What changed in this filing

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Item 1. Financial Statements

2025-11-10 compared with 2025-08-12 · 449 added, 361 removed, 450 unchanged (64% of the section changed)

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Index to the Financial Statements

Condensed Consolidated Balance Sheets as of June 30, 2025 (unaudited) and December 31, 2024

Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2025 and 2024 (unaudited)

Condensed Consolidated Statements of Changes in Stockholder’s Equity for the Three and Six Months Ended June 30, 2025 and 2024 (unaudited)

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024 (unaudited)

Condensed Consolidated Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited)

Condensed Consolidated Statements of Changes in Stockholder’s Equity for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited)

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 (unaudited)

Notes to the Unaudited Condensed Consolidated Financial Statements

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CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

Current Assets:

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Prepaid expenses

Other receivable

Marketable securities

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Common stock, par value $ 0.001 per share, 15,000,000 shares authorized;

7,218,838 and 7,153,647 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

Treasury stock at cost ( 39,574 and 348,968 shares held at June 30, 2025 and December 31, 2024, respectively)

7,386,705 and 7,153,647 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively

Treasury stock at cost ( 58,038 and 348,968 shares held at September 30, 2025 and December 31, 2024, respectively)

( 1,055,592 )

Additional paid-in capital

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Accumulated deficit

( 29,705,709 )

( 25,782,308 )

Accumulated other comprehensive loss

1 unchanged sentence

Total Liabilities and Stockholders' Equity

The accompanying notes are an integral part of these

unaudited condensed consolidated financial statements

The accompanying notes are an integral part

of these unaudited condensed consolidated financial statements

FOCUS UNIVERSAL INC.

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AND COMPREHENSIVE LOSS

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Cost of revenue

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Loss from operations

( 1,180,376 )

( 1,746,849 )

( 3,994,663 )

( 4,192,206 )

Other income (expense):

Interest income (expense), net

Interest income, net

Interest (expense) - related party

Gain on disposed of property

Unrealized gain (loss) on marketable equity securities

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Total other income

Loss from continuing operations

Loss from discontinued operations, net of tax

Income (loss) from continuing operations

( 1,166,375 )

( 3,923,401 )

Income (loss) from discontinued operations, net of tax

$ ( 1,166,375 )

$ ( 3,923,401 )

$ ( 1,238,776 )

Other comprehensive items

Foreign currency translation loss

Foreign currency translation income (loss)

Total comprehensive loss

$ ( 1,165,698 )

$ ( 3,933,157 )

$ ( 1,249,787 )

Basic net income loss per share:

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Basic and Fully Diluted

The accompanying notes are an integral part of these

unaudited condensed consolidated financial statements

The accompanying notes are an integral part

of these unaudited condensed consolidated financial statements

FOCUS UNIVERSAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS'

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2025 AND 2024

Treasury Stock

Shares to be issued

Comprehensive

Stockholders'

Balance – March 31, 2025

Additional Paid-In

Shares to be issued Common

Accumulated Other Comprehensive

Total Stockholders'

Balance – June 30, 2025

$ ( 173,838 )

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Purchase of treasury stock

Retirement of treasury stock

( 1,055,242 )

Stock issued for cash

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( 1,166,375 )

Balance – June 30, 2025

Balance – September 30, 2025

$ ( 249,676 )

$ ( 29,705,709 )

to be issued Common

Comprehensive

Stockholders'

Balance – March 31, 2024

Treasury Stock

Additional Paid-In

Shares to be issued Common

Accumulated Other Comprehensive

Total Stockholders'

Balance – June 30, 2024

$ ( 385,686 )

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Stock based compensation - shares

Stock issued for placement agent

Stock issued for private placement

Retirement of treasury stock

Other comprehensive income

( 1,365,106 )

Balance – June 30, 2024

Stock based compensation related to discount on shares sold to related parties

Other comprehensive loss

Balance – September 30, 2024

$ ( 385,686 )

$ ( 23,820,946 )

to be issued Common

Comprehensive

Stockholders'

Treasury Stock

Additional Paid-In

Shares to be issued Common

Accumulated Other Comprehensive

Total Stockholders'

Balance – December 31, 2024

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Stock issued for cash

Other comprehensive income

Other comprehensive loss

( 3,923,401 )

Balance – June 30, 2025

Balance – September 30, 2025

$ ( 249,676 )

$ ( 29,705,709 )

to be issued Common

Comprehensive

Stockholders'

Treasury Stock

Additional Paid-In

Shares to be issued Common

Accumulated Other Comprehensive

Total Stockholders'

Balance – December 31, 2023

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Retirement of treasury stock

Other comprehensive income

Stock issued for placement agent

Stock issued for private placement

Stock based compensation related to discount on shares sold to related parties

Other comprehensive loss

( 1,238,776 )

Balance – June 30, 2024

Balance – September 30, 2024

$ ( 385,686 )

$ ( 23,820,946 )

The accompanying notes are an integral part of these

unaudited condensed consolidated financial statements

The accompanying notes are an integral part

of these unaudited condensed consolidated financial statements

FOCUS UNIVERSAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Cash flows from operating activities:

