Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission File Number 001-40391

iPower Inc.

(Exact name of registrant as specified in its charter)

Nevada		82-5144171
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

8798 9^th Street

Rancho Cucamonga, CA 91730

(Address of principal executive offices) (Zip Code)

(626) 863-7344

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		IPW		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

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

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

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

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

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

The number of shares outstanding of the registrant’s common stock on November 14, 2024 was 31,431,242.

iPower Inc.

TABLE OF CONTENTS

		Page No.

	PART I. Financial Information

Item 1.	Unaudited Condensed Consolidated Financial Statements	3

	Unaudited Condensed Consolidated Balance Sheets as of September 30, 2024 and June 30, 2024	3

	Unaudited Condensed Consolidated Statements of Operations and Comprehensive (Loss) for the three months ended September 30, 2024 and 2023	4

	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three months ended September 30, 2024 and 2023	5

	Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2024 and 2023	6

	Notes to Unaudited Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44

Item 4.	Controls and Procedures	44

	PART II. Other Information

Item 1.	Legal Proceedings	46

Item 1A.	Risk Factors	46

Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds	46

Item 3.	Defaults Upon Senior Securities	46

Item 4.	Mine Safety Disclosures	46

Item 5.	Other Information	46

Item 6.	Exhibits	47

	Signatures	48

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

iPower Inc. and Subsidiaries

Unaudited Condensed Consolidated Balance Sheets

As of September 30, 2024 and June 30, 2024


	September 30,			June 30,
	2024			2024
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalent	$	2,577,305		$	7,377,837
Accounts receivable, net		12,278,182			14,740,093
Inventories, net		8,668,497			10,546,273
Prepayments and other current assets, net		2,808,914			2,346,534
Total current assets		26,332,898			35,010,737

Non-current assets
Right of use - non-current		5,226,888			6,124,163
Property and equipment, net		337,036			370,887
Deferred tax assets, net		3,090,525			2,445,605
Goodwill		3,034,110			3,034,110
Intangible assets, net		3,468,357			3,630,700
Other non-current assets		905,673			679,655
Total non-current assets		16,062,589			16,285,120

Total assets	$	42,395,487		$	51,295,857

LIABILITIES AND EQUITY
Current liabilities
Accounts payable, net	$	8,352,699		$	11,227,116
Other payables and accrued liabilities		3,507,224			3,885,487
Lease liability - current		1,686,889			2,039,301
Short-term loan payable		–			491,214
Short-term loan payable - related party		350,000			350,000
Revolving loan payable, net		–			5,500,739
Income taxes payable		285,963			276,158
Total current liabilities		14,182,775			23,770,015

Non-current liabilities
Long-term revolving loan payable, net		3,131,955			–
Lease liability - non-current		3,945,935			4,509,809

Total non-current liabilities		7,077,890			4,509,809

Total liabilities		21,260,665			28,279,824

Commitments and contingency		–			–

Stockholders' Equity
Preferred stock, $0.001 par value; 20,000,000 shares authorized; 0 shares issued and outstanding at September 30, 2024 and June 30, 2024		–			–
Common stock, $0.001 par value; 180,000,000 shares authorized; 31,359,899 shares issued and outstanding at September 30, 2024 and June 30, 2024		31,361			31,361
Additional paid in capital		33,669,843			33,463,883
Accumulated deficits		(12,259,882	)		(10,230,601	)
Non-controlling interest		(41,040	)		(38,204	)
Accumulated other comprehensive loss		(265,460	)		(210,406	)
Total stockholders' equity		21,134,822			23,016,033

Total liabilities and stockholders' equity	$	42,395,487		$	51,295,857

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

iPower Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss

For the Three Months Ended September 30, 2024 and 2023


	For the Three Months Ended September 30,
	2024			2023
	(Unaudited)			(Unaudited)

REVENUES
Product sales revenues	$	18,275,412		$	26,508,374
Service income		733,109			–
Total revenues		19,008,521			26,508,374

COST OF REVENUES
Product costs		9,917,448			14,749,529
Service costs		603,176			–
Total cost of revenues		10,520,624			14,749,529

GROSS PROFIT		8,487,897			11,758,845

OPERATING EXPENSES:
Selling and fulfillment		5,914,808			10,063,471
General and administrative		5,319,523			2,964,051
Total operating expenses		11,234,331			13,027,522

LOSS FROM OPERATIONS		(2,746,434	)		(1,268,677	)

OTHER INCOME (EXPENSE)
Interest expenses		(139,962	)		(228,365	)
Loss on equity method investment		(919	)		(1,025	)
Other non-operating income (Loss)		218,686			(67,166	)
Total other income (expenses), net		77,805			(296,556	)

LOSS BEFORE INCOME TAXES		(2,668,629	)		(1,565,233	)

PROVISION FOR INCOME TAX BENEFIT		636,512			275,882
NET LOSS		(2,032,117	)		(1,289,351	)

Non-controlling interest		2,836			2,836

NET LOSS ATTRIBUTABLE TO IPOWER INC.	$	(2,029,281	)	$	(1,286,515	)

OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustments		(55,054	)		(707	)

COMPREHENSIVE LOSS ATTRIBUTABLE TO IPOWER INC.	$	(2,084,335	)	$	(1,287,222	)

WEIGHTED AVERAGE NUMBER OF COMMON STOCK
Basic and diluted		31,417,203			29,764,515

LOSSES PER SHARE
Basic and diluted	$	(0.06	)	$	(0.04	)

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

iPower Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity

For the Three Months Ended September 30, 2024 and 2023


	Common Stock				Additional Paid in		Accumulated			Non-controlling			Accumulated other Comprehensive
	Shares		Amount		Capital		Deficit			interest			loss			Total
Balance, June 30, 2024		31,359,899	$	31,361	$	33,463,883	$	(10,230,601	)	$	(38,204	)	$	(210,406	)	$	23,016,033
Net loss		–		–		–		(2,029,281	)		(2,836	)		–			(2,032,117	)
Stock-based compensation		–		–		205,960		–			–			–			205,960
Foreign currency translation adjustments		–		–		–		–			–			(55,054	)		(55,054	)
Balance, September 30, 2024, Unaudited		31,359,899	$	31,361	$	33,669,843	$	(12,259,882	)	$	(41,040	)	$	(265,460	)	$	21,134,822



Balance, June 30, 2023		29,710,939	$	29,712	$	29,624,520	$	(8,702,442	)	$	(24,915	)	$	(62,134	)	$	20,864,741
Net loss		–		–		–		(1,286,515	)		(2,836	)		–			(1,289,351	)
Stock-based compensation		–		–		117,882		–			–			–			117,882
Foreign currency translation adjustments		–		–		–		–			–			(707	)		(707	)
Balance, September 30, 2023, Unaudited		29,710,939	$	29,712	$	29,742,402	$	(9,988,957	)	$	(27,751	)	$	(62,841	)	$	19,692,565

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

iPower Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows

For the Three Months Ended September 30, 2024 and 2023


	For the Three Months Ended September 30,
	2024			2023
	(Unaudited)			(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(2,032,117	)	$	(1,289,351	)
Adjustments to reconcile net loss to cash (used in) provided by operating activities:
Depreciation and amortization expense		196,558			201,705
Inventory reserve		288,474			105,192
Credit loss reserve		1,475,594			–
Loss on equity method investment		919			1,025
Stock-based compensation expense		205,960			117,882
Gain on foreign currency exchange rates		(182,188	)		–
Amortization of operating lease right of use assets		522,538			685,106
Amortization of debt premium / discount and non-cash financing costs		66,305			53,726
Change in operating assets and liabilities
Accounts receivable		986,317			834,261
Inventories		1,589,302			5,432,074
Deferred tax assets		(644,920	)		(277,189	)
Prepayments and other current assets, net		(619,099	)		1,046,697
Non-current prepayments		–			70,422
Other non-current assets		132,841			9,615
Accounts payable		(2,874,417	)		(1,213,634	)
Other payables and accrued liabilities		4,034			(1,040,347	)
Operating lease liabilities		(541,549	)		(683,277	)
Income taxes payable		9,805			(1,566	)
Net cash (used in) provided by operating activities		(1,415,643	)		4,052,341

CASH FLOWS FROM INVESTING ACTIVITIES:
Prepayments for software development		(202,140	)		–
Net cash used in investing activities		(202,140	)		–

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of offering cost settlement		(325,000	)		–
Proceeds from short-term loans - related party		–			2,000,000
Payments on short-term loans - related party		(483,599	)		(1,000,000	)
Payments on promissory note		–			(875,000	)
Proceeds from revolving loan		1,500,000			–
Payments on revolving loan		(4,000,000	)		(5,200,000	)
Net cash used in financing activities		(3,308,599	)		(5,075,000	)

EFFECT OF EXCHANGE RATE ON CASH		125,850			16,178

CHANGES IN CASH AND CASH EQUIVALENTS		(4,800,532	)		(1,006,481	)

CASH AND CASH EQUIVALENTS, beginning of period		7,377,837			3,735,642

CASH AND CASH EQUIVALENTS, end of period	$	2,577,305		$	2,729,161

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income tax	$	–		$	–
Cash paid for interest	$	55,743		$	–

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING TRANSACTIONS:
Right of use assets derecognized due to termination of operating leases	$	(374,737	)	$	–
Right of use assets acquired under new operating leases	$	–		$	613,980

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

iPower Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

As of September 30, 2024 and June 30, 2024 and for the Three Months Ended September 30, 2024 and 2023

Note 1 - Nature of business and organization

iPower Inc., formerly known as BZRTH Inc., a Nevada corporation (the “Company”), was incorporated on April 11, 2018. The Company is principally engaged in the marketing and sale of consumer home, garden and other products and accessories mainly in the North America.

On May 18, 2021, the Company acquired 100% of the equity ownership of its variable interest entity, E Marketing Solution Inc. (“E Marketing”), an entity incorporated in California and owned by one of the minority shareholders of the Company. As a result, E Marketing became the Company’s wholly owned subsidiary.

On May 18, 2021, the Company acquired 100% of the equity ownership of its variable interest entity, Global Product Marketing Inc. (“GPM”), an entity which was incorporated in the State of Nevada on September 4, 2020, and was owned by Chenlong Tan, the Company’s Chairman, CEO and President, and one of the majority shareholders of the Company. As a result, GPM became the Company’s wholly owned subsidiary.

On January 13, 2022, the Company entered into a joint venture agreement and formed a Nevada limited liability company, Box Harmony, LLC (“Box Harmony”), for the principal purpose of providing logistics services primarily for foreign-based manufacturers or distributors who desire to sell their products online in the United States, with such logistics services to include, without limitation, receiving, storing and transporting such products. The Company owns 40% of the equity interest in Box Harmony, retaining significant influence, but does not own a majority equity interest in or otherwise control Box Harmony. See details at Note 3 below.

On February 10, 2022, the Company entered into another joint venture agreement and formed a Nevada limited liability company, Global Social Media, LLC (“GSM”), for the principal purpose of creating a social media platform in order to provide content and services to assist businesses, including the Company and other businesses, in marketing their products. The Company owns 60% of the equity interest in GSM and controls its operations. See details at Note 3 below.

On February 15, 2022, the Company acquired 100% of the ordinary shares of Anivia Limited (“Anivia”), a corporation organized under the laws of the British Virgin Islands (“BVI”), in accordance with the terms of a share transfer framework agreement (the “Transfer Agreement”), dated February 15, 2022, by and between the Company, White Cherry Limited, a BVI company (“White Cherry”), White Cherry’s equity holders, Li Zanyu and Xie Jing (together with White Cherry, the “Sellers”), Anivia, Fly Elephant Limited, a Hong Kong company, Dayourenzai (Shenzhen) Technology Co., Ltd., and Daheshou (Shenzhen) Information Technology Co., Ltd. Anivia owns 100% of the equity of Fly Elephant Limited, which in turn owns 100% of the equity of Dayourenzai (Shenzhen) Technology Co., Ltd., a corporation located in the People’s Republic of China (“PRC”), which is a wholly foreign-owned enterprise (“WFOE”) of Fly Elephant Limited. The WFOE controls, through contractual arrangements summarized in Note 4 below, the business, revenues and profits of Daheshou (Shenzhen) Information Technology Co., Ltd., a company organized under the Laws of the PRC (“DHS”) and located in Shenzhen, China. See details on Note 4 below.

Note 2 – Basis of Presentation and Summary of significant accounting policies

Basis of presentation

The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries and VIE and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These unaudited condensed consolidated financial statements have been prepared on the same basis as its annual consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of the Company’s financial information. These interim results are not necessarily indicative of the results to be expected for the fiscal year ending June 30, 2025, or for any other interim period or for any other future year. All intercompany balances and transactions have been eliminated in consolidation.

These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Annual Report for the year ended June 30, 2024, which are included in Form 10-K filed with the SEC on September 20, 2024.

Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries, E Marketing Solution Inc., Global Product Marketing Inc., Global Social Media, LLC, and Anivia Limited and its subsidiaries and VIE, including Fly Elephant Limited, Dayourenzai (Shenzhen) Technology Co., Ltd., and Daheshou (Shenzhen) Information Technology Co., Ltd. All inter-company balances and transactions have been eliminated.

Prior Period Reclassification

Certain prior period amounts in the unaudited condensed statements of cash flows have been reclassified to conform to the current period presentation, including reclassifications made in the presentation of cash flows from operating activities. These reclassifications had no impact on the prior year net loss or stockholders’ equity.

Emerging Growth Company Status

The company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of utilizing the emerging growth company reduced reporting requirements difficult.

Use of estimates and assumptions

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities reported and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

Foreign currency translation and transactions

The reporting and functional currency of iPower and its subsidiaries is the U.S. dollar (USD). iPower’s WFOE and VIE in China uses the local currency, Renminbi (“RMB”), as its functional currency. Assets and liabilities of the VIE are translated at the current exchange rate as quoted by the People’s Bank of China (the “PBOC”) at the end of the period. Income and expense accounts are translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income (loss) in the statement of changes in stockholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

The balance sheet amounts of the VIE, with the exception of equity, on September 30, 2024, were translated at 7.0181 RMB to $1.00. The equity accounts were stated at their historical rates. The average translation rates applied to statements of operations and comprehensive income (loss) accounts for the three months ended September 30, 2024 was 7.1623 RMB to $1.00. Cash flows were also translated at average translation rates for the period and, therefore, amounts reported on the statement of cash flows would not necessarily agree with changes in the corresponding balances on the unaudited condensed consolidated balance sheet.

Cash and cash equivalents

Cash and cash equivalents consist of amounts held as cash on hand and financial institution and financial service company deposits.

From time to time, the Company may maintain bank balances in interest bearing accounts in excess of the $250,000, which is currently the maximum amount insured by the FDIC for interest bearing accounts (there is currently no insurance limit for deposits in noninterest bearing accounts). The Company has not experienced any losses with respect to cash. Management believes our Company is not exposed to any significant credit risk with respect to its cash.

Accounts receivable, net

During the ordinary course of business, the Company extends unsecured credit to its customers. Accounts receivable are stated at the amount the Company expects to collect from customers, which includes the amount withheld by sales channel partners and refundable to the Company. Based on historical and expected loss rate and status of negotiations with the sales channel partner, management reviews its accounts receivable balances each reporting period to determine if an allowance for credit loss is required.

The Company evaluates the creditworthiness of all of its customers individually before accepting them and continuously monitors the recoverability of accounts receivable. If there are any indicators that a customer may not make payment, the Company may consider making provision for non-collectability for that particular customer. At the same time, the Company may cease further sales or services to such customer. The following are some of the factors that the Company develops allowance for credit losses:

	·	the customer fails to comply with its payment schedule;

	·	the customer is in serious financial difficulty;

	·	a significant dispute with the customer has occurred regarding job progress or other matters;

	·	the customer breaches any of its contractual obligations;

	·	the customer appears to be financially distressed due to economic or legal factors;

	·	the business between the customer and the Company is not active; or

	·	other objective evidence indicates non-collectability of the accounts receivable.

Accounts receivable are recognized and carried at carrying amount less an allowance for credit losses, if any. The Company maintains an allowance for credit losses resulting from the inability of its customers to make required payments based on contractual terms. The Company reviews the collectability of its receivables on a regular and ongoing basis. The Company has also included in calculation of allowance for credit losses the potential impact of the COVID-19 pandemic on our customers’ businesses and their ability to pay their accounts receivable. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. The Company also considers external factors to the specific customer, including current conditions and forecasts of economic conditions, including the potential impact of the COVID-19 pandemic. In the event we recover amounts previously written off, we will reduce the specific allowance for credit losses. In late October 2024, the Company determined that the collectability of certain shortage claim receivables from Amazon was remote so recorded additional allowance for credit losses of approximately $1.4 million for the quarter ended September 30, 2024.

Equity method investment

The Company accounts for its ownership interest in Box Harmony, a 40% owned joint venture, following the equity method of accounting, in accordance with ASC 323, Investments — Equity Method and Joint Ventures. Under this method, the carrying cost is initially recorded at cost and then increased or decreased by recording its percentage of gain or loss in Box Harmony’s statement of operations and a corresponding charge or credit to the carrying value of the asset.

Variable interest entities

On February 15, 2022, the Company acquired 100% of the ordinary shares of Anivia and its subsidiaries, including Daheshou (Shenzhen) Information Technology Co., Ltd., a company organized under the Laws of the PRC (“DHS”). Pursuant to the terms of the Agreements, the Company does not have direct ownership in DHS but is actively involved in DHS’s operations as the sole manager to direct the activities and significantly impact DHS’s economic performance. DHS’s operational funding has been provided by the Company following the February 15, 2022 acquisition. During the term of the Agreements, the Company bears all the risk of loss and has the right to receive all of the benefits from DHS. As such, based on the determination that the Company is the primary beneficiary of DHS, in accordance with ASC 810-10-25-38A through 25-38J, DHS is considered a VIE of the Company and the financial statements of DHS have been consolidated from the date such control existed, February 15, 2022.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of assets acquired and liabilities assumed. The Company accounts for goodwill under ASC Topic 350, Intangibles-Goodwill and Other.

Goodwill is not amortized but is reviewed for potential impairment on an annual basis, or if events or circumstances indicate a potential impairment, at the reporting unit level. The Company’s review for impairment includes an assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill. If it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill, a quantitative goodwill impairment test is performed, which compares the fair value of the reporting unit with its carrying amounts, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. However, if the carrying amount of the reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.

During the three months ended September 30, 2024 and 2023, the Company performed a qualitative goodwill impairment analysis following the steps laid out in ASC 350-20-35-3C and noted no goodwill impairment. As of September 30, 2024 and June 30, 2024, the goodwill balance amounted to $3,034,110.

Intangible Assets, net

Finite life intangible assets at September 30, 2024 include covenant not to compete, supplier relationship, and software recognized as part of the acquisition of Anivia. Intangible assets are recorded at the estimated fair value of these items at the date of acquisition, February 15, 2022. Intangible assets are amortized on a straight-line basis over their estimated useful life as follows:

Schedule of estimated useful life
		Useful Life
Covenant Not to Compete		10 years
Supplier relationship		6 years
Software		5 years

The Company reviews the recoverability of long-lived assets, including intangible assets, when events or changes in circumstances occur that indicate the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the ability to recover the carrying value of the asset from the expected future pretax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations. As of September 30, 2024 and 2023, there were no indicators of impairment.

