1、 UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549 FORM 10-K(Mark One)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31,2016or TRANSITION REPORT UNDER SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 C
2、ommission 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)829 Lawson Street,City of Industry,CA 91748(Address of principal executive offic
3、es)(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 under Section 12(g)of the Exchange Act:None(Titl
4、e of class)Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d)of the Act.Indicate by check mark whether the registrant(1)f
5、iled all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate b
6、y check mark whether the registrant has submitted electronically and posted on its corporate Website,if any,every Interactive Data File required to be submitted andposted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the
7、 registrant was required to submitand post such files).Yes No Indicate 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 best registrants knowledge,in definitive proxy or informa
8、tion statements incorporated by reference in Part III of this Form 10-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“largeaccelerated filer
9、,”“accelerated filer”and“smaller reporting company”in Rule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filer Non-accelerated filer (Do not check if a smaller reporting company)Smaller reporting company Indicate by check mark whether the registrant is a shell company(as defined in R
10、ule 12b-2 of the Act).Yes No As of March 20,2017,the date immediately preceding the filing of this Annual Report,the aggregate market value of voting stock held by non-affiliates of the registrant,basedon the closing price of the Over-The-Counter QB of$1.50 per share,at which the common equity was s
11、old,was$51,862,059.The number of shares outstanding of the registrants common stock,$0.001 par value,outstanding as of March 20,2017:34,574,706.DOCUMENTS INCORPORATED BY REFERENCE Articles of Incorporation,Bylaws,Subscription Agreement,are incorporated by reference to the Companys Registration State
12、ment on Form S-1 filed with the SEC onDecember 26,2013.Stock Purchase Agreement dated December 29,2014 is incorporated by reference to the 8-K filed on January 5,2015 by the Company.Merger Agreementdated December 30,2015 is incorporated by reference to the 8-K/A filed on January 7,2016.TABLE OF CONT
13、ENTS Part IPage No.Item 1.Business1 Item 1A.Risk Factors9 Item 1B.Unresolved Staff Comments18 Item 2.Properties18 Item 3.Legal Proceedings18 Item 4.Mine Safety Disclosures18 Part II Item 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities19 It
14、em 6.Selected Financial Data20 Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations20 Item 7A.Quantitative and Qualitative Disclosures About Market Risk25 Item 8.Financial Statements and Supplementary Data25 Item 9.Changes in and Disagreements With Accountants
15、on Accounting and Financial Disclosure26 Item 9A.Controls and Procedures26 Item 9B.Other Information Part III Item 10.Directors,Executive Officers and Corporate Governance28 Item 11.Executive Compensation29 Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholde
16、r Matters31 Item 13.Certain Relationships and Related Transactions,and Director Independence31 Item 14.Principal Accounting Fees and Services32 Part IV Item 15.Exhibits,Financial Statement Schedules33 Item 16.Form 10-K Summary33 Signatures34 i FOCUS UNIVERSAL INC.FORWARD LOOKING STATEMENTS This Annu
17、al Report contains forward-looking statements.Forward-looking statements are projections of events,revenues,income,future economic performance ormanagements plans and objectives for our future operations.In some cases,you can identify forward-looking statements by terminology such as“may”,“should”,“
18、expects”,“plans”,“anticipates”,“believes”,“estimates”,“predicts”,“potential”or“continue”or the negative of these terms or other comparable terminology.These statements are onlypredictions and involve known and unknown risks,uncertainties and other factors,including the risks in the section entitled“
19、Risk Factors”and the risks set out below,any ofwhich may cause our or our industrys actual results,levels of activity,performance or achievements to be materially different from any future results,levels of activity,performance or achievements expressed or implied by these forward-looking statements
20、.These risks include,by way of 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;risks related to our international operations an
21、d currency exchange fluctuations;and other 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 be considered carefully and readers shouldnot
22、place undue reliance on our forward-looking statements.Forward-looking statements are made based on managements beliefs,estimates and opinions on the date thestatements are made and we undertake no obligation to update forward-looking statements if these beliefs,estimates and opinions or other circu
23、mstances 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 orachievements.Except as required by applicable law,including the securities laws of the United States,we do n
24、ot intend to update any of the forward-looking statements toconform these statements to actual results.Our financial statements are stated in United States dollars(US$)and are prepared in accordance with United States Generally Accepted Accounting Principles.All referencesto“common stock”refer to th
25、e 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.ii PART I Item 1.BUSINESS Company Background.Focus Universal Inc.(the“Company”,“we”,“us”or“our”)is a Nevada corporation invo
26、lved in two separate industries:(1)an online marketing,advertising and designprovider;and(2)a provider of handheld sensor devices and wholesaler of various air filters.We are based in the City of Industry,California,and were incorporated in Nevada in 2012.In December 2013,we filed an S-1 registratio
27、n statement that went effective onMarch 14,2014.Our website is .Our website and the information contained therein or connected thereto are not intended to be incorporated into this Annual Report onForm 10-K.Focus Universal Inc.is primarily a handheld systems and filters wholesaler to distribution pl
28、atforms.We are also researching,developing,and manufacturing a universal smartinstrument device and working on specializing in the development and commercialization of such universal smart technologies and instruments.We define universal smarttechnology as commercial technology with an integrated pl
29、atform,which provides a unique and universal solution for test and measurement made up of off-the-shelf parts.Weare working on developing a universal sensor node and gateway system that use the data processing capabilities of a smartphone to display readings of multiple probe modules.We are also res
30、earching the development of an anti-counterfeit authentication technology that we believe could address the problem of counterfeit production by attempting toauthenticate consumer goods.We call this device the“Ubiquitor”because it can be used to wirelessly measure and test a variety of electrical an
31、d physical phenomena such asvoltage,current,temperature,pressure,sound,light,and humidity.The Ubiquitor,which we have created and have manufactured in limited quantities,utilizes a standard desktop computer with Mac OS,Windows OS,an Android-based or iOS-based smartphone,or mobile tablet device as a
32、platform that communicates with a group of sensors or probes manufactured by different vendors in a manner that requires theuser to have little or no knowledge of their unique characteristics.The data readout is displayed on the computer,smartphone,or tablet display in a program or application weint
33、end to create.We are designing the application software(the“App”)to have a graphical representation of control and indicator elements common in real instruments such asknobs,buttons,dials,and graphs,etc.Our developers are designing and implementing a soft control touch screen interface which support
34、s real-time data monitoring andfacilitates instrument control and operation.Until March 31,2016,we offered a full range of web services,including web marketing services,social and viral marketing campaigns,search engine optimization consulting,custom web design,website usability consulting and web a
35、nalytics implementation.We generate our revenue from providing these services to small and medium sizedbusinesses.We focused on providing one-off services,such as development of a fully functioning website or creation of a marketing strategy plan,to small business clients.Through a merger with Perfe
36、cular Inc.,we have strategically expanded our services to the manufacture and marketing of high-tech electronic devices.We sell handheld sensorsystems and filters wholesaler to distribution platforms and are working on developing a universal sensor node and gateway system that use the data processin
37、g capabilities of asmartphone to display readings of multiple probe modules.We are also researching the development of an anti-counterfeit authentication technology that we believe couldaddress the problem of counterfeit production by attempting to authenticate consumer goods.On December 29,2014,Xu
38、Tang and Desheng Wang,two non-affiliates,acquired over 90%equity of the Company.That same date,the current officers and directors,Ms.Tatyana Popova resigned as Chief Executive Officer and President of the Company and Ms.Elena Ignatenko resigned as Treasurer,Secretary,Chief Financial Officer,principa
39、laccounting officer,and principal financial officer of the Company.Upon such resignations,Desheng Wang was appointed as the Chief Executive Officer and Secretary of theCompany,Xu Tang was appointed as the President of the Company,Yan Chen was appointed as the Senior Vice President,and Messrs.Wang,Ta
40、ng,and Chen accepted suchappointments.On October 21,2015 Xu Tang entered into a stock purchase agreement whereby Mr.Tang collectively sold 3,260,000 shares of the Companys Common Stock to eightunrelated persons using private funds to purchase the shares.This represented at the time 49.5%of the Compa
41、nys outstanding common stock and represented a material changein control of the Companys ownership.1 To the Companys knowledge,there are no arrangements or understandings among members of both the former and new control groups and their associates with respect toelection of directors or other matter
42、s.Effective as of October 21,2015,Xu Tang and Yan Chen resigned from their positions as President and Senior Vice President,respectively,of the Company.There are nodisagreements between the Company and Messrs.Tang and Chen.Dr.Edward Lee has been appointed to serve as President of the Company.Also ef
43、fective as of October 21,2015,Dr.Jennifer Gu and Dr.Edward Lee were appointed as directors of the Company,and Dr.Gu and Dr.Lee accepted such appointments.Thereupon,each of Xu Tang and Yan Chen resigned as directors of the Company.Accordingly,effective as of the 10th day after the accompanying Inform
44、ation Statement isfiled with the Securities and Exchange Commission and transmitted to the shareholders of the Company,each of Dr.Jennifer Gu and Dr.Edward Lee would become membersof the Board of Directors,and the entire Board of Directors would consist of Dr.Desheng Wang,Dr.Jennifer Gu,and Dr.Edwar
45、d Lee.In 2015,we leased a warehouse in Los Angeles County,California.We have relocated our headquarters to the Los Angeles area to expand our existing operations and grow thecompany.We subleased part of the warehouse space to Perfecular Inc.,a related company that was majority-owned by Desheng Wang,
