1、 UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549 FORM 10-K(Mark One)XANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF1934 For the fiscal year ended March 31,2014or TRANSITION REPORT UNDER SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For
2、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)8275 S.Eastern Ave.,Ste.200-674,Las Vegas,Nev
3、ada 89123(Address of principal executive offices)(Zip Code)Registrants telephone number,including area code(702)724-2646 Securities registered under Section 12(b)of the Exchange Act:Title of each class Name of each exchange onwhich registeredCommon Stock$0.001 par value None Securities registered un
4、der Section 12(g)of the Exchange Act:None(Title of class)Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the SecuritiesAct Yes No X Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d)of the Act.No
5、te-Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d)of the Exchange Act from their obligations under those Sections.Indicate by check mark whether the registrant(1)filed all reports required to be filed by Section 13 or 15(d)of the Securi
6、ties Exchange Act of 1934 during the preceding 12 months(or for suchshorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes X No Indicate by check mark whether the registrant has submitted electronically and po
7、sted on its corporate Website,if any,every Interactive Data File required to be submitted and posted pursuant toRule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit and post such files).Yes X No Indica
8、te by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K(229.405 of this chapter)is not contained herein,and will not be contained,to the bestregistrants knowledge,in definitive proxy or information statements incorporated by reference in Part III of this Form 10
9、-K or any amendments to this From 10-K.Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,or a smaller reporting company.See definitions of“large accelerated filer,”“accelerated filer”and“smaller reporting company”in Rule 12b-2 of
10、the Exchange Act.Large accelerated filer Accelerated filer Non-accelerated filer (Do not check if a smaller reporting company)Smaller reporting company X Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Act).Yes No X State the aggregate market value of
11、 the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold,or the average bid andasked price of such common equity,as of the last business day of the registrants most recently completed fiscal quarter As of June 27,2014,the
12、aggregate market value of voting stock held by non-affiliates of the registrant,based on the price at which the common equity was sold,was$32,250.DOCUMENTS INCORPORATED BY REFERENCE Articles of Incorporation,Bylaws,Subscription Agreement,Consulting Agreeement(President)and Consulting Agreement(C.F.O
13、.)are incorporated by reference to the Companys RegistrationStatement on Form S-1 filed with the SEC on December 26,2013.TABLE OF CONTENTS Part IPage No.Item 1.Business4 Item 1.ARisk Factors6 Item 2.Properties13 Item 3.Legal Proceedings13 Item 4.Mine Safety Disclosures13 Part II Item 5.Market for Re
14、gistrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities13 Item 6.Selected Financial Data14 Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations.14 Item 7A.Quantitative and Qualitative Disclosures About Market Risk.17 Item 8
15、.Financial Statements and Supplementary Data17 Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure31 Item 9 A.Controls and Procedures31 Part III Item 10.Directors,Executive Officers and Corporate Governance31 Item 11.Executive Compensation32 Item 12.Security O
16、wnership of Certain Beneficial Owners and Management and Related Stockholder Matters.33 Item 13.Certain Relationships and Related Transactions,and Director Independence34 Item 14.Principal Accounting Fees and Services.35 Part IV Item 15.Exhibits,Financial Statement Schedules.35 Signatures36 FOCUS UN
17、IVERSAL INC.FORWARD LOOKING STATEMENTS This Annual Report contains forward-looking statements.Forward-looking statements are projections of events,revenues,income,future economic performance or managements plans andobjectives for our future operations.In some cases,you can identify forward-looking s
18、tatements by terminology such as“may”,“should”,“expects”,“plans”,“anticipates”,“believes”,“estimates”,“predicts”,“potential”or“continue”or the negative of these terms or other comparable terminology.These statements are only predictions and involve known and unknown risks,uncertainties andother fact
19、ors,including the risks in the section entitled“Risk Factors”and the risks set out below,any of which may cause our or our industrys actual results,levels of activity,performance orachievements to be materially different from any future results,levels of activity,performance or achievements expresse
20、d or implied by these forward-looking statements.These risks include,by wayof example 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 to continue as going concern;r
21、isks related to our international operations and currency exchange fluctuations;andother risks and uncertainties 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
22、be considered carefully and readers should not place unduereliance on our forward-looking statements.Forward looking statements are made based on managements beliefs,estimates and opinions on the date the statements are made and we undertake noobligation to update forward-looking statements if these
23、 beliefs,estimates and opinions or other circumstances should change.Although we believe that the expectations reflected in the forward-looking statements are reasonable,we cannot guarantee future results,levels of activity,performance or achievements.Except as required by applicable law,including t
24、he securities laws of the UnitedStates,we do not intend to update any of the forward-looking statements to conform 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 Princ
25、iples.All references to“common stock”refer to the common shares in our capital stock.As used in this annual report,the terms“we”,“us”,“our”,the“Company”and“Focus Universal”mean Focus Universal Inc.unless otherwise indicated.Item 1.BUSINESS Our Business Focus Universal is an online marketing,advertis
26、ing and design provider.We generate our revenue from providing services that include marketing,advertising and website design to small andmedium size businesses.To date,we have focused on providing one-off services such as development of a fully functioning website or creation of a marketing strateg
27、y plan to small business clients.We plan to expand our service offerings to include subscription-based service packages.Our current services include:Marketing We offer a wide variety of online marketing service to meet our clients needs.Our services include:email marketing;search engine optimization
28、;affiliate marketing;pay per click management;content creation;conversion rate optimization and social media marketing.Paid Search AdvertisingPaid search advertising refers to search engine advertising such as Google AdWords(Yahoo and MSN have similar paid search programs available).Search advertise
29、ments are targeted to match keysearch terms(called keywords)entered on search engines.We help our clients manage their search campaigns by:4 -Selecting targeted keywords and monitoring their effectiveness.-Creating relevant ad text that is likely to convert leads into new clients.-Structuring and op
30、timizing campaigns for better performance and maximum results.-Providing monthly client reporting to communicate the strategies weve implemented and recommendations for future improvement.-Developing and researching possible new avenues of online marketing to build the new client base.Social and Vir
31、al Marketing CampaignsWe help companies to create innovative,interactive online campaigns that build brand awareness.Strategy The foundation of an effective online strategy is based upon an intimate understanding of the offering,the business and its online objectives.Our strategic consulting service
32、s involve in-depth workwith our clients to develop a comprehensive plan of action to meet their marketing needs for a specific amount of time.We work with clients to set objectives for each marketing campaign.Usinganalytics,each campaign is analyzed for its effectiveness.Our marketing strategy plann
33、ing services include:digital review;research&analysis and campaign planning.SocialWe enable our customers to facilitate social media engagement with current and potential consumers.This involves utilizing the appeal of popular social networks such as Facebook,Twitter,andPinterest.We generate content
34、 that is appropriate for social media use and is targeted to our clients needs for audience engagement.This is used to increase company visibility and create socialmedia interactions with their potential customers.These activities can also help improve our customers search engine rankings.Our social
35、 services include:social and viral marketing campaigncreation and management;social media consulting;custom channel design and review;content generation;cross channel promotions.Website Design We offer custom web design services for websites targeted at traditional browser views,as well as sites opt
36、imized for consumption on mobile devices.Our custom design service includes thedevelopment of a unique website look and layout that is created specifically for our client.Our design team can assist with layout as well as content creation and image sourcing.We also provideconsulting services on websi
37、te usability,where we help clients ensure that their website is effective and easy to use.Patent,Trademark,License and Franchise Restrictions and Contractual Obligations and Concessions We do not own,either legally or beneficially,any patents or trademarks.Research and Development Activities Other t
38、han time spent researching our proposed business we have not spent any funds on research and development activities to date.We do not currently plan to spend any funds on research anddevelopment activities in the future.Compliance with Environmental Laws We are not aware of any environmental laws th
39、at have been enacted,nor are we aware of any such laws being contemplated for the future,that impact issues specific to our business.Employees As of the date of this Annual Report we have two employees,the Companys officers,Tatyana Popova,our President and Chief Executive Officer and Elena Ignatenko
40、,our Chief Financial Officer,Treasurer and Secretary.Our officers and directors are responsible for planning,developing and operational duties,and will continue to do so throughout the early stages of our growth.5 Reports to Securities Holders We provide an annual report that includes audited financ
41、ial information to our shareholders.We will make our financial information equally available to any interested parties or investors throughcompliance with the disclosure rules for a small business issuer under the Securities Exchange Act of 1934.We are subject to disclosure filing requirements inclu
42、ding filing Form 10K annually andForm 10Q quarterly.In addition,we will file Form 8K and other proxy and information statements from time to time as required.We do not intend to voluntarily file the above reports in the event thatour obligation to file such reports is suspended under the Exchange Ac
43、t.The public may read and copy any materials that we file with the Securities and Exchange Commission,(SEC),at the SECsPublic 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
44、 SEC maintains an Internet site(http:/www.sec.gov)that containsreports,proxy and information statements,and other information regarding issuers that file electronically with the SEC.Item 1A.RISK FACTORS We face intense competition in our industry.If we are unable to compete successfully,our business
45、 will be seriously harmed.The market for our marketing services is highly competitive and has low barriers to entry.Our competitors vary in size and in the variety of services they offer.Many of our current and potentialcompetitors have longer operating histories,significantly greater financial,tech
46、nical,marketing and other resources and an established client base.These competitors may be able to adapt morequickly to new or emerging social media marketing technologies and changes in customer requirements.They may also be able to devote greater resources to the promotion and sales of their serv
47、icesthan we can,or may adopt more aggressive pricing policies.If we fail to compete successfully against our competitors,our revenue could decline and our business could be harmed.We lack an operating history.There is no assurance our future operations will result in profitable revenues.If we cannot