Fair values of financial instruments

ASC 825, “Disclosures about Fair Value of Financial Instruments,” requires disclosure of fair value information about financial instruments. ASC 820, “Fair Value Measurements” defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and all other current assets and liabilities approximate fair values due to their short-term nature.

For other financial instruments to be reported at fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines the fair value of its financial instruments based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

Level 2 – Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and

Level 3 – Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data.

The Company does not have any assets or liabilities measured at fair value on a recurring basis. We measure certain non-financial assets on a non-recurring basis, including goodwill. As a result of those measurements, as of September 30, 2024 and June 30, 2024, the Company had goodwill with a carry book value of $3,034,110, which approximated its fair value:

Schedule of impairment charges
	Total Fair Value		Level 1		Level 2		Level 3
Goodwill	$	3,034,110	$	–	$	–	$	3,034,110
Total	$	3,034,110	$	–	$	–	$	3,034,110

The fair value of goodwill was determined based on the discounted cash flow method, which is an income approach, which required the use of inputs that were unobservable in the marketplace (Level 3), including a discount rate that would be used by a market participant, projections of revenues and cash flows with the revised projections reflecting the increase in freight and storage costs in the current interim quarter, among others.

Revenue recognition

The Company recognizes revenues from service and product sales, net of promotional discounts and return allowances, when the following revenue recognition criteria are met: a contract has been identified, separate performance obligations are identified, the transaction price is determined, the transaction price is allocated to separate performance obligations and revenue is recognized upon satisfying each performance obligation. The Company transfers the risk of loss or damage upon shipment or completion of service, therefore, revenue from product sales is recognized when it is shipped to the customer and the revenue from services is recognized upon completion of services. Return allowances, which reduce product revenue by the Company’s best estimate of expected product returns, are estimated using historical experience.

The Company evaluates the criteria of ASC 606 - Revenue Recognition Principal Agent Considerations in determining whether it is appropriate to record the gross amount of product sales and related costs or the net amount earned as commissions. Generally, when the Company is primarily responsible for fulfilling the promise to provide a specified good or service and the Company has discretion in establishing the price, revenue is recorded at gross.

Payments received prior to the delivery of goods to customers are recorded as customer deposits.

The Company periodically provides incentive offers to its customers to encourage purchases. Such offers include current discount offers, such as percentage discounts off current purchases and other similar offers. Current discount offers, when accepted by the Company’s customers, are treated as a reduction to the purchase price of the related transaction.

Sales discounts are recorded in the period in which the related sales are recorded. Sales return allowances are estimated based on historical amounts and are recorded upon recognizing the related sales. Shipping and handling costs are recorded as selling expenses.

Advertising costs

Advertising costs are expensed as incurred. Total advertising and promotional costs included in selling and fulfillment expenses for the three months ended September 30, 2024 and 2023 were $651,125 and $1,570,742, respectively.

Cost of revenue

Cost of revenue mainly consists of costs for purchases of products, net of purchase discounts and rebates, and related inbound freight and delivery fees.

Operating expenses

Operating expenses, which consist of selling and fulfillment and general and administrative expenses, are expensed as incurred. Vendor warranty credits resulting from refund of returns on quality issues are recorded to offset merchant selling fees. During the three months ended September 30, 2024 and 2023, the Company did not have any vendor credits.

Inventory, net

Inventory consists of finished goods ready for sale and is stated at the lower of cost or market. The Company values its inventory using the weighted average costing method. The Company’s policy is to include as a part of inventory and cost of goods sold any freight incurred to ship the product from its vendors to warehouses. Outbound freight costs related to shipping costs to customers are considered periodic costs and are reflected in selling and fulfillment expenses. The Company regularly reviews inventory and considers forecasts of future demand, market conditions and product obsolescence.

If the estimated realizable value of the inventory is less than cost, the Company makes provisions in order to reduce its carrying value to its estimated market value. The Company also reviews inventory for slow moving inventory and obsolescence and records allowance for obsolescence.

Debt Issuance Costs

Costs incurred in connection with the issuance of debt are deferred and amortized as interest expense over the term of the related debt using the effective interest method. To the extent that the debt is outstanding, these amounts are reflected in the unaudited condensed consolidated balance sheets as direct deductions from the carrying amount of the outstanding borrowings.

Equity offering costs

The Company capitalizes certain legal, accounting and other third-party fees that are directly related to an equity financing that is probable of successful completion until such financing is consummated. After consummation of an equity financing, these costs are recorded as a reduction of the proceeds received as a result of the offering. Should a planned equity financing be abandoned, terminated or significantly delayed, the deferred offering costs are immediately written off to operating expenses in the consolidated statements of operations and comprehensive income (loss) in the period of determination. For the years ended June 30, 2024, $1,756,913 were recorded as deferred offering costs and reclassed to additional paid in capital upon closing of the offering. As of September 30, 2024 and June 30, 2024, there were no deferred offering costs included in the consolidated balance sheets.

Segment reporting

The Company follows ASC 280, Segment Reporting. The Company’s chief operating decision maker, the Chief Executive Officer, reviews the consolidated results of operations when making decisions about allocating resources and assessing the performance of the Company as a whole and, hence, the Company has only one reportable segment. The Company does not distinguish between markets or segments for the purpose of internal reporting. For the three months ended September 30, 2024 and 2023, sales through Amazon to Canada and other foreign countries were approximately 13.4% and 8.2% of the Company’s total sales. During the three months ended September 30, 2024, sales of hydroponic products, including ventilation and grow light systems, was approximately 17.2% of the Company’s total sales and the remaining 82.8% consisted of general gardening, home goods, and other products and accessories. During the three months ended September 30, 2023, sales of hydroponic products, including ventilation and grow light systems, were approximately 16.8% of the Company’s total sales and the remaining 83.2% consisted of general gardening, home goods and other products and accessories. As of September 30, 2024 and June 30, 2024, the Company had approximately $1.6 million and $1.9 million of inventory stored in China. The Company’s majority of long-lived assets are located in California, United States, majority of the deferred tax assets are US related, and a majority of the Company’s revenues are derived from within the United States.

Leases

The Company records right-of-use (“ROU”) assets and related lease obligations on the balance sheet.

ROU assets represent our right to use an underlying asset for the lease terms and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company generally uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Stock-based Compensation

The Company applies ASC No. 718, “Compensation-Stock Compensation,” which requires that share-based payment transactions with employees and nonemployees, upon adoption of ASU 2018-07, be measured based on the grant date fair value of the equity instrument and recognized as compensation expense over the requisite service period, with a corresponding addition to equity. Under this method, compensation costs related to employee share options or similar equity instruments is measured at the grant date based on the fair value of the award and is recognized over the period during which an employee is required to provide service in exchange for the award, which generally is the vesting period. In addition to the requisite service period, the Company also evaluates the performance condition and market condition under ASC 718-10-20. For an award which contains both a performance and a market condition, and where both conditions must be satisfied for the award to vest, the market condition is incorporated into the fair value of the award, and that fair value is recognized over the employee’s requisite service period or nonemployee’s vesting period if it is probable the performance condition will be met. If the performance condition is ultimately not met, compensation costs related to the award should not be recognized (or should be reversed) because the vesting condition in the award has not been satisfied.

The Company will recognize forfeitures of such equity-based compensation as they occur.

Income taxes

The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their perspective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance must be established for deferred tax assets when it is more-likely-than-not (a probability level of more than 50%) that they will not be realized. Valuation allowances are recorded, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The Company has analyzed filing positions in each of the federal and state jurisdictions where the Company is required to file income tax returns, as well as open tax years in such jurisdictions. The Company has identified the U.S. federal jurisdiction, and the states of Nevada and California, as its “major” tax jurisdictions. However, the Company has certain tax attribute carryforwards which will remain subject to review and adjustment by the relevant tax authorities until the statute of limitations closes with respect to the year in which such attributes are utilized.

The Company believes that our income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740, Income Taxes. The Company’s policy for recording interest and penalties associated with income-based tax audits is to record such items as a component of income taxes.

Commitments and contingencies

In the ordinary course of business, the Company is subject to certain contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters, such as government investigations and tax matters. The Company recognizes a liability for such contingency if it determines it is probable that a loss has occurred and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments including historical and specific facts and circumstances of each matter.

Earnings per share

Basic earnings per share is computed by dividing net income attributable to holders of common stock by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share reflect the potential dilution that could occur if securities to issue common stock were exercised.

Recently issued accounting pronouncements

In December 2023, The FASB issued ASU 2023-09, Improvements to Income Tax Disclosures. Under this ASU, public business entities must annually “(1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income [or loss] by the applicable statutory income tax rate).” This ASU’s amendments are effective for public business entities for annual periods beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025. Entities are permitted to early adopt the standard “for annual financial statements that have not yet been issued or made available for issuance.” The amendments should be applied on a prospective basis. Retrospective application is permitted. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

In November 2023, The FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments apply to all public entities that are required to report segment information in accordance with Topic 280, Segment Reporting. The amendments in this ASU are intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The key amendments: 1. Require that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss. 2. Require that a public entity disclose, on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition. The other segment items category is the difference between segment revenue less the significant expenses disclosed and each reported measure of segment profit or loss. 3. Require that a public entity provide all annual disclosures about a reportable segment’s profit or loss and assets currently required by FASB Accounting Standards Codification® Topic 280, Segment Reporting, in interim periods. 4. Clarify that if the CODM uses more than one measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources, a public entity may report one or more of those additional measures of segment profit. However, at least one of the reported segment profit or loss measures (or the single reported measure, if only one is disclosed) should be the measure that is most consistent with the measurement principles used in measuring the corresponding amounts in the public entity’s consolidated financial statements. 5. Require that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. 6. Require that a public entity that has a single reportable segment provide all the disclosures required by the amendments in the ASU and all existing segment disclosures in Topic 280. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. A public entity should apply the amendments retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative. This ASU incorporates certain U.S. Securities and Exchange Commission (SEC) disclosure requirements into the FASB Accounting Standards Codification™ (“Codification”). The amendments in the ASU are expected to clarify or improve disclosure and presentation requirements of a variety of Codification Topics, allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC’s regulations. In SEC Release No. 33-10532, Disclosure Update and Simplification, issued August 17, 2018, the SEC referred certain of its disclosure requirements that overlap with, but require incremental information to, generally accepted accounting principles to the FASB for potential incorporation into the Codification. The ASU incorporates into the Codification 14 of the 27 disclosures referred by the SEC. They modify the disclosure or presentation requirements of a variety of Topics in the Codification. The requirements are relatively narrow in nature. Some of the amendments represent clarifications to, or technical corrections of, the current requirements. Because of the variety of Topics amended, a broad range of entities may be affected by one or more of those amendments. For entities subject to the SEC’s existing disclosure requirements and for entities required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be the date on which the SEC removes that related disclosure from its rules. For all other entities, the amendments will be effective two years later. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective for any entity. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

In September 2022, FASB issued ASU 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. The amendments in this ASU require that a company that uses a supplier finance program in connection with the purchase of goods or services disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. ASU 2022-04 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2022, except for the rollforward of the supplier finance program obligations, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. An entity should apply ASU No. 2022-04 retrospectively to all periods in which a balance sheet is presented, except for the obligation rollforward, which should be applied prospectively. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

In June 2022, FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments in this ASU clarify the guidance in ASC 820 on the fair value measurement of an equity security that is subject to a contractual sale restriction and require specific disclosures related to such an equity security. This standard is effective for fiscal years beginning after December 15, 2024. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

In March 2020 and January 2021, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope, respectively (collectively, “Topic 848”). Topic 848 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by Topic 848 are effective for all entities as of March 12, 2020 through December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate reform (Topic 848): Deferral of the Sunset Date of Topic 848, which deferred the sunset date of Topic 848, Reference Rate Reform to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The Company does not expect the adoption of this standard to have a material impact on the Company's consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40).” This ASU reduces the number of accounting models for convertible debt instruments and convertible preferred stock, as well as amend the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. In addition, this ASU improves and amends the related EPS guidance. This standard is effective for the Company on July 1, 2024, including interim periods within those fiscal years. Adoption is either a modified retrospective method or a fully retrospective method of transition. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows.

Subsequent events

The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the consolidated financial statements are available to be issued. Material subsequent events that required recognition or additional disclosure in the unaudited condensed consolidated financial statements are presented.

Note 3 - Joint Ventures

Box Harmony, LLC

On January 13, 2022, the Company entered into a joint venture agreement (the “Joint Venture Agreement”) with Titanium Plus Autoparts, Inc., a California corporation (“TPA”), Tony Chiu (“Chiu”) and Bin Xiao (“Xiao”). Pursuant to the terms of the Joint Venture Agreement, the parties formed a Nevada limited liability company, Box Harmony, LLC (“Box Harmony”), for the principal purpose of providing logistic services primarily for foreign-based manufacturers or distributors who desire to sell their products online in the United States, with such logistic services to include, without limitation, receiving, storing and transporting such products.

Following entry into the Joint Venture Agreement, Box Harmony issued a total of 6,000 certificated units of membership interest, designated as Class A voting units (“Equity Units”), as follows: (i) the Company agreed to contribute $50,000 in cash in exchange for 2,400 Equity Units in Box Harmony and agreed to provide Box Harmony with the use and access to certain warehouse facilities leased by the Company (see below), and (ii) TPA received 1,200 Equity Units in exchange for (a) $1,200 and contributing the TPA IP License referred to below, (b) its existing and future customer contracts, and (c) granting Box Harmony the use of shipping accounts (FedEx and UPS) and all other TPA carrier contracts, and (iii) Xiao received 2,400 Equity Units in exchange for $2,400 and his agreement to manage the day to day operations of Box Harmony.

Under the terms of the Box Harmony limited liability operating agreement (the “LLC Agreement”), TPA and Xiao each granted to the Company an unconditional and irrevocable right and option to purchase from Xiao and TPA at any time within the first 18 months following January 13, 2022, up to 1,200 Class A voting units, at an exercise price of $550 per Class A voting unit, for a total exercise price of up to $660,000. If such option is fully exercised, the Company would own 3,600 Equity Units or 60% of the total outstanding Equity Units. As of the date of this report, the Company had not exercised the option to purchase additional voting units from Xiao and TPA. The LLC Agreement prohibits the issuance of additional Equity Units and certain other actions unless approved in advance by the Company, that a noncontrolling right that would not be substantive to overcome the majority voting interests held by TPA and Xiao. In January 2023, TPA and Xiao transferred their 60% equity units to a third party without consideration as the LLC was still in development stage and did not have significant operations. The transfer of equity did not have any impact on the LLC’s financial statements.

As a result, the Company owns 40% of the equity interest in Box Harmony with significant influence but does not own a majority equity interest or otherwise control of Box Harmony. The Company accounts for its ownership interest in Box Harmony following the equity method of accounting, in accordance with ASC 323, Investments —Equity Method and Joint Ventures. Under this method, the carrying cost is initially recorded at cost and then increased or decreased by recording its percentage of gain or loss in its statement of operations and a corresponding charge or credit to the carrying value of the asset.

Global Social Media, LLC

On February 10, 2022, the Company entered into a joint venture agreement with Bro Angel, LLC, Ji Shin and Bing Luo (the “GSM Joint Venture Agreement”). Pursuant to the terms of the GSM Joint Venture Agreement, the parties formed a Nevada limited liability company, Global Social Media, LLC (“GSM”), for the principal purpose of providing a social media platform, contents and services to assist businesses, including the Company and other businesses, in marketing their products.

Following entry into the GSM Joint Venture Agreement, GSM issued 10,000 certificated units of membership interest (the “GSM Equity Units”), of which the Company was issued 6,000 GSM Equity Units and Bro Angel was issued 4,000 GSM Equity Units. Messrs. Shin and Luo are the owners of 100% of the equity of Bro Angel. The LLC Agreement prohibits the issuance of additional Equity Units and certain other actions unless approved in advance by Bro Angel, creating a noncontrolling right that would not be substantive to overcome the majority voting interests held by the Company.

As of the date of this report, the members had not completed the capital contributions and no receivables were recorded.

Pursuant to the terms of the Agreements, the Company owns 60% of the equity interest in GSM and control of GSM’s operations. Based on ASU 2015-02, the Company consolidates GSM into its financial statements due to its majority equity ownership and control over operations.For the three months ended September 30, 2024 and 2023, the impact of GSM’s activities were immaterial to the Company’s unaudited condensed consolidated financial statements.

Note 4 – Variable interest entity

Effective February 15, 2022, upon acquisition of Anivia, the Company assumed the contractual arrangements between the WFOE and DHS through a variable interest operating entity structure. On September 26, 2024, Mr. Zanyu Li, the equity owner of DHS transferred his shares to Ms. Xiaoyun Liu. Ms. Liu has become the Manager and Legal Representative of DHS and assumed all responsibilities and obligations of Mr. Zanyu Li. The transfer of equity ownership did not change the control the Company had on the VIE, therefore there was no impact on the Company’s financial statements.

The Company did not provide financial or other support to the VIE for the periods presented where the Company was not otherwise contractually required to provide such support.

As of September 30, 2024 and June 30, 2024, there was no pledge or collateralization of the VIE assets that would be used to settle obligations of the VIE.

The carrying amounts of the assets, liabilities and the results of operations of the VIE included in the Company’s unaudited condensed consolidated balance sheets and statements of operations and comprehensive income after the elimination of intercompany balances and transactions with the VIE are as follows:

The carrying amount of the VIE’s assets and liabilities were as follows for the periods indicated:


	September 30, 2024		June 30, 2024
Cash in bank	$	330,760	$	222,648
Prepayments and other receivables	$	337,172	$	202,904
Rent deposit	$	–	$	72,281
Office equipment, net	$	9,174	$	12,205
Right of use – noncurrent	$	–	$	434,034
Accounts payable	$	213,717	$	381,013
Lease liability	$	–	$	443,059
Income tax payable	$	285,963	$	276,158
Other payables and accrued liabilities	$	652,387	$	514,285

The operating results of the VIE were as follows for the three months ended September 30, 2024:


	September 30, 2024
Revenue	$	–
Net loss after elimination of intercompany transactions	$	138,930

The operating results of the VIE were as follows for the three months ended September 30, 2023 :


	September 30, 2023
Revenue	$	–
Net loss after elimination of intercompany transactions	$	419,343

For the three months ended September 30, 2024, the VIE contributed approximately $1.4 million of revenue and $0.2 million of net loss before elimination. For the three months ended September 30, 2023, the VIE contributed approximately $2.1 million of revenue and $0.05 million of net loss before elimination.

Note 5 – Accounts receivable, net

Accounts receivable for the Company consisted of the following as of the dates indicated below:

Schedule of accounts receivable
	September 30, 2024			June 30, 2024
Accounts receivable	$	14,109,162		$	15,095,479
Less: allowance for credit losses		(1,830,980	)		(355,386	)
Total accounts receivable	$	12,278,182		$	14,740,093

The changes in allowance for credit losses on accounts receivable are summarized below:


	Allowance for Credit Losses
Balance at June 30, 2023	$	70,000
Allowance recorded during the three months ended September 30, 2023		–
Balance at September 30, 2023	$	70,000

Balance at June 30, 2024	$	355,386
Allowance recorded during the three months ended September 30, 2024		1,475,594
Balance at September 30, 2024	$	1,830,980

Note 6 – Inventories, net

As of September 30, 2024 and June 30, 2024, inventories consisted of finished goods ready for sale, net of allowance for obsolescence, amounted to $8,668,497 and $10,546,273, respectively.

