What changed in this filing

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Item 1. Financial Statements

2025-05-15 compared with 2025-02-14 · 465 added, 406 removed, 1154 unchanged (43% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

As of December 31, 2024 and June 30, 2024

As of March 31, 2025

and June 30, 2024

Current assets

Cash and cash equivalent

Cash and cash equivalents

Accounts receivable, net

20 unchanged sentences

Non-current liabilities

Long-term revolving loan payable

Long-term revolving loan payable, net

Lease liability - non-current

5 unchanged sentences

20,000,000 shares authorized;

0 shares issued and outstanding at December 31, 2024 and June 30, 2024

0 shares issued and outstanding at March 31, 2025 and June 30, 2024

Common stock, $ 0.001 par value;

180,000,000 shares authorized;

31,359,899 and 31,359,899 shares issued and outstanding at December 31, 2024 and June 30, 2024

31,359,899 shares issued and outstanding at March 31, 2025 and June 30, 2024

Additional paid in capital

Accumulated deficits

Accumulated deficit

( 12,380,662 )

4 unchanged sentences

Total liabilities and stockholders' equity

The accompanying notes

are an integral part of these unaudited condensed consolidated financial statements

The accompanying

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

and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss

For the Three and Six Months Ended December 31, 2024 and 2023

For the Three Months Ended

For the Six Months Ended

Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income

For the Three and Nine Months

Ended March 31, 2025 and 2024

For the Three Months

Ended March 31,

For the Nine Months

Ended March 31,

Product sales

9 unchanged sentences

Total operating expenses

INCOME (LOSS) FROM OPERATIONS

( 2,552,347 )

( 2,062,827 )

( 3,821,024 )

(LOSS) INCOME FROM OPERATIONS

OTHER INCOME (EXPENSE)

3 unchanged sentences

Total other expenses, net

INCOME (LOSS) BEFORE INCOME TAXES

( 2,606,922 )

( 2,332,454 )

( 4,172,155 )

(LOSS) INCOME BEFORE INCOME TAXES

PROVISION FOR INCOME TAX EXPENSE (BENEFIT)

NET INCOME (LOSS)

( 1,917,983 )

( 1,816,453 )

( 3,207,334 )

NET (LOSS) INCOME

Non-controlling interest

NET INCOME (LOSS) ATTRIBUTABLE TO IPOWER INC.

$ ( 1,914,828 )

$ ( 1,810,462 )

$ ( 3,201,343 )

OTHER COMPREHENSIVE INCOME (LOSS)

NET (LOSS) INCOME ATTRIBUTABLE TO IPOWER INC.

OTHER COMPREHENSIVE (LOSS) INCOME

Foreign currency translation adjustments

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO IPOWER INC.

$ ( 2,075,083 )

$ ( 1,709,386 )

$ ( 3,362,305 )

COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO IPOWER INC.

WEIGHTED AVERAGE NUMBER OF COMMON STOCK

EARNINGS (LOSSES) PER SHARE

(LOSSES) EARNINGS PER SHARE

The accompanying

1 unchanged sentence

and Subsidiaries

Unaudited Condensed

Consolidated Statements of Changes in Stockholders' Equity

For the Three and Six Months Ended December 31 , 2024 and 2023

Retained Earnings

Condensed Consolidated Statements of Changes in Stockholders' Equity

For the Three and Nine Months Ended March 31 , 2025 and 2024

Additional Paid in

Retained Earnings (Accumulated

Non- controlling

Accumulated other Comprehensive

Paid in Capital

income (loss)

Accumulated other Comprehensive income

Balance, June 30, 2024

4 unchanged sentences

Stock-based compensation

Foreign currency translation adjustments

Balance, September 30, 2024, unaudited

Foreign currency

translation adjustments

Balance, September 30, 2024,

$ ( 12,259,882 )

2 unchanged sentences

Stock-based compensation

Foreign currency translation adjustments

Balance, December 31, 2024, unaudited

Foreign currency

translation adjustments

Balance, December 31, 2024,

$ ( 12,041,063 )

$ ( 109,330 )

Reversal of unvested stock-based

Foreign currency

translation adjustments

Balance, March 31, 2025, unaudited

$ ( 12,380,662 )

$ ( 206,886 )

Balance, June 30, 2023

3 unchanged sentences

Stock-based compensation

Foreign currency translation adjustments

Balance, September 30, 2023, unaudited

Foreign currency

translation adjustments

Balance, September 30, 2023,

$ ( 9,988,957 )

2 unchanged sentences

Stock-based compensation

Foreign currency translation adjustments

Balance, December 31, 2023, unaudited

Foreign currency

translation adjustments

Balance, December 31, 2023,

$ ( 11,903,785 )

$ ( 223,096 )

The accompanying

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

Net income (loss)

