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Item 9A. Controls and Procedures

2022-03-08 compared with 2021-03-23 · 486 added, 528 removed, 140 unchanged (88% of the section changed)

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Evaluation of Disclosure Controls

Our Chief Executive Officer and Principal

Financial Officer, after evaluating the effectiveness of our “disclosure controls and procedures”

(as defined in the

Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual Report on Form

10-K (the “Evaluation Date”), concluded that as of the Evaluation Date, our disclosure controls and procedures were

not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under

the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange

Commission rules and forms.

Our Chief Executive Officer and Principal Financial

Officer, after evaluating the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange

Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual Report on Form 10-K (the “Evaluation

Date”), concluded that as of the Evaluation Date, our disclosure controls and procedures were not effective to provide reasonable

assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed,

summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms.

Changes in internal control over financial

There were no changes in our internal control

over financial reporting during our most recent fiscal quarter that materially affected, or were reasonably likely to materially

affect, our internal control over financial reporting.

Limitations on the Effectiveness of

Internal Controls

Disclosure controls and procedures, no

matter how well designed and implemented, can provide only reasonable assurance of achieving an entity’s disclosure objectives.

The likelihood of achieving such objectives is affected by limitations inherent in disclosure controls and procedures.

These include

the fact that human judgment in decision-making can be faulty and that breakdowns in internal control can occur because of human

failures such as simple errors or mistakes or intentional circumvention of the established process.

Management’s Report on Internal

Control over Financial Reporting

over financial reporting during our most recent fiscal quarter that materially affected, or were reasonably likely to materially affect,

our internal control over financial reporting.

Limitations on the Effectiveness of Internal

Disclosure controls and procedures, no matter

how well designed and implemented, can provide only reasonable assurance of achieving an entity’s disclosure objectives.

The likelihood

of achieving such objectives is affected by limitations inherent in disclosure controls and procedures.

These include the fact that human

judgment in decision-making can be faulty and that breakdowns in internal control can occur because of human failures such as simple errors

or mistakes or intentional circumvention of the established process.

Management’s Report on Internal Control

over Financial Reporting

Our management is responsible for establishing

and maintaining adequate internal control over financial reporting;

as such term is defined in the Securities Exchange Act of 1934

Rule 13a-15(f).

Our management conducted an evaluation of the effectiveness of our internal control over financial reporting based

on the framework in Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway

Commission (“1992 COSO Framework”).

A material weakness is a deficiency or

combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material

misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Our management

concluded we did not maintain effective controls over the Company’s financial reporting.

The material weaknesses in our internal

control over financial reporting, caused principally by inadequate staffing and technical expertise in key positions, resulted

in overly relying on outside consultants to make numerous adjustments to our financial statements.

Additionally, the significant

deficiencies or material weaknesses could result in future material misstatement of the consolidated financial statements that

would not be prevented or detected.

Management has concluded that the identified control deficiency constitutes a material weakness.

This annual report does not include an

attestation report of the Company’s independent registered public accounting firm regarding internal control over financial

Management’s report was not subject to attestation by the Company’s independent registered public accounting

firm pursuant to rules of the SEC that permit the company to provide only management’s report on internal control in this

annual report.

Background and Remediation Plan

Management has

determined that its processes and procedures over accounting and financial reporting are not adequate.

As a result, the Company

plans to implement a number of steps to remediate the material weakness discussed above and improve its internal control over financial

Specifically, the following are planned:

hiring additional qualified accounting personnel;

reviewing all areas of the

accounting process;

strengthening controls and improving the reporting tools and quality of data used in the analysis of disclosures

to review activities relevant to the financial reporting process.

Management believes

that the measures described above should remediate the material weakness identified and strengthen the Company’s internal

control over financial reporting.

As the Company continues to evaluate and improve its internal control over financial reporting,

additional measures to remediate the material weakness or modifications to certain of the remediation procedures described above

may be necessary.

The Company expects to complete the required remedial actions during 2020.

and maintaining adequate internal control over financial reporting, as such term is defined in the Securities Exchange Act of 1934 Rule

Our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework

in Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO

Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability

of our financial reporting and the preparation of our financial statements for external purposes in accordance with U.S.

A material weakness is a deficiency or combination

of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement

of our annual or interim financial statements will not be prevented or detected on a timely basis.

An effective internal control system,

no matter how well designed, has inherent limitations, including the possibility of human error or overriding of controls, and therefore

can provide only reasonable assurance with respect to reliable financial reporting.

Because of its inherent limitations, our internal

control over financial reporting may not prevent or detect all misstatements, including the possibility of human error, the circumvention

or overriding of controls or fraud.

Effective internal controls can provide only reasonable assurance with respect to the preparation

and fair presentation of financial statements.

In connection with the audit of our financial

statements as of and for the years ended December 31, 2021 and 2020, we identified significant deficiencies in our internal control over

financial reporting and a general understanding of U.S.

As such, there is a reasonable possibility that a misstatement of our financial

statements will not be prevented or detected on a timely basis.

As we have thus far not needed to comply with

Section 404 of the Sarbanes-Oxley Act, neither we nor our independent registered public accounting firm has performed an evaluation of

our internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act.

In light of this deficiency, we

believe that it is possible that certain control deficiencies and material weaknesses may have been identified if such an evaluation had

been performed.

We are working to remediate the deficiencies and

material weaknesses.

Our remediation efforts are ongoing, and we will continue our initiatives to implement and document policies, procedures,

and internal controls.

We have taken steps to enhance our internal control environment and plan to take additional steps to remediate

the deficiencies and address material weaknesses.

Specifically:

We have hired our Vice President of Finance.

We have also hired additional outside consultants, and we will hire qualified personnel in our accounting department, especially to add an experienced accountant in a controller capacity.

We will continue to evaluate the structure of the finance organization and add resources as needed;

We are engaging an external accounting firm to supplement our efforts to the implementation of the COSO Framework for internal controls;

We will design and implement internal controls related to revenue and expenses recognition accounting;

We are initiating a comprehensive program and development plan to provide ongoing company-wide trainings regarding internal controls, with particular emphasis on the training of our accounting staff;

We are implementing additional internal reporting procedures, including those designed to add depth to our review processes and improve our segregation of duties;

We are updating our systems so that we may collect the information necessary to enable us to more effectively monitor and comply with applicable filing requirements on a timely basis;

We will continue to enhance risk assessment procedures and conduct a comprehensive risk assessment to enhance overall compliance;

We are redesigning and implementing common internal control activities;

and we will continue to establish policies and procedures and enhance corporate oversight over process-level controls and structures to ensure that there is appropriate assignment of authority, responsibility and accountability to enable remediating our material weaknesses.

In addition to the items noted above, as we continue

to evaluate, remediate and improve our internal control over financial reporting, executive management may elect to implement additional

measures to address control deficiencies or may determine that the remediation efforts described above require modification.

management, in consultation with and at the direction of our Audit Committee, will continue to assess the control environment and the

above-mentioned efforts to remediate the underlying causes of the identified material weaknesses.

Although we plan to complete this remediation

process as quickly as possible, we are unable, at this time to estimate how long it will take;

and our efforts may not be successful in

remediating the deficiencies or material weaknesses.

This annual report does not include an attestation

report of the Company’s independent registered public accounting firm regarding internal control over financial reporting.

report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to rules of the SEC

that permit the company to provide only management’s report on internal control in this annual report.

OTHER INFORMATION

DIRECTORS, EXECUTIVE OFFICERS

AND CORPORATE GOVERNANCE

The following table presents information with respect to our

officers, directors and significant employees as of the date of this report:

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT

Not applicable.