For the three months ended September 30, 2024 and 2023, the Company recorded inventory reserve expense of $288,474 and $105,192, respectively. As of September 30, 2024 and June 30, 2024, allowance for obsolescence was $936,299 and $647,825, respectively.

Note 7 – Prepayments and other current assets, net

As of September 30, 2024 and June 30, 2024, prepayments and other current assets consisted of the following:


	September 30, 2024		June 30, 2024
Advance to suppliers	$	1,953,093	$	1,567,528
Prepaid income taxes		16,687		31,496
Prepaid expenses and other receivables		839,134		747,510
Less: Allowance for credit losses		–		–

Total	$	2,808,914	$	2,346,534

Other receivables consisted of delivery fees of $2,786 and $3,995 from a third party for using the Company’s courier accounts at September 30, 2024 and June 30, 2024.

The changes in allowance for credit losses on other receivables are summarized below:


	Allowance for Credit Losses
Balance at June 30, 2023	$	249,128
Allowance recorded during the three months ended September 30, 2023		–
Balance at September 30, 2023	$	249,128

Balance at June 30, 2024	$	–
Allowance recorded during the three months ended September 30, 2024		–
Balance at September 30, 2024	$	–

During the year ended June 30, 2024, the Company collected $249,128 of aged other receivables and recorded a reduction of bad debts expense as a reversal of the allowance of credit loss.

Note 8 – Intangible assets, net

As of September 30, 2024 and June 30, 2024, intangible assets, net, consisted of the following:

Schedule of intangible assets, net
	September 30, 2024			June 30, 2024
Covenant not to compete	$	3,459,120		$	3,459,120
Supplier relationships		1,179,246			1,179,246
Software		534,591			534,591
Accumulated amortization		(1,704,560	)		(1,542,257	)
Total	$	3,468,357		$	3,630,700

The intangible assets were acquired on February 15, 2022 through acquisition of Anivia. The weighted average remaining life for finite-lived intangible assets at September 30, 2024 was approximately 5.95 years. The amortization expense for the three months ended September 30, 2024 and 2023 was $162,343 and $162,343, respectively. At September 30, 2024, finite-lived intangible assets are expected to be amortized over their estimated useful lives, which ranges from a period of five to 10 years, and the estimated remaining amortization expense for each of the five succeeding years thereafter is as follows:

Schedule of amortization expense
Year Ending June 30,	Amount
2025	$	487,028
2026		649,371
2027		609,277
2028		468,750
2029		345,912
Thereafter		908,019
Intangible assets, net	$	3,468,357

Note 9 – Other payables and accrued liabilities

As of September 30, 2024 and June 30, 2024, other payables and accrued liabilities consisted of the following:


	September 30, 2024		June 30, 2024
Accrued payables for inventory in transit	$	1,296,989	$	1,405,780
Credit cards payable		206,769		231,243
Customer deposit		326,364		313,358
Accrued Amazon fees		450,512		530,456
Sales taxes payable		437,265		442,889
Payroll liabilities		191,882		204,137
Settlement payable		–		325,000
Other accrued liabilities and payables		597,443		432,624

Total	$	3,507,224	$	3,885,487

Note 10 – Loans payable

Long-term loan

Asset-based revolving loan

On November 12, 2021, the Company entered into a Credit Agreement with JPMorgan Chase Bank, N.A. (“JPMorgan”), as administrative agent, issuing bank and swingline lender, for an asset-based revolving loan (“ABL”) of up to $25 million with key terms listed as follows:

Borrowing base equal to the sum of

	Ø	Up to 90% of eligible credit card receivables
	Ø	Up to 85% of eligible trade accounts receivable
	Ø	Up to the lesser of (i) 65% of cost of eligible inventory or (ii) 85% of net orderly liquidation value of eligible inventory

	·	Interest rates of between LIBOR plus 2% and LIBOR plus 2.25% depending on utilization
	·	Undrawn fee of between 0.25% and 0.375% depending on utilization
	·	Maturity Date of November 12, 2024

In addition, the ABL includes an accordion feature that allows the Company to borrow up to an additional $25.0 million. To secure complete payment and performance of the secured obligations, the Company granted a security interest in all of its right, title and interest in, to and under all of the Company’s assets as collateral to the ABL. Upon closing of the ABL, the Company paid $796,035 in financing fees including 2% of $25.0 million or $500,000 paid to its financial advisor. The financing fees are recorded as debt discount and are to be amortized over the three-year term of the ABL as interest expense.

Below is a summary of the interest expense recorded for the three months ended September 30, 2024 and 2023:

Schedule of interest expense
	2024		2023
Accrued interest	$	43,145	$	133,615
Credit utilization fees		21,767		15,525
Amortization of debt discount		66,305		66,305
Total	$	131,217	$	215,445

As disclosed in Note 18, the maturity date of the ABL has been extended to November 8, 2027. As of September 30, 2024, the outstanding amount of the ABL, which was classified as long-term revolving loan payable, net of debt discount and including interest payable, was $3,131,955. As of June 30, 2024, the outstanding amount of the revolving loan payable, net of debt discount and including interest payable, was $5,500,739.

On October 7, 2022, the Company entered into a second amendment to the credit agreement and consent (the “Second Amendment to the Credit Agreement”), originally dated November 12, 2021, as amended, with JPMorgan. The Company entered into the Second Amendment to the Credit Agreement primarily for the purpose of changing the interest rate repayment calculations from LIBOR to the Secured Overnight Financing Rate, or SOFR, which adjustment had originally been anticipated under the terms of the original Credit Agreement. In addition, two of the negative covenants set forth in the original Credit Agreement were amended in order to (i) adjust the definition of “Covenant Testing Trigger Period” to increase the required cash availability from $3,000,000 to $4,000,000, or 10% of the aggregate revolving commitment for the preceding 30 days, and (ii) require that the Company will not and will not permit any of its subsidiaries, after reasonable due diligence and due inquiry, to knowingly sell their products, inventory or services directly to any commercial businesses that grow or cultivate cannabis; it being acknowledged, however, that the Company does not generally conduct due diligence on its individual retail customers.

As of September 30, 2024, the Company was in compliance with the ABL covenants.

Promissory note payable

On February 15, 2022, as part of the consideration for the acquisition of Anivia, the Company issued a two-year unsecured 6% subordinated promissory note, payable in equal semi-annual installments commencing August 15, 2022 (the “Purchase Note”). The principal amount of the Purchase Note was $3.5 million with a fair value of $3.6 million as of February 15, 2022. In October 2022, the Company paid the first installment of $875,000. And in February 2023, the Company paid the second installment of $875,000. In August 2023, the Company paid the third installment of $875,000. In February 2024, the Company paid the fourth installment of $875,000. For the three months ended September 30, 2024, the Company recorded accrued interest of $0 and amortization of note premium of $0. For the three months ended September 30, 2023, the Company recorded accrued interest of $19,688 and amortization of note premium of $12,579. For the year ended June 30, 2024, the Company recorded accrued interest of $39,429 and amortization of note premium of $31,602. In February 2024, the note premium was fully amortized, and the outstanding balance of the principal and accrued interest of $275,679 was fully paid off. As of September 30, 2024 and June 30, 2024, the total outstanding balance of the Purchase Note was $0.

Short-term loan payable

On July 8, 2023, the Company entered into an agreement with White Cherry Limited (“White Cherry”), a BVI company owned by the former owner of DHS, for an on-demand, unsecured and subordinated loan (“On-demand Loan”). Pursuant to the agreement, White Cherry agreed to loan the Company the amount requested. The On-demand Loan bears interest at the rate of the Secured Overnight Financing Rate, or SOFR, plus 1% per annum. The On-demand Loan is due in 30 days upon receipt of White Cherry’s notice of repayment. On July 16, 2023, the Company borrowed $2 million from White Cherry and repaid $1 million on July 31, 2023 and $1 million on January 31, 2024. For the three months ended September 30, 2024 and 2023, the Company recorded accrued interest of $0 and $6,060. As of September 30, 2024, the outstanding balance of the On-demand Loan was fully paid off.

On April 8, 2024, the Company entered into an agreement with an unrelated accredited investor (the “Investor”) for an on-demand, unsecured and subordinated loan (“On-demand Loan 2”). Pursuant to the agreement, the Investor agreed to loan the Company the amount requested. The On-demand Loan 2 bears interest at the rate of the Secured Overnight Financing Rate, or SOFR, plus 1.5% per annum. The On-demand Loan 2 is due in 30 days upon receipt of the Investor’s notice of repayment. For the three months ended September 30, 2024, the Company recorded interest expense of $3,733. As of June 30, 2024, the outstanding balance of the On-demand Loan 2, including accrued interest of $7,615, was $491,214. As of September 30, 2024, the On-demand Loan 2 had been fully paid off.

On April 1, 2024, the Company borrowed $350,000 short-term loan (“RP Loan”) from an entity owned by Mr. Allan Huang, one of the majority shareholders of the Company. The RP Loan bears no interest and is due upon receipt of request of repayment. As of September 30, 2024 and June 30, 2024, the outstanding balance of the RP Loan was $350,000 and $350,000, respectively.

Note 11 - Related party transactions

On April 1, 2024, the Company borrowed $350,000 short-term loan from an entity owned by Mr. Allan Huang, one of the majority shareholders of the Company. See Note 10 above for details.

During the year ended June 30, 2024, the Company started selling products through MII Strategy Inc. (“MII”), a company owned by the Company’s CEO, Mr. Chenlong Tan. As of September 30, 2024 and June 30, 2024, the total amount due from MII was $56,406. As of the date of this report, the outstanding balance was fully paid off.

On July 8, 2023, the Company entered into an agreement with White Cherry for an on demand loan. See Note 10 above for details.

Note 12 – Income taxes

In addition to corporate income taxes in the United States, upon completion of the acquisition of Anivia in February 2022, the Company is subject to corporate income taxes in People’s Republic of China (“PRC”). Anivia and its subsidiaries are subject to BVI or Hong Kong income taxes but did not have any operations for the year ended June 30, 2022 in those jurisdictions. DHS, the operating VIE of Anivia, is considered a Controlled Foreign Corporation (CFC) defined under IRC Sec. 957(a) since the Company indirectly owns more than 50% voting control of DHS as a result of the Transfer Agreement. Therefore, DHS is subject to the Global Intangible Low-Taxed Income (or GILTI) Tax. DHS is subject to 5% tax rate in PRC until December 31, 2027. Since DHS had losses during the three months ended September 30, 2024 and 2023 and the year ended June 30, 2024, no GILTI tax was recorded as of September 30, 2024 and June 30, 2024. The Company is not eligible for the GILTI high-tax exclusion. In addition, as a result of the acquisition, the Company recognized goodwill in the amount of $6,094,144. Since the acquisition was a stock acquisition, the Goodwill is not deductible for tax purposes.

For the three months ended September 30, 2024, as a result of the Company’s inability to establish a reliable estimate for annual effective tax rate, the Company calculated income tax expense using the actual effective tax rate year to date, as opposed to the estimated annual effective tax rate, as provided in Accounting Standards Codification (ASC) 740-270-30-18.

The income tax provision for the three months ended September 30, 2024 and 2023 consisted of the following:

Schedule of income tax provision
	September 30, 2024			September 30, 2023
Current:
Federal	$	–		$	(1,705	)
State		8,409			12,470
Foreign		–			–
Total current income tax provision		8,409			10,765
Deferred:
Federal		(521,137	)		(284,648	)
State		(123,784	)		(66,624	)
Foreign		–			64,625
Total deferred taxes		(644,921	)		(286,647	)

Total provision for income taxes	$	(636,512	)	$	(275,882	)

The Company is subject to U.S. federal income tax as well as state income tax in certain jurisdictions. The tax years 2019 to 2023 remain open to examination by the major taxing jurisdictions to which the Company is subject. The following is a reconciliation of income tax expenses at the effective rate to income tax at the calculated statutory rates:


	September 30, 2024			September 30, 2023
Statutory tax rate
Federal		21.00%			21.00%
State (net of federal benefit)		5.51%			5.82%
Foreign tax rate difference		(3.16%	)		(4.88%	)
Net effect of state income tax deduction and other permanent differences		0.5%			(4.31%	)
Effective tax rate		23.85%			17.63%

As of September 30, 2024, prepaid income taxes to US tax authorities and income tax payable to Chinese tax authorities was $16,687 and $285,964, respectively. As of June 30, 2024, prepaid income taxes to US tax authorities and income tax payable to Chinese tax authorities was $31,496 and $276,158, respectively.

The tax effects of temporary differences which give rise to significant portions of the deferred taxes are summarized as follows:

Schedule of deferred taxes
	September 30, 2024			June 30, 2024
Deferred tax assets
263A calculation	$	239,234		$	291,354
Inventory reserve		248,254			171,942
State taxes		1,766			4,840
Accrued expenses		131,467			155,860
ROU assets / liabilities		107,632			110,391
Net operating loss		2,304,794			2,190,589
Disallowed interest expense		269,322			258,352
Stock-based compensation		395,850			341,591
Valuation allowance		(85,054	)		(64,897	)
Allowance for credit loss		485,472			40,067
Total deferred tax assets		4,098,737			3,500,089

Deferred tax liabilities
Depreciation		(74,059	)		(77,287	)
Intangible assets acquired		(934,153	)		(977,197	)
Total deferred tax liabilities		(1,008,212	)		(1,054,484	)

Net deferred tax assets	$	3,090,525		$	2,445,605

For the three months ended September 30, 2024 and 2023, the Company recorded $20,157 and $64,145 of valuation allowance to reduce deferred tax assets for the losses incurred by DHS.

Note 13 – Earnings per share

The following table sets forth the computation of basic and diluted earnings per share for the periods presented:


	For the three months ended September 30,
	2024			2023
Numerator:
Net loss attributable to iPower Inc.	$	(2,029,281	)	$	(1,286,515	)
Denominator:
Weighted-average shares used in computing basic and diluted earnings per share*	$	31,417,203		$	29,764,515
Losses per share of ordinary shares - basic and diluted	$	(0.06	)	$	(0.04	)

*	Due to the anti-dilutive effect, the computation of basic and diluted EPS did not include the shares underlying the exercise of warrants, options, and unvested RSUs as the Company had a net loss for the three months ended September 30, 2024 and 2023.

*	For the three months ended September 30, 2024 and 2023, 71,343 and 66,366 vested but unissued shares of restricted stock units under the 2020 Equity Incentive Plan (as discussed in Note 14) are considered issued shares and therefore are included in the computation of basic losses per share when the shares are fully vested.

Note 14 – Equity

Common Stock

As of September 30, 2024, the total authorized shares of capital stock were 200,000,000 shares consisting of 180,000,000 shares of Common Stock (“Common Stock”) and 20,000,000 shares of preferred stock (the “Preferred Stock”), each with a par value of $0.001 per share.

The holders of Common Stock shall be entitled to one vote per share in voting to the election of directors and all other corporate purposes. Subject to the express terms of any outstanding series of Preferred Stock, dividends may be paid in cash or otherwise with respect to the holders of Common Stock out of the assets of the Company legally available therefor, upon the terms, and subject to the limitations, as the Board of Directors of the Company (the “Board of Directors”) may determine. In the event of liquidation or dissolution of the Company, subject to the express terms of any outstanding series of Preferred Stock, the holders of Common Stock shall be entitled to share in the distribution of any remaining assets available for distribution to the holders of Common Stock ratably in proportion to the total number of shares of Common Stock then issued and outstanding.

During the year ended June 30, 2024, the Company issued 107,293 shares of restricted Common Stock for RSUs vested.

On June 18, 2024, the Company closed on a registered direct offering (the “Registered Direct”) of 2,083,334 shares of common stock (the “Shares”) and a concurrent private placement (“Private Placement,” and together with the Registered Direct, the “Offering”) of warrants (the “Warrants”) to purchase 2,083,334 shares of common stock (the “Warrant Shares”), which were sold for gross aggregate proceeds of $5,000,002. The Shares were sold pursuant to a prospectus supplement, filed on June 18, 2024, to the Registration Statement on Form S-3, originally filed on September 25, 2023, with the SEC (File No. 333-274665) and declared effective by the SEC on September 29, 2023. The Warrants, which were issued pursuant to an exemption from registration pursuant to Section 4(a)(2) or Regulation D on the Securities Act, have a term of five years and are immediately exercisable at $2.40 per share. The Shares and Warrants were sold to a purchaser pursuant to a securities purchase agreement, dated June 16, 2024, between the Company and the purchaser (the “Purchase Agreement”). Roth Capital Partners, LLC (the “Placement Agent”) acted as placement agent, pursuant to a placement agency agreement between the Company and the Placement Agent dated June 16, 2024 (the “Placement Agency Agreement”). The Company paid the Placement Agent as compensation a cash fee equal to 6.5% of the gross proceeds of the Offering plus reimbursement of certain expenses and legal fees. The net proceeds of the Offering, after deducting $456,913, the Placement Agent’s fees and expenses and other direct offering costs paid by the Company, was $4,543,089.

The Company calculated the fair value of the Warrants at $3.1 million, with a relative fair value of $1.7 million after allocation of the fair value of the Shares, using the Black-Scholes Model with the following variables:

·	Stock Price - $2.00
·	Exercise Price - $2.40
·	Volatility – 104%
·	Term –5 years
·	Risk Free Rate of Return – 4.24%

Pursuant to the Warrant agreement, except for some fundamental transactions within the Company’s control, in no event shall the Company be required to net cash settle the Warrants. The Company considered and followed the rules and guidelines under ASC 480-10 and ASC 815 and concluded that the Warrants should be classified and recorded as equity. Further, as the warrants were issued as part of the Offering, the relative fair value of the Warrants was included in the gross proceeds and recorded as additional paid-in capital.

On June 18, 2024, as disclosed in Note 17 below, in order to recoup the settlement payment made to Boustead Securities, LLC, the Company’s Chief Executive Officer and co-founder, Lawrence Tan, along with co-founder Allan Huang, returned a total of 541,667 shares to the Company for cancellation (the “Share Cancellation”). The Share Cancellation was completed in June 2024 and the par value of $542 was reduced against additional paid-in capital.

As of September 30, 2024 and June 30, 2024, there were 31,359,899 shares of Common Stock issued and outstanding.

Preferred Stock

The Preferred Stock was authorized as “blank check” series of Preferred Stock, providing that the Board of Directors is expressly authorized, subject to limitations prescribed by law, by resolution or resolutions and by filing a certificate pursuant to the applicable law of the State of Nevada, to provide, out of the authorized but unissued shares of Preferred Stock, for series of Preferred Stock, and to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof. As of September 30, 2024 and June 30, 2024, respectively, there were no shares of Preferred Stock issued and outstanding.

Equity Incentive Plan

On May 5, 2021, the Company’s Board of Directors adopted, and its stockholders approved and ratified, the iPower Inc. Amended and Restated 2020 Equity Incentive Plan (the “Plan”). The Plan allows for the issuance of up to 5,000,000 shares of Common Stock, whether in the form of stock options, restricted stock, restricted stock units, stock appreciation rights, performance units, performance shares and other stock or cash awards. The general purpose of the Plan is to provide an incentive to the Company’s directors, officers, employees, consultants and advisors by enabling them to share in the future growth of the Company’s business. On November 16, 2021 and December 6, 2022, the Company filed a registration statement on Form S-8 registering all shares issuable under the Plan, which was subsequently amended on December 6, 2022 and September 15, 2023 and November 22, 2023.

