What changed in this filing

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Item 1. Financial Statements

2023-11-17 compared with 2023-08-14 · 512 added, 317 removed, 764 unchanged (52% of the section changed)

3 unchanged sentences

Index to the Financial Statements

Condensed Consolidated Balance Sheets as of June 30, 2023 (unaudited) and December 31, 2022

Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2023 and 2022 (unaudited)

Condensed Consolidated Statements of Changes in Stockholder’s Equity for the Three and Six Months Ended June 30, 2023 and 2022 (unaudited)

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022 (unaudited)

Condensed Consolidated Balance Sheets as of September 30, 2023 (unaudited) and December 31, 2022

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2023 and 2022 (unaudited)

Condensed Consolidated Statements of Changes in Stockholder’s Equity for the Three and Nine Months Ended September 30, 2023 and 2022 (unaudited)

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022 (unaudited)

Notes to the Unaudited Condensed Consolidated Financial Statements

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

Current Assets:

1 unchanged sentence

Accounts receivable – related party

Other receivables

Prepaid expenses

6 unchanged sentences

Accounts payable and accrued liabilities

Related party loan

Treasury stock payable

9 unchanged sentences

Stockholders' Equity:

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

64,771,817 shares issued and outstanding as of June 30, 2023 and 65,296,383 shares issued and outstanding as of December 31, 2022

Treasury stock at cost ( 233,040 shares and 400,000 shares held at June 30, 2023 and December 31, 2022, respectively)

Common stock, par value $ 0.001 per

share, 75,000,000 shares authorized;

and 65,296,383

shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

Treasury stock at cost ( 1,183,040 shares and 400,000 shares held at September 30, 2023 and December 31, 2022, respectively)

( 2,000,000 )

11 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended

September 30,

Nine Months Ended

September 30,

Revenue - related party

12 unchanged sentences

( 4,103,175 )

( 3,129,209 )

Other Income (Expense):

9 unchanged sentences

( 3,872,247 )

( 2,132,409 )

( 2,930,227 )

Income tax expense

18 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS'

FOR THE THREE AND SIX MONTHS ENDED JUNE 30,

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2023 AND 2022

4 unchanged sentences

Total Stockholders’

Balance – March 31, 2023

Balance – June 30, 2023

$ ( 420,686 )

$ ( 19,996,437 )

Stock based compensation - options

Stock based compensation - shares

Purchase of treasury stock

Issued stock dividend

Amendment stock purchase agreement – treasury stock

Other comprehensive income

Balance – September 30, 2023

$ ( 385,686 )

2 unchanged sentences

$ ( 15,867,318 )

$ ( 19,996,437 )

Balance – March 31, 2022*

$ ( 14,806,021 )

Stock based compensation - options

Stock based compensation - shares

Common stock to be issued for service

Purchase of treasury stock

( 2,000,000 )

Other comprehensive income

( 2,000,000 )

Other comprehensive income

Balance – September 30, 2022*

$ ( 2,000,000 )

Balance – June 30, 2022

$ ( 16,809,338 )

FOCUS UNIVERSAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS'

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2023 AND 2022

Treasury Stock

12 unchanged sentences

( 1,999,400 )

Amendment stock purchase agreement – treasury stock

Other comprehensive income

2 unchanged sentences

( 3,100,442 )

Balance – June 30, 2023

Balance – September 30, 2023

$ ( 385,686 )

4 unchanged sentences

Stock based compensation - shares

Common stock to be issued for service

Purchase of treasury stock

( 2,000,000 )

Common stock issued for this period service

Common stock issued for prior period service

Common stock issued for cashless exercise of warrants

( 1,776,044 )

Other comprehensive income

1 unchanged sentence

( 3,872,247 )

Balance – June 30, 2022*

Balance – September 30, 2022*

$ ( 2,000,000 )

$ ( 16,809,338 )

*Retroactively applied to the stock split

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Ended June 30,

Ended September 30,

Cash flows from operating activities:

6 unchanged sentences

Amortization of intangible assets

Unrealized (gain) loss on marketable equity

Realized (gain) loss on marketable equity

Unrealized (gain) loss on marketable equity securities

Realized loss on marketable equity securities

SBA loan forgiveness

1 unchanged sentence

Stock-based compensation – shares

Stock option compensation – options

Stock-based compensation – options

Changes in operating assets and liabilities:

1 unchanged sentence

Accounts receivable - related party

Other receivable

Other receivables

Prepaid expenses

10 unchanged sentences

Purchase of marketable securities

Proceeds from sale of marketable securities

Proceeds from sale of marketable

Net cash flows provided by (used in) investing activities

Cash flows from financing activities:

Proceeds from related party loan

Purchase of treasury stock

1 unchanged sentence

Net cash flows used in financing activities

( 1,420,686 )

Effect of exchange rate

7 unchanged sentences

Cash paid for interest

Supplemental disclosure for noncash financing activities:

Right-of-use assets obtained in exchange for operating

lease liabilities

Supplemental disclosure for noncash investing and financing activities:

Right-of-use assets obtained

in exchange for operating lease liabilities

Treasury stock payable

Cashless exercise of options

The accompanying notes are an integral part

2 unchanged sentences

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

FOR THE THREE AND SIX MONTHS ENDED JUNE 30,

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2023 AND 2022

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AVX also markets and sells our IoT Products, such as high end LED, live wall panel products and cameras, under the Smart AVX name.

set up a branch in Shenzhen China, Focus Shenzhen, to be engaged in IoT research and development, equipment sales, application services,

and software development and sales, amongst other activities.

On December 23, 2021, Focus Shenzhen was founded

as a mainland China office for manufacturing procurement expertise and support research and development activities.

Focus Shenzhen is

designed to function as a branch office accessing high level ability to source products and build relationships with manufacturers in

the region and as a lower cost form of support research and development as engineers are more plentiful in the region.