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

Gain on sale of building

( 3,181,706 )

Bad debt expense

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Stock-based compensation – shares

Stock based compensation related to discount on shares sold to related parties

Stock based compensation – options

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Lease liabilities

Other liabilities

Net cash flows used in operating activities from continuing operations

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Purchase of property and equipment

Net cash flows used in investing activities

Proceeds from sale of property

Net cash flows provided by (used in) investing activities

Cash flows from financing activities:

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Proceeds from related party loan

Repayment on related party loan

( 2,101,000 )

Repayment on third party loan

Stock issued for placement agent

Stock issued for private placement

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Cash paid for interest

The accompanying notes are an integral part of these

unaudited condensed consolidated financial statements

The accompanying notes are an integral part

of these unaudited condensed consolidated financial statements

FOCUS UNIVERSAL INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025

Note 1 – Organization and Operations

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The Company is a universal smart instrument

developer and manufacturer, headquartered in Ontario, California, specializing in the development and commercialization of novel and

proprietary universal smart technologies and instruments.

developer and manufacturer, headquartered in Ontario, California, specializing in the development and commercialization of novel and proprietary

universal smart technologies and instruments.

Focus Universal Inc.

is also a provider of patented hardware and software design

technologies for Internet of Things (“IoT”) and 5G.

The Company has developed what it believes are five disruptive patented

technology platforms with 28 patents and patents pending in various phases and 8 trademarks to solve what it believes are the major problems

facing hardware and software design and production within the industry today.

These technologies combined have the potential to reduce

costs, product development timelines and energy usage while increasing range, speed, efficiency, and security of the IoT and 5G networks.

The smartphone or other mobile device serves as the foundation, where the user can see the sensor readouts and together with the Ubiquitor

is also a provider of patented hardware and software design technologies

for Internet of Things (“IoT”) and 5G.

The Company has developed what it believes are five disruptive patented technology

platforms with 28 patents and patents pending in various phases and 8 trademarks to solve what it believes are the major problems facing

hardware and software design and production within the industry today.

These technologies combined have the potential to reduce costs,

product development timelines and energy usage while increasing range, speed, efficiency, and security of the IoT and 5G networks.

smartphone or other mobile device serves as the foundation, where the user can see the sensor readouts and together with the Ubiquitor

device, performs the functions of multiple traditional scientific and engineering instruments.

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

The Company has multiple subsidiaries, including Perfecular

The Company has multiple subsidiaries, including

Perfecular Inc.

(“Perfecular”), AVX Design & Integration, Inc.

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have since been discontinued.

Perfecular, a wholly owned subsidiary of Focus, was

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

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

AVX, incorporated on June 16, 2000, in the state of

California, is an IoT installation and management company specializing in high performance audio/video systems, home theaters, lighting

Perfecular, a wholly owned subsidiary of Focus,

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

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

AVX, incorporated on June 16, 2000, in the state

of California, is an IoT installation and management company specializing in high performance audio/video systems, home theaters, lighting

control, automation and integration.

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the Smart AVX name.

On December 23, 2021, Focus Shenzhen was founded as

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

Focus Shenzhen is designed

to function as a branch office to source products and build relationships with manufacturers in China and as a lower cost form of support,

research and development as engineers abound in China.

On January 5, 2022, the Company founded a wholly owned

subsidiary named Lusher Bioscientific.

On April 30, 2024, the Company founded a wholly owned

subsidiary named Lusher Inc.

was founded to develop, market, and commercialize automation software, titled One Touch Financial,

initially targeting the financial reporting software market sector.

AT Tech Systems was a subsidiary of Focus and specialized

in commercial and industrial smart IoT installation projects in areas throughout Southern California.

On August 5, 2024, the Company and

the segment manager of AT Tech Systems LLC reached a tentative oral agreement to terminate his employment, and the employment of his two

team members.

The Company discontinued operations of AT Tech Systems on August 21, 2024, with a termination cost of $ 22,000 and is now

presenting these operations as discontinued.

On December 23, 2021, Focus Shenzhen was founded

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

Focus Shenzhen is

designed to function as a branch office to source products and build relationships with manufacturers in China and as a lower cost form

of support, research and development as engineers abound in China.

On January 5, 2022, the Company founded a wholly

owned subsidiary named Lusher Bioscientific.

On April 30, 2024, the Company founded a wholly

owned subsidiary named Lusher Inc.

was founded to develop, market, and commercialize automation software, titled One Touch

Financial, initially targeting the financial reporting software market sector.

AT Tech Systems was a subsidiary of Focus and

specialized in commercial and industrial smart IoT installation projects in areas throughout Southern California.

On August 5, 2024, the

Company and the segment manager of AT Tech Systems LLC reached a tentative oral agreement to terminate his employment, and the employment

of his two team members.

The Company discontinued operations of AT Tech Systems on August 21, 2024, with a termination cost of $ 22,000

and is now presenting these operations as discontinued.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

The unaudited condensed financial statements of the

Company for the three and six months ended June 30, 2025 and 2024 have been prepared in accordance with accounting principles generally

accepted in the U.S.