46、one of our directors,officers,andcontrol shareholders.In 2015,we acquired Perfecular.Scientific Instrument Research,Development and Sales Industry Background and Overview Through our acquisition of Perfecular Inc.,we entered into the scientific instrument industry,specifically the instrument sensor
47、industry.Instrument sensors are devicesspecifically designed and constructed for sensing and measuring physical variables that are useful in:(i)industrial operations;(ii)environmental,commercial and medicalapplications;(iii)research and development in a variety of industries;and(iv)the daily lives o
48、f electronics consumers.We believe that instrument sensors are important in modern science,having applications in both the industrial and educational fields.In recent years,significant progress hasbeen made in instruments and instrumentation systems.The performance of measuring and monitoring instru
49、ments has improved considerably in the computer age.Analoginstruments are used to indicate the magnitude of the quantity in the form of pointer movement.Digital instruments,on the other hand,specify the quantity in a digital format,they can be read easily,and are more accurate than the analog multi-
50、meters,reducing interpolation and reading errors.Digital instruments offer significant advantages overanalog devices.The auto-polarity function of digital devices prevents various problems.Parallax error which occurs when the pointer of an analog instrument is viewed from adifferent angle,which may
51、cause users to see and read a different value are eliminated as well.Digital instruments are free from wear and potential shock failures because theyhave no moving parts.With the advancements in technology of integrated circuits,digital instruments are becoming increasingly compact and accurate.Key
52、market players ofanalog and digital instruments include Thermo Fisher Scientific,Danaher Corporation,Mettler Toledo,Metrohm USA,Hanna Instruments,Agilent Technologies,and PerkinElmer.2 Most modern instruments are digital.They are designed for measuring various physical quantities in objects;and cons
53、ist of the following functional components:Data acquisition.This is the process of sampling signals that measure real world physical conditions and converting the resulting samples into digital numeric values thatcan be manipulated by a microprocessor.The components of data acquisition systems inclu
54、de:a.Sensors,to convert physical parameters to electrical signals;b.Signal conditioning circuitry,to convert sensor signals into a form that can be converted to digital values;c.Analog-to-digital converters,to convert conditioned sensor signals to digital values.It normally operates on conditioned s
55、ignals,that is,signals that have already beenfiltered and amplified by analog circuits.Storage and communication components.Application-specific input/output(I/O)components.In digital instrumentation systems,the transmission of databetween devices is realized relatively easily by using serial or par
56、allel transmission techniques.Ancillaries such as displays and power supplies and application specific software.Traditional hardware-centered instrumentation systems are made up of multiple stand-alone instruments that are interconnected to carry out a determined measurement orcontrol an operation.T
57、hey have fixed vendor-defined functionality,are very powerful and large,expensive,and cumbersome.They also require a lot of power,and often haveexcessive amounts of features that are not user friendly.Users generally cannot extend or customize them easily.The knobs and buttons on the instrument,the
58、built-in circuitry,and the functions available to the user,are specific to the nature of the instrument.Instrument inter-operability and connectivity allow the Ubiquitor to communicate and work with other instruments manufactured by different vendors,in a manner that requiresthe user to have little
59、or no knowledge of the unique characteristics of those instruments.Traditional instruments,including traditional hardware-centered instrumentations andsoftware centered virtual instrumentations,are specifically designed,constructed and refined to perform one or more specific tasks.Most of the instru
60、ments on the market comewith a variety of connectivity technologies and do not have the built-in firmware or software to support the connectivity and inter-operability of instruments without drasticallyrevising the application software across instrument brands.Unfortunately,while the instrument driv
61、ers simplify software development and maintenance,they did not addresshardware obsolescence since each manufacturer has their own drivers and application and none are compatible,current applications are limited only to large,expensive test andmeasurement instruments.A universal instrument is a versa
62、tile device which combines many individual instrument functions,sensors and probes in a single unit.It has a primary purpose,but alsoincorporates other instruments functionalities.One instrument could perform many different measurements and control and substitute many other instruments.It utilizes a
63、variety of probes to connect to the device for a wide variety of process measurement and control.A universal instrument offers superior sensor or probe compatibility,versatility,inter-operability,connectivity and scalability.Theoretically,it is feasible to design a universal instrument which is comp
64、atible with all sensors or probes on themarket,and capable of monitoring and controlling any combination of sensors or probes.Despite the undoubted usefulness of the universal instruments,one of the major obstacles that prevent the universal instruments from being adopted by end users is their cost.
65、The cost of a$10 traditional instrument,which incorporates the functions of a$1000 instrument,may have to increase its cost to the order of$1000.The end user who justneeds a$10 traditional instrument for his applications certainly does not have the motivation to spend$1000 for functions he does not
66、need.Functionality always needs to bebalanced against cost.The knobs and buttons on the instrument,the built-in circuitry,and the functions available to the user,are specific to the nature of the instrument,makingthem very expensive and hard to adapt.3 Smartphones and tablets have been considered re
67、creational devices for communicating,playing games and streaming videos,but they are also one of the most powerful toolsengineers use for designing,validating,and producing products.These ubiquitous smartphones perform better than most instrumentation in many fields.Because of theirnetwork connectiv
68、ity,smartphones and tablets are great tools for remotely viewing measurements.However,their small size and processing power also makes them effectivefor portable measurements.The ubiquity of wireless connectivity combined with increasing functionality and the speed of connected devices and mobile ne
69、tworks will furtherdrive consumer demand for more cost effective smartphone based instruments.Building an application for a smartphone or tablet and turning a smartphone or tablet to aninstrument is not a trivial task.Many of the instrument manufacturers have limited or no expertise programming for
70、mobile platforms and designing wireless hardware.To helpinstrument manufacturers take advantage of these smart devices,Perfecular Inc.,has dedicated many years of research and development efforts into designing,manufacturing,marketing and promoting wireless smart technology and products.Universal sm
71、art protocol focuses not only on the design of the hardware and software modules,but also on the design of the overall universal smart instruments system,guidedby the structured,universal and modular principles.It is open to instrument manufacturers,software and hardware developers.Compatibility:The
72、 compatibility in universal smart instrument system refers not only to the compatibility between the same types of instruments from different manufactures,but also to the compatibility between various instrument types.The full inter-operability and absolute instrument interchangeability was addresse
73、d in the protocol.Universality:All functionalities of the traditional instruments are integrated into a single unit,allowing different data acquisition modules to execute on the same mobileplatform.Thus,the interoperability between various sensors or probes can be achieved.Upgradeability:The most tr
74、aditional instrument interface is a unidirectional application,the instrument performs its task and transmits results to the interface device in onedirection only.Many traditional instruments have been limited by design to unidirectional interfaces.They only perform monitoring tasks and share a majo
75、rity of functions ofthe bi-directional controlling instruments,however,they cannot be upgraded to controllers.End users have to purchase a new controlling instrument for their applications.Taking advantage of the secure bi-directional wireless communications and interface supported by smartphones or
76、 mobile devices,universal smart instruments,which deliverdata between the smartphone and sensors back and forth,can be readily modified or upgraded by adding the corresponding actuators for controlling applications.Sensors orprobes measure the output performance of the device being controlled and gi
77、ve feedback to the input actuators that can make corrections towards the desired performance.Expandability and Scalability:Similar to sensor network technology,universal smart instruments are more flexible than sensor networks.They can currently monitor andcontrol a few hundreds of sensors or probes
78、.They automatically identify and configure the corresponding graphical user interfaces.End users are free to add or removes sensorsor probes.All communication protocols supported by smartphones are integrated in the software design including WI-FI,blue tooth,cellular network technology and wiredform
79、 through the audio port on the smartphone.Security:Universal smart instruments have the sensor security built-in data acquisition module and help companies meet sensor security requirements,preventing unauthorizedusers from accessing the sensor measurements and control.Unauthorized access of the uni
80、versal smart instruments sensors is forbidden.Our Approach to Measurement and Sensing We offer a different approach that links handheld devices and sensors with common smartphone computing power through an application on the smartphone in both IOS andAndroid devices.Tapping into the computing power
81、of a smartphone enables a measurement device to increase its capabilities.We also offer an array of traditional handheld meters through our wholesale distribution platform.4 Filter and Handheld Meter Wholesaler We are a wholesaler of various filtration products and digital meters.We source our produ
82、cts from manufacturers in China and then sell to a major U.S.distributor who resellsour products directly to consumers through retail distribution channels.Specifically,we sell the following products:Fan Speed Adjuster device.We provide a fan speed adjuster device to retailers and distributors.Desig
83、ned specifically for centrifugal fans with brushless motors,our adjusterdevice helps ensure longer life by preventing damage to fan motors by adjusting the speed of centrifugal fans without causing the motor to hum.These devices are rated for 350watts max,have 120VAC voltage capacity and feature an
84、internal,electronic auto-resetting circuit breaker.Carbon filter devices.We also sell two types of carbon filter devices to distributors.These Carbon filter devices are professional grade filters specifically designed and used tofilter air in greenhouses that might be polluted by fermenting organics
85、.One of these filters can be attached to a centrifugal fan to scrub the air in a constant circle or can beattached to an exhaust line as a single pass filter,which moves air out of the growing area and filters unwanted odors and removes pollens,dust,and other debris in the air.Theother filter is des