48、 generate sufficient revenues to operate profitably,our business willfail.We were incorporated on December 4,2012,and as of March 31,2014 have realized$15,900 in revenues,incurred$5,000 in cost of revenue and$33,754 in operating costs since inception(December 4,2012).As of March 31,2014,we had defic
49、it accumulated during the development stage of$22,854.We have a limited operating history upon which an evaluation of our futuresuccess or failure can be made.Based upon current plans,we expect to continue generating revenues.However,our revenues may not be sufficient to cover our operating costs.We
50、 cannot guaranteethat we will be successful in generating significant revenues in the future.Failure to achieve a sustainable sales level will cause us to go out of business.Our auditors have issued a going concern opinion because there is substantial uncertainty that we will continue operations in
51、which case you could lose your investment.Our auditors have issued a going concern opinion.This means that there is substantial doubt that we can continue as an ongoing business for the next twelve months.The financial statements do notinclude any adjustments that might result from the uncertainty a
52、bout our ability to continue in business.As such we may have to cease operations and you could lose your investment.Our operating results could be impaired if we become subject to burdensome government regulation and legal uncertainties.We are not currently subject to direct regulation by any domest
53、ic or foreign governmental agency,other than regulations applicable to businesses generally.However,due to the increasing popularityand use of the Internet,it is possible that a number of laws and regulations may be adopted with respect to the Internet,relating to user privacy,content and copyrights
54、.The adoption of any additionallaws or regulations may decrease the expansion of the Internet.A decline in the growth of the Internet could decrease demand for our services and increase our cost of doing business.Our business,financial condition and results of operations could be seriously harmed by
55、 any new legislation or regulation.We depend on key personnel.Our future success will depend in part on the continued service of key personnel,particularly,Tatyana Popova,our President and Director and Elena Ignatenko,our Secretary,Treasurer,ChiefFinancial Officer and Director.6 We have entered into
56、 consulting agreements with Tatyana Popova,our President,and Elena Ignatenko,our Chief Financial Officer,on September 18,2013.Either party can terminate these contractswith a thirty(30)day advance written notice.If any of our directors and officers will choose to leave the company,we will face signi
57、ficant difficulties in attracting potential candidates forreplacement of our key personnel due to our limited financial resources and operating history.In addition,the loss of any key employees or the inability to attract or retain qualified personnel coulddelay our plan of operations and harm our a
58、bility to provide services to our current customers and harm the markets perception of us.Our officers and directors live outside the United States,making it difficult for an investor to enforce liabilities in foreign jurisdictions.We are a Nevada corporation and,as such,are subject to the jurisdict
59、ion of the State of Nevada and the United States courts for purposes of any lawsuit,action or proceeding by investors herein.Aninvestor would have the ability to effect service of process in any action on the company within the United States.However,since Ms.Popova and Ms.Ignatenko,our officers and
60、directors,resideoutside the United States,substantially all or a portion of their assets are located outside the United States.As a result,it may not be possible for investors to:-effect service of process within the United States against your non-U.S.resident officers or directors;-enforce U.S.cour
61、t judgments based upon the civil liability provisions of the U.S.federal securities laws against any of the above referenced foreign persons in the United States;-enforce in foreign courts U.S.court judgments based on the civil liability provisions of the U.S.federal securities laws against the abov
62、e foreign persons;and-bring an original action in foreign courts to enforce liabilities based upon the U.S.federal securities laws against the above foreign persons.The lack of public company experience of our management team could adversely impact our ability to comply with the reporting requiremen
63、ts of U.S.securities laws.Ms.Popova and Ms.Ignatenko lack public company experience,which could impair our ability to comply with legal and regulatory requirements such as those imposed by Sarbanes-Oxley Act of2002.Our CEO has never been responsible for managing a publicly traded company.Such respon
64、sibilities include complying with federal securities laws and making required disclosures on a timelybasis.Any such deficiencies,weaknesses or lack of compliance could have a materially adverse effect on our ability to comply with the reporting requirements of the Securities Exchange Act of1934,as a
65、mended,which is necessary to maintain our public company status.If we were to fail to fulfill those obligations,our ability to continue as a U.S.public company would be in jeopardy inwhich event you could lose your entire investment in our company.Our officers,directors,consultants and advisors are
66、involved in other businesses and not obligated to commit their time and attention exclusively to our business and therefore they mayencounter conflicts of interest with respect to the allocation of time and business opportunities between our operations and those of other businesses.Our directors are
67、 currently involved in other businesses and not obligated to commit their time and attention exclusively to our business and,accordingly,they may encounter conflicts of interest inallocating their own time,or any business opportunities which they may encounter,between our operations and those of oth
68、er businesses.Currently,Tatyana Popova,our President,and Director,Elena Ignatenko,our Treasurer,Chief Financial Officer and Director each commit between 20 to 30 hours per week of their time to our business in their capacities as officers and directors.Nevertheless,if the execution of our business p
69、lan demands more time than is currently committed by any of our officers,directors,consultants or advisors,they will be under no obligation tocommit such additional time,and their failure to do so may adversely affect our ability to carry on our business and successfully execute our business plan.Ad
70、ditionally,Tatyana Popova,our President,in the course of her other business activities,may become aware of investments,business opportunities or information which may be appropriate forpresentation to us as well as to another entity,Most Marketing Inc.to which she owes fiduciary duties,such as loyal
71、ty and duty of care.For the past five years Ms.Popova worked as marketingmanager at Most Marketing Inc.,an online marketing company.7 Ms.Popova is not an officer or a director of Most Marketing and her fiduciary duties to the Most Marketing,such as loyalty and duty of care encompass her responsibili
72、ties only as marketingmanager within her job description.As a result,she may have conflicts of interest only in determining to which entity management particular opportunities or information should be presented,e.g.anew client engagement.Another example of a conflict of interest is so called“self-de
73、aling transactions.The concept is that the directors of Focus Universal are dealing with themselves,and may not reach an agreementthat is fair to the company,e.g.their remuneration for serving as officers of the Company.If a conflict-of-interest transaction is negotiated and approved by the non-inte
74、rested directors,in a mannerthat approximates arms-length negotiations,including the right of the non-interested directors to reject the transaction altogether,the transaction is accepted unless a shareholder proves in court thatthe transaction is not entirely fair to the company.The burden is on th
75、e shareholder to show lack of entire fairness.Otherwise,the transaction is considered invalid if challenged,unless the directorsprove in court that the transaction is entirely fair to the company.The burden is on the directors to show entire fairness.We are not aware of potential self-dealing transa
76、ctions that could possibly occur due to overlapping business of the company and Most Marketing.Focus Universal and Most Marketing had neverworked together,had common clients or any contractual relationships.We do not have plans to work or enter in an agreement with Most Marketing in future.If,as a r
77、esult of before mentionedconflicts,we are deprived of business opportunities or information,the execution of our business plan and our ability to effectively compete in the marketplace may be adversely affected.If webecome aware of such conflict of interests we will take an immediate action to resol
78、ve it.Each conflict of interest will be handled by the company based on the nature of the conflict and the individualinvolved in it.We do not have any actual or potential conflict of interests with our consultants or advisors.We do not have a majority of independent directors on our Board and the Co
79、mpany has not voluntarily implemented various corporate governance measures,in the absence of whichstockholders may have more limited protections against interested director transactions,conflicts of interest and similar matters.Federal legislation,including the Sarbanes-Oxley Act of 2002,has result
80、ed in the adoption of various corporate governance measures designed to promote the integrity of the corporate managementand the securities markets.Some of these measures have been adopted in response to legal requirements.Others have been adopted by companies in response to the requirements of nati
81、onal securitiesexchanges,such as the NYSE or the NASDAQ Stock Market,on which their securities are listed.Among the corporate governance measures that are required under the rules of national securitiesexchanges are those that address board of directors independence,audit committee oversight,and the
82、 adoption of a code of ethics.We have not yet adopted any of these other corporate governancemeasures and since our securities are not yet listed on a national securities exchange,we are not required to do so.Our Board of Directors is comprised of two individuals,both of whom are also ourexecutive o
83、fficers.As a result,we do not have independent directors on our Board of Directors.We have not adopted corporate governance measures such as an audit or other independent committee of our board of directors,as we presently do not have independent directors on our board.If weexpand our board membersh
84、ip in future periods to include additional independent directors,we may seek to establish an audit and other committee of our board of directors.It is possible that if ourBoard of Directors included independent directors and if we were to adopt some or all of these corporate governance measures,stoc
85、kholders would benefit from somewhat greater assurance thatinternal corporate decisions were being made by disinterested directors and that policies had been implemented to define responsible conduct.For example,at present in the absence of audit,nominating and compensation committees comprised of a
86、t least a majority of independent directors,decisions concerning matters such as compensation packages or employment contracts to oursenior officers are made by a majority of directors who have an interest in the outcome of the matters being decided.However,as a general rule,the board of directors,i
87、n making its decisions,determines first that the terms of such transaction are no less favorable to us that those that would be available to us withrespect to such a transaction from unaffiliated third parties.The company executes the transaction between executive officers and the company once it wa
88、s approved by the Board of Directors.Prospective investors should bear in mind our current lack of corporate governance measures in formulating their investment decisions.8 Because our Directors,who are also our sole promoters,own 60.79%of our outstanding common stock they could make and control cor