(“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q

and Regulation S-K for scaled disclosures for smaller reporting companies.

Accordingly, they do not include all the information and footnotes

required by GAAP for complete financial statements.

However, such information reflects all adjustments (consisting solely of normal recurring

adjustments), which are, in the opinion of management, necessary for the fair presentation of the Company’s financial position and

results of operations.

Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal

The balance sheet information as of December 31, 2024 was derived from the audited financial statements included in the Company’s

financial statements as of and for the years ended December 31, 2024 and 2023 contained in the Company’s Annual Report on Form 10-K

filed with the Securities and Exchange Commission, or the SEC, on February 28, 2025.

These financial statements should be read in conjunction

with that report.

The unaudited condensed financial statements of

the Company for the three and nine months ended September 30, 2025 and 2024 have been prepared in accordance with accounting principles

generally accepted in the U.S.

(“GAAP”) for interim financial information and pursuant to the requirements for reporting on

Form 10-Q and Regulation S-K for scaled disclosures for smaller reporting companies.

Accordingly, they do not include all the information

and footnotes required by GAAP for complete financial statements.

However, such information reflects all adjustments (consisting solely

of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the Company’s

financial position and results of operations.

Results shown for interim periods are not necessarily indicative of the results to be obtained

for a full fiscal year.

The balance sheet information as of December 31, 2024 was derived from the audited financial statements included

in the Company’s financial statements as of and for the years ended December 31, 2024 and 2023 contained in the Company’s

Annual Report on Form 10-K filed with the Securities and Exchange Commission, or the SEC, on February 28, 2025.

These financial statements

should be read in conjunction with that report.

The accompanying unaudited condensed consolidated

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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.

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

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Allowance for Doubtful Accounts

The Company estimates an allowance for doubtful accounts

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

It is reasonably possible that the

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

As of June 30, 2025 and December 31, 2024, allowance for

doubtful accounts amounted to $ 278,201 and $ 278,201 , respectively.

The Company estimates an allowance for doubtful

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

It is reasonably possible

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

As of September 30, 2025 and December 31, 2024,

allowance for doubtful accounts amounted to $ 278,201 and $ 278,201 , respectively.

Concentrations of Credit and Business Risk

Financial instruments that potentially subject the

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

The Company limits its exposure to credit loss

by investing its cash with high credit quality financial institutions.

Financial instruments that potentially subject

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

The Company limits its exposure to credit

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

Major customers

For the three months ended of June 30, 2025 and 2024,

the Company’s revenue received from the following companies were set out as below:

For the three months ended of September 30, 2025

and 2024, the Company’s revenue received from the following companies were set out as below:

Schedule of concentrations of credit risk

Three months ended June 30,

Revenue had not exceeded 10% or more of the Company’s consolidated revenue of the Company.

For the six months ended of June 30, 2025 and 2024,

the Company’s revenue received from the following companies were set out as below:

Six months ended June 30,

Three months ended September 30,

For the nine months ended of September 30, 2025

and 2024, the Company’s revenue received from the following companies were set out as below:

Nine months ended September 30,

Major Vendors

One major vendor accounted for more than 66 % of our

total purchases during the six months ended June 30, 2025 and no major vendor accounted more than 10% of total purchase during the six

months ended June 30, 2024.

One major vendor accounted for more than 76 % of

our total purchases during the nine months ended September 30, 2025 and no major vendor accounted more than 10% of total purchase during

the nine months ended September 30, 2024.

Share-Based Compensation

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

The measurement of stock-based compensation is subject

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

are received.

The Company calculates the fair value of option grants

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

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

expected to vest.

The resulting stock-based compensation expense for

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

The measurement of stock-based compensation is

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

services are received.

The Company calculates the fair value of option

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

common stock.

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

are ultimately expected to vest.

The resulting stock-based compensation expense

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

Fair Value of Financial Instruments

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

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

the fair value of its financial instruments.

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

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

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

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

measure the fair value of its financial instruments.

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

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

GAAP), and expands disclosures about fair value measurements.

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

The following table summarize financial assets and

liabilities measured at fair value on a recurring basis as of June 30, 2025 and December 31, 2024:

The following table summarizes financial assets

and liabilities measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024:

Schedule of fair value of assets

and liabilities measured on recurring basis

June 30, 2025 (unaudited)

September 30, 2025 (unaudited)

Marketable securities:

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The Company’s other comprehensive

loss for the six months ended June 30, 2025 and 2024 was comprised of foreign currency translation adjustments.

loss for the nine months ended September 30, 2025 and 2024 was comprised of foreign currency translation adjustments.

Revenue Recognition

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

These five elements, as applied to each of the Company’s

revenue category, is summarized below:

These five elements, as applied to each of the

Company’s revenue category, is summarized below:

Product sales – revenue is recognized at the time of sale upon the delivery of the equipment to the customer and completion of performance obligation.

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Perfecular and Lusher and (2) Corporate and IoT Products.