Restricted Stock Unit

Following completion of the IPO on May 11, 2021, pursuant to their letter agreements, the Company awarded 46,546 restricted stock units (“RSUs”) under the Plan to its independent directors, its Chief Financial Officer, and certain other employees and consultants, all of which vested over 12 months following the grant date and were subject to other restrictions until the filing of a Registration Statement on Form S-8 registering the shares. The fair value of the RSUs was determined based on $5.00 per share, the initial listing price of the Company’s Common Stock on the grant date. During the three months ended September 30, 2024, the Company granted an additional 71,427 shares of RSUs. For the three months ended September 30, 2024 and 2023, the Company recorded $31,788 and $7,500 of stock-based compensation expense. There was no forfeiture of RSUs occurred during the three months ended September 30, 2024 and 2023. As of September 30, 2024 and June 30, 2024, the unvested number of RSUs was 47,619 and 3,250 and the unamortized expense was $60,000 and $1,788, respectively.

Information relating to RSU grants is summarized as follows:

Schedule of RSU activity
	Total RSUs Issued			Total Fair Market Value of RSUs Issued as Compensation (1)
RSUs granted, but not vested, at June 30, 2024		3,250
RSUs granted		71,427		$	90,000
RSUs forfeited		–
RSUs vested		(27,058	)
RSUs granted, but not vested, at September 30, 2024		47,619

_____________________

(1)	The total fair value was based on the current stock price on the grant date.

As of September 30, 2024, of the 357,212 vested RSUs, 285,869 shares of Common Stock were issued, and 71,343 shares were to be issued in the near future.

Stock Option

On May 12, 2022, the Compensation Committee of the Board of Directors approved an incentive plan for the Company’s executive officers consisting of a cash performance bonus of $60,000 to be awarded to Kevin Vassily, CFO of the Company, and grants of stock option (the “Option Grants”) exercisable to purchase (i) 3,000,000 shares of Common Stock to Chenlong Tan, CEO and (ii) 330,000 shares of Common Stock to Mr. Vassily. The Option Grants, which were issued on May 13, 2022, have an exercise price of $1.12, a contractual term of 10 years, and consist of six vesting tranches with a vesting schedule based entirely on the attainment of both operational milestones (performance conditions) and market conditions, assuming continued employment of the recipients through each vesting date. Each of the six vesting tranches of the Option Grants will vest when both (i) the market capitalization milestone for such tranche, which begins at $150 million for the first tranche and increases by increments of $50 million through the fourth tranche and $100 million thereafter (based on achieving such market capitalization for five consecutive trading days), has been achieved, and (ii) any one of the following six operational milestones focused on revenue or any one of the six operational milestones focused on operating income have been achieved during a given fiscal year.

The estimated achievement status of the operational milestones as of September 30, 2024 was as follows:


	Revenue in Fiscal Year			Operating Income in Fiscal Year
	Milestone (in Millions)	Achievement Status		Milestone (in Millions)	Achievement Status

$	90	Probable	$	6	Probable
$	100	Probable	$	8	Probable
$	125	Probable	$	10	Probable
$	150	Probable	$	12	Probable
$	200	Probable	$	16	–
$	250	–	$	20	–

The Company evaluated the performance condition and market condition under ASC 718-10-20. The Option Grants are considered an award containing a performance and a market condition and both conditions (in this case at least one of the performance conditions) must be satisfied for the award to vest. The market condition is incorporated into the fair value of the award, and that fair value is recognized over the longer of the implied service period or requisite service period if it is probable that one of the performance conditions will be met. In relation to the five awards deemed probable to vest, the recognition period ranges from 2.93 years to 9.64 years. If the performance condition is ultimately not met, compensation cost related to the award should not be recognized (or should be reversed to the extent any expense has been recognized related to such tranche) because the vesting condition in the award would not have been satisfied.

On the grant date, a Monte Carlo simulation was used to determine for each tranche (i) a fixed amount of expense for such tranche and (ii) the future time when the market capitalization milestone for such tranche was expected to be achieved. Separately, based on a subjective assessment of our future financial performance, each quarter we determine whether it is probable that the Company will achieve each operational milestone that has not previously been achieved or deemed probable of achievement and, if so, the future time when the Company expects to achieve that operational milestone. The Monte Carlo simulation utilized the following inputs:

	·	Stock Price - $1.12
	·	Volatility – 95.65%
	·	Term –10 years
	·	Risk Free Rate of Return – 2.93%
	·	Dividend Yield – 0%

The total fair value of the Option Grants was $3.2 million of which, at September 30, 2023, $2.3 million is deemed probable of vesting. As of September 30, 2024, none of the options had vested. For the three months ended September 30, 2024 and 2023, the Company recorded $110,382 and $110,382 of stock-based compensation expense related to the Option Grants. As of September 30, 2024, unrecognized compensation cost related to tranches probable of vesting is approximately $1.2 million and will be recognized over two years to nine years, depending on the tranche.

On August 29, 2024, the board of directors (the “Board”) of the Company, based on the recommendation of the compensation committee of the Board, approved a grant of 1,200,000 stock options (the “2024 Stock Options”) issuable to Chenlong Tan, the Company’s Chief Executive Officer, pursuant to the terms of the iPower Inc. Amended and Restated 2020 Equity Incentive Plan (the “Plan”). Following the Board’s approval, Mr. Tan and the Company entered into a stock option award agreement (the "Stock Option Award Agreement").

According to the Stock Option Award Agreement, and subject to the terms and conditions of the Stock Option Award Agreement and the Plan, upon vesting of the 2024 Stock Options, Mr. Tan will have the option to purchase common stock, par value $0.001 per share of the Company, at an exercise price of $1.43 per share (which is 110% of the Fair Market Value of the stock on the grant date). The 2024 Stock Options have a term of 10 years and will vest as follows: 30,000 2024 Stock Options vested on the grant date (August 29, 2024), and 32,500 2024 Stock Options will vest on the first day of each month from September 1, 2024, to August 1, 2027.

On the grant date, a Black-Scholes Model was used to determine the fair value of the 2024 Stock Options with the following inputs:

	·	Stock Price - $1.30
	·	Exercise Price - $1.43
	·	Volatility – 101%
	·	Expected Term –5.71 years
	·	Risk Free Rate of Return – 3.66%
	·	Dividend Yield – 0%

The total fair value of the 2024 Stock Options was $1.22 million as of the grant date. For the three months ended September 30, 2024, 62,500 stock options were vested and the Company recorded $63,790 as stock compensation expense. As of September 30, 2024, the unrecognized compensation cost of the 2024 Stock Options was approximately $1.16 million and will be recognized monthly through August 1, 2027.

Note 15 – Warrant liabilities

On January 27, 2021, the Company completed a private placement offering pursuant to which the Company sold to two accredited investors an aggregate of $3,000,000 in Convertible Notes and warrants to purchase shares of Class A Common Stock equaling 80% of the number of shares of Class A Common Stock issuable upon conversion of the Convertible Notes. The convertible note warrants are exercisable for a period of three years from the IPO completion date at a per share exercise price equal to the IPO. In accordance with the terms of the warrants, in the event the Convertible Notes are repaid in cash by the Company, the warrants issued in conjunction with the Convertible Notes will expire and have no further value.

The outstanding warrants held by the Convertible Note investors were reclassified to additional paid in capital as the terms became fixed upon closing of the IPO. Through September 30, 2023, none of the private placement investors exercised any of their warrants and the warrants expired in May 2024. As such, there were no warrants outstanding as of September 30, 2024 and June 30, 2024.

Note 16 - Concentration of risk

Credit risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.

As of September 30, 2024 and June 30, 2024, $2,577,305 and $7,377,837, respectively, were deposited with various major financial institutions in the United States and PRC. Accounts at each institution in the United States are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000. The Company had approximately $1.4 million and $5.8 million, respectively, in excess of the FDIC insurance limit, as of September 30, 2024 and June 30, 2024.

Accounts receivable are typically unsecured and derived from revenue earned from customers, thereby exposing the Company to credit risk. The risk is mitigated by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances. The Company maintains reserves for estimated credit losses, and such losses have generally been within expectations.

The business of DHS, the Company’s VIE, may be impacted by Chinese economic conditions, changes in regulations and laws, and other uncertainties.

Customer and vendor concentration risk

For the three months ended September 30, 2024 and 2023, Amazon Vendor and Amazon Seller customers accounted for 89% and 91% of the Company's total revenues, respectively. As of September 30, 2024 and June 30, 2024, accounts receivable from Amazon Vendor and Amazon Seller accounted for 87% and 91% of the Company’s total accounts receivable.

For the three months ended September 30, 2024 and 2023, one supplier accounted for 11% and 15% of the Company's total purchases, respectively. As of September 30, 2024 and June 30, 2024, accounts payable to one supplier accounted for 20% and 36% of the Company’s total accounts payable.

Note 17 - Commitments and contingencies

Lease commitments

The Company has entered into a lease agreement for office and warehouse space with a lease period from December 1, 2018 until December 31, 2020. On August 24, 2020, the Company negotiated for new terms to extend the lease through December 21, 2023 at the rate of approximately $42,000 per month. On December 21, 2023, the lease expired without renewal.

On September 1, 2020, in addition to the primary fulfillment center, the Company leased a second fulfillment center in City of Industry, California. The base rental fee was $27,921 to $29,910 per month through October 31, 2023. On October 31, 2023, the lease expired without renewal.

On February 15, 2022, upon completion of the acquisition of Anivia Limited, the Company assumed an operating lease for offices located in the People’s Republic of China. In July 2023, the Company renewed the lease contract for its existing office plus additional office space. The lease term is for three years expiring on July 14, 2026. The total base rental fee for these offices is approximately $19,406 per month. In September 2024, the Company terminated the lease contract of the office space.

On July 28, 2021, the Company entered into a Lease agreement (the “Lease Agreement”) with 9th & Vineyard, LLC, a Delaware limited liability company (the “Landlord”), to lease from the Landlord approximately 99,347 square feet of space located at 8798 9th Street, Rancho Cucamonga, California (the “Premises”). The term of the Lease Agreement is for 62 months, commencing on the date on which the Landlord completes certain prescribed improvements on the property (the “Rent Commencement Date”). The Lease Agreement does not provide for an option to renew. Under the Lease Agreement, the Company is responsible for its pro rata share of certain costs, including utility costs, insurance and common area costs, as further detailed in the Lease Agreement. In addition, following the Rent Commencement Date, the first two months of the Base Rent were abated.

The lease did not start under the original agreement as the construction was not completed. On February 23, 2022, the Company entered into an amended agreement to extend the lease term to 74 months. Under the amended agreement, the lease commenced on February 10, 2022, with rent payments commencing May 11, 2022 and the lease expiring on May 31, 2028. The base rental fee is $114,249, increasing gradually over time to $140,079 per month through the expiration date of May 31, 2028.

On May 1, 2022, the Company leased another fulfillment center in Duarte, California. The base rental fee is $56,000 to $59,410 per month through April 30, 2025.

In September 2024, DHS entered into a sublease agreement with a third-party entity for office space in Shenzhen. The lease term is for one year from October 1, 2024 to September 30, 2025. The lease is treated as short-term lease and the base rental fee is approximately $10,000 per month.

The Company’s total commitment for the full term of these leases is $12,651,376. The financial statements reflected $5,226,888 and $6,124,163, respectively, of operating lease right-of-use assets, and $5,632,824 and $6,549,110, respectively, of operating lease liabilities as of September 30, 2024 and June 30, 2024.

Three months Ended September 30, 2024 and 2023:


Lease cost	9/30/2024		9/30/2023
Operating lease cost (included in G&A in the Company's statement of operations)	$	594,133	$	792,826

Other information
Cash paid for amounts included in the measurement of lease liabilities	$	604,117	$	792,317
Remaining term in years		0.58 – 3.67		0.08 – 4.67
Average discount rate - operating leases		5 - 6%		5 - 8%

The supplemental balance sheet information related to leases for the period is as follows:


Operating leases	9/30/2024		6/30/2024
Right of use asset - non-current	$	5,226,888	$	6,124,163

Lease Liability – current		1,686,889		2,039,301
Lease Liability - non-current		3,945,935		4,509,809
Total operating lease liabilities	$	5,632,824	$	6,549,110

Maturities of the Company’s lease liabilities are as follows:


	Operating
	Lease
For Year ending June 30:
2025	$	1,535,511
2026		1,533,918
2027		1,586,572
2028		1,459,409
Less: Imputed interest/present value discount		(482,586	)
Present value of lease liabilities	$	5,632,824

Contingencies

Except as disclosed below, the Company is not currently a party to any material legal proceedings, investigation or claims. As the Company may, from time to time, be involved in legal matters arising in the ordinary course of its business, there can be no assurance that such matters will not arise in the future or that any such matters in which the Company is involved, or which may arise in the ordinary course of the Company’s business, will not at some point proceed to litigation or that such litigation will not have a material adverse effect on the business, financial condition or results of operations of the Company.

Pursuant to an engagement agreement, dated and effective August 31, 2020 (the “Engagement Agreement”), with Boustead Securities LLC (“Boustead”), the Company engaged Boustead to act as its exclusive placement agent for private placements of its securities and as a potential underwriter for its initial public offering. On February 28, 2021, the Company informed Boustead that it was terminating the Engagement Agreement and any continuing obligations the Company may have had under its terms. On April 15, 2021, the Company provided formal written notice to Boustead of its termination of the Engagement Agreement and all obligations thereunder, effective immediately. On April 30, 2021, Boustead filed a statement of claim with the Financial Institute Regulatory Authority, or FINRA, demanding to arbitrate the dispute, and is seeking, among other things, monetary damages against the Company and D.A. Davidson & Co. (who acted as underwriter in the Company’s IPO). The Company has agreed to indemnify D.A. Davidson & Co. and the other underwriters against any liability or expense they may incur or be subject to arising out of the Boustead dispute. Additionally, Chenlong Tan, the Company’s Chairman, President and Chief Executive Officer and a beneficial owner more than 5% of the Company’s Common Stock, has agreed to reimburse the Company for any judgments, fines and amounts paid or actually incurred by the Company or an indemnitee in connection with such legal action or in connection with any settlement agreement entered into by the Company or an indemnitee up to a maximum of $3.5 million in the aggregate, with the sole source of funding of such reimbursement to come from sales of shares then owned by Mr. Tan. As of September 30, 2023, the Company cannot reasonably estimate the amount of potential exposure.

On April 3, 2024, the Company and D.A. Davidson & Co entered into a settlement agreement and mutual release (the “Settlement Agreement”) with Boustead Securities, LLC (“Boustead”) and its current and former employees, officers, directors, partners, agents and affiliates, pursuant to which all parties agreed to release all claims in exchange for the Company’s payment of $1.3 million (the “Settlement Amount”) to Boustead. The Settlement Agreement was entered into for purposes of settling in full the FINRA Arbitration (FINRA Case No. 22-01133) which had been brought by Boustead against the Company and D.A. Davidson after the Company opted not to complete its initial public offering with Boustead but instead engaged and completed its initial public offering with D.A. Davidson. Pursuant to the terms of the Settlement Agreement, the Company is required to pay the Settlement Amount in four equal installments of $325,000 on each of April 3, 2024, May 3, 2024, June 3, 2024 and July 3, 2024. Within five days of its receipt of the final payment, or by July 8, 2024, Boustead will be obligated to dismiss the FINRA Arbitration against the Company, with prejudice, after which time the Company will be required to dismiss, with prejudice, all counterclaims brought by the Company against Boustead. For the year ended June 30, 2024, the Company considered and concluded that the Settlement Amount of $1.3 million was incremental costs directly associated with the IPO under ASC 340-10-S99-1 and so recorded as offering costs against additional paid-in capital. As of June 30, 2024, the outstanding balance of the Settlement Amount was $325,000. As of September 30, 2024, the Settlement Amount had been paid off and the parties have formally withdrawn all of the complaints that were before FINRA, with prejudice, and the matter is settled in full.

In conjunction with entry into the Settlement Agreement, the Company’s CEO and co-founder, Chenlong Tan, and Allan Huang, also a co-founder of the Company, entered into a pledge agreement (the “Pledge Agreement”) with the Company pursuant to which they each pledged 1,300,000 shares of their iPower common stock, for a total of 2,600,000 shares (the “Pledged Shares”), in order that the Company may, from time to time, sell such Pledged Shares into the market on behalf of Messrs. Tan and Huang in order to recoup the Settlement Amount.

On June 18, 2024, calculating the shares at $2.40, Messrs. Tan and Huang returned a total of 541,667 shares as indemnification payment to the Company for cancellation (the “Share Cancellation”). The Share Cancellation was completed in June 2024.

In February 2022, the Russian Federation began conducting military operations against Ukraine, and in October 2023, an armed conflict between Hamas-led Palestinian militant groups and Israeli military forces began, both of which have since escalated into prolonged wars. While we do not do business in those regions, the military conflicts in Ukraine and in Israel have resulted in global economic uncertainty and increased the cost of various commodities. In response to these types of events, should they directly impact our supply chain or other operations, we may experience or be exposed to supply chain disruptions which could cause us to seek alternate sources for product supply or suffer consequences that are unexpected and difficult to mitigate. Any of these risks might have a materially adverse impact on our business operations and our financial position or results of operations. Although, it is difficult to predict the impact that these factors may have on our business in the future, we have experienced a delay in, as well as an increase in costs in shipping, and the resulting inventory level increase in our warehouse facilities, thus resulting in reduced profits. In addition, supply chain disruptions may put upward pressure on our costs and increase the risk that we may be unable to acquire the materials and services we need to continue to make certain products.

On April 13, 2020, the Company entered into an agreement with Royal Business Bank (the “Lender”) for a total amount of $175,500, pursuant to a promissory note issued by the Company to the Lender (the “PPP Note”). The loan was made pursuant to the Payroll Protection Program established as part of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”). On March 22, 2021, the $175,500 PPP Note due to Royal Business Bank was fully forgiven by the Small Business Administration (“SBA”).

The Company is required to retain PPP loan documentation through 2026 and permit authorized representatives of the SBA to access such files upon request. Should the SBA conduct such a review and reject all or some of the Company’s judgments pertaining to satisfying PPP loan eligibility or forgiveness conditions, the Company may be required to adjust previously reported amounts and disclosures in the consolidated financial statements.

Note 18 - Subsequent events

The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the unaudited condensed consolidated financial statements were available to be issued. Other than as set forth below, there were no material subsequent events that required recognition or additional disclosure in the unaudited condensed consolidated financial statements presented.

On November 8, 2024, the Company entered into a third amendment (the “Third Amendment”) to that certain credit agreement, initially entered into by and among the Company and its subsidiaries and JPMorgan Chase Bank, N.A., as administrative agent for the Lender and a lender (the “Administrative Agent” or “Lender”), on November 12, 2021 (the “Credit Agreement”). The Third Amendment to the Credit Agreement amended, among other things, (i) the defined term “Aggregate Revolving Commitment” to mean $15,000,000, and (ii) extended the maturity date to “November 8, 2027 or any earlier date on which the Revolving Commitments are reduced to zero or otherwise terminated pursuant to the terms hereof.” The borrowing rate is SOFR plus 2.25% to 2.50% depending on utilization of the borrowing availability.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (the “MD&A”) should be read in conjunction with our unaudited financial statements and the related notes thereto included elsewhere herein. This MD&A contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations, and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect,” and the like, and/or future-tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements in this report. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors.

