What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-05-14 compared with 2025-11-10 · 192 added, 247 removed, 268 unchanged (62% of the section changed)

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This automation is designed to create an error-free, seamless process.

We expect to showcase the software

to public in 2025.

Customer testing of the fully automated

SEC financial reporting software began in July 2025.

Our securities are currently traded on Nasdaq

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We have developed a device we call the Ubiquitor

which replaces the functions of traditional digital measurement and sensing products by integrating many digital sensors and measurement

tools into one single digital device.

We believe the platform represents a technological advancement in the IoT marketplace by integrating

large numbers of technologies, including cloud technology, wired and wireless communication technology, software programming, instrumentation

technology, artificial intelligence, PLC technology, and sensor networking into a single platform.

We believe the result of such integration

is a smaller, cheaper, and faster circuit system design than those currently offered in the instrumentation market.

(the "Ubiquitor"), which replaces the functions of traditional digital measurement and sensing products by integrating many

digital sensors and measurement tools into one single digital device.

We believe the platform represents a technological advancement in

the IoT marketplace by integrating large numbers of technologies, including cloud technology, wired and wireless communication technology,

software programming, instrumentation technology, artificial intelligence, PLC technology, and sensor networking into a single platform.

We believe the result of such integration is a smaller, cheaper, and faster circuit system design than those currently offered in the

instrumentation market.

Our USIP technology that will make the Ubiquitor

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

On July 11, 2025, Focus Universal signed a contract

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

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.

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Lusher Corporate Services, One Touch Financial

Financial reporting is the annual and quarterly

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

information they need before making an investment decision.

Because of the depth and nature of the information

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

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

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

Financial reporting is the annual and

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

have the information they need before making an investment decision.

Because of the depth and nature of the

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

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

The time and expertise required to complete

the process is a substantial burden.

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.

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

Human data entry of hundreds or thousands of financial

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

This risk is compounded by a frequent

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

prior to submission.

Given the complexity and volume of data involved,

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

also improve accuracy and compliance.

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

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

Human data entry of hundreds or thousands

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

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

and auditing processes prior to submission.

Given the complexity and volume of data

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

but also improve accuracy and compliance.

We began customer testing of our fully automated

SEC financial reporting software on July 22, 2025.

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

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,

costly, and time-consuming process.

SEC financial reporting is traditionally a complex, costly,

and time-consuming process.

Preparing consolidated financial statements,

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embedding tags as required for regulatory filing.

For large organizations, this process is resource

intensive and time consuming.

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

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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.

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

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

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“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.

December 31, 2025, filed with the Securities and Exchange Commission on March 31, 2026.

Research and Development Efforts of 5G Cellular

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and the 5G applications, see “Part I - Item 1.

Business, Section 2.

“Creating a faster 5G cellular technology by using ultra-narrowband

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

Business in our Annual Report on Form 10-K filed with the SEC on March 31, 2026.

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.

and officially commenced the mold tooling design for the Universal Smart Internet of Things (IoT).

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

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.

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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.

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

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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 for our products.

regulations in this area, which drives demand.

Market Potential

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that are sensitive to price.

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

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

Software as a Service (SaaS) model.

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

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

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

2022, an increase of 21.5%.

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

More specifically, the

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

The IoT marketplace size assessments usually

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

Additionally, the

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

currently predominant services in the 5G category.

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

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

services proved to be more effective and efficient.

The financial reporting software market size was

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

Purchase of Building

January 21, 2026, the Company entered into a purchase, sale, and escrow agreement with 901 Corporate Center, LP to acquire a 100,743

office and commercial building, along with a four-level parking structure, located in Monterey Park, California.

price was $17,700,000, with an escrow deposit of $525,000.

The escrow was initially scheduled to close within sixty days of opening escrow.

The $525,000 deposit was placed into the escrow account on January 26, 2026.

Lusher Holding LLC, a subsidiary of the Company, entered

into a term loan agreement with East West Bank (the “East West Loan”) to borrow $11,050,000, at 6.25% interest for the first

3-years, then floating at the Wall Street Journal Prime Rate plus (+) 0.25% for the remaining term, with a floor interest rate at 6.25%.

The loan provides for 36 consecutive monthly principal and interest payments of approximately $68,698.64, beginning on May 1, 2026 and

subsequently, 83 monthly principal and interest payments of an initially estimated amount of approximately $73,917.99 (subject to change

based on Wall Street Journal Prime Rate plus 0.25%) beginning May 1, 2029.

A final principal and interest payment of approximately $9,533,143.67

(subject to change based on Wall Street Journal Prime Rate plus 0.25%) is due on April 1, 2036.

Focus Universal Inc.

is listed as the

primary guarantor for this East West Loan with Desheng Wang listed as a backup guarantor.

Lusher Holding LLC on Friday, April 17, 2026,

deposited $11 million, from the East West Loan to escrow and $5.8 million as downpayment to close escrow.

As of April 17, 2026, the Company

and Lusher Holding LLC have completed the purchase of the building.

The building will serve as Focus Universal’s principal headquarters

and is expected to carry the same rent roll in 2026.

Results of Operations

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

three months ended September 30, 2024

For the three months ended March 31, 2026 compared to the three

months ended March 31, 2025

Revenue, cost of revenue and gross profit

For the three

September 30, 2025

March 31, 2026

For the three

September 30, 2024

March 31, 2025

Cost of revenue

Gross Profit (Loss)

Our consolidated gross revenue for the three months

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.

ended March 31, 2026 and 2025 was $47,973 and $190,255, respectively.

