused portion to a third party.

The tenant paid $12,335 as a security deposit, shown as other

liability in non-current liability.

Note 7 –

Related Party Transactions

Revenue generated from Vitashower Corp.,

a company owned by the CEO’s wife, amounted to $21,267 and $10,300 for the nine months ended September 30, 2020 and 2019,

respectively.

Account receivable balance due from Vitashower Corp.

amounted to $22,410 and $0 as of September 30, 2020 and December

31, 2019, respectively.

Compensation for services provided by the

President and Chief Executive Officer for the nine months ended September 30, 2020 and 2019 amounted to $90,000 and $90,000, respectively.

Revenue generated from Vitashower Corp., a company

owned by the CEO’s wife, amounted to $10,191 and $14,672 for the three months ended March, 2021 and 2020, respectively.

receivable balance due from Vitashower Corp.

amounted to $0 and $0 as of March 31, 2021 and December 31, 2020, respectively.

Compensation for services provided by the President

and Chief Executive Officer for the three months ended March 31, 2021 and 2020 amounted to $30,000 and $30,000, respectively.

Note 8 –

1 unchanged sentence

Major customers

One customer accounted for 24% and 18%

of the total accounts receivable as of September 30, 2020 and December 31, 2019, respectively.

One customer accounted for 48% and 17% of the

total accounts receivable as of March 31, 2021 and December 31, 2020, respectively.

This customer accounted for 80% and 58% of the total

revenue for the period ended March 31, 2021 and 2020, respectively.

Major vendors

One vendor accounted for 0% and 21% of

total accounts payable at September 30, 2020 and December 31, 2019, respectively.

One vendor accounted for 96% and 0% of total accounts

payable at March 31, 2021 and December 31, 2020, respectively.

This vendor accounted for 84% and 38% of the total purchases for the period

ended March 31, 2021 and 2020, respectively.

Note 9 –

1 unchanged sentence

Asset and Operating Lease Liability

lease right-of-use assets and liabilities are recognized at the present value of the future lease payments at the lease commencement

The interest rate used to determine the present value is our incremental borrowing rate, estimated to be 15%, as the interest

rate implicit in our lease is not readily determinable.

During the nine months ended September 30, 2020 and 2019, the Company recorded

$48,885 and $32,412, respectively as operating lease expense.

The Company currently has a lease agreement

for AVX’s operation for a monthly payment of $5,258 and shall increase by 3% every year.

The lease commenced July 1, 2015

and expires on August 31, 2022.

lease right-of-use assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date.

The interest rate used to determine the present value is our incremental borrowing rate, estimated to be 15%, as the interest rate implicit

in our lease is not readily determinable.

During the three months ended March 31, 2021 and 2020, the Company recorded $16,295 and $16,295,

respectively as operating lease expense.

The Company currently has a lease agreement for

AVX’s operation for a monthly payment of $5,258 and shall increase by 3% every year.

The lease commenced July 1, 2015 and expires

on August 31, 2022.

A security deposit of $5,968 was also held for the duration of the lease term.

1 unchanged sentence

the Company has elected the ‘package of practical expedients,’

which permit it not to reassess under the new

standard its prior conclusions about lease identification, lease classification and initial direct costs.

The Company did not elect

the use-of-hindsight or the practical expedient pertaining to land easements;

which permit it not to reassess under the new standard its

prior conclusions about lease identification, lease classification and initial direct costs.

The Company did not elect the use-of-hindsight

or the practical expedient pertaining to land easements;

the latter is not applicable to the Company.

the Company elected not to apply ASC Topic 842 to arrangements with lease terms of 12 months or less.

On March 15, 2019 when AVX

was acquired, upon adoption of ASC Topic 842, the Company recorded a right-of-use asset.

In addition, the Company elected

not to apply ASC Topic 842 to arrangements with lease terms of 12 months or less.

On March 15, 2019 when AVX was acquired, upon adoption

of ASC Topic 842, the Company recorded a right-of-use asset.

Right-of-use asset is summarized below:

September 30, 2020

March 31, 2021

March 31, 2020

accumulated amortization

Right-of-use asset, net

Operating Lease liability is summarized

September 30, 2020

Operating Lease liability is summarized below:

March 31, 2021

March 31, 2020

current portion

3 unchanged sentences

Year ending December 31, 2022

Total future minimum lease payment

5 unchanged sentences

entered into an agreement to receive a U.S.

