What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-08-12 compared with 2025-05-07 · 291 added, 155 removed, 290 unchanged (61% of the section changed)

MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN

MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF

The following discussion of our financial condition

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Focus Universal Inc.

(the “Company,”

“we,” “us,” or “our”) is a Nevada corporation.

We believe we have developed five proprietary technologies

utilizing our patent portfolio which we believe solve the most fundamental problems plaguing the internet of things (“IoT”)

industry through:

(the “Company,” “we,”

“us,” or “our”) is a Nevada corporation.

We believe we have developed five proprietary technologies utilizing

our patent portfolio which we believe solve the most fundamental problems plaguing the internet of things (“IoT”) industry

(1) increasing overall chip integration by shifting integration from the component level to the device level;

a faster 5G cellular technology by using ultra-narrowband technology;

(2) creating a

faster 5G cellular technology by using ultra-narrowband technology;

(3) leveraging ultra-narrowband power line communication (“PLC”)

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to public in 2025.

Our securities are currently traded on Nasdaq

Capital Market effective as of September 23, 2024.

Our securities are currently traded on Nasdaq Capital

Market effective as of September 23, 2024.

Our Current Products Include:

We are a wholesaler of various digital, analog,

and quantum light meters and filtration products, including fan speed adjusters, carbon filters and HEPA filtration systems.

We are a wholesaler of various digital, analog, and

quantum light meters and filtration products, including fan speed adjusters, carbon filters and HEPA filtration systems.

Ubiquitor Wireless Universal Sensor Device

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the ability to connect potentially thousands of different sensors or probes, addressing major limitations present in traditional instrumentation

On July 11 2025, Focus Universal signed a contract

with Shenzhen Donghui Precision Mold Manufacturing Co., and commenced the mold tooling design for the Universal Smart Internet of Things

This milestone enabled full-scale production and commercialization for the IoT platform which had been developed under the Focus

Universal name for many years.

Additional Focus Universal Inc.

under Smart AVX.

IoT Products under

Focus Universal Inc.

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Lusher Corporate Services, One Touch Financial

Financial reporting is the annual and

quarterly reporting process by which a public company keeps investors aware of a company’s financial condition, allowing them to

have the information they need before making an investment decision.

Because of the depth and nature of the

information they contain, reports on Forms 10-K and 10-Q can become time-consuming, especially given the complex processes that require

a company’s internal teams to gather large amounts of data across multiple sources.

The time and expertise required to complete

the process is a substantial burden.

Financial reporting is the annual and quarterly reporting

process by which a public company keeps investors aware of a company’s financial condition, allowing them to have the information

they need before making an investment decision.

Because of the depth and nature of the information

they contain, reports on Forms 10-K and 10-Q can become time-consuming, especially given the complex processes that require a company’s

internal teams to gather large amounts of data across multiple sources.

The time and expertise required to complete the process is a substantial

SEC reporting deadlines are firm and inflexible.

Delays and mistakes in SEC financial

reporting can have far-reaching consequences for companies and their shareholders including.

Delays and mistakes in SEC financial reporting can

have far-reaching consequences for companies and their shareholders including.

SEC review, enforcement actions, and penalties.

Late, inaccurate, or incomplete filings can often lead to a drop in the company’s stock price and a decrease in investor confidence.

Human data entry of hundreds or thousands

of financial numbers in the financial report imposes another challenge and presented by regularly occurring human error.

compounded by a frequent requirement to update or revise these hundreds or thousands of numbers during the time-constrained review processes

and auditing processes prior to submission.

Given the complexity and volume of data

involved, companies are looking for solutions that not only save cost, and reduce the time and effort required to report in a timely manner

but also improve accuracy and compliance.

Late, inaccurate,

or incomplete filings can often lead to a drop in the company’s stock price and a decrease in investor confidence.

Human data entry of hundreds or thousands of financial

numbers in the financial report imposes another challenge and regularly occurring human errors.