Historical results may not indicate future performance. Our forward-looking statements reflect our current views about future events, are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements. We undertake no obligation to publicly update or revise any forward- looking statements, including any changes that might result from any facts, events, or circumstances after the date hereof that may bear upon forward-looking statements. Furthermore, we cannot guarantee future results, events, levels of activity, performance, or achievements.

Overview

Driven by tech and data, iPower Inc. is an online supplier of consumer goods, including hydroponics equipment, general gardening supplies, and consumer home goods. Through the operations of our e-commerce platforms and channel partners, our combined 121,000 square foot fulfillment centers in Rancho Cucamonga and Los Angeles, California, we believe we are one of the leading marketers, distributors and retailers in the consumer gardening and home goods categories, based on management’s estimates. Our core strategy continues to focus on expanding our geographic reach across the United States and internationally through organic growth, both in terms of expanding customer base as well as brand and product development. iPower has developed a set of methodologies driven by proprietary data formulas to effectively bring products to market and sales.

We are actively developing our in-house branded products and through supply chain partners, which to date include the iPower and Simple Deluxe brands and more, some of which have been designated as Amazon best seller product leaders and Amazon Choice products, among others.

Trends and Expectations

Product and Brand Development

We plan to increase investments in product and brand development. We actively evaluate potential acquisition opportunities of companies and product brand names that can complement our product catalog and improve our existing products and supply chain efficiencies.

Global Economic Disruption

While at present the majority of our products are sourced either in the United States or China, the military conflicts between Russia and Ukraine and Israel and Hamas may nonetheless increase the likelihood of supply chain disruptions and hinder our ability to find the materials we need to make our products. Thus far, as a result of the general global economic disruptions, we have experienced a decrease in the speed with which we are able to purchase new inventory, as well as an increase in costs due to delays in shipping, the resulting increase in time with which products remain in our warehouse facilities, thus resulting in reduced profits. In addition, supply chain disruptions may make it harder for us to find favorable pricing and reliable sources for the materials we need, putting upward pressure on our costs and increasing the risk that we may be unable to acquire the materials and services we need to continue to make certain products.

Regulatory Environment

We sell hydroponic gardening products to end users that may use such products in new and emerging industries or segments, including the growing of cannabis. The demand for hydroponic gardening products depends on the uncertain growth of these industries or segments due to varying, inconsistent, and rapidly changing laws, regulations, administrative practices, enforcement approaches, judicial interpretations, and consumer perceptions. For example, certain countries and a total of 46 U.S. states plus the District of Columbia have adopted frameworks that authorize, regulate and tax the cultivation, processing, sale and use of cannabis for medicinal and/or non-medicinal use, including legalization of hemp and CBD, while the U.S. Controlled Substances Act and the laws of U.S. states prohibit growing cannabis. Demand for our products could be impacted by changes in the regulatory environment with respect to such industries and segments.

Recent Developments

On June 18, 2024, we closed on the registered direct offering (the “Offering”) of 2,083,334 shares of common stock (the “Shares”) and a concurrent private placement (the “Private Placement”) of warrants (“Warrants”) to purchase 2,083,334 shares of common stock (the “Warrant Shares”), which were sold for gross aggregate proceeds of $5,000,002. The Shares were sold pursuant to a prospectus supplement, filed on June 18, 2024, to the registration statement on Form S-3, originally filed on September 25, 2023 with the SEC (File No. 333-274665), and declared effective on September 29, 2023. The Warrants, which were issued pursuant to an exemption from registration under Section 4(a)(2) or Regulation D of the Securities Act of 1933, as amended (the “Securities Act”), have a term of five years and are immediately exercisable at $2.40 per share. The Shares and Warrants were sold to purchasers named on the signature page of a certain securities purchase agreement, dated June 16, 2024, between the Company and the purchaser (the “Purchase Agreement”). Roth Capital Partners, LLC acted as the placement agent, pursuant to a placement agency agreement. The Company paid compensation to the placement agent consisting of a cash fee equal to 6.5% of the gross proceeds of the Offering plus reimbursement of certain expenses and legal fees.

On July 9, 2024, as required by the Purchase Agreement, we filed a resale registration statement on Form S-1 with the SEC (the "Resale Form S-1"). Upon filing an amendment on July 23, 2024, the Resale Form S-1 was declared effective by the SEC on July 26, 2024.

RESULTS OF OPERATIONS

For the three months ended September 30, 2024 and 2023

The following table presents certain unaudited condensed consolidated statement of operations information and presentation of that data as a percentage of change from period to period.

	Three Months Ended September 30, 2024			Three Months Ended September 30, 2023			Variance
Revenues – product sales	$	18,275,412		$	26,508,374		(31.1%	)
Revenues – service income		733,109			–		–
		19,008,521			26,508,374		(28.3%	)

Cost of revenues – product costs		9,917,448			14,749,529		(32.8%	)
Cost of revenues – service costs		603,176			–		–
		10,520,624			14,749,529		(28.7%	)

Gross profit		8,487,897			11,758,845		(27.8%	)
Operating expenses		11,234,331			13,027,522		(13.8%	)
Operating loss		(2,746,434	)		(1,268,677	)	116.5%
Other income (expenses)		77,805			(296,556	)	126.2%
Loss before income taxes		(2,668,629	)		(1,565,233	)	70.5%
Income tax benefit		636,512			275,882		130.7%
Net loss		(2,032,117	)		(1,289,351	)	57.6%
Non-controlling interest		2,836			2,836		0%
Net loss attributable to iPower Inc.		(2,029,281	)		(1,286,515	)	57.7%
Other comprehensive loss		(55,054	)		(707	)	7687.0%
Comprehensive loss attributable to iPower Inc.	$	(2,084,335	)	$	(1,287,222	)	61.9%

Gross profit % of revenues – product sales		45.7%			44.4%
Gross profit % of revenues – service income		17.7%			–
Operating loss % of revenues		(14.4%	)		(4.8%	)
Net loss % of revenues		(10.7%	)		(4.9%	)

Revenues

Revenues for the three months ended September 30, 2024 decreased 28.3% to $19,008,521 as compared to $26,508,374 for the three months ended September 30, 2023. While pricing remained stable and with the additional logistics service income, the decrease was mainly due to the combination of decreased orders from Amazon and temporary disruption of product supply during the quarter ended September 30, 2024 and the increased sales generated from promotional activities in the same quarter in 2023.

Costs of Goods Sold

Costs of goods sold for the three months ended September 30, 2024 decreased 28.7% to $10,520,624 as compared to $14,749,529 for the three months ended September 30, 2023. The decrease was primarily due to a combination of the costs related to the logistics service income and the decrease in sales, freight costs, and lowered product costs resulted from management’s efforts on supply chain management.

Gross Profit

Gross profit was $8,487,897 for the three months ended September 30, 2024 as compared to $11,758,845 for the three months ended September 30, 2023. The gross profit ratio of the product sales revenues increased to 45.7% for the three months ended September 30, 2024 from 44.4% for the three months ended September 30, 2023. The increase in the gross profit ratio was mainly driven by the decrease in costs of goods sold during the three months ended September 30, 2024, as discussed above.

Operating Expenses

Operating expenses for the three months ended September 30, 2024 decreased 13.8% to $11,234,331 as compared to $13,027,522 for the three months ended September 30, 2023. The decrease was mainly due to the combination of a decrease in selling and fulfillment expenses of $4.1 million as a result of decreased costs related to advertising, merchant fees, rental expenses and delivery fees, and an increase in general and administrative expenses of $2.4 million, which included payroll expenses, stock-based compensation expense, insurance expenses, allowance for credit losses, travel expenses and other operating expenses. The increase in general and administrative expenses was mainly due to the expansion of our vendor network and development of the SuperSuite platform and an increased allowance for credit loss and inventory reserves of $1.76 million.

Loss from Operations

Loss from operations was $2,746,434 for the three months ended September 30, 2024 as compared to $1,268,677 for the three months ended September 30, 2023. The increase in loss resulted from the decrease in sales being greater than the decrease in operating expenses and the increase in gross profit ratio.

Other Income (Expenses)

Other income (expenses) consist of interest expense and other non-operating income (expenses). Other income (expenses) for the three months ended September 30, 2024 was $77,805 as compared to $(296,556) for the three months ended September 30, 2023. The increase in other income (expenses) was mainly due to the combination of an increase in other non-operating income of $285,852, and a decrease in interest, including amortization of debt discount, on the revolving loan of $88,403 during the three months ended September 30, 2024 resulted from the decreasing loan balance.

Net Loss Attributable to iPower Inc.

Net loss attributable to iPower Inc. for the three months ended September 30, 2024 was $2,029,281 as compared to $1,286,515 for the three months ended September 30, 2023, representing an increase in net loss of $742,766. The increase was primarily due to the decrease in sales being greater than the decrease in operating expenses and the increase in gross profit ratio as discussed above.

Comprehensive Loss Attributable to iPower Inc.

Comprehensive loss attributable to iPower Inc. for the three months ended September 30, 2024 was $2,084,335 as compared to $1,287,222 for the three months ended September 30, 2023, representing an increase in comprehensive loss of $797,113. The increase was due to the reasons discussed above, along with an increase in other comprehensive loss of $54,347 as a result of foreign currency translation adjustments resulting from the translation of RMB, the functional currency of our VIE in the PRC, to USD, the reporting currency of the Company.

LIQUIDITY AND CAPITAL RESOURCES

Sources of Liquidity

During the three months ended September 30, 2024, we primarily funded our operations with cash and cash equivalents generated from operations, as well as through borrowing under our credit facility from JPMorgan Chase Bank (“JPM”). Additionally, on June 18, 2024, we closed on the registered direct offering of 2,083,334 Shares and a concurrent Private Placement of Warrants to purchase up to 2,083,334 Warrant Shares, which Shares and Warrants were sold for gross aggregate proceeds of $5,000,002. As of September 30, 2024, we had cash and cash equivalents of $2,577,305, representing a $4,800,532 decrease from $7,377,837 in cash as of June 30, 2024. The cash decrease was primarily due to the result of cash used in operating activities and financing activities resulting from our payments to pay down the short-term loans - related party and the JPM revolving line of credit.

Based on our current operating plans, we believe that our existing cash and cash equivalents and cash flows from operations will be sufficient to finance our operations during the next 12 months.

Our cash requirements consist primarily of day-to-day operating expenses and obligations with respect to warehouse leases. We lease all our office and warehouse facilities. We expect to make future payments on existing leases from cash generated from operations. We have credit terms in place with our major suppliers, however as we bring on new suppliers, we are often required to prepay our inventory purchases from them. This is consistent with our historical operating model which allowed us to operate using only cash generated by the business. Beyond the next 12 months we believe that our cash flow from operations should improve as supply chain operations normalize and new suppliers we are bringing online transition to credit terms more favorable to us. In addition, we plan to increase the size of our in-house product catalog, which will have a net beneficial impact to our margin profile and ability to generate cash. Currently, we have approximately $11.0 million in unused credit under the revolving line with JPM. Given our current working capital position and available funding from our revolving credit line, we believe we will be able to manage through the current challenges by managing payment terms with customers and vendors.

Given our current working capital position and available funding from our revolving credit line and proceeds from our June Registered Direct offering, we believe we will be able to work through the current challenges by managing payment terms with customers and vendors.

Working Capital

As of September 30, 2024 and June 30, 2024, our working capital was $12.2 million and $11.2 million, respectively. The historical seasonality in our business during the year can cause cash and cash equivalents, inventory and accounts payable to fluctuate, resulting in changes in our working capital. We anticipate that past historical trends to remain in place through the balance of the fiscal year with working capital remaining near this level for the foreseeable future.

Cash Flows

Operating Activities

Our largest source of cash provided by operations is from sales of products. Our primary uses of cash from operating activities include payments to suppliers for products, to employees for compensation, and other general expenses. Net cash (used in) provided by operating activities for the three months ended September 30, 2024 and 2023 was $(1,415,643) and $4,052,341, respectively. The decrease in cash provided by operating activities mainly resulted from a decrease in cash received from customers and an increase in cash paid for cost of revenues and operating expenses.

Investing Activities

Net cash used in investing activities for the three months ended September 30, 2024 and 2023 was $202,140 and $0, respectively. The increase was due to the prepayments made for software developments during the quarter ended September 30, 2024.

Financing Activities

Net cash used in financing activities was $3,308,599 and $5,075,000, respectively, for the three months ended September 30, 2024 and 2023. The decrease in net cash used in financing activities was primarily due to a decrease in payments on the revolving loan.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements (as that term is defined in Item 303 of Regulation S-K) that are reasonably likely to have a current or future material effect on our financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States, or GAAP, and pursuant to the rules and regulations of the SEC. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. In some cases, changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ materially from our estimates. To the extent that there are material differences between these estimates and actual results, our financial condition and results of operations will be affected. We base our estimates on experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. We refer to accounting estimates of this type as critical accounting policies, which we discuss further below. While our significant accounting policies are more fully described in Note 2 to our unaudited condensed consolidated financial statements, we believe that the following accounting policies are critical to the process of making significant judgments and estimates in the preparation of our unaudited condensed consolidated financial statements.

Revenue recognition

Payments received prior to the delivery of goods to customers are recorded as customer deposits.

Accounts receivable, net

During the ordinary course of business, the Company extends unsecured credit to its customers. Accounts receivable are stated at the amount the Company expects to collect from customers, which includes the amount withheld by sales channel partners and refundable to the Company. Based on historical an expected loss rate and status of negotiations with the sales channel partner, management reviews its accounts receivable balances each reporting period to determine if an allowance for credit loss is required.

	·	the customer fails to comply with its payment schedule;

	·	the customer is in serious financial difficulty;

	·	a significant dispute with the customer has occurred regarding job progress or other matters;

	·	the customer breaches any of its contractual obligations;

	·	the customer appears to be financially distressed due to economic or legal factors;

	·	the business between the customer and the Company is not active; and

	·	other objective evidence indicates non-collectability of the accounts receivable.

Accounts receivable are recognized and carried at carrying amount less an allowance for credit losses, if any. The Company maintains an allowance for credit losses resulting from the inability of its customers to make required payments based on contractual terms. The Company reviews the collectability of its receivables on a regular and ongoing basis. The Company has also included in calculation of allowance for credit losses the potential impact of the COVID-19 pandemic on our customers’ businesses and their ability to pay their accounts receivable. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. The Company also considers external factors to the specific customer, including current conditions and forecasts of economic conditions, including the potential impact of the COVID-19 pandemic. In the event we recover amounts previously written off, we will reduce the specific allowance for credit losses. In late October 2024, the Company determined that the collectability of certain shortage claim receivables from Amazon was remote so the Company recorded additional allowance for credit losses of approximately $1.5 million for the quarter ended September 30, 2024.

Inventory, net

Inventory consists of finished goods ready for sale and is stated at the lower of cost or market. The Company values its inventory using the weighted average costing method. The Company’s policy is to include as a part of inventory and cost of goods sold any freight incurred to ship the product from its vendors to warehouses. Outbound freight costs related to shipping costs to customers are considered period costs and reflected in selling and fulfillment expenses. The Company regularly review inventory and consider forecasts of future demand, market conditions and product obsolescence.

If the estimated realizable value of the inventory is less than cost, the Company makes provisions in order to reduce its carrying value to its estimated market value. The Company also reviews inventory for slow moving and obsolescence and records allowance for obsolescence.

Variable interest entities

On February 15, 2022, the Company acquired 100% of the ordinary shares of Anivia and its subsidiaries, including Daheshou (Shenzhen) Information Technology Co., Ltd., a company organized under the Laws of the PRC (“DHS”). Pursuant to the terms of the agreements, the Company does not have direct ownership in DHS but is actively involved in DHS’s operations as the sole manager to direct the activities and significantly impact DHS’s economic performance. DHS’s operational funding is provided by the Company after February 15, 2022. During the term of the agreements, which run for a term of 10 years from February 2022 to February 2032, the Company bears all the risk of loss and has the right to receive all of the benefits from DHS. As such, based on the determination that the Company is the primary beneficiary of DHS, in accordance with ASC 810-10-25-38A through 25-38J, DHS is considered a variable interest entity (“VIE”) of the Company and the financial statements of DHS have been consolidated from the date such control existed, February 15, 2022.

Goodwill

During the three months ended September 30, 2024 and 2023, the Company performed a qualitative and quantitative goodwill impairment analysis following the steps laid out in ASC 350-20-35-3C and noted no goodwill impairment. As of September 30, 2024 and 2023, the goodwill balance amounted to $3,034,110 and $3,034,110, respectively.

Intangible Assets, net

Finite life intangible assets at September 30, 2024 include a covenant not to compete, supplier relationships and software recognized as part of the acquisition of Anivia. Intangible assets are recorded at the estimated fair value of these items at the date of acquisition, February 15, 2022. Intangible assets are amortized on a straight-line basis over their estimated useful life as follows:

		Useful Life
Covenant Not to Compete		10 years
Supplier relationship		6 years
Software		5 years

Stock-based Compensation

The Company applies ASC No. 718, “Compensation-Stock Compensation,” which requires that share-based payment transactions with employees and nonemployees upon adoption of ASU 2018-07, be measured based on the grant date fair value of the equity instrument and recognized as compensation expense over the requisite service period, with a corresponding addition to equity. Under this method, compensation cost related to employee share options or similar equity instruments is measured at the grant date based on the fair value of the award and is recognized over the period during which an employee is required to provide service in exchange for the award, which generally is the vesting period. In addition to the requisite service period, the Company also evaluates the performance condition and market condition under ASC 718-10-20. For an award that contains both a performance and a market condition, and where both conditions must be satisfied in order for the award to vest, the market condition is incorporated into the fair value of the award, and that fair value is recognized over the employee’s requisite service period or nonemployee’s vesting period if it is probable that the performance condition will be met. If the performance condition is ultimately not met, compensation cost related to the award should not be recognized (or should be reversed) because the vesting condition in the award has not been satisfied.

The Company will recognize forfeitures of such equity-based compensation as they occur.

Income taxes

The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their perspective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded, when necessary, to reduce deferred tax assets to the amount expected to be realized.

Recently issued accounting pronouncements

Other than as set forth under Note 2 to the unaudited condensed consolidated financial statements under “Recently issued accounting pronouncements,” the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company,” we are not required to provide the information required by this Item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow for timely decisions regarding required disclosure.

As of September 30, 2024, our management carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our management concluded that our internal controls over financial reporting were not effective because, among other things, our controls related to the financial statement closing process were not adequately designed or appropriately implemented to identify material misstatements in our financial reporting on a timely basis. Management has evaluated remediation plans to address these deficiencies and is implementing changes to address the material weakness identified, including hiring additional accountants and consultants and implementing controls and procedures over the financial reporting process.

Changes in Internal Controls

There have been no changes in our internal controls over financial reporting that occurred during the quarter ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

UHY LLP, our independent registered public accounting firm, is not required to and has not provided an assessment concerning the design or effectiveness of our internal controls over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not presently party to any pending or threatened legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition, or operating results, although from time to time, we may become involved in legal proceedings in the ordinary course of business.

