FOCUS UNIVERSAL INC. 10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the Quarterly period ended June 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Commission File No. 000-40770

FOCUS UNIVERSAL INC.

(Exact Name of Small Business Issuer as specified in its charter)

Nevada	46-3355876
(State or other jurisdiction	(IRS Employer File Number)
of incorporation)

2311 E. Locust Court, Ontario, CA	91761
(Address of principal executive offices)	(Zip Code)

(626) 272-3883

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.001 par value

FCUV

The Nasdaq Stock Market LLC

(Nasdaq Capital Market)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files. Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 01, 2025, registrant had 7,386,705 shares outstanding of the registrant's common stock at a par value of $0.001 per share.

FORM 10-Q

FOCUS UNIVERSAL INC.

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION	3

Item 1. Condensed Consolidated Financial Statements (Unaudited)	3

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3. Quantitative and Qualitative Disclosures About Market Risk	34

Item 4. Controls and Procedures	34

PART II OTHER INFORMATION	36

Item 1. Legal Proceedings	36

Item 1A. Risk Factors	36

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	36

Item 3. Defaults Upon Senior Securities	36

Item 4. Mine Safety Disclosures	36

Item 5. Other Information	36

Item 6. Exhibits	37

Signatures	38

PART I. FINANCIAL INFORMATION

References in this document to “us,” “we,” or “Company” refer to Focus Universal Inc.

ITEM 1. FINANCIAL STATEMENTS

FOCUS UNIVERSAL INC.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Index to the Financial Statements

Contents	Page

Condensed Consolidated Balance Sheets as of June 30, 2025 (unaudited) and December 31, 2024	4

Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2025 and 2024 (unaudited)	5

Condensed Consolidated Statements of Changes in Stockholder’s Equity for the Three and Six Months Ended June 30, 2025 and 2024 (unaudited)	6

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024 (unaudited)	8

Notes to the Unaudited Condensed Consolidated Financial Statements	9

FOCUS UNIVERSAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


	June 30,			December 31,
	2025			2024
	(Unaudited)
ASSETS
Current Assets:
Cash	$	1,111,201		$	3,589,318
Accounts receivable, net		150			5,584
Inventories, net		138,370			126,071
Prepaid expenses		96,599			100,730
Other receivable		88,201			–
Marketable securities		39,413			24,660
Deposits – current portion		63,029			–
Total Current Assets		1,536,963			3,846,363

Property and equipment, net		75,518			60,485
Operating lease right-of-use asset		62,324			108,270
Deposits		–			65,195

Total Assets	$	1,674,805		$	4,080,313

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts payable and accrued liabilities	$	793,419		$	702,065
Other current liabilities		3,566			68,204
Lease liability, current portion		32,239			106,706
Total Current Liabilities		829,224			876,975

Non-Current Liabilities:
Lease liability, less current portion		–			8,114
Total Non-Current Liabilities		–			8,114

Total Liabilities		829,224			885,089

Contingencies		–			–

Stockholders' Equity:
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		7,219			7,154
Treasury stock at cost (39,574 and 348,968 shares held at June 30, 2025 and December 31, 2024, respectively)		(173,838	)		(1,055,592	)
Additional paid-in capital		29,564,293			30,025,587
Shares to be issued, common shares		22,864			25,573
Accumulated deficit		(28,539,334	)		(25,782,308	)
Accumulated other comprehensive loss		(35,623	)		(25,190	)
Total Stockholders' Equity		845,581			3,195,224

Total Liabilities and Stockholders' Equity	$	1,674,805		$	4,080,313

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

FOCUS UNIVERSAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)


	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
Revenue	$	35,330		$	11,234		$	225,585		$	190,739

Cost of revenue		47,742			(4,050	)		207,453			85,156

Gross Profit (Loss)		(12,412	)		15,284			18,132			105,583

Operating Expenses
Selling expense		7,420			35,640			56,400			74,925
Compensation - officers and directors		125,357			55,255			250,744			112,048
Research and development		467,297			296,248			839,555			639,525
Professional fees		429,155			354,421			902,146			707,032
General and administrative		501,119			505,561			783,574			1,017,800
Total Operating Expenses		1,530,348			1,247,125			2,832,419			2,551,330

Loss from Operations		(1,542,760	)		(1,231,841	)		(2,814,287	)		(2,445,747	)

Other Income (Expense):
Interest income (expense), net		12,130			(9,900	)		34,018			(11,153	)
Interest (expense) - related party		–			(56,098	)		–			(89,098	)
Unrealized gain (loss) on marketable equity securities		17,745			(7,680	)		14,753			(9,155	)
Rental income		–			41,547			–			82,692
Other income, net		7,237			45,142			8,490			42,797
Total other income		37,112			13,011			57,261			16,083

Loss from continuing operations		(1,505,648	)		(1,218,830	)		(2,757,026	)		(2,429,664	)
Loss from discontinued operations, net of tax		–			(146,276	)		–			(251,039	)
Net Loss	$	(1,505,648	)	$	(1,365,106	)	$	(2,757,026	)	$	(2,680,703	)

Other comprehensive items
Foreign currency translation loss		(4,065	)		(7,287	)		(10,433	)		(8,276	)

Total comprehensive loss	$	(1,509,713	)	$	(1,372,393	)	$	(2,767,459	)	$	(2,688,979	)

Basic net income loss per share:
Continuing operations	$	(0.20	)	$	(0.19	)	$	(0.38	)	$	(0.37	)
Discontinued operations		–			(0.02	)		–			(0.04	)
Basic net loss per share	$	(0.20	)	$	(0.21	)	$	(0.38	)	$	(0.41	)

Weighted Average Number of Common Shares Outstanding: Basic and Fully Diluted		7,530,930			6,483,739			7,188,374			6,480,442