Software Development Costs

In accordance with ASC 985-20,

Costs of Software to Be Sold, Leased, or Marketed, the Company expenses software development costs as research and development until technological

feasibility is established.

Technological feasibility is established when the Company has completed all planning, designing, coding, and

testing activities that are necessary to establish that the product can be produced to meet its design specifications, including functions,

features, and performance requirements.

Costs incurred prior to the establishment of technological feasibility are expensed as research

and development.

Subsequent to achieving technological

feasibility, and until the product is available for general release, the Company will capitalize qualifying development costs, which primarily

include payroll and related costs for employees directly involved in coding and testing, fees paid to third-party developers, and other

direct costs incurred to complete the software product.

Capitalization ceases when the product is ready for release.

Capitalized software development

costs will be amortized on a product-by-product basis using the greater of (i) the ratio of current gross revenues to total anticipated

gross revenues or (ii) the straight-line method over the estimated economic life of the product, generally three to five years.

expense will be included in cost of revenues.

Capitalized software will be reviewed for impairment when indicators of loss are present.

The Company has not capitalized any of its software

costs to date, though it believes it has the technological resources required to successfully develop.

We now believe we have met technological

feasibility in both the IoT and financial software products internally, and as evidenced by our subsequent news releases.

The final versions

of these products have been shown to the Company’s existing customer base prior to their general release.

The Company plans to capitalize

certain costs incurred related to the development of both the IoT and financial software products until the general release of those products.

Research and Development

Research and development costs are expensed as incurred.

Research and development costs are expensed as

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

Basic and Fully Diluted Net Income (Loss) Per Share

Net income (loss) per share is computed pursuant to

ASC 260-10-45.

Net income (loss) per share is computed pursuant

to ASC 260-10-45.

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

number of shares outstanding during the period.

Fully diluted EPS is computed by dividing net income

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

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

Fully diluted EPS is computed by dividing net

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

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

unless these shares are covered by anti-dilutive protections.

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As a result, they are included in the fully diluted EPS computation to the extent that the effect would be dilutive.

As of each period end, all potentially dilutive instruments

would be anti-dilutive.

As of each period end, all potentially dilutive

instruments would be anti-dilutive.

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

The following potentially

dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive.

Schedule of anti-dilutive

Six Months Ended June 30,

The following

potentially dilutive shares were excluded from the shares used to calculate diluted earnings per share as their inclusion would be anti-dilutive.

Schedule of anti-dilutive shares

Nine Months Ended September 30,

Stock options

Foreign Currency Translation and Transactions

The reporting and functional currency of Focus is

The reporting and functional currency of Focus

The functional currency of Focus Universal (Shenzhen) Technology Co.

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is the Renminbi (“RMB”).

For financial reporting purposes, the financial statements

of the Company’s Chinese subsidiary, which are prepared using the RMB, are translated into the Company’s reporting currency,

For financial reporting purposes, the financial

statements of the Company’s Chinese subsidiary, which are prepared using the RMB, are translated into the Company’s reporting

currency, 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.

Revenue and expenses are translated

using average exchange rates prevailing during each reporting period.

Stockholders’ equity is translated at historical exchange

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

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Schedule of exchange rates foreign currency

Average Rate for the Six Months Ended

Average Rate for the Nine Months Ended

September 30,

China Yuan (RMB)

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Exchange Rate at

June 30, 2025

September 30, 2025

December 31, 2024

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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 $ 2,757,026 for the six months ended June 30, 2025.

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 $ 3,923,401 for the nine months ended September 30, 2025.

In addition, the Company had an accumulated deficit of $ 29,705,709

as of June 30, 2025, and negative cash flow from operating activities of $ 2,648,288 for the six months ended June 30, 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 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, such financing may bring about 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.

as of September 30, 2025, and negative cash flow from operating activities of $ 3,709,104 for the nine months ended September 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 September 30, 2025, the Company had cash and

cash equivalents, and short-term investments, in the amount of $ 454,432 .

Subsequent to September 30, 2025, the Company raised $ 6,000,000 through

the sale of shares of its Preferred Stock.

(Note 10) 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, such financing may bring about 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.

Note 3 – Recent Accounting Pronouncement

In November 2024, FASB issued ASU 2024-03 Income Statement—Reporting

Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses.

in ASU 2024-03 requires public business entities to disclose in the notes to the financial statements, among other things, specific information

about certain costs and expenses including purchases of inventory;

In November 2024, FASB issued ASU 2024-03 Income

Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement

The guidance in ASU 2024-03 requires public business entities to disclose in the notes to the financial statements, among other

things, specific information about certain costs and expenses including purchases of inventory;

employee compensation;

and depreciation and amortization expense for

each caption on the income statement where such expenses are included.

The update is effective for annual reporting periods beginning

after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted, and the amendments

may be applied prospectively to reporting periods after the effective date or retrospectively to all periods presented in the financial

We are currently evaluating the provisions of this guidance and assessing the potential impact on our financial statement

and depreciation

and amortization expense for each caption on the income statement where such expenses are included.

The update is effective for annual

reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is

permitted, and the amendments may be applied prospectively to reporting periods after the effective date or retrospectively to all periods

presented in the financial statements.

