iPower Inc.

Previous wording

Driven bytechnologyand data, iPower Inc. (“iPower,” “we,” “us,” or “the Company”)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, and our combined 121,000 sq. ft. 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.

Current wording

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, and our 99,347 square foot fulfillment centers in Rancho Cucamonga, 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.

Previous wording

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.

Current wording

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 on existing products and supply chain efficiencies.

Previous wording

At present the majority of our products are sourced either in the United States or China. On April 10, 2025, the U.S. announced it would be imposing tariffs of 145% on all goods imported from China, and the Chinese government countered by imposing 125% tariffs on all goods exported from the U.S. to China. On May 12, 2025, the United States and China announced a 90-day pause on most of their recent tariffs on each other. The combined U.S. tariff rate on Chinese imports will be cut to 30% from 145%, while China’s levies on U.S. imports will fall to 10% from 125%. We anticipate general economic disruption and uncertainty in trade stability during the near term. This is on top of any global economic disruptions caused by the wars between Ukraine and Russia and Israel and Hamas. 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, as well as a 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. While we are actively working on a cost-restructuring plan to reduce our costs and expenses, we anticipate that these challenges around trade and general supply chain disruption will remain uncertain in the near term and are unable to predict with certainty the effects of such disruptions on our business.

Current wording

While at present the majority of our products are sourced either in the United States or China, the military conflict between Russia and Ukraine may nonetheless increase the likelihood of supply chain interruptions and hinder our ability to find the materials we need to make our products. Thus far, as a result of the general global economic disruption, 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, 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.

Previous wording

Among our suite of products, 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. Demand for our products could be impacted by changes in the regulatory environment with respect to such industries and segments.

Current wording

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.

Previous wording

Revenues for the three months ended March 31, 2025 decreased 28.9% to $16,569,678 as compared to $23,308,508 for the three months ended March 31, 2024. While pricing remained stable and with the additional logistics service income, the decrease was mainly due to uncertainty over tariffs and reduction of Amazon vendor orders, offset by an increase of retail channel and service revenues during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

Current wording

Revenues for the three months ended September 30, 2025 decreased 36.8% to $12,017,467 as compared to $19,008,521 for the three months ended September 30, 2024.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, 2025. In addition, the Company also experienced a significant decrease in amazon orders due to uncertainty over tariffs during quarter ended September 30, 2025.

Previous wording

Costs of revenues for the nine months ended March 31, 2025 decreased 17.7% to $30,596,013 as compared to $37,172,810 for the nine months ended March 31, 2024. The decrease was primarily due to a combination of the costs related to the logistics service income and the decrease in product sales, freight costs, and lowered product costs resulted from management’s efforts on supply chain management.

Current wording

Costs of revenues for the three months ended September 30, 2025 decreased 31.5% to $7,210,943 as compared to $10,520,624 for the three months ended September 30, 2024. The decrease wasprimarily due to a combination of the costs related to the logistics service income and the decrease in sales, freight costs, and lowered product costs resulting from management’s efforts on supply chain management.

Previous wording

Gross profit was $7,176,974 for the three months ended March 31, 2025 as compared to $10,367,109 for the three months ended March 31, 2024. While the overall gross profit ratio of the total sales revenues decreased to 43.3% for the three months ended March 31, 2025 from 44.5% for the three months ended March 31, 2024, the gross profit ratio of product sales revenue for the three months ended March 31, 2025 and 2024 was 45.2% and 45.3%, respectively. The decrease in the gross profit ratio was primarily driven by the increase in the logistics service income and secondarily by increases in freight costs and product costs.

Current wording

Gross profit was $4,806,524 for the three months ended September 30, 2025 as compared to $8,487,897 for the three months ended September 30, 2024. While the overall gross profit ratio of the total sales revenues decreased to 40.0% for the three months ended September 30, 2025 from 44.7% for the three months ended September 30, 2024, the gross profit ratio of product sales revenue for the three months ended September 30, 2025 and 2024 was 43.9% and 45.7%, respectively. The decrease in the gross profit ratio was primarily driven by the increase in the logistics service income and secondarily by increases in freight costs and product costs.

Previous wording

Operating expenses for the nine months ended March 31, 2025 decreased 16.7% to $26,386,587 as compared to $31,663,942 for the nine months ended March 31, 2024. The decrease was mainly due to the combination of a decrease in selling and fulfillment expenses of $6.4 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 $1.1 million, which included allowance for credit losses, travel expenses and other operating expenses, partly offset by reversal of stock compensation expense of $674,720. 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 losses and inventory reserves of $1.9 million.