During the third

quarter of 2023, this office has continued to grow and increase its headcount to 28 employees.

Employees of Focus Shenzhen are added to

the engineering staff, the sales staff, and the marketing and market analysis staff in house to enhance the internal capabilities of the

As of January 6, 2023, AT Tech Systems is a subsidiary

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and wholesalers, and provides clients with integrated network, security, and multimedia design solutions and technology systems.

has completed integration throughout its existing businesses, including key employees serving dual roles with its subsidiaries.

Anthony Tejeda serves as the Company’s director of installation services, as the vice president of operations of AVX, and as

chief operating officer of AT Tech Systems.

The Company has completed integration throughout

its existing businesses, including key employees serving dual roles with its subsidiaries.

For example, Mr.

Anthony Tejeda serves as the

Company’s director of installation services, as the vice president of operations of AVX, and as chief operating officer of AT Tech

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated

financial statements include the accounts of Focus and its wholly-owned subsidiaries, Perfecular, AVX, Focus Shenzhen, Lusher and AT Tech

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

All intercompany balances

and transactions have been eliminated upon consolidation.

The Company’s unaudited condensed consolidated financial statements have

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

The accompanying unaudited condensed

consolidated financial statements include the accounts of Focus and its wholly-owned subsidiaries, Perfecular, AVX, Focus Shenzhen,

Lusher and AT Tech Systems (collectively, the “Company,” “we,” “our,” or “us”).

intercompany balances and transactions have been eliminated upon consolidation.

The Company’s unaudited condensed consolidated

financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America

Segment Reporting

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the Company’s subsidiaries that spread across all functional categories and research and development of technology products.

Perfecular, AVX (doing business as Smart AVX) and Lusher jointly operate the “IoT Products” segment, which involves the

wholesale, marketing, and production of our universal smart instruments and devices in the hydroponic and controlled agriculture segments

and of our smart products into the commercial and home automation sectors.

And third, AVX (exclusive of the smart IoT Products sales under

Smart AVX) and AT Tech Systems cooperatively run our “IoT Installation Services” segment, which handles our IoT installation

and management business specializing in high performance and easy to use audio/video systems, home theaters, lighting control, automation,

and integration.

Perfecular, AVX (doing business as and branded under Smart AVX) and Lusher jointly operate the “IoT Products” segment, which

involves the wholesale, marketing, and production of our universal smart instruments and devices in the hydroponic and controlled agriculture

segments and of our smart products into the commercial and home automation sectors.

And third, AVX (exclusive of the smart IoT Products

sales under Smart AVX) and AT Tech Systems cooperatively run our “IoT Installation Services” segment, which handles our IoT

installation and management business specializing in high performance and easy to use audio/video systems, home theaters, lighting control,

automation, and integration.

Use of Estimates

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

The actual results experienced by the Company

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

To the extent there are material differences between the estimates

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

Significant estimates in the accompanying financial statements

include the lease term impacting right-of-use asset with the estimate discount rate and lease liability, useful lives of property and

equipment, useful lives of intangible assets, allowance for doubtful accounts, inventory reserves, and the valuation allowance on deferred

The Company regularly evaluates its estimates and assumptions.

The actual results experienced by the

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

To the extent there are material differences between

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

Significant estimates in the accompanying

financial statements include the lease term impacting right-of-use asset with the estimate discount rate and lease liability, useful

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

option valuation, share-based compensation, fair value of warrants, and the valuation allowance on deferred tax assets.

regularly evaluates its estimates and assumptions.

The Company considers all highly liquid investments

2 unchanged sentences

(FDIC) insurance limits.

As of June 30, 2023 and December 31, 2022, respectively, approximately $ 781,867 and $ 3,120,763 of the Company’s

As of September 30, 2023 and December 31, 2022, respectively, approximately $ 616,174 and $ 3,120,763 of the Company’s

cash was not insured by the FDIC.

There were no cash equivalents held by the Company as of either June 30, 2023 or December 31, 2022.

There were no cash equivalents held by the Company as of either September 30, 2023 or December 31, 2022.

Accounts Receivable

9 unchanged sentences

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

As of June 30, 2023 and December 31, 2022, allowance

for doubtful accounts amounted to $ 227,647 and $ 222,972 , respectively.

As of September 30, 2023 and December 31, 2022,

allowance for doubtful accounts amounted to $ 229,843 and $ 222,972 , respectively.

Concentrations of Credit Risk

35 unchanged sentences

Long-Lived Assets

The Company applies the provisions of Financial Accounting

Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 360, Property, Plant, and Equipment,

which addresses financial accounting and reporting for the impairment or disposal of long-lived assets.

ASC 360 requires impairment losses

to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated

to be generated by those assets are less than the assets’ carrying amounts.

In that event, a loss is recognized based on the amount

by which the carrying value exceeds the fair value of the long-lived assets.

Loss on long-lived assets to be disposed of is determined

in a similar manner, except that those fair values are reduced for the cost of disposal.

Long-term assets of the Company are reviewed

when circumstances warrant as to whether their carrying value has become impaired.

The Company considers assets to be impaired if the

carrying value exceeds the future projected cash flows from related operations.

The Company applies the provisions of Financial

Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 360, Property, Plant, and

Equipment, which addresses financial accounting and reporting for the impairment or disposal of long-lived assets.

ASC 360 requires impairment

losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows

estimated to be generated by those assets are less than the assets’ carrying amounts.

In that event, a loss is recognized based

on the amount by which the carrying value exceeds the fair value of the long-lived assets.

Loss on long-lived assets to be disposed of

is determined in a similar manner, except that those fair values are reduced for the cost of disposal.

Long-term assets of the Company

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

The Company considers assets to be impaired

if the carrying value exceeds the future projected cash flows from related operations.