86、igned to be used with fans from 0-6000 C.F.M.HEPA filtration device.We provide an organic air high efficiency particulate arrestance(“HEPA”)filtration device at wholesale prices to distributors and retailers.Manufactured,tested,certified,and labeled in accordance with current HEPA filter standards,t
87、his device is targeted towards greenhouses and grow rooms and designed to keepinsects,bacteria,and mold out of grow rooms.We sell these devices in various sizes.Digital light meter.We provide a handheld digital light meter that is used to measure luminance in fc units,or foot-candles.The meter we se
88、ll is designed to be full cosinecorrected for the angular incidence of light(meaning if you are not holding the sensor perpendicular to the light source,the sensor will still read the light correctly).The meterhas a built-in low battery indicator and is designed to accurately measure to 40,000 FC.Qu
89、antum par meter.We provide a handheld quantum par meter used to measure photosynthetically active radiation(“PAR”).This fully portable handheld PAR meter isdesigned to measure PAR flux in wavelengths ranging from 400 to 700 nm.It is designed to measure up to 10,000 umol.Ubiquitor Wireless Universal
90、Sensor Device Our“Ubiquitor,”device will be a handheld fully modular system with a universal sensor node and gateway system that will use a smartphone as the output display module thatdisplays the readings of various probe modules.We have initial functioning prototype devices created and intend to d
91、evelop this into full-scale production.The Ubiquitor willbe a wireless sensor device that combines measuring tools with smartphone technology to quickly deliver sensor node data on desktop and mobile phone screens.TheUbiquitors sensor analytics system will integrate event-monitoring,storage and anal
92、ytics software in a cohesive package that provides a holistic view of sensor data it isreading.The physical hardware consists of:1.The sensor probes,which come in hundreds of different varieties of sensor instruments in the form of a USB stick,with both male and female ports;and 2.The main hardware
93、gateway,a small cell phone size device with integrated circuits.This device can connect up to 2.5 kilometers of sensor instruments,and integrate data using embedded software to display the data and all analytics onto a digital screen(desktop or mobile displays)using a Wi-Fi connection.Most types of
94、probes can connect to the hardware.If the sensor size is bigger than the standard probe size,it is possibleto simply use a USB cable to connect the probe and the hub.All data and analytics are displayed on a single screen,with tools that record and keep track of all measurements,and sort and display
95、 analytic information in easy to read charts.5 The Ubiquitor is a general platform that collects data in real time,up to 100hz per second,and thus is intended to be adapted to many industry uses.The Ubiquitor is a multipurpose wireless intelligent sensor device.Its greatest advantage is universal co
96、mpatibility.Currently,the Ubiquitor device could simultaneouslyaccommodate more than 256 different types of sensor heads.Therefore,users could use their smartphones to simultaneously operate and monitor over 256 kinds of sensorreadings.With Perfeculars technology,users only need to obtain the sensor
97、 heads,facilitating ease and convenience of use.Using a smartphone,users can collect and analyzedata in real time.By using the smartphone as a substitute platform,we believe we will achieve the following efficiencies:1.Cut production costs.Smartphone technology will advance and become more widely us
98、ed than the vast majority products on the small sensor device market.Byutilizing smartphone technology,the Ubiquitor will add superior functionality and performance,improve the products quality and cutting production costs 2.Reduce the effort required to develop a new sensor product.With the Ubiquit
99、or,we believe that there will be no need for device manufacturers to research anddevelop the new monitoring and operating components because they will just need to develop new sensor heads based on our software technology.3.Reduce clutter.It is anticipated that the Ubiquitor dispenses with the hassl
100、e of hooking up cables,since it is based on wireless transmission of data.Strategy Strategy and Marketing Plan We have designed,manufactured,marketed and distributed our electronic measurement devices,such as temperature humidity meters,digital meters,quantum PAR meters,pHmeters,TDS meters and CO2 m
101、onitors,for many years and have many loyal customers.The universal smart technology has been applied to our existing traditional devices anddemonstrated functionality and hardware cost savings.We believe we have achieved hardware cost savings in the range of 70%to 90%.Prototypes were sent to our cus
102、tomersfor demonstrations and evaluation.Currently,we are in the stage of producing a pilot manufacturing run.The first round of pilot production was completed in May,2016.Thesecond round of pilot production was completed in July 2016.Smartphones are an integral part of our wireless universal smart t
103、echnology system.Both wireless and wired communication connectivity are used and targeted on differentapplications.In wired connectivity,the data acquisition module is connected through the audio port in the smartphone.The smartphone is used to replace a traditionalinstrument.Compared with the wirel
104、ess solution,the wireless communication module or even the power supply used for data acquisition module are eliminated in the design,asa consequence of this some hardware costs are saved.End users are not able to access the sensors or probes remotely.We believe that the instruments based on wired u
105、niversalsmart technology are not as convenient as their wireless counterparts.Currently,in the industry,however,wired instruments are cheaper.We believe that being the first ones in the market provides a significant and sustained market-share advantage over later competitors.We first focus on our ex
106、isting instrumentsand convert them to universal smart devices and market them to our existing customers.We are putting together an internal sales team with the proceeds of the offering in order to get established for the marketing efforts.We believe that wireless universal smart technology will play
107、 a critical role for traditional instrument manufacturers,as it is too expensive and difficult to develop for mediumor smaller companies.The cost factor is the first consideration when deciding whether a company wants to develop smart wireless technologies and implement them in theirproducts.There a
108、re hundreds of thousands of instrument manufacturers and trillion-dollar revenues for this industry in China.We plan to open a sales department in Chinadedicate to promoting our technologies to local instrument manufacturers.6 Smartphones have been seamlessly integrated into our daily life.A large n
109、umber of functions and services have become accessible to the masses through the use of smartphones.The proliferation of the smartphone and its user-friendly interface,which allows access to digital information,will cause these devices to become a crucial part of ourwireless universal smart instrume
110、nts.Our goals over the next three years include:Raise capital to move to full manufacturing and production for our Ubiquitor device;Partner with manufacturers and promote the adoption of our Ubiquitor platform;Acquire a stable market share of the handheld wireless sensor device market;Continue to de
111、velop market share in our wholesale distribution of sensors and filters;and Utilize our internet marketing strategies to market our handheld sensors and filters.In order to achieve these goals,we intend to focus on the following initiatives:Position the Ubiquitor product as the industry standard in
112、universal wireless sensor reading technology;Establish strategic supply chain channels to facilitate efficient production operations;and Communicate the product and service differentiation through direct networking and effective marketing.Distribution Method We intend to continue to engage in relati
113、onships with Chinese manufacturers and then distribute our products to distributors and retailers directly from the Chinesemanufacturers and then we intend to distribute the Ubiquitor by selling directly to traditional instrument manufacturers.We believe that traditional instrument manufacturerswill
114、 adopt this technology since the Ubiquitor device is intended to consolidate various other sensors.We intend to manufacture and market the Ubiquitor and sell it directly to consumers or distributors using internet marketing and also using channels such as A and tolaunch the product through crowdfund
115、ing sites like indiegogo and .We also intend to establish a marketing department overseas in China.Raw Materials The electronic components used in the Ubiquitor are common and can be easily purchased.Production and assembly lines are also available worldwide.Manufacturing and Production We have a li
116、mited production facility in California where small and medium sized circuit board production can take place until we have enough sales to convert manufacturingto a large-scale manufacturing facility in China,where we have key strategic relationships with manufacturing facilities.7 Competitors There
117、 are several competitors we have identified in the wireless sensor node industry,including traditional instruments or devices manufacturers such as Hanna Instruments orExtech Instruments.Hach developed and launched SC1000 Multi-parameter Universal Controller,a probe module for connecting up to 8 SC
118、sensors and their products are not compatible with smartphones yet and we believe their price-point is still prohibitive to consumers.Monnit Corporation offers a range of wireless or remote sensors.Many of Monnits products are web-based wireless sensors usually are not portable because of the powerc
119、onsumption.Also,the sensors real-time updates are slow and we believe security of the web-based sensor data acquisition also may be a concern.In addition to purchasing thedevice,consumers usually have to pay monthly fee for using web-based services.We are not trying to compete with traditional instr
120、uments or device manufacturers because we utilize our Ubiquitor universal smart device in conjunction with our genericinstruments smartphone application,which we believe will be a completely different product category.Patent,Trademark,License and Franchise Restrictions and Contractual Obligations an
121、d Concessions On November 4,2016 we filed a U.S.patent application number 15/344,041 with the U.S.Patent and Trademark Office.We hope this full patent application protects theUbiquitor universal sensor device.It is anticipated that the publication will occur on July 20,2017.We do not own,either lega
122、lly or beneficially,any trademarks.Research and Development Activities Other than 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 anyfunds on research and development activities in the future.Co
123、mpliance with Environmental Laws We are not aware of any environmental laws that have been enacted,nor are we aware of any such laws being contemplated for the future,that impact issues specific to ourbusiness.Employees As of the date of this Annual Report we have seven full-time and two part-time e
124、mployees,the Companys officers,our President Dr.Edward Lee,our Chief Executive Officerand Secretary Desheng Wang.Our officers and directors are responsible for planning,developing and operational duties,and will continue to do so throughout the early stagesof our growth.Our seven full-time employees