This risk is compounded by a frequent

requirement to update or revise these hundreds or thousands of numbers during the time-constrained review processes and auditing processes

prior to submission.

Given the complexity and volume of data involved,

companies are looking for solutions that not only save cost, and reduce the time and effort required to report in a timely manner but

also improve accuracy and compliance.

Focus is scheduled begin customer testing of their

fully automated SEC financial reporting software.

The Company plans to launch a technology roadshow to showcase this groundbreaking platform.

Interested clients, partners, corporate filers, and investors are welcome to contact Focus Universal Inc for meetings and product demonstrations.

SEC financial reporting is traditionally a complex,

costly, and time-consuming process.

· Preparing consolidated financial statements,

· Drafting SEC reports using various office software

and / or burdensome company-wide systems,

· Converting those documents into fully SEC-compliant

· Embedding tags as required for regulatory filing.

For large organizations, this process can take thousands

of person days.

For small public companies, the entire process may take several weeks.

Delays in filing can result in SEC reviews, enforcement

actions, and significant penalties.

Currently, several companies offer semi-automated

solutions that address only part of the tagging process as part of the entire process.

Focus Universal, by contrast, has developed a fully

automated, end-to-end solution powered by both automation and Variegated AI, whereby Focus believes the technology enables the computer

to conduct the activities for which the computer is designed and optimal and allows the human to remain within the decision loop and center

upon what the human excels.

With a single click, our software can:

· Retrieve financial statements from accounting

· Reformat data into spreadsheets for consolidated

financial reporting,

· Automatically generate consolidated financials,

· Populate the word-processed version of SEC filings,

· Convert the documents to SEC-compliant versions

via formatting, and

· Embed accurate tags into the HTML file —

with very limited manual input.

On August 30, 2025, Focus is scheduled begin customer

testing of their fully automated SEC financial reporting software.

The Company plans to launch a technology roadshow to showcase this

groundbreaking platform.

Currently, several companies offer semi-automated solutions that address only part of the tagging process as

part of the entire process.

Focus Universal, by contrast, has developed a fully automated, end-to-end solution powered by AI, whereby

Focus believes the technology enables the computer to conduct the activities for which the computer is designed and optimal and allows

the human to remain within the decision loop and center upon what the human excels.

Built-in validation, including self-consistency and

compliance checks, ensures accuracy and eliminates human error.

The solution provides a true one-click process from raw accounting data

all the way to a complete SEC filing.

Built-in validation, including self-consistency and

compliance checks, ensures accuracy and eliminates human error.

Essentially, Focus believes what once took weeks of manual work can now

be completed in minutes.

Unlike other companies offering partial automation, the Focus solution provides a true one-click process from

raw accounting data all the way to a complete SEC filing.

With years of development, Focus’solution full automated processing including

the final edgarization and XBRL tagging.

Research and Development Efforts of Power Line

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of PLC technology.

For a description of our products and services

offering, please refer to Item 1.

“Business” beginning on page 1 of our Annual Report on Form 10-K for the fiscal year ending

December 31, 2024, filed with the Securities and Exchange Commission on February 28, 2025.

For a description of our products and services offering,

please refer to Item 1.

“Business” beginning on page 1 of our Annual Report on Form 10-K for the fiscal year ending December

31, 2024, filed with the Securities and Exchange Commission on February 28, 2025.

Research and Development Efforts of 5G Cellular

Just like our ultra-narrowband technology can

be used to effectively reduce noise in powerline communication technology, our internal research suggests that our ultra-narrowband technology

Just like our ultra-narrowband technology can be used

to effectively reduce noise in powerline communication technology, our internal research suggests that our ultra-narrowband technology

can be leveraged to create a type of 5G wireless communication technology that can achieve both low band 5G coverage and an estimated

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technology” in our Annual Report on Form 10-K filed with the SEC on February 28, 2025.

Focus Universal signed a contract

with Shenzhen Donghui Precision Mold Manufacturing Co., Ltd.

and officially commenced the mold tooling design for the Universal Smart

Internet of Things (IoT) today.