Small Business Administration Loan (“SBA Loan”) from JPMorgan Chase

Small Business Administration Loan (“SBA Loan”) from JPMorgan Chase Bank,

related to the COVID-19 pandemic in the amount of $116,460, which we received on May 1, 2020.

The SBA Loan has a fixed

interest rate of 0.98 percent per annum and a maturity date two years from the date the loan was issued.

The SBA Loan has a fixed interest rate

of 0.98 percent per annum and a maturity date two years from the date the loan was issued.

On May 4, 2020, Perfecular Inc.

entered into an

agreement to receive a U.S.

Small Business Administration Loan (“SBA Loan”) from Bank of America related to the COVID-19 pandemic

in the amount of $151,500, which we received on May 4, 2020.

The SBA Loan has a fixed interest rate of 1 percent per annum and

a maturity date two years from the date loan was issued.

On March 2, 2021, Perfecular Inc.

into an agreement to receive a U.S.

Small Business Administration Loan (“SBA Loan”) from Bank of America related to

the COVID-19 pandemic in the amount of $151,500, which we received on May 4, 2020.

The SBA Loan has a fixed interest rate of 1 percent

per annum and a maturity date two years from the date loan was issued.

The application for these funds required

the Company in good faith to certify that the current economic uncertainty made the loan request necessary to support the ongoing

operations of the Company.

This certification further required the Company to take into account current business activity and the

ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental

to the business.

The guidance and requirements with respect to the certification made by the Company did not contain any objective

criteria and is subject to interpretation.

Despite the Company’s understanding under the CARES Act that given the Company’s

circumstances it satisfied all eligible requirements for the SBA Loan, management will continue to assess the Company’s continued

qualification if or when updated or revised guidance is released by the U.S.

Department of the Treasury.

If a determination is

subsequently made that the Company’s qualification status has changed, the Company may be required to, among other matters,

return the SBA Loan.

Under the terms of the SBA Loan, the Company may be eligible for full or partial loan forgiveness, however,

no assurance is provided that the Company will apply for, or obtain forgiveness for, any portion of the SBA Loan.

Small Business Administration Loan (“SBA Loan”) from Wells Fargo related to the COVID-19

pandemic in the amount of $158,547, which we received on March 3, 2021.

The SBA Loan has a fixed interest rate of 1 percent per annum

and a maturity date two years from the date loan was issued.

On March 10, 2021, AVX Design & Integration,

entered into an agreement to receive an SBA Loan from Chase Bank related to the COVID-19 pandemic in the amount of $108,750.

SBA Loan has a fixed interest rate of 0.98 percent per annum and a maturity date five years from the date loan was issued.

Economic Injury Disaster Loan

On June 4, 2020, Perfecular Inc.

into an agreement to receive a U.S.

Small Business Administration Loan (“SBA Loan”) from Bank of America related to

the COVID-19 pandemic in the amount of $81,100, which we received on June 4, 2020.

The SBA Loan has a fixed interest rate of 3.75

percent per annum and a maturity date thirty years from the date loan was issued.

an agreement to receive a U.S.

Small Business Administration Loan (“SBA Loan”) from Bank of America related to the COVID-19

pandemic in the amount of $81,100, which we received on June 4, 2020.

The SBA Loan has a fixed interest rate of 3.75 percent per annum

and a maturity date thirty years from the date loan was issued.

On June 5, 2020, AVX Design & Integration,

entered into an agreement to receive a U.S.

Small Business Administration Loan (“SBA Loan”) from JPMorgan Chase

Small Business Administration Loan (“SBA Loan”) from JPMorgan Chase Bank,

related to the COVID-19 pandemic in the amount of $56,800, which we received on June 5, 2020.

The SBA Loan has a fixed

interest rate of 3.75 percent per annum and a maturity date thirty years from the date loan was issued.

Borrower will use all of the proceeds from

this Loan solely as working capital to alleviate economic injury caused by disaster occurring in the month of January 31, 2020

and continuing thereafter.