We are currently evaluating the provisions of this guidance and assessing the potential impact

on our financial statement disclosures.

Management does not believe that any other recently

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Note 4 – Inventory

At June 30, 2025 and December 31, 2024, inventory

At September 30, 2025 and December 31, 2024, inventory

consisted of the following:

Schedule of inventory

June 30, 2025

December 31, 2024

September 30,

Finished goods

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Note 5 – Property and Equipment

At June 30, 2025 and December 31, 2024, property and equipment consisted

of the following:

At September 30, 2025 and December 31, 2024, property and equipment

consisted of the following:

Schedule of property and equipment

June 30, 2025

December 31, 2024

September 30,

Building improvement

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Property and equipment, net

Depreciation expense for the six months ended June

30, 2025 and 2024 amounted to $ 10,959 and $ 67,354 , respectively.

Depreciation expense for the nine months ended

September 30, 2025 and 2024 amounted to $ 17,231 and $ 72,738 , respectively.

Note 6 – Leases

Operating Leases

On January 16, 2023, Focus Universal (Shenzhen) Technology

LTD entered into a thirty-six month commercial lease with a third party for an approximately 2,017 square foot office space.

commenced on February 1, 2023 and will end on January 31, 2026.

The monthly rent is RMB29,974 (approximately $4,172) 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 term, which is

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

On February 22, 2023, Focus Universal (Shenzhen) Technology

LTD entered into a thirty-six month commercial lease with a third party for an approximately 3,449 square foot office space.

commenced on March 31, 2023 and will end on February 28, 2026.

The monthly rent is RMB35,246 (approximately $4,906) 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

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

Operating lease right-of-use assets represent the

Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to

make lease payments arising from the lease.

As of June 30, 2025 and December 31, 2024, operating lease right-of use assets and lease liabilities

were as follows:

On January 16, 2023, Focus Universal

(Shenzhen) Technology Co.

LTD entered into a thirty-six month commercial lease with a third party for an approximately 2,017 square

foot office space.

The lease commenced on February 1, 2023 and will end on January 31, 2026.

The monthly rent is RMB 29,974

(approximately $4,172) 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 term, which is 10%.

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

On February 22, 2023, Focus Universal

(Shenzhen) Technology Co.

LTD entered into a thirty-six month commercial lease with a third party for an approximately 3,449 square

foot office space.

The lease commenced on March 31, 2023 and will end on February 28, 2026.

The monthly rent is RMB 35,246

(approximately $4,906) 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%.

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

the lease term.

Operating lease right-of-use assets represent

the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation

to make lease payments arising from the lease.

As of September 30, 2025 and December 31, 2024, operating lease right-of use assets and

lease liabilities were as follows:

Schedule of operating lease right of use assets and lease liabilities

June 30, 2025

December 31, 2024

September 30,

Operating lease right-of-use assets, net

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Schedule of lease term and discount rate

June 30, 2025

December 31, 2024

September 30,

Weighted average remaining lease term:

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Base monthly rent is $16,804, with a total of $58,812

due upon execution of the lease.

The Company entered into a First Lease Amendment on March 21, 2025, extending the lease until January

31, 2026, with no other changes to the original terms.

The Company recorded an operating lease expense of

$ 168,417 and $ 56,625 for the six months ended June 30, 2025 and 2024, respectively.

This is included in general and administrative expenses.

which was due upon execution of the lease.

The Company entered into a First Lease Amendment on March 21, 2025, extending the lease until

January 31, 2026, with no other changes to the original terms.

The Company recorded an operating lease expense

of $ 256,733 and $ 146,523 for the nine months ended September 30, 2025 and 2024, respectively.

This is included in general and administrative

Note 7 – Stockholders’ Equity

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at the earliest period presented.

An additional 309,281 common stock shares were included

in the Company’s issued and outstanding shares as a result of rounding-up fractional shares into whole shares as a result of the

reverse stock split.

On April 28, 2025 Alumni Capital purchased 94,825

of our common shares for $ 381,224 , based on our Equity Line of Credit (ELOC) Purchase Agreement, dated November 16, 2024.

The price for

these shares was $ 4.02 based on a 9 % discount of the lowest of the 5-day VWAP of $ 4.41 from the closing date on May 6, 2025, accessible

via the Bloomberg terminal.

An additional 309,281 common stock shares were

included in the Company’s issued and outstanding shares as a result of rounding-up fractional shares into whole shares as a result

of the reverse stock split.

On November 16, 2024, we entered into a Securities

Purchase Agreement (the “Agreement”) with Alumni Capital LP, a Delaware limited partnership.

Pursuant to the Agreement, we

have the right, but not the obligation to cause Alumni Capital LP to purchase up to $20,000,000 common stock, par value $0.001, at certain

purchase price during the period beginning on the execution date of the Agreement and ending on the earlier of (i) the date which Alumni

Capital LP has purchased $20,000,000 of the Company’s common stock pursuant to the Agreement or (ii) November 16, 2027.

to this Agreement, on April 28, 2025, Alumni Capital LP purchased 94,825 shares of our common stock for $ 381,224 .