89、porate decisions that may be disadvantageous to otherminority shareholders.Our Directors own 60.79%of the outstanding shares of our common stock as of the date of this Offering.Accordingly,they have a significant influence in determining the outcome of all corporatetransactions or other matters,incl
90、uding mergers,consolidations and the sale of all or substantially all of our assets.They also have the power to prevent or cause a change in control.The interests ofour directors may differ from the interests of the other stockholders and thus result in corporate decisions that are disadvantageous t
91、o other shareholders.You could be diluted from our future issuance of capital stock and derivative securities.As of June 27,2014,we had 6,580,000 shares of common stock outstanding and no shares of preferred stock outstanding.We are authorized to issue up to 75,000,000 shares of common stock and nos
92、hares of preferred stock.To the extent of such authorization,our Board of Directors will have the ability,without seeking stockholder approval,to issue additional shares of common stock or preferred stock in the future for such consideration as the Board of Directors may consider sufficient.The issu
93、ance of additional common stock or preferred stock in the future may reduce yourproportionate ownership and voting power.None of the members of our Board of Directors are considered audit committee financial experts.If we fail to maintain an effective system of internal control over financial report
94、ing,we maynot be able to accurately report our financial results.As a result,current and potential shareholders could lose confidence in our financial reporting,which would harm our business and thetrading price of our stock.Members of our Board of Directors are inexperienced with U.S.GAAP and the r
95、elated internal control procedures required of U.S.public companies.Management has determined that our internalaudit function is also significantly deficient due to insufficient qualified resources to perform internal audit functions.Finally,we have not established an Audit Committee of our Board of
96、 Directors.We are a development stage company with limited resources.Therefore,we cannot assure investors that we will be able to maintain effective internal controls over financial reporting based oncriteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission(“COSO”)in
97、 Internal Control-Integrated Framework.A material weakness is a deficiency,or acombination of deficiencies,in internal control over financial reporting,such that there is a reasonable possibility that a material misstatement of the companys annual or interim financial statementswill not be prevented
98、 or detected on a timely basis.For these reasons,we are considering the costs and benefits associated with improving and documenting our disclosure controls and procedures andinternal controls and procedures,which includes(i)hiring additional personnel with sufficient U.S.GAAP experience and(ii)impl
99、ementing ongoing training in U.S.GAAP requirements for ourCFO and accounting and other finance personnel.If the result of these efforts are not successful,or if material weaknesses are identified in our internal control over financial reporting,ourmanagement will be unable to report favorably as to
100、the effectiveness of our internal control over financial reporting and/or our disclosure controls and procedures,and we could be required to furtherimplement expensive and time-consuming remedial measures and potentially lose investor confidence in the accuracy and completeness of our financial repo
101、rts which could have an adverse effect onour stock price and potentially subject us to litigation.The requirements of being a public company may strain our resources and distract our management.We are required to comply with various regulatory and reporting requirements,including those required by t
102、he Securities and Exchange Commission.Complying with these reporting and otherregulatory requirements is time-consuming and may result in increased costs to us and could have a negative effect on our business,results of operations and financial condition.As a public company,we are subject to the rep
103、orting requirements of the Securities Exchange Act of 1934,as amended,or the Exchange Act,and requirements of the Sarbanes-Oxley Act of 2002,asamended,or SOX.These requirements may place a strain on our systems and resources.The Exchange Act requires that we file annual,quarterly and current reports
104、 with respect to our business andfinancial condition.The SOX requires that we maintain effective disclosure controls and procedures and internal controls over financial reporting.Compliance with these rules and regulations willincrease our legal and financial compliance costs,make some activities mo
105、re difficult,time-consuming or costly and increase demand on our systems and resources.9 These activities may divert managements attention from other business concerns,which could have a material adverse effect on our business and results of operations.In addition,changing laws,regulations and stand
106、ards relating to corporate governance and public disclosure are creating uncertainty for public companies,increasing legal and financial compliancecosts and making some activities more time consuming.These laws,regulations and standards are subject to varying interpretations,in many cases due to the
107、ir lack of specificity,and,as a result,theirapplication in practice may evolve over time as new guidance is provided by regulatory and governing bodies.This could result in continuing uncertainty regarding compliance matters and highercosts necessitated by ongoing revisions to disclosure and governa
108、nce practices.We intend to invest resources to comply with evolving laws,regulations and standards,and this investment may resultin increased general and administrative expenses and a diversion of managements time and attention from revenue-generating activities to compliance activities.If our effor
109、ts to comply with newlaws,regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice,regulatory authorities may initiate legal proceedings againstus and our business may be harmed.We also expect that being a public company a
110、nd these new rules and regulations will make it more expensive for us to obtain director and officer liability insurance,and we may be required to acceptreduced coverage or incur substantially higher costs to obtain coverage.These factors could also make it more difficult for us to attract and retai
111、n qualified members of our Board of Directors,particularly to serve on our audit committee and compensation committee,and qualified executive officers.The Company is subject to the 15(d)reporting requirements under the Securities Exchange Act of 1934 which does not require a company to file all the
112、same reports and information as fullyreporting company.Pursuant to Section 15(d),we are required to file periodic reports with the SEC,such as annual reports on Form 10-K,quarterly reports on Form 10-Q,and current reports on Form 8-K,once ourregistration statement is declared effective,including the
113、 annual report on Form 10-K for the fiscal year during which the registration statement is declared effective.That filing obligation willgenerally apply even if our reporting obligations have been suspended automatically under section 15(d)of the Exchange Act prior to the due date for the Form 10-K.
114、After that fiscal year and provided the Company has less than 300 shareholders,the Company is not required to file these reports.If the reports are not filed,the investors will have reduced visibilityas to the Company and its financial condition.In addition,as a filer subject to Section 15(d)of the
115、Exchange Act,the Company is not required to prepare proxy or information statements;ourcommon stock will not be subject to the protection of the going private regulations;the company will be subject to only limited portions of the tender offer rules;our officers,directors,and more thanten(10%)percen
116、t shareholders are not required to file beneficial ownership reports about their holdings in our company;that these persons will not be subject to the short-swing profit recoveryprovisions of the Exchange Act;and that more than five percent(5%)holders of classes of your equity securities will not be
117、 required to report information about their ownership positions in thesecurities.We will not be required to evaluate our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act until the end of the second fiscal year reported upon in our secondannual report on form 10-K
118、.The Sarbanes-Oxley Act of 2002 and the new rules subsequently implemented by the Securities and Exchange Commissions,the Financial Industry Regulatory Authority(“FINRA”)and the PublicCompany Accounting Oversight Board have imposed various new requirements on public companies,including requiring cha
119、nges in corporate governance practices.We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly.These costs could affect profitability and ourresults of operations.We are in the process of determining whethe
120、r our existing internal controls over financial reporting systems are compliant with Section 404.We will not be required to conduct the evaluation ofeffectiveness of our internal controls until the end of the fiscal year reported upon in our second annual report on Form 10-K.In addition,because we a
121、re a smaller reporting company,we are notrequired to obtain the auditor attestation of managements evaluation of internal controls over financial reporting.If we obtain and disclose such reports we could continue doing so at our discretionso long as we remain a smaller reporting company.This process
122、 of internal control evaluation and attestation may divert internal resources and will take a significant amount of time,effort and expense to complete.If it is determined that we are not incompliance with Section 404,we may be required to implement new internal control procedures and re-evaluate ou
123、r financial reporting.If we are unable to implement these changes effectively orefficiently,it could harm our operations,financial reporting or financial results,which could adversely affect our ability to comply with our periodic reporting obligations under the Exchange Act.10 There is no public(tr
124、ading)market for our common stock and there is no assurance that the common stock will ever trade on a recognized exchange or dealers network;therefore,ourinvestors may not be able to sell their shares.Our common stock is not listed on any exchange or quoted on any similar quotation service,and ther
125、e is currently no public market for our common stock.We have filed an application with theFinancial Industry Regulatory Authority(“FINRA”)to enable our common stock to be quoted on the OTC Bulletin Board,but can provide no assurance that this application will be approved and ourcommon stock will be
126、quoted on any quotation service or that any market for our common stock will ever develop.As a result,stockholders may be unable to liquidate their investments,or mayencounter considerable delay in selling shares of our common stock.A trading market may not develop in the future,and if one does deve
127、lop,it may not be sustained.If an active trading marketdoes develop,the market price of our common stock is likely to be highly volatile due to,among other things,the nature of our business and because we are a new public company with a limitedoperating history.Further,even if a public market develo
128、ps,the volume of trading in our common stock will presumably be limited and likely be dominated by a few individual stockholders.Thelimited volume,if any,will make the price of our common stock subject to manipulation by one or more stockholders and will significantly limit the number of shares that
129、 one can purchase or sell in ashort period of time.The market price of our common stock may also fluctuate significantly in response to the following factors,most of which are beyond our control:-variations in our quarterly and annual operating results;-changes in general economic conditions;-change
130、s in technologies favored by consumers;-price competition or pricing changes by us or our competitors;and -the addition or loss of key managerial and collaborative personnel.The equity markets have,on occasion,experienced significant price and volume fluctuations that have affected the market prices
131、 for many companies securities and that have often been unrelated to the operating performance of these companies.Any such fluctuations may adversely affect the market price of our common stock,regardless of our actual operating performance.As a result,stockholders may be unable to sell their shares