125、 are working in the warehouse orchestrating the development and distribution of our handheld sensor devices as well as our filters.Reports to Securities Holders We provide an Annual Report that includes audited financial information to our shareholders.We will make our financial information equally
126、available to any interested partiesor investors through compliance with the disclosure rules for a small business issuer under the Securities Exchange Act of 1934.We are subject to disclosure filing requirementsincluding filing Form 10-K annually and Form 10-Q quarterly.In addition,we will file Form
127、 8-K and other proxy and information statements from time to time as required.Wedo not intend to voluntarily file the above reports in the event that our obligation to file such reports is suspended under the Exchange Act.The public may read and copy anymaterials that we file with the Securities and
128、 Exchange Commission,(SEC),at the SECs Public Reference Room at 100 F Street NE,Washington,DC 20549.The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.The SEC maintains an Internet site(http:/www.sec.gov)that contains reports,proxy an
129、d information statements,and other information regarding issuers that file electronically with the SEC.8 Item 1A.RISK FACTORS We lack an operating history.There is no assurance our future operations will result in profitable revenues.If we cannot generate sufficient revenues to operate profitably,ou
130、r business will fail.We were incorporated on December 4,2012,and as of December 31,2015 have realized$53,898 in revenues,incurred$21,775 in cost of revenue and$244,216 in operatingcosts since inception(December 4,2012).As of December 31,2015,we had deficit accumulated during the development stage of
131、$216,810.We have a limited operatinghistory upon which an evaluation of our future success or failure can be made.Based upon current plans,we expect to continue generating revenues.However,our revenuesmay not be sufficient to cover our operating costs.We cannot guarantee that we will be successful i
132、n generating significant revenues in the future.Failure to achieve asustainable sales level will cause us to go out of business.We require significant funding to manufacture and market our Ubiquitor wireless sensor.We may ultimately require up to$20 million to fund the manufacturing and marketing st
133、rategy for our product.Once we achieve this fund raising goal,we intend to positionourselves in the small device market,establishing the price at below a few hundred dollars.Due to superior functionality and low price,we expect to capture this section of themarket fairly easily,while our product and
134、 service matures,and the Company becomes better known,we will seize the high-end market.None of this will be possible if we failto obtain the funding we require.We depend on key personnel.Our future success will depend in part on the continued service of key personnel,particularly,Desheng Wang our C
135、hief Executive Officer and our President Edward Lee.If any of our directors and officers will choose to leave the company,we will face significant difficulties in attracting potential candidates for replacement of our key personneldue to our limited financial resources and operating history.In addit
136、ion,the loss of any key employees or the inability to attract or retain qualified personnel could delay ourplan of operations and harm our ability to provide services to our current customers and harm the markets perception of us.We outsourced our product manufacturing and procurement,decreasing qua
137、lity and reliability and protectability We have fully outsourced all manufacturing and have no direct control over the manufacturing processes of our products.This lack of control may increase quality or reliabilityrisks and could limit our ability to quickly increase or decrease production rates.It
138、 also creates liability in that we could lose control of our intellectual property that is notproperly protected.Demand for our products is uncertain and depends on our currently unproven ability to create and maintain superior performance Our future operating results will depend upon our ability to
139、 provide our products or services and to operate profitably in an industry characterized by intense competition,rapidtechnological advances and low margins.This,in turn,will depend on a number of factors,including:Our ability to generate significant sales and profit margin from the Ubiquitor device;
140、Worldwide market conditions and demand for web services,sensor devices and other products we may continue to add as we move forward;Our success in meeting targeted availability dates for our products and services;Our ability to develop and commercialize new intellectual property and to protect exist
141、ing intellectual property;Our ability to maintain profitable relationships with our distributors,retailers and other resellers;Our ability to maintain an appropriate cost structure;Our ability to attract and retain competent,motivated employees;Our ability to comply with applicable legal requirement
142、s throughout the world;and Our ability to successfully manage litigation,including enforcing our rights,protecting our interests and defending claims made against us.9 These factors are difficult to manage,satisfy and influence and we cannot provide any assurance that we will be able to sustain prof
143、its in the future.Our Ubiquitor Product could fail to gain traction in the marketplace for a number of reasons that would adversely impact our financial results and cause our investors tolose money.Future successful sales of our Ubiquitor entail numerous risks such as:Any lack of market acceptance o
144、f the Ubiquitor;Failure to maintain acceptable arrangements with product suppliers,particularly in light of lower than anticipated volumes;Manufacturing,technical,supplier,or quality-related delays,issues or concerns,including the loss of any key supplier or failure of any key supplier to deliver hi
145、ghquality products on time;Competition;Potential declines in demand for sensor devices;and Risks that third parties may assert intellectual property claims against our products.In order to compete successfully,we must accurately forecast demand,closely monitor inventory levels,secure quality product
146、s,continuously drive down costs,meet aggressiveproduct price and performance targets,create market demand for our brand and hold sufficient,but not excess,inventory.There is a risk that the market will not adapt to using the smartphone as a substitute platform for sensor devices,causing our products
147、 to fail in the marketplace.There is a risk that the market will not receive the smartphone technology,which we will be using as our platform.The vast majority of products on the small sensor devicemarket do not currently use smartphones to collect and analyze sensor data.There is no guarantee that
148、using smartphone technology will cut production costs and be wellreceived.If our platform using smartphone technology is not well received,there is a risk that device manufacturers will develop new monitoring and operating componentsthat are incompatible with our current platform instead of developi
149、ng the traditional sensors that are compatible with our technology.Updating our platform to stay compatiblewith new components could increase our costs unexpectedly.Using wireless transmission technologies such as WI-FI and Bluetooth may create security risks.There is also a risk of failure based on
150、 the wireless transmission of data used by our smartphone platform.If there is instability in a wireless network,Bluetooth sensor,or othernetwork problems that are out of our control,our new platform may not be well received.Our smartphone platform relies on the wireless transmission of data through
151、 WIFInetworks and Bluetooth sensors.These networks are often deemed less secure than a hard-wired network.The security of a wireless network is often out of our control.However,any breach of security could result in the market and sensor device manufacturers to fail to embrace our platform.Our busin
152、ess involves the use,transmission and storage of confidential information,and the failure to properly safeguard such information could result in significantreputational harm.We may at times collect,store and transmit information of,or on behalf of,our clients that may include certain types of confid
153、ential information that may be consideredpersonal or sensitive,and that are subject to laws that apply to data breaches.We believe that we take reasonable steps to protect the security,integrity and confidentiality of theinformation we collect and store,but there is no guarantee that inadvertent or
154、unauthorized disclosure will not occur or that third parties will not gain unauthorized access to thisinformation despite our efforts to protect this information,including through a cyber-attack that circumvents existing security measures and compromises the data that we store.If such unauthorized d
155、isclosure or access does occur,we may be required to notify persons whose information was disclosed or accessed.Most states have enacted data breachnotification laws and,in addition to federal laws that apply to certain types of information,such as financial information,federal legislation has been
156、proposed that wouldestablish broader federal obligations with respect to data breaches.We may also be subject to claims of breach of contract for such unauthorized disclosure or access,investigation and penalties by regulatory authorities and potential claims by persons whose information was disclos
157、ed.The unauthorized disclosure of information,or a cyber-security incident involving data that we store,may result in the termination of one or more of our commercial relationships or a reduction in client confidence and usage of ourservices.We may also be subject to litigation alleging the improper
158、 use,transmission or storage of confidential information,which could damage our reputation among ourcurrent and potential clients and cause us to lose business and revenue.10 Our business depends on our ability to keep manufacturing costs low and we may lack the expertise necessary to negotiate and
159、maintain favorable pricing,supply,businessand credit terms with our potential vendors.It may be difficult to negotiate or maintain favorable pricing,supply,business or credit terms with our potential vendors,suppliers and service providers.In addition,productmanufacturing costs may increase if we fa
160、il to achieve anticipated volumes.There can be no assurance that we will be able to successfully manage these risks.In summary,wecan offer no assurance that we will be able to obtain a sufficient(but not excess)supply of products on a timely and cost effective basis.Our failure to do so would lead t
161、o amaterial adverse impact on our business.The lack of public company experience of our management team could adversely impact our ability to comply with the reporting requirements of U.S.securities laws.Dr.Wang lacks public company experience,which could impair our ability to comply with legal and
162、regulatory requirements such as those imposed by Sarbanes-Oxley Act of2002.Our CEO and CFO have never been responsible for managing a publicly traded company.Such responsibilities include complying with federal securities laws andmaking required disclosures on a timely basis.Any such deficiencies,we
163、aknesses or lack of compliance could have a materially adverse effect on our ability to comply with thereporting requirements of the Securities Exchange Act of 1934,as amended,which is necessary to maintain our public company status.If we were to fail to fulfill thoseobligations,our ability to conti