DIRECTORS, EXECUTIVE

OFFICERS AND CORPORATE GOVERNANCE

The following table presents information with respect to our officers,

directors and significant employees as of the date of this report:

Director and Chairman

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(1) Independent director

Each director serves until our next annual

meeting of the stockholders or unless they resign earlier and serves until his or her successor is elected and qualified.

present time, members of the Board of Directors are not compensated with cash for their services to the board.

Each of our officers is elected by the

Board of Directors to a term of one (1) year and serves until his or her successor is duly elected and qualified, or until he or

she is removed from office.

Each director serves until our next annual meeting

of the stockholders or unless they resign earlier and serves until his or her successor is elected and qualified.

At the present time,

members of the Board of Directors are not compensated with cash for their services to the board.

Each of our officers is elected by the Board of

Directors to a term of one (1) year and serves until his or her successor is duly elected and qualified, or until he or she is removed

Biographical Information Regarding Officers and Directors

Desheng Wang was appointed as Chief

Executive Officer, Secretary, and has been a director since December 29, 2014.

Wang has over 20 years of professional experience

in mobile technology.

Wang earned his bachelor’s degree from Hebei Normal University, Physics Department in 1985.

Wang earned his master’s degree from Dalian Institute of Chemical Physics at the Chinese Academy of Science.

Desheng Wang was appointed as Chief Executive

Officer, Secretary, and has been a director since December 29, 2014.

Wang has over 20 years of professional experience in mobile technology.

Wang earned his bachelor’s degree from Hebei Normal University, Physics Department in 1985.

Wang earned his master’s

degree from Dalian Institute of Chemical Physics at the Chinese Academy of Science.

Wang earned his Ph.D.

in Chemistry at Emory University in 1994.

Wang served as a senior research fellow at California Institute

of Technology from 1994-2011.

in Chemistry at Emory University

Wang served as a senior research fellow at California Institute of Technology from 1994-2011.

Over the last five years, Dr.

Wang has served as president of Vitashower Corporation and formerly

as President of Perfecular Inc.

Edward Lee was appointed President

and director on October 21, 2015.

Wang has served as president of Vitashower Corporation and formerly as President of Perfecular Inc.

Edward Lee was appointed President and director

on October 21, 2015.

On November 15, 2019, Dr.

Lee resigned as President and was appointed as Chairman of the Board

of Directors.

Lee received his bachelor’s degree in Mathematics at Lanzhou University in 1983, received his master’s

degree at University of Science and Technology of China in 1985 and earned his Ph.D.

Lee resigned as President and was appointed as Chairman of the Board of Directors.

Lee received his bachelor’s degree in Mathematics at Lanzhou University in 1983, received his master’s degree at University

of Science and Technology of China in 1985 and earned his Ph.D.

in Mathematics at University of Florida in 1991.

Lee worked as an assistant professor at Tsinghua University in 1986 and National University of Singapore in 1992.

Lee has served as CEO of AIDP, a leading supplier of dietary supplement ingredients, focusing on research & development

and marketing and sales of proprietary ingredients like Magtein, KoACT, Predtic X, and Actizin.

Lee is also serving as the

Vice Chairperson of the American Chinese CEO Association.

Lee worked as an

assistant professor at Tsinghua University in 1986 and National University of Singapore in 1992.

Since 1996, Dr.

Lee has served as CEO

of AIDP, a leading supplier of dietary supplement ingredients, focusing on research and development and marketing and sales of proprietary

ingredients like Magtein, KoACT, Predtic X, and Actizin.

Lee is also serving as the Vice Chairperson of the American Chinese CEO Association.

Lee is married to Jennifer Gu, a current director of Focus Universal.

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Lee is presently a licensed Certified Public Accountant.

Lee graduated in 2006 with a bachelor’s degree

in Accounting from the University of Southern California and has more than 11 years of experience with public company accounting

and financial reporting with the SEC.

Lee worked on the audit staff of the PCAOB accounting firm of Moore Stephens Wurth Frazer

and Torbet LLP and then worked as a senior associate at the PCAOB accounting firm of Simon & Edward, LLP in Diamond Bar, CA.

Lee graduated in 2006 with a bachelor’s degree in Accounting from

the University of Southern California and has more than 11 years of experience with public company accounting and financial reporting

with the SEC.

Lee worked on the audit staff of the PCAOB accounting firm of Moore Stephens Wurth Frazer and Torbet LLP and then worked

as a senior associate at the PCAOB accounting firm of Simon & Edward, LLP in Diamond Bar, CA.

Since 2011, Mr.

Lee has worked in-house as a staff accountant at a public company called E-world USA Holding, Inc.

preparing their

routine securities filings, including their 10-K and 10-Q filings.

In addition to working with E-World USA Holding, Inc., in the

past five years, Mr.

Lee has also worked as an outside consultant CPA for other public companies.

Jennifer Gu was appointed as a director

on October 21, 2015.

Gu earned her bachelor’s degree in Biology from University of Florida in 1990 and earned her Ph.D.

in Experimental Pathology at University of California, Los Angeles in 1997.

She also completed post-doctoral research at the California

Institute of Technology in 2004.

Lee has worked in-house

as a staff accountant at a public company called E-World USA Holding, Inc.

preparing their routine securities filings, including their

10-K and 10-Q filings.

In addition to working with E-World USA Holding, Inc., in the past five years, Mr.

Lee has also worked as an outside

consultant CPA for other public companies.

Jennifer Gu was appointed as a director on

October 21, 2015.

Gu earned her bachelor’s degree in Biology from University of Florida in 1990 and earned her Ph.D.

in Experimental

Pathology at University of California, Los Angeles in 1997.

She also completed post-doctoral research at the California Institute of Technology

Since 2005, Dr.

Gu served, and is still currently serving, as the Vice President of Research &

Development at AIDP.

Gu is married to Edward Lee, the current Chairman of the Board of Directors of Focus Universal.

Michael Pope was appointed as a director

of the Company on June 8, 2018.

Gu served, and is still currently serving, as the Vice President of Research & Development at AIDP.

is married to Edward Lee, the current Chairman of the Board of Directors of Focus Universal.

Michael Pope was appointed as a director of the

Company on June 8, 2018.

Pope serves as the CEO and Chairman at Boxlight Corporation (Nasdaq:

BOXL), a global provider

of interactive technology solutions, where he has been an executive since July 2015 and director since September 2014.

has led Boxlight through nine acquisitions from 2016 to 2020, a Nasdaq IPO in November 2017, and over $100 million in debt and

equity fundraising.

He previously served as Managing Director at Vert Capital, a private equity and advisory firm from October

2011 to October 2016, managing portfolio holdings in the education, consumer products, technology and digital media sectors.

to joining Vert Capital, from May 2008 to October 2011, Mr.

Pope was Chief Financial Officer and Chief Operating Officer for the

Taylor Family in Salt Lake City, managing family investment holdings in consumer products, professional services, real estate and

Pope also held positions including senior SEC reporting at Omniture (previously listed on Nasdaq and acquired by

Adobe (Nasdaq:

BOXL), a global provider of interactive

technology solutions, where he has been an executive since July 2015 and director since September 2014.

Pope has led Boxlight through

nine acquisitions from 2016 to 2020, a Nasdaq IPO in November 2017, and over $100 million in debt and equity fundraising.

He previously

served as Managing Director at Vert Capital, a private equity and advisory firm from October 2011 to October 2016, managing portfolio

holdings in the education, consumer products, technology and digital media sectors.

