Focus Universal Inc. (FCUV) 2021年年度報告「NASDAQ」.pdf

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1、Table of Contents UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549 FORM 10-K(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31,2021 or TRANSITION REPORT UNDER SECTION 13 OR 15(d)OF THE SECURITIES EXCH

2、ANGE ACT OF 1934 For the transition period from _ to _ Commission file number 333-193087 FOCUS UNIVERSAL INC.(Exact name of registrant as specified in its charter)Nevada 46-3355876(State or other jurisdiction of(I.R.S.Employer Identification No.)Incorporation or organization)2311 East Locus Court,On

3、tario,CA 91761(Address of principal executive offices)(Zip Code)Registrants telephone number,including area code(626)272-3883 Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredCommon Stock,$0.001 par valueFCUVThe Na

4、sdaq Stock Market LLC(Nasdaq Global Market)Securities registered pursuant to Section 12(g)of the Act:Title of each classNone Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the registrant is not re

5、quired to file reports pursuant to Section 13 or 15(d)of the Act.Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12months(or for such shorter period that the registrant

6、 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(232.405 of this ch

7、apter)during the preceding 12 months(or for 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 growthcompa

8、ny.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 com

9、pany,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financialaccounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the registrant has filed a report on and attest

10、ation to its managements assessment of the effectiveness of its internal control over financialreporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.Indicate by check mark whether the registrant is a

11、shell company(as defined in Rule 12b-2 of the Act).Yes No As of June 30,2021,the aggregate market value of shares held by non-affiliates of the registrant(based upon the closing price of such shares on the OTCQB Market on June30,2021)was$112,565,464.For purposes of calculating the aggregate market v

12、alue of shares held by non-affiliates,we have assumed that all outstanding shares are held bynon-affiliates,except for shares held by each of our executive officers,directors and 5%or greater stockholders.In the case of 5%or greater stockholders,we have not deemedsuch stockholders to be affiliates u

13、nless there are facts and circumstances which would indicate that such stockholders exercise any control over our company,or unless theyhold 10%or more of our outstanding common stock.These assumptions should not be deemed to constitute an admission that all executive officers,directors and 5%or gre

14、aterstockholders are,in fact,affiliates of our company,or that there are not other persons who may be deemed to be affiliates of our company.Further information concerningshareholdings of our officers,directors and principal stockholders is included in Part III,Item 12 of this Annual Report on Form

15、10-K.The number of shares outstanding of the registrants common stock,$0.001 par value,outstanding as of March 8,2022:43,259,741.DOCUMENTS INCORPORATED BY REFERENCE None.TABLE OF CONTENTS Part IPage No.Item 1.Business1 Item 1A.Risk Factors28 Item 1B.Unresolved Staff Comments42 Item 2.Properties42 It

16、em 3.Legal Proceedings42 Item 4.Mine Safety Disclosures43 Part II Item 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities44 Item 6.Reserved45 Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations45 Item 7

17、A.Quantitative and Qualitative Disclosures About Market Risk52 Item 8.Financial Statements and Supplementary DataF-1 Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure51 Item 9A.Controls and Procedures51 Item 9B.Other Information54 Item 9C.Disclosure Regardin

18、g Foreign Jurisdictions that Prevent Inspections54 Part III Item 10.Directors,Executive Officers and Corporate Governance55 Item 11.Executive Compensation60 Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters63 Item 13.Certain Relationships and Rela

19、ted Transactions,and Director Independence63 Item 14.Principal Accounting Fees and Services64 Part IV Item 15.Exhibits,Financial Statement Schedules65 Item 16.Form 10-K Summary65 Signatures66 i FOCUS UNIVERSAL INC.FORWARD-LOOKING STATEMENTS This Annual Report contains forward-looking statements.Forw

20、ard-looking statements are projections of events,revenues,income,future economic performance ormanagements plans and objectives for our future operations.In some cases,you can identify forward-looking statements by terminology such as“may,”“should,”“expects,”“plans,”“anticipates,”“believes,”“estimat

21、es,”“predicts,”“potential”or“continue”or the negative of these terms or other comparable terminology.These statements are onlypredictions and involve known and unknown risks,uncertainties and other factors,including,but not limited to,the risks in the section entitled“Risk Factors”and the risks seto

22、ut below,any of which may cause our or our industrys actual results,levels of activity,performance or achievements to be materially different from any future results,levelsof activity,performance or achievements expressed or implied by these forward-looking statements.These risks include,by way of e

23、xample and not in limitation:the uncertainty of profitability based upon our history of losses;risks related to failure to obtain adequate financing on a timely basis and on acceptable terms;risks related to our international operations and currency exchange fluctuations;and other risks and uncertai

24、nties related to our business plan and business strategy.This list is not an exhaustive list of the factors that may affect any of our forward-looking statements.These and other factors should be considered carefully,and readers shouldnot place undue reliance on our forward-looking statements.Forwar

25、d-looking statements are made based on managements beliefs,estimates and opinions on the date thestatements are made,and we undertake no obligation to update forward-looking statements if these beliefs,estimates and opinions or other circumstances should change.Although we believe that the expectati

26、ons reflected in the forward-looking statements are reasonable,we cannot guarantee future results,levels of activity,performance orachievements.Except as required by applicable law,including the securities laws of the United States,we do not intend to update any of the forward-looking statements toc

27、onform these statements to actual results.Our financial statements are stated in United States dollars(US$)and are prepared in accordance with United States Generally Accepted Accounting Principles.All referencesto“common stock”refer to the common shares in our capital stock.As used in this annual r

28、eport,the terms“we,”“us,”“our,”the“Company”and“Focus Universal”mean Focus Universal Inc.unless otherwise indicated.ii PART I Item 1.BUSINESS Company Background.Focus Universal Inc.(the“Company,”“we,”“us,”or“our”)is a Nevada corporation.We are based in the city of Ontario,California,and were incorpor

29、ated in Nevada in 2012.In December of 2013,we filed an S-1 registration statement that went effective on March 14,2014.From March 14,2014 through August 30,2021,our securities traded on theOTCQB Market.From August 31,2021 through January 27,2022,our securities traded on the Nasdaq Capital Market.Fro

30、m January 28,2022,our securities have traded onthe Nasdaq Global Market.Our website is .Our website and the information contained therein or connected thereto are not intended to be incorporated into this report.We have developed five proprietary platform technologies that we believe solve the most

31、fundamental problems plaguing the internet of things(“IoT”)industry by:(1)increasing the overall degree of chip integration capabilities by shifting integration from the component level directly to the device level;(2)creating a faster 5G cellulartechnology by using ultra-narrowband technology;(3)le

32、veraging ultra-narrowband power line communication(“PLC”)technology;(4)developing a natural integratedprogramming language(“NIPL”)applied to software development,which generates a user interface through machine auto generation technology;and(5)developing auniversal smart instrumentation platform(“US

33、IP”).Index of Key Technical Abbreviated Terms AbbreviationFull Term5GFifth Generation Mobile Wireless Telecommunications NetworkFSKGaussian Frequency Shift KeyingHANsHome Area NetworksICIntegrated ChipIoTInternet of ThingsLTE NetworksLong-Term Evolution NetworksMOS TransistorMetal-Oxide-Silicon Tran

34、sistorPLCPower Line CommunicationUNBUltra-narrowbandUSIOUniversal Smart Instrumentation Operating SystemUSIPUniversal Smart Instrumentation Platform 1.Our goal is to increase the overall degree of chip integration capabilities by shifting integration from the component level directly to the device l

35、evel.We have developed an innovative and proprietary“device on a chip”(“DoC”)technology,which combines the required electronic circuits of various integrated circuitcomponents onto a single,integrated chip(“IC”)and pushes beyond the limits of current integrated chip.Our DoC technology works as a sin

36、gle component but is capable ofhandling entire IoT device functions(excluding sensors and architecture-specific components).Our DoC technology includes both the hardware and software,uses less powercompared to traditional IoT devices,with better performance,includes smaller overall devices,and offer

37、s greater reliability in spite of decreasing the number ofinterconnections between components.We believe that incorporating our DoC technology into our product offering,will simplify the manufacturing process,lowering our costsand allowing us to achieve a faster time-to-market,when compared to our c

38、ompetitors who only manufacture and sell multi-chip devices.Our planned DoC technology allowsdevices to achieve interoperability with one another and are interchangeable,both features where traditional IoT devices fall short.1 Our research and development suggests that the existing IC integration in

39、 IoT devices is mainly focused on hardware-to-hardware integration,not incorporating softwaresolutions.This lack of incorporating software under a common operating system,application software,and extra interface into ICs,limits IC integration to the component level.Software is a critical component i

40、n electronics,and the more tightly integrated the software,the better the power and performance.Software also adds an element of flexibilityand allows multiple discrete ICs,which in the past were unable to be further integrated into a single IC.Currently,ICs integration requires the development and

41、manufacture of customized hardware and software.As a result,IC fabrication is too expensive to manufacture on alarge scale.IC is ideally designed for products that are intended for mass production to keep manufacturing costs low by producing uniform products using repetitive andstandardized processe

42、s.Product standardization has become a major bottleneck in device-level IC fabrication because most devices are custom-designed and manufactured.The Universal Smart Instrumentation Platform(“USIP”)we developed is a standardized,universal hardware and software integration platform that provides a uni

43、versalcommon foundation for what we anticipate will be thousands of IoT and standalone devices.The electronic design and production starts from a 90%completed commonfoundation,our USIP,instead of the individual components that necessitate the current method of building each standalone instrument fro

44、m scratch.USIP allows ICs to beintegrated from the component level up to the device level,which pushes the frontier of semiconductor technology beyond Moores Law.Our USIP also eliminates redundanthardware and software and results in significant cost savings and production efficiency.Figure 1.From US

45、IP to device level integrated circuits(“IC”).2.Creating a faster 5G cellular technology by using ultra-narrowband technology.Fifth-generation(“5G”)telecommunications networks will revolutionize the digital economy by enabling new applications that depend on ultra-fast communications on anindustrial

46、scale.5G promises to deliver an improved end-user experience by offering new applications and services through gigabit speeds and significantly improvedperformance and reliability.5G will build on the successes of 2G,3G,and 4G mobile networks,which have transformed society,supporting new services an