Current wording

Operating expenses for the three months ended September 30, 2025 decreased 42.1% to $6,501,703 as compared to $11,234,331 for the three months ended September 30, 2024. The decrease was mainly due to the combination of a decrease in selling and fulfillment expenses of $0.7 million as a result of decreased costs related to advertising, merchant fees, rental expenses and delivery fees, and a decrease in general and administrative expenses of $4.0 million, which included payroll expenses, stock-based compensation expense, insurance expenses, allowance for credit losses, travel expenses and other operating expenses. The decrease in general and administrative expenses was primarily attributable to the implementation of a cost-cutting plan during the current quarter, as compared to the prior-year period which included expenses related to the expansion of our vendor network, the development of the SuperSuite platform, and an increase in the allowance for credit losses and inventory reserves totaling $1.76 million for the quarter ended September 30, 2024.

Previous wording

Loss from operations was $2,331,830 for the nine months ended March 31, 2025 as compared to $2,219,748 for the nine months ended March 31, 2024. The increase in loss resulted from the decrease in sales being greater than the decrease in operating expenses.

Current wording

Loss from operations was $1,695,179 for the three months ended September 30, 2025 as compared to $2,746,434 for the three months ended September 30, 2024. The decrease in loss resulted from the decrease in operating expenses being greater than the decrease in gross profit.

Previous wording

Other income (expenses) consist of interest expense and other non-operating income (expenses). Other income (expenses) for the three months ended March 31, 2025 was $(47,353) as compared to $(211,660) for the three months ended March 31, 2024. The decrease in other income (expenses) was mainly due to the combination of the increase in other non-operating income of $65,270, including a foreign currency exchange income of $35,601, and a decrease in interest, including amortization of debt discount, on the revolving loan of $99,231 during the three months ended March 31, 2025 resulted from the decreasing loan balance.

Current wording

Other income consists of interest expense and other non-operating income. Other income for the three months ended September 30, 2025 was $697,947 as compared to $77,805 for the three months ended September 30, 2024. The increase in other income was mainly due to combination of the increase in other non-operating income of $620,142 resulted from discounted settlement and write-offs of aged accounts payable, recognition of loss on deconsolidation of VIE, and a decrease in interest, including amortization of debt discount, on the revolving loan of $78,243 during the three months ended September 30, 2025 resulted from the decreasing loan balance.

Previous wording

Net loss attributable to iPower Inc. for the nine months ended March 31, 2025 was $2,150,061 as compared to $2,185,261 for the nine months ended March 31, 2024, representing a decrease in net loss of $35,200. The decrease was primarily due to the decrease in other expense.

Current wording

Net loss attributable to iPower Inc. for the three months ended September 30, 2025 was $533,648 as compared to $2,029,281 for the three months ended September 30, 2024, representing a decrease in net loss of $1,495,633. The decrease was primarily due to the decrease inoperating expensesand the increase in other income as discussed above.

Previous wording

Comprehensive (loss) income attributable to iPower Inc. for the three months ended March 31, 2025 was $(437,155) as compared to $1,085,204 for the three months ended March 31, 2024, representing an increase in comprehensive loss of $1,522,359. The decrease was due to the reasons discussed above, along with an increase in other comprehensive loss of $166,678 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.

Current wording

Comprehensive loss attributable to iPower Inc. for the three months ended September 30, 2025 was $508,705 as compared to $2,084,335 for the three months ended September 30, 2024, representing a decrease in comprehensive loss of $1,575,630. The decrease was due to the reasons discussed above, along with an increase in other comprehensive income of $79,997 as a result of foreign currency translation adjustments resulting from the translation of RMB, the functional currency of our subsidiary and VIE in the PRC, to USD, the reporting currency of the Company.

Previous wording

During the nine months ended March 31, 2025, 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 a registered direct offering of 2,083,334 shares of common stock (the “Shares”) and a concurrent private placement of warrants to purchase up to 2,083,334 shares of common stock (the “Warrants”), which Shares and Warrants were sold for aggregate gross proceeds of $5,000,002. As of March 31, 2025, we had cash and cash equivalents of $2,192,254, representing a $5,185,583 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, investing activities and financing activities resulting from our payments to offering cost settlement, pay down the short-term loans - related party and part of the JPM revolving line of credit.