Stock-based compensation

Restricted shares issued for vested

Foreign currency

translation adjustments

Balance, March 31, 2024, unaudited

$ ( 10,887,703 )

$ ( 153,974 )

The accompanying notes

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

and Subsidiaries

1 unchanged sentence

Consolidated Statements of Cash Flows

For the Six Months Ended December 31 , 2024 and 2023

For the Six Months Ended December 31,

For the Nine Months Ended

March 31, 2025 and 2024

For the Nine Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

1 unchanged sentence

$ ( 2,194,865 )

Adjustments to reconcile net loss to cash (used in) provided by operating activities:

Adjustments to reconcile net loss to cash (used in)

provided by operating activities:

Depreciation and amortization expense

2 unchanged sentences

Loss on equity method investment

Stock-based compensation expense

Stock-based compensation (reversal) expense

Amortization of operating lease right of use assets

2 unchanged sentences

Accounts receivable

( 2,772,149 )

Deferred tax assets

Prepayments and other current assets

Non-current prepayments

Other non-current assets

Prepayments and other current assets, net

Non-current prepayments and other non-current assets

Accounts payable

1 unchanged sentence

Other payables and accrued liabilities

( 1,594,968 )

Operating lease liabilities

( 1,455,440 )

( 1,208,551 )

Income taxes payable

Net cash (used in) provided by operating activities

( 1,387,926 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Prepayments for software development

( 1,519,928 )

Net cash used in investing activities

( 1,519,928 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Payments of offering cost settlement

Payments on Short-term loan - related parties

( 1,000,000 )

Proceeds from short-term loans - related party

Payments on short-term loans - related party

Payments on promissory note

( 2,000,000 )

Payments on short-term loans

( 1,750,000 )

Proceeds from revolving loan

5 unchanged sentences

( 6,100,000 )

EFFECT OF EXCHANGE RATE ON CASH

EFFECT OF EXCHANGE RATES ON CASH

CHANGES IN CASH AND CASH EQUIVALENT

7 unchanged sentences

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING TRANSACTIONS:

Right of use assets derecognized due to termination of operating leases

Termination of operating leases

Right of use assets acquired under new operating leases

2 unchanged sentences

Notes to Unaudited Condensed Consolidated Financial

As of December 31, 2024 and June 30, 2024 and

for the Three and Six Months Ended December 31, 2024 and 2023

As of March 31, 2025 and June 30, 2024 and for

the Three and Nine Months Ended March 31, 2025 and 2024

Note 1 - Nature of business and organization

14 unchanged sentences

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.

Company owns 40% of the equity interest in Box Harmony, retaining significant influence while not owning a majority equity interest in

or otherwise controlling Box Harmony.

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 while not owning a majority equity interest

in or otherwise controlling Box Harmony.

See details at Note 3 below.

35 unchanged sentences

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 on Form 10-K for the year ended June 30, 2024, which was filed with the SEC on September 20, 2024.

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 on Form 10-K for the year ended June 30, 2024, which was filed with the SEC on September 20, 2024.

Principles of Consolidation

6 unchanged sentences

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’

condensed consolidated statements of operations and cash flows have been reclassified to conform to the current period presentation, including

reclassifications made in the presentation of service income and costs and cash flows from operating activities.

These reclassifications

had no impact on the prior year’s financial statements as a whole.

Emerging Growth Company Status

44 unchanged sentences

The balance sheet amounts of the VIE, with the

exception of equity, on December 31, 2024, were translated at 7.2993 RMB to $1.00.

The equity accounts were stated at their historical

The average translation rates applied to statements of operations and comprehensive income (loss) accounts for the six months ended

December 31, 2024 was 7.1764 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.

exception of equity, on March 31, 2025, were translated at 7.2096 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 nine months ended March

31, 2025 was 7.2633 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

28 unchanged sentences

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

overall economic conditions on our customers’ industry and businesses and their ability to pay our accounts receivable.

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 recorded additional allowance for credit losses of $ 41,346 and $ 1,516,940 for the three and six months ended December 31, 2024.

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 COVID-19 pandemic and the recent tariff policy.

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 amounts withheld by sales channel partners was remote so we

recorded additional allowance for credit losses.

For the three and nine months ended March 31, 2025 the credit loss was $ 52,089

and $ 1,569,029 ,

respectively.

Equity method investment

31 unchanged sentences

total amount of goodwill allocated to that reporting unit.

During the six months ended December 31, 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 December 31, 2024 and June 30, 2024, the goodwill balance amounted to $ 3,034,110 .

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

As of March 31, 2025 and June 30, 2024, the goodwill balance amounted to $ 3,034,110 .