164、nue as a U.S.public company would be in jeopardy in which event you could lose your entire investment in our company.Our officers,directors,consultants and advisors are involved in other businesses and not obligated to commit their time and attention exclusively to our business andtherefore they may
165、 encounter conflicts of interest with respect to the allocation of time and business opportunities between our operations and those of other businesses.Our President Mr.Desheng Wang is currently involved in other businesses and not obligated to commit his time and attention exclusively to our busine
166、ss and,accordingly,hemay encounter conflicts of interest in allocating his own time,or any business opportunities that he may encounter,between our operations and those of other businesses.Furthermore,if the execution of our business plan demands more time than is currently committed by him,he will
167、be under no obligation to commit such additional time,andhis failure to do so may adversely affect our ability to carry on our business and successfully execute our business plan.Another example of a conflict of interest is so called“self-dealing transactions.The director of Perfecular is dealing wi
168、th himself,and may not reach an agreement that is fairto the company,e.g.his remuneration for serving as officer of the Company.If a conflict-of-interest transaction is negotiated and approved,in a manner that approximates arms-length negotiations,the transaction is accepted unless a shareholder pro
169、ves in court that the transaction is not entirely fair to the Company.The burden is on the shareholder toshow lack of entire fairness.Otherwise,the transaction is considered invalid if challenged,unless the director proves in court that the transaction is entirely fair to the company.The burden is o
170、n the director to show entire fairness.If,as a result of before mentioned conflicts,we are deprived of business opportunities or information,the execution of our business plan and our ability to effectively compete inthe marketplace may be adversely affected.If we become aware of such conflict of in
171、terests we will take an immediate action to resolve it.Each conflict of interest will behandled by the company based on the nature of the conflict and the individual involved in it.We do not have any actual or potential conflict of interests with our consultants or advisors.We do not have a majority
172、 of independent directors on our Board and the Company has not voluntarily implemented various corporate governance measures,in theabsence of which stockholders may have more limited protections against interested director transactions,conflicts of interest and similar matters.Federal legislation,in
173、cluding the Sarbanes-Oxley Act of 2002,has resulted in the adoption of various corporate governance measures designed to promote the integrity of thecorporate management and the securities markets.Some of these measures have been adopted in response to legal requirements.Others have been adopted by
174、companies inresponse to the requirements of national securities exchanges,such as the NYSE or the NASDAQ Stock Market,on which their securities are listed.Among the corporategovernance measures that are required under the rules of national securities exchanges are those that address board of directo
175、rs independence,audit committee oversight,andthe adoption of a code of ethics.We have not yet adopted any of these other corporate governance measures and since our securities are not yet listed on a national securitiesexchange,we are not required to do so.Our Board of Directors is comprised of one
176、individual.As a result,we do not have independent directors on our Board of Directors.11 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 independentdirectors on our board.If we expand our board me
177、mbership in future periods to include additional independent directors,we may seek to establish an audit and other committeeof our board of directors.It is possible that if our Board of Directors included independent directors and if we were to adopt some or all of these corporate governance measure
178、s,stockholders would benefit from somewhat greater assurance that internal corporate decisions were being made by disinterested directors and that policies had beenimplemented to define responsible conduct.For example,at present in the absence of audit,nominating and compensation committees comprise
179、d of at least a majority ofindependent directors,decisions concerning matters such as compensation packages or employment contracts to our officers are made by a director who has an interest in theoutcome of the matters being decided.However,as a general rule,the Board of Directors,in making its dec
180、isions,determines first that the terms of such transaction are no less favorable to us that those that would beavailable to us with respect to such a transaction from unaffiliated third parties.The Company executes the transaction between executive officers once approved by the Boardof Directors.Pro
181、spective investors should bear in mind our current lack of corporate governance measures in formulating their investment decisions.We have concluded that we have not maintained effective internal control over financial reporting through the year ended December 31,2016.Significant deficienciesand mat
182、erial weaknesses in our internal control could have material adverse effects on us.It is important for us to maintain effective internal control over financial reporting,which is a process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of
183、 financial statements for external purposes in accordance with generally accepted accounting principles.Because of its inherentlimitations,internal control over financial reporting may not prevent or detect misstatements.Also,projections of any evaluation of effectiveness to future periods are subje
184、ct tothe risk that controls may become inadequate because of changes in conditions,or that the degree of compliance with the policies or procedures may deteriorate.For a discussion of our internal control over financial reporting and a description of the identified material weakness,see“Managements
185、Report on Internal Control OverFinancial Reporting”included in Item 9A of this Report.A material weakness is a deficiency,or combination of deficiencies,in internal control over financial reporting,suchthat there is a reasonable possibility that a material misstatement of the Companys annual or inte
186、rim financial statements will not be prevented or detected on a timely basis.A material weakness in our internal control over financial reporting could adversely impact our ability to provide timely and accurate financial information.We plan toimplement a number of remediation steps to address the m
187、aterial weakness as described in Item 9A of this Report.If we are unsuccessful in implementing or following ourremediation plan,we may not be able to timely or accurately report our financial condition,results of operations or cash flows or maintain effective disclosure controls andprocedures.If we
188、are unable to report financial information timely and accurately or to maintain effective disclosure controls and procedures,we could be subject to,amongother things,regulatory or enforcement actions by the SEC,any one of which could adversely affect our business prospects.We currently have identifi
189、ed significant deficiencies in our internal control over financial reporting that,if not corrected,could result in material misstatements of ourfinancial statements.In connection with the audit of our financial statements as of and for the year ended March 31,2016,we identified significant deficienc
190、ies in our internal control over financialreporting and a general understanding of accounting principles generally accepted in the United States of America(“U.S.GAAP”).As such,there is a reasonable possibility thata misstatement of our financial statements will not be prevented or detected on a time
191、ly basis.As we have thus far not needed to comply with Section 404 of the Sarbanes-Oxley Act,neither we nor our independent registered public accounting firm has performed anevaluation of our internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act.In light
192、of the deficiency,we believe that it is possible thatcertain control deficiencies may have been identified if such an evaluation had been performed.12 We are working to remediate the deficiencies or material weaknesses.We have taken steps to enhance our internal control environment and plan to take
193、additional steps toremediate the material weaknesses.Specifically:We have hired additional outside consultants and will fire unqualified personnel in our accounting department,especially to add an experienced accountant in acontroller capacity.We will continue to evaluate the structure of the financ
194、e organization and add resources as needed;We are implementing additional internal reporting procedures,including those designed to add depth to our review processes and improve our segregation of duties;We are updating our systems so that we may collect the necessary information to enable us to mor
195、e effectively monitor and comply with applicable filingrequirements on a timely basis;and We are in the process of documenting,assessing and testing our internal control over financial reporting as part of our efforts to comply with Section 404 of theSarbanes-Oxley Act.Although we plan to complete t
196、his remediation process as quickly as possible,we are unable,at this time to estimate how long it will take,and our efforts may not be successfulin remediating the deficiencies or material weaknesses.We do not have a majority of independent directors on our Board and the Company has not voluntarily
197、implemented various corporate governance measures,in theabsence of which stockholders 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 resulted in the adoption of vari
198、ous corporate governance measures designed to promote the integrity of thecorporate management and the securities markets.Some of these measures have been adopted in response to legal requirements.Others have been adopted by companies inresponse to the requirements of national securities exchanges,s
199、uch as the NYSE or the NASDAQ Stock Market,on which their securities are listed.Among the corporategovernance measures that are required under the rules of national securities exchanges are those that address board of directors independence,audit committee oversight,andthe adoption of a code of ethi
200、cs.We have not yet adopted any of these other corporate governance measures and since our securities are not yet listed on a national securitiesexchange,we are not required to do so.Our Board of Directors is comprised of three individuals,all of whom are also our executive officers.As a result,we do
201、 not haveindependent 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 independentdirectors on our board.If we expand our board membership in future periods to in
202、clude additional independent directors,we may seek to establish an audit and other committeeof our Board of Directors.It is possible that if our Board of Directors included independent directors and if we were to adopt some or all of these corporate governancemeasures,stockholders would benefit from
203、 somewhat greater assurance that internal corporate decisions were being made by disinterested directors and that policies had beenimplemented to define responsible conduct.For example,at present in the absence of audit,nominating and compensation committees comprised of at least a majority ofindepe
204、ndent directors,decisions concerning matters such as compensation packages or employment contracts to our senior officers are made by a majority of directors whohave an interest in the outcome of the matters being decided.However,as a general rule,the Board of Directors,in making its decisions,deter