47、d new businessmodels.5G provides an opportunity for wireless operators to move beyond providing connectivity services to developing rich solutions and services for consumers andindustries across a wide range of sectors at an affordable cost.5G is an opportunity to implement wired and wireless conver

48、ged networks and offers particular opportunities tointegrate network management systems.The United States and China are in a race to deploy 5G wireless networks,and the country that gets there first will lead in standard-setting,patents,and the global supply chain.A World Economic Forum report state

49、d that by 2035 5G networks would contribute$13.2 trillion in economic value globally andgenerate 22.3 million jobs in the 5G global value chain from direct network investments and residual services.1 5G networks and their related applications are expected to addthree million jobs and$1.2 trillion to

50、 the economy in the U.S.2 _1 World Economic Forum,January 2020“The Impact of 5G:Creating New Value across Industries and Society,”available at:http:/www3.weforum.org/docs/WEF_The_Impact_of_5G_Report.pdf(last accessed January 10,2022).2 https:/ accessed on January 10,2022).2 Though 5G offers a signif

51、icant increase in speed and bandwidth over previous generation telecommunication networks,its more limited range for high-speed internet willrequire further infrastructure investments.A 5G network requires spectrum across low,mid,and high spectrum bands to deliver widespread coverage and support a w

52、ide rangeof use cases.3 A low-band cell site can cover hundreds of square miles and deliver a downlink data rate in the range of 30-250 Mbps.4 Mid-band frequencies(2.5/3.5Ghz)canalso travel fairly long distances but can carry a lot more data than low-band cell sites.5 Mid-band 5G base stations can t

53、ransmit and receive high-capacity signals over fairlylarge areas.They can represent an ideal mix of performanceincluding some networks providing download speeds around 100-900 Mbpsfor the bulk of 5G traffic inmetropolitan areas.6 High-band 5G uses millimeter-wave(mmWave)frequency bands.Despite recei

54、ving plenty of publicity,high-band is actually a very specialized part of the5G offering.7 Functioning over a shorter radius,its particularly useful in urban areas and busy venues like stadiums and shopping malls.8 With the potential to offer data ratesof up to 10 Gbps,high-band 5G is already being

55、deployed in several major cities.Download speeds for carriers high-band 5G can sometimes clock in around 450 Mbps,withpeak speeds of nearly 1 Gbps,and upload speeds near 50 Mbps.9 High-band,mmWave spectrum is used primarily for urban and dense urban markets.The characteristics of high-band,mmWave sp

56、ectrum is that it is very wide and provides asignificant increase in capacity.Because of the greater spectrum width,speed is increased,and transmission latency is reduced.However,the drawback is that high-bandspectrum does not propagate over a large coverage area.For example,a 28 GHz mmWave spectrum

57、 can only travel 500 feet.10 Low-band frequencies can travel long distances and penetrate buildings but can only carry a limited amount of data.High-band frequencies can carry a substantial amount ofdata,but due to their shorter wavelength,they travel shorter distances and are more susceptible to bu

58、ildings and trees blocking the signal.11 _3 Horwitz,Jeremy(December 10,2019).“The definitive guide to 5G low,mid,and high band speeds.”VentureBeat online magazine(available at:https:/ accessed January 10,2022).4 Id.5 Id.6 Id.7 See“5G RolloutBeyond the Hype.”Parsons Cyber Blog,June 16,2020(“As a resu

59、lt,5G base stations must be positioned as close as a third of a mile,whereas 4G basestations can provide coverage of 20 to 45 miles.This limitation becomes especially acute in more rural and/or remote areas,wherein 5G networks become impractical”)(available at:https:/ accessed,April 15,2021).8 Id.9

60、https:/www.t- accessed January 5,2022).10 https:/ accessed January 5,2022).11 https:/ accessed January 5,2022).3 Unlike 4G LTE,which operates on established frequency bands below 6GHz,5G requires frequencies up to 300GHz.Wireless carriers still need to bid for the costly higherspectrum bands,as they

61、 build and roll out their respective 5G networks.Adding the hardware required for 5G networks can significantly increase operating expenses.Building5G networks is expensive.According to Heavy Readings Mobile Operator 5G Capex,total global spending on 5G is set to reach$88 billion by 2023.12 Figure 2

62、.Mobile Operator 5G Capex Forecasts:2018-2023.A typical 5G base station consumes up to twice or more the power of a 4G base station.Energy costs can grow even more at higher frequencies due to a need for more antennasand a denser layer of small cells.Edge computing facilities needed to support local

63、 processing and new internet of things(IoT)services will also add to overall network powerusage.Figure 3.Site Power requirements 2G,2-4G,and 5G.Select 5G base stations in China are being powered off every day from 21:00 to 9:00 to reduce energy consumption and lower electricity bills.5G base station

64、s are substantialenergy consumers such that electricity bills have become one of the highest costs for 5G network operators._12 Heavy Reading,Report,“Mobile Operator 5G Capex Forecasts:2018-2023”available at:http:/ accessed on January 5,2022).4 Our ultra-narrowband wireless communication 5G+technolo

65、gy aims to achieve both low band 5G coverage and 1 Gbps high-band speed because we employ an ultra-narrowspectrum channel(1KHz)to establish an ultra-long-distance link between the 5G base station and the receiver.The ultra-narrowband modulation was initially conceived in1985 by Dr.Harold R.Walker as

66、 a method to be used with frequency modulation(FM)Sub-Carriers(as opposed to“FM Supplementary Carriers”or“In Band On Channel”Carriers).In its original form,data rates as high as 196 kb/s were obtained from a subcarrier at 98 kHz,and bandwidth spectral efficiencies as high as 15 bits/sec/Hz wereachie

67、ved.A pulse width modulation baseband encoding method called the“Slip Code”was used.That method,which was a baseband method,was limited in data rate andrequired excessive filtering,which precluded it from being a practical ultra-narrowband method.Ultra-narrowband(“UNB”)technology employs an ultra-na

68、rrow spectrum channel(4000 As shown in the table,our internal testing shows that our finished ultra-narrowband technology can achieve speeds of 4 Mbps per second at a bandwidth of less than 1000 Hz.The spectral efficiency of our finished technology has reached 4000 bits/sec/Hz.Development work of ou

69、r ultra-narrowband technology is underway for speeds of 64 Mbps at abandwidth of 64 MHz with spectral efficiency of over 4000 bits/sec/Hz.UNB speeds will increase proportionally if it operates at the higher frequencies used by 4G or 5G networks or adopts multiple subcarriers,equivalent to increasing

70、 bandwidth.As a result,we believe that our ultra-narrowband technology can reach 5G speeds and has the potential for much higher speeds.Utilizing the same bandwidth,our internalresults show that UNB can save energy of up to 20,000 times when compared to current 4G technology and 100,000 times when c

71、ompared to current 5G technology.Keepingthe same bandwidth and energy consumption,our internal testing results suggest the coverage provided by UNB can increase by two orders of magnitude.UNB breaks throughthe Shannon Laws critical limit that current 5G cellular communication is reaching,overcomes t

72、he current 5G challenges,and allows cellular communication developmentbeyond 5G.Despite the excitement surrounding 5G networks,several challenges need to be address before global adoption of 5G technology can occur.1)Spectrum availability.5G networks operate on higher bandwidth frequencies reaching

73、up to 300 GHz,which permit data rates capable of delivering ultra-fast speeds measuring as much as20 times more than those provided by 4G LTE networks.However,the availability and cost of spectrum bands are still an issue for wireless operators.Wirelessoperators need to bid for these costly higher s

74、pectrum bands as they build and deploy their respective 5G networks.On February 24,2021,the FederalCommunications Commission announced the winning bids in Auction 107,the auction of 3.7 GHz service licenses.The winning bids for all 5,684 available licensestotaled over$81 billion and were concentrate

75、d among just 21 bidders.13 Given that Focus Universal operates in the ultra-narrowband spectrum where very limitedspectrum is required and public access spectrum is also available,this is potentially less of a concern than pursuing the traditional broadband capacity pathways._13 Federal Communicatio

76、ns Commission.(2021,February 24).FCC Announces Winning Bidders in C-Band Auction Press release.https:/www.fcc.gov/document/fcc-announces-winning-bidders-c-band-auction.6 2)Coverage.Despite 5G networks offering significantly increased speeds,their more limited range will require increased infrastruct

77、ure investments.5G requires three to four timesthe number of base stations to provide the same coverage area as 4G LTE because higher frequencies are more readily absorbed by solid objects than lowerfrequencies.For example,a signal at 700 MHz provides a coverage area three to four times that of a 2.

78、6 GHz signal.Likewise,we expect UNB coverage to potentiallyincrease coverage over standard 5G broadband pathways.3)Cost.Building a 5G network is expensive.To do so is not just building a layer on top of an existing 4G network;instead,it is laying the groundwork for something newaltogether.The cost o

79、f a current 5G base station is approximately three times that of a 4G base station.14 4)Energy consumption.Two factors relate directly to the increased energy consumption of 5G networks.First,5Gs operating on higher frequency spectrums require greater energy input.Forexample,a typical 5G base statio

80、n consumes up to twice the power consumed by a 4G base station.Second,to provide the same coverage area as a 4G network,a 5Gnetwork requires three to four times the number of base stations.Accordingly,the overall energy consumption of a typical 5G network will be at least six to eighttimes more than

81、 the energy consumption of a 4G network with equivalent coverage.Similar to the coverage applications,we also expect energy consumption to bepotentially significantly less with UNB technologies over the conventional broadband pathways.5G+We are currently developing 5G+,which we believe is a promisin

82、g alternative wireless technology that uses our innovative ultra-narrowband(UNB)wireless technology.UNBtechnology employs an ultra-narrow spectrum channel(1 kHz)to establish an ultra-long-distance link between transmitter and receiver.Our internal testing suggests that asingle 5G+subcarrier wave has

83、 the potential to provide speeds of 64 to 256 Mbps.Moreover,multiple UNB subcarriers may be combined,which effectively increasesbandwidth.Given anticipated data rates of 64 Mbps,we believe only 4 to 16 5G+subcarrier waves would be needed to achieve the current 5G speeds,and just 40 to 160 5G+subcarr