ITEM 1A. RISK FACTORS

As a “smaller reporting company,” we are not required to provide the information required by this Item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

During the quarter ended September 30, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

ITEM 6. EXHIBITS

The following exhibits are filed or furnished with this report:

Exhibit No.		Description of Exhibit
3.1		Sixth Amended and Restated Articles of Incorporation of iPower Inc. (incorporated by reference to Exhibit 3.3 to Amendment No. 3 to the Registration Statement on Form S-1 filed May 5, 2021).
3.2		Second Amended and Restated Bylaws of iPower Inc. (incorporated by reference to Exhibit 3.3 to Amendment No. 2 the Registration Statement on Form S-1 filed April 27, 2021).
4.1		Certificate of Designation of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-1 filed February 1, 2021).
4.2		Form of Warrant (incorporated by Reference to Exhibit 4.1 to the Current Report on Form 8-K filed June 18, 2024).
10.1		Third Amendment to Credit Agreement, dated November 8, 2024, by and between iPower Inc., its subsidiaries and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed November 13, 2024).
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *
32.1		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **
32.2		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
101.INS		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document
101.SCH		Inline XBRL Taxonomy Schema Document
101.CAL		Inline XBRL Taxonomy Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Definition Linkbase Data
101.LAB		Inline XBRL Taxonomy Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Presentation Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith.

** Furnished herewith.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	iPower Inc.

November 14, 2024	By:	/s/ Chenlong Tan
		Chenlong Tan
		Chief Executive Officer

November 14, 2024

By:

/s/ Kevin Vassily

Kevin Vassily

Chief Financial Officer

Exhibit 31.1

CERTIFICATION

I, Chenlong Tan, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q Pursuant to Rule 15d-2 under the Securities Exchange Act of 1934 for the period ended September 30, 2024 of iPower Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2024

/s/ Chenlong Tan

Chenlong Tan

Chief Executive Officer

(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION

I, Kevin Vassily, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q Pursuant to Rule 15d-2 under the Securities Exchange Act of 1934 for the period ended September 30, 2024 of iPower Inc. (the “registrant”);

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2024

/s/ Kevin Vassily

Kevin Vassily

Chief Financial Officer

(Principal Financial and Accounting Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of iPower Inc. (the “Company”) on Form 10-Q pursuant to Rule 15d-2 under the Securities Exchange Act of 1934 for the period ended September 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Chenlong Tan, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2024

/s/ Chenlong Tan

Chenlong Tan

Chief Executive Officer

(Principal Executive Officer)

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of iPower Inc. (the “Company”) on Form 10-Q pursuant to Rule 15d-2 under the Securities Exchange Act of 1934 for the period ended September 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kevin Vassily, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2024

/s/ Kevin Vassily

Kevin Vassily

Chief Financial Officer

(Principal Financial and Accounting Officer)

Cover - shares	3 Months Ended
Cover - shares	Sep. 30, 2024	Nov. 14, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2024
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2025
Current Fiscal Year End Date	--06-30
Entity File Number	001-40391
Entity Registrant Name	iPower Inc.
Entity Central Index Key	0001830072
Entity Tax Identification Number	82-5144171
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	8798 9th Street
Entity Address, City or Town	Rancho Cucamonga
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	91730
City Area Code	626
Local Phone Number	863-7344
Title of 12(b) Security	Common Stock
Trading Symbol	IPW
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		31,431,242

Unaudited Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2024	Jun. 30, 2024
Current assets
Cash and cash equivalent	$ 2,577,305	$ 7,377,837
Accounts receivable, net	12,278,182	14,740,093
Inventories, net	8,668,497	10,546,273
Prepayments and other current assets, net	2,808,914	2,346,534
Total current assets	26,332,898	35,010,737
Non-current assets
Right of use - non-current	5,226,888	6,124,163
Property and equipment, net	337,036	370,887
Deferred tax assets, net	3,090,525	2,445,605
Goodwill	3,034,110	3,034,110
Intangible assets, net	3,468,357	3,630,700
Other non-current assets	905,673	679,655
Total non-current assets	16,062,589	16,285,120
Total assets	42,395,487	51,295,857
Current liabilities
Accounts payable, net	8,352,699	11,227,116
Other payables and accrued liabilities	3,507,224	3,885,487
Lease liability - current	1,686,889	2,039,301
Short-term loan payable	0	491,214
Short-term loan payable - related party	350,000	350,000
Revolving loan payable, net		5,500,739
Income taxes payable	285,963	276,158
Total current liabilities	14,182,775	23,770,015
Non-current liabilities
Long-term revolving loan payable, net	3,131,955	0
Lease liability - non-current	3,945,935	4,509,809
Total non-current liabilities	7,077,890	4,509,809
Total liabilities	21,260,665	28,279,824
Commitments and contingency
Stockholders' Equity
Preferred stock, $0.001 par value; 20,000,000 shares authorized; 0 shares issued and outstanding at September 30, 2024 and June 30, 2024	0	0
Common stock, $0.001 par value; 180,000,000 shares authorized; 31,359,899 shares issued and outstanding at September 30, 2024 and June 30, 2024	31,361	31,361
Additional paid in capital	33,669,843	33,463,883
Accumulated deficits	(12,259,882)	(10,230,601)
Non-controlling interest	(41,040)	(38,204)
Accumulated other comprehensive loss	(265,460)	(210,406)
Total stockholders' equity	21,134,822	23,016,033
Total liabilities and stockholders' equity	$ 42,395,487	$ 51,295,857

Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2024	Jun. 30, 2024
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	180,000,000	180,000,000
Common stock, shares outstanding	31,359,899	31,359,899
Common stock, shares outstanding	31,359,899	31,359,899

Unaudited Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
REVENUES
Total revenues	$ 19,008,521	$ 26,508,374
COST OF REVENUES
Total cost of revenues	10,520,624	14,749,529
GROSS PROFIT	8,487,897	11,758,845
OPERATING EXPENSES:
Selling and fulfillment	5,914,808	10,063,471
General and administrative	5,319,523	2,964,051
Total operating expenses	11,234,331	13,027,522
LOSS FROM OPERATIONS	(2,746,434)	(1,268,677)
OTHER INCOME (EXPENSE)
Interest expenses	(139,962)	(228,365)
Loss on equity method investment	(919)	(1,025)
Other non-operating income (Loss)	218,686	(67,166)
Total other income (expenses), net	77,805	(296,556)
LOSS BEFORE INCOME TAXES	(2,668,629)	(1,565,233)
PROVISION FOR INCOME TAX BENEFIT	636,512	275,882
NET LOSS	(2,032,117)	(1,289,351)
Non-controlling interest	2,836	2,836
NET LOSS ATTRIBUTABLE TO IPOWER INC.	(2,029,281)	(1,286,515)
OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustments	(55,054)	(707)
COMPREHENSIVE LOSS ATTRIBUTABLE TO IPOWER INC.	(2,084,335)	(1,287,222)
Product Sales [Member]
REVENUES
Product sales revenues	18,275,412	26,508,374
COST OF REVENUES
Product costs	9,917,448	14,749,529
Service Income [Member]
REVENUES
Service income	733,109	0
Service Costs [Member]
COST OF REVENUES
Service costs	$ 603,176	$ 0

Unaudited Condensed Consolidated Statements of Operations (Parenthetical) - $ / shares	3 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Income Statement [Abstract]
Weighted Average Number of Shares Outstanding, Basic	31,417,203	29,764,515
Weighted Average Number of Shares Outstanding, Diluted	31,417,203	29,764,515
Earnings Per Share, Basic	$ (0.06)	$ (0.04)
Earnings Per Share, Diluted	$ (0.06)	$ (0.04)

Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Noncontrolling Interest [Member]	AOCI Attributable to Parent [Member]	Total
Beginning balance, value at Jun. 30, 2023	$ 29,712	$ 29,624,520	$ (8,702,442)	$ (24,915)	$ (62,134)	$ 20,864,741
Beginning balance, shares at Jun. 30, 2023	29,710,939
Net loss			(1,286,515)	(2,836)		(1,289,351)
Stock-based compensation		117,882				117,882
Foreign currency translation adjustments					(707)	(707)
Balance, September 30, 2023, Unaudited at Sep. 30, 2023	$ 29,712	29,742,402	(9,988,957)	(27,751)	(62,841)	19,692,565
Ending balance, shares at Sep. 30, 2023	29,710,939
Beginning balance, value at Jun. 30, 2024	$ 31,361	33,463,883	(10,230,601)	(38,204)	(210,406)	23,016,033
Beginning balance, shares at Jun. 30, 2024	31,359,899
Net loss			(2,029,281)	(2,836)		(2,032,117)
Stock-based compensation		205,960				205,960
Foreign currency translation adjustments					(55,054)	(55,054)
Balance, September 30, 2023, Unaudited at Sep. 30, 2024	$ 31,361	$ 33,669,843	$ (12,259,882)	$ (41,040)	$ (265,460)	$ 21,134,822
Ending balance, shares at Sep. 30, 2024	31,359,899

Unaudited Condensed Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (2,032,117)	$ (1,289,351)
Adjustments to reconcile net loss to cash (used in) provided by operating activities:
Depreciation and amortization expense	196,558	201,705
Inventory reserve	288,474	105,192
Credit loss reserve	1,475,594	0
Loss on equity method investment	919	1,025
Stock-based compensation expense	205,960	117,882
Gain on foreign currency exchange rates	(182,188)	0
Amortization of operating lease right of use assets	522,538	685,106
Amortization of debt premium / discount and non-cash financing costs	66,305	53,726
Change in operating assets and liabilities
Accounts receivable	986,317	834,261
Inventories	1,589,302	5,432,074
Deferred tax assets	(644,920)	(277,189)
Prepayments and other current assets, net	(619,099)	1,046,697
Non-current prepayments	0	70,422
Other non-current assets	132,841	9,615
Accounts payable	(2,874,417)	(1,213,634)
Other payables and accrued liabilities	4,034	(1,040,347)
Operating lease liabilities	(541,549)	(683,277)
Income taxes payable	9,805	(1,566)
Net cash (used in) provided by operating activities	(1,415,643)	4,052,341
CASH FLOWS FROM INVESTING ACTIVITIES:
Prepayments for software development	(202,140)
Net cash used in investing activities	(202,140)	0
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of offering cost settlement	(325,000)
Proceeds from short-term loans - related party	0	2,000,000
Payments on short-term loans - related party	(483,599)	(1,000,000)
Payments on promissory note	0	(875,000)
Proceeds from revolving loan	1,500,000
Payments on revolving loan	(4,000,000)	(5,200,000)
Net cash used in financing activities	(3,308,599)	(5,075,000)
EFFECT OF EXCHANGE RATE ON CASH	125,850	16,178
CHANGES IN CASH AND CASH EQUIVALENTS	(4,800,532)	(1,006,481)
CASH AND CASH EQUIVALENTS, beginning of period	7,377,837	3,735,642
CASH AND CASH EQUIVALENTS, end of period	2,577,305	2,729,161
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING TRANSACTIONS:
Cash paid for income tax	0	0
Cash paid for interest	55,743	0
Right of use assets derecognized due to termination of operating leases	(374,737)
Right of use assets acquired under new operating leases		$ 613,980

Pay vs Performance Disclosure - USD ($)	3 Months Ended
Pay vs Performance Disclosure - USD ($)	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure [Table]
Net Income (Loss)	$ (2,029,281)	$ (1,286,515)

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
Insider Trading Arrangements [Line Items]
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Nature of business and organization

3 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of business and organization

Note 1 - Nature of business and organization

Basis of Presentation and Summary of significant accounting policies

3 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Basis of Presentation and Summary of significant accounting policies

Note 2 – Basis of Presentation and Summary of significant accounting policies

Basis of presentation

Principles of Consolidation

Prior Period Reclassification

Emerging Growth Company Status

Use of estimates and assumptions

Foreign currency translation and transactions

Cash and cash equivalents

Cash and cash equivalents consist of amounts held as cash on hand and financial institution and financial service company deposits.

Accounts receivable, net

	·	the customer fails to comply with its payment schedule;

	·	the customer is in serious financial difficulty;

	·	a significant dispute with the customer has occurred regarding job progress or other matters;

	·	the customer breaches any of its contractual obligations;

	·	the customer appears to be financially distressed due to economic or legal factors;

	·	the business between the customer and the Company is not active; or

	·	other objective evidence indicates non-collectability of the accounts receivable.

Equity method investment

Variable interest entities

Goodwill

Intangible Assets, net

Schedule of estimated useful life
		Useful Life
Covenant Not to Compete		10 years
Supplier relationship		6 years
Software		5 years

Fair values of financial instruments

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and all other current assets and liabilities approximate fair values due to their short-term nature.

Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

Level 3 – Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data.

Schedule of impairment charges
	Total Fair Value		Level 1		Level 2		Level 3
Goodwill	$	3,034,110	$	–	$	–	$	3,034,110
Total	$	3,034,110	$	–	$	–	$	3,034,110

Revenue recognition

Payments received prior to the delivery of goods to customers are recorded as customer deposits.

Advertising costs

Cost of revenue

Cost of revenue mainly consists of costs for purchases of products, net of purchase discounts and rebates, and related inbound freight and delivery fees.

Operating expenses

Inventory, net

Debt Issuance Costs

Equity offering costs

Segment reporting

Leases

The Company records right-of-use (“ROU”) assets and related lease obligations on the balance sheet.

Stock-based Compensation

The Company will recognize forfeitures of such equity-based compensation as they occur.

Income taxes

Commitments and contingencies

Earnings per share

Recently issued accounting pronouncements

Subsequent events

Joint Ventures

3 Months Ended

Sep. 30, 2024

Joint Ventures

Joint Ventures

Note 3 - Joint Ventures

Box Harmony, LLC

Global Social Media, LLC

As of the date of this report, the members had not completed the capital contributions and no receivables were recorded.

Variable interest entity

3 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Variable interest entity

Note 4 – Variable interest entity

The Company did not provide financial or other support to the VIE for the periods presented where the Company was not otherwise contractually required to provide such support.

As of September 30, 2024 and June 30, 2024, there was no pledge or collateralization of the VIE assets that would be used to settle obligations of the VIE.

The carrying amount of the VIE’s assets and liabilities were as follows for the periods indicated:


	September 30, 2024		June 30, 2024
Cash in bank	$	330,760	$	222,648
Prepayments and other receivables	$	337,172	$	202,904
Rent deposit	$	–	$	72,281
Office equipment, net	$	9,174	$	12,205
Right of use – noncurrent	$	–	$	434,034
Accounts payable	$	213,717	$	381,013
Lease liability	$	–	$	443,059
Income tax payable	$	285,963	$	276,158
Other payables and accrued liabilities	$	652,387	$	514,285

The operating results of the VIE were as follows for the three months ended September 30, 2024:


	September 30, 2024
Revenue	$	–
Net loss after elimination of intercompany transactions	$	138,930

The operating results of the VIE were as follows for the three months ended September 30, 2023 :


	September 30, 2023
Revenue	$	–
Net loss after elimination of intercompany transactions	$	419,343

Accounts receivable, net

3 Months Ended

Sep. 30, 2024

Receivables [Abstract]

Accounts receivable, net

Note 5 – Accounts receivable, net

Accounts receivable for the Company consisted of the following as of the dates indicated below:

Schedule of accounts receivable
	September 30, 2024			June 30, 2024
Accounts receivable	$	14,109,162		$	15,095,479
Less: allowance for credit losses		(1,830,980	)		(355,386	)
Total accounts receivable	$	12,278,182		$	14,740,093

The changes in allowance for credit losses on accounts receivable are summarized below:


	Allowance for Credit Losses
Balance at June 30, 2023	$	70,000
Allowance recorded during the three months ended September 30, 2023		–
Balance at September 30, 2023	$	70,000

Balance at June 30, 2024	$	355,386
Allowance recorded during the three months ended September 30, 2024		1,475,594
Balance at September 30, 2024	$	1,830,980

Inventories, net

3 Months Ended

Sep. 30, 2024

Inventory Disclosure [Abstract]

Inventories, net

Note 6 – Inventories, net

As of September 30, 2024 and June 30, 2024, inventories consisted of finished goods ready for sale, net of allowance for obsolescence, amounted to $8,668,497 and $10,546,273, respectively.

Prepayments and other current assets, net

3 Months Ended

Sep. 30, 2024

Prepayments And Other Current Assets Net

Prepayments and other current assets, net

Note 7 – Prepayments and other current assets, net

As of September 30, 2024 and June 30, 2024, prepayments and other current assets consisted of the following:


	September 30, 2024		June 30, 2024
Advance to suppliers	$	1,953,093	$	1,567,528
Prepaid income taxes		16,687		31,496
Prepaid expenses and other receivables		839,134		747,510
Less: Allowance for credit losses		–		–

Total	$	2,808,914	$	2,346,534

Other receivables consisted of delivery fees of $2,786 and $3,995 from a third party for using the Company’s courier accounts at September 30, 2024 and June 30, 2024.

The changes in allowance for credit losses on other receivables are summarized below:


	Allowance for Credit Losses
Balance at June 30, 2023	$	249,128
Allowance recorded during the three months ended September 30, 2023		–
Balance at September 30, 2023	$	249,128

Balance at June 30, 2024	$	–
Allowance recorded during the three months ended September 30, 2024		–
Balance at September 30, 2024	$	–

During the year ended June 30, 2024, the Company collected $249,128 of aged other receivables and recorded a reduction of bad debts expense as a reversal of the allowance of credit loss.

Intangible assets, net

3 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets, net

Note 8 – Intangible assets, net

As of September 30, 2024 and June 30, 2024, intangible assets, net, consisted of the following:

Schedule of intangible assets, net
	September 30, 2024			June 30, 2024
Covenant not to compete	$	3,459,120		$	3,459,120
Supplier relationships		1,179,246			1,179,246
Software		534,591			534,591
Accumulated amortization		(1,704,560	)		(1,542,257	)
Total	$	3,468,357		$	3,630,700

Schedule of amortization expense
Year Ending June 30,	Amount
2025	$	487,028
2026		649,371
2027		609,277
2028		468,750
2029		345,912
Thereafter		908,019
Intangible assets, net	$	3,468,357

Other payables and accrued liabilities

3 Months Ended

Sep. 30, 2024

Payables and Accruals [Abstract]

Other payables and accrued liabilities

Note 9 – Other payables and accrued liabilities

As of September 30, 2024 and June 30, 2024, other payables and accrued liabilities consisted of the following:


	September 30, 2024		June 30, 2024
Accrued payables for inventory in transit	$	1,296,989	$	1,405,780
Credit cards payable		206,769		231,243
Customer deposit		326,364		313,358
Accrued Amazon fees		450,512		530,456
Sales taxes payable		437,265		442,889
Payroll liabilities		191,882		204,137
Settlement payable		–		325,000
Other accrued liabilities and payables		597,443		432,624

Total	$	3,507,224	$	3,885,487

Loans payable

3 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Loans payable

Note 10 – Loans payable

Long-term loan

Asset-based revolving loan

Borrowing base equal to the sum of

	Ø	Up to 90% of eligible credit card receivables
	Ø	Up to 85% of eligible trade accounts receivable
	Ø	Up to the lesser of (i) 65% of cost of eligible inventory or (ii) 85% of net orderly liquidation value of eligible inventory

	·	Interest rates of between LIBOR plus 2% and LIBOR plus 2.25% depending on utilization
	·	Undrawn fee of between 0.25% and 0.375% depending on utilization
	·	Maturity Date of November 12, 2024

Below is a summary of the interest expense recorded for the three months ended September 30, 2024 and 2023:

Schedule of interest expense
	2024		2023
Accrued interest	$	43,145	$	133,615
Credit utilization fees		21,767		15,525
Amortization of debt discount		66,305		66,305
Total	$	131,217	$	215,445

As of September 30, 2024, the Company was in compliance with the ABL covenants.