Prior to joining Vert Capital, from May 2008 to October

Pope was Chief Financial Officer and Chief Operating Officer for the Taylor Family in Salt Lake City, managing family investment

holdings in consumer products, professional services, real estate and education.

Pope also held positions including senior SEC reporting

at Omniture (previously listed on Nasdaq and acquired by Adobe (Nasdaq:

ADBE) in 2009) and Assurance Associate at Grant Thornton.

Since January 2021, Mr.

Pope has served as a member of

the board of directors of Novo Integrated Sciences, Inc.

NVOS), a provider of multi-dimensional primary healthcare products

and services.

He holds an active CPA license and earned his undergraduate and graduate degrees in accounting from Brigham Young

January 2021, Mr.

Pope has served as a member of the board of directors of Novo Integrated Sciences, Inc.

NVOS), a provider of

multi-dimensional primary healthcare products and services.

He holds an active CPA license and earned his undergraduate and graduate degrees

in accounting from Brigham Young University.

Sheri Lofgren

Lofgren was appointed as an independent director of the Company on June 8, 2018.

Lofgren has served as a financial consultant

since March 2018.

She served as Chief Financial Officer for Boxlight Corporation (Nasdaq:

BOXL), a global education technology

provider, from September 2014 to March 2018.

She was Chief Financial Officer at Logical Choice Technologies, Inc., a distributor

of interactive technologies to the education market, from 2005 to 2013.

Lofgren is a Certified Public Accountant with extensive

experience in financial accounting and management, operational improvement, budgeting and cost control, cash management and treasury,

along with broad audit experience, internal control knowledge and internal and external reporting.

She started her career with

KPMG and then joined Tarica and Whittemore, an Atlanta based CPA firm, as an audit manager.

Lofgren is a graduate of Georgia

State University where she earned a B.A.

in Business Administration –

Sheri Lofgren was appointed as an independent

director of the Company on June 8, 2018.

Lofgren has served as a financial consultant since March 2018.

She served as Chief Financial

Officer for Boxlight Corporation (Nasdaq:

BOXL), a global education technology provider, from September 2014 to March 2018.

She was Chief

Financial Officer at Logical Choice Technologies, Inc., a distributor of interactive technologies to the education market, from 2005 to

Lofgren is a Certified Public Accountant with extensive experience in financial accounting and management, operational improvement,

budgeting and cost control, cash management and treasury, along with broad audit experience, internal control knowledge and internal and

external reporting.

She started her career with KPMG and then joined Tarica and Whittemore, an Atlanta based CPA firm, as an audit manager.

Lofgren is a graduate of Georgia State University where she earned a B.A.

in Business Administration – Accounting.

Greg Butterfield

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director of the Company on November 28, 2018.

Butterfield is the founder and Managing Partner of SageCreek Partners (“SCP”)

a technology commercialization and consulting firm.

Prior to starting SCP Mr.

Butterfield served as the CEO of Vivint Solar, a

leading full-service residential solar integrator.

Butterfield served as the CEO of Vivint Solar, a leading

full-service residential solar integrator.

Before Vivint, Mr.

Butterfield was the Group President for Symantec’s

Server and Storage business units.

Butterfield joined Symantec through the company’s acquisition of Altiris in April

At Altiris, he served as chairman of the board, President, and CEO starting in February 2000.

Butterfield is widely credited

as the driving force behind eleven acquisitions and navigated the company through a successful IPO in 2002 in spite of a notable

economic downturn in the technology sector.

Butterfield was the Group President for Symantec’s Server and Storage

business units.

Butterfield joined Symantec through the company’s acquisition of Altiris in April 2007.

At Altiris, he served

as chairman of the board, President, and CEO starting in February 2000.

Butterfield is widely credited as the driving force behind

eleven acquisitions and navigated the company through a successful IPO in 2002 in spite of a notable economic downturn in the technology

The IPO was followed in August of 2003 with a successful secondary offering.

was invited to the 2006 World Economic Forum as a Technology Pioneer.

He was also the winner of the 2002 Ernst and Young Entrepreneur

of the Year award and served as the chairman of the board of the Utah Information Technology Association from 2003 to 2005.

Butterfield received a Bachelor of Science in Business Administration (finance emphasis) from Brigham Young University.

Clark was appointed as an independent director of the Company on June 8, 2018.

Clark has served as president and CEO of four

high-growth tech companies.

Butterfield was invited to the 2006 World Economic

Forum as a Technology Pioneer.

He was also the winner of the 2002 Ernst and Young Entrepreneur of the Year award and served as the chairman

of the board of the Utah Information Technology Association from 2003 to 2005.

Butterfield received a Bachelor of Science in Business

Administration (finance emphasis) from Brigham Young University.

Carine Clark was appointed as an independent director

of the Company on June 8, 2018.

Clark has served as president and CEO of four high-growth tech companies.

In March 2019, Ms.

Clark was appointed to the board of directors of Domo, Inc.

is currently serving as a member of Domo’s compensation committee.

Since 2017 she has served as an Executive Board Member

of the Utah Governor’s Office of Economic Development and Silicon Slopes, a non-profit helping Utah’s tech community

was appointed to the board of directors of Domo, Inc.

DOMO) and is currently serving as a member of Domo’s compensation

Since 2017 she has served as an Executive Board Member of the Utah Governor’s Office of Economic Development and Silicon

Slopes, a non-profit helping Utah’s tech community thrive.

Prior to that, Ms.

Clark served from January 2015 to December 2016 as the President and CEO of MartizCX.

From December

2012 to December 2016, Ms.

Clark served from January 2015 to December 2016 as

the President and CEO of MartizCX.

From December 2012 to December 2016, Ms.

Clark served as the President and CEO of Allegiance, Inc.

Her reputation as a data-driven marketing

executive at Novell for 14 years, Altiris for five years, and Symantec for more than 10 years.

She has received numerous awards

including the EY Entrepreneur of The Year®

Award in the Utah Region and Utah Business Magazine’s CEO of the Year.

Clark earned a bachelor’s degree in organizational communications and an MBA from Brigham Young University.

Her reputation as a data-driven marketing executive at Novell for 14 years, Altiris for five years, and Symantec for more than 10 years.

She has received numerous awards including the EY Entrepreneur of The Year® Award in the Utah Region and Utah Business Magazine’s

CEO of the Year.

Clark earned a bachelor’s degree in organizational communications and an MBA from Brigham Young University.

Corporate Governance

Our Board of Directors currently consists

of seven members.

Our Board of Directors currently consists of seven

Our Chairperson of the Board of Directors is Dr.

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Desheng Wang and Dr.

Gu are the three members of our Board of Directors who are not independent directors.

Michael Pope, Sheri Lofgren, Greg Butterfield,

and Carine Clark are four members of our Board of Directors who are independent directors.

Jennifer Gu are the three

members of our Board of Directors who are not independent directors.

Michael Pope, Sheri Lofgren, Greg Butterfield, and Carine Clark are

four members of our Board of Directors who are independent directors.

Director Attendance at Meetings

Our Board of Directors conducts its business

through meetings, both in person and telephonic, and by actions taken by written consent in lieu of meetings.

During the year ended

December 31, 2020, our Board of Directors held four meetings.

All directors attended at least 75% of the meetings of our Board

of Directors and of the committees of our Board of Directors on which they served during 2020.

Our Board of Directors conducts its business through

meetings, both in person and telephonic, and by actions taken by written consent in lieu of meetings.

During the year ended December 31,

2021, our Board of Directors held four meetings.

