What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-11-10 compared with 2025-08-12 · 221 added, 287 removed, 294 unchanged (63% of the section changed)

MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF

MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN

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

(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:

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

(2) creating a

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

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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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.

The Company believes that signing a contract to produce the product in the final design signifies technological feasibility for

this product release, including the IoT software.

Additionally, on October 14, 2025, the Company launched the Smart IoT apps in the Apple

and Google Play Stores, for limited end client release prior to a broader general release.

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.

IoT Products under

under Smart AVX.

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.

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

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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.

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

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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.

We are scheduled to begin customer testing of

our fully automated SEC financial reporting software.

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

Interested clients, partners, corporate filers, and investors will be welcomed to contact us for meetings and product demonstrations.

SEC financial reporting is traditionally a complex,

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Preparing consolidated financial statements,

· Drafting SEC reports using various office software

and / or burdensome company-wide systems,

· Converting those documents into fully SEC-compliant

drafting SEC reports using various office software and / or burdensome company-wide systems,

converting those documents into fully SEC-compliant files, and

embedding tags as required for regulatory filing.

For large organizations, this process can take thousands

of person days.

For large organizations, this process is resource

intensive and time consuming.

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

Delays in filing can result in SEC reviews, enforcement

actions, and significant penalties.

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.

solutions that address only part of the tagging process.

We have developed a fully automated, end-to-end solution powered by both automation

and Variegated AI.

We believe the technology enables the computer to conduct the activities for which the computer is designed and optimal,

while allowing humans to remain in the decision loop and center upon what they excel at.

With a single click, our software can:

· Retrieve financial statements from accounting

· Reformat data into spreadsheets for consolidated

financial reporting,

Retrieve financial statements from accounting platforms,

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.

convert the documents to SEC-compliant versions via formatting, and

embed accurate tags into the HTML file — with very limited manual input.

On July 22, 2025, we began customer testing of

our fully automated SEC financial reporting software in the final design format of the software product.

The Company organized and conducted

a technology roadshow to showcase the platform.

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.

Management estimates that with this product what

once took weeks of manual work can now be completed in minutes.

Unlike other companies offering partial automation, our solution provides

a true one-click process from raw accounting data all the way to a complete SEC filing.

With years of development, our full automated

software processing includes 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.

We 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.

For our Company this marks a pivotal milestone in the commercialization of the Universal Smart IoT, a breakthrough that has been over

a decade in the making.

With over a decade of innovation, we are now ready to move forward with full-scale production and commercialization.

In doing so, we hope 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 internal research suggests that our platform provides both a competitive edge and cost

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

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

Intellectual Property Protection

On November 4, 2016, we filed U.S.

patent application

number 15/344,041 with the U.S.

Patent and Trademark Office (USPTO).

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.

The resulting U.S.

10,251,037 was issued on

February 26, 2019.

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

Patent Application

The patent title is a “Universal Smart Device,” which is a universal smart instrument that unifies heterogeneous

measurement probes into a single device that can analyze, publish, and share the data analyzed.

The resulting U.S.

was issued on April 2, 2019.

On November 29, 2019, the Company filed an international

utility patent application through the Patent Cooperation Treaty (PCT) as International Patent Application No.

PCT/US2019/63880.

6, 2022, the International Searching Authority (ISA) issued a favorable International Preliminary Report of Patentability (IPRP) regarding

this patent application, which describes the Company’s PLC technology.

The IPRP cited only three category “A” documents,

indicating that the Company’s application met both the novelty and non-obviousness patentability requirements.

Consequently, the

Company is optimistic that a patent including claims directed to its PLC technology will be issued in due course and will allow the Company

to protect its PLC technology.

In 2021, we hired the law firm of Knobbe, Martens,

Olson & Bear, LLP (“Knobbe Martens”) to serve as outside intellectual property counsel for the Company.

The firm is working

on converting the Company’s provisional patent applications to formal nonprovisional patent applications and expanding existing

patent portfolios.

In addition, Knobbe Martens is working on filing four previously unfiled patents and pursuing patent coverage in Europe

and Australia.