132、,or may be forced to sell them at a loss.We do not intend to pay dividends and there will be less ways in which you can make a gain on any investment in Focus Universal Inc.We have never paid any cash dividends and currently do not intend to pay any dividends for the foreseeable future.To the extent
133、 that we require additional funding currently not provided for in ourfinancing plan,our funding sources may likely prohibit the payment of a dividend.Because we do not intend to declare dividends,any gain on an investment in Focus Universal Inc.will need tocome through appreciation of the stocks pri
134、ce.If our common stock is accepted for quotation on the OTC Bulletin Board,the application of the“Penny Stock”rules could adversely affect the market price of our common shares and increaseyour transaction costs to sell those shares.The Securities and Exchange Commission has adopted Rule 3A51-1,whic
135、h establishes the definition of a“Penny Stock,”for the purposes relevant tous,as any equity security that has market price of less than$5.00 per share or within an exercise price of less than$5.00 per share,subject to certain exceptions.For any transaction involvinga penny stock,unless exempt,Rule 1
136、5G-9 require:-that a broker or dealer approve a persons account for transactions in penny stocks;and -the broker or dealer receive from the investor a written agreement to the transaction,setting forth the identity and quantity of the penny stock to be purchased.In order to approve a persons account
137、 for transactions in penny stocks,the broker or dealer must:-obtain financial information and investment experience objectives of the person;and -make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience
138、in financial matters to be capable ofevaluating the risks of transactions in penny stocks.11 The broker or dealer must also deliver,prior to any transaction in a penny stock,a disclosure schedule prescribed by the SEC relating to the penny stock market,which,in highlight form:-sets forth the basis o
139、n which the broker or dealer made the suitability determination;and -that the broker or dealer received a signed,written agreement from the investor prior to the transaction.Generally,brokers may be less willing to execute transactions in securities subject to the penny stock”rules.This may make it
140、more difficult for investors to dispose of our common stock and cause adecline in the market value of our stock.You may face significant restrictions on the resale of your shares due to state“blue sky”laws.Each state has its own securities laws,often called“blue sky”laws,which(1)limit sales of secur
141、ities to a states residents unless the securities are registered in that state or qualify for an exemptionfrom registration,and(2)govern the reporting requirements for broker-dealers doing business directly or indirectly in the state.Before a security is sold in a state,there must be a registration
142、in placeto cover the transaction,or it must be exempt from registration.The applicable broker-dealer must also be registered in that state.We do not know whether our securities will be registered or exempt from registration under the laws of any state.A determination regarding registration will be m
143、ade by those broker-dealers,if any,who agree to serve as market makers for our common stock.There may be significant state blue sky law restrictions on the ability of investors to sell,and on purchasers to buy,our securities.Youshould therefore consider the resale market for our common stock to be l
144、imited,as you may be unable to resell your shares without the significant expense of state registration or qualification.Focus Universal is an“emerging growth company”under the Jumpstart Our Business Startups Act.We cannot be certain if the reduced reporting requirements applicable to emerging growt
145、hcompanies will make our shares of common stock less attractive to investors.Focus Universal is and will remain an emerging growth company until the earliest to occur of(a)the last day of the fiscal year during which its total annual revenues equal or exceed$1 billion(subject to adjustment for infla
146、tion),(b)the last day of the fiscal year following the fifth anniversary of its initial public offering,(c)the date on which Focus Universal has,during the previous three-year period,issued more than$1 billion in non-convertible debt securities,or(d)the date on which Focus Universal is deemed a larg
147、e accelerated filer(with at least$700 million in public float)under the Securities and Exchange Act of 1934(the EXCHANGE ACT).For so long as Focus Universal remains an emerging growth company as defined in the JOBS Act,it may take advantage of certain exemptions from various reporting requirements t
148、hat areapplicable to other public companies that are not emerging growth companies as described in further detail in the risk factors below.Focus Universal cannot predict if investors will find its sharesof common stock less attractive because Focus Universal will rely on some or all of these exempt
149、ions.If some investors find Focus Universals shares of common stock less attractive as a result,theremay be a less active trading market for its shares of common stock and its stock price may be more volatile.If Focus Universal avails itself of certain exemptions from various reporting requirements,
150、its reduced disclosure may make it more difficult for investors and securities analysts to evaluate FocusUniversal and may result in less investor confidence.The recently enacted JOBS Act is intended to reduce the regulatory burden on emerging growth companies.Focus Universal meets the definition of
151、 an emerging growth company and so long asit qualifies as an emerging growth company,it will not be required to:have an auditor report on our internal controls over financial reporting pursuant to Section 404(b)of the Sarbanes-Oxley Act;comply with any requirement that may be adopted by the Public C
152、ompany Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditors report providingadditional information about the audit and the financial statements(i.e.,an auditor discussion and analysis);submit certain executive compensation matters to shareholder advisory
153、 votes,such as“say-on-pay”and“say-on-frequency;”and 12 disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEOs compensation to median employeecompensation.In addition,Section 107 of the JOBS Act also pro
154、vides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B)of the Securities Actfor complying with new or revised accounting standards.In other words,an emerging growth company can delay the adoption of certain accounting standards until
155、those standards would otherwiseapply to private companies.However,Focus Universal is choosing to opt out of such extended transition period,and as a result,Focus Universal will comply with new or revised accountingstandards on the relevant dates on which adoption of such standards is required for no
156、n-emerging growth companies.Section 107 of the JOBS Act provides that its decision to opt out of the extendedtransition period for complying with new or revised accounting standards is irrevocable.Notwithstanding the above,we are also currently a“smaller reporting company”,meaning that we are not an
157、 investment company,an asset-backed issuer,or a majority-owned subsidiary of a parentcompany that is not a smaller reporting company and have a public float of less than$75 million and annual revenues of less than$50 million during the most recently completed fiscal year.In the event that we are sti
158、ll considered a“smaller reporting company”,at such time are we cease being an“emerging growth company”,we will be required to provide additional disclosure in ourSEC filings.However,similar to“emerging growth companies”,“smaller reporting companies”are able to provide simplified executive compensati
159、on disclosures in their filings;are exempt from theprovisions of Section 404(b)of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control overfinancial reporting;are not required to conduct say-on-pay
160、 and frequency votes until annual meetings occurring on or after January 21,2013;and have certain other decreased disclosure obligationsin their SEC filings,including,among other things,only being required to provide two years of audited financial statements in annual reports.Decreased disclosures i
161、n our SEC filings due to ourstatus as an“emerging growth company”or“smaller reporting company”may make it harder for investors to analyze the Companys results of operations and financial prospects.Item 2.PROPERTIES We do not hold ownership or leasehold interest in any property and pay our office ren
162、t on a monthly basis.Item 3.LEGAL PROCEEDINGS We are not currently a party to any legal proceedings,and we are not aware of any pending or potential legal actions.Item 4.MINE SAFETY DISCLOSURES Not applicable.PART II Item 5.MARKET FOR REGISTRANTS COMMON EQUITY,RELATED STOCKHOLDER MATTERS AND ISSUER
163、PURCHASES OF EQUITY SECURITIES.Market Information Our common stock is not listed on any exchange or quoted on any similar quotation service,and there is currently no public market for our common stock.We have filed an application with theFinancial Industry Regulatory Authority(“FINRA”)to enable our
164、common stock to be quoted on the OTC Bulletin Board,but can provide no assurance that this application will be approved and ourcommon stock will be quoted on any quotation service or that any market for our common stock will ever develop.Holders.As of June 27,2014,there were 33 record holders(includ
165、ing our two directors)of 6,580,000 shares of the Companys common stock.13 Dividends.The Company has not paid any cash dividends to date and does not anticipate or contemplate paying dividends in the foreseeable future.It is the present intention of management to utilize allavailable funds for the de
166、velopment of the Companys business.Securities Authorized for Issuance Under Equity Compensation Plans None.Recent sales of unregistered securities.We completed an offering of 4,000,000 shares of our common stock at a price of$0.001 per share to our Directors Tatyana Popova(2,000,000)and Elena Ignate
167、nko(2,000,000)on September 30,2013.The total amount received from this Offering was$4,000.We completed this offering pursuant to Regulation S of the Securities Act.All of our directors and all of our executive officers resideoutside the United States.The offer and sale of all shares of our common st
168、ock listed above were affected in reliance on the exemptions for sales of securities not involving a public offering,as set forth in Regulation Spromulgated under the Securities Act.The investor acknowledged the following:subscriber is not a United States Person,nor is the subscriber acquiring the s
169、hares directly or indirectly for the account or benefit of a United States Person.None of the funds used by the subscriber to purchase the units have been obtained from United States Persons.For purposes of the Subscription Agreement,“United States Person”within themeaning of U.S.tax laws,means a ci
170、tizen or resident of the United States,any former U.S.citizen subject to Section 877 of the Internal Revenue Code,any corporation,or partnership organized orexisting under the laws of the United States of America or any state,jurisdiction,territory or possession thereof and any estate or trust the i
171、ncome of which is subject to U.S.federal income taxirrespective of its source,and within the meaning of U.S.securities laws,as defined in Rule 902(o)of Regulation S,means:(i)any natural person resident in the United States;(ii)any partnership orcorporation organized or incorporated under the laws of
172、 the United States;(iii)any estate of which any executor or administrator is a U.S.person;(iv)any trust of which any trustee is a U.S.person;(v)any agency or branch of a foreign entity located in the United States;(vi)any non-discretionary account or similar account(other than an estate or trust)hel
173、d by a dealer or other fiduciary for thebenefit or account of a U.S.person;(vii)any discretionary account or similar account(other than an estate or trust)held by a dealer or other fiduciary organized,incorporated,or(if an individual)resident in the United States;and(viii)any partnership or corporat
174、ion if organized under the laws of any foreign jurisdiction,and formed by a U.S.person principally for the purpose of investing insecurities not registered under the Securities Act,unless it is organized or incorporated,and owned,by accredited investors(as defined in Rule 501(a)who are not natural p