All directors attended at least 75% of the meetings of our Board of Directors and of

the committees of our Board of Directors on which they served during 2021.

Our Board of Directors encourages all directors

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Committees of our Board of Directors

Our Board of Directors has established

and delegated certain responsibilities to its standing Audit Committee, Compensation Committee and Nominating and Corporate Governance

Our Board of Directors has established and delegated

certain responsibilities to its standing Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee.

Audit Committee

We have a separately designated standing

Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act.

The Audit Committee’s primary duties

and responsibilities include monitoring the integrity of our financial statements, monitoring the independence and performance

of our external auditors, and monitoring our compliance with applicable legal and regulatory requirements.

The functions of the

Audit Committee also include reviewing periodically with our independent registered public accounting firm the performance of the

services for which they are engaged, including reviewing the scope of the annual audit and its results, reviewing with management

and the auditors the adequacy of our internal accounting controls, reviewing with management and the auditors the financial results

prior to the filing of quarterly and annual reports, reviewing fees charged by our independent registered public accounting firm

and reviewing any transactions between our Company and related parties.

Our independent registered public accounting firm reports

directly and is accountable solely to the Audit Committee.

The Audit Committee has the sole authority to hire and fire the independent

registered public accounting firm and is responsible for the oversight of the performance of their duties, including ensuring the

independence of the independent registered public accounting firm.

The Audit Committee also approves in advance the retention of,

and all fees to be paid to, the independent registered public accounting firm.

The rendering of any auditing services and all non-auditing

services by the independent registered public accounting firm is subject to prior approval of the Audit Committee.

The Audit Committee operates under a written

The Audit Committee is required to be composed of directors who are independent under the rules of the SEC and the listing

standards of the NASDAQ Stock Market LLC (“NASDAQ”).

The current members of the Audit Committee

are directors Ms.

We have a separately designated standing Audit

Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act.

The Audit Committee’s primary duties and responsibilities

include monitoring the integrity of our financial statements, monitoring the independence and performance of our external auditors, and

monitoring our compliance with applicable legal and regulatory requirements.

The functions of the Audit Committee also include reviewing

periodically with our independent registered public accounting firm the performance of the services for which they are engaged, including

reviewing the scope of the annual audit and its results, reviewing with management and the auditors the adequacy of our internal accounting

controls, reviewing with management and the auditors the financial results prior to the filing of quarterly and annual reports, reviewing

fees charged by our independent registered public accounting firm and reviewing any transactions between our Company and related parties.

Our independent registered public accounting firm reports directly and is accountable solely to the Audit Committee.

The Audit Committee

has the sole authority to hire and fire the independent registered public accounting firm and is responsible for the oversight of the

performance of their duties, including ensuring the independence of the independent registered public accounting firm.

The Audit Committee

also approves in advance the retention of, and all fees to be paid to, the independent registered public accounting firm.

The rendering

of any auditing services and all non-auditing services by the independent registered public accounting firm is subject to prior approval

of the Audit Committee.

The Audit Committee operates under a written charter.

The Audit Committee is required to be composed of directors who are independent under the rules of the SEC and the listing standards of

The NASDAQ Stock Market LLC (“NASDAQ”).

The current members of the Audit Committee are

directors Ms.

Sheri Lofgren, the Chairperson of the Audit Committee, Mr.

Michael Pope and Mr.

Greg Butterfield, all of whom

have been determined by the Board of Directors to be independent under the NASDAQ listing standards and rules adopted by the SEC

applicable to audit committee members.

Greg Butterfield, all of whom have been

determined by the Board of Directors to be independent under the NASDAQ listing standards and rules adopted by the SEC applicable to audit

committee members.

The Board of Directors has determined that Mr.

Sheri Lofgren qualifies as an “audit

committee financial expert”

Sheri Lofgren qualifies as an “audit committee financial expert”

under the rules adopted by the SEC and the Sarbanes-Oxley Act.

The Audit Committee met four times

The Audit Committee met four times during 2021.

Compensation Committee

The primary duties and responsibilities

of our standing Compensation Committee are to review, modify and approve the overall compensation policies for the Company, including

the compensation of the Company’s Chief Executive Officer and other senior management;

establish and assess the adequacy

of director compensation;

and approve the adoption, amendment and termination of the Company’s stock option plans, pension

and profit-sharing plans, bonus plans and similar programs.

The Compensation Committee may delegate to one or more officers the

authority to make grants of options and restricted stock to eligible individuals other than officers and directors, subject to

certain limitations.

Additionally, the Compensation Committee has the authority to form subcommittees and to delegate authority

to any such subcommittee.

The Compensation Committee also has the authority, in its sole discretion, to select, retain and obtain,

at the expense of the Company, advice and assistance from internal or external legal, accounting or other advisors and consultants.

Moreover, the Compensation Committee has sole authority to retain and terminate any compensation consultant to assist in the evaluation

of director, Chief Executive Officer or senior executive compensation, including sole authority to approve such consultant’s

reasonable fees and other retention terms, all at the Company’s expense.

The Compensation Committee operates under

a written charter.

All members of the Compensation Committee must satisfy the independence requirements of NASDAQ applicable to

compensation committee members.

The primary duties and responsibilities of our

standing Compensation Committee are to review, modify and approve the overall compensation policies for the Company, including the compensation

of the Company’s Chief Executive Officer and other senior management;

establish and assess the adequacy of director compensation;

and approve the adoption, amendment and termination of the Company’s stock option plans, pension and profit-sharing plans, bonus

plans and similar programs.

The Compensation Committee may delegate to one or more officers the authority to make grants of options and

restricted stock to eligible individuals other than officers and directors, subject to certain limitations.

Additionally, the Compensation

Committee has the authority to form subcommittees and to delegate authority to any such subcommittee.

The Compensation Committee also

has the authority, in its sole discretion, to select, retain and obtain, at the expense of the Company, advice and assistance from internal

or external legal, accounting or other advisors and consultants.

Moreover, the Compensation Committee has sole authority to retain and

terminate any compensation consultant to assist in the evaluation of director, Chief Executive Officer or senior executive compensation,

including sole authority to approve such consultant’s reasonable fees and other retention terms, all at the Company’s expense.

The Compensation Committee operates under a written

All members of the Compensation Committee must satisfy the independence requirements of NASDAQ applicable to compensation committee

The Compensation Committee currently consists

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Sheri Lofgren.

Carine Clark is the Chairperson of the Compensation

Each of the Compensation Committee members has been determined by the Board of Directors to be independent under NASDAQ

listing standards applicable to compensation committee members.

Carine Clark is the Chairperson of the Compensation Committee.

Each of the Compensation Committee members has been determined by the Board of Directors to be independent under NASDAQ listing standards

applicable to compensation committee members.

The Compensation Committee met four times during 2021.

Nominating and Corporate Governance

The Nominating and Corporate Governance

Committee identifies, reviews and evaluates candidates to serve on the Board;

reviews and assesses the performance of the Board

of Directors and the committees of the Board;

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee

identifies, reviews and evaluates candidates to serve on the Board;

reviews and assesses the performance of the Board of Directors and

the committees of the Board;

and assesses the independence of our directors.

The Nominating and Corporate Governance

Committee is also responsible for reviewing the composition of the Board’s committees and making recommendations to the entire

Board of Directors regarding the chairpersonship and membership of each committee.

In addition, the Nominating and Corporate Governance

Committee is responsible for developing corporate governance principles and periodically reviewing and assessing such principles,

as well as periodically reviewing the Company’s policy statements to determine their adherence to the Company’s Code

of Business Conduct and Ethics.