The Company also re-evaluates the periods of amortization

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

Based on its review at June 30, 2023

Based on its review at September 30,

2023 and December 31, 2022, the Company believes there was no impairment of its long-lived assets.

Intangible Assets

The Company’s intangible assets were acquired

from AT Tech Systems due to customer relationships using the multi-period excess earnings method.

These intangible assets were valued

based on the AT Tech Systems business acquisition.

The value is based on the assessed income expected to be generated from the existing

customer list, namely the carry-over of the existing contracts after a careful evaluation of the customer list.

Amortization on the intangible

assets was computed by the percentage completed for these existing assets and fully amortized as of June 30, 2023.

The Company’s intangible assets were

acquired from AT Tech Systems due to customer relationships using the multi-period excess earnings method.

These intangible assets

were valued based on the AT Tech Systems business acquisition during January 2023.

The value is based on the assessed income expected to

be generated from the existing customer list, namely the carry-over of the existing contracts after a careful evaluation of the

customer list.

Amortization on the intangible assets was computed by the percentage completed for these existing assets and fully

amortized as of September 30, 2023.

Treasury stock

39 unchanged sentences

of warrants utilizing the Black-Scholes pricing model.

The Company does no t have any outstanding warrants as of June 30, 2023 and December

31, 2022, respectively.

The Company does no t have any outstanding warrants as of September 30, 2023 and

December 31, 2022, respectively.

Stock Dividends

29 unchanged sentences

The following table summarize financial assets

and liabilities measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022:

and liabilities measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022:

Schedule of fair value assets and liabilities measured on recurring basis

June 30, 2023 (unaudited)

September 30, 2023 (unaudited)

Marketable securities:

3 unchanged sentences

Total assets measured at fair value

The carrying amount of the Company’s financial

assets and liabilities, such as cash, accounts receivable, inventory, other receivables, prepaid expenses, deposit, accounts payable,

treasury stock payable and accrued expenses, other current liabilities, customer deposit, approximate their fair value because of the

short maturity of those instruments.

The carrying amount of the Company’s

financial assets and liabilities, such as cash, accounts receivable, inventory, other receivables, prepaid expenses, deposits,

accounts payable, treasury stock payable and accrued expenses, other current liabilities, and customer deposits, approximate their

fair value because of the short maturity of those instruments.

Transactions involving related parties cannot

9 unchanged sentences

The Company’s other comprehensive

loss for the six months ended June 30, 2023 and for the year ended December 31, 2022 was comprised of foreign currency translation adjustments.

loss for the nine months ended September 30, 2023 and for the year ended December 31, 2022 was comprised of foreign currency translation

Revenue Recognition

2 unchanged sentences

The core principle of ASC

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

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

The Company’s updated

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

The impact of adopting

ASC 606 was not material to the unaudited condensed consolidated financial statements.

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

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

The Company’s

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

of adopting ASC 606 was not material to the unaudited condensed consolidated financial statements.

Revenue from the Company is recognized under ASC

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The disclosures shall include:

(a) the nature

of the relationship(s) involved;

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

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

of the effects of the transactions on the unaudited condensed consolidated financial statements;

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

from that used in the preceding period;

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

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

nature of the relationship(s) involved;

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

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

to an understanding of the effects of the transactions on the unaudited condensed consolidated financial statements;

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

the terms from that used in the preceding period;

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

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

Commitments and Contingencies

52 unchanged sentences

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

There were no material deferred tax assets or liabilities as of June 30, 2023 and December 31, 2022.

As of June 30, 2023 and December 31, 2022, the

Company did no t identify any material uncertain tax positions.

There were no material deferred tax assets or liabilities as of September 30, 2023 and December 31, 2022.

As of September 30, 2023 and December 31, 2022,

the Company did no t identify any material uncertain tax positions.

Basic and Diluted Net Income (Loss) Per Share

12 unchanged sentences

Schedule of anti dilutive shares

Six Months Ended June 30,

Nine Months Ended September 30,

Stock options

While the EPS treatment was applied in Q2 ended

June 30, 2032, the adjustment is also retroactive accordingly.

While the EPS treatment was applied in the quarter

ended September 30, 2023, and a fifty percent stock dividend adjustment on March 23, 2023 is also retroactive accordingly.

Reclassification

7 unchanged sentences

The functional currency of Focus Shenzhen is the renminbi (RMB).

For financial reporting purposes, the financial

statements of Focus Shenzhen, which are prepared using the RMB, are translated into the USD.

Assets and liabilities are translated using

the exchange rate on the balance sheet date.

Revenue and expenses are translated using average exchange rates prevailing during each reporting

For financial reporting purposes, the

financial statements of Focus Shenzhen, which are prepared using the RMB, are translated into the USD.

Assets and liabilities are

translated using the exchange rate on the balance sheet date.

Revenue and expenses are translated using average exchange rates

prevailing during each reporting period.

Stockholders’ equity is translated at historical exchange rates.

Adjustments resulting from the translation are recorded

as a separate component of accumulated other comprehensive loss in stockholders’ equity.

resulting from the translation are recorded as a separate component of accumulated other comprehensive loss in stockholders’

Transactions denominated in currencies other than

4 unchanged sentences

Schedule of intercompany foreign currency balances

Average Rate for the Six Months Ended

Average Rate for the Nine Months Ended

September 30,

China Yuan (RMB)

1 unchanged sentence

Exchange Rate at

June 30, 2023

September 30, 2023

December 31, 2022

2 unchanged sentences

Going Concern

In August 2014, the FASB issued ASC 2014-15, Disclosure

of Uncertainties about an Entity’s Ability to Continue as a Going Concern.

The Company has assessed its ability to continue as a

15 unchanged sentences

The Company has a net loss of $ 3,100,442

and $ 2,930,227 for the six months ended

June 30, 2023 and 2022, respectively.

and $ 3,872,247 for the

nine months ended September 30, 2023 and 2022, respectively.