175、ersons,estates or trusts.Issuer Purchases of Equity Securities We did not repurchase any of our equity securities during the years ended March 31,2014 and 2013.Item 6.SELECTED FINANCIAL DATA We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are no
176、t required to provide the information under this item.Item 7.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS The following discussion should be read in conjunction with our audited financial statements and notes thereto included herein.In connection with,and becau
177、se we desire to take advantage of,the“safe harbor”provisions of the Private Securities Litigation Reform Act of 1995,we caution readers regarding certain forward looking statements in the following discussion and elsewhere in thisreport and in any other statement made by,or on our behalf,whether or
178、not in future filings with the Securities and Exchange Commission.Forward-looking statements are statements not based onhistorical information and which relate to future operations,strategies,financial results or other developments.Forward looking statements are necessarily based upon estimates and
179、assumptionsthat are inherently subject to significant business,economic and competitive uncertainties and contingencies,many of which are beyond our control and many of which,with respect to futurebusiness decisions,are subject to change.These uncertainties and contingencies can affect actual result
180、s and could cause actual results to differ materially from those expressed in any forwardlooking statements made by,or our behalf.We disclaim any obligation to update forward-looking statements.14 Results of Operations For the year ended March 31,2014 compared to the period from December 4,2012(Ince
181、ption)to March 31,2013 We were formed on December 4,2012.Accordingly,the results of operations during the t fiscal period from December 4,2012 to March 31,2013(approximately 4 months)are not necessarilyindicative of the results of the regular(12 months)full fiscal year.All revenues,cost of revenues
182、and operating expenses during the period from December 4,2012 to March 31,2013 were affected bythe shorter reporting period compared to the full year of operations.Revenue,cost of sales and gross profit Our gross revenue from online marketing and consulting services for the year ended March 31,2014
183、and the period from inception(December 4,2012)to March 31,2013 was$15,900 and$nil,respectively.Our cost of revenues for the year ended March 31,2014 and the period from inception(December 4,2012)to March 31,2013 was$5,000 and$nil,respectively resulting in a gross profitof$10,900 for the year ended M
184、arch 31,2014 and$nil for the period from inception(December 4,2012)to March 31,2013.All of our revenues are derived from custom web design,development of online and social media strategy,advertising campaign planning and social media consulting.All the work,except webdevelopment,was performed by our
185、 officers and directors.The web development was performed by an independent third party contractor.We do not have long-term contracts with any of our clientsand rely on signing new clients in order to generate additional revenues.If we will not be able to attract new clients our revenue could declin
186、e and our business could be harmed.Operating Expenses The major components of our operating expenses for the year ended March 31,2014 and for the period from December 4,2012(Inception)to March 31,2013 are outlined in the table below:YearEndedMarch 31,2014 PeriodFrom Inception(December 4,2012)Through
187、 March 31,2013 Increase(Decrease)($)General and administrative$13,456$348 13,108Compensation-officers6,400-6,400Professional fees11,550 2,000 9,550$31,406$2,348 The increase in our operating costs in our fiscal 2014,compared to our fiscal 2013,was due to an increase in our corporate activities,an in
188、crease in expenses related to implementation of our businessplan and an increase in professional fees associated with preparation of our Registration Statement.General and administrative expenses of$13,456 represent consulting fees of$7,500(March 31,2013:$Nil),office rent of$389(March 31,2013:$Nil),
189、miscellaneous office expenses of$927(March 31,2013:$Nil)and filing fees of$4,640(March 31,2013:$Nil).Professional fees representaudit and accounting fees of$6,500(March 31,2013:$2,000)and legal fees of$5,050(March 31,2013:$Nil).In addition,the Company incurred$348 in incorporation costs during the p
190、eriod fromDecember 4,2012(Inception)to March 31,2013 which were classified as general and administrative expenses.The President of the Company provides management consulting services to the Company.During the year ended March 31,2014,management consulting services of$3,200(March 31,2013:$Nil)were ch
191、arged to operations.The Chief Financial Officer of the Company provides consulting services to the Company.During the year ended March 31,2014,consulting services of$3,200(March31,2013:$Nil)were charged to operations.As at March 31,2014 and 2013 the Company owed its directors and officers$6,400 and$
192、348 respectively.These amounts represent unpaid consulting fees and expenses incurred on behalf of theCompany.15 Net Losses During the twelve months ended March 31,2014 and the period from December 6,2012(Inception)to March 31,2013 we incurred net losses of$20,506 and$2,348,respectively,due to the f
193、actorsdiscussed above.Liquidity and Capital Resources Working Capital As of March 31,2014 As ofMarch 31,2013 Current Assets$7,716$-Current Liabilities$(23,570)$(2,348)Working Capital Deficit$(15,854)$(2,348)Cash Flows The table below,for the periods indicated,provides selected cash flow information:
194、For theYear Ended March 31,2014 For thePeriod fromDecember 4,2012(Inception)through,March 31,2013 Cash provided by(used in)operating activities$408$-Cash used in investing activities$-$-Cash provided by financing activities$7,000$-Net increase(decrease)in cash$7,408$-We have generated revenues of$15
195、,900 and$Nil for the year ended March 31,2014 and for the period from December 4,2012 to March 31,2013 respectively.In addition to cash received fromconsulting services,we received proceeds totaling$4,000 from the issuance of 4,000,000 shares of common stock at$0.001 per share during the year ended
196、March 31,2014.Also,during the year,wereceived$3,000 in common stock subscription funds.We had no other sources of cash inflow during the reporting periods.We anticipate that for the next 12 months we will be generating cash from the same revenue stream.We believe that our cash generated from operati
197、ons and cash on hand will provide sufficientcapital to fund our operations and meet our cash needs on a short term and long term basis for the next twelve months.In addition,we intend to finance our internal growth with cash on hand,cashprovided from operations,borrowings,debt or equity offerings,or
198、 some combination thereof.Cash Flows from Operating Activities Our cash flows from operating activities represent the most significant source of funding for our operations.The major uses of our operating cash include funding general operating expenses(marketing,travel,legal and professional expenses
199、,and office rent)and cost of revenues.Our cash provided by operating activities generally follows the trend in our net revenues and operatingresults.Our net cash generated by operating activities of$408 for the year ended March 31,2014 was primarily the result of our net loss of$20,506 largely offse
200、t for cash flow purposes by changes in ouroperating assets and liabilities.These changes include an increase in prepaid expenses of$308,in accounts payable and accrued liabilities of$15,170 and in amounts due to related party of$6,052.The increase in prepaid expenses was due to a security deposit an
201、d prepaid office rent.The increase in accounts payable and accrued liabilities reflected the increase in our general operating expensesincurred during the year ended March 31,2014 that remained unpaid at the end of the reporting period.16 The increase in amounts due to related party was due to consu
202、lting services incurred by the Company with our officers and directors that remain unpaid as of March 31,2014.We did not generate,orused,any cash from operating during the period from December 4,2012(Inception)to March 31,2013.Our net loss of$2,348 was offset for cash flow purposes by increases in a
203、ccounts payable of$2,000 and amounts due to related party of$348.The increase in accounts payable and accrued liabilities reflected the increase in professional fees incurred during the period ended March 31,2013,that remained unpaid at the end of the reportingperiod.The increase in amounts due to r
204、elated party was due to incorporation costs incurred by our officers and directors that remain unpaid as of March 31,2013.We expect that cash provided by operating activities may fluctuate in future periods as a result of a number of factors including fluctuations in our net revenues and operating r
205、esults,utilization ofnew revenue streams,collection of accounts receivable,and timing of billings and payments.Cash Flows from Investing Activities We did not generate or use any cash from investing activities during the year ended March 31,2014 or during the period from December 4,2012(Inception)to
206、 March 31,2013.Cash Flows from Financing Activities During the year ended March 31,2014 the Company sold 4,000,000 shares of common stock at par to the Company Directors for$4,000 in cash.During the year ended March 31,2014,the Companys Registration Statement on the Form S-1 filed with the Securitie
207、s and Exchange Commission was declared effective.As at March 31,2014 hadthe Company received$3,000 in common stock subscription funds although the offering was not closed until after the March 31,2014,the year end.Management expects to keep operating costs to a minimum until cash is available throug
208、h financing or operating activities.Management plans to continue to seek,in addition to equity financing,other sources of financing(e.g.bank loan,line of credit,shareholder loan)on favorable terms;however,there are no assurances that any such financing can be obtained on favorable terms,if at all.If
209、 we are unable to generate profits sufficient to cover our operating costs or unable to obtain additional funds for our working capital needs,we may need to cease or curtail operations.Furthermore,there is no assurance the net proceeds from any successful financing arrangement will be sufficient to
210、cover cash requirements during the initial stages of the Companys operations.Off-Balance Sheet Arrangements We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition,changes in financial condition,revenues or expenses,r
211、esultsof operations,liquidity,capital expenditures or capital resources that are material to stockholders.Item 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to prov
212、ide the information under this item.Item 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 17 FOCUS UNIVERSAL INC.(A DEVELOPMENT STAGE COMPANY)FOR THE YEAR ENDED MARCH 31,2014,THE PERIOD FROM INCEPTION(DECEMBER 4,2012)TO MARCH 31,2013AND FOR THE PERIOD FROM INCEPTION(DECEMBER 4,2012)TO MARCH 31,2014 Ind
213、ex to the Financial Statements ContentsPage Report of Independent Registered Public Accounting FirmF-1 Balance Sheets at March 31,2014 and 2013F-3 Statements of Operations for the Year Ended March 31,2014,the Period from December 4,2012(Inception)through March 31,2013 and the Period from December 4,
214、2012(Inception)through March 31,2014 F-4 Statement of Changes in Stockholders Deficit for the Period from December 4,2012(Inception)through March 31,2014F-5 Statements of Cash Flows for the Year Ended March 31,2014,the Period from December 4,2012(Inception)through March 31,2013 and the Period from D
215、ecember 4,2012(Inception)through March 31,2014F-6 Notes to the Financial StatementsF-7 18 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Focus Universal Inc.8275 S.Eastern Ave.,Ste.200-674Las Vegas,NV 89123 We have audited the accompanying balance sheets of Focus Universal Inc.(a developmen
216、t stage company)as of March,31 2014 and 2013 and the related statements ofopera?ons,changes in stockholders deficit and cash flows for the year ended March 31,2014,the period from Incep?on(December 4,2012)to March 31,2013 and theperiod from Incep?on(December 4,2012)to March 31,2014.These financial s
217、tatements are the responsibility of the Companys management.Our responsibility is toexpress an opinion on these financial statements based on our audits.We conducted our audit in accordance with the standards of the Public Company Accoun?ng Oversight Board(United States).Those standards require that