The Nominating and Corporate Governance

Committee has adopted a charter that identifies the procedures whereby Board of Director candidates are identified primarily through

suggestions made by directors, management and stockholders of the Company.

We have implemented no material changes in the past

year to the procedures by which stockholders may recommend nominees for the Board.

The Nominating and Corporate Governance Committee is also

responsible for reviewing the composition of the Board’s committees and making recommendations to the entire Board of Directors

regarding the chairpersonship and membership of each committee.

In addition, the Nominating and Corporate Governance Committee is responsible

for developing corporate governance principles and periodically reviewing and assessing such principles, as well as periodically reviewing

the Company’s policy statements to determine their adherence to the Company’s Code of Business Conduct and Ethics.

The Nominating and Corporate Governance Committee

will consider director nominees recommended by stockholders that are submitted in writing to the Company’s Corporate Secretary

in a timely manner and which provide necessary biographical and business experience information regarding the nominee.

The Nominating

and Corporate Governance Committee does not intend to alter the manner in which it evaluates candidates, including the criteria

considered by the Nominating Committee, based on whether or not the candidate was recommended by a stockholder.

The Board of Directors

does not prescribe any minimum qualifications for director candidates, and all candidates for director will be evaluated based

on their qualifications, diversity, age, skill and such other factors as deemed appropriate by the Nominating and Corporate Governance

Committee given the current needs of the Board of Directors, the committees of the Board of Directors and the Company.

the Nominating and Corporate Governance Committee does not have a specific policy on diversity, it considers the criteria noted

above in selecting nominees for directors, including members from diverse backgrounds who combine a broad spectrum of experience

and expertise.

Absent other factors which may be material to its evaluation of a candidate, the Nominating and Corporate Governance

Committee expects to recommend to the Board of Directors for selection incumbent directors who express an interest in continuing

to serve on the Board.

Following its evaluation of a proposed director’s candidacy, the Nominating and Corporate Governance

Committee will make a recommendation as to whether the Board of Directors should nominate the proposed director candidate for election

by the stockholders of the Company.

The Nominating and Corporate Governance

Committee operates under a written charter.

No member of the Nominating and Corporate Governance Committee may be an employee of

the Company, and each member must satisfy the independence requirements of NASDAQ and the SEC.

The Nominating and Corporate Governance

Committee currently consists of directors Mr.

has adopted a charter that identifies the procedures whereby Board of Director candidates are identified primarily through suggestions

made by directors, management and stockholders of the Company.

We have implemented no material changes in the past year to the procedures

by which stockholders may recommend nominees for the Board.

The Nominating and Corporate Governance Committee will consider director nominees

recommended by stockholders that are submitted in writing to the Company’s Corporate Secretary in a timely manner and which provide

necessary biographical and business experience information regarding the nominee.

The Nominating and Corporate Governance Committee does

not intend to alter the manner in which it evaluates candidates, including the criteria considered by the Nominating Committee, based

on whether or not the candidate was recommended by a stockholder.

The Board of Directors does not prescribe any minimum qualifications

for director candidates, and all candidates for director will be evaluated based on their qualifications, diversity, age, skill and such

other factors as deemed appropriate by the Nominating and Corporate Governance Committee given the current needs of the Board of Directors,

the committees of the Board of Directors and the Company.

Although the Nominating and Corporate Governance Committee does not have a specific

policy on diversity, it considers the criteria noted above in selecting nominees for directors, including members from diverse backgrounds

who combine a broad spectrum of experience and expertise.

Absent other factors which may be material to its evaluation of a candidate,

the Nominating and Corporate Governance Committee expects to recommend to the Board of Directors for selection incumbent directors who

express an interest in continuing to serve on the Board.

Following its evaluation of a proposed director’s candidacy, the Nominating

and Corporate Governance Committee will make a recommendation as to whether the Board of Directors should nominate the proposed director

candidate for election by the stockholders of the Company.

The Nominating and Corporate Governance Committee

operates under a written charter.

No member of the Nominating and Corporate Governance Committee may be an employee of the Company, and

each member must satisfy the independence requirements of NASDAQ and the SEC.

The Nominating and Corporate Governance Committee

currently consists of directors Mr.

Greg Butterfield, who is the Chairperson of the committee, Mr.

1 unchanged sentence

Carine Clark.

Each of the members of the Nominating and Corporate Governance Committee has been determined by the Board of Directors

to be independent under NASDAQ listing standards.

Each of the members of the Nominating and Corporate Governance Committee has been determined by the Board of Directors to be independent

under NASDAQ listing standards.

The Nominating and Corporate Governance Committee met four times in 2021.

Oversight of Risk Management

Risk is inherent with every business, and

how well a business manages risk can ultimately determine its success.

We face a number of risks, including economic risks, financial

risks, legal and regulatory risks and others, such as the impact of competition.

Management is responsible for the day-to-day management

of the risks that we face, while our Board, as a whole and through its committees, has responsibility for the oversight of risk

In its risk oversight role, our Board of Directors is responsible for satisfying itself that the risk management processes

designed and implemented by management are adequate and functioning as designed.

Our Board of Directors assesses major risks facing

our Company and options for their mitigation in order to promote our stockholders’

interests in the long-term health of our

Company and our overall success and financial strength.

A fundamental part of risk management is not only understanding the risks

a company faces and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate

The involvement of our full Board of Directors in the risk oversight process allows our Board of Directors to assess management’s

appetite for risk and also determine what constitutes an appropriate level of risk for our Company.

Our Board of Directors regularly

includes agenda items at its meetings relating to its risk oversight role and meets with various members of management on a range

of topics, including corporate governance and regulatory obligations, operations and significant transactions, risk management,

insurance, pending and threatened litigation and significant commercial disputes.

While our Board of Directors is ultimately

responsible for risk oversight, various committees of our Board of Directors oversee risk management in their respective areas

and regularly report on their activities to our entire Board of Directors.

In particular, the Audit Committee has the primary responsibility

for the oversight of financial risks facing our Company.

The Audit Committee’s charter provides that it will discuss our

major financial risk exposures and the steps we have taken to monitor and control such exposures.

Our Board of Directors has also

delegated primary responsibility for the oversight of all executive compensation and our employee benefit programs to the Compensation

The Compensation Committee strives to create incentives that encourage a level of risk-taking behavior consistent with

our business strategy.

We believe the division of risk management

responsibilities described above is an effective approach for addressing the risks facing our Company and that our Board’s

leadership structure provides appropriate checks and balances against undue risk taking.

Risk is inherent with every business, and how

well a business manages risk can ultimately determine its success.

We face a number of risks, including economic risks, financial risks,

legal and regulatory risks and others, such as the impact of competition.

Management is responsible for the day-to-day management of the

risks that we face, while our Board, as a whole and through its committees, has responsibility for the oversight of risk management.

its risk oversight role, our Board of Directors is responsible for satisfying itself that the risk management processes designed and implemented

by management are adequate and functioning as designed.

Our Board of Directors assesses major risks facing our Company and options for

their mitigation in order to promote our stockholders’ interests in the long-term health of our Company and our overall success

and financial strength.

A fundamental part of risk management is not only understanding the risks a company faces and what steps management

is taking to manage those risks, but also understanding what level of risk is appropriate for us.

The involvement of our full Board of

Directors in the risk oversight process allows our Board of Directors to assess management’s appetite for risk and also determine

what constitutes an appropriate level of risk for our Company.