84、ier waves would be needed to achieve 6G speeds.By contrast,5G technology requires 3,276 subcarrier waves to achieve its current speeds.Fewer subcarriers translateinto cost savings because they are more compact and consume less energy.Our goal is to increase the speed of 5G networks while simultaneou

85、sly reducing the number ofsubcarriers.Our internal testing suggests that to achieve speeds of 1 Gbps,our 5G+technology would only require bandwidths of 4 to 16 kHz,which is narrow enough to be operated inlower frequency spectrums.This would mean that 5G+providers would not need to purchase the highe

86、r frequency spectrums required by 5G technology.Accordingly,a 5G+provider would realize significant savings from not having to bid for costly higher spectrum band licenses.Operating in relatively lower frequency spectrum bands,whencompared to 5G,also means that 5G+would have a more extensive coverag

87、e area than that of 5G,in many cases three to ten times larger.It would also mean that we couldreduce the number of subcarriers and reduce the overall costs of the 5G networks infrastructure.Further,the design of 5G+infrastructure means that cost savings could be realized as there is the potential o

88、f piggybacking the required 5G+infrastructure on the current 4Ginfrastructure.Finally,5G+only consumes 1/25,000 to 1/6,250 of the energy consumed by 5G.As outlined above,5G+has the potential to overcome the challenges presentedby the use of higher broadband spectrums required for the implementation

89、of the broadband technology used in 5G._14“How much does it cost to build a 5G base station?”Phate Zhang,April 7,2020,CNTechPost(available at:https:/ accessed on January 10,2022).7 3.Leveraging ultra-narrowband power line communication(“PLC”)technology.Our patented PLC is an innovative communication

90、 technology that enables sending data over existing power cables in the electric grid.Because PLC uses the existing powerlines,it does not require substantial new investment for a dedicated wiring infrastructure.Existing power lines already form a distribution network that penetrates everyresidentia

91、l,commercial,and industrial property.Given that the power grid is,for the most part,an established ubiquitous network,PLC is potentially the most cost-effective,scalable interconnectivity approach for the backbone communication infrastructure required for the IoT.PLC allows IoT devices to be plugged

92、 into power outlets to establish aconnection using the existing electrical wiring,permitting data sharing without the substantial investment and inconvenience of running dedicated network cables.Historically,the primary design goal of the power line network was electric power distribution.The power

93、line network was not originally designed to function as acommunication channel.Consequently,while PLC has been around for many years,the harsh electrical noise present on power lines and variations in equipment and standardsmake communications over the power grid difficult and present several challe

94、nges for data transfer.Signals propagating along the power line are subjected to substantialamounts of noise,attenuation,and distortion that make them erratic,with several attributes varying over time.PLC is susceptible to noise from devices linked to the powersupply infrastructure,including,for exa

95、mple,fluorescent tube lights,drills,hair dryers,microwave ovens,computers,switch-mode power supply,cellphone chargers,dimmers,refrigerators,televisions,washing machines,and vacuum cleaners.The result is that previous attempts at implementing PLC technology resulted in power companies andinternet ser

96、vice providers deciding that the technology is not a viable means of delivering data or broadband internet access.These technological challenges have impeded oreven halted progress in PLC technologys development.We have successfully developed ultra-narrowband PLC technology that can transfer data th

97、rough the power grid.According to our internal testing,our ultra-narrowband PLCtechnology can send and receive data without the customary interference that occurs in standard office and residential environments,achieving speeds of 4 Mbps at a bandwidthof less than 1000 Hz.To test noise interference

98、and disturbance,we utilized six industrial blowers simultaneously when testing,and no significant interference was found.Bycomparison,a single hair dryer will render our competitors legacy PLC technology completely useless.We have completed the development of our 4Mbps PLC modules andthe printed cir

99、cuit board layout.These modules will be used for IoT systems involving over 1,000 sensors.Our ultra-narrowband PLC technology is a considerably more effective way to transfer data than current in-home and commercial network systems,such as Zigbee and Z-Wave.While Zigbee and Z-Wave will need new infr

100、astructure to be installed,our PLC technology could operate by itself or complement existing wideband communicationtools like Wi-Fi,Zigbee,or Z-Wave.Penetrating physical barriers like walls within a single floor or reaching out to different floors in a single building is a challenge for thewireless

101、technology that current IoT systems are using.Moreover,wireless networks often face performance issues due to radio-frequency interference caused by microwaveovens,cordless telephones,or even Bluetooth devices at home.However,our PLC technology can reach every node connected via the power lines.Our

102、technology convertsvirtually every standard wall socket into an access point,in many ways incorporating the best of wired and wireless communication,making it a more consistent and reliablesystem for crucial and sensitive operations.Our ultra-narrowband PLC technologys ability to reach long distance

103、s via power lines becomes especially useful in commercialnetworks that require the ability to avoid physical barriers like walls,underground structures,and hills,such as those networks used in industrial facilities,undergroundstructures,golf course irrigation systems,and campuses.Moreover,our techno

104、logy can be an integral part of any smart city,community,or campus.4.Developing a natural integrated programming language(“NIPL”)applied to software development,which generates a user interface through machine auto generationtechnology.We have developed a proprietary and patented“user interface mach

105、ine auto generation platform”(“UIMAGP”)to replace the manual software designs that are currently used.This platform is used to build the IoT user interface.The natural integrated programming language we have developed is similar to the language humans use to communicatewith each other,which makes it

106、 is easy for humans to learn,while still being understood by a machine.The UIMAGP simplifies the process of software programming bysaving hundreds of lines of code into a micro code that can be saved to a sensor module.When that sensor module is plugged into a USIP,the user interface specification c

107、odessaved to the sensor module is sent to the platform and a universal display,such as a smartphone,a computer,or a display unit.The UIMAGP saved on the universal displayautomatically generates the user interface within milliseconds instead of requiring months or years of software development work.A

108、n embedded coding hardware engineer candesign sensor module hardware and provide the user interface specification code.Thus,the hardware-defining software is achieved.8 UIMAGP is similar to low code or no code programming because it reduces the amount of traditional hand-coding,enabling accelerated

109、delivery of business applications.However,low code and no code programming suffer from integration restrictions,absence of customization,and security risks issues,making them unsuitable for large-scaleand mission-critical enterprise applications such as IoT applications.UIMAGP has overcome these cha

110、llenges while requiring only a minimum amount of coding.TheUIMAGP and user interface specification codes work collectively to perform the function of traditional customized software,enabling UIMAGP to be shared by the estimated20 billion IoT devices worldwide,15 a feat that current manual software d

111、esigns could not achieve.5.Developing a universal smart instrumentation platform(“USIP”)Instrumentation is a vast industry that covers a variety of fields,including medical,healthcare,scientific,commercial,industrial,military,and daily life.Lack ofinstrumentation universality results in every instru

112、ment design starting from scratch.Moreover,each instrument can only carry out a determined measurement or control aspecific operation.Integrating existing instruments that lack interoperability and compatibility into a platform can be difficult and expensive.This integration is impeded by theinabili

113、ty of instruments to easily communicate with devices and sensors for perception,mobility,and manipulation.As society enters the IoT era,it is not unreasonable toassume that millions of devices will need to be connected in one square kilometer.If each IoT device requires unique hardware and software

114、developed from scratch,implementation in dense urban areas is simply not feasible.Wireless networks can be accessed by any device within the networks signal range.USIP is an advanced hardware and software integrated instrumentation platform with a large-scale modular design approach.USIP integrates

115、a large number of technologies,including cloud technology,wired and wireless communication technology,software programming,instrumentation technology,artificial intelligence,PLC,sensor networking,and IoT technology into a single platform.This results in circuit designs that we believe are vastly che

116、aper and faster than those constructed of discrete integrated circuitcomponents designed from scratch.USIP has primary functionalities and an open architecture capable of incorporating a variety of individual instruments,functions,sensors,and probes from different industriesand vendors into a single

117、 unit.Instruments,sensors,or probes ranging from a few to several hundred or even thousands in any combination from various industries and vendorscan share or reuse the same platform.Adding,removing,or changing instruments or sensors is all the platform requires to switch from one type of device to

118、another withoutrevising the software and redesigning the hardware.Compared to traditional stand-alone instruments,USIP exploits a computers or mobile devices processing power,productivity,display,and connectivity capabilities toprovide a more powerful,flexible,and cost-effective measurement solution

119、.Traditional hardware-centered instrumentation systems are made up of multiple stand-aloneinstruments interconnected to carry out a determined measurement or control an operation.They have fixed vendor-defined functionality,and the components that comprise theinstruments are also fixed and permanent

120、ly associated with each other.Different instruments provided by different vendors cannot be interoperated and interchanged.Forexample,we simply cannot use a traditional blood pressure meter to measure temperature or vice versa.USIP is designated to be compatible with all instruments,sensors,orprobes

121、 on the market and capable of monitoring and controlling any combination of instruments or sensors.We believe our USIP will revolutionize the field of instrumentation,measurement,control,and automation.USIP is a versatile platform,able to perform and combine different measurements and controls,to su

122、bstitute some instruments for others,and to integrate existing instrumentsinto it.The development of USIP is closely associated with the development and proliferation of computers and mobile devices that provide the foundation and technicalsupport to the universal smart instrument such as an attract

123、ive graphical user touch screen interface,data processing and analysis capabilities,video and audio,cameras,GPS,ubiquitous wireless connectivity,artificial intelligence,cloud-based communications and a diverse number of functions and software available to users that are not contained intraditional i

124、nstruments.These features embody the advantages of USIP,which are lacking stand-alone instrument systems.When compared with traditional instrument systems,USIPs biggest advantage is cost savings.Other distinctive features include universality,interoperability,flexibility,compatibility,upgradeability

125、,expandability,scalability,security,modularity,fast prototyping,reducing inventory,plug-and-play operation,remote accessibility,simplification,standardization,and cloud instrumentation._15 Gartner Insights“Leading the IoT,”available at:https:/ accessed January 10,2022).9 We have been dedicated to so

126、lving instrumentation interoperability for over a decade.We subdivide instruments into a reusable foundation component to the maximum extentpossible,architecture-specific components,and sensor modules,which perform traditional instruments functions at a fraction of their cost.For most instruments,90