218、 we plan andperform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.An audit includes examining,on a testbasis,evidence suppor?ng the amounts and disclosures in the financial statements.An audit also includes assessing the accoun?ng
219、principles used and significantestimates made by management,as well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for our opinion.In our opinion,the financial statements referred to above present fairly,in all material respects,the f
220、inancial posi?on of Focus Universal Inc.as March 31,2014,andMarch 31,2013 and the related statements of opera?ons,changes in stockholders equity and cash flows for the year ended March 31,2014,the period from Incep?on(December 4,2012)to March 31,2013 and the period from Incep?on(December 4,2012)to M
221、arch 31,2014 in conformity with accoun?ng principles generally acceptedin the United States of America.The accompanying financial statements have been prepared assuming that the Company will con?nue as a going concern.As discussed in Note 3 to the financialstatements the Company has suffered losses
222、from opera?ons since Incep?on(December 4,2012)and currently does not have sufficient available funding to fullyimplement its business plan.These factors raise substan?al doubt about its ability to con?nue as a going concern.Managements plans in regard to these ma?ers are alsodescribed in Note 3.The
223、financial statements do not include any adjustments that might result from the outcome of this uncertainty.Arvada,Colorado/s/Cutler&Co.,LLC June 27,2014 Cutler&Co.,LLC 12191 W.64th AVenue,Suite 205B,Arvada,Colorado 80004 *Phone:303.968.3281 *Fax:303.456.7488 * F-1 FOCUS UNIVERSAL INC.(A DEVELOPMENT
224、STAGE COMPANY)BALANCE SHEETS March 31,March 31,20142013ASSETSCurrent Assets:Cash$7,408$-Prepaid expenses308-Total current assets 7,716 -Total Assets$7,716$-LIABILITIES AND STOCKHOLDERS DEFICITCurrent Liabilities:Accounts payable and accrued liabilities$17,170$2,000 Accounts payable-related parties 6
225、,400 348 Total current liabilities 23,570 2,348Total Liabilities 23,570 2,348 Commitments and Contingencies Stockholders Deficit:Common stock,par value$0.001 per share,75,000,000 shares authorized;4,000,000,and 0 shares issued and outstanding as of March 31,2014 and 2013,respectively 4,000 -Common s
226、tock subscription3,000-Deficit accumulated during the development stage (22,854)(2,348)Total stockholders deficit (15,854)-Total Liabilities and Stockholders Deficit$7,716$-See Accompanying Notes to Financial Statements F-2 FOCUS UNIVERSAL INC.STATEMENTS OF OPERATIONS(A DEVELOPMENT STAGE COMPANY)Yea
227、rEndedMarch 31,2014PeriodFrom Inception(December 4,2012)Through March 31,2013CumulativeFrom Inception(December 4,2012)Through March 31,2014 Revenue$15,900$-$15,900Cost of revenue 5,000 -5,000Gross profit 10,900 -10,900 Operating Expenses:Compensation-officers 6,400 -6,400 General and administrative
228、13,456 348 13,804 Professional fees 11,550 2,000 13,550 Total operating expenses 31,406 2,348 33,754Income(Loss)from Operations (20,506)(2,348)(22,854)Income tax provision -Net Loss$(20,506)$(2,348)$(22,854)Net Loss Per Common Share:Net loss per common share-Basic and Diluted$(0.01)$-*Weighted Avera
229、ge Number of Common Shares Outstanding-Basic and Diluted 1,994,521-*-No shares of common stock were issued and outstanding during this period.See Accompanying Notes to Financial Statements F-3 FOCUS UNIVERSAL INC.(A DEVELOPMENT STAGE COMPANY)STATEMENTS OF CHANGES IN STOCKHOLDERS DEFICITFOR THE PERIO
230、D FROM INCEPTION(DECEMBER 4,2012)THROUGH MARCH 31,2014 DescriptionCommon stockCommonStockSubscriptionDeficitAccumulatedDuringDevelopmentStageTotalSharesAmount Balance at Inception(December 4,2012)-$-$-$-$-Net loss for the period -(2,348)(2,348)Balance March 31,2013 -(2,348)(2,348)Common stock issued
231、 for cash at$0.001 per share 4,000,000 4,000 -4,000Common stock subscription at$0.0125 per share 3,000 3,000Net loss for the year -(20,506)(20,506)Balance March 31,2014 4,000,000$4,000$3,000$(22,854)$(15,854)See Accompanying Notes to Financial Statements F-4 FOCUS UNIVERSAL INC.(A DEVELOPMENT STAGE
232、COMPANY)STATEMENTS OF CASH FLOWS YearEndedMarch 31,2014PeriodFrom Inception(Dber 4,2012)Through March 31,2013CumulativeFrom Inception(December 4,2012)Through March 31,2014Operating Activities:Net Loss$(20,506)$(2,348)$(22,854)Adjustments to reconcile net loss to net cash generated by operating activ
233、ities:Changes in Operating Assets and Liabilities-Prepaid expenses(308)-(308)Accounts payable and accrued liabilities 15,170 2,000 17,170 Accounts payable-related party 6,052 348 6,400Net Cash Generated by Operating Activities 408 -408 Investing Activities:-Financing Activities:Proceeds from sale of
234、 common stock4,000-4,000 Common stock subscription 3,000 -3,000Net Cash Provided by Financing Activities 7,000 -7,000 Net Change in Cash 7,408 -7,408Cash-Beginning of Period -Cash-End of Period$7,408$-$7,408 Cash paid during the period for:Interest$-$-$-Income tax paid$-$-$-See Accompanying Notes to
235、 Financial Statements F-5 FOCUS UNIVERSAL INC.(A DEVELOPMENT STAGE COMPANY)FOR THE YEAR ENDED MARCH 31,2014,THE PERIOD FROM INCEPTION(DECEMBER 4,2012)TO MARCH 31,2013AND FOR THE PERIOD FROM INCEPTION(DECEMBER 4,2012)TO MARCH 31,2014 NOTES TO THE FINANCIAL STATEMENTS Note 1 Organization and Operation
236、s Focus Universal Inc.(the“Company”)was incorporated under the laws of the State of Nevada on December 4,2012(“Inception”).Focus Universal Inc.offers a full range of web services,includingweb marketing services,social and viral marketing campaigns,search engine optimization consulting,custom web des
237、ign,website usability consulting and web analytics implementation.Note 2 Summary of Significant Accounting Policies Basis of Presentation The Companys financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America(“U.S.GAAP”).Devel
238、opment Stage Company The Company is a development stage company as defined by section 915-10-20 of the FASB Accounting Standards Codification.Although the Company has recognized nominal amounts ofrevenue,it is still devoting substantially all of its efforts on establishing the business.All losses ac
239、cumulated since Inception(December 4,2012)have been considered as part of the Companysdevelopment stage activities.Use of Estimates and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management
240、to make estimates and assumptions thataffect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses duringthe reporting period.The Companys significant estimates and
241、assumptions include the fair value of financial instruments;income tax rate,income tax provision and valuation allowance of deferred tax assets;and theassumption that the Company will continue as a going concern.Those significant accounting estimates or assumptions bear the risk of change due to the
242、 fact that there are uncertainties attached tothose estimates or assumptions,and certain estimates or assumptions are difficult to measure or value.Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances,the result
243、s of which form the basis for makingjudgments about the carrying values of assets and liabilities that are not readily apparent from other sources.Management regularly reviews its estimates utilizing currently available information,changes in facts and circumstances,historical experience and reasona
244、ble assumptions.After such reviews,and ifdeemed appropriate,those estimates are adjusted accordingly.Actual results could differ from those estimates.Fair Value of Financial Instruments The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fai
245、r value of its financial instruments and paragraph 820-10-35-37 of the FASBAccounting Standards Codification(“Paragraph 820-10-35-37”)to measure the fair value of its financial instruments.Paragraph 820-10-35-37 establishes a framework for measuring fair value inaccounting principles generally accep
246、ted in the United States of America(U.S.GAAP),and expands disclosures about fair value measurements.F-6 FOCUS UNIVERSAL INC.(A DEVELOPMENT STAGE COMPANY)FOR THE YEAR ENDED MARCH 31,2014,THE PERIOD FROM INCEPTION(DECEMBER 4,2012)TO MARCH 31,2013AND FOR THE PERIOD FROM INCEPTION(DECEMBER 4,2012)TO MAR
247、CH 31,2014 NOTES TO THE FINANCIAL STATEMENTS To increase consistency and comparability in fair value measurements and related disclosures,Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuationtechniques used to measure fair value into three(3)broad levels
248、.The fair value hierarchy gives the highest priority to quoted prices(unadjusted)in active markets for identical assets or liabilities andthe lowest priority to unobservable inputs.The three(3)levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:Level 1 Quoted market
249、prices available in active markets for identical assets or liabilities as of the reporting date.Level 2 Pricing inputs other than quoted prices in active markets included in Level 1,which are either directly or indirectly observable as of the reporting date.Level 3 Pricing inputs that are generally
250、observable inputs and not corroborated by market data.Financial assets are considered Level 3 when their fair values are determined using pricing models,discounted cash flow methodologies or similar techniques and at least one significant modelassumption or input is unobservable.The fair value hiera
251、rchy gives the highest priority to quoted prices(unadjusted)in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.If the inputs used tomeasure the financial assets and liabilities fall within more than one level described above,the categorization is bas
252、ed on the lowest level input that is significant to the fair value measurement of theinstrument.The carrying amount of the Companys financial assets and liabilities,such as cash,prepaid expenses,accounts payable and accrued expenses,approximate their fair value because of the shortmaturity of those
253、instruments.Transactions involving related parties cannot be presumed to be carried out on an arms-length basis,as the requisite conditions of competitive,free-market dealings may not exist.Representationsabout transactions with related parties,if made,shall not imply that the related party transact
254、ions were consummated on terms equivalent to those that prevail in arms-length transactions unless suchrepresentations can be substantiated.It is not however practical to determine the fair value of advances from stockholders,if any,due to their related party nature.Cash Equivalents The Company cons
255、iders all highly liquid investments with a maturity of three months or less to be cash and cash equivalents.Related Parties The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.Pursuan
256、t to Section 850-10-20 the related parties include:a.affiliates of the Company;b.entities for which investments in their equity securities would be required,absent the election of the fair value option under the FairValue Option Subsection of Section 8251015,to be accounted for by the equity method
257、by the investing entity;c.trusts for the benefit of employees,such as pension and profit-sharing trusts thatare managed by or under the trusteeship of management;d.principal owners of the Company;e.management of the Company;f.other parties with which the Company may deal if one party controlsor can
258、significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests;andg.other parties that can significantly influence the management or operating policies of the transacting par
259、ties or that have an ownership interest in one of the transacting parties and can significantlyinfluence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.F-7 FOCUS UNIVERSAL INC.(A DEVELOPMENT STAGE COMPANY)FOR THE Y
260、EAR ENDED MARCH 31,2014,THE PERIOD FROM INCEPTION(DECEMBER 4,2012)TO MARCH 31,2013AND FOR THE PERIOD FROM INCEPTION(DECEMBER 4,2012)TO MARCH 31,2014 NOTES TO THE FINANCIAL STATEMENTS The financial statements shall include disclosures of material related party transactions,other than compensation arr
261、angements,expense allowances,and other similar items in the ordinary course ofbusiness.However,disclosure of transactions that are eliminated in the preparation of financial statements is not required in those statements.The disclosures shall include:a.the nature of therelationship(s)involved;b.a de
262、scription of the transactions,including transactions to which no amounts or nominal amounts were ascribed,for each of the periods for which income statements arepresented,and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements;c.