This marks a pivotal milestone in the commercialization of the Universal Smart IoT, a breakthrough that

has been over two decades in the making.

With two decades of innovation, we are now ready to move forward with full-scale production and

commercialization.

In doing so, we not only fulfill our promise to shareholders but also demonstrate to the world that deploying complex

IoT technology can be as easy as plugging in an office phone.

Our platform provides both a competitive edge and cost savings even when

compared to traditional, non-IoT devices—thanks to universal hardware and software shared across all sensors.

Switching from one

sensor to another requires no change to the underlying device’s hardware or software, enabling true interoperability across devices.

Intellectual Property Protection

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The patent was issued on March 20, 2018.

We filed with the USPTO on June 2, 2017 a patent

application regarding a process for improving a spectral response curve of a photo sensor.

We filed with the USPTO on June 2, 2017 a patent application

regarding a process for improving a spectral response curve of a photo sensor.

The resulting U.S.

10,251,037 was

issued on February 26, 2019.

10,251,037 was issued on

February 26, 2019.

On March 19, 2018, we filed U.S.

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Focus Universal Inc, hired Dority Manning on July 16, 2024 to serve as outside intellectual property counsel for the Company.

The Company’s patent number 11,488,468 was

allowed and subsequently issued on November 1, 2022.

The patent is titled “Sensor for Detecting the Proximity of an IEEE 802.11

Protocol Connectable Device.” On November 7, 2023, our patent application titled “Activated Carbon Air Filter” issued

We also just received an issue notification from the USPTO, indicating that our patent application titled

“Electronic Lock and Method of Operation” will issue on November 21, 2023, as U.S.

The company has

begun to file omnibus patents to combine certain patents under a unified central patent.

The Company’s patent number 11,488,468 was allowed

and subsequently issued on November 1, 2022.

The patent is titled “Sensor for Detecting the Proximity of an IEEE 802.11 Protocol

Connectable Device.” On November 7, 2023, our patent application titled “Activated Carbon Air Filter” issued as U.S.

We also received an issue notification from the USPTO, indicating that patent application titled “Electronic

Lock and Method of Operation” was issue on November 21, 2023, as U.S.

The Company has begun to file omnibus

patents to combine certain patents under a unified central patent.

We have identified several competitors specifically

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conjunction with our smartphone application, which we believe will be a completely different product category.

There are many competitors in the SEC Financial

Reporting software space, including Workiva, ActiveDisclosure, Datarails, and Carta.

We believe that our product will be superior because

our pricing will be substantially cheaper than the current competitors in the market.

Also, since it is an integration for common desktop

applications, software implementation maybe potentially rapid, accessible, and straightforward.

There are many competitors in the SEC Financial Reporting

software space, including Workiva, ActiveDisclosure, Datarails, and Carta.

We believe that our product will be superior because our pricing

will be substantially cheaper than the current competitors in the market.

Also, since it is an integration for common desktop applications,

software implementation maybe potentially rapid, accessible, and straightforward.

IoT Installation Industry

There are several companies that compete with

AVX in smart home installations, including Vivint Smart Home, Savant, Crestron and Control4.

There are several companies that compete with AVX

in smart home installations, including Vivint Smart Home, Savant, Crestron and Control4.

However, we believe we can distinguish ourselves

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errors and bugs.

Air Filtration Systems and Meter Products

Air Filtration Systems and Meter Products Industry

The air filtration system and meter products industry

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Market Potential

We believe universal wireless smart technology

will play a critical role for traditional instrument manufacturers, as currently the undertaking of an IoT project is simply too expensive

We believe universal wireless smart technology will

play a critical role for traditional instrument manufacturers, as currently the undertaking of an IoT project is simply too expensive

and difficult to develop for medium or smaller companies and carries a 75% failure rate according to Cisco Systems.

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that are sensitive to price.

Regarding the larger IoT industry statistics, overall enterprise IoT spending increased to $201 billion in

2022, an increase of 21.5%.