127、%of thedesign,parts,and firmware are the same.These parts can be replaced by USIP.USIP utilizes a computer or a mobile device as its display and control to communicate with a group of sensors,instruments,probes,or controllers manufactured by differentvendors in a manner that requires the user to hav

128、e little or no knowledge of their unique characteristics.The portable version of USIP is illustrated below.When a blood pressure sensor is plugged into the universal device,the user interface specification code saved on the bloodpressure sensor is sent to the universal device,and a computer or smart

129、phone will then generate the user interface for the blood pressure device based on the interfacespecification code saved in the sensor.Figure 5.A blood pressure sensor is connected to our universal device,which we call the Ubiquitor,and changes our device into a blood pressure measurement instrument

130、.Similarly,if we remove the blood pressure sensor and connect our universal device to both a pH sensor and a CO2 sensor,the universal device changes to a two-sensordevice capable of measuring pH and CO2 concentration.Each sensor has its own user interface automatically generated based on the user in

131、terface specification codesaved in each sensor.Figure 6.A pH sensor and a CO2 sensor are connected to our universal device,and our device changes into a two-sensor device.A computer or smartphone can also beused for display.As illustrated below,when a light sensor is also plugged into our universal

132、device using a three-way splitter,the universal device becomes a three-sensor device.Figure 7.A pH sensor,a CO2 sensor,and a light sensor are connected to the universal device,and the device changes into a three-sensor device.A computer or smartphonecan also be used for display.10 As illustrated in

133、Figure 8,the universal device can connect any number of sensors in any combination.Figure 8.Any number of sensors in any combination can be connected to the universal device and changed it into a multiple sensor device.A computer or smartphone canalso be used for the display.As an example of the cap

134、abilities of the Ubiquitor,we implemented our universal device in the configuration pictured in Figure 9.This configuration demonstrates that ouruniversal device simultaneously controls 27 light sensors,21 pH sensors,and 23 temperature humidity sensors(which have 23 temperature sensors and 23 humidi

135、ty sensors),representing one device controlling a total of 72 devices and 95 sensors.Our universal device also controls two lights in this configuration,which it can control by turning thelights on or off(including on a schedule)or by using a light sensor to control the lights output intensity.Figur

136、e 9.Our universal platform simultaneously monitors and controls 72 different devices and 95 sensors.To illustrate,the entire horticulture industry has only a few hundred devices from different vendors for various measurement and control purposes.One of our universal smartdevices and corresponding se

137、nsors or actuators can replace all at a fraction of the cost.Leveraging the same technical principles discussed above,we can simplify the smartcontrol and monitoring in this and related industries(including agriculture and aquaculture)with a platform that requires little design work for interoperabi

138、lity between sensorsand control devices.Figure 10.Traditional horticulture measurement and control devices.11 Figure 11.Universal Smart Device.All household measurement and control devices,such as air conditioner controls,swimming pool controls,garage door controls,sprinkler controls,lighting contro

139、ls,andmotorized curtain controls,can be replaced by a single universal device and corresponding unique accessories.Figure 12.A single universal smart device can replace all these household control devices.Internet of Things Overview IoT refers to the overarching network created by billions of intern

140、et-compatible devices and machines that share data and information worldwide.According to a Gartnerreport,by the end of 2020,there were an estimated 20 billion IoT-connected devices in use around the world.16 As the sophistication of both hardware and software in theconsumer electronics industry sky

141、rockets,an increasing share of the electronic devices produced around the world are manufactured with internet connectivity.Forecastssuggest that by 2030,around 50 billion of these IoT devices will be in use worldwide,creating a massive web of interconnected devices spanning everything from smartpho

142、nesto kitchen appliances.17 The IoT will significantly impact the economy by transforming many enterprises into digital businesses,facilitating new business models,improvingefficiency,and increasing employee and customer engagement.It is foreseeable that the explosive growth in IoT will rapidly depl

143、ete natural and human labor resources.Webelieve that IoT will soon reach a critical limit;we do not have enough human labor and natural resources to support IoT growth.Twenty billion IoT devices challenge existingresources.We have overcome the current massive IoT production challenges by developing

144、a shared distributed universal IoT.Billions of internet-compatible devices andmachines share data and information around the world and share a large section of hardware and software(up to 90%).Billions of IoT devices are in use worldwide,each with different terminologies,technical specifications,and

145、 functional capabilities.These differences make it challenging tocreate one standard interoperability format for acquiring,harmonizing,storing,accessing,analyzing,and sharing data in near real-time.In fact,not even those instruments builton the same platform are necessarily interoperable because the

146、y are often highly customized to an organizations unique workflow and preferences._16 Gartner Report“Leading the IoT:Gartner Insights on How To Lead in a Connected World”available at:https:/ accessed February 10,2021).17 Statista Report“Number of internet of things(IoT)connected devices worldwide in

147、 2018,2025 and 2030”available at https:/ accessed January 10,2022).12 Wireless networks are far from perfect for IoT.They are typically slower,expensive,and highly susceptible to radio signals and radiation interference.They can be accessed byany device within range of the networks signal,so unautho

148、rized users may intercept information transmitted through the network(including encrypted data).Walls and floorscan seriously limit the range of the wireless network.Our proprietary ultra-narrowband PLC technology offers a promising alternative to wireless networks.Integrating USIPwith our ultra-nar

149、rowband PLC technology results in significant simplification and cost savings in implementing IoT,as illustrated in Figure 13.Using these technologies,wehave designed IoT products for both residential and industrial usage and are now in the process of testing.Figure 13.Comparison between(a)a traditi

150、onal machine to machine IoT and(b)a shared distributed universal IoT,which depicts a USIP and sensors forming a local networkthrough PLC technology.The platform communicates with the cloud to form a remote cloud-based system.Figure 14.Comparison between(a)a traditional wireless network and(b)Focus U

151、niversal Inc.s PLC network.How we will implement our business plan We currently operate in the scientific instruments industry and the smart home installations industry and plan to apply several of our new technologies to the IoT marketplace.Four divisions have been established within our Company to

152、 develop and promote our technologies.We believe that our technologies,as depicted above,can be used instandalone device design and production and on large scale IoT device design and production,aiming to solve the attendant complexity and cost challenges.13 a)Ultra-narrowband power line communicati

153、on division.Our ultra-narrowband PLC technology has achieved data transfer speeds of 4 megabits per second(“Mbps”),with a bandwidth of less than 1000 hertz(Hz).These results are15 times faster than the Zigbee short-range wireless technology mesh networks and 100-400 times faster than Z-Waves low-ene

154、rgy wave short-range wireless technology.Thecurrent 4Mbps PLC modules will be used for IoT applications involving thousands of sensors.We are developing even higher communication speeds through our PLC.Theultra-narrowband PLC module will be integrated into ICs.This division will focus on ultra-narro

155、wband PLC research and development,promoting and marketing ultra-narrowband PLC,ICs and finished products.We also intend to promote and market ICs,licensing,and contract designing.Given that the power grid is an already established,ubiquitous network,connectivity via PLC technology may be the most c

156、ost-effective and scalable interconnectivityapproach for the IoT.Due to the harsh electrical noise and interference currently present on power lines and to the variations in equipment and standards,that make datatransfer using PLC technology limited and difficult,the global market for PLC technology

157、 is very limited.Figure 15.Markets and Markets Updated date Oct 25 The market size for PLC is expected to reach$9.5 billion at the end of 2023.18 This prediction is based on current PLC technology,which provides speeds that are too slow(usually less than 9,600 bps),coverage that is too short(200-300

158、 yards),and harsh electrical noise and interference.The major vendors of PLC technology include ABB,General Electric,Siemens,AMETEK,Schneider Electric,Texas Instruments,Maxim Integrated,Devolo,Cypress Semiconductor,ST Microelectronics,Panasonic,Microchip,Qualcomm Atheros,TP-Link Technologies,NETGEAR

159、,D-Link,NXP Semiconductor NV,Landis+Gyr,Sigma Designs,Zyxel Communications,Nyx Hemera Technologiesand Renesas Electronics Corporation.It is our understanding that no other vendor has developed a PLC technology application that is similar to our ultra-narrowband PLC technology.We believe that market

160、sizewill increase significantly with the introduction of our ultra-narrowband PLC technology,which can overcome the interference and noise challenges presented by traditionalPLC technology.We believe that by utilizing ultra-narrowband PLC,the global IoT communication infrastructure costs and operati

161、ng costs can be reduced.b)Ultra-narrowband wireless division This division will focus on developing ultra-narrowband wireless technology and overcoming the challenges facing current 5G networks.We intend to sell DoC for wirelesscommunication,licensing,and contract designing.While developing our ultr

162、a-narrowband PLC technology,we gained insight into the development of a single carrier wave ultra-narrowband wireless technology,which aims toincrease data transfer rates from 4 Mbps to 64 Mbps.We expect our ultra-narrowband wireless technology to achieve data transfer rates of 256 Mbps using 4 subc

163、arrier waves,which is close to 5G speeds requiring more than three thousand subcarrier waves.The projected speed can be further increased if multiple carrier waves or higher operatingfrequencies are used._18 Market Research Report“Powerline Communication Market by Offering(Hardware,Software,and Serv

164、ices),Frequency(Narrowband,and Broadband),Application(Energy Management and Smart Grid,and Indoor Networking),Vertical,and Geography Global Forecast to 2023,”available at:https:/ accessed February 10,2021).14 Our current research and development efforts are focused on an operating frequency of 64 me

165、gahertz(MHz),which is about 100 times lower than 4G networks(6 gigahertz(GHz)and 5,000 times lower than 5G networks(up to 300 GHz).Our technologys 1,000 Hz bandwidth is approximately 20,000 times narrower than 4G networks and100,000 times narrower than 5G networks.The narrower the bandwidth,the less

166、 energy consumption.By maintaining the 1,000 Hz bandwidth,our ultra-narrowband wirelesstechnology can save electricity usage by a factor of up to 100,000 times when compared with a 5G network.We believe that our ultra-narrowband wireless technology has thepotential to push the wireless frontier well

167、 beyond 5G.We expect to finalize our ultra-narrowband technology research with data transfer speeds of 64-256 Mbps by the fourthquarter of 2022.MarketsandMarkets projects that the 5G infrastructure market will reach USD 47,775 million by 2027,at a CAGR of 67.1%.The major players in the 5G infrastruc