In addition, the Company had an accumulated deficit of $ 20,964,470

and $ 17,864,028 as of June 30,

2023 and December 31, 2022, respectively, and negative cash flow from operating activities of $1,606,739 and $1,749,492 for the six

months ended June 30, 2023 and 2022, respectively.

These factors raise substantial doubt about the Company’s ability to

continue as a going concern.

The Company’s ability to continue as a going concern is dependent on its ability to raise

additional capital.

The Company’s consolidated financial statements do not include any adjustments relating to the

recoverability and classification of reported asset amounts or the amount and classification of liabilities that might be necessary

should the Company be unable to continue as a going concern.

The Company is operating on a going concern basis as of June 30,

and $ 17,864,028

as of September 30, 2023 and December 31, 2022, respectively, and negative cash flow from operating activities of $ 2,603,545

and $ 2,435,157

for the nine months ended September 30, 2023 and 2022, respectively.

As noted above, the Company’s ability to continue as a

going concern is dependent on its ability to raise additional capital.

The Company’s consolidated financial statements do not

include any adjustments relating to the recoverability and classification of reported asset amounts or the amount and classification

of liabilities that might be necessary should the Company be unable to continue as a going concern.

Note 3 – Recent Accounting Pronouncement

In June 2016, the FASB issued ASU No.

In June 2016, the FASB issued Accounting

Standards Update (“ASU”) No.

2016-13, (Topic 326), Financial Instruments – Credit Losses:

Measurement of Credit Losses on Financial

Instruments which amends the current accounting guidance and requires the use of the new forward-looking “expected loss” model,

rather than the “incurred loss” model, which requires all expected losses to be determined based on historical experience,

current conditions and reasonable and supportable forecasts.

This guidance amends the accounting for credit losses for most financial

assets and certain other instruments including trade and other receivables, held-to-maturity debt securities, loans and other instruments.

Measurement of Credit Losses on

Financial Instruments which amends the current accounting guidance and requires the use of the new forward-looking “expected

loss” model, rather than the “incurred loss” model, which requires all expected losses to be determined based on

historical experience, current conditions and reasonable and supportable forecasts.

This guidance amends the accounting for credit

losses for most financial assets and certain other instruments including trade and other receivables, held-to-maturity debt

securities, loans and other instruments.

In November 2019, the FASB issued ASU No.

2019-10 to postpone the effective date of ASU No.

2016-13 for public business entities eligible

to be smaller reporting companies defined by the Securities and Exchange Commission to fiscal years beginning after December 15, 2022,

including interim periods within those fiscal years.

The Company believes the adoption of ASU No.

2016-13 will not have a material impact

on its financial position and results of operations.

2016-13 for public business entities eligible to be smaller reporting companies defined by the Securities and Exchange Commission to

fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

The Company believes the

adoption of ASU No.

2016-13 will not have a material impact on its financial position and results of operations.

Management does not believe that any recently

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Note 4 – Inventory

At June 30, 2023 and December 31, 2022, inventory

At September 30, 2023 and December 31, 2022, inventory

consisted of the following:

Schedule of inventory

June 30, 2023

September 30, 2023

December 31, 2022

1 unchanged sentence

Note 5 – Deposits

deposits balance as of June 30, 2023 amounted to $ 23,545

for lease agreement and utility deposits and third-party payroll service deposits.

The deposits balance as of September 30, 2023

amounted to $ 23,420 for lease agreement and utility deposits and third-party payroll service deposits.

The deposits balance as of December

amounted to $ 33,264

for lease agreement and utility deposits.

31, 2022 amounted to $ 33,264 for lease agreement and utility deposits.

Note 6 – Property and Equipment

As of June 30, 2023 and December 31, 2022, property and equipment consisted

of the following:

As of September 30, 2023 and December 31, 2022, property and equipment

consisted of the following:

Schedule of property and equipment

June 30, 2023

September 30, 2023

December 31, 2022

3 unchanged sentences

Property and equipment, net

Depreciation expense for the three months ended June 30, 2023 and 2022

amounted to $42,209 and $41,898, respectively.

Depreciation expense for the six months ended

June 30, 2023 and 2022 amounted to $ 84,616 and $ 82,063 , respectively.

Depreciation expense for the three months ended

September 30, 2023 and 2022 amounted to $ 43,723

and $ 41,845 , respectively.

Depreciation expense

for the nine months ended September 30, 2023 and 2022 amounted to $ 127,171

and $ 123,908 , respectively.

Note 7 – Intangible Assets, Net

The following table presents the intangible assets balances as of

June 30, 2023 and December 31, 2022:

The following table presents the intangible assets balances as of September

30, 2023 and December 31, 2022:

Schedule of intangible assets

June 30, 2023

September 30, 2023

December 31, 2022

Customer Relationship

Customer Relationships

Less accumulated amortization

2 unchanged sentences

Revenue generated from Vitashower Corp., a company

owned by the Chief Executive Officer’s wife, amounted to $ 0 and $ 33,820 for the six months ended June 30, 2023 and 2022, respectively.

owned by the Chief Executive Officer’s wife, amounted to $ 0 and $ 33,820 for the nine months ended September 30, 2023 and 2022, respectively.

The accounts receivable balance due from Vitashower Corp.

amounted to $ 0 and $ 34,507 as of June 30, 2023 and December 31, 2022, respectively.

amounted to $ 0 and $ 34,507 as of September 30, 2023 and December 31, 2022, respectively.

Note 9 – Related Party Loan

On August 3, 2023, the Company submitted a written

consent, and the Board approved a loan amount from $1 million to $5 million.

On September 7, 2023, the Company entered into a loan agreement

with Golden Sunrise Investment LLC in the amount of $ 1,000,000 .

This loan is secured against the Company’s property, which serves as collateral, with a net book value of $4.5 million pledged.