The outlook for growth in 2023 is 18.5% from this large base of enterprise spending.

More specifically, the

IoT sensors market is projected to reach $26 billion by 2026 from $11.1 billion in 2022.

The IoT marketplace size assessments usually

include the hardware components and the software components, which often contain a Software as a Service (SaaS) model.

Additionally, the

rising need for reliable high bandwidth communication for IoT devices is expected to rise to $664.75 billion in 2028, spearheaded by the

currently predominant services in the 5G category.

We would also expect this market to grow with the addition of new categories of services

delivering reliable high bandwidth communication for IoT devices and would cannibalize and expand the existing services where the new

services proved to be more effective and efficient.

The financial reporting software market size was

estimated at 13.9 billion in 2022 and is projected to reach $36.6 billion by 2030.

The expanding demand of software solutions to reduce

the overall cost of compliance and boost efficiency is one of the main reasons the financial reporting software sector is projected to

More specifically, the IoT sensors market is projected to reach $26 billion by 2026 from $11.1 billion in

The IoT marketplace size assessments usually include the hardware components and the software components, which often contain a

Software as a Service (SaaS) model.

Additionally, the rising need for reliable high bandwidth communication for IoT devices is expected

to rise to $664.75 billion in 2028, spearheaded by the currently predominant services in the 5G category.

The financial reporting software market size was estimated

at 13.9 billion in 2022 and is projected to reach $36.6 billion by 2030.

The expanding demand of software solutions to reduce the overall

cost of compliance and boost efficiency is one of the main reasons the financial reporting software sector is projected to grow.

Results of Operations

For the three months ended March 31, 2025 compared to the three

months ended March 31, 2024

For the three months ended June 30, 2025 compared to the three months

ended June 30, 2024

Revenue, cost of revenue and gross profit

For the three

March 31, 2025

June 30, 2025

For the three

March 31, 2024

June 30, 2024

Cost of revenue

Gross Profit (Loss)

Our consolidated gross revenue for the three months

ended March 31, 2025 and 2024 was $190,255 and $179,505, respectively.

Cost of revenue for the three months ended March 31, 2025 was $159,711,

compared to $89,206 for the three months ended March 31, 2024.

In addition to the increase in revenue and cost of revenue, gross profit

decreased to $30,544 compared to $90,299 for the three months ended March 31, 2025 and 2024, respectively.

The major components of our cost and operating

expenses for the three months ended March 31, 2025 and 2024 are outlined in the table below:

ended June 30, 2025 and 2024 was $35,330 and $11,234, respectively.

Cost of revenue for the three months ended June 30, 2025 was $47,742,

compared to $(4,050) for the three months ended June 30, 2024 .

The increase in cost of revenue was due to higher cost of the LED

materials for installation during this time period, though increases were somewhat nominal.

In addition to the increase in revenue and

cost of revenue, gross profit (loss) decreased to $(12,412) compared to $15,284 for the three months ended June 30, 2025 and 2024, respectively.

As a result, the gross profits decreased for the same reason.

The major components of our cost and operating expenses

for the three months ended June 30, 2025 and 2024 are outlined in the table below:

For the three

March 31, 2025

June 30, 2025

For the three

March 31, 2024

June 30, 2024

Selling expense

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Total operating expenses

Selling expenses for the three months ended March

31, 2025 were $48,980, compared to $39,285 for the three months ended March 31, 2024.

Selling expenses for the three months ended June 30,

2025 were $7,420, compared to $35,640 for the three months ended June 30, 2024.

Selling expenses were mainly from third party advertising

fees and marketing related fees.

The increase in selling expenses was due to an increase in advertising fees.

The decrease in selling expenses was due to a decrease in advertising fees.

Compensation – officers and directors were $125,357

$125,387 and $56,793 for the three months ended March 31, 2025 and 2024, respectively.

and $55,255 for the three months ended June 30, 2025 and 2024, respectively.