For loan amounts of greater than $25,000,

Borrower hereby grants to the SBA, the secured party hereunder, a continuing security interest in and to any and all “Collateral”

as described herein to secure payment and performance of all debts, liabilities, and obligations of Borrower to the SBA hereunder

without limitation, including but not limited to all interest, other fees and expenses (all hereinafter called “Obligations”).

The Collateral includes the following property that Borrower now owns or shall acquire or create immediately upon the acquisition

or creation thereof:

all tangible and intangible personal property, including, but not limited to:

(a) inventory, (b) equipment,

(c) instruments, including promissory notes, (d) chattel paper, including tangible chattel paper and electronic chattel paper,

(e) documents, (f) letter of credit rights, (g) accounts, including health-care insurance receivables and credit card receivables,

(h) deposit accounts, (i) commercial tort claims, (j) general intangibles, including payment intangibles and software, and (k)

as-extracted collateral as such terms may from time to time be defined in the Uniform Commercial Code.

The security interest Borrower

grants includes all accessions, attachments, accessories, parts, supplies, and replacements for the Collateral, all products, proceeds

and collections thereof and all records and data relating thereto.

June 30, 2020

The SBA Loan has a fixed interest rate

of 3.75 percent per annum and a maturity date thirty years from the date loan was issued.

January 8, 2021, Focus Universal Inc.

entered into a secured promissory note agreement with East West Bank in the amount of $1,500,000.

The note has a variable interest rate of 0.25% above Wall Street Journal Prime Rate.

The note requires monthly payments with the final

payment of $1,357,178 due on January 22, 2026.

Borrower will use all of the proceeds from this

Loan solely as working capital to alleviate economic injury caused by disaster occurring in the month of January 31, 2020 and continuing

current portion

Long term portion

Interest expense incurred from the loans

amounted to $2,290 for the nine months ended September 30, 2020.

Economic Injury Disaster Loan advance

In response to the COVID-19 pandemic, small

businesses, including agricultural businesses, and non-profit organizations in all U.S.

states, Washington D.C., and U.S.

can apply for an Economic Injury Disaster Loan (EIDL).

The EIDL program is designed to provide economic relief to businesses that

are currently experiencing a temporary loss of revenue due to COVID-19.

EIDL proceeds can be used to cover a wide array of working

capital and normal operating expenses, such as continuation to health care benefits, rent, utilities, and fixed debt payments.

The amount of the EIDL Advance was determined by the number of employees indicated on the EIDL application at $1,000 per employee,

up to a maximum of $10,000.

The EIDL Advance does not have to be repaid.

Recipients did not have to be approved for an EIDL

loan in order to receive the EIDL.

On June 16, 2020, the Company received

a $10,000 EIDL Advance and recorded the receipt as other income.

Interest expense incurred from the loans amounted

to $7,565 and $0 for the three months ended March 31, 2021 and 2020, respectively.

Note 11 –

1 unchanged sentence

Shares authorized

Upon formation, the total number of shares

of all classes of stock that the Company is authorized to issue is seventy-five million (75,000,000) shares of common stock, par

value $0.001 per share.

As of September 30, 2020 the Company had

Upon formation, the total number of shares of

all classes of stock that the Company is authorized to issue is seventy-five million (75,000,000) shares of common stock, par value $0.001

As of March 31, 2021 the Company had 40,959,741

shares of common stock issued and outstanding.

During the nine months ended September

During the three months ended March 31, 2021,

the Company did not issue common stock.

Shares to be issued for compensation

The Company entered into agreements with

third-party consultants for financing and management consultation.

The Company has incurred consulting service fees paid in cash

amounting to $36,000 for the nine months ended September 30, 2020, which the Company intends to issue stock as compensation for

services rendered.

Expenses incurred but not yet paid in shares as of September 30, 2020 and September 30, 2019 amounted to $86,709

and $35,455, respectively.

During the nine months ended

September 30, 2019, the Company had the following transactions pertaining to its common stock:

Issued 13,445 shares to consultants in exchange for professional services rendered.

The shares were valued at $96,509 based on the closing price of the Company’s common stock on the dates that the shares were deemed earned, according to the agreements;

Issued 39,286 shares as consideration for the AVX acquisition valued at $290,716.

The value of the common stock was determined based on the market price on the day of the closing of the acquisition.