The price for these

shares was $4.02 based on a 9% discount of the lowest of the 5-day VWAP of $4.41 from the closing date on May 6, 2025, accessible via

the Bloomberg terminal.

On July 15, 2025, and July 18, 2025, Alumni Capital LP purchased 25,000 and 142,867 of our common shares for $ 86,995

and $ 354,282 , respectively.

The price for these shares was $4.02 based on a 9% discount of the lowest of the 5-day VWAP of $4.41 from

the closing date on July 15, 2025, accessible via the Bloomberg terminal.

Therefore, as of the date of issuance of the unaudited consolidated

financial statements, the Company has only executed a purchase notice for an aggregate 262,692 shares to Alumni Capital LP, based on this

Agreement, and the aggregate proceeds of $ 822,501 have been received and recorded for the period ended September 30, 2025.

Treasury stock

During the six months ended June 30, 2025, the Company

repurchased 39,574 shares of its common stock for $ 173,837 in the public market at average price of $4.39 and placed them in treasury.

In the same period, the Company terminated 348,968 shares of its common stock previously repurchased $ 1,055,592 .

As of June 30, 2025 and

December 31, 2024, 39,574 and 348,968 shares remain as treasury shares, respectively.

These were all purchased as part of publicly announced

plans or program, as also noted in the December 31, 2024 10-K filing.

During the nine months ended September 30,

2025, the Company repurchased 58,038

shares of its common stock for $ 249,675

in the public market at average price of $4.30 and placed them in treasury.

In the same period, the Company retired 348,968

shares of its common stock previously repurchased $ 1,055,591 .

As of September 30, 2025 and December 31, 2024, 58,038

shares remain as treasury shares, respectively.

These were all purchased as part of publicly announced plans or program, as also

noted in the Annual Report on Form 10-K for the year ended December 31, 2024.

Employee compensation

In prior years, the Company entered into several employment

agreements that require the issuance of common shares for services that vest on a quarterly basis.

During the period ended June 30, 2025,

4,953 shares with a fair value of $ 13,905 that previously vested were issued.

During the period ended June 30, 2025, an aggregate of 2,711

shares with a fair value of $ 11,191 vested and were recognized as compensation costs.

As of June 30, 2025, 3,439 shares of common stock

with a fair value of $ 22,864 remain vested but not issued.

In prior years, the Company entered into several

employment agreements that require the issuance of common shares for services that vest on a quarterly basis.

During the period ended

September 30, 2025, 4,953 shares with a fair value of $ 13,905 that previously vested were issued.

During the period ended September 30,

2024, an aggregate of 7,494 shares with a fair value of $ 48,564 vested and were recognized as compensation costs.

As of September 30,

2025, 20,723 shares of common stock with a fair value of $ 52,733 remain vested but not issued.

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

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awards on the date of grant was determined to be $ 2,942,800 which is being amortized over the 5 year vesting period.

During the year ended

December 31, 2024, the Company amortized $ 357,340 of this amount leaving an unamortized balance of $ 714,680 at December 31, 2024.

the period ended June 30, 2025, 5,100 shares of common stock vested and the Company amortized $ 178,670 of this amount leaving an unamortized

balance of $ 536,010 at June 30, 2025.

As of June 30, 2025, 20,400 of the shares had been vested.

During the periods

ended September 30, 2025 and 2024, 5,100 shares of common stock vested and the Company amortized $ 268,005 of this amount leaving an unamortized

balance of $ 446,675 at September 30, 2025.

As of September 30, 2025, 20,400 of the shares had vested.

Stock options

On January 2, 2025, each member of the Board was granted

2,250 options to purchase shares at $ 3.45 per share with a fair value of $ 6,854 .

The options vest monthly over one (1) year, and may be

exercised during a 10 -year term.

On January 2, 2025, each member of the Board was

granted 2,250 options to purchase shares at $ 3.45 per share with a fair value of $ 6,854 .

The options vest monthly over one (1) year, and

may be exercised during a 10 -year term.

In the aggregate, 13,500 options were granted with a fair value of $ 41,124 .

During the six months ended

June 30, 2025, the Company recognized $ 20,568 of compensation cost relating to the vesting of these options and $ 20,556 remained unvested

which will be amortized over the remainder of 2025.

For the six months ended June 30, 2025 and 2024, the

Company’s stock option compensation expenses amounted to $ 20,568 and $ 73,990 , respectively.

During the nine months

ended September 30, 2025, the Company recognized $ 30,852 of compensation cost relating to the vesting of these options and $ 10,272 remained

unvested which will be amortized over the remainder of 2025.

For the nine months ended September 30, 2025 and

2024, the Company’s stock option compensation expenses amounted to $ 30,852 and $ 110,985 , respectively.