The increase in cost was a result in the increase

in the share price, resulting in a larger stock-based compensation for the directors associated.

Research and development costs were $467,297 and $296,248

$343,277 for the three months ended March 31, 2025 and 2024, respectively.

Professional fees were $472,991 during the three months

ended March 31, 2025, compared to $352,611 during the three months ended March 31, 2024.

The increase in these professional fees compared

to the prior period was due to a increase in legal fees for employment litigation defense.

for the three months ended June 30, 2025 and 2024, respectively.

This increase was a result of the one-time R&D expenses

related to the tooling and manufacturing process this quarter.

Professional fees were $429,155 during the three

months ended June 30, 2025, compared to $354,421 during the three months ended June 30, 2024.

The increase in these professional fees

compared to the prior period was due to an increase in legal fees for employment litigation defense.

General and administrative expenses for the three

months ended March 31, 2025 was $282,455 compared to $512,239 during the three months ended March 31, 2024.

The increase of general and

months ended June 30, 2025 was $501,119 compared to $505,561 during the three months ended June 30, 2024.

The decrease of general and

administrative expenses was primarily due to the Company received its employee retention credit from internal revenue service in 2025.

Other Income (expense)

Other income for the three months ended March

31, 2025 was $20,149, compared to $3,072 for the three months ended March 31, 2024.

Other income for the three months ended June 30, 2025

was $37,112, compared to $13,011 for the three months ended June 30, 2024.

Loss from discontinued operations, net of tax

Loss from discontinued operations, net of tax was

$0 and $104,763 during the three months ended March 31, 2025 and 2024, respectively.

$0 and $146,276 during the three months ended June 30, 2025 and 2024, respectively.

The decrease was due to the discontinued operations

of AT Tech Systems LLC in August 2024.

During the three months ended March 31, 2025 and

During the three months ended June 30, 2025 and

2024, we incurred net loss of $1,505,648 and $1,365,106 respectively, due to the factors discussed above.

For the six months ended June 30, 2025 compared to the six months

ended June 30, 2024

Revenue, cost of revenue and gross profit

June 30, 2025

June 30, 2024

Cost of revenue

Our consolidated gross revenue for the six months

ended June 30, 2025 and 2024 was $225,585 and $190,739, respectively.

Cost of revenue for the six months ended June 30, 2025 was $207,453,

compared to $85,156 for the six months ended June 30, 2024.

In addition to the increase in revenue and cost of revenue, gross profit decreased

to $18,132 compared to $105,583 for the six months ended June 30, 2025 and 2024, respectively.

This decrease was a result of a lower amount

of revenues this quarter despite having a similar cost structure.

In part, the decreased revenues were a result of uncertainty in the

market with respect to tariff changes in the marketplace.

The major components of our cost and operating expenses

for the six months ended June 30, 2025 and 2024 are outlined in the table below:

June 30, 2025

June 30, 2024

Selling expense

Compensation – officers and directors

Research and development

Professional fees

General and administrative

Total operating expenses

Selling expenses for the six months ended June 30,

2025 were $56,400, compared to $74,925 for the six months ended June 30, 2024.

Selling expenses were mainly from third party advertising

fees and marketing related fees.

The decrease in selling expenses was due to an decrease in advertising fees.

Compensation – officers and directors were $250,744

and $112,048 for the six months ended June 30, 2025 and 2024, respectively.

The increase in cost was a result in the increase

in the share price, resulting in a larger stock-based compensation for the directors associated.

Research and development costs were $839,555 and

$639,525 for the six months ended June 30, 2025 and 2024, respectively.

The increase this quarter was a result of the increase in R&D

expenses as a result of the tooling and manufacturing process this quarter.

Professional fees were $902,146 during the six

months ended June 30, 2025, compared to $707,032 during the six months ended June 30, 2024.

The increase in these professional fees compared

to the prior period was due to an increase in legal fees for employment litigation defense.

General and administrative expenses for the six

months ended June 30, 2025 was $783,574 compared to $1,017,800 during the six months ended June 30, 2024.