At the time of entering the loan agreement, Golden Sunrise Investment LLC was owned by two of the Company’s shareholders who collectively

owned approximately 19 %

of the Company’s outstanding shares.

The loan has an annual interest rate of 12 %

and the principal amount has a due date of September

The interest expense amount was $ 8,333

for the nine months ended September 30, 2023.

accrued interest as of September 30, 2023 and the total principal outstanding loan amount was $ 1,000,000

as of September 30, 2023.

As a note, the interest rate increases to 15% as of the due date of loan on any unpaid principal balance

Note 10 – Business Concentration and Risks

Major customers

Two customers accounted for 32 % of the total accounts

receivable as of June 30, 2023 and four customers accounted for 11 % of the total accounts receivable as of December 31, 2022.

Two customers

accounted for 37 % of the total revenue for the six months ended June 30, 2023 and three customers accounted for 54 % of total revenue for

the six months ended June 30, 2022.

One customer accounted for 46 % of the total accounts

receivable as of September 30, 2023 and four customers accounted for 11 % of the total accounts receivable as of December 31, 2022.

customer accounted for 30 % of the total revenue for the nine months ended September 30, 2023, and three customers accounted for 43 % of

total revenue for the nine months ended September 30, 2022.

Major vendors

No major vendor accounted more than 10 % of total

purchases during the six months ended June 30, 2023.

One vendor, Tianjin Guanglee, accounted for 0 % of total accounts payable at June

and this vendor accounted for 24 % of total purchases during the six months ended June 30, 2022.

Of subsequent note, Tianjin

Guanglee was once owned by the Chief Executive Officer, as fully disclosed in our annual report in 2017.

In 2018, the Chief Executive

Officer transferred ownership of the entity to an unrelated third party in a transaction not considered a related party transaction per

the relevant guidelines.

purchases during the nine months ended September 30, 2023, One vendor, Tianjin Guanglee, accounted for 0 % of total accounts payable at

September 30, 2022;

and this vendor accounted for 24 % of total purchases during the nine months ended September 30, 2022.

Of subsequent

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

In 2018, the Chief

Executive Officer transferred ownership of the entity to an unrelated third party in a transaction not considered a related party transaction

per the relevant guidelines.

Note 11 – Lease

The Company recorded its operating lease expense

of $ 81,069 and $ 237,045 for the six months ended June 30, 2023 and 2022, respectively.

of $ 104,156 and $ 280,311 for the nine months ended September 30, 2023 and 2022, respectively.

This is included in general and administrative

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a thirty-eight month commercial lease with a third party for an approximately 5,895 square foot office space.

The lease commenced on December

25, 2021 and was scheduled to end on February 28, 2025.

The monthly rent was RMB70,097 (approximately $9,663) with approximately an 11.1%

to 12.5% increase rate in each additional year.

The incremental borrowing rate for a lease is the rate of interest the Company would have

to pay on a collateralized basis to borrow an amount equal to the lease payments for the asset under similar terms, which is 10%.

expense for this lease is recognized on a straight-line basis over the lease term.

The lease commenced on

December 25, 2021 and was scheduled to end on February 28, 2025.

The monthly rent was RMB70,097 (approximately $9,610) with approximately

an 11.1% to 12.5% increase rate in each additional year.

The incremental borrowing rate for a lease is the rate of interest the Company

would have to pay on a collateralized basis to borrow an amount equal to the lease payments for the asset under similar terms, which

Lease expense for this lease is recognized on a straight-line basis over the lease term.

This lease was terminated on February

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to make lease payments arising from the lease.

As of June 30, 2023 and December 31, 2022, operating lease right-of-use assets and lease

liabilities were as follows:

As of September 30, 2023 and December 31, 2022, operating lease right-of-use assets and

lease liabilities were as follows:

Schedule of operating right-of-use asset and liability

June 30, 2023

September 30, 2023

December 31, 2022

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Lease term and discount rate:

Schedule of lease term and discount

June 30, 2023

Schedule of lease term and discount rate

September 30, 2023

December 31, 2022

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The minimum future lease payments are as follows:

Schedule of maturity of lease liabilities

Schedule of maturity of lease payments

Year ending December 31, 2023

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

On March 23, 2023, the Company issued a

fifty percent (50%) stock dividend of the Company’s common stock to its shareholders for a stock dividend of one share of

common stock for every two shares of common stock held.

During the six months ended June 30, 2023, the

Company issued 75,434 shares of common stock.

On January 17, 2023, the Company retired 600,000

shares obtained pursuant to a prior stock repurchase agreement as announced in a current report on October 7, 2022.

On March 23, 2023, the Company issued a fifty

percent (50%) stock dividend of the Company’s common stock to its shareholders for a stock dividend of one share of common stock

for every two shares of common stock held.

During the nine months ended September 30,

2023, the Company issued 75,434

shares of common stock, not including the abovementioned stock dividend.

On January 17, 2023, the Company retired the 400,000 shares

(representing 600,000 shares of common stock after a fifty percent stock dividend adjustment on March 23, 2023, and then valued at

$ 2,000,000 .

The value of $1,965,000 was determined several months later for a total of 1.3 million shares) obtained pursuant to a prior stock

repurchase agreement as announced in a current report on October 7, 2022.

On February 13, 2023, the Company issued 62,250

shares to employees based on their Restricted Stock Award Agreements (see Employee compensation ).

shares (for consideration of $ 184,979 ,

based on their share price on grant date of $4.03 and $4.27) to employees based on their Restricted Stock Award Agreements (see Employee

stock-based compensation below).

On February 21, 2023, the Company issued 10,857

shares to one of the prior board members who exercised his options with cashless exercise.

shares (for consideration of $ 41,401 ,

based on their share price on grant date of $5.72) to a prior board member who exercised his options with cashless

On April 3, 2023, the Company issued 2,327 shares

to round up the stock dividend effective on March 23, 2023.