In addition, in May 2022, the Company engaged Chang & Hale, LLP as suggested by our counsel at Knobbe Martens to assist

with two new patents, noting that Knobbe Martens still remains our main IP counsel.

Currently, the Company has 18 pending 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 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

in the wireless sensor node industry, including traditional instruments or device manufacturers.

Hach developed and launched the SC1000

Multi-parameter Universal Controller, a probe module for connecting up to 32 digital sensors or analyzers.

However, their products are

not compatible with smart phones yet;

and we believe their price point is still prohibitive to consumers.

Monnit Corporation offers a

range of wireless and remote sensors.

Many of Monnit’s products are web-based wireless sensors that usually are not portable because

of their power consumption.

Also, the sensors’ real-time updates are slow;

and we believe security of the web-based sensor data

acquisition may also be a concern.

In addition to purchasing the device, consumers usually have to pay monthly fees for using web-based

We are not trying to compete with traditional instruments or device manufacturers because we utilize our Ubiquitor device in

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.

However, we are not trying to compete

with traditional instruments or device manufacturers because we utilize our Ubiquitor device in 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, we expect software implementation to be 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 Industry

Air Filtration Systems and Meter Products

The air filtration system and meter products industry

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many national and local governments overseeing indoor air quality and other emissions are enacting stricter workforce health and safety

regulations in this area, which drives demand.

regulations in this area, which drives demand for our products.

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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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.

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

Results of Operations

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

ended June 30, 2024

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

three months ended September 30, 2024

Revenue, cost of revenue and gross profit

For the three

June 30, 2025

September 30, 2025

For the three

June 30, 2024

September 30, 2024

Cost of revenue

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Our consolidated gross revenue for the three months

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.

ended September 30, 2025 and 2024 was $28,689 and $74,215, respectively.

Cost of revenue for the three months ended September 30, 2025

was $30,301, compared to $42,530 for the three months ended September 30, 2024.

The decrease 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 decrease in

revenue and cost of revenue, gross profit (loss) decreased to $(1,612) compared to $31,685 for the three months ended September 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:

The major components of our cost and operating

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

For the three

June 30, 2025

September 30, 2025

For the three

June 30, 2024

September 30, 2024

Selling expense

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Total operating expenses

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.

Selling expenses for the three months ended September

30, 2025 were $2,374, compared to $30,936 for the three months ended September 30, 2024.

Selling expenses were mainly from third party

advertising fees and marketing related fees.

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

Compensation – officers and directors were

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

The increase in cost was a result in the increase

$124,981 and $575,255 for the three months ended September 30, 2025 and 2024, respectively.

The decrease in cost was a result of the decrease

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

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.

Research and development costs were $288,078

and $308,516 for the three months ended September 30, 2025 and 2024, respectively.

This decrease was a result of the decrease the

number of R&D employees in this quarter.

Professional fees were $321,917 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 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.

months ended September 30, 2025, compared to $278,336 during the three months ended September 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 nine

months ended September 30, 2025 was $1,224,988 compared to $1,612,735 during the nine months ended September 30, 2024.

The decrease of

general and administrative expenses was primarily due to the Company receiving its employee retention credit from the internal revenue

service in 2025.

Other Income (expense)

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.

Other income for the three months ended September

30, 2025 was $14,001, compared to $3,215,560 for the three months ended September 30, 2024.

Loss from discontinued operations, net of tax

Loss from discontinued operations, net of tax was

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

Loss from discontinued operations, net of tax

was $0 and $26,784 during the three months ended September 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 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

Net income (losses)

During the three months ended September 30, 2025

and 2024, we incurred net income (loss) of $(1,166,375) and $1,441,927 respectively, due to the factors discussed above.

For the nine months ended September 30, 2025 compared to the

nine months ended September 30, 2024

Revenue, cost of revenue and gross profit

June 30, 2025

June 30, 2024

September 30, 2025

September 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

Our consolidated gross revenue for the nine months

ended September 30, 2025 and 2024 was $254,274 and $264,954, respectively.