The fair value of the stock options issued during

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Schedule of assumptions

June 30, 2025

September 30, 2025

Risk-free interest rate

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The following is a summary of the option activity

from December 31, 2024 to June 30, 2025:

from December 31, 2024 to September 30, 2025:

Schedule of option activity

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Cancelled or forfeited

Outstanding at June 30, 2025

Exercisable as of June 30, 2025

Based on the closing fair market value of $4.09 per

share on June 30, 2025, intrinsic value of $ 1,802 was attributed to exercisable but not exercised common stock options at June 30, 2025.

Outstanding at September 30, 2025

Exercisable as of September 30, 2025

Based on the closing fair market value of $3.09

per share on September 30, 2025, intrinsic value of $ 0 was attributed to exercisable but not exercised common stock options at September

Note 8 – Discontinued Operation

On August 5, 2024, the Company and the segment manager

of AT Tech Systems LLC reached a tentative oral agreement to terminate his employment and the employment of his two direct report team

On August 5, 2024, the Company and the segment

manager of AT Tech Systems LLC reached a tentative oral agreement to terminate his employment and the employment of his two direct report

team members.

The Company discontinued operations of AT Tech Systems on August 21, 2024 with a termination cost of $ 22,000 .

The income (loss) from discontinued operations presented

in the statement of operations for the three months ended June 30, 2025 and 2024 as follows:

The income (loss) from discontinued operations

presented in the statement of operations for the three months ended September 30, 2025 and 2024 as follows:

Schedule of discontinued operations

Three Months Ended June 30,

Three Months Ended September 30,

Cost of Revenue

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Total other income, net

$ ( 146,276 )

Total operating cash flows from discontinued operations

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

The income (loss) from discontinued operations presented

in the statement of operations for the six months ended June 30, 2025 and 2024 as follows:

Six Months Ended June 30,

The income (loss) from discontinued operations

presented in the statement of operations for the nine months ended September 30, 2025 and 2024 as follows:

Nine Months Ended September 30,

Cost of Revenue

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Total operating cash flows from discontinued operations

were $ 0 and $ 187,709 , respectively, for the six months ended June 30, 2025 and 2024.

were $ 0 and $ 65,221 respectively, for the nine months ended September 30, 2025 and 2024.

Note 9 – Segment Reporting

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devices in the hydroponic and controlled agriculture segments.

Asset information by operating segment is not presented

as the Chief Executive Officer does not review this information by segment.

The reporting segments follow the same accounting policies

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

The management team reviews financial information on

a consolidated level and allocates resources based on net loss, which also serves as the key metric for evaluating financial performance.

Asset information by operating segment is not

presented as the Chief Executive Officer does not review this information by segment.

The reporting segments follow the same accounting

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

The management team reviews financial information

on a consolidated level and allocates resources based on net loss, which also serves as the key metric for evaluating financial performance.

The following tables summarize the financial information

of each operating segment of the Company for the six months ended June 30, 2025:

of each operating segment of the Company for the nine months ended September 30, 2025:

Schedule of segment reporting

For the Six Months ended June 30, 2025

For the Nine Months ended September 30, 2025

Perfecular & Lusher

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The following tables summarize the financial information

of each operating segment of the Company for the six months ended June 30, 2024:

For the Six Months ended June 30, 2024

of each operating segment of the Company for the nine months ended September 30, 2024:

For the Nine Months ended September 30, 2024

Perfecular & Lusher

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Loss from operations

( 4,035,558 )

( 4,192,206 )

Total other income

Loss from discontinued operations

Note 10 – 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 reasonable estimated.

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

probable amount in the range is accrued.

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

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

On or about April 13, 2020, the Chief Operating

Officer (the “Former COO”) of our subsidiary AVX resigned from his position.

On May 5, 2020, the Former COO filed an action

in the Superior Court for the County of Los Angeles, State of California, against the company, et al.

The complaint sought unspecified

economic and non-economic losses, as well as attorneys’ fees.

On August 29, 2025, the Company and Former COO entered into a confidential

settlement agreement which concluded this matter and releases all claims against the Company.

This settlement has been accounted for in

these financial statements and is scheduled to be executed and concluded in early August.

Similarly, on or about

April 14, 2020, we terminated our Sales and Marketing Director (the “Former Sales and Marketing Director”).

On May 13, 2020,

the Former Sales and Marketing Director filed an action in the Superior Court for the County of Los Angeles, State of California.

The complaint

sought unspecified economic and non-economic losses, as well as attorneys’ fees.

On August 29, 2025, the Company and Former Sales

and Marketing Director entered into a confidential settlement agreement which concluded this matter and releases all claims against the

This settlement has been accounted for in these financial statements and this is scheduled to be executed and concluded in early

August as well.

The conclusion on these two related matters would mark the conclusion of all legal matters with respect to Focus

Universal Inc.

On August 26, 2024, a former software engineer

filed an action against Perfecular Inc., a wholly owned subsidiary of the Company, in the Superior Court for the County of San Bernardino,

State of California alleging wrongful termination and other violations of the California Labor Code.

The complaint seeks unspecified

economic and non-economic losses, as well as attorneys’ fees.

This case was settled for $ 130,000 plus legal fees, and its impact

recorded in the accompanying financial statements.

The Company has EPLI insurance with a deductible amount of $100,000.