During the six months ended June 30, 2022, the

Company issued 230,664 shares of common stock.

During the nine months ended September 30, 2022,

the Company issued 403,761 shares of common stock.

On April 4, 2022, the Company issued 181,723 shares

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common stock on the dates that the shares were deemed earned, according to the terms of the related agreements.

As of June 30, 2023 and December 31, 2022, the

Company had 64,771,817 shares and 65,296,383 shares of common stock issued and outstanding, respectively.

On August 17, 2022, the Company issued 82,347

shares to two board members who exercised their options.

The board members exercised a combined 107,500

options, and the shares were valued at $ 652,501

upon the cashless exercise option of the options.

On August 22, 2022, the Company issued 90,750

shares (for consideration of $ 642,789 ,

based on their share price on grant date of $7.44) to employees based on the Restricted Stock Award Agreement (see Employee

stock-based compensation ).

As of September 30, 2023 and December 31, 2022,

the Company had 64,771,817 shares and 65,296,383 shares of common stock issued and outstanding, respectively.

Treasury stock

On August 10, 2022, the Company entered a stock

purchase agreement (the “Stock Purchase Agreement”) with a private shareholder to repurchase 400,000 shares of its common

stock for $2,000,000.

The private shareholder transferred the shares on October 4, 2022, forming a binding agreement, which the Company

placed in treasury;

On August 10, 2022, the Company entered a

stock purchase agreement (the “Stock Purchase Agreement”) with a private shareholder to repurchase 400,000 shares

(600,000 shares after a fifty percent stock dividend adjustment on March 23, 2023) of its common stock for $2,000,000.

private shareholder transferred the shares on October 4, 2022, forming a binding agreement, which the Company placed in treasury;

and on October 6, 2022, the Company wired the first $1,000,000 of the purchase price.

Subsequently, on July 14, 2023,

the Company entered into an amendment to the Stock Purchase Agreement that increased the number of shares of its common stock the Company

would purchase to 1,300,000 shares and revised the total purchase price of the shares to $1,965,000 (See Note 14).

The remaining $965,000

was paid on July 14, 2023.

Upon receipt of the additional 900,000 shares, the Company also placed them in treasury.

As of January 17,

2023, the Company retired the initial 400,000 shares and restored them to the status of authorized and unissued shares.

Subsequently, on July 14, 2023, the Company

entered into an amendment to the Stock Purchase Agreement that increased the number of shares of its common stock the Company would

purchase to 1,300,000 shares

and revised the total purchase price of the shares to $ 1,965,000 .

The remaining $ 965,000 was

paid on July 14, 2023.

Upon receipt of the additional 900,000 shares,

the Company also placed them in treasury.

As of January 17, 2023, the Company retired the initial 400,000 shares

(600,000 shares after a fifty percent stock dividend adjustment on March 23, 2023) and restored them to the status of authorized and unissued shares.

As part of the Company’s repurchase

program, during the six months ended June 30, 2023 the Company repurchased 233,040

program, during the nine months ended September 30, 2023 the Company repurchased 233,040

shares of its common stock for $ 420,686

and placed them in treasury.

As of June 30, 2023 and December 31, 2022,

the Company had 233,040 and 400,000 treasury

shares, respectively.

The intention of the Company is to retire the additional 900,000 shares obtained pursuant to the amendment to

the Stock Purchase Agreement along with the 233,040 shares repurchased during the six months ended June 30, 2023.

Employee stock-based

the six months ended June 30, 2023, the Company entered into employment contracts with three employees of

its engineering staff.

These employment contracts contained provisions for a total bonus of restricted stock grants valued at $ 50,000

based on the share price upon the date of completion of the performance metrics described in the employment

The fair value of the above employee compensation was

as of June 30, 2023.

On February 11, 2022 (the “Vesting Date”),

the Company entered into a restricted stock award agreement (the “Award Agreement”) with eight employees for 280,000 shares

of the Company’s common stock subject to the terms and to the fulfillment of the conditions set forth in the Company’s equity

incentive plan.

in the public market at average price of $1.80 and placed them in treasury.

As of September 30, 2023 and December 31,

2022, the Company had 1,183,040

treasury shares, respectively.

The intention of the Company is to retire the additional 900,000 shares obtained pursuant to the

amendment to the Stock Purchase Agreement along with the additional 233,040 shares repurchased during the nine months ended

September 30, 2023.

Employee stock-based compensation

During the nine months ended September 30, 2023,

the Company entered into employment contracts with three employees of its engineering staff.

These employment contracts contained provisions

for a total bonus of restricted stock grants valued at $ 50,000

based on the share price upon the date of completion of the performance metrics described in the employment contracts.

value of the above employee compensation was $ 16,250

(approximately 9,931

shares) as of September 30, 2023.

On February 11, 2022 (the “Vesting

Date”), the Company entered into a restricted stock award agreement (the “Award Agreement”) with eight employees

for 280,000 shares of the Company’s common stock subject to the terms and to the fulfillment of the conditions set forth in

the Company’s equity incentive plan.

The first 20% of the restricted shares were granted and vested on February 11, 2022.

An additional 20% of the restricted

shares will vest on each anniversary of the Vesting Date until the fourth anniversary of the Vesting Date.

There were 41,500 shares granted

as of February 13, 2023.

The fair value of the above employee compensation was $ 136,904 as of June 30, 2023.

additional 20% of the restricted shares will vest on each anniversary of the Vesting Date until the fourth anniversary of

the Vesting Date.

There were 51,000

shares granted as of February 13, 2023.

The fair value of the above employee compensation was $ 136,904

as of September 30, 2023.

In November 2021, the Company entered into a one-year

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quarter certain performance metrics are achieved.

In November 2022, the Company entered into an amendment agreement to amend the performance

metrics and extend the term.

As of June 30, 2023, 5,000 shares have vested.