168、ture marketare Huawei(China),Ericsson(Sweden),Samsung(South Korea),Nokia Networks(Finland),ZTE(China),NEC(Japan),CISCO(US),CommScope(US),Comba TelecomSystems(Hong Kong),Alpha Networks(Taiwan),Siklu Communication(Israel),and Mavenir(US).Huawei(China)is the leader in the 5G infrastructure market.Limit

169、edcoverage,high energy consumption,and expensive infrastructure installation are the major holdups for the successful deployment of 5G technology.Most 5G technologies arebased on broadband technology;our research suggests there are very few companies working on ultra-narrowband technology.We believe

170、 that adopting our ultra-narrowbandwireless technology can provide significant cost savings to 5G spectrum bands,5G network hardware,and 5G energy consumption.c)User interface machine auto generation division Established in 2009,our Companys software user interface machine auto generation technology

171、 division has developed 100 sensors in arbitrary combinations,all of whichhave been tested for the iOS system.RS-485 is an industrial specification that defines the electrical interface and physical layer for point-to-point communication of electricaldevices.RS-485 is widely adopted and used in the

172、IoT industry.Standard RS-485 modules available today usually do not support more than 100 sensors.The first version ofUIMAGP has been completed and we believe should support more than 1,000 sensors.We intend to sell and license the software to device manufacturers that use our DoC ICsand other indus

173、tries where the software can be applied.UIMAGP can be used in IoT software design and can be applied to other industry sectors.This division is planning to expand to other industries as well.The software market size is enormous.According to ,the market reached$388.98 billion in 2020.Figure 16.Softwa

174、re market size.Today,some of the biggest companies within the software industry,including Microsoft,IBM,Oracle,SAP,and Salesforce,generate billions of dollars in annual revenue.Noneof these companies have developed a UIMAGP.Any software that can be created by low code and no code programming can als

175、o be created by using UIMAGP.However,thesoftware created by UIMAGP achieves what low code and no code programming cannot because of the complexities of applying the code to different platforms and theaccompanying required customization.One of the distinct features of UIMAGP is that the programming p

176、rovides a starting point that includes foundational code that may beused on any platform or operating system.This makes the final programming much more efficient,as it needs relatively few lines of code to program a complicated application.15 d)Universal smart instrument division This division will

177、focus on developing and marketing end-user universal smart instruments and shared distributed universal IoT devices for the commercial and residentialmarkets.The development of universal smart instruments and IoT have considerable overlap,with the only difference being the number of devices involved

178、.We will capitalizeon this overlap by unifying universal smart instruments and IoT into a single system,eliminating any distinction between them.USIP,a cost-effective and fully production-ready hardware and software platform,provides a considerable advantage in shorting design,building,testing,and f

179、ixing cycles.Smart home products,including light controls,air conditioner controls,sprinkler controls,garden light controls,heating floor controls,motorized curtain controls,pool filtration and algae controls,smoke detector controls,carbon monoxide measurement,motion detectors,and doorbells,have bee

180、n designed and tested.This division will also develop and market end-user universal smart instruments and shared distributed universal IoT devices in the horticulture,agriculture,and aquacultureindustries.Leveraging the Companys ultra-narrowband PLC technology and USIP,we intend to provide a more st

181、able,secure,and faster network for large industrial operationsrequiring data-specific sensing and control automation to ensure optimal outcomes.According to MarketsandMarkets,the agriculture IoT market is expected to grow from$12.7 billion in 2019 to$20.9 billion by 2024,at a CAGR of 10.4%.19 A key

182、factor driving the growth of this market is the rising demand for agricultural production due toincreasing population and adoption of IoT and AI technologies by farmers and growers.Deere&Company(US),Trimble(US),Raven Industries(US),AGCO Corporation(AGCO)(US),AgJunction Inc.(AgJunction)(US),DeLaval(S

183、weden),GEA Farm Technology(Germany),Lely(Netherlands),Antelliq(France),AG Leader Technology(AGLeader)(US),Tigercat(Canada),Ponsse(Finland),Komatsu Forest AB(Sweden),Caterpillar(US),Treemetrics(Ireland),Topcon Positioning Systems(US),and DICKEY-john Corporation(US)are some of the major players in the

184、 agriculture IoT market.We have completed the design of certain PLC industrial IoT devices,including industriallight controls,temperature controls,humidity controls,carbon dioxide controls,digital lighting controls,quantum PAR measurement and controls,pH measurement andcontrols,TDS measurement and c

185、ontrols,and fan speed controls.The market size of the instrumentation industry is vast and difficult to estimate.However,the IoT industry sector is only a fraction of the larger market.MarketsandMarketsforecasts that the global IoT market size is expected to reach$561 billion by 2022.20 The key mark

186、et players include Intel Corporation(US),SAP SE(Walldorf,Germany),Cisco Systems,Inc.(US),Microsoft Corporation(US),Oracle Corporation(US),International Business Machine(IBM)Corporation(US),PTC Inc.(US),Google Inc.(US),Hewlett-Packard Enterprise(US),Amazon Web Services Inc.(US),Bosch Software Innovat

187、ion GmbH(Stuttgart,Germany)and General Electric(US).These industry playersIoT devices are of a traditional machine-to-machine type and face challenges in terms of cost and implementation.Our shared distributed universal IoT devices are much morecost-efficient.This division will also focus on develop

188、ing device-on-a-chip(DoC)ICs,which we intend to sell to electronic device manufacturers for use in conjunction with the USIP.Wewill distinguish our DoC technology from the component ICs;these ICs can perform entire device functions.According to the“Integrated Circuits Global Market Report2020,”the g

189、lobally integrated circuits market was worth$412.3 billion in 2019.21 The market is expected to grow at a CAGR of 5.09%and reach a value of$502.94 billion by2023.Major players in the IC market are Intel Corporation,Texas Instruments,Analog Devices,STMicroelectronics,NXP,ON Semiconductor,Micron,Toshi

190、ba,Broadcom,and Qualcomm._19 MarketsandMarkets Market research Report,October 2019:“Agriculture IoT Market by Offering(Hardware,Software,&Services),Application(Precision Farming,Precision Forestry,Livestock Monitoring,Fish Farm Monitoring and Smart Greenhouse),Application,and Geography-Global Foreca

191、st to 2024,”available at:https:/ accessed March 4,2021).20 Id.21 The Business Research Company,March 2020,“Integrated Circuits Global Market Report 2020,”available at:https:/ accessed January 24,2021).16 This division will also install and design customer solutions for residential and commercial IoT

192、 projects.The Company currently specializes in high-performance,easy-to-useaudio/video,home theater,lighting control,automation,and home integration solutions for residential installation and custom solution services.On the commercial side,weplan to add well-trained staff ready to handle all aspects

193、 of voice,data,fiber,paging,audio-video services,CATV,and other low voltage premise cabling.All of our serviceproviders hold certifications for multiple product lines and specialty work.The Company plans to use its current client base and expertise from these installation services tointegrate produc

194、ts developed on the USIP into the project proposals.Products we are currently selling In addition to the technologies which we have developed and described above,we are a wholesaler of various digital,analog,and quantum light meters and filtration products,including fan speed adjusters,carbon filter

195、s,and HEPA filtration systems.We source these products from manufacturers in China and then sell them to a major U.S.distributor,Hydrofarm,who resells our products directly to consumers through retail distribution channels and,in some cases,places its branding on our products.Specifically,we sell th

196、e following products:Fan speed adjuster device.We provide a fan speed adjuster device to our client Hydrofarm.Designed specifically for centrifugal fans with brushless motors,our adjuster devicehelps ensure longer life by preventing damage to fan motors by adjusting the speed of centrifugal fans wit

197、hout causing the motor to hum.These devices are rated for 350 wattsmax,have 120VAC voltage capacity,and feature an internal,electronic auto-resetting circuit breaker.Our Fan Speed Adjuster Device 17 Carbon filter devices.We sell two types of carbon filter devices to our client Hydrofarm.These carbon

198、 filter devices are professional-grade filters specifically designed andused to filter the air in greenhouses that might be polluted by fermenting organics.One of these filters can be attached to a centrifugal fan to scrub the air in a constant circle orcan be attached to an exhaust line as a single

199、 pass filter,which moves air out of the growing area,filters unwanted odors,and removes pollen,dust,and other debris in the air.The other filter is designed to be used with fans from 0-6000 C.F.M.Our Carbon Filter Device HEPA filtration device.We provide a high-efficiency particulate arrestance(“HEP

200、A”)filtration device at wholesale prices to our client Hydrofarm.Manufactured,tested,certified,and labeled in accordance with current HEPA filter standards,this device is targeted towards greenhouses and grow rooms and designed to keep insects,bacteria,andmold out of grow rooms.We sell these devices

201、 in various sizes.Our HEPA Filtration Device 18 Digital light meter.We provide a handheld digital light meter to measure luminance in FC units or foot-candles.Our Digital Light Meter Device Quantum par meter.We provide a handheld quantum PAR meter to measure photosynthetically active radiation(“PAR”

202、).This fully portable handheld PAR meter measuresPAR flux in wavelengths ranging from 400 to 700 nm.It is designed to measure up to 10,000 mol.Our Quantum Par Meter Device 19 Strategy behind AVX Acquisition On March 15,2019,the Company completed a transaction with Patrick Calderone to purchase 100%o

203、f the outstanding stock of AVX Design and Integration,Inc.(“AVX”),anIoT installation and management company based in southern California.Through our acquisition of AVX,we are planning to offer residential customers an entire smart home product line in the$3,000 range We have finished designing smart

204、 devicesfor lighting control,air conditioner control,sprinkler control,garden light control,garage door control,and heating control.We are developing a swimming pool control device,smoke detector,and carbon monoxide monitor.We believe smart home installation based on the USIP,and our Ubiquitor will

205、include more functionalities than the current systems offered by our competitors.Our smart homesystems would integrate,exchange data,interact and connect utilizing our PLC technology.As a result,the installation process would be simplified,and its costs would bereduced.Once successfully integrated,t