Our Board of Directors regularly includes agenda items at its meetings

relating to its risk oversight role and meets with various members of management on a range of topics, including corporate governance

and regulatory obligations, operations and significant transactions, risk management, insurance, pending and threatened litigation and

significant commercial disputes.

While our Board of Directors is ultimately responsible

for risk oversight, various committees of our Board of Directors oversee risk management in their respective areas and regularly report

on their activities to our entire Board of Directors.

In particular, the Audit Committee has the primary responsibility for the oversight

of financial risks facing our Company.

The Audit Committee’s charter provides that it will discuss our major financial risk exposures

and the steps we have taken to monitor and control such exposures.

Our Board of Directors has also delegated primary responsibility for

the oversight of all executive compensation and our employee benefit programs to the Compensation Committee.

The Compensation Committee

strives to create incentives that encourage a level of risk-taking behavior consistent with our business strategy.

We believe the division of risk management responsibilities

described above is an effective approach for addressing the risks facing our Company and that our Board’s leadership structure provides

appropriate checks and balances against undue risk taking.

Code of Business Conduct and Ethics

Our Board of Directors has adopted a code

of ethical conduct that applies to our principal executive officer, principal financial officer and senior financial management.

This code of ethical conduct is embodied within our Code of Business Conduct and Ethics, which applies to all persons associated

with our Company, including our directors, officers and employees (including our principal executive officer, principal financial

officer, principal accounting officer and controller).

In order to satisfy our disclosure requirements under Item 5.05 of Form

8-K, we will disclose amendments to, or waivers of, certain provisions of our Code of Business Conduct and Ethics relating to our

chief executive officer, chief financial officer, chief accounting officer, controller or persons performing similar functions

on our website promptly following the adoption of any such amendment or waiver.

The Code of Business Conduct and Ethics provides

that any waivers of, or changes to, the code that apply to the Company’s executive officers or directors may be made only

by the Audit Committee.

In addition, the Code of Business Conduct and Ethics includes updated procedures for non-executive officer

employees to seek waivers of the code.

Our Board of Directors has adopted a code of ethical

conduct that applies to our principal executive officer, principal financial officer and senior financial management.

This code of ethical

conduct is embodied within our Code of Business Conduct and Ethics, which applies to all persons associated with our Company, including

our directors, officers and employees (including our principal executive officer, principal financial officer, principal accounting officer

and controller).

In order to satisfy our disclosure requirements under Item 5.05 of Form 8-K, we will disclose amendments to, or waivers

of, certain provisions of our Code of Business Conduct and Ethics relating to our chief executive officer, chief financial officer, chief

accounting officer, controller or persons performing similar functions on our website promptly following the adoption of any such amendment

The Code of Business Conduct and Ethics provides that any waivers of, or changes to, the code that apply to the Company’s

executive officers or directors may be made only by the Audit Committee.

In addition, the Code of Business Conduct and Ethics includes

updated procedures for non-executive officer employees to seek waivers of the code.

Director Independence

Our Company is governed by our Board.

each member of our Board, other than Mr.

Edward Lee, Mr.

Desheng Wang, and Ms.

each member of our Board, other than Dr.

Edward Lee, Dr.

Desheng Wang, and Dr.

Jennifer Gu, is an independent director;

standing committees of our Board of Directors are composed entirely of independent directors, in each case under NASDAQ’s

independence definition applicable to boards of directors.

For a director to be considered independent, our Board of Directors

must determine that the director has no relationship which, in the opinion of our Board, would interfere with the exercise of independent

judgment in carrying out the responsibilities of a director.

Members of the Audit Committee also must satisfy a separate SEC independence

requirement, which provides that they may not accept directly or indirectly any consulting, advisory or other compensatory fee

from us or any of our subsidiaries other than their directors’

compensation.

In addition, under SEC rules, an Audit Committee

member who is an affiliate of the issuer (other than through service as a director) cannot be deemed to be independent.

In determining

the independence of members of the Compensation Committee, NASDAQ listing standards require our Board of Directors to consider

certain factors, including, but not limited to:

(1) the source of compensation of the director, including any consulting, advisory

or other compensatory fee paid by us to the director, and (2) whether the director is affiliated with us, one of our subsidiaries

or an affiliate of one of our subsidiaries.

Under our Compensation Committee Charter, members of the Compensation Committee also

must qualify as “outside directors”

for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended

(the “Code”), and as “non-employee directors”

for purposes of Rule 16b-3 under the Exchange Act.

The independent

members of the Board of Directors are Michael Pope, Sheri Lofgren, Greg Butterfield, and Carine Clark.

and all standing

committees of our Board of Directors are composed entirely of independent directors, in each case under NASDAQ’s independence definition

applicable to boards of directors.

For a director to be considered independent, our Board of Directors must determine that the director

has no relationship which, in the opinion of our Board, would interfere with the exercise of independent judgment in carrying out the

responsibilities of a director.

Members of the Audit Committee also must satisfy a separate SEC independence requirement, which provides

that they may not accept directly or indirectly any consulting, advisory or other compensatory fee from us or any of our subsidiaries

other than their directors’ compensation.

In addition, under SEC rules, an Audit Committee member who is an affiliate of the issuer

(other than through service as a director) cannot be deemed to be independent.

In determining the independence of members of the Compensation

Committee, NASDAQ listing standards require our Board of Directors to consider certain factors, including, but not limited to:

source of compensation of the director, including any consulting, advisory or other compensatory fee paid by us to the director, and (2)

whether the director is affiliated with us, one of our subsidiaries or an affiliate of one of our subsidiaries.

Under our Compensation

Committee Charter, members of the Compensation Committee also must qualify as “outside directors” for purposes of Section

162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and as “non-employee directors” for purposes

of Rule 16b-3 under the Exchange Act.

The independent members of the Board of Directors are Michael Pope, Sheri Lofgren, Greg Butterfield,

and Carine Clark.

EXECUTIVE COMPENSATION

Compensation of Officers

The following summary compensation table

sets forth information concerning compensation for services rendered in all capacities during 2020, and 2019 awarded to, earned

by or paid to our executive officers.

Compensation Table

The following summary compensation table sets

forth information concerning compensation for services rendered in all capacities during 2021, and 2020 awarded to, earned by or paid

to our executive officers.

Summary Compensation

Name and Principal

1 unchanged sentence

Non-Equity Incentive Plan Compensation

Change in Pension Value & Non-qualified Deferred

Compensation Earnings

President and Director

Change in Pension Value & Non-qualified Deferred Compensation Earnings

CEO, Secretary and Director

Chief Financial Officer

Narrative Disclosure Requirement for Summary Compensation

Edward Lee did not receive

compensation for service provided as President in 2019 (a position he resigned from on November 15, 2019).

into an employment agreement with the Company whereby the Company agreed to pay Dr.

Wang a salary of $121,154 per year,

payable monthly, for his services as Chief Executive Officer, effective as of November 1, 2018.

We have not provided our

other named executive officers with perquisites or other personal benefits.

As of the date of this prospectus, no other

officer or director has formally entered into any compensation arrangement for services provided under consulting agreements

or employment agreements.

Duncan Lee was hired in April 2018.

In 2019, Duncan Lee received $29,000 in compensation in 2019

Narrative Disclosure Requirement for Summary Compensation Table

Desheng Wang entered into an employment agreement

with the Company whereby the Company agreed to pay Dr.

Wang a salary of $124,615 per year, payable monthly, for his services as Chief

Executive Officer, effective as of November 1, 2018.

We have not provided our other named executive officers with perquisites or other

personal benefits.

Duncan Lee was hired in April 2018 to serve as Chief Financial Officer.

Lee received $22,100 in compensation in

2020 and $21,700 in 2021.

As of the date of this report, no other officer or director has formally entered into any compensation arrangement

for services provided under consulting agreements or employment agreements.

Retirement, Resignation or Termination Plans

We sponsor no plan, whether written or

verbal, that would provide compensation or benefits of any type to an executive upon retirement, or any plan that would provide

payment for retirement, resignation, or termination as a result of a change in control of our company or as a result of a change

in the responsibilities of an executive following a change in control of our company.

Directors’

The persons who served as affiliated members

of our Board of Directors, including executive officers, did not receive any compensation for services as directors in 2019 or

As of the date of this prospectus, no director has formally entered into any compensation arrangement for services provided

under consulting agreements or employment agreements.

As of the date of this annual report, all

directors have been issued 45,000 options per person pursuant to our 2018 Stock Option Plan and such options will vest over a period

In 2019 and 2020, all independent directors were paid $20,000 cash, except for Sheri Lofgren, who received $25,000

for serving as the chair of the audit committee.

We sponsor no plan, whether written or verbal,

that would provide compensation or benefits of any type to an executive upon retirement, or any plan that would provide payment for retirement,

resignation, or termination as a result of a change in control of our company or as a result of a change in the responsibilities of an

executive following a change in control of our company.

Directors’ Compensation

The persons who served as affiliated members of

our Board of Directors, including executive officers, did not receive any compensation for services as directors in 2020 or 2021.

the date of this report, no director has formally entered into any compensation arrangement for services provided under consulting agreements

or employment agreements.

As of the date of this annual report, all directors

have been issued 60,000 options per person pursuant to our 2018 Stock Option Plan and such options will vest over a period of one year.

In 2020 and 2021, all independent directors were paid $20,000 cash, except for Sheri Lofgren, who received $25,000 for serving as the

chair of the audit committee.

Additionally, a company affiliated with Mr.

Pope received $153,964 for advisory

services in 2019, which included $82,000 in cash and $71,964 in stock and $120,000 for advisory services in 2020, which included

$72,000 in cash and $48,000 in stock.

Pope received $120,000 for advisory services in 2020, which

included $72,000 in cash and $48,000 in stock, and $120,000 for advisory services in 2021, which included $72,000 in cash and $48,000

Option Exercises and Stock Vested

Previously, we did not have a stock option

plan in place;

therefore, there were no options issued, outstanding, exercised, or stock issued or vested as compensation during

the years ended December 31, 2020 and 2019.

On December 17, 2018, the Company adopted the 2018 Stock Option Plan (the “2018

Stock Option Plan”) whereby the Company reserved for issuance 1,000,000 shares of common stock and agreed that such shares

shall, when issued and paid for in accordance with the provisions of the 2018 Stock Option Plan, constitute validly issued, fully

paid and non-assessable shares of common stock.

On December 17, 2018, the Company adopted the

2018 Stock Option Plan (the “2018 Stock Option Plan”) whereby the Company reserved for issuance 1,000,000 shares of common

stock and agreed that such shares shall, when issued and paid for in accordance with the provisions of the 2018 Stock Option Plan, constitute

validly issued, fully paid and non-assessable shares of common stock.

Pension Benefits and Nonqualified Deferred Compensation

The Company does not maintain any qualified

retirement plans or non-nonqualified deferred compensation plans for its employees or directors.

Executive Officer Outstanding Equity Awards at Fiscal

The Company does not maintain any qualified retirement

plans or non-nonqualified deferred compensation plans for its employees or directors.

Executive Officer Outstanding Equity Awards at Fiscal Year-End

The following table provides certain information

concerning any common share purchase options, stock awards or equity incentive plan awards held by each of our named executive

officers that were outstanding as of December 31, 2020.

concerning any common share purchase options, stock awards or equity incentive plan awards held by each of our named executive officers

that were outstanding as of December 31, 2021.

Option Awards

Exercise Price

Unexercisable

Edward Lee - Chairman

August 6, 2029

Desheng Wang - CEO, Secretary

August 6, 2029

Duncan Lee - CFO

August 6, 2029

Sheri Lofgren

August 6, 2029

Greg Butterfield

August 6, 2029

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth certain information regarding

beneficial ownership of our common stock as of December 31, 2020:

SECURITY OWNERSHIP

OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth certain information

regarding beneficial ownership of our common stock as of December 31, 2021:

(i) by each of our directors, (ii) by each of the Named Executive

1 unchanged sentence

own more than five percent (5%) of any class of our outstanding shares.

As of December 31, 2020, there were 40,959,741 shares of

our common stock outstanding:

As of December 31, 2021, there were 26,294,129 shares of our common

stock outstanding:

Title of Class

4 unchanged sentences

Edward Lee, Chairman and Director jointly with Jennifer Gu, Director

(1) Applicable percentage of ownership

is based on 40,959,741 shares of common stock outstanding on December 31, 2020.

(2) Share held by company affiliated

Percentage ownership is determined based

on shares owned together with securities exercisable or convertible into shares of common stock within 60 days of December 31,

2020, for each stockholder.

Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting

or investment power with respect to securities.

Shares of common stock subject to securities exercisable or convertible into shares

of common stock that are currently exercisable or exercisable within 60 days of December 31, 2020, are deemed to be beneficially

owned by the person holding such securities for the purpose of computing the percentage of ownership of such person, but are not

treated as outstanding for the purpose of computing the percentage ownership of any other person.

Our common stock is our only

issued and outstanding class of securities eligible to vote.

(1) Applicable percentage of ownership is based

on 43,259,741 shares of common stock outstanding on December 31, 2021.

(2) Shares held by a company affiliated with Mr.

Percentage ownership is determined based on shares

owned together with securities exercisable or convertible into shares of common stock within 60 days of December 31, 2021, for each stockholder.

Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect

to securities.

Shares of common stock subject to securities exercisable or convertible into shares of common stock that are currently

exercisable or exercisable within 60 days of December 31, 2021, are deemed to be beneficially owned by the person holding such securities

for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing

the percentage ownership of any other person.

Our common stock is our only issued and outstanding class of securities eligible to vote.

As of December 31, 2021, there were 25,710,568

shares of common stock outstanding owned by our officers and directors.

CERTAIN RELATIONSHIPS AND RELATED

TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Consulting services provided by the President, Chief Executive

Officer, Secretary and Treasurer and Chief Financial Officer for the years ended December 31, 2020 and 2019 were as follows:

CERTAIN RELATIONSHIPS

AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Consulting services provided by the President,

Chief Executive Officer, Secretary, Treasurer and Chief Financial Officer for the years ended December 31, 2021 and 2020 were as follows:

Chief Executive Officer, Secretary and Treasurer

1 unchanged sentence

Advances to (from) related party

Revenue generated

from Vitashower Corp., a company owned by the CEO’s wife, amounted to $26,449 and $14,184 for the years ended

December 31, 2020 and 2019, respectively.

Account receivable balance due from Vitashower Corp.

amounted to $0 and $39,625 as of

December 31, 2019 and 2018, respectively.

Purchases generated from Vitashower Corp.

amounted to $11,371 and $0 for the years

ended December 31, 2020 and 2019, Respectively.

There were accounts payable balance $11,371 and $0 to Vitashower Corp.

as of December

31, 2020 and 2019, respectively.

Delinquent Section 16(a) Beneficial

Ownership Report

Section 16(a)

of the Exchange Act requires our directors, executive officers and persons who beneficially own more than ten percent (10%) of

a registered class of our equity securities to file reports of ownership and changes in ownership of our common stock and other

equity securities with the SEC on a timely basis.

The Company believes, based solely on a review of Section 16 reports filed with

the SEC and representations by the Company’s reporting persons that no other reports were required during the year ended

December 31, 2019, that all Section 16(a) filing requirements applicable to our executive officers, directors and greater than

ten percent (10%)_beneficial owners were timely filed during 2019 other than as follows:

on September 12, 2019, a late Form 3 was

filed for each of Mr.

Butterfield, Ms.

Lee to report their status as an executive

officer, director and/or ten percent (10%) beneficial owner;

on September 12, 2019, Mr.

filed a late Form 5 report for the year 2015 to report the common stock exchange on December 30, 2015 pursuant to the Perfecular

on September 12, 2019, Mr.

Wang, filed a late Form 5 report for the year

2018 to report his three purchases of Common Stock on July 5, 2018, July 10, 2018 and July 12, 2018;

on September 12, 2019, Mr.

Lee filed a late Form 5 for the year 2018 to report his purchase of Common Stock on June 29, 2018;

and on September 13,

2019, a late Form 3 was filed for Ms.

Lofgren to report her appointment as an independent director on June 8, 2018;

February 7, 2020, Mr.

Wang amended a Form 5 originally filed on September 12, 2019 for the year 2015 to report his five purchases

of Common Stock on March 31, 2015, June 12, 2015 and December 30, 2015.

On February 7, 2020, Mr.

Wang amended a Form 5 originally

filed on September 12, 2019 for the year 2018 to report two separate transactions on July 12, 2018 instead of one transaction for

the same number of shares of Common Stock on that date.

On February 7, 2020, Mr.

Wang filed a late Form 5 for the year 2017 reporting

his two purchases of Common Stock on September 28, 2017 and October 18, 2017.

To the best of

the Company’s knowledge, the rest of the Company’s Section 16 reports have been filed as of the date of this annual

Revenue generated from Vitashower Corp., a company

owned by the CEO’s wife, amounted to $29,084 and $26,449 for the year ended December 31, 2021 and 2020, respectively.

Account receivable

balance due from Vitashower Corp.

amounted to $15,176 and $0 as of December 31, 2021 and 2020, respectively.

Purchases generated from

Vitashower Corp.

amounted to $3,379 and $0 for the years ended December 31, 2021 and 2020, respectively.

There were accounts payable balances

of $0 and $17,371 due to Vitashower Corp.

as of December 31, 2021 and 2020, respectively.

Director Independence

2 unchanged sentences

Our director Edward Lee is also our Chairman;

Desheng Wang is also our Chief Executive Officer.

The rest of our directors are considered to be independent directors

ACCOUNTING FEES AND SERVICES

During the year ended March 31, 2015, 2014,

and the period from December 4, 2012 (Inception) to March 31, 2013, we engaged Cutler & Co, LLC, as our independent auditor.

On October 20, 2015, we changed our independent auditor to DYH & Company.

On April 16, 2017, we changed our independent auditor

to BF Borgers CPA PC.

our director Desheng

Wang is also our Chief Executive Officer.

The rest of our directors, excluding Jennifer Gu, are considered to be independent directors.

PRINCIPAL ACCOUNTING FEES AND SERVICES

During the year ended March 31, 2015, 2014, and

the period from December 4, 2012 (Inception) to March 31, 2013, we engaged Cutler & Co, LLC, as our independent auditor.

20, 2015, we changed our independent auditor to DYH & Company.

On April 16, 2017, we changed our independent auditor to BF Borgers

For the years ended December 31, 2021 and 2020, we incurred fees as discussed below:

Audit –

Audit – related fees

All other fees

1 unchanged sentence

services rendered in connection with the audit of our annual financial statements and review of our quarterly financial statements.

Tax fees represent fees related to preparation of our corporation income tax returns.

Our policy is to pre-approve all audit and

permissible non-audit services performed by the independent accountants.

These services may include audit services, audit-related

services, tax services and other services.

fees represent fees related to preparation of our corporation income tax returns.

Our policy is to pre-approve all audit and permissible

non-audit services performed by the independent accountants.

These services may include audit services, audit-related services, tax services

and other services.

EXHIBIT NUMBER

Articles of Incorporation.

Incorporated by reference to the Company’s Registration Statement on Form S-1 filed with the SEC on December 26, 2013.

Articles of Incorporation , as filed with the SEC on

December 26, 2013.

Amended and Restated Bylaws, as filed with the SEC on October 22, 2019.

Subscription Agreement.

Incorporated by reference to the Company’s Registration Statement on Form S-1 filed with the SEC on December 26, 2013.

Agreement, as filed with the SEC on December

Form of Stock Purchase Agreement, as filed with the SEC on March 18, 2019.

4 unchanged sentences

2018 Equity Incentive Plan, as filed with the SEC on December 28, 2018.

Promissory Note with Chase Bank, dated March 10, 2021 for $108,750 SBA Loan.

Note with Chase Bank, dated March 10, 2021 for $108,750 SBA Loan , as filed with the SEC on March 23, 2021.

Secured Promissory Note with East West Bank, dated January 8, 2021 for $1,500,000 ,

Loan Agreement with Golden Sunrise Investment LLC, dated March 15, 2021 for $1,500,000.

as filed with the SEC on March 23, 2021.

Loan Agreement with Golden Sunrise Investment LLC, dated March 15, 2021

for $1,500,000 , as filed with the SEC on March 23, 2021.

Company Guarantee Agreement with Golden Sunrise Investment LLC, dated March

15, 2021 , as filed with the SEC on March 23, 2021.

Secured Promissory Note with Golden Sunrise Investment LLC, dated March 15, 2021 for $1,500,000 ,

as filed with the SEC on March 23, 2021.

Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 .

2 unchanged sentences

Certification of the Chief Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 .

XBRL Instance Document **

XBRL Taxonomy Extension Schema Document **

XBRL Taxonomy Extension Calculation Linkbase Document **

XBRL Taxonomy Extension Definition Linkbase Document **

XBRL Taxonomy Extension Label Linkbase Document **

XBRL Taxonomy Extension Presentation Linkbase Document **

Inline XBRL Instance Document ( the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)**

Inline XBRL Taxonomy Extension Schema Document**

Inline XBRL Taxonomy Extension Calculation Linkbase Document**

Inline XBRL Taxonomy Extension Definition Linkbase Document **

Inline XBRL Taxonomy Extension Label Linkbase Document **

Inline XBRL Taxonomy Extension Presentation Linkbase Document **

Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith.

** XBRL (Extensible Business Reporting

Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11

or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act

of 1934, as amended, and otherwise is not subject to liability under these sections.

** XBRL (Extensible Business Reporting Language)

information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities

Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise

is not subject to liability under these sections.

FORM 10-K SUMMARY

Pursuant to the requirements of the Securities

Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly

Pursuant to the requirements of Section 13 or

15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,

thereunto duly authorized.

March 8, 2022

FOCUS UNIVERSAL INC.

/s/ Desheng Wang

Chief Executive Officer, Secretary, and Director

In accordance with the Exchange Act, this

report has been signed below by the following persons on behalf of Focus Universal Inc.

and in the capacities and on the dates

Pursuant to the requirements of the Securities

Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and

on the dates indicated.

/s/ Desheng Wang

1 unchanged sentence

March 8, 2022

Focus Universal Inc., a Nevada corporation

/s/ Desheng Wang

By Desheng Wang,

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-K

Item 9A. Controls and Procedures