The decrease of general and

administrative expenses was primarily due to the Company received its employee retention credit from internal revenue service in 2025.

Other Income (expense)

Other income for the six months ended June 30, 2025

was $57,261, compared to $16,083 for the six months ended June 30, 2024 .

There was an amount of bonus earned which was classified

in other income from the previous financing options.

Loss from discontinued operations, net of tax

Loss from discontinued operations, net of tax was

$0 and $251,039 during the six months ended June 30, 2025 and 2024, respectively.

The decrease was due to the discontinued operations

of AT Tech Systems LLC in August 2024.

During the six months ended June 30, 2025 and

2024, we incurred net loss of $2,757,026 and $2,680,703 respectively, due to the factors discussed above.

Liquidity and Capital Resources

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selected cash flow information:

For the three months ended March 31, 2025

For the three months ended March 31, 2024

For the six months ended June 30, 2025

For the six months ended June 30, 2024

Net cash used in operating activities

$ (2,648,288 )

$ (1,721,946 )

Net cash used in investing activities

Net cash provided by (used in) financing activities

Net cash provided by financing activities

Effect of exchange rate

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Our net cash outflows from operating activities

of $1,220,089 for the three months ended March 31, 2025 was primarily the result of our net loss of $1,251,378 and changes in our operating

of $2,648,288 for the six months ended June 30, 2025 was primarily the result of our net loss of $2,757,026 and changes in our operating

assets and liabilities offset by the add-back of non-cash expenses, and operating activities from discontinued operations.

Our net cash outflows from operating activities

of $892,089 for the three months ended March 31, 2024 was primarily the result of our net loss of $1,315,597 and changes in our operating

Our net cash outflows from operating activities of

$1,721,946 for the six months ended June 30, 2024 was primarily the result of our net loss of $2,680,703 and changes in our operating

assets and liabilities offset by the add-back of non-cash expenses, and operating activities from discontinued operations.

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Cash Flows from Investing Activities

For the three months ended March 31, 2025 we had cash

For the six months ended June 30, 2025 we had cash

outflow from investing activities of $25,091 from the purchase of property and equipment of $25,091.

For the three months ended March

For the six months ended June 30,

2024, we had cash outflow from investing activities of $9,743 from the purchase of property and equipment of $9,743.

Cash Flows from Financing Activities

For the three months ended March 31, 2025, we

had cash outflows of $144,575 due to purchase of treasury stock of $144,575.

For the three months ended March 31, 2024, we had cash inflows

of $550,000 due to proceeds from third party loan of $300,000, proceeds from related party loan of $300,000 and repayment on third party

loan of $50,000.

For the six months ended June 30, 2025, we had

cash inflows of $207,387 due to stock issued for private placement of $381,224 offset by the purchase of treasury stock of $173,837.

the six months ended June 30, 2024, we had cash inflows of $1,326,000 due to proceeds from third party loan of $350,000, proceeds from

related party loan of $1,101,000 and repayment on third party loan of $125,000.

On November 11, 2024, we entered into a Share

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As of the date of issuance

of the unaudited consolidated financial statement, the Company has only executed a purchase notice for 94,825 shares to Alumni Capital,

based on our Purchase Agreement, dated November 16, 2024, but the Closing Date has not been completed and proceeds have not been received.

of the unaudited consolidated financial statements, the Company has only executed a purchase notice for 94,825 shares to Alumni Capital,

based on our Purchase Agreement, dated November 16, 2024, and the proceeds of $381,224 have been received and recorded for the period

ended June 30,2025.

Subsequently, the Company issued a purchase notice to Alumni Capital totaling 167,867 shares under the same purchase

agreement, and received proceeds of $441,277, which were recorded in July 2025.

Going Concern

The Company has assessed its ability to continue

as a going concern for a period of one year from the date of the issuance of these condensed consolidated financial statements.

has a net loss of $1,251,378 for the three months ended March 31, 2025.

as a going concern for a period of one year from the date of the issuance of these unaudited condensed consolidated financial statements.