205、mines first that the terms of such transaction are no less favorable to us that those that would beavailable to us with respect to such a transaction from unaffiliated third parties.Prospective investors should bear in mind our current lack of corporate governance measures in formulating their inves
206、tment decisions.13 Because one of our Directors,who is also our sole promoter,owns over 49%of our outstanding common stock he could make and control corporate decisions that may bedisadvantageous to other minority shareholders.One of our Directors owns over 49%of the outstanding shares of our common
207、 stock as of the date of this reporting.Accordingly,Directors have a significant influence indetermining the outcome of all corporate transactions or other matters,including mergers,consolidations and the sale of all or substantially all of our assets.They also have thepower to prevent or cause a ch
208、ange in control.The interests of our Directors may differ from the interests of the other stockholders and thus result in corporate decisions that aredisadvantageous to other shareholders.Our executive officers and Directors collectively have the power to control our management and operations,and ha
209、ve a significant majority in voting power on all matterssubmitted to the stockholders of the company.Management currently beneficially owns a majority of our outstanding common stock.Consequently,management has the ability to influence control of the operations of theCompany and,acting together,will
210、 have the ability to influence or control substantially all matters submitted to stockholders for approval,including:Election of our Board of Directors;Removal of directors;Amendment to the Companys Articles of Incorporation or Bylaws;and Adoption of measures that could delay or prevent a change in
211、control or impede a merger,takeover or other business combination.These stockholders have complete control over our affairs.Accordingly,this concentration of ownership by itself may have the effect of impeding a merger,consolidation,takeover or other business consolidation,or discouraging a potentia
212、l acquirer from making a tender offer for the common stock.You could be diluted from our future issuance of capital stock and derivative securities.As of March 28,2016,we had 34,574,706 shares of common stock outstanding and no shares of preferred stock outstanding.We are authorized to issue up to 7
213、5,000,000 sharesof common stock and no shares of preferred stock.To the extent of such authorization,our Board of Directors will have the ability,without seeking stockholder approval,toissue additional shares of common stock or preferred stock in the future for such consideration as the Board of Dir
214、ectors may consider sufficient.The issuance of additionalcommon stock or preferred stock in the future may reduce your proportionate 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
215、 internal control overfinancial reporting,we may not be able to accurately report our financial results.As a result,current and potential shareholders could lose confidence in our financialreporting,which would harm our business and the trading price of our stock.Members of our Board of Directors ar
216、e inexperienced with U.S.GAAP and the related internal control procedures required of U.S.public companies.Management hasdetermined that our internal audit function is also significantly deficient due to insufficient qualified resources to perform internal audit functions.Finally,we have notestablis
217、hed an Audit Committee of our Board of Directors.We are a smaller reporting company with limited resources.Therefore,we cannot assure investors that we will be able to maintain effective internal controls over financialreporting based on criteria set forth by the Committee of Sponsoring Organization
218、s of the Treadway Commission(“COSO”)in Internal Control-Integrated Framework.Amaterial weakness is a deficiency,or a combination of deficiencies,in internal control over financial reporting,such that there is a reasonable possibility that a materialmisstatement of the companys annual or interim fina
219、ncial statements will not be prevented or detected on a timely basis.For these reasons,we are considering the costs andbenefits associated with improving and documenting our disclosure controls and procedures and internal controls and procedures,which includes(i)hiring additional personnelwith suffi
220、cient U.S.GAAP experience and(ii)implementing ongoing training in U.S.GAAP requirements for our CFO and accounting and other finance personnel.If the resultof these efforts are not successful,or if material weaknesses are identified in our internal control over financial reporting,our management wil
221、l be unable to report favorably asto the effectiveness of our internal control over financial reporting and/or our disclosure controls and procedures,and we could be required to further implement expensive andtime-consuming remedial measures and potentially lose investor confidence in the accuracy a
222、nd completeness of our financial reports which could have an adverse effect on ourstock price and potentially subject us to litigation.14 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 re
223、quirements,including those required by the Securities and Exchange Commission.Complying with thesereporting and other regulatory requirements is time-consuming and may result in increased costs to us and could have a negative effect on our business,results of operations andfinancial condition.As a p
224、ublic company,we are subject to the reporting requirements of the Securities Exchange Act of 1934,as amended,or the Exchange Act,and requirements of the Sarbanes-Oxley Act of 2002,as amended,or SOX.These requirements may place a strain on our systems and resources.The Exchange Act requires that we f
225、ile annual,quarterly andcurrent reports with respect to our business and financial condition.The SOX requires that we maintain effective disclosure controls and procedures and internal controls overfinancial reporting.Compliance with these rules and regulations will increase our legal and financial
226、compliance costs,make some activities more difficult,time-consuming orcostly and increase demand on our systems and resources.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 additio
227、n,changing laws,regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies,increasing legal andfinancial compliance costs and making some activities more time consuming.These laws,regulations and standards are subject to varying int
228、erpretations,in many cases due totheir lack of specificity,and,as a result,their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies.This could result incontinuing uncertainty regarding compliance matters and higher costs necessitated by ongoin
229、g revisions to disclosure and governance practices.We intend to invest resources tocomply with evolving laws,regulations and standards,and this investment may result in increased general and administrative expenses and a diversion of managements timeand attention from revenue-generating activities t
230、o compliance activities.If our efforts to comply with new laws,regulations and standards differ from the activities intended byregulatory or governing bodies due to ambiguities related to practice,regulatory authorities may initiate legal proceedings against us and our business may be harmed.We also
231、 expect that being a public company and these new rules and regulations will make it more expensive for us to obtain director and officer liability insurance,and wemay be required to accept reduced coverage or incur substantially higher costs to obtain coverage.These factors could also make it more
232、difficult for us to attract and retainqualified 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 no
233、t require a company to file all the same reports andinformation as fully reporting 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 onForm 8-K,once our registration statement
234、 is declared effective,including the annual report on Form 10-K for the fiscal year during which the registration statement is declaredeffective.That filing obligation will generally apply even if our reporting obligations have been suspended automatically under section 15(d)of the Exchange Act prio
235、r to thedue date for the Form 10-K.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 willhave reduced visibility as to the Company and its financial condition.In addition,as a fi
236、ler subject to Section 15(d)of the Exchange Act,the Company is not required to prepareproxy or information statements;our common stock will not be subject to the protection of the going private regulations;the Company will be subject to only limited portionsof the tender offer rules;our officers,dir
237、ectors,and more than ten(10%)percent shareholders are not required to file beneficial ownership reports about their holdings in ourCompany;that these persons will not be subject to the short-swing profit recovery provisions of the Exchange Act;and that more than five percent(5%)holders of classes of
238、your equity securities will not be required to report information about their ownership positions in the securities.15 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 yearreported upon in
239、 our second annual report on Form 10-K.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 Public Company Accounting Oversight Board have imposed various new requirements on p
240、ublic companies,including requiring changes in corporategovernance 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 couldaffect profitability and our results of operations.We ar
241、e in the process of determining whether our existing internal controls over financial reporting systems are compliant with Section 404.We will not be required to conductthe evaluation of effectiveness of our internal controls until the end of the fiscal year reported upon in our second annual report
242、 on Form 10-K.In addition,because we are asmaller reporting company,we are not required to obtain the auditor attestation of managements evaluation of internal controls over financial reporting.If we obtain anddisclose such reports we could continue doing so at our discretion so long as we remain a
243、smaller reporting company.This process 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 isdetermined that we are not in compliance with Section 404,we may be required to implement new internal
244、 control procedures and re-evaluate our financial reporting.If we areunable to implement these changes effectively or efficiently,it could harm our operations,financial reporting or financial results,which could adversely affect our ability tocomply with our periodic reporting obligations under the
245、Exchange Act.There is a very limited public(trading)market for our common stock and;therefore,our investors may not be able to sell their shares.Our common stock is listed on the over-the-counter exchange,and is thinly traded.As a result,stockholders may be unable to liquidate their investments,or m
246、ay encounterconsiderable delay in selling shares of our common stock.If an active trading market does 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 limited operating his
247、tory.Further,a few individual stockholders dominate ourshares.The limited trading volume subjects the price of our common stock to manipulation by one or more stockholders and will significantly limit the number of shares thatone can purchase or sell in a short period of time.The market price of our
248、 common stock may also fluctuate significantly in response to the following factors,most of which arebeyond our control:variations in our quarterly and annual operating results;changes in general economic conditions;changes in technologies favored by consumers;price competition or pricing changes by