263、the dollar amounts of transactions for each of the periodsfor which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period;and d.amounts due from or to related parties asof the date of each balance sheet presented
264、and,if not otherwise apparent,the terms and manner of settlement.Commitments and Contingencies The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies.Certain conditions may exist as of the date the financial statements areissued,which
265、 may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur.The Company assesses such contingent liabilities,and suchassessment inherently involves an exercise of judgment.In assessing loss contingencies related to legal proceedings that
266、 are pending against the Company or unasserted claims that may result insuch proceedings,the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be soughttherein.If the assessment of a cont
267、ingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated,then the estimated liability would be accrued inthe Companys financial statements.If the assessment indicates that a potential material loss contingency is not probable but i
268、s reasonably possible,or is probable but cannot be estimated,then thenature of the contingent liability,and an estimate of the range of possible losses,if determinable and material,would be disclosed.Loss contingencies considered remote are generally not disclosed unless they involve guarantees,in w
269、hich case the guarantees would be disclosed.Management does not believe,based uponinformation available at this time that these matters will have a material adverse effect on the Companys financial position,results of operations or cash flows.However,there is no assurance thatsuch matters will not m
270、aterially and adversely affect the Companys business,financial position,and results of operations or cash flows.Revenue Recognition The Company applies paragraph 605-10-S99-1 of the FASB Accounting Standards Codification for revenue recognition.The Company recognizes revenue when it is realized or r
271、ealizable andearned.The Company considers revenue realized or realizable and earned when all of the following criteria are met:(i)persuasive evidence of an arrangement exists,(ii)the product has been shippedor the services have been rendered to the customer,(iii)the sales price is fixed or determina
272、ble,and(iv)collectability is reasonably assured.The Company derives its revenues from sales contracts with its customer with revenues being generated upon rendering of services.Persuasive evidence of an arrangement is demonstrated viainvoice;service is considered provided when the service is deliver
273、ed to the customers;and the sales price to the customer is fixed upon acceptance of the purchase order and there is no separate salesrebate,discount,or volume incentive.Income Tax Provision The Company accounts for income taxes under Section 740-10-30 of the FASB Accounting Standards Codification,wh
274、ich requires recognition of deferred tax assets and liabilities for the expectedfuture tax consequences of events that have been included in the financial statements or tax returns.F-8 FOCUS UNIVERSAL INC.(A DEVELOPMENT STAGE COMPANY)FOR THE YEAR ENDED MARCH 31,2014,THE PERIOD FROM INCEPTION(DECEMBE
275、R 4,2012)TO MARCH 31,2013AND FOR THE PERIOD FROM INCEPTION(DECEMBER 4,2012)TO MARCH 31,2014 NOTES TO THE FINANCIAL STATEMENTS Under this method,deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax r
276、ates in effect for the year inwhich the differences are expected to reverse.Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not berealized.Deferred tax assets and liabilities are measured using enacted tax ra
277、tes expected to apply to taxable income in the years in which those temporary differences are expected to be recovered orsettled.The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statements of operations in the period that includes the enactment date.The
278、 Company adopted the provisions of paragraph 740-10-25-13 of the FASB Accounting Standards Codification.Paragraph 740-10-25-13 addresses the determination of whether tax benefitsclaimed or expected to be claimed on a tax return should be recorded in the financial statements.Under paragraph 740-10-25
279、-13,the Company may recognize the tax benefit from an uncertain taxposition only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities,based on the technical merits of the position.The tax benefits recognized inthe financial statements from su
280、ch a position should be measured based on the largest benefit that has a greater than fifty percent(50%)likelihood of being realized upon ultimate settlement.Paragraph 740-10-25-13 also provides guidance on de-recognition,classification,interest and penalties on income taxes,accounting in interim pe
281、riods and requires increased disclosures.The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets,as well as tax credit carry-backs and carry-forwards.The Company periodically reviews the recoverability
282、of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary.Management makes judgments as to the interpretation of the tax laws that might be challenged upon an audit and cause changes to previous estimates of tax liability.In addition,the Co
283、mpanyoperates within multiple taxing jurisdictions and is subject to audit in these jurisdictions.In managements opinion,adequate provisions for income taxes have been made for all years.If actual taxableincome by tax jurisdiction varies from estimates,additional allowances or reversals of reserves
284、may be necessary.Uncertain Tax Positions The Company did not take any uncertain tax positions and had no unrecognized tax liabilities or benefits in accordance with the provisions of Section 740-10-25 at March 31,2014 and 2013.Net Income(Loss)Per Common Share Net income(loss)per common share is comp
285、uted pursuant to section 260-10-45 of the FASB Accounting Standards Codification.Basic net income(loss)per common share is computed bydividing net income(loss)by the weighted average number of shares of common stock outstanding during the period.Diluted net income(loss)per common share is computed b
286、y dividing netincome(loss)by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period to reflect the potential dilution that could occur fromcommon shares issuable through contingent shares issuance arrangement,stock options or warran
287、ts.There were no potentially debt or equity instruments issued and outstanding at any time during the year ended March 31,2014 or the period from Inception(December 4,2012)through March 31,2013.F-9 FOCUS UNIVERSAL INC.(A DEVELOPMENT STAGE COMPANY)FOR THE YEAR ENDED MARCH 31,2014,THE PERIOD FROM INCE
288、PTION(DECEMBER 4,2012)TO MARCH 31,2013AND FOR THE PERIOD FROM INCEPTION(DECEMBER 4,2012)TO MARCH 31,2014 NOTES TO THE FINANCIAL STATEMENTS Cash Flows Reporting The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting,classifies cash receipts a
289、nd payments according to whether they stem fromoperating,investing,or financing activities and provides definitions of each category,and uses the indirect or reconciliation method(“Indirect method”)as defined by paragraph 230-10-45-25 of theFASB Accounting Standards Codification to report net cash f
290、low from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of(a)all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and(b)all items that are i
291、ncluded in net income that do not affectoperating cash receipts and payments.The Company reports the reporting currency equivalent of foreign currency cash flows,using the current exchange rate at the time of the cash flows and theeffect of exchange rate changes on cash held in foreign currencies is
292、 reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separatelyprovides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Account
293、ing StandardsCodification.Subsequent Events The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events.The Company will evaluate subsequent eventsthrough the date when the financial statements were issued.Pursuant to AS
294、U 2010-09 of the FASB Accounting Standards Codification,the Company as an SEC filer considers its financialstatements issued when they are widely distributed to users,such as through filing them on EDGAR.Recently Issued Accounting Pronouncements The Company has reviewed all recently issued,but not y
295、et effective,accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause amaterial impact on its financial condition or the results of its operations.Note 3 Going Concern The accompanying financial statements have been prepared assuming that
296、 the Company will continue as a going concern,which contemplates continuity of operations,realization of assets,andliquidation of liabilities in the normal course of business.As reflected in the accompanying financial statements,the Company had a deficit accumulated during the development stage at M
297、arch 31,2014 and 2013 of$22,854 and$2,348,respectively,and anet loss for the period from December 4,2012(Inception)through March 31,2014 of$22,854.These factors raise substantial doubt about the Companys ability to continue as a going concern.While the Company is attempting to generate sufficient re
298、venues,the Companys cash position may not be sufficient enough to support the Companys daily operations.Management intends to raiseadditional funds by way of a public or private offering.Management believes that the actions presently being taken to further implement its business plan and generate su
299、fficient revenues provide the opportunity for the Company to continue as a goingconcern.While the Company believes in the viability of its strategy to generate sufficient revenues and in its ability to raise additional funds,there can be no assurances to that effect.The ability ofthe Company to cont
300、inue as a going concern is dependent upon the Companys ability to further implement its business plan and generate sufficient revenues.The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification
301、of liabilities that might benecessary if the Company is unable to continue as a going concern.F-10 FOCUS UNIVERSAL INC.(A DEVELOPMENT STAGE COMPANY)FOR THE YEAR ENDED MARCH 31,2014,THE PERIOD FROM INCEPTION(DECEMBER 4,2012)TO MARCH 31,2013AND FOR THE PERIOD FROM INCEPTION(DECEMBER 4,2012)TO MARCH 31
302、,2014 NOTES TO THE FINANCIAL STATEMENTS Note 4 Related Party Transactions Consulting services from President,Chief Executive Officer,Secretary and Treasurer and Chief Financial Officer Consulting services provided by the President,Chief Executive Officer,Secretary and Treasurer and Chief Financial O
303、fficer for the year ended March 31,2014 and for the period fromDecember 4,2012(Inception)to March 31,2014 were as follows:For theYearEndedMarch 31,2014 For the Period From December 4,2012(Inception)toMarch 31,2013 President,Chief Executive Officer$3,200$-Chief Financial Officer,Secretary and Treasur
304、er 3,200 -$6,400$-Accounts Payable Related Parties As at March 31,2014 and 2013 the Company owed its directors and officers$6,400 and$348 respectively.These amounts represent unpaid consulting fees and expenses incurred on behalfof the Company.Note 5 Stockholders Equity Shares authorized Upon format
305、ion the total number of shares of all classes of stock which the Company is authorized to issue is seventy-five million(75,000,000)shares of common stock,par value$0.001per share.Common stock On September 30,2013,the Company sold 4,000,000 shares of its common stock at par to its directors for$4,000
306、 in cash.Common stock subscription During the year ended March 31,2014,the Companys Registration Statement on the Form S-1 filed with the Securities and Exchange Commission was declared effective.As at March 31,2014 theCompany received$3,000 in common stock subscription funds.This offering was close
307、d subsequent to the year end.Subsequent to year end,the Company completed the sale of 2,580,000 shares ofcommon stock at$0.0125 per share for total proceeds of$32,250.Note 6 Income Tax Deferred Tax Assets At March 31,2014,the Company had net operating loss(“NOL”)carryforwards for Federal income tax
308、purposes of$22,854 that may be offset against future taxable income through2033.F-11 FOCUS UNIVERSAL INC.(A DEVELOPMENT STAGE COMPANY)FOR THE YEAR ENDED MARCH 31,2014,THE PERIOD FROM INCEPTION(DECEMBER 4,2012)TO MARCH 31,2013AND FOR THE PERIOD FROM INCEPTION(DECEMBER 4,2012)TO MARCH 31,2014 NOTES TO
309、 THE FINANCIAL STATEMENTS No tax benefit has been reported with respect to these net operating loss carry-forwards in the accompanying financial statements because the Company believes that the realization of the Companysnet deferred tax assets of approximately$3,428,was not considered more likely t
310、han not and accordingly,the potential tax benefits of the net loss carry-forwards are fully offset by a valuationallowance.Components of deferred tax assets at March 31,2014 and 2013 are as follows:March 31,2014 March 31,2013 Net deferred tax assets Non-current:Expected income tax benefit from NOL c
311、arry-forwards$3,428$352 Less valuation allowance (3,428)(352)Deferred tax assets,net of valuation allowance$-$-Deferred tax assets consist primarily of the tax effect of NOL carry-forwards.The Company has provided a full valuation allowance on the deferred tax assets because of the uncertaintyregard
312、ing its realizability.The valuation allowance increased approximately$3,076 during the year ended March 31,2014 and$352 for the period from December 4,2012(Inception)to March 31,2013 respectively.Income Tax Provision in the Statements of Operations A reconciliation of the federal statutory income ta
313、x rate and the effective income tax rate as a percentage of income before income taxes is as follows:For theYearEndedMarch 31,2014 For the PeriodFromDecember 4,2012(Inception)toMarch 31,2013 Federal statutory income tax rate 15.0%15.0%Change in valuation allowance on net operating loss carry-forward
314、s(15.0)%(15.0)%Effective income tax rate 0.00%0.00%Note 7 Subsequent Events Between March 27,2014 and April 15,2014 the Company sold 2,580,000 shares of common stock at$0.0125 per share for total proceeds of$32,250.The Company has evaluated all events that occurred after the balance sheet date throu
315、gh the date when the financial statements were issued on June 27,2014 to determine if they must bereported.The Management of the Company determined that other than as disclosed above,there were no reportable subsequent events to be disclosed.F-12 Item 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
316、ON ACCOUNTING AND FINANCIAL DISCLOSURE None.Item 9A.CONTROLS AND PROCEDURES Evaluation of Disclosure Controls We evaluated the effectiveness of our disclosure controls and procedures as of the end of the 2014 fiscal year.This evaluation was conducted with the participation of our chief executive off
317、icer andour principal accounting officer.Disclosure controls are controls and other procedures that are designed to ensure that information that we are required to be disclosed in the reports we file pursuant to the Securities Exchange Act of1934 is recorded,processed,summarized and reported.Limitat
318、ions on the Effective of ControlsOur management does not expect that our disclosure controls or our internal controls over financial reporting will prevent all error and fraud.A control system,no matter how well conceived andoperated,can provide only reasonable,but no absolute,assurance that the obj
319、ectives of a control system are met.Further,any control system reflects limitations on resources,and the benefits of acontrol system must be considered relative to its costs.These limitations also include the realities that judgments in decision-making can be faulty and that breakdowns can occur bec
320、ause of simpleerror or mistake.Additionally,controls can be circumvented by the individual acts of some persons,by collusion of two or more people or by management override of a control.A design of acontrol system is also based upon certain assumptions about potential future conditions;over time,con
321、trols may become inadequate because of changes in conditions,or the degree of compliancewith the policies or procedures may deteriorate.Because of the inherent limitations in a cost-effective control system,misstatements due to error or fraud may occur and may not be detected.Conclusions Based upon
322、their evaluation of our controls,the chief executive officer and principal accounting officer have concluded that,subject to the limitations noted above,the disclosure controls are effectiveproviding reasonable assurance that material information relating to us is made known to management on a timel
323、y basis during the period when our reports are being prepared.There were no changesin our internal controls that occurred during the year covered by this report that have materially affected,or are reasonably likely to materially affect our internal controls.PART III Item 10.DIRECTORS,EXECUTIVE OFFI
324、CERS AND CORPORATE GOVERNANCE The following table presents information with respect to our officers,directors and significant employees as of the date of this Report:Name Position Tatyana Popova President,Chief Executive Officer,and DirectorElena Ignatenko Chief Financial Officer,Secretary,Treasurer
325、 and Director Each director serves until our next annual meeting of the stockholders or unless they resign earlier.The Board of Directors elects officers and their terms of office are at the discretion of the Board ofDirectors.Each of our directors serves until his or her successor is elected and qu
326、alified.Each of our officers is elected by the board of directors to a term of one(1)year and serves until his or her successor isduly elected and qualified,or until he or she is removed from office.At the present time,members of the board of directors are not compensated for their services to the b
327、oard.31 Biographical Information Regarding Officers and Directors Tatyana Popova.Ms.Tatyana Popova earned her degree in Financial Management.Throughout her career,she has worked as an accountant and controller,where her duties included general accounting,preparation ofmonthly,quarterly and annual fi
328、nancial statements and reports,working with auditors and financial institutions.Eleven years ago,Ms.Popova shifted her focus toward the online marketing field,studying the industry before taking a position at a marketing company,Most Marketing Inc.Her duties included online search campaign managemen
329、t,client relations,cross-channel promotions,andanalysis of data to determine actionable opportunities for online marketing campaigns.For the past five years,she has worked as an online optimization and marketing manager at the company.Elena Ignatenko.Ms.Elena Ignatenko has a Masters degree in advert
330、ising that strongly focused on marketing,strategic planning and branding.She has been exposed to projects in different fields that strengthenedher analytical skills,critical thinking and ability to implement key insights.Ms.Ignatenkos extensive experience in design,management and technical solutions
331、 empowers her to manage complexprojects with demanding deliverables and sensitive timelines.For the past seven years,she has worked as an independent freelancer on a contract basis,providing marketing services.Item 11:EXECUTIVE COMPENSATION Compensation of Officers The following summary compensation
332、 table sets forth information concerning compensation for services rendered in all capacities during 2014 and 2013 awarded to,earned by or paid to ourexecutive officers.Summary Compensation Table(a)(b)(c)(d)(e)(f)(g)(h)(i)(j)Change in Pension Value&Non-quali-Non-Equityfied IncentiveDeferredAll PlanC
333、ompen-Other StockOptionCompen-sationCompen-Name and Principal SalaryBonusAwardsAwardssationEarningssationTotalsPosition 1Year($)*($)($)($)(S)($)($)($)Tatyana Popova 2014 0 0 0 0 0 0 3,200 3,200President,CEO20130000000 0 Elena Ignatenko20140000003,200 3,200CFO,Treasurer,Secretary20130000000 0 Retirement,Resignation or Termination Plans We sponsor no plan,whether written or verbal,that would provide
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