Current wording

During the three months ended September 30, 2025, we primarily funded our operations with cash and cash equivalents generated from operations, borrowing from related party, as well as through borrowing under our credit facility from JPMorgan Chase Bank (“JPM”). Additionally, on June 18, 2024, we closed on a registered direct offering of 69,445 shares of common stock (the “Shares”) and a concurrent private placement of warrants to purchase up to 69,445 shares of common stock (the “Warrants”), which Shares and Warrants were sold for aggregate gross proceeds of $5,000,002. As of September 30, 2025, we had cash and cash equivalents of $903,975, representing a $1,103,915 decrease from $2,007,890 in cash as of June 30, 2025. The cash decrease was primarily due to the combined result of cash provided by operating activities, cash used in investing activities and financing activities resulting from our payments to pay down the JPM revolving line of credit.

Previous wording

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

Current wording

Based on our current operating plan, 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. However, our liquidity and our ability to meet our obligations and fund our capital requirements are dependent on our future financial performance, which is subject to general economic, financial and other factors that are beyond our control, such as rising inflation and potential recession, and our anticipated funding requirements could increase. See “Item 1A - Risk Factors” in our Annual Report on Form 10-K filed with the SEC on October 9, 2025.

Previous wording

Our cash requirements consist primarily of day-to-day operating expenses and obligations with respect to warehouse leases. We lease all of 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 $11.5 million in unused credit under the revolving line with JPM.

Current wording

Our cash requirements consist primarily of day-to-day operating expenses and obligations with respect to warehouse leases. We lease all of 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 $1.0 million in unused credit under the revolving line with JPM.

Previous wording

As of March 31, 2025 and June 30, 2024, our working capital was $11.9 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.

Current wording

As of September 30, 2025 and June 30, 2025, our working capital was $4.1 million and $4.9 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.

Previous wording

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 nine months ended March 31, 2025 and 2024 was $(500,214) and $5,151,956, 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 costs of revenues and operating expenses.

Current wording

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 provided by (used in) operating activities for the three months ended September 30, 2025 and 2024 was $1,686,463 and $(1,415,643), respectively. The increase in cash provided by operating activities mainly resulted from an increasein cash received from customers, which was partially offset by an increase in cash paid for cost of revenues and operating expenses.

Previous wording

Net cash used in investing activities for the nine months ended March 31, 2025 and 2024 was $1,519,928 and $0, respectively. The increase was due to the prepayments made for software developments during the nine months ended March 31, 2025.

Current wording

Net cash used in investing activities for the three months ended September 30, 2025 and 2024 was $1,037,272 and $202,140, respectively. The increase was mainly due to deconsolidation of VIE cash, payments made for investment in joint venture and prepayments made for software developments during the quarter ended September 30, 2025.

Previous wording

Net cash used in financing activities was $3,168,925 and $6,100,000, respectively, for the nine months ended March 31, 2025 and 2024. The decrease in net cash used in financing activities was primarily due to decrease payments on short-terms loans and decrease in net borrowing from the revolving loan.

Current wording

Net cash used in financing activities was $1,778,026 and $3,308,599, respectively, for the three months ended September 30, 2025 and 2024. The decrease in net cash used in financing activities was primarily due toa decrease in payments on the revolving loan.

Previous wording

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 overall economic conditions on our customers’ industry and businesses and their ability to pay our 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 refundable amount withheld by sales channel partners was remote so the Company recorded additional allowance for credit losses of $52,092 and $1,569,031 for the three and nine months ended March 31, 2025.

Current wording

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 overall economic conditions on our customers’ industry and businesses and their ability to pay our 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 recent tariff policy. In the event we recover amounts previously written off, we will reduce the specific allowance for credit losses.

Previous wording

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.

Current wording

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.

Previous wording

During the nine months ended March 31, 2025 and 2024, 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 March 31, 2025 and 2024, the goodwill balance amounted to $3,034,110 and $3,034,110, respectively.

Current wording

During the three months ended September 30, 2025 and 2024, 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, 2025 and June 30, 2025, the goodwill balance amounted to $3,034,110 and $3,034,110, respectively.

Previous wording

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 March 31, 2025 and 2024, there were no indicators of impairment.

Current wording

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. The Company did not record any impairment charge for the three months ended September 30, 2025 and 2024.

Previous wording

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. In assessing the recoverability of its deferred tax assets, the Company evaluates available positive and negative evidence to estimate whether it is more likely than not that sufficient future taxable income will be generated to permit use of the existing deferred tax assets in each taxing jurisdiction.

Current wording

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.