249、 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 for many companies securities and that haveoften been unrelated to the operatin
250、g performance of these companies.Any such fluctuations may adversely affect the market price of our common stock,regardless of ouractual operating performance.As a result,stockholders may be unable to sell their shares,or may be forced to sell them at a loss.Our common stock has not been widely trad
251、ed,and the price of our common stock may fluctuate substantially.To date,there has been a limited public market for shares of our common stock,with limited trading.An active public trading market may not develop or,if developed,may notbe sustained.The current market price of our common stock and any
252、 possible subsequent listing on another larger securities exchange,if and when we are successful in doingso,will be affected by a number of factors,including those discussed above.16 Future sales of our common stock by existing stockholders could cause our stock price to decline.If our existing stoc
253、kholders sell substantial amounts of our common stock in the public market,then the market price of our common stock could decrease significantly.Theperception in the public market that our stockholders might sell shares of common stock also could depress the market price of our common stock.There a
254、re approximately34,574,706 shares of our common stock outstanding,of which approximately 610,000 shares are currently freely tradable.We may in the future issue and register additionalshares of our common stock that might be freely transferable at the time of such transaction.A decline in the price
255、of shares of our common stock might impede our ability to raise capital through the issuance of additional shares of our common stock or other equitysecurities.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
256、never paid any cash dividends and currently do not intend to pay any dividends for the foreseeable future.To the extent that we require additional funding currentlynot provided for in our financing plan,our funding sources may likely prohibit the payment of a dividend.Because we do not intend to dec
257、lare dividends,any gain on aninvestment in Focus Universal Inc.will need to come through appreciation of the stocks price.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 sale
258、s of securities to a states residents unless the securities are registered in that state orqualify for an exemption from registration,and(2)govern the reporting requirements for broker-dealers doing business directly or indirectly in the state.Before a security issold in a state,there must be a regi
259、stration in place to cover the transaction,or it must be exempt from registration.The applicable broker-dealer must also be registered in thatstate.We do not know whether our securities will be registered or exempt from registration under the laws of any state.A determination regarding registration
260、will be made by thosebroker-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,andon purchasers to buy,our securities.You should therefore consider the resale market for our common stock
261、 to be limited,as you may be unable to resell your shares without thesignificant 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 applicableto emerging
262、 growth companies 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 orexceed$1 billion(subject to adjustment for
263、 inflation),(b)the last day of the fiscal year following the fifth anniversary of its initial public offering,(c)the date on which FocusUniversal 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
264、 largeaccelerated 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 reportingrequiremen
265、ts that are applicable to other public companies that are not emerging growth companies as described in further detail in the risk factors below.Focus Universalcannot predict if investors will find its shares of common stock less attractive because Focus Universal will rely on some or all of these e
266、xemptions.If some investors find FocusUniversals shares of common stock less attractive as a result,there may 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 requirem
267、ents,its reduced disclosure may make it more difficult for investors and securities analyststo evaluate Focus Universal and may result in less investor confidence.17 The recently enacted JOBS Act is intended to reduce the regulatory burden on emerging growth companies.Focus Universal meets the defin
268、ition of an emerging growthcompany and so long as it 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
269、Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement tothe auditors report providing additional information about the audit and the financial statements(i.e.,an auditor discussion and analysis);submit certain executive compensation matters to shareholder
270、advisory votes,such as“say-on-pay”and“say-on-frequency;”and disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEOscompensation to median employee compensation.In addition,Section 107 of the JOBS Act als
271、o provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B)of the Securities Act for complying with new or revised accounting standards.In other words,an emerging growth company can delay the adoption of certain accountingstandards u
272、ntil those standards would otherwise apply to private companies.However,Focus Universal is choosing to opt out of such extended transition period,and as aresult,Focus Universal will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required
273、for non-emerging growthcompanies.Section 107 of the JOBS Act provides that its decision to opt out of the extended transition period for complying with new or revised accounting standards isirrevocable.Notwithstanding the above,we are also currently a“smaller reporting company”,meaning that we are n
274、ot an investment company,an asset-backed issuer,or a majority-ownedsubsidiary of a parent company 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 themost recently completed fiscal year.In the event that we are
275、 still considered a“smaller reporting company”,at such time are we cease being an“emerging growth company”,we will be required to provideadditional disclosure in our SEC filings.However,similar to“emerging growth companies”,“smaller reporting companies”are able to provide simplified executivecompens
276、ation disclosures in their filings;are exempt from the provisions of Section 404(b)of the Sarbanes-Oxley Act requiring that independent registered public accountingfirms provide an attestation report on the effectiveness of internal control over financial reporting;are not required to conduct say-on
277、-pay and frequency votes until annualmeetings occurring on or after January 21,2013;and have certain other decreased disclosure obligations in their SEC filings,including,among other things,only being requiredto provide two years of audited financial statements in annual reports.Decreased disclosure
278、s in our SEC filings due to our status as an“emerging growth company”or“smallerreporting company”may make it harder for investors to analyze the Companys results of operations and financial prospects.Item 1B.UNRESOLVED STAFF COMMENTS None.Item 2.PROPERTIES We entered into a two-year Lease Agreement
279、in a multi-tenant warehouse facility in Los Angeles County whereby we pay$7,699 per month starting on April 20,2015 to April30,2017.On May 1,2016,the monthly lease payment increased to$7,930 per month.Item 3.LEGAL PROCEEDINGS We are not currently a party to any legal proceedings,and we are not aware
280、 of any pending or potential legal actions.Item 4.MINE SAFETY DISCLOSURES Not applicable to our Company.18 PART II Item 5.MARKET FOR REGISTRANTS COMMON EQUITY,RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITYSECURITIES.Market Information On September 23,2014,our common stock was verified fo
281、r trading on OTCQB under the trading symbol FCUV.Prior to that time,there was no public market for our stock.The following table sets forth for the indicated periods the high and low intra-day sales price per share for our common stock on the OTCQB for the four quarters of 2015 andfor the four quart
282、ers of 2016.High Low 2015:First Quarter$2.00$0.05 2015:Second Quarter$3.05$1.50 2015:Third Quarter$3.05$3.00 2015:Fourth Quarter$3.05$3.50 2016:First Quarter$1.50$1.50 2016:Second Quarter$1.50$1.50 2016:Third Quarter$1.50$1.50 2016:Fourth Quarter$1.50$1.50 Holders.As of March 20,2017,there were 52 r
283、ecord holders(including our two directors)of 34,574,706 shares of the Companys common stock.At December 31,2016,there were 52record holders(including our two directors)of 34,574,706 shares of the Companys common stock.Dividends.The Company has not paid any cash dividends to date and does not anticip
284、ate or contemplate paying dividends in the foreseeable future.It is the present intention ofmanagement to utilize all available funds for the development of the Companys business.Securities Authorized for Issuance Under Equity Compensation Plans None.Recent sales of unregistered securities.On Septem
285、ber 30,2013 we completed an offering of 4,000,000 shares of our common stock at a price of$0.001 per share to our former Directors Tatyana Popova(2,000,000),and Elena Ignatenko(2,000,000).The total amount received from this Offering was$4,000.We completed this offering pursuant to Regulation S of th
286、e Securities Act.The offer and sale of all shares of our common stock listed above were affected in reliance on the exemptions for sales of securities not involving a public offering,as set forthin Regulation S promulgated under the Securities Act.The investor acknowledged the following:subscriber i
287、s not a United States Person,nor is the subscriber acquiring the shares directly or indirectly for the account or benefit of aUnited 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 SubscriptionAgreement,“U
288、nited States Person”within the meaning of U.S.tax laws,means a citizen or resident of the United States,any former U.S.citizen subject to Section 877 of theInternal Revenue Code,any corporation,or partnership organized or existing under the laws of the United States of America or any state,jurisdict
289、ion,territory or possessionthereof and any estate or trust the income of which is subject to U.S.federal income tax irrespective of its source,and within the meaning of U.S.securities laws,as defined inRule 902(o)of Regulation S,means:(i)any natural person resident in the United States;(ii)any partn
290、ership or corporation organized or incorporated under the laws of theUnited 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 foreignentity located in the United States;(vi)any non-discretiona
291、ry account or similar account(other than an estate or trust)held by a dealer or other fiduciary for the benefit oraccount 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 anindividual)resi
292、dent in the United States;and(viii)any partnership or corporation if organized under the laws of any foreign jurisdiction,and formed by a U.S.personprincipally for the purpose of investing in securities not registered under the Securities Act,unless it is organized or incorporated,and owned,by accre
293、dited investors(as definedin Rule 501(a)who are not natural persons,estates or trusts.Since that time we have had no sales of unregistered securities.19 Issuer Purchases of Equity Securities We did not repurchase any of our equity securities during the year ended December 31,2016,the nine months end
294、ed December 31,2015,the year ended March 31,2015,2014or the period from December 4,2012(inception)to March 31,2013.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 not required to provide the information under t