The Company has a net loss of $2,757,026 for the six months ended June 30, 2025.

In addition, the Company had an accumulated deficit of

as of March 31, 2025, and negative cash flow from operating activities of $1,220,049 for the three months ended March 31, 2025.

doubt about the Company’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate,

indicate that it is probable that the Company will be unable to meet its obligations as they become due within one year from the financial

statement issuance date.

The accompanying condensed consolidated financial statements have been prepared in conformity with U.S.

which contemplate continuation of the Company as a going concern.

The Company currently suffered recurring loss from operations, generated

negative cash flow from operating activities, has an accumulated deficit and has not completed its efforts to establish a stabilized source

of revenues sufficient to cover operating costs over an extended period of time.

These conditions raise substantial doubt as to its ability

to continue as a going concern.

These unaudited condensed consolidated financial statements do not include 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’s independent registered public accounting firm, in its report

on the Company’s consolidated financial statements for the year ended December 31, 2024, has also expressed substantial doubt about

the Company’s ability to continue as a going concern.

At March 31, 2025, the Company had cash and cash

equivalents, and short-term investments, in the amount of $2,217,268.

The ability to continue as a going concern is dependent on the Company

attaining and maintaining profitable operations in the future and raising additional capital to meet its obligations and repay its liabilities

arising from normal business operations when they come due.

Since inception, the Company has funded its operations primarily through equity

and debt financings, and it expects to continue to rely on these sources of capital in the future.

Even if the Company is able to obtain

additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution

for our stockholders, in case of equity financing, or grant unfavorable terms in future licensing agreements.

$28,539,334 as of June 30, 2025, and negative cash flow from operating activities of $2,648,288 for the six months ended June 30, 2025.

Substantial doubt about the Company’s ability to continue as a going concern exists when relevant conditions and events, considered

in the aggregate, indicate that it is probable that the Company will be unable to meet its obligations as they become due within one year

from the financial statement issuance date.

The accompanying condensed consolidated financial statements have been prepared in conformity

GAAP, which contemplate continuation of the Company as a going concern.

The Company currently suffered recurring loss from operations,

generated negative cash flow from operating activities, has an accumulated deficit and has not completed its efforts to establish a stabilized

source of revenues sufficient to cover operating costs over an extended period of time.

These conditions raise substantial doubt as to

its ability to continue as a going concern.

These unaudited condensed consolidated financial statements do not include 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’s independent registered public accounting firm, in its

report on the Company’s consolidated financial statements for the year ended December 31, 2024, has also expressed substantial doubt

about the Company’s ability to continue as a going concern.

At June 30, 2025, the Company had cash and cash equivalents,

and short-term investments, in the amount of $1,150,614.

The ability to continue as a going concern is dependent on the Company attaining

and maintaining profitable operations in the future and raising additional capital to meet its obligations and repay its liabilities arising

from normal business operations when they come due.

Since inception, the Company has funded its operations primarily through equity and

debt financings, and it expects to continue to rely on these sources of capital in the future.

Even if the Company is able to obtain additional

financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders,

in case of equity financing, or grant unfavorable terms in future licensing agreements.

No assurance can be given that any future financing

will be available or, if available, that it will be on terms that are satisfactory to the Company.

Off-Balance Sheet Arrangements

As of March 31, 2025, we did not have any off-balance-sheet arrangements,

As of June 30, 2025, we did not have any off-balance-sheet arrangements,

as defined in Item 303(a)(4)(ii) of Regulation SK.

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Recent Accounting Pronouncements

Our Company has implemented all new accounting

pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting

pronouncements that have been issued that might have a material impact on its financial position or results of operations.

AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined

by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

See notes to consolidated financial statements regarding

recent accounting pronouncements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule

12b-2 of the Exchange Act and are not required to provide the information required under this item.

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 2. Management’s Discussion and Analysis