Promissory note payable

Short-term loan payable

Related party transactions

3 Months Ended

Sep. 30, 2024

Related party transactions

Note 11 - Related party transactions

On April 1, 2024, the Company borrowed $350,000 short-term loan from an entity owned by Mr. Allan Huang, one of the majority shareholders of the Company. See Note 10 above for details.

On July 8, 2023, the Company entered into an agreement with White Cherry for an on demand loan. See Note 10 above for details.

Income taxes

3 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

Income taxes

Note 12 – Income taxes

The income tax provision for the three months ended September 30, 2024 and 2023 consisted of the following:

Schedule of income tax provision
	September 30, 2024			September 30, 2023
Current:
Federal	$	–		$	(1,705	)
State		8,409			12,470
Foreign		–			–
Total current income tax provision		8,409			10,765
Deferred:
Federal		(521,137	)		(284,648	)
State		(123,784	)		(66,624	)
Foreign		–			64,625
Total deferred taxes		(644,921	)		(286,647	)

Total provision for income taxes	$	(636,512	)	$	(275,882	)


	September 30, 2024			September 30, 2023
Statutory tax rate
Federal		21.00%			21.00%
State (net of federal benefit)		5.51%			5.82%
Foreign tax rate difference		(3.16%	)		(4.88%	)
Net effect of state income tax deduction and other permanent differences		0.5%			(4.31%	)
Effective tax rate		23.85%			17.63%

The tax effects of temporary differences which give rise to significant portions of the deferred taxes are summarized as follows:

Schedule of deferred taxes
	September 30, 2024			June 30, 2024
Deferred tax assets
263A calculation	$	239,234		$	291,354
Inventory reserve		248,254			171,942
State taxes		1,766			4,840
Accrued expenses		131,467			155,860
ROU assets / liabilities		107,632			110,391
Net operating loss		2,304,794			2,190,589
Disallowed interest expense		269,322			258,352
Stock-based compensation		395,850			341,591
Valuation allowance		(85,054	)		(64,897	)
Allowance for credit loss		485,472			40,067
Total deferred tax assets		4,098,737			3,500,089

Deferred tax liabilities
Depreciation		(74,059	)		(77,287	)
Intangible assets acquired		(934,153	)		(977,197	)
Total deferred tax liabilities		(1,008,212	)		(1,054,484	)

Net deferred tax assets	$	3,090,525		$	2,445,605

For the three months ended September 30, 2024 and 2023, the Company recorded $20,157 and $64,145 of valuation allowance to reduce deferred tax assets for the losses incurred by DHS.

Earnings per share

3 Months Ended

Sep. 30, 2024

LOSSES PER SHARE

Earnings per share

Note 13 – Earnings per share

The following table sets forth the computation of basic and diluted earnings per share for the periods presented:


	For the three months ended September 30,
	2024			2023
Numerator:
Net loss attributable to iPower Inc.	$	(2,029,281	)	$	(1,286,515	)
Denominator:
Weighted-average shares used in computing basic and diluted earnings per share*	$	31,417,203		$	29,764,515
Losses per share of ordinary shares - basic and diluted	$	(0.06	)	$	(0.04	)

*	Due to the anti-dilutive effect, the computation of basic and diluted EPS did not include the shares underlying the exercise of warrants, options, and unvested RSUs as the Company had a net loss for the three months ended September 30, 2024 and 2023.

*	For the three months ended September 30, 2024 and 2023, 71,343 and 66,366 vested but unissued shares of restricted stock units under the 2020 Equity Incentive Plan (as discussed in Note 14) are considered issued shares and therefore are included in the computation of basic losses per share when the shares are fully vested.

Equity

3 Months Ended

Sep. 30, 2024

Equity [Abstract]

Equity

Note 14 – Equity

Common Stock

During the year ended June 30, 2024, the Company issued 107,293 shares of restricted Common Stock for RSUs vested.

·	Stock Price - $2.00
·	Exercise Price - $2.40
·	Volatility – 104%
·	Term –5 years
·	Risk Free Rate of Return – 4.24%

As of September 30, 2024 and June 30, 2024, there were 31,359,899 shares of Common Stock issued and outstanding.

Preferred Stock

Equity Incentive Plan

Restricted Stock Unit

Information relating to RSU grants is summarized as follows:

Schedule of RSU activity
	Total RSUs Issued			Total Fair Market Value of RSUs Issued as Compensation (1)
RSUs granted, but not vested, at June 30, 2024		3,250
RSUs granted		71,427		$	90,000
RSUs forfeited		–
RSUs vested		(27,058	)
RSUs granted, but not vested, at September 30, 2024		47,619

_____________________

(1)	The total fair value was based on the current stock price on the grant date.

As of September 30, 2024, of the 357,212 vested RSUs, 285,869 shares of Common Stock were issued, and 71,343 shares were to be issued in the near future.

Stock Option

The estimated achievement status of the operational milestones as of September 30, 2024 was as follows:


	Revenue in Fiscal Year			Operating Income in Fiscal Year
	Milestone (in Millions)	Achievement Status		Milestone (in Millions)	Achievement Status

$	90	Probable	$	6	Probable
$	100	Probable	$	8	Probable
$	125	Probable	$	10	Probable
$	150	Probable	$	12	Probable
$	200	Probable	$	16	–
$	250	–	$	20	–

	·	Stock Price - $1.12
	·	Volatility – 95.65%
	·	Term –10 years
	·	Risk Free Rate of Return – 2.93%
	·	Dividend Yield – 0%

On the grant date, a Black-Scholes Model was used to determine the fair value of the 2024 Stock Options with the following inputs:

	·	Stock Price - $1.30
	·	Exercise Price - $1.43
	·	Volatility – 101%
	·	Expected Term –5.71 years
	·	Risk Free Rate of Return – 3.66%
	·	Dividend Yield – 0%

Warrant liabilities

3 Months Ended

Sep. 30, 2024

Warrant Liabilities

Warrant liabilities

Note 15 – Warrant liabilities

Concentration of risk

3 Months Ended

Sep. 30, 2024

Risks and Uncertainties [Abstract]

Concentration of risk

Note 16 - Concentration of risk

Credit risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.

The business of DHS, the Company’s VIE, may be impacted by Chinese economic conditions, changes in regulations and laws, and other uncertainties.

Customer and vendor concentration risk

Commitments and contingencies

3 Months Ended

Sep. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and contingencies

Note 17 - Commitments and contingencies

Lease commitments

On May 1, 2022, the Company leased another fulfillment center in Duarte, California. The base rental fee is $56,000 to $59,410 per month through April 30, 2025.

Three months Ended September 30, 2024 and 2023:


Lease cost	9/30/2024		9/30/2023
Operating lease cost (included in G&A in the Company's statement of operations)	$	594,133	$	792,826

Other information
Cash paid for amounts included in the measurement of lease liabilities	$	604,117	$	792,317
Remaining term in years		0.58 – 3.67		0.08 – 4.67
Average discount rate - operating leases		5 - 6%		5 - 8%

The supplemental balance sheet information related to leases for the period is as follows:


Operating leases	9/30/2024		6/30/2024
Right of use asset - non-current	$	5,226,888	$	6,124,163

Lease Liability – current		1,686,889		2,039,301
Lease Liability - non-current		3,945,935		4,509,809
Total operating lease liabilities	$	5,632,824	$	6,549,110

Maturities of the Company’s lease liabilities are as follows:


	Operating
	Lease
For Year ending June 30:
2025	$	1,535,511
2026		1,533,918
2027		1,586,572
2028		1,459,409
Less: Imputed interest/present value discount		(482,586	)
Present value of lease liabilities	$	5,632,824

Contingencies

Subsequent events

3 Months Ended

Sep. 30, 2024

Subsequent Events [Abstract]

Subsequent events

Note 18 - Subsequent events

Basis of Presentation and Summary of significant accounting policies (Policies)

3 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Basis of presentation

Principles of Consolidation

Prior Period Reclassification

Emerging Growth Company Status

Use of estimates and assumptions

Foreign currency translation and transactions

Cash and cash equivalents

Cash and cash equivalents consist of amounts held as cash on hand and financial institution and financial service company deposits.

Accounts receivable, net

	·	the customer fails to comply with its payment schedule;

	·	the customer is in serious financial difficulty;

	·	a significant dispute with the customer has occurred regarding job progress or other matters;

	·	the customer breaches any of its contractual obligations;

	·	the customer appears to be financially distressed due to economic or legal factors;

	·	the business between the customer and the Company is not active; or

	·	other objective evidence indicates non-collectability of the accounts receivable.

Equity method investment

Variable interest entities

Goodwill

Intangible Assets, net

Schedule of estimated useful life
		Useful Life
Covenant Not to Compete		10 years
Supplier relationship		6 years
Software		5 years

Fair values of financial instruments

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and all other current assets and liabilities approximate fair values due to their short-term nature.

Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

Level 3 – Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data.

Schedule of impairment charges
	Total Fair Value		Level 1		Level 2		Level 3
Goodwill	$	3,034,110	$	–	$	–	$	3,034,110
Total	$	3,034,110	$	–	$	–	$	3,034,110

Revenue recognition

Payments received prior to the delivery of goods to customers are recorded as customer deposits.

Advertising costs

Cost of revenue

Cost of revenue mainly consists of costs for purchases of products, net of purchase discounts and rebates, and related inbound freight and delivery fees.

Operating expenses

Inventory, net

Debt Issuance Costs

Equity offering costs

Segment reporting

Leases

The Company records right-of-use (“ROU”) assets and related lease obligations on the balance sheet.

Stock-based Compensation

The Company will recognize forfeitures of such equity-based compensation as they occur.

Income taxes

Commitments and contingencies

Earnings per share

Recently issued accounting pronouncements

Subsequent events

Basis of Presentation and Summary of significant accounting policies (Tables)

3 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Schedule of estimated useful life

Schedule of estimated useful life
		Useful Life
Covenant Not to Compete		10 years
Supplier relationship		6 years
Software		5 years

Schedule of impairment charges

Schedule of impairment charges
	Total Fair Value		Level 1		Level 2		Level 3
Goodwill	$	3,034,110	$	–	$	–	$	3,034,110
Total	$	3,034,110	$	–	$	–	$	3,034,110

Variable interest entity (Tables)

3 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of VIE’s assets and liabilities


	September 30, 2024		June 30, 2024
Cash in bank	$	330,760	$	222,648
Prepayments and other receivables	$	337,172	$	202,904
Rent deposit	$	–	$	72,281
Office equipment, net	$	9,174	$	12,205
Right of use – noncurrent	$	–	$	434,034
Accounts payable	$	213,717	$	381,013
Lease liability	$	–	$	443,059
Income tax payable	$	285,963	$	276,158
Other payables and accrued liabilities	$	652,387	$	514,285

Schedule of operating results of the VIE


	September 30, 2024
Revenue	$	–
Net loss after elimination of intercompany transactions	$	138,930

The operating results of the VIE were as follows for the three months ended September 30, 2023 :


	September 30, 2023
Revenue	$	–
Net loss after elimination of intercompany transactions	$	419,343

Accounts receivable, net (Tables)

3 Months Ended

Sep. 30, 2024

Receivables [Abstract]

Schedule of accounts receivable

Schedule of accounts receivable
	September 30, 2024			June 30, 2024
Accounts receivable	$	14,109,162		$	15,095,479
Less: allowance for credit losses		(1,830,980	)		(355,386	)
Total accounts receivable	$	12,278,182		$	14,740,093

Schedule of changes in allowance for credit losses on accounts receivable


	Allowance for Credit Losses
Balance at June 30, 2023	$	70,000
Allowance recorded during the three months ended September 30, 2023		–
Balance at September 30, 2023	$	70,000

Balance at June 30, 2024	$	355,386
Allowance recorded during the three months ended September 30, 2024		1,475,594
Balance at September 30, 2024	$	1,830,980

Prepayments and other current assets, net (Tables)

3 Months Ended

Sep. 30, 2024

Prepayments And Other Current Assets Net

Schedule of prepayments and other current assets


	September 30, 2024		June 30, 2024
Advance to suppliers	$	1,953,093	$	1,567,528
Prepaid income taxes		16,687		31,496
Prepaid expenses and other receivables		839,134		747,510
Less: Allowance for credit losses		–		–

Total	$	2,808,914	$	2,346,534

Schedule of changes in allowance for credit losses on other receivables


	Allowance for Credit Losses
Balance at June 30, 2023	$	249,128
Allowance recorded during the three months ended September 30, 2023		–
Balance at September 30, 2023	$	249,128

Balance at June 30, 2024	$	–
Allowance recorded during the three months ended September 30, 2024		–
Balance at September 30, 2024	$	–

Intangible assets, net (Tables)

3 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of intangible assets, net

Schedule of intangible assets, net
	September 30, 2024			June 30, 2024
Covenant not to compete	$	3,459,120		$	3,459,120
Supplier relationships		1,179,246			1,179,246
Software		534,591			534,591
Accumulated amortization		(1,704,560	)		(1,542,257	)
Total	$	3,468,357		$	3,630,700

Schedule of amortization expense

Schedule of amortization expense
Year Ending June 30,	Amount
2025	$	487,028
2026		649,371
2027		609,277
2028		468,750
2029		345,912
Thereafter		908,019
Intangible assets, net	$	3,468,357

Other payables and accrued liabilities (Tables)

3 Months Ended

Sep. 30, 2024

Payables and Accruals [Abstract]

Schedule of other payables and accrued liabilities


	September 30, 2024		June 30, 2024
Accrued payables for inventory in transit	$	1,296,989	$	1,405,780
Credit cards payable		206,769		231,243
Customer deposit		326,364		313,358
Accrued Amazon fees		450,512		530,456
Sales taxes payable		437,265		442,889
Payroll liabilities		191,882		204,137
Settlement payable		–		325,000
Other accrued liabilities and payables		597,443		432,624

Total	$	3,507,224	$	3,885,487

Loans payable (Tables)

3 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Schedule of interest expense

Schedule of interest expense
	2024		2023
Accrued interest	$	43,145	$	133,615
Credit utilization fees		21,767		15,525
Amortization of debt discount		66,305		66,305
Total	$	131,217	$	215,445

Income taxes (Tables)

3 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

Schedule of income tax provision

Schedule of income tax provision
	September 30, 2024			September 30, 2023
Current:
Federal	$	–		$	(1,705	)
State		8,409			12,470
Foreign		–			–
Total current income tax provision		8,409			10,765
Deferred:
Federal		(521,137	)		(284,648	)
State		(123,784	)		(66,624	)
Foreign		–			64,625
Total deferred taxes		(644,921	)		(286,647	)

Total provision for income taxes	$	(636,512	)	$	(275,882	)

Schedule of reconciliation of effective income tax expenses rate


	September 30, 2024			September 30, 2023
Statutory tax rate
Federal		21.00%			21.00%
State (net of federal benefit)		5.51%			5.82%
Foreign tax rate difference		(3.16%	)		(4.88%	)
Net effect of state income tax deduction and other permanent differences		0.5%			(4.31%	)
Effective tax rate		23.85%			17.63%

Schedule of deferred taxes

Schedule of deferred taxes
	September 30, 2024			June 30, 2024
Deferred tax assets
263A calculation	$	239,234		$	291,354
Inventory reserve		248,254			171,942
State taxes		1,766			4,840
Accrued expenses		131,467			155,860
ROU assets / liabilities		107,632			110,391
Net operating loss		2,304,794			2,190,589
Disallowed interest expense		269,322			258,352
Stock-based compensation		395,850			341,591
Valuation allowance		(85,054	)		(64,897	)
Allowance for credit loss		485,472			40,067
Total deferred tax assets		4,098,737			3,500,089

Deferred tax liabilities
Depreciation		(74,059	)		(77,287	)
Intangible assets acquired		(934,153	)		(977,197	)
Total deferred tax liabilities		(1,008,212	)		(1,054,484	)

Net deferred tax assets	$	3,090,525		$	2,445,605

Earnings per share (Tables)

3 Months Ended

Sep. 30, 2024

LOSSES PER SHARE

Schedule of computation of basic and diluted earnings per share


	For the three months ended September 30,
	2024			2023
Numerator:
Net loss attributable to iPower Inc.	$	(2,029,281	)	$	(1,286,515	)
Denominator:
Weighted-average shares used in computing basic and diluted earnings per share*	$	31,417,203		$	29,764,515
Losses per share of ordinary shares - basic and diluted	$	(0.06	)	$	(0.04	)

*	Due to the anti-dilutive effect, the computation of basic and diluted EPS did not include the shares underlying the exercise of warrants, options, and unvested RSUs as the Company had a net loss for the three months ended September 30, 2024 and 2023.

*	For the three months ended September 30, 2024 and 2023, 71,343 and 66,366 vested but unissued shares of restricted stock units under the 2020 Equity Incentive Plan (as discussed in Note 14) are considered issued shares and therefore are included in the computation of basic losses per share when the shares are fully vested.

Equity (Tables)

3 Months Ended

Sep. 30, 2024

Equity [Abstract]

Schedule of RSU activity

Schedule of RSU activity
	Total RSUs Issued			Total Fair Market Value of RSUs Issued as Compensation (1)
RSUs granted, but not vested, at June 30, 2024		3,250
RSUs granted		71,427		$	90,000
RSUs forfeited		–
RSUs vested		(27,058	)
RSUs granted, but not vested, at September 30, 2024		47,619

_____________________

(1)	The total fair value was based on the current stock price on the grant date.