206、he Ubiquitor will be central to every smart home installation that AVX does.The Ubiquitors connectivity capabilities will allow that system tobe expanded and customized in the future.We also plan to offer zero down payment options for installation of AVXs smart home systems and charge a monthly subs

207、criptionfee instead.Notwithstanding the foregoing,should we be unable to successfully integrate the Ubiquitor into AVXs smart home installations,the Ubiquitor will continue to be a flagshipproduct of our Company that can be applied to various other purposes in the different industries and fields men

208、tioned above.Strategy and Marketing Plan The Company plans to market the USIP to the industrial sector first,including key growth industries such as indoor agriculture.Once the technology is established there,thecore technologies of universality and interoperability through a readily available devic

209、e,such as a mobile device or smartphone,may be ported to products specifically intendedfor the consumer and residential markets.While industrial markets are large,the consumer and residential markets are even more significant.This two-phase approach will allow for continuous and increasing revenuegr

210、owth.Moreover,during the industrial phase of development,the Company will test and refine its products to ensure that they are ready for the consumer and residentialmarkets.Once we have successfully entered the industrial sector,we intend to roll out additional technologies that are currently under

211、development.These technologies will advance andsupport the core technologies marketed in phases one and two to the industrial and consumer markets.We will continue to design,manufacture,market,and distribute our electronic measurement devices,such as temperature humidity meters,digital meters,quantu

212、m PAR meters,pH meters,TDS meters,and CO2 monitors.Over the years,Hydrofarm has developed a broad and loyal customer base that buys our existing products on a repeat basis.Theuniversal smart technology has been applied to our existing traditional devices and demonstrated significant functional impro

213、vement and hardware cost savings.We believehardware cost reductions of up to 90%have been achieved.However,promoting universal smart technology and universal smart IoT devices to our customers,includingtraditional instrument manufacturers,will be the central focus of our business in the future.Diffe

214、rent markets require different strategies.We divided our customers into a few segments to determine what specific marketing technique will reach each targeted group andits needs.a)Our Existing Customer,Hydrofarm To minimize the upfront cost of entering a market,we must carefully choose our entry poi

215、nt to find one that offers the least possible resistance.It costs more to attract newcustomers than to retain and increase sales to our existing customer,Hydrofarm.Our universal smart instruments design,development,and manufacture are targeted toincrease current sales to our existing customer.20 Our

216、 current customer,Hydrofarm,is the largest distributor in the horticulture industry,with roughly 50%of the market share in the U.S.horticulture industry.All our current universal smart devices,including sensors and controllers,will be distributed to Hydrofarm.Smartphones can be used to display and c

217、ontrol all the sensors andcontrollers in the horticulture industry.By the end of 2020,we completed the development of several sensors that are used in the gardening industry,including a light controlnode,temperature sensor,humidity sensor,digital light sensor,quantum PAR sensor,pH sensor,TDS sensor

218、and carbon dioxide sensor;and we finished the circuit layouts forthe pilot IoT system for the gardening industry(consisting of approximately 1,000 sensor nodes and controllers).We sent these circuit layouts to our manufacturer in China forproduction.However,due to the coronavirus pandemic,the produc

219、tion was delayed.In 2022,we intend to extend our product line to Hydrofarm,who in turn will resell andmarket our systems and devices to its customers in the horticulture industry.b)Online Customers We intend to use traditional and specialized e-commerce outlets to help with online brand awareness.By

220、 analyzing Amazons data,we plan to determine which traditionalinstruments have the highest selling volumes and at what price point.Future research and development will focus on integrating the sensors used in these instruments into theuniversal smart instruments to leverage on their existing markets

221、.c)Traditional Controller and Remote-Control Customers Traditional controllers monitor and control their sensors through bi-directional communication implemented by hardware.The sensors or probes in controllers not only measurethe physical environment but also give feedback to the input actuators th

222、at can make necessary corrections.They are expensive and require a corresponding monitor in whichunidirectional communication is needed.For example,a traditional temperature meter may cost approximately$15 and a temperature controller may cost approximately$100.The wireless bi-directional communicat

223、ion supported by a smartphone or mobile device offers cost reduction in controller design and manufacturing.Traditional remote controlis accomplished through hardware,which can be replaced by a smartphone.Universal smart technology will also play an important role in traditional control applications

224、.Traditional controller users are one of highest profit margin customers of universal smart technology.d)Special Customers For customers who consider an instruments compatibility,interoperability,interchangeability,universality,upgradeability,expandability,scalability,and remote access abilityas cru

225、cial,universal smart technology has several fundamental advantages over traditional instruments in terms of hardware cost and functionality.End users will not onlyenjoy the remote access to their sensors wirelessly but also save the cost of the hardware module which will be replaced by a smartphone.

226、e)Traditional Instruments Manufacturers We may consider selling the Ubiquitor directly to instrument manufacturers and allowing them to distribute it through their established platforms.We are putting together aninternal sales team in order to establish the marketing campaign for our sensor devices,

227、including the Ubiquitor.We are also expanding the sales team for AVX because webelieve that the Ubiquitor device will be integral to smart home installations.We believe that universal smart technology will play a critical role for traditional industrial instrument manufacturers,because it is too exp

228、ensive and difficult to developindustrial instrument sensors for medium or smaller companies or individual homes.The cost factor is the first consideration when deciding whether a company wants todevelop universal smart technologies and implement them in their products.On December 23,2021,Focus Univ

229、ersal(Shenzhen)Technology Co.LTD was founded as a mainland China office for manufacturing procurement expertise and supportresearch and development activities.Focus Universal(Shenzhen)Technology Co.LTD is 100%owned by Focus Universal Inc.and designed to function as a branch officeaccessing high leve

230、l ability to source products and build relationships with manufacturers in the region and as a lower cost form of support research and development asengineers are more plentiful in the region.In the future,this office could also handle other online marketing and marketing production activities,provi

231、ded a cost and qualitybenefit exists at the time.21 Our goals over the next three years include:Raise capital to move into full manufacturing and production for our Ubiquitor device;Partner with manufacturers and promote the adoption of our Ubiquitor device in a USIP;Acquire a stable market share of

232、 the sensor device market;Continue performing research and development on PLC technology;Focus on building our smart home offerings so that we can reduce the cost of smart home implementation to focus on expanding smart home installation andimplementation beyond luxury homes;File additional patents

233、to expand our intellectual property portfolio related to the many uses of our Ubiquitor device;and File patents to protect our PLC technology.In order to achieve these goals,we intend to focus on the following initiatives:Position the Ubiquitor device as the industry standard in universal sensor rea

234、ding technology;Establish strategic supply chain channels to facilitate efficient production operations;and Communicate the product and service differentiation through direct networking and effective marketing.Growth Strategy Growth through Mergers and Acquisitions Mergers and acquisitions(“M&A”)rep

235、resent a significant part of our growth strategy because M&A can fill business gaps or add key business operations without requiring usto wait years for marketing and sales cycles to materialize.We have used this growth strategy in our acquisition of AVX,and in the future intend to continue to use M

236、&A tofind and secure opportunities that will either:(i)achieve the objective of growth in our market segments;or(ii)provide an area of expansion that will add to the Companysproducts and/or service lines in markets that we are currently not serving,but could serve if we had the appropriate expertise

237、.The resulting combination of our existingproducts and services,new key personnel,and strategic partnerships through M&A will allow us to operate in new markets and provide new offerings to our existing market.Acquiring key competitors may allow the addition of key personnel to our team.These additi

238、ons may include people with vast industry knowledge,which can act as a catalystto further our growth and lead to the development of new products and business lines.We will seek to target synergistic acquisitions in the same industry,targeting differentgeographic locations,which will allow us to acti

239、vely compete on a regional or national scale in the IoT segment.If we target businesses in the same sector or location we hopeto combine resources to reduce costs,eliminate duplicate facilities or departments and increase revenue.We believe this strategy will allow for accelerated growth andmaximize

240、 investor returns.One of our key strategies to grow through M&A is to acquire smaller businesses that focus on IoT installation technology(industrial or residential)and in the USIP or PLCindustries.22 Original Equipment Manufacturer(“OEM”)Engineering Consulting and Design Services Universal smart te

241、chnology is new to most electronic engineers and manufacturers.One way to promote our universal smart technology is to provide direct OEM engineeringdesign consulting services to potential industrial customers.Direct,on-site consulting will educate our industrial consumers on the many ways our techn

242、ology can beimplemented in a variety of industrial applications.We believe that we are well positioned to perform product design and engineering consulting services for future OEMcustomers.We believe we can operate as a seamless extension of our customers engineering organizations and add scale,flex

243、ibility and speed to their design processes.Wewill not be able to offer such engineering consulting and design consulting services until the Ubiquitor is being produced and distributed.We believe that once the Ubiquitor isbeing produced and distributed,we will have hired and trained enough engineers

244、 to execute our consulting strategy.Through our engineering consulting services strategy,weintend to become our customers engineering partner at all stages of the design cycle so that we may effectively assist them in transforming ideas into production-readyproducts and accelerate time to market for

245、 our universal smart technology product segment.Technology Licensing We may also consider entering into licensing arrangements with our customers for our technology.We believe that once we educate our industrial consumers,they may want tointegrate our universal smart technology into their own techno

246、logy through licensing agreements.We believe licensing our intellectual property may provide a revenue streamwith no additional overhead,all while allowing us to retain proprietary ownership and create long-term industrial consumers who rely on our products.By creating incentives,such as cost incent

247、ives,to license our IP rather than design their own technology,we believe potential customers could save on design costs and create business developmentopportunities.Licensing may also allow us to rely on the expertise,capacity and skill of a licensee to commercialize our IP,which is especially valu

248、able if we lack theinfrastructure,financial resources and know-how to bring a product to market independently.Although a licensing deal can occur at any time,we do believe that licensing maynot occur until the last quarter of 2022 due to the fact that we will need to have a team of our consulting en

249、gineers in place,working with industrial consumers on productintegration,as well as time to negotiate the terms of licensing agreements with potential customers.Distribution Method We intend to engage in relationships predominantly with standard U.S.component manufacturers and similar electronics pr

250、oviders for the manufacturing of unassembled partsof the Ubiquitor and its sensor nodes,and to then ship such parts to our Ontario,California facility where we will assemble the Ubiquitor devices and sensor nodes.Afterwards,we would distribute our Ubiquitor devices to distributors and retailers dire