Cost of revenue for the three months ended March 31, 2026 was $32,729,

compared to $159,711 for the three months ended March 31, 2025.

The decrease in cost of revenue was primarily due to the decrease in revenue

and fewer LED installation projects during the period and also the increase in LED materials.

In addition to the decrease in revenue and

cost of revenue, gross profit decreased to $15,244 compared to $30,544 for the three months ended March 31, 2026 and 2025, respectively.

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:

expenses for the three months ended March 31, 2026 and 2025 are outlined in the table below:

For the three

September 30, 2025

March 31, 2026

For the three

September 30, 2024

March 31, 2025

Selling expense

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Total operating expenses

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.

Selling expenses for the three months ended March

31, 2026 were $32,848, compared to $48,980 for the three months ended March 31, 2025.

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

$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 $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.

Compensation – officers and directors were $117,551 and $125,387

for the three months ended March 31, 2026 and 2025, respectively.

The decrease in cost was a result of the decrease in the share price,

which reduced the stock-based compensation expense for the associated directors.

Research and development costs were $264,797 and

$372,258 for the three months ended March 31, 2026 and 2025, respectively.

The decrease was due to software costs being capitalized in

the current year.

Professional fees were $385,205 during the three

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 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

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.

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

September 30, 2025

September 30, 2024

Cost of revenue

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

Compensation – officers and directors

Research and development

Professional fees

General and administrative

Total operating expenses

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

$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 $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

months ended March 31, 2026, compared to $472,991 during the three months ended March 31, 2025.

The decrease in these professional fees

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

General and administrative expenses for the

three months ended March 31, 2026 was $486,554 compared to $282,455 during the three months ended March 31, 2025.

The increase in

general and administrative expenses was primarily due to the Company having received its employee retention credit from the Internal

Revenue Service in 2025, which reduced the prior year’s comparable expenses.

Other Income (expense)

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

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 nine months ended September 30, 2025 and

Other income for the three months ended March

31, 2026 was $25,633, compared to $20,149 for the three months ended March 31, 2025.

During the three months ended March 31, 2026 and 2025,

we incurred net loss of $1,246,078 and $1,251,378 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 nine months ended September 30, 2025

For the nine months ended September 30, 2024

For the three months ended March 31, 2026

For the three months ended March 31, 2025

Net cash used in operating activities

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$ (1,220,049 )

Net cash provided by (used in) investing activities

Net cash provided by financing activities

Net cash used in investing activities

Net cash used in financing activities

Effect of exchange rate

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$ (1,922,241 )

$ (1,393,718 )

Cash Flows from Operating Activities

Our net cash outflows from operating activities

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.

of $1,148,500 for the three months ended March 31, 2026 was primarily the result of our net loss of $1,246,078 and changes in our operating

assets and liabilities offset by the add-back of non-cash expenses.

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.

of $1,220,049 for the three months ended March 31, 2025 was primarily the result of our net loss of $1,251,378 and changes in our operating

assets and liabilities offset by the add-back of non-cash expenses.

We expect that cash flows from operating activities

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Cash Flows from Investing Activities

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.

For the three months ended March 31, 2026 we had

cash outflow from investing activities of $622,216 from the purchase of property and equipment of $297, deposit on building of $525,000

and capitalized software cost of $96,919.

For the three months ended March 31, 2025 we had cash outflow from investing activities of $23,380

from the purchase of property and equipment of $23,380.

Cash Flows from Financing Activities

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.

For the three months ended March 31, 2026, we

had cash outflows of $154,617 due to purchase of treasury stock of $154,617.

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

of $144,575 due to purchase of treasury stock of $144,575.

Going Concern

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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.

has a net loss of $1,246,078 for the three months ended March 31, 2026.

In addition, the Company had an accumulated deficit of $32,496,155

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.

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 March 31, 2026, and negative cash flow from operating activities of $1,148,500 for the three months ended March 31, 2026.

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

GAAP, which contemplate

continuation of the Company as a going concern.

The Company currently suffered recurring losses 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 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.

At March 31, 2026, the Company had cash and cash

equivalents, and short-term investments, in the amount of $6,021,591.

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

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

arising from normal business operations when they come due.

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

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

Even if the Company is able to obtain

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

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

No assurance can be given

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

Off-Balance Sheet Arrangements

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

As of March 31, 2026, we did not have any off-balance-sheet arrangements,

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

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The discussion and analysis of our financial condition

and results of operations are based upon our financial statements, which have been prepared in accordance with the accounting principles

generally accepted in the United States of America.

Preparing financial statements requires management to make estimates and assumptions

that affect the reported amounts of assets, liabilities, revenue, and expenses.

These estimates and assumptions are affected by management’s

application of accounting policies.

We believe that understanding the basis and nature of the estimates and assumptions involved with

the following aspects of our financial statements is critical to an understanding of our financial statements.

and results of operations are based upon our financial statements, which have been prepared in accordance with U.S.

Preparing financial

statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and

These estimates and assumptions are affected by management’s application of accounting policies.

We believe that understanding

the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an

understanding of our financial statements.

Use of Estimates

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Recent Accounting Pronouncements

See notes to consolidated financial statements

regarding recent accounting pronouncements.

Our Company has implemented all new accounting

pronouncements that are in effect and that may impact its financial statements.

Except for ASU 2024-03, which the Company is currently

evaluating as discussed in Note 3, the Company does not believe that there are any other new accounting pronouncements that have been

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

QUANTITATIVE AND QUALITATIVE DISCLOSURES

3 unchanged sentences

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