Cost of revenue for the nine months ended September 30, 2025

was $237,754, compared to $127,686 for the nine months ended September 30, 2024.

In addition to the decrease in revenue and cost of revenue,

gross profit decreased to $16,520 compared to $137,268 for the nine months ended September 30, 2025 and 2024, respectively.

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 nine months ended September 30, 2025 and 2024 are outlined in the table below:

September 30, 2025

September 30, 2024

Selling expense

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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.

Selling expenses for the nine months ended September

30, 2025 were $58,774, compared to $96,027 for the nine months ended September 30, 2024.

Selling expenses were mainly from third party

advertising fees and marketing related fees.

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

Compensation – officers and directors were

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

The increase in cost was a result in the increase

$375,725 and $687,303 for the nine months ended September 30, 2025 and 2024, respectively.

The decrease in cost was a result in the decrease

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.

Research and development costs were $1,127,633

and $948,041 for the nine months ended September 30, 2025 and 2024, respectively.

The increase this period was a result of increased R&D

Professional fees were $1,224,063 during the nine

months ended September 30, 2025, compared to $985,368 during the nine months ended September 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 nine

months ended September 30, 2025 was $1,224,988 compared to $1,612,735 during the nine months ended September 30, 2024.

The decrease of

general and administrative expenses was primarily due to the Company received its employee retention credit from internal revenue service

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.

Other income for the nine months ended September

30, 2025 was $71,262, compared to $3,231,253 for the nine months ended September 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.

Loss from discontinued operations, net of tax

was $0 and $277,823 during the nine months ended September 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

During the nine months ended September 30, 2025 and

2024, we incurred net loss of $3,923,401 and $1,238,776 respectively, due to the factors discussed above.

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Working Capital

September 30,

Current Assets

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selected cash flow information:

For the six months ended June 30, 2025

For the six months ended June 30, 2024

For the nine months ended September 30, 2025

For the nine months ended September 30, 2024

Net cash used in operating activities

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$ (3,658,901 )

Net cash used in investing activities

Net cash provided by (used in) investing activities

Net cash provided by financing activities

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Our net cash outflows from operating activities

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

of $3,709,104 for the nine months ended September 30, 2025 was primarily the result of our net loss of $3,923,401 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

$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

Our net cash outflows from operating activities

of $3,658,901 for the nine months ended September 30, 2024 was primarily the result of our net loss of $1,238,776 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 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 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.

For the nine months ended September 30, 2025 we

had cash outflow from investing activities of $27,318 from the purchase of property and equipment of $27,318.

For the nine months ended

September 30, 2024, we had cash inflow from investing activities of $7,132,558 from the purchase of property and equipment of $13,250

and proceeds from sale of property of $7,145,808.

Cash Flows from Financing Activities

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

Purchase Agreement with Alumni Capital LP, a Delaware limited partnership.

Pursuant to the Purchase Agreement, we have the right, but

not the obligation to cause Alumni Capital to purchase up to $20,000,000 common stock, par value $0.00001, 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 has purchased

$20,000,000 of the Company’s common stock pursuant to the Purchase Agreement or (ii) November 11, 2027.

As of the date of issuance

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.

For the nine months ended September 30, 2025,

we had cash inflows of $572,826 due to stock issued for private placement of $822,501 offset by the purchase of treasury stock of $249,675.

For the nine months ended September 30, 2024, we had cash inflows of $1,451,000 due to proceeds from third party loan of $350,000, proceeds

from related party loan of $1,101,000, repayment on related party loan of $2,101,000, repayment on third party loan of $275,000, stock

issued for placement agent of $1,086,000 and stock issued for private placement of $1,290,000.

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

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 our Agreement, dated November 16, 2024, and the proceeds of an aggregate $822,501 have been

received and recorded for the period ended September 30, 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 unaudited condensed consolidated financial statements.

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

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

$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.

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

14 unchanged sentences

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.

At September 30, 2025, the Company had cash and

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

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.

Off-Balance Sheet Arrangements

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

As of September 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

See notes to consolidated financial statements regarding

recent accounting pronouncements.

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.

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