The share price will be determined based on the closing price as of the last day of

each quarter.

Pursuant to the terms of the employment agreement, if the Company determined it was satisfied with the performance of the

VP, his position would be promoted to Chief Financial Officer after the one-year anniversary.

In November 2022, the Company entered into

an amendment agreement to amend the performance metrics and extend the term.

As of September 30, 2023, 7,500 shares have vested, collectively

valued at $14,925.

In October 2022, the Company entered into an employee

agreement with the CFO of the Company, pursuant to which the Company awarded a 10,000-share bonus consisting of shares of the Company’s

agreement with the VP of the Company, pursuant to which the Company awarded a 10,000-share bonus consisting of shares of the Company’s

common stock, which will be granted in blocks of 2,500 shares every quarter.

As of June 30, 2023, 5,000 shares have vested.

During the six months ended June 30, 2023

and 2022, the total employee stock-based compensation amount for all employees in the company, was $ 168,304

and $ 692,920 ,

respectively.

As of September 30, 2023, 7,500 shares have vested, collectively valued at $ 14,925 .

During the nine months ended September 30, 2023

and 2022, the total employee stock-based compensation amount for all employees in the company, was $ 183,004 and $ 671,901 , respectively.

Stock options

7 unchanged sentences

was granted 22,500 options to purchase shares at $ 4.27 per share.

As of June 30, 2023, there were 615,061

options granted, 457,934

options vested and exercisable, 78,316

options unvested, and 536,249

outstanding stock options.

For the six months ended June 30, 2023 and 2022,

As of September 30, 2023, there were 615,063 options

granted, 497,092 options vested and exercisable, 39,158 options unvested, and 536,249 outstanding stock options.

For the nine months ended September 30, 2023 and

2022, the Company’s stock option compensation expenses amounted to $ 400,208 and $ 652,501 , respectively.

1 unchanged sentence

was determined using the Black-Scholes option pricing model with the following assumptions:

Schedule of fair value of stock option activity

Schedule of fair value of the stock options activity

December 31, 2022

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The following is a summary of the option activity

from December 31, 2022 to June 30, 2023:

Schedule of options activity

from December 31, 2022 to September 30, 2023:

Schedule of option activity

Number of Options

Weighted average exercise price

2 unchanged sentences

Outstanding at December 31, 2022

Vested at December 31, 2022

Exercisable at December 31, 2022

Forfeited or expired

Outstanding at June 30, 2023

Vested as of June 30, 2023

Exercisable at June 30, 2023

Outstanding at September 30, 2023

Vested as of September 30, 2023

Exercisable at September 30, 2023

Note 13 – Commitments and Contingencies

In the normal course of business or otherwise,

the Company may become involved in legal proceedings.

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

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

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

probable amount in the range is accrued.

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

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

There were no recorded litigation loss contingencies

as of September 30, 2023 and December 31, 2022.

Note 14 – Segment Reporting

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the Company’s subsidiaries that spread across all functional categories and research and development of technology products.

Perfecular, AVX (doing business as Smart AVX) and Lusher jointly operate the “IoT Products” segment, which involves the

wholesale, marketing, and production of our universal smart instruments and devices in the hydroponic and controlled agriculture segments

and of our smart instruments into the commercial and home automation sectors.

And third, AVX (exclusive of the smart IoT Products sales

under Smart AVX) and AT Tech Systems cooperatively run our “IoT Installation Services” segment, which handles our IoT installation

Perfecular, AVX (doing business as Smart AVX) and Lusher jointly operate the “IoT Products” segment, which involves the wholesale,

marketing, and production of our universal smart instruments and devices in the hydroponic and controlled agriculture segments and of

our smart instruments into the commercial and home automation sectors.

And third, AVX (exclusive of the smart IoT Products sales under

Smart AVX) and AT Tech Systems cooperatively run our “IoT Installation Services” segment, which handles our IoT installation

and management business specializing in high performance and easy to use audio/video systems, home theaters, lighting control, automation,

and integration.

Segment Reporting

Six Months Ended June 30, 2023

The following tables summarize the performance

of each operating segment of the Company for the three months ended September 30, 2023 and the performance of the IoT Installation Service

segment broken out between its residential and commercial services for the same period:

Schedules of segment reporting

Three Months Ended September 30, 2023

IoT Installation

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General and administrative

Total Cost and Operating Expenses

Loss from Operations

Total Operating Expenses

Income (loss) from Operations

( 1,070,935 )

2 unchanged sentences

Interest income (expense), net

Gain on bargain purchase

Unrealized loss on marketable equity securities

Realized income on marketable equity securities

Rental income

Other income (expense), net

Total other income (expense)

Income (loss) before income taxes

( 1,005,806 )

Net Income (Loss)

$ ( 1,005,806 )

$ ( 968,033 )

Three Months Ended September 30, 2023

Total IoT Installation

Revenue – related party

Total revenue

Cost of revenue

Operating Expenses

Selling expense

General and administrative

Total Operating Expenses

Income (loss) from Operations

Other Income (Expense):

Interest income (expense), net

Other income (expense), net

Total other income (expense)

Income (loss) before income taxes

Net Income (Loss)

The following tables summarize the performance

of each operating segment of the Company for the three months ended September 30, 2022 and the performance of the IoT Installation Service

segment broken out between its residential and commercial services for the same period:

Three Months Ended September 30, 2022

IoT Installation

Revenue – related party

Total revenue

Cost of revenue

Operating Expenses

Selling expense

Compensation – officers and directors

Research and development

Professional fees

General and administrative

Total Operating Expenses

Loss from Operations

Other Income (Expense):

Interest income (expense), net

Unrealized income on marketable equity securities

Realized loss on marketable equity securities

6 unchanged sentences

$ ( 942,020 )