During the quarter,

Focus Universal settled and this matter was finally executed and concluded on April 25, 2025.

$ ( 155,319 )

$ ( 1,083,457 )

$ ( 1,238,776 )

Note 10 – Subsequent Events

On July 15, 2025 and July 18, 2025 Alumni Capital

purchased 25,000 and 142,867 of our common shares for $86,995 and $354,282, respectively, based on our Equity Line of Credit (ELOC) Purchase

Agreement, dated November 16, 2024.

The price for these shares was $4.02 based on a 9% discount of the lowest of the 5-day VWAP of $4.41

from the closing date on July 15, 2025, accessible via the Bloomberg terminal.

In July, the Company repurchased 17,464

shares of its common stock for $70,092 with our broker Paulson Securities in the public market at an average price of $4.01 and placed

them in treasury.

All these shares were purchased as part of publicly announced plans or program, as also noted in the December 31, 2024

On September 15, 2025, the Company’s Board

and a majority of stockholders approved through a written consent an amendment and restatement of our Articles of Incorporation to increase

the number of shares we are authorized to issue to 1,000,000,000 shares of common stock, par value $0.001 per share (“Common Stock”)

and 100,000,000 shares of preferred stock, par value $0.001 per share (“Preferred Stock”) (the “Amended and Restated

The Company intends to file the Amended and Restated Articles with the Secretary of State of the State of Nevada on

or around November 17, 2025, as described in the 14C Information Statement filed on October 27, 2025.

As described in the 14C Information Statement

filed on October 27, 2025, on October 2, 2025 and October 10, 2025, the Company’s Board and a majority of stockholders, respectively,

through a written consent, authorized (1) management to use their discretion to consider the adoption of one or more digital asset treasury

(2) the issuance of up to $250 million in securities in one or more non-public offerings provided that (a) the total aggregate

consideration for securities we issue will not exceed $250 million (or 250 million shares of Common Stock issued directly or on conversion

of a convertible security), (b) the maximum discount at which securities (which may consist of shares of Common Stock or securities convertible

into Common Stock) will be equivalent to no more than a discount of 30% to the market price of our Common Stock at the date of issuance,

(c) such offerings will occur, if at all, on or before the date that is 90 days following the date of the 14C Information Statement, (d)

such other terms as our Board shall deem to be in the best interests of the Company and its stockholders, not inconsistent with the foregoing;

and (3) an amendment to our Articles of Incorporation to effect a potential reverse stock split of our Common Stock any time prior to

the first anniversary of the stockholders’ approval at a maximum ratio of 200-to-1, with the exact ratio to be determined at the

discretion of the Board.

On October 15, 2025,

the Company entered into a Series A Preferred Stock Purchase Agreement with the Chairman of the Board and one of our shareholders pursuant

to which we agreed to issue 500,000 and 250,000 shares of Series A Convertible Preferred Stock, par value $0.001 per share, at a price

of $4.00 per share, for an aggregate purchase price of $2,000,000 and $1,000,000, respectively.

The Company received the proceeds of $2,000,000

and $1,000,000 on October 17, 2025, and October 31, 2025, respectively.

On October 21, 2025, the Company filed a Certificate

of Designation of Series A Preferred Stock (“ Series A Designation ”) that had the effect of designating 1,000,000 shares

of its 5,000,000 authorized shares of preferred stock as Series A Preferred Stock.

Designation as filed with the Secretary of State of Nevada is included as Exhibit 3.1 in the Current Report on Form 8-K ,

filed on October 27, 2025.

On October 20, 2025, the Company filed a Certificate

of Designation of Series B Preferred Stock (“ Series B Designation ”) that had the effect of designating 15,000 shares

of its 5,000,000 authorized shares of preferred stock as Series B Convertible Preferred Stock.

Series B Designation as filed with the Secretary of State of Nevada is included as Exhibit 3.2 in the Current Report on Form

8-K , filed on October 27, 2025.

On October 22, 2025,

the Company entered into a Series B Preferred Stock Purchase Agreement with Spartan Capital Securities, LLC, pursuant to the terms and

conditions of the Series B Agreement, the Investors committed to purchase up to $7,000,000 or 8,236 shares (the “Commitment Amount”)

of the Company’s Series B Convertible Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”) at

a price per share of $850.00 (the “Series B Private Placement”), which represents a 15% original issuance discount.

will be three Closings:

(i) $3,000,000 for the purchase of the Series B Preferred Stock funded at the Initial Closing;

(ii) $1,000,000

for the purchase of the Series B Preferred Stock funded on the date the Company files, (a) the Registration Statement on Form S-1 required

by and pursuant to the Registration Rights Agreement and (b) the Information Statement with the SEC;

and (iii) $3,000,000 for the purchase

of the Series B Preferred Stock funded within two (2) Business Days after (a) such Registration Statement is declared effective by the

SEC and (b) the Information Statement has become effective under Rule 14c-2.

The Company received the initial proceeds of $3,000,000 on

October 23, 2025.

The Company has evaluated all other subsequent

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

What changed 10-Q

Item 1. Financial Statements