295、his item.Item 7.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with our audited financial statements and notes thereto included herein.In connection with,and because we desire totake advantage of,the“safe ha
296、rbor”provisions of the Private Securities Litigation Reform Act of 1995,we caution readers regarding certain forward-looking statements in thefollowing discussion and elsewhere in this report and in any other statement made by,or on our behalf,whether or not in future filings with the Securities and
297、 ExchangeCommission.Forward-looking statements are statements not based on historical information and which relate to future operations,strategies,financial results or otherdevelopments.Forward-looking statements are necessarily based upon estimates and assumptions that are inherently subject to sig
298、nificant business,economic and competitiveuncertainties and contingencies,many of which are beyond our control and many of which,with respect to future business decisions,are subject to change.These uncertaintiesand contingencies can affect actual results and could cause actual results to differ mat
299、erially from those expressed in any forward-looking statements made by,or our behalf.We disclaim any obligation to update forward-looking statements.Narrative Description of the Business Focus Universal Inc.(“the Company”,“we”,“us”or“our”)currently conducts business as a handheld sensor systems and
300、filters wholesaler to distribution platforms.We areworking on developing a universal sensor node and gateway system that use the data processing capabilities of a smartphone to display readings of multiple probe modules.Weare also researching the development of an anti-counterfeit authentication tec
301、hnology that we believe could address the problem of counterfeit production by attempting toauthenticate consumer goods.Through a merger with Perfecular Inc.,we strategically expanded our business to the manufacture and marketing of high-tech electronic devices.We realized that Internetmarketing wou
302、ld not be sufficient to generate sales of our products,particularly the Ubiquitor product.We are going to focus on all types of marketing,particularly marketingdirectly to established consumer distributions retailers.For this reason,during the first quarter of 2016 we decided to emphasize our sales
303、of handheld sensors and air filters anddiscontinue our marketing and advertising business segment.Through the development and creation of our Ubiquitor device,we anticipate that sales and marketing involvedwith bringing this product to market will require us to hire a number of new employees in orde
304、r to gain traction in the market as well as continue to expand such sales of ourexisting sensor and air filter products.Our current services include:Scientific Instrument Research and Development and Sales Engineers and scientists use instrumentation to observe,understand,and manage real-world data
305、and phenomena,events,and processes related to their industries or areas ofexpertise.Instrumentation systems that we are researching and developing measure and control electrical signals,such as voltage,current and power,as well as temperature,pressure,speed,flow,volume,torque,light sensing,and vibra
306、tion for example.Common general-purpose instruments in our market segment include,for example,voltmeters,signal generators,oscilloscopes,data loggers,spectrum analyzers,cameras,and temperature and pressure monitors and controllers.Systems that perform measurement andcontrol can be generally categori
307、zed as test,measurement,and embedded systems.20 A New Approach to Measurement and Sensing We offer a different approach than what is currently on the market because we are attempting to establish a demand for devices that link handheld devices and sensors withcommon smartphone computing power throug
308、h an application on the smartphone in both IOS and Android devices.Tapping into the computing power of a smartphone enablesa measurement device to increase its capabilities.We also offer an array of traditional handheld measurement and control meters through our wholesale distribution platform.Filte
309、r and Handheld Meter Wholesaler We are a wholesaler of various filtration products and digital meters.We source our products from manufacturers in China and then sell to a major U.S.distributor who resellsour products directly to consumers through retail distribution channels.Specifically,we sell th
310、e following products:Fan Speed Adjuster device.We provide a fan speed adjuster device to retailers and distributors.Designed specifically for centrifugal fans with brushless motors,our adjusterdevice helps ensure longer life by preventing damage to fan motors by adjusting the speed of centrifugal fa
311、ns without causing the motor to hum.These devices are rated for 350watts max,have 120VAC voltage capacity and feature an internal,electronic auto-resetting circuit breaker.Carbon filter devices.We also sell two types of carbon filter devices to distributors.These Carbon filter devices are profession
312、al grade filters specifically designed and used tofilter air in greenhouses that might be polluted by fermenting organics.One of these filters can be attached to a centrifugal fan to scrub the air in a constant circle or can beattached to an exhaust line as a single pass filter,which moves air out o
313、f the growing area and filters unwanted odors and removes pollens,dust,and other debris in the air.Theother filter is designed to be used with fans from 0-6000 C.F.M.HEPA filtration device.We provide an organic air high efficiency particulate arrestance(“HEPA”)filtration device at wholesale prices t
314、o distributors and retailers.Manufactured,tested,certified,and labeled in accordance with current HEPA filter standards,this device is targeted towards greenhouses and grow rooms and designed to keepinsects,bacteria,and mold out of grow rooms.We sell these devices in various sizes.Digital light mete
315、r.We provide a handheld digital light meter that is used to measure luminance in fc units,or foot-candles.The meter we sell is designed to be full cosinecorrected for the angular incidence of light(meaning if you are not holding the sensor perpendicular to the light source,the sensor will still read
316、 the light correctly).The meterhas a built-in low battery indicator and is designed to accurately measure to 40,000 FC.Quantum par meter.We provide a handheld quantum par meter used to measure photosynthetically active radiation(“PAR”).This fully portable handheld PAR meter isdesigned to measure PAR
317、 flux in wavelengths ranging from 400 to 700 nm.It is designed to measure up to 10,000 umol.Ubiquitor Wireless Universal Sensor Device We have fully researched and developed a device we call the“Ubiquitor,”which is a handheld fully modular system with a universal sensor node and gateway system that
318、usesa smartphone as the output display module that displays the readings of various probe modules.We have completed an initial production run of 1,000 devices and intend todevelop this into full-scale production as soon as possible.The Ubiquitor is a wireless sensor device that combines measuring to
319、ols with smartphone technology to quicklydeliver sensor node data on desktop and mobile phone screens.The Ubiquitors sensor analytics system will integrate event-monitoring,storage and analytics software in acohesive package that we hope will provide a holistic view of sensor data it is reading.Afte
320、r sending our circuit boards to China for soldering at an unaffiliated manufacturing facility,we assembled the initial production run at our facilities here in the City ofIndustry.This initial production run will allow us to show large distributors and consumers the capabilities of the Ubiquitor whi
321、ch we hope will generate demand.21 The physical hardware consists of:1.The sensor probes,which come in hundreds of different varieties of sensor instruments in the form of a USB stick,with both male and female ports;and 2.The main hardware gateway,a small cell phone size device with integrated circu
322、its.This device is intended to connect up to 2.5 kilometers of sensor instruments,and integrate data using embedded software to display the data and all analytics onto a digitalscreen(desktop or mobile displays)using multiple types of wireless connections(i.e.,Wi-Fi,Bluetooth,3G and 4G).Most types o
323、f probes can connect to the hardware.If thesensor size is bigger than the standard probe size,it is possible to simply use a USB cable to connect the probe and the hub.All data and analytics are displayed on a singlescreen,with tools that record and keep track of all measurements,and sort and displa
324、y analytic information in easy to read charts.The Ubiquitor is a general platform that collects data in real time,up to 100hz per second,and thus is intended to be adapted to many industry uses.The Ubiquitor is a multipurpose wireless intelligent sensor device that will be intended to achieve univer
325、sal compatibility.Currently,the Ubiquitor device could simultaneouslyaccommodate more than 256 different types of sensor heads.Users could use their smartphones to simultaneously operate and monitor over 256 kinds of sensor readings.WithPerfeculars technology,users only need to obtain the sensor hea
326、ds,facilitating ease and convenience of use.Using a smartphone,users can collect and analyze data in realtime.We have not yet started research and development of a second generation Ubiquitor device,but once we demonstrate the market for this product intend to begin suchresearch and development.Inte
327、llectual Property Protection On November 4,2016 we filed a U.S.patent application number 15/344,041 with the U.S.Patent and Trademark Office.We hope this full patent application protects theUbiquitor universal sensor device.It is anticipated that the publication will occur on July 20,2017.We do not
328、own,either legally or beneficially,any trademarks.Competitors There are several competitors we have identified in the wireless sensor node industry,including traditional instruments or devices manufacturers such as Hanna Instruments orExtech Instruments.Hach developed and launched SC1000 Multi-param
329、eter Universal Controller,a probe module for connecting up to 8 SC sensors and their products are not compatible with smartphones yet and we believe their price-point is still prohibitive to consumers.Monnit Corporation offers a range of wireless or remote sensors.Many of Monnits products are web-ba
330、sed wireless sensors usually are not portable because of the powerconsumption.Also,the sensors real-time updates are slow and we believe security of the web-based sensor data acquisition also may be a concern.In addition to purchasing thedevice,consumers usually have to pay monthly fee for using web
331、-based services.We are not trying to compete with traditional instruments or device manufacturers because we utilize our Ubiquitor universal smart device in conjunction with our genericinstruments smartphone application,which we believe will be a completely different product category.Market Potentia
332、l We believe that wireless universal smart technology will play a critical role for traditional instrument manufacturers,as it is too expensive and difficult to develop for mediumor smaller companies.The cost factor is the first consideration when deciding whether a company wants to develop smart wi
333、reless technologies and implement them in theirproducts or use them in their field testing.We also hope to play a role in academic laboratories,particularly with smaller academic laboratories who are sensitive to price.22 Results of Operations For the twelve months ended December 31,2016 compared to the twelve months ended December 31,2015(unaudited)Revenue,cost of sales and gross profit Our conso
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