Three Months Ended September 30, 2022

Total IoT Installation

Revenue – related party

Total revenue

Cost of revenue

Operating Expenses

Selling expense

General and administrative

Total Operating Expenses

Loss from Operations

Other Income (Expense):

Interest income (expense), net

Other income (expense), net

Total other income (expense)

Loss before income taxes

The following tables summarize the performance

of each operating segment of the Company for the nine months ended September 30, 2023 and the performance of the IoT Installation Service

segment broken out between its residential and commercial services for the same period:

Nine Months Ended September 30, 2023

IoT Installation

Revenue – related party

Total revenue

Cost of revenue

Operating Expenses

Selling expense

Compensation – officers and directors

Research and development

Professional fees

General and administrative

Total Operating Expenses

Income (loss) from Operations

( 3,361,649 )

Six Months Ended June 30, 2022

( 3,342,759 )

Other Income (Expense):

Interest income (expense), net

Gain on bargain purchase

Unrealized income on marketable equity securities

Realized loss on marketable equity securities

Rental income

Other income (expense), net

Total other income (expense)

Income (loss) before income taxes

( 3,115,037 )

( 3,100,442 )

Net Income (loss)

$ ( 3,115,037 )

$ ( 3,100,442 )

Nine Months Ended September 30, 2023

IoT Installation

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General and administrative

Total Cost and Operating Expenses

Loss from Operations

Total Operating Expenses

Income (loss) from Operations

Other Income (Expense):

Interest income (expense), net

Other income (expense), net

Total other income (expense)

Income (loss) before income taxes

Net Income (loss)

The following tables summarize the performance of each operating segment

of the Company for the nine months ended September 30, 2022 and the performance of the IoT Installation Service segment broken out between

its residential and commercial services for the same period:

Nine Months Ended September 30, 2022

IoT Installation

Revenue – related party

Total revenue

Cost of revenue

Operating Expenses

Selling expense

Compensation – officers and directors

Research and development

Professional fees

General and administrative

Total Operating Expenses

Income (loss) from Operations

( 3,939,923 )

8 unchanged sentences

Total other income (expense)

Loss before income taxes

Income (loss) before income taxes

( 3,702,521 )

( 3,872,247 )

Net Income (loss)

$ ( 3,702,521 )

1 unchanged sentence

$ ( 3,872,247 )

Nine Months Ended September 30, 2022

Total IoT Installation

Revenue – related party

Total revenue

Cost of revenue

Operating Expenses

Selling expense

General and administrative

Total Operating Expenses

Loss from Operations

Other Income (Expense):

Interest income (expense), net

Other income (expense), net

Total other income (expense)

Loss before income taxes

$ ( 177,930 )

The following table summarizes the total assets

of each operating segment of the Company as of September 30, 2023:

Schedule of segment assets

September 30, 2023

IoT Installation

The following table summarizes the total assets

of each operating segment of the Company as of December 31, 2022:

December 31, 2022

IoT Installation

Note 15 – Business Combination

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business combination of AT Tech Systems for a purchase price of $1 in cash.

The Company’s intangible assets were acquired from AT

Tech Systems due to customer relationships using the multi-period excess earnings method.

Amortization on the intangible assets was fully

amortized during the six months ended June 30, 2023.

A bargain purchase gain is recognized when the net assets acquired in a business

combination have a higher fair value than the consideration paid.

The result of AT Tech Systems’ operations has been included in

the condensed consolidated financial statement since that date.

The Company’s intangible assets were acquired from

AT Tech Systems due to customer relationships using the multi-period excess earnings method.

Amortization on the intangible assets was

fully amortized during the nine months ended September 30, 2023.

A bargain purchase gain is recognized when the net assets acquired in

a business combination have a higher fair value than the consideration paid.

The result of AT Tech Systems’ operations has been

included in the condensed consolidated financial statement since that date.

The following table summarizes the purchase consideration

and fair value of the assets acquired and liabilities assumed as of January 6, 2023:

Fair value of assets acquired and liabilities assumed

Schedule of fair value of the assets acquired and liabilities assumed

Accounts receivable

6 unchanged sentences

As a result of above information that existed

as of the combination date, the Company recorded a bargain purchase gain of $61,747 during the six months ended June 30, 2023.

as of the combination date, the Company recorded a bargain purchase gain of $ 61,747 during the nine months ended September 30, 2023.

The excess of the aggregate net fair value of

6 unchanged sentences

Note 16– Subsequent Events

As described in Note 11 above, on July 14, 2023, the

Company entered into an amendment to that certain previous stock purchase agreement wherein the Company agreed to purchase 400,000 shares

of its common stock from a single private, non-affiliate for a total purchase price of $2,000,000.

The private shareholder transferred

the 400,000 shares on October 4, 2022, forming a binding agreement;

and on October 6, 2022, the Company wired the first $1,000,000 of

the purchase price.

While a check for the second $1,000,000 of the purchase price was issued and paid on March 31, 2023, the matter was

kept open and direct discussion between the shareholder and the Company continued.

As the stock market and the Company share prices continued

to fluctuate due to both general market conditions and Company-specific conditions at that point in time, the transaction was not fully

completed during the six-month period ended June 30, 2023.

Both parties mutually agreed that in fairness to the Company’s shareholders

and to benefit the long-term goals of the Company in a number of market-related areas, that an amendment should be negotiated to facilitate

growth for the Company in good faith.

As a result of these negotiations, the amendment increased the number of shares of its common stock

the Company would purchase from two private, non-affiliate shareholders to an aggregate 1,300,000 shares, inclusive of the initial 400,000

shares, and revised the total purchase price of the shares down to an aggregate $1,965,000.

The Company has evaluated all subsequent events

through the date these unaudited condensed consolidated financial statements were issued and determined that there were no other subsequent

through the date these unaudited condensed consolidated financial statements were issued and determined that there were no subsequent

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

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

What changed 10-Q

Item 1. Financial Statements