251、ctly and also ship directly to traditional industrial instrument manufacturers.We have a salesdepartment operating out of our Ontario,California office and eventually plan to open a second sales department in China dedicated to promoting our technologies to localinstrument manufacturers who can util

252、ize our Ubiquitor devices in their manufacturing and other processes.We intend to market the Ubiquitor to industrial end-users throughHydrofarm,through direct business-to-business sales channels and also directly to consumers via e-commerce internet platforms.For our quantum light meters,and airfilt

253、ration products,we rely solely on Hydrofarm to distribute to end-users through its distribution channels.Raw Materials The electronic components used in the Ubiquitor are common and can be easily purchased through a variety of suppliers with little advanced notice.We predominantly uselarge-scale man

254、ufacturers in the United States such as Texas Instruments and Intel for the major components.Other key suppliers we could consider include Analog Devices,Skyworks Solutions,Infineon,STMicroelectronics,NXP Semiconductors,Maxim Integrated,On Semiconductor,and Microchip Technology.Production and assemb

255、ly linesare also available worldwide if we needed to outsource or increase our capacity,though we intend to complete our assembly in our Ontario,California facility.On October 1,2018,we entered into an agreement with Beijing Hengnar Technology Development Co.,Ltd.to develop certain infrared online g

256、as analyzer products that detect O2,CO,CO2,H2,Nox,SF6 and other gases for our digital light meter and filtration business segment.23 Manufacturing and Assembly We have an assembly facility in Ontario,California where we assemble the Ubiquitor from parts sourced predominantly in the United States.Our

257、 quantum light meters andhandheld sensors are also manufactured in our Ontario,California facility.Our air filtration products are manufactured and assembled in China by a third-party contractmanufacturer,Tianjin Guanglee.Our subsidiary unit in the Canton province of mainland China,Focus Universal(S

258、henzhen)Technology Co.LTD,was founded in December 2021 as an office formanufacturing procurement expertise and support research and development activities.Focus Universal(Shenzhen)Technology Co.LTD is designed to function as a branchoffice accessing high level ability to source products and build re

259、lationships with manufacturers in the region and as a lower cost form of support research and development asengineers are more plentiful in the region.In the future,this office could also handle other online marketing and marketing production activities,provided a cost and qualitybenefit exists at t

260、he time.This excludes any projects subject to approval or that require a separate business license in accordance with the local laws.China allows foreignentities to setup wholly owned limited liability companies in China,also known as Wholly Foreign Owned Enterprises(WFOEs),in non“restricted”or“proh

261、ibited”industriesor business activities.The subsidiarys business operation has been approved by the local government in Shenzhen to be qualified as a WFOE entity in China.The entity is100%owned by Focus Universal Inc.Competitors Sensor Node Industry There are several competitors we have identified i

262、n the sensor node industry,including traditional instruments or devices manufacturers such as Hanna Instruments or ExtechInstruments.Hach developed and launched the SC1000 Multi-parameter Universal Controller,a probe module for connecting up to 32 digital sensors or analyzers.However,their productsa

263、re 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 Monnits products are web-based wireless sensors that usually are not portable because of theirpower consumption.Also,the

264、 sensors real-time updates are slow;and we believe security of the web-based sensor data acquisition may be a concern.In addition to purchasingthe device,consumers usually have to pay a monthly fee for using web-based services.IoT Installation Industry There are several companies that compete with A

265、VX in smart home installations,including Vivint Smart Home,Crestron and Control4.However,we believe we can distinguishourselves from our competitors by offering a substantially lower price.An installation by Crestron ranges between$20,000 and$100,000 and by Control4 between$20,000 and$40,000.The che

266、apest competitor we can identify in this sector is Vivint Smart Home,which costs less than$5,000 to install;however,we understand that the Vivint SmartHome focuses on security systems only and that users have no other smart applications,which our smart home product line would include.Air Filtration

267、Systems and Meter Products Industry The air filtration system and meter products industry is a niche industry.The global industrial air filtration market was valued at$11.6 billion in 2018 and analysts expect it toregister a CAGR of 6.7%from 2019 to 2025 because of the industrial need to control air

268、 quality across a range of industries.22 Air purification methods are an effective way tocontrol contaminants and improve indoor air quality and as a result,many national and local governments overseeing indoor air quality and other emissions are enacting stricterworkforce health and safety regulati

269、ons in this area,which drives demand.One of our competitors,Donaldson Company,Inc.,an air filtration company,announced in its SECfilings that on October 18,2018 it acquired BOFA International LTD(“BOFA”),headquartered in the United Kingdom,for$98.2 million less cash acquired of$2.2 million.BOFA manu

270、factures systems across a wide range of air filtration applications.We are not trying to compete with traditional instruments or device manufacturers because we plan to utilize our Ubiquitor device in conjunction with our smartphoneapplication.We believe the resulting product may compete in a much w

271、ider product category due to its many potential applications._22 Grand View Research.(2020,February).Industrial Air Filtration Market Size,Share&Trends Analysis Report,by Product,by End Use(Cement,Food,Metals,Power,Pharmaceutical,Agriculture,Paper&Pulp and Woodworking,Plastic),by Region and Segment

272、Forecasts,2020-2027.Retrieved at:https:/ Our Corporate History We are based in the City of Ontario,California,and were incorporated in Nevada in 2012.In December of 2013,we filed an S-1 registration statement that went effective onMarch 14,2014.From March 14,2014 through August 30,2021,our securitie

273、s traded on the OTCQB Market.From August 31,2021,our securities traded on the NasdaqCapital Market.From January 28,2022,our securities traded on the Nasdaq Global Market.Our website is .Our website and the information contained therein or connected thereto are not intended to be incorporated into th

274、is report.The Company entered the residential and commercial automation installation service industry through the acquisition of AVX Design and Integration,Inc.(“AVX”)in March of2019.AVX was established in 2000 with the goal of installing high-performance,easy-to-use Audio/Video,Home Theater,Lightin

275、g Control,Automation and Integrationsystems for high-net-worth residential projects.Additionally,we are performing research and development on an electric power line communication(“PLC”)technology and have filed three patents with the United StatesPatent and Trademark Office(USPTO)related to our Ubi

276、quitor device and the design of a quantum PAR photo sensor.Eventually,we hope that PLC technology will furtherenhance smart IoT installations performed by AVX and powered by the Ubiquitor.On October 21,2015,Dr.Jennifer Gu and Dr.Edward Lee were appointed as directors of the Company.After such appoin

277、tments,the Board of Directors consisted of Dr.Desheng Wang,Dr.Jennifer Gu and Dr.Edward Lee.On April 2,2018,Duncan Lee was appointed as the Chief Financial Officer of the Company.On June 8,2018,we announced the appointment of four new board members of the Company,the majority of whom were independen

278、t:Sheri Lofgren,Sean Warren,MichaelPope,and Carine Clark.Our Board of Directors subsequently formed our Audit,Compensation,and Nominating Committees.On July 26,2018,our Board of Directors approved our submission of an application in compliance with The Nasdaq Stock Market LLC(“NASDAQ”)rules and regu

279、lations tolist and trade our Companys securities on the Nasdaq Capital Market.On November 28,2018,Sean Warren resigned as a member of the Board of Directors;and Greg Butterfield was appointed in his place.On December 1,2018,Mr.Warrenbecame a part-time consultant to the Company.In late 2018,we purcha

280、sed a manufacturing warehouse and office space addressed at 2311 East Locust Court,Ontario,CA,91761.The property consists of an industrial type,two-story building,with a total building area of 30,740 square feet.Ten thousand square feet will be utilized for office space;and 20,000 square feet will b

281、e utilized forwarehouse space.The property includes 58 parking spaces.The purchase price for the property was approximately$4.62 million.On March 15,2019,the Company entered into a stock purchase agreement with Patrick Calderone,the CEO and owner of AVX,whereby the Company purchased 100%of theoutsta

282、nding stock of AVX(the“AVX Acquisition”)for$890,716.The purchase price was structured as follows:(1)$550,000 payable in cash at closing;(2)$290,716 payablein 39,286 shares of the Companys common stock issued upon closing;and(3)$50,000 payable in the form of a secured promissory note at 6%interest ov

283、er 12 months securedby six shares of AVX common stock.In connection with the AVX Acquisition,Patrick Calderone also entered into a consulting agreement with the Company pursuant to whichhe would offer consulting and training services during the 12-month period following the closing of the AVX Acquis

284、ition.Since AVX is an installer of smart home products,and since we anticipate that our Ubiquitor device is capable of enhancing smart home installations,we believe that this acquisition will allow us to test new applications and theintegration capabilities of our Ubiquitor device in smart homes.On

285、November 15,2019,Dr.Edward Lee resigned as President of the Company and was appointed to be the Chairman of the Board of Directors.On August 31,2021,the Company commenced trading on the Nasdaq Capital Market under the symbol“FCUV.”25 On September 2,2021,the Company announced the closing of an underw

286、ritten public offering of 2,300,000 newly issued shares of common stock at a price to the public of$5.00 per share.The closing included the full exercise of the underwriters over-allotment option to purchase 300,000 shares of common stock at the public offering price,forgross proceeds to the Company

287、 of$11.5 million,prior to deducting underwriting discounts and commissions and offering expenses payable by us.On November 10,2021,the Company appointed Irving Kau as Vice President of Finance and Head of Investor Relations.On January 26,2022,the Company announced approval for the uplist of its stoc

288、k onto the Nasdaq Global Market exchange under the symbol“FCUV.”Patent,Trademark,License and Franchise Restrictions and Contractual Obligations and Concessions On November 4,2016,we filed a U.S.patent application number 15/344,041 with the USPTO.On March 5,2018,we issued a press release announcing t

289、hat the USPTO hadissued an Issue Notification for U.S.Patent Application No.9924295 entitled“Universal Smart Device,”which covers a patent application regarding the Companys UniversalSmart Device.The patent was granted on March 20,2018.Subsequent to our internal research and development efforts,we f

290、iled with the USPTO on June 2,2017,a patent application regarding a process for improving the spectralresponse curve of a photo sensor.The small and cost-effective multicolor sensor and its related software protected by the potential patent we believe could achieve a spectralresponse that approximat