The Company entered into agreements with third

party consultants for financing and management consultation.

The Company has incurred consulting service fees not paid in cash amounting

to $12,000 for the period ended March 31, 2021, which the Company intends to issue stock as compensation for services rendered.

incurred but not yet paid in shares as of March 31, 2021 and 2020 amounted to $110,709 and $62,709, respectively.

Stock options

On August 6, 2019, each member of the Board

was granted 30,000 options to purchase shares at $5.70 per share.

As of September 30, 2020, there were 210,000 options granted,

210,000 options vested, 0 options unvested, and 210,000 outstanding stock options.

For the nine months ended September 30,

2020 and 2019, the Company’s stock option compensation expenses amounted to $605,150 and $172,900, respectively.

The fair value of the warrants listed above was determined using

the Black-Scholes option pricing model with the following assumptions:

September 30,

On January 4, 2021, each member of the Board was

granted 15,000 options to purchase shares at $3.00 per share.

On August 6, 2019, each member of the Board was

granted 30,000 options to purchase shares at $5.70 per share.

As of March 31, 2021, there were 315,000 options

granted, 236,250 options vested, 0 options unvested, and 315,000 outstanding stock options.

the three months ended March 31, 2021 and 2020, the Company’s stock option compensation expenses amounted to $259,350 and $106,838 ,

respectively.

The fair value of the warrants listed above was determined using the

Black-Scholes option pricing model with the following assumptions:

Risk-free interest rate

3 unchanged sentences

The following is a summary of options activity

from December 31, 2019 to September 30, 2020:

from December 31, 2020 to March 31, 2021:

Weighted average exercise price

3 unchanged sentences

Forfeited or expired

Outstanding at September 30, 2020

Vested as of September 30, 2020

Exercisable at September 30, 2020

The exercise price for options outstanding

and exercisable at September 30, 2020:

Outstanding at March 31, 2021

Vested as of March 31, 2021

Exercisable at March 31, 2021

The exercise price for options outstanding and

exercisable at March 31, 2021:

Note 12 –

3 unchanged sentences

and Perfecular Inc.

(“Focus”) involve wholesale, research and development of universal smart

instrument and farming devices.

(“Focus”) involve wholesale, research and development of universal smart instrument

and farming devices.

AVX Design & Integration, Inc.

(“AVX”) is an IoT installation and management company

specializeing in high performance and easy to use audio/gideo, home theater, lighting control, automation, and integration.

table below discloses income statement information by segment.

Nine months ended September 30, 2020

(“AVX”) is an IoT installation and management company specializing

in high performance and easy to use audio/video, home theater, lighting control, automation, and integration.

The table below discloses

income statement information by segment.

Three months ended March 31, 2021

Revenue - related party

12 unchanged sentences

related party

Other income (expense), net

Total other income (expense)

Loss before income taxes

$ (1,792,071 )

$ (1,988,333 )

Note 13 –

2 unchanged sentences

the Company may become involved in legal proceedings.

The Company will accrue a liability for such matters when it is probable

that a liability has been incurred and the amount can be reasonable estimated.

When only a range of possible loss can be established,

the most probable amount in the range is accrued.

The accrual for a litigation loss contingency might include, for example, estimates

of potential damages, outside legal fees, and other directly related costs expected to be incurred.

The Company will accrue a liability for such matters when it is probable that a

liability has been incurred and the amount can be reasonable estimated.

When only a range of possible loss can be established, the most

probable amount in the range is accrued.

The accrual for a litigation loss contingency might include, for example, estimates of potential

damages, outside legal fees, and other directly related costs expected to be incurred.

Note 14 –

1 unchanged sentence

The Company has evaluated all other subsequent

events through the date these condensed consolidated financial statements were issued and determine that there were no subsequent

events or transactions that require recognition or disclosures in the condensed consolidated financial statements.

On October 19, 2020, the Company subleased 3,000 feet of its

warehouse and one office space for eight months commencing December 1, 2020 with the option to extend the lease to twelve months.

The monthly lease is $2,400 with a $4,800 deposit.

events through the date these condensed consolidated financial statements were issued and determine that there were no subsequent events

or transactions that require recognition or disclosures in the condensed consolidated financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements