What changed in this filing

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Item 9A. Controls and Procedures

2023-03-31 compared with 2022-03-08 · 140 added, 119 removed, 507 unchanged (34% of the section changed)

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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 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;

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Not applicable.

DIRECTORS, EXECUTIVE

OFFICERS AND CORPORATE GOVERNANCE

DIRECTORS, EXECUTIVE OFFICERS AND

CORPORATE GOVERNANCE

The following table presents information with respect to our officers,

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Chief Executive Officer, Secretary, and Director

Duncan Lee***

Irving Kau******

Chief Financial Officer

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Carine Clark****

Greg Butterfield*****

Sean Warren*****

* Appointed director on October 21, 2015

** Appointed director on December 29, 2014

*** Appointed officer on April 2, 2018

**** Appointed director on June 8, 2018

***** Appointed director on November 28, 2018

***** Appointed director on August 10, 2022

****** Appointed officer on November 18, 2022

(1) Independent director

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

Duncan Lee was appointed as CFO on April 2, 2018.

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.

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.

Irving Kau was appointed as Chief Financial Officer

on November 18, 2022, prior to that he served as Focus Universal’s Vice President of Finance and Head of Investor Relations since

November 10, 2021.

Prior to joining the Company, Mr.

Kau served as a Managing Partner of both Elementz Ventures and KW Capital Partners,

and during his tenure he successfully invested and grew companies across various geographies.

The Company expects that as CFO, Mr.

will assist with many matters in the near future, including building up the Company’s internal businesses, processes and controls,

the Company’s external outreach and growth measures, as well as strengthen the Company’s financial reporting and the investor

Prior to his work at Elementz Ventures and KW Capital Partners, Mr.

Kau served as the head of Asia at GHS (now known as Seaport

Kau also previously served for approximately 10 years as Chief Financial Officer of an AgBiotech company Origin Agritech

Limited (Nasdaq:

During his tenure, shareholders included Wellington Management, Fidelity Investments, Citadel Investments, Heartland

Fund, Mitsubishi UFJ, amongst others.

Kau received undergraduate degrees from Johns Hopkins University and a graduate degree from

Rice University and pursued a PhD degree in Business Strategy (economics) at USC.

Jennifer Gu was appointed as a director on

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in Business Administration – Accounting.

Greg Butterfield

Greg Butterfield was appointed as an independent

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.

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 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.

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.

Sean Warren is a seasoned executive with over

25 years of experience in technology and enterprise technology systems.

He brings a wealth of expertise with strengths in areas such as

software development, cloud management, enterprise infrastructure development and full spectrum of IT compliance.

Sean has been the CIO

of Mountain Medical, Veyo Medical and VP of IT at Larry Miller.

He has worked for technology companies as Omniture, Adobe and served as

the director of cloud operations at Domo from 2016 to 2018.

From 2019-2021, Mr.

Warren served as the VP of OPSA Change Advisory at Wells

Fargo, and since 2021 to the present works as the VP of Global Platform Services at Cotiviti where he manages over 1,000 employees globally

in four countries.

Sean is fluent in Spanish and graduated from Florida State University in accounting.

Warren previously served on

our board of directors from June 2018 to November 28, 2018.

Carine Clark was appointed as an independent director

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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.

Michael Pope, Sheri Lofgren, Sean Warren, and Carine Clark are four

members of our Board of Directors who are independent directors.

Director Attendance at Meetings

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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.

Sean Warren, 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

The Board of Directors has determined that Mr.

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Carine Clark, Mr.

Greg Butterfield, and Mr.

Sean Warren, and Mr.

Sheri Lofgren.

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currently consists of directors Mr.

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

Sean Warren, who is the Chairperson of the committee, Mr.

Michael Pope and Ms.

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.

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.

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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.

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

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

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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.

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.

Director Independence

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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.

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

our executive officers.

Summary Compensation

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Option Awards

Non-Equity Incentive Plan Compensation

Change in Pension Value & Non-qualified Deferred Compensation Earnings

Non-Equity Incentive

Plan Compensation

Change in Pension

Value & Non-qualified Deferred Compensation Earnings

CEO, Secretary and Director

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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.

Irving Kau was appointed as the Company’s Chief Financial Officer on November 18, 2022.

Kau has executed

and employment agreement with the Company, dated November 3, 2021, for the provision of services as VP of Finance.

Kau’s employment

agreement included a salary and certain equity incentive.

Kau would receive up to 10,000 shares of the Company’s common stock

per year, vesting in 4 installments of 2,500 shares at the end of each calendar quarter, provided that certain metrics are achieved.

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

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have been issued 15,000 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.

In 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.

In 2022, all independent directors were paid $30,000 cash, except for Sheri Lofgren, Gregory Butterfield, and Sean

Sheri Lofgren received $32,500 for serving as the chair of the audit committee.

Gregory Butterfield and Sean Warren received $10,000

and $15,699, respectively, for serving independent board director.

Additionally, a company affiliated with Mr.

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

Pope received $120,000

for advisory services in 2021, which included $72,000 in cash and $48,000 in stock and $20,000 for advisory services in 2022, which included

$12,000 in cash and $8,000 in stock.

Option Exercises and Stock Vested

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that were outstanding as of December 31, 2022.

Option Awards

Incentive Plan

Exercise Price

Incentive Plan

Shares, Units

That Have Not

Unexercisable

1 unchanged sentence

Desheng Wang - CEO, Secretary

Duncan Lee - CFO

Irving Kau - CFO

Sheri Lofgren

Greg Butterfield

SECURITY OWNERSHIP

OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL

OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth certain information

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

Sheri Lofgren

(1) Applicable percentage of ownership is based

on 43,530,915 shares of common stock outstanding on December 31, 2022.

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

Percentage ownership is determined based on shares

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

CERTAIN RELATIONSHIPS

AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

CERTAIN RELATIONSHIPS AND RELATED

TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Consulting services provided by the President,

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Chief Financial Officer

Advances to (from) related party

Related party Transactions

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.

owned by the Chief Executive Officer’s wife, amounted to $41,536 and $29,084 for the year ended December 31, 2022 and 2021, respectively.

Account receivable balance due from Vitashower Corp.

amounted to $34,507 and $15,176 as of December 31, 2022 and 2021, 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.

Service revenue generated from the installation of

home security equipment by AVX for one of the Company’s directors, amounted to $8,246 and $0 for the year ended December 31, 2022

and 2021, respectively.

Compensation for services provided by the President

and Chief Executive Officer for the year ended December 31, 2022 and 2021 amounted to $141,020 and $124,615, respectively.

Of subsequent

note, Tianjin Guanglee was once owned by the Chief Executive Officer Desheng Wang, as fully disclosed in the annual report in 2017.

then, during 2018, the entity was transferred to another individual and was not considered a related party transaction per guidelines.

Director Independence

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Wang is also our Chief Executive Officer.

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

The rest of our directors, excluding Jennifer Gu, are 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.

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

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

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

PC (the “Former Auditor”).

On January 19, 2023, the Company notified the Former

Auditor that the Company is dismissing it as the independent registered public accounting firm of the Company due to partner and personnel

movement from the Former Auditor to the Company’s New Auditor.

On the same day, the Company engaged Reliant CPA PC (the “New

Auditor”) as its independent PCAOB registered public accounting firm for the Company’s fiscal year ended December 31, 2022.

For the years ended December 31, 2022 and 2021, we

incurred fees as discussed below:

Audit – related fees

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

Agreement, as filed with the SEC on December

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

Form of Secured Promissory Note, as filed with the SEC on March 18, 2019.

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

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

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

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

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as filed with the SEC on March 23, 2021.

Employment Agreement by and between the Company and Irving Kau, dated November 3, 2021.

Amendment to I.

Kau Employment Agreement, dated November 21, 2022.

At the Market Sales Agreement, dated December 9, 2022, with Sutter Securities, as filed with the SEC on December 12, 2022.

Asset Purchase Agreement, dated December 19, 2022 with AT Tech Systems.

Articles of Organization of Lusher Bioscientific, LLC.

Bylaws of Lusher Bioscientific *

Articles of Organization of AT Tech Systems, LLC.

Operating Agreement of AT Tech Systems, LLC.

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.

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* 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

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FOCUS UNIVERSAL INC.

/s/ Desheng Wang

Chief Executive Officer, Secretary, and Director

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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