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

FOCUS UNIVERSAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

(UNAUDITED)


	Common Stock						Treasury Stock			Additional Paid-In			Shares to be issued Common		Accumulated			Accumulated Other Comprehensive			Total Stockholders'
Description	Shares			Amount			at Cost			Capital			Shares		Deficit			Loss			Equity
Balance – March 31, 2025		7,472,981		$	7,473		$	(1,200,167	)	$	30,138,792		$	17,295	$	(27,033,686	)	$	(31,558	)	$	1,898,149

Stock based compensation - options		–			–			–			10,284			–		–			–			10,284

Stock based compensation - shares		–			–			–			89,330			5,569		–			–			94,899

Purchase of treasury stock		–			–			(29,262	)		–			–		–			–			(29,262	)

Retirement of treasury stock		(348,968	)		(349	)		1,055,591			(1,055,242	)		–		–			–			–

Stock issued for cash		94,825			95			–			381,129			–		–			–			381,224

Other comprehensive income		–			–			–			–			–		–			(4,065	)		(4,065	)

Net loss		–			–			–			–			–		(1,505,648)			–			(1,505,648	)

Balance – June 30, 2025		7,218,838		$	7,219		$	(173,838	)	$	29,564,293		$	22,864	$	(28,539,334	)	$	(35,623	)	$	845,581

	Common Stock						Treasury Stock			Additional Paid-In			Shares to be issued Common			Accumulated			Accumulated Other Comprehensive			Total Stockholders'
Description	Shares			Amount			at Cost			Capital			Shares			Deficit			Loss			Equity
Balance – March 31, 2024		6,477,182		$	6,477		$	(434,048	)	$	26,531,450		$	169,386		$	(23,897,767	)	$	(14,553	)	$	2,360,945

Stock based compensation - options		–			–			–			36,995			–			–			–			36,995

Stock based compensation - shares		12,594			12			–			287,514			(153,418	)		–			–			134,108

Retirement of treasury stock		(3,000	)		(3	)		48,362			(48,359	)		–			–			–			–

Other comprehensive income		–			–			–			–			–			–			(7,287	)		(7,287	)

Net loss		–			–			–			–			–			(1,365,106	)		–			(1,365,106	)

Balance – June 30, 2024		6,486,776		$	6,486		$	(385,686	)	$	26,807,600		$	15,968		$	(25,262,873	)	$	(21,840	)	$	1,159,655


	Common Stock						Treasury Stock			Additional Paid-In			Shares to be issued Common			Accumulated			Accumulated Other Comprehensive			Total Stockholders'
Description	Shares			Amount			at Cost			Capital			Shares			Deficit			Loss			Equity
Balance – December 31, 2024		7,153,647		$	7,154		$	(1,055,592	)	$	30,025,587		$	25,573		$	(25,782,308	)	$	(25,190	)	$	3,195,224

Stock based compensation - options		–			–			–			20,568			–			–			–			20,568

Stock based compensation - shares		10,053			10			–			192,560			(2,709	)		–			–			189,861

Purchase of treasury stock		–			–			(173,837	)		–			–			–			–			(173,837	)

Stock split rounding up		309,281			309			–			(309	)		–			–			–			–

Retirement of treasury stock		(348,968	)		(349	)		1,055,591			(1,055,242	)		–			–			–			–

Stock issued for cash		94,825			95			–			381,129			–			–			–			381,224

Other comprehensive income		–			–			–			–			–			–			(10,433	)		(10,433	)

Net loss		–			–			–			–			–			(2,757,026	)		–			(2,757,026	)

Balance – June 30, 2025		7,218,838		$	7,219		$	(173,838	)	$	29,564,293		$	22,864		$	(28,539,334	)	$	(35,623	)	$	845,581

	Common Stock						Treasury Stock			Additional Paid-In			Shares to be issued Common			Accumulated			Accumulated Other Comprehensive			Total Stockholders'
Description	Shares			Amount			at Cost			Capital			Shares			Deficit			Loss			Equity
Balance – December 31, 2023		6,477,182		$	6,477		$	(434,048	)	$	26,494,455		$	74,476		$	(22,582,170	)	$	(13,564	)	$	3,545,626

Stock based compensation - options		–			–			–			73,990			–			–			–			73,990

Stock based compensation - shares		12,594			12			–			287,514			(58,508	)		–			–			229,018

Retirement of treasury stock		(3,000	)		(3	)		48,362			(48,359	)		–			–			–			–

Other comprehensive income		–			–			–			–			–			–			(8,276	)		(8,276	)

Net loss		–			–			–			–			–			(2,680,703	)		–			(2,680,703	)

Balance – June 30, 2024		6,486,776		$	6,486		$	(385,686	)	$	26,807,600		$	15,968		$	(25,262,873	)	$	(21,840	)	$	1,159,655

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

FOCUS UNIVERSAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


	For the Six Months Ended June 30,
	2025			2024
Cash flows from operating activities:
Net Loss	$	(2,757,026	)	$	(2,680,703	)
Adjustments to reconcile net loss to net cash from operating activities:
Bad debt expense		–			60,570
Inventory reserve		1,644			–
Depreciation expense		10,959			67,354
Unrealized (gain) and loss on marketable equity securities		(14,753	)		9,155
Stock-based compensation – shares		189,861			229,018
Stock based compensation – options		20,568			73,990
Changes in operating assets and liabilities:
Accounts receivable		5,434			(63,233	)
Inventories		(13,943	)		(213,873	)
Other receivable		(88,201	)		20,394
Deposit		2,593			(2,223	)
Prepaid expenses		4,186			(

SEC Form 10-Q filed by Focus Universal Inc.