291、es an ideal photo response to measure optical measurement.The patent was issued on February 26,2019.On November 29,2019,the Company filed an international utility patent application filed through the patent cooperation treaty as application PCT/US2019/63880.In April2020,the Company was notified that

292、 it received a favorable international search report from the International Searching Authority regarding this patent application,whichpatents the Companys PLC technology.The World International Property Organization report cited only three category“A”documents,indicating that the Companysapplicatio

293、n met both the novelty and non-obviousness patentability requirements.Consequently,the Company is optimistic that the patent covering the claims for its PLCtechnology will be issued in due course and will allow the Company to implement strong protections on the PLC technology worldwide.On May 19,202

294、1,we filed thirteen provisional patent applications with the USPTO that we had been researching and developing for years encompassing a broad spectrum oftechnology areas including sensor technology,wired and wireless communications,power line communications,computer security,software solutions,inter

295、connectedtechnological communications,smart home systems and methods for both home and hydroponic areas,dynamic password cipher,local file security,payment card security,infrared sensor,and a method and apparatus for high data rate transmission.In the fourth quarter of 2021,we hired the law firm of

296、Knobbe Martens,Olson&Bear,LLP to serve as outside intellectual property counsel for the Company.The firm isworking on transferring the Companys provisional patent applications to formal patent applications.Research and Development Activities For the year ended December 31,2021,we spent a total of$22

297、0,469 on research and development activities;and for the year ended December 31,2020,we spent a total of$256,636.Focus Universal(Shenzhen)Technology Co.LTD was founded as a mainland China office for not only manufacturing procurement expertise but also non-confidential supportresearch and developmen

298、t activities.This wholly owned subsidiary is registered to be engaged in IoT research and development and IoT sales and service amongst other relatedactivities.Compliance with Environmental Laws We are not aware of any environmental laws that have been enacted,nor are we aware of any such laws being

299、 contemplated for the future,that impact issues specific to ourbusiness.26 Employees As of the date of this report we have 13 full-time employees and 4 part-time employees.The Companys Chief Executive Officer and Secretary is Dr.Desheng Wang,and ourChief Financial Officer is Duncan Lee.Irving Kau se

300、rves as Vice President of Finance and Head of Investor Relations.We have a head of marketing whose efforts are focusedon the controlled agricultural market segment.We also have a CEO of our China subsidiary who leads the component and product procurement unit within Asia.We have threefull-time senio

301、r electrical and computer engineers working on research and development of our products.Two full-time employees are working in the warehouse assemblingelectronics for Hydrofarm,orchestrating the development and distribution of our sensor devices and filters,contacting vendors when receiving orders f

302、or Hydrofarm,andperforming warehouse logistics,product assembly,and other administrative tasks.We also have a full-time accounting manager/controller.Three employees performaudio/visual home installations for our subsidiary AVX,with one employee serving as the supervisor and operational head.Legal P

303、roceedings On April 13,2020,Ian Patterson resigned from his position as Chief Operations Officer of AVX.On May 5,2020,Mr.Patterson filed an action in the Superior Court for theCounty of Los Angeles,State of California,against the Company et al.We believe neither the Company nor Dr.Wang has been serv

304、ed properly and venue is improper.Thecomplaint alleges claims including wrongful termination,retaliation and various other provisions of the California Labor Code,and various other claims under California statelaw.The complaint seeks unspecified economic and non-economic losses,as well as attorneys

305、fees.The Company is investigating and intends to vigorously defend itself in theforegoing matter.We have completed written discovery and non-expert discovery.Trial is set for May 31,2022.AVX intends to vigorously contest this matter.Further,AVXdisputes that the other defendants are proper parties to

306、 the litigation.However,litigation and investigations are inherently uncertain.Accordingly,the Company cannot predictthe outcome of this matter.On April 13,2020,AVX terminated an employee from her position as Sales and Marketing Director.On May 13,2020,she filed an action in the Superior Court for t

307、he Countyof Los Angeles,State of California.The Complaint alleges claims including wrongful termination,retaliation and various other provisions of the California Labor Code,andvarious other claims under California state law.The complaint seeks unspecified economic and non-economic losses,as well as

308、 attorneys fees.The Company is investigatingand intends to vigorously defend itself in the foregoing matters.In response to the Complaint,defendants filed a motion to compel arbitration asking the court to order Plaintiffto submit her claims to binding individual arbitration based on an arbitration

309、agreement signed by Plaintiff at the outset of her employment.The motion was unfortunatelydenied,and in response,defendants filed an appeal which is currently pending.The appeal is anticipated to take the majority of 2022 before it is resolved.AVX intends tovigorously contest this matter.Further,AVX

310、 disputes that the other defendants are proper parties to the litigation.However,litigation and investigations are inherentlyuncertain,but the outcome could have a material impact on the Company.Reports to Securities Holders We provide an annual report that includes audited financial information to

311、our shareholders.We make our financial information equally available to any interested parties orinvestors through compliance with the disclosure rules for a small business issuer under the Exchange Act.We are subject to disclosure filing requirements including filingForm 10-K annually and Form 10-Q

312、 quarterly.In addition,we will file Form 8-K and other proxy and information statements from time to time as required.We do not intend tovoluntarily file the above reports in the event that our obligation to file such reports is suspended under the Exchange Act.The public may read and copy any mater

313、ials that wefile with the Securities and Exchange Commission at the SECs Public Reference Room at 100 F Street NE,Washington,DC 20549.The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.The SEC maintains an Internet site(http:/www.sec.

314、gov)that contains reports,proxy and information statements,and other information regarding issuers that file electronically with the SEC.27 Item 1A.RISK FACTORS Risks Related to our Business and Industry We have a history of operating losses,and we may not be able to sustain profitability.We were in

315、corporated on December 4,2012;and as of December 31,2021,we had an accumulated deficit of$12,937,091.If we are not successful in growing revenues andcontrolling costs,we will not maintain profitable operations or positive cash flow,and even if we achieve profitability in the future,we may not be abl

316、e to sustain profitabilityin subsequent periods.Because we have a limiting operating history with positive revenues,you may not be able to accurately evaluate our operations.We were incorporated on December 4,2012 and have had limited profitable operations to date.Therefore,we have a limited profita

317、ble operating history upon which to evaluatethe merits of investing in our company.The likelihood of success must be considered in light of the problems,expenses,difficulties,complications and delays encountered inconnection with the operations that we plan to undertake.These potential problems incl

318、ude,but are not limited to,unanticipated problems relating to the ability to generatesufficient cash flow to operate our business,and additional costs and expenses that may exceed current estimates.However,we expect to continue generating revenues.Additionally,we recognize that if the effectiveness

319、of our business plan is not forthcoming,we will not be able to continue business operations.If we are unsuccessful inaddressing these risks,our business will most likely fail.We require significant funding to develop,manufacture and market our Ubiquitor wireless sensor.We may ultimately require up t

320、o$20 million to fund the development,manufacturing,assembly and marketing strategy for the Ubiquitor.Once we achieve this fund-raisinggoal,we intend to position ourselves in the small device market,establishing the price at below a few hundred dollars.Due to superior functionality and low price,we e

321、xpect tocapture this section of the market fairly easily.Once our product and service matures,and the Company becomes better known,we believe we could gain market share in thehigh-end market.None of this will be possible if we fail to obtain the funding we require.There is no guarantee that addition

322、al funding can be obtained on favorable terms,if atall.We depend on key personnel.Our future success will depend in part on the continued service of key personnel,particularly,Desheng Wang,our Chief Executive Officer,and Edward Lee,the Chairman ofour Board.If any of our directors and officers choose

323、 to leave the company,we will face significant difficulties in attracting potential candidates for replacement of our key personnel dueto our limited financial resources and operating history.In addition,the loss of any key employees or the inability to attract or retain qualified personnel could de

324、lay our plan ofoperations and harm our ability to provide services to our current customer,Hydrofarm,and harm the markets perception of us.Regulatory actions could limit our ability to market and sell our products.Many of our products and the industries in which they are used are subject to U.S.and

325、foreign regulation.Government regulatory action could greatly reduce the market for ourUbiquitor device and for smart home installation.For example,the power line grid,which is the communications grid that could be used by some of our products,is subject tospecial regulations in North America,Europe

326、 and Japan.In general,these regulations limit the ability of companies such as ours to use power lines as a communicationmedium.In addition,some of our competitors have attempted or may attempt to use regulatory actions to reduce the market opportunity for our products or to increase themarket oppor

327、tunity for their own products.28 We outsource our product manufacturing and are susceptible to problems in connection with procurement,decreasing quality,reliability and protectability.We assemble our Ubiquitor devices by using fully manufactured parts,the manufacturing of which has been fully outso

328、urced.We have no direct control over the manufacturingprocesses of our products.This lack of control may increase quality or reliability risks and could limit our ability to quickly increase or decrease production rates.Our business operations and financial performance may be affected by the coronav

329、irus pandemic.The coronavirus pandemic has adversely affected economies throughout the world.With the continued spread of the coronavirus in the United States and other countries,it isunclear how economic activity and workflow might be impacted on a worldwide basis generally or for our Company speci

330、fically.If the pandemic continues and/or conditionsworsen,we may experience a disruption in our supply chain as well as a decline in sales activities and customer orders.The impact of the coronavirus on our operations isuncertain at this time.Given the rapidly changing situation related to this pand

331、emic,we believe it could have a material adverse effect on our business,financial conditions andresults of operations.During 2020,our subsidiary AVX was negatively impacted by the COVID-19 pandemic.AVX encountered delays in certain projects due to thegovernment-imposed restrictions affecting access

332、to job sites as well as clients contracting the coronavirus.We also had employees contract the virus,which negativelyimpacted our research and development.In 2021,we had delays in receiving the inventory necessary for Perfecular to fulfill sales orders due to a shortage of shipmentcontainers caused

333、by the pandemic,which resulted in delays in completing our sales cycles.We outsource the manufacturing of key elements of our quantum light meters and air filters to a single manufacturing partner,with whom we do not have a formalcontractual relationship.We outsource the manufacture of our quantum light meter and air filtration devices to a single contract manufacturer,Tianjin Guanglee Technologie