Commitments and contingencies (Tables)

3 Months Ended

Sep. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Schedule of lease cost and other information


Lease cost	9/30/2024		9/30/2023
Operating lease cost (included in G&A in the Company's statement of operations)	$	594,133	$	792,826

Other information
Cash paid for amounts included in the measurement of lease liabilities	$	604,117	$	792,317
Remaining term in years		0.58 – 3.67		0.08 – 4.67
Average discount rate - operating leases		5 - 6%		5 - 8%

Schedule of supplemental balance sheet information related to leases


Operating leases	9/30/2024		6/30/2024
Right of use asset - non-current	$	5,226,888	$	6,124,163

Lease Liability – current		1,686,889		2,039,301
Lease Liability - non-current		3,945,935		4,509,809
Total operating lease liabilities	$	5,632,824	$	6,549,110

Schedule of maturities of lease liabilities


	Operating
	Lease
For Year ending June 30:
2025	$	1,535,511
2026		1,533,918
2027		1,586,572
2028		1,459,409
Less: Imputed interest/present value discount		(482,586	)
Present value of lease liabilities	$	5,632,824

Basis of Presentation and Summary of significant accounting policies (Details - Useful lives)	Sep. 30, 2024
Noncompete Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible asset, useful life	10 years
Supplier Relationship [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible asset, useful life	6 years
Software [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible asset, useful life	5 years

Basis of Presentation and Summary of significant accounting policies (Details - Fair values of financial instruments) - Fair Value, Nonrecurring [Member]	Sep. 30, 2024 USD ($)
Fair Value, Inputs, Level 1, Level 2, and Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets fair value disclosure	$ 3,034,110
Fair Value, Inputs, Level 1, Level 2, and Level 3 [Member] \| Goodwill [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets fair value disclosure	3,034,110
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets fair value disclosure	0
Fair Value, Inputs, Level 1 [Member] \| Goodwill [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets fair value disclosure	0
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets fair value disclosure	0
Fair Value, Inputs, Level 2 [Member] \| Goodwill [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets fair value disclosure	0
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets fair value disclosure	3,034,110
Fair Value, Inputs, Level 3 [Member] \| Goodwill [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets fair value disclosure	$ 3,034,110

Basis of Presentation and Summary of significant accounting policies (Details Narrative)	3 Months Ended
	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Jun. 30, 2024 USD ($)
Product Information [Line Items]
Additional allowance for credit loss	$ 1,400,000
Goodwill	3,034,110		$ 3,034,110
Goodwill, Fair Value Disclosure	3,034,110		3,034,110
Advertising and promotion costs	651,125	$ 1,570,742
Vendor credits	0	$ 0
CHINA
Product Information [Line Items]
Inventory	$ 1,600,000		$ 1,900,000
Revenue Benchmark [Member] \| Customer Concentration Risk [Member] \| Hydroponic Products [Member]
Product Information [Line Items]
Concentration risk, percentage	17.20%	16.80%
Revenue Benchmark [Member] \| Customer Concentration Risk [Member] \| General Gardening Home Goods And Other Products And Accessories [Member]
Product Information [Line Items]
Concentration risk, percentage	82.80%	83.20%
Revenue Benchmark [Member] \| Customer Concentration Risk [Member] \| Amazon Sales To Canada And Other Foreign Countries [Member]
Product Information [Line Items]
Concentration risk, percentage	13.40%	8.20%
Box Harmony [Member]
Product Information [Line Items]
Ownership interest	40.00%
China, Yuan Renminbi
Product Information [Line Items]
Translation rate at period end	7.0181
Translation rate during period	7.1623

Joint Ventures (Details Narrative)	Sep. 30, 2024
Box Harmony [Member]
Equity interest rate	40.00%
GSM [Member]
Equity interest rate	60.00%

Variable interest entity (Details - Assets and liabilities) - USD ($)	Sep. 30, 2024	Jun. 30, 2024
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Right of use – noncurrent	$ 5,226,888	$ 6,124,163
Accounts payable	8,352,699	11,227,116
Lease liability	5,632,824	6,549,110
Income tax payable	285,963	276,158
Variable Interest Entity, Primary Beneficiary [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Cash in bank	330,760	222,648
Prepayments and other receivables	337,172	202,904
Rent deposit	0	72,281
Office equipment, net	9,174	12,205
Right of use – noncurrent	0	434,034
Accounts payable	213,717	381,013
Lease liability	0	443,059
Income tax payable	285,963	276,158
Other payables and accrued liabilities	$ 652,387	$ 514,285

Variable interest entity (Details - VIE operations) - USD ($)	3 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Revenue	$ 19,008,521	$ 26,508,374
Net loss after elimination of intercompany transactions	(2,029,281)	(1,286,515)
Variable Interest Entity, Primary Beneficiary [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Revenue	0	0
Net loss after elimination of intercompany transactions	$ 138,930	$ 419,343

Variable interest entity (Details Narrative) - Variable Interest Entity, Primary Beneficiary [Member] - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Revenue before consolidation	$ 1,400	$ 2,100
Net loss before elimination	$ 200	$ 50

Accounts receivable, net (Details - Accounts receivable) - USD ($)	Sep. 30, 2024	Jun. 30, 2024
Receivables [Abstract]
Accounts receivable	$ 14,109,162	$ 15,095,479
Less: allowance for credit losses	(1,830,980)	(355,386)
Total accounts receivable	$ 12,278,182	$ 14,740,093

Accounts receivable, net (Details - Credit losses) - USD ($)	3 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Receivables [Abstract]
Allowance for credit losses, beginning balance	$ 355,386	$ 70,000
Allowance for credit losses	1,475,594	0
Allowance for credit losses, ending balance	$ 1,830,980	$ 70,000

Inventories, net (Details Narrative) - USD ($)	3 Months Ended
Inventories, net (Details Narrative) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Jun. 30, 2024
Inventory Disclosure [Abstract]
Inventory, net	$ 8,668,497		$ 10,546,273
Inventory reserve expense	288,474	$ 105,192
Allowance for obsolescence	$ 936,299		$ 647,825

Prepayments and other current assets, net (Details - Other assets) - USD ($)	Sep. 30, 2024	Jun. 30, 2024	Sep. 30, 2023	Jun. 30, 2023
Prepayments and other current assets	$ 2,808,914	$ 2,346,534
Allowance for credit losses	0	0	$ 249,128	$ 249,128
Advance To Suppliers [Member]
Prepayments and other current assets	1,953,093	1,567,528
Prepaid Income Taxes [Member]
Prepayments and other current assets	16,687	31,496
Prepaid Expenses And Other Receivables [Member]
Prepayments and other current assets	$ 839,134	$ 747,510

Prepayments and other current assets, net (Details - Credit losses) - USD ($)	3 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Prepayments And Other Current Assets Net
Allowance for credit losses, beginning balance	$ 0	$ 249,128
Allowance recorded during the period ended	0	0
Allowance for credit losses, ending balance	$ 0	$ 249,128

Prepayments and other current assets, net (Details Narrative) - USD ($)	12 Months Ended
	Jun. 30, 2024	Sep. 30, 2024
Prepayments And Other Current Assets Net
Other receivables	$ 3,995	$ 2,786
Accounts Receivable, Allowance for Credit Loss, Writeoff	$ 249,128

Intangible assets, net (Details) - USD ($)	Sep. 30, 2024	Jun. 30, 2024
Finite-Lived Intangible Assets [Line Items]
Accumulated amortization	$ (1,704,560)	$ (1,542,257)
Intangible assets, net	3,468,357	3,630,700
Noncompete Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	3,459,120	3,459,120
Supplier Relationship [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	1,179,246	1,179,246
Software [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 534,591	$ 534,591

Intangible assets, net (Details - Future amortization) - USD ($)	Sep. 30, 2024	Jun. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]
2025	$ 487,028
2026	649,371
2027	609,277
2028	468,750
2029	345,912
Thereafter	908,019
Intangible assets, net	$ 3,468,357	$ 3,630,700

Intangible assets, net (Details Narrative) - USD ($)	3 Months Ended
Intangible assets, net (Details Narrative) - USD ($)	Sep. 30, 2024	Sep. 30, 2023
Restructuring Cost and Reserve [Line Items]
Amortization expense	$ 162,343	$ 162,343
Anivia [Member]
Restructuring Cost and Reserve [Line Items]
Weighted average remaining life for finite-lived intangible assets	5 years 11 months 12 days

Other payables and accrued liabilities (Details) - USD ($)	Sep. 30, 2024	Jun. 30, 2024
Payables and Accruals [Abstract]
Accrued payables for inventory in transit	$ 1,296,989	$ 1,405,780
Credit cards payable	206,769	231,243
Customer deposit	326,364	313,358
Accrued Amazon fees	450,512	530,456
Sales taxes payable	437,265	442,889
Payroll liabilities	191,882	204,137
Settlement payable	0	325,000
Other accrued liabilities and payables	597,443	432,624
Total	$ 3,507,224	$ 3,885,487

Loans payable (Details - Interest expense) - USD ($)	3 Months Ended
Loans payable (Details - Interest expense) - USD ($)	Sep. 30, 2024	Sep. 30, 2023
Debt Disclosure [Abstract]
Accrued interest	$ 43,145	$ 133,615
Credit utilization fees	21,767	15,525
Amortization of debt discount	66,305	66,305
Total	$ 131,217	$ 215,445

Loans payable (Details Narrative) - USD ($)				1 Months Ended				3 Months Ended		12 Months Ended
Loans payable (Details Narrative) - USD ($)	Jan. 31, 2024	Jul. 31, 2023	Nov. 12, 2021	Feb. 29, 2024	Aug. 31, 2023	Feb. 28, 2023	Oct. 31, 2022	Sep. 30, 2024	Sep. 30, 2023	Jun. 30, 2024	Apr. 01, 2024	Jul. 16, 2023	Feb. 15, 2022
Line of Credit Facility [Line Items]
Amortization of note premium								$ 66,305	$ 53,726
White Cherry Limited [Member]
Line of Credit Facility [Line Items]
Interest expense								0	6,060
Debt borrowed												$ 2,000,000
Repayment of debt	$ 1,000,000	$ 1,000,000
Accredited Investor [Member] \| Ondemand Loan 2 [Member]
Line of Credit Facility [Line Items]
Interest expense								3,733
Interest payable										$ 7,615
Note payable, balance										491,214
Allan Huang [Member] \| RP Loan [Member]
Line of Credit Facility [Line Items]
Debt face amount											$ 350,000
Note payable, balance								350,000		350,000
Anivia Purchase Note [Member]
Line of Credit Facility [Line Items]
Debt face amount													$ 3,500,000
Note payable fair vallue													$ 3,600,000
Repayment of debt				$ 875,000	$ 875,000	$ 875,000	$ 875,000
Interest expense								0	19,688	39,429
Amortization of note premium								0	$ 12,579	31,602
Promissory note payable				$ 275,679				0		0
Asset Based Revolving Loan [Member]
Line of Credit Facility [Line Items]
Maturity date			Nov. 12, 2024
Line of credit maximum borrowing amount			$ 25.00
Payments of financing cost			$ 796,035
Long-Term Line of Credit								$ 3,131,955		$ 5,500,739

Related party transactions (Details Narrative) - USD ($)	Sep. 30, 2024	Jun. 30, 2024	Apr. 01, 2024
MII Strategy Inc [Member]
Related Party Transaction [Line Items]
[custom:DueFromRelatedPartyTransactions-0]	$ 56,406	$ 56,406
Allan Huang [Member] \| RP Loan [Member]
Related Party Transaction [Line Items]
Principal amount			$ 350,000

Income taxes (Details - Tax provision) - USD ($)	3 Months Ended
Income taxes (Details - Tax provision) - USD ($)	Sep. 30, 2024	Sep. 30, 2023
Current:
Federal	$ 0	$ (1,705)
State	8,409	12,470
Foreign	0	0
Total current income tax provision	8,409	10,765
Deferred:
Federal	(521,137)	(284,648)
State	(123,784)	(66,624)
Foreign	0	64,625
Total deferred taxes	(644,921)	(286,647)
Total provision for income taxes	$ (636,512)	$ (275,882)

Income taxes (Details - Reconciliation of effective income tax rate)	3 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Federal	21.00%	21.00%
State (net of federal benefit)	5.51%	5.82%
Foreign tax rate difference	(3.16%)	(4.88%)
Net effect of state income tax deduction and other permanent differences	0.50%	(4.31%)
Effective tax rate	23.85%	17.63%

Income taxes (Details - Deferred taxes) - USD ($)	Sep. 30, 2024	Jun. 30, 2024
Deferred tax assets
263A calculation	$ 239,234	$ 291,354
Inventory reserve	248,254	171,942
State taxes	1,766	4,840
Accrued expenses	131,467	155,860
ROU assets / liabilities	107,632	110,391
Net operating loss	2,304,794	2,190,589
Disallowed interest expense	269,322	258,352
Stock-based compensation	395,850	341,591
Valuation allowance	(85,054)	(64,897)
Allowance for credit loss	485,472	40,067
Total deferred tax assets	4,098,737	3,500,089
Deferred tax liabilities
Depreciation	(74,059)	(77,287)
Intangible assets acquired	(934,153)	(977,197)
Total deferred tax liabilities	(1,008,212)	(1,054,484)
Net deferred tax assets	$ 3,090,525	$ 2,445,605

Income taxes (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
Income taxes (Details Narrative) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Jun. 30, 2024
Effective Income Tax Rate Reconciliation [Line Items]
Effective Income Tax Rate Reconciliation, GILTI, Amount	$ 0		$ 0
Goodwill	3,034,110		3,034,110
Valuation allowance	20,157	$ 64,145
US Tax Authorities [Member]
Effective Income Tax Rate Reconciliation [Line Items]
Prepaid taxes	16,687		31,496
Chinese Tax Authorities [Member]
Effective Income Tax Rate Reconciliation [Line Items]
Prepaid taxes	285,964		$ 276,158
GILTI [Member]
Effective Income Tax Rate Reconciliation [Line Items]
Goodwill	$ 6,094,144

Earnings per share (Details - Basic and diluted earnings per share) - USD ($)	3 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Numerator:
Net loss attributable to iPower Inc.	$ (2,029,281)	$ (1,286,515)
Denominator:
Weighted-average shares used in computing basic earnings per share	31,417,203	29,764,515
Weighted-average shares used in computing diluted earnings per share	31,417,203	29,764,515
Losses per share of ordinary shares - basic	$ (0.06)	$ (0.04)
Losses per share of ordinary shares - diluted	$ (0.06)	$ (0.04)
Unissued shares of restricted stock units	71,343	66,366

Equity (Details - RSU's activity) - Restricted Stock Units (RSUs) [Member]

3 Months Ended

Sep. 30, 2024

USD ($)

Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]

RSUs granted but not vested, Beginning balance

3,250

RSUs granted

71,427

Total fair market value of RSUs issued as compensation, RSUs granted | $

$ 90,000

^[1]

RSUs forfeited

RSUs vested

(27,058)

RSUs granted but not vested, Ending balance

47,619

[1]	The total fair value was based on the current stock price on the grant date.

Equity (Details Narrative) - USD ($)					3 Months Ended		12 Months Ended
Equity (Details Narrative) - USD ($)	Aug. 29, 2024	Jun. 18, 2024	May 12, 2022	May 11, 2021	Sep. 30, 2024	Sep. 30, 2023	Jun. 30, 2024	May 13, 2022	May 05, 2021
Subsidiary, Sale of Stock [Line Items]
Common stock, shares authorized					180,000,000		180,000,000
Preferred stock shares authorized					20,000,000		20,000,000
Preferred stock, par value					$ 0.001		$ 0.001
Common stock, par value					$ 0.001		$ 0.001
Common Stock, Shares, Outstanding					31,359,899		31,359,899
Preferred stock, shares issued					0		0
Preferred stock, shares outstanding					0		0
Stock-based compensation expense					$ 205,960	$ 117,882
Options vested					0
Stock options vested					71,343	66,366
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Period Increase (Decrease)					62,500
Common Stock [Member]
Subsidiary, Sale of Stock [Line Items]
Stock issued for RSU's vested					285,869
Stock to be issued for RSU's vested					71,343
Mr Vassily [Member]
Subsidiary, Sale of Stock [Line Items]
Cash performance bonus			$ 60,000
Options, grants in period			330,000
Exercise price								$ 1.12
Chenlong Tan [Member]
Subsidiary, Sale of Stock [Line Items]
Options, grants in period			3,000,000
Stock options granted	1,200,000
Monte Carlo [Member]
Subsidiary, Sale of Stock [Line Items]
Share price			$ 1.12
Volatility rate			95.65%
Expected term			10 years
Risk free rate of return			2.93%
Dividend yield			0.00%
Equity Incentive Plan [Member]
Subsidiary, Sale of Stock [Line Items]
Number of shares authorized									5,000,000
Private Placement Offering [Member]
Subsidiary, Sale of Stock [Line Items]
Share price		$ 2.00
Warrants fair value		$ 3,100,000
Relative fair value after allocation of shares		$ 1,700,000
Warrant exercise price		2.40
Volatility rate		104.00%
Expected term		5 years
Risk free rate of return		4.24%
Share Cancellation [Member]
Subsidiary, Sale of Stock [Line Items]
Share price		$ 2.40
Number of share cancellation		541,667
Additional paid-in capital		$ 542
Registered Direct Offering [Member]
Subsidiary, Sale of Stock [Line Items]
Shares issued		2,083,334
Purchase of warrants		2,083,334
Aggregate gross proceeds		$ 5,000,002
Warrants outstanding term		5 years
Share price		$ 2.40
Compensation fee percentage		6.50%
Placement agent fees and other direct offering costs		$ 456,913
Aggregate offering costs		$ 4,543,089
Stock Issued For Vested RSUs [Member]
Subsidiary, Sale of Stock [Line Items]
Number of RSU's granted							107,293
Restricted Stock Units (RSUs) [Member]
Subsidiary, Sale of Stock [Line Items]
Number of RSU's granted					71,427
Stock-based compensation expense					$ 31,788	$ 7,500
Number of restricted shares, forfeited					0	0
Unvested RSUs					47,619		3,250
Unamortized expense					$ 60,000		$ 1,788
Conversion of RSUs vested, shares					357,212
Restricted Stock Units (RSUs) [Member] \| Various Parties [Member]
Subsidiary, Sale of Stock [Line Items]
Number of RSU's granted				46,546
Options Granted [Member]
Subsidiary, Sale of Stock [Line Items]
Stock-based compensation expense					$ 110,382	$ 110,382
Equity Option [Member]
Subsidiary, Sale of Stock [Line Items]
Common stock, par value	$ 0.001
Share price	$ 1.30
Volatility rate	101.00%
Expected term	5 years 8 months 15 days
Risk free rate of return	3.66%
Stock-based compensation expense					$ 63,790
Dividend yield	0.00%
Exercise price per share	$ 1.43
Stock options term	10 years
Stock options vested	30,000				32,500
Share price	$ 1.43

Warrant liabilities (Details Narrative) - shares	Sep. 30, 2024	Jun. 30, 2024
Warrant Liabilities
Warrants outstanding	0	0

Concentration of risk (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
Concentration of risk (Details Narrative) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Jun. 30, 2024
Concentration Risk [Line Items]
Cash and cash equivalents	$ 2,577,305		$ 7,377,837
Cash, uninsured amount	$ 1,400,000		$ 5,800,000
Total Purchases [Member] \| Product Concentration Risk [Member] \| One Supplier [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	11.00%	15.00%
Accounts Payable [Member] \| Product Concentration Risk [Member] \| One Supplier [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	20.00%		36.00%
Amazon Vendor And Amazon Seller [Member] \| Revenue Benchmark [Member] \| Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	89.00%
Amazon Vendor And Amazon Seller [Member] \| Accounts Receivable [Member] \| Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	87.00%		91.00%

Commitments and contingencies (Details - Lease cost) - USD ($)	3 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Operating lease cost	$ 594,133	$ 792,826
Cash paid for amounts included in the measurement of lease liabilities	$ 604,117	$ 792,317
Remaining term in years	0.58 – 3.67	0.08 – 4.67
Average discount rate - operating leases	5 - 6%	5 - 8%

Commitments and contingencies (Details - Balance sheet) - USD ($)	Sep. 30, 2024	Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
Right of use asset - non-current	$ 5,226,888	$ 6,124,163
Lease Liability – current	1,686,889	2,039,301
Lease Liability - non-current	3,945,935	4,509,809
Total operating lease liabilities	$ 5,632,824	$ 6,549,110

Commitments and contingencies (Details - Lease maturity) - USD ($)	Sep. 30, 2024	Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
2025	$ 1,535,511
2026	1,533,918
2027	1,586,572
2028	1,459,409
Less: Imputed interest/present value discount	(482,586)
Present value of lease liabilities	$ 5,632,824	$ 6,549,110

Commitments and contingencies (Details Narrative) - USD ($)	Jun. 18, 2024	Apr. 03, 2024	Sep. 30, 2024	Jun. 30, 2024
Offsetting Assets [Line Items]
Total commitment of term lease			$ 12,651,376
Right of use - non-current			5,226,888	$ 6,124,163
Lease liability			$ 5,632,824	6,549,110
Settlement Agreement [Member]
Offsetting Assets [Line Items]
Settlement payment		$ 1,300,000
Outstanding balance of settlement amount				$ 325,000
Pledge Agreement [Member]
Offsetting Assets [Line Items]
Pledged shares		1,300,000
Total number of pledged shares		2,600,000
Share Cancellation [Member]
Offsetting Assets [Line Items]
Share price	$ 2.40
Number of shares returned	541,667