Intangible Assets, net

Finite life intangible assets at December 31,

Finite life intangible assets at March 31, 2025

include covenant not to compete, supplier relationship, and software recognized as part of the acquisition of Anivia.

assets are recorded at the estimated fair value of these items at the date of acquisition, February 15, 2022.

Intangible assets

are recorded at the estimated fair value of these items at the date of acquisition, February 15, 2022.

Intangible assets are amortized

12 unchanged sentences

value determinations.

As of December 31, 2024 and 2023, there were no indicators of impairment.

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

Fair value of financial instruments

55 unchanged sentences

Advertising costs are expensed as incurred.

advertising and promotional costs included in selling and fulfillment expenses for the three and six months ended December 31, 2024 and

advertising and promotional costs included in selling and fulfillment expenses for the three and nine months ended March 31, 2025 and

2024 were as following.

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

Advertising and promotion

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.

Cost of product sales revenue mainly consists

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

Cost of service

income consists of direct fees charged by outside service providers.

Operating expenses

3 unchanged sentences

on quality issues are recorded to offset merchant selling fees.

During the six months ended December 31, 2024 and 2023, the Company recorded

During the nine months ended March 31, 2025 and 2024, the Company recorded

vendor credits of $48,903 and $858,456, respectively.

26 unchanged sentences

of determination.

For the year ended June 30, 2024, $1,756,913 was recorded as deferred offering costs and reclassified to additional

paid in capital upon closing of the offering on June 18, 2024.

As of December 31, 2024 and June 30, 2024, there were no deferred offering

costs included in the Company’s consolidated balance sheets.

As of March 31, 2025 and June 30, 2024, there were no deferred offering costs included in the Company’s 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

The Company does not distinguish between markets or segments for the purpose of internal reporting.

For the six months ended

December 31, 2024 and 2023, sales through Amazon to Canada and other foreign countries were approximately 6.9 % and 9.8 % of the Company’s

total sales, respectively.

During the six months ended December 31, 2024, sales of hydroponic products, including ventilation and grow

light systems, was 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.

During the six months ended December 31, 2023, sales of hydroponic products, including ventilation

and grow light systems, were approximately 19.3 % of the Company’s total sales and the remaining 80.7 % consisted of general gardening,

home goods and other products and accessories.

As of December 31, 2024 and June 30, 2024, the Company had approximately $ 1.4 million and

The Company follows ASC 280, Segment

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

For the nine months ended March 31, 2025 and 2024, sales through Amazon to Canada and other foreign countries were

approximately 6.3 %

of the Company’s total sales, respectively.

During the nine months ended March 31, 2025, sales of hydroponic products,

including ventilation and grow light systems, was approximately 15.9 %

of the Company’s total product sales and the remaining 84.1 %

consisted of general gardening, home goods, and other products and accessories.

During the nine months ended March 31, 2024, sales

of hydroponic products, including ventilation and grow light systems, were approximately 21.7 %

of the Company’s total product sales and the remaining 78.3 %

consisted of general gardening, home goods and other products and accessories.

As of March 31, 2025 and June 30, 2024, the Company

had approximately $ 1.3

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

majority of the deferred tax assets are US related, and a majority of the Company’s revenues are derived from within the

United States.

The Company records right-of-use (“ROU”)

12 unchanged sentences

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.

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 also revisits the anticipated timing for meeting the performance conditions.

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until the statute of limitations closes with respect to the year in which such attributes are utilized.

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.

The Company believes that our income tax filing

17 unchanged sentences

Recently issued accounting pronouncements

In November 2024, The FASB issued ASU 2024-03, Income Statement—Reporting

Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

requires public companies to disclose, in the notes to financial statements, specified information about certain costs and expenses at

each interim and annual reporting period.

The FASB further clarified the effective date in January 2025 with the issuance of ASU

2025-01, Income Statement — Reporting Comprehensive Income — Expense Disaggregation

Disclosures (Subtopic 220-40):

In November 2024, The FASB issued ASU 2024-03,

Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income

Statement Expenses.

This ASU requires public companies to disclose, in the notes to financial statements, specified information about

certain costs and expenses at each interim and annual reporting period.

The FASB further clarified the effective date in January 2025

with the issuance of ASU 2025-01, Income Statement — Reporting Comprehensive Income — Expense

Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date (“ASU 2025-01”).

ASU 2024-03 is effective for annual

periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with

early adoption permitted.

ASU 2024-03 is effective

for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15,

2027, with early adoption permitted.

The requirements should be applied on a prospective basis while retrospective application is permitted.

Company plans to adopt this pronouncement for its fiscal year beginning July 1, 2027, and is in the process of analyzing the impact on

its consolidated financial statements.

The Company plans to adopt this pronouncement for its fiscal year beginning July 1, 2027, and is in the process of analyzing the impact

on its consolidated financial statements.

In December 2023, The FASB issued ASU 2023-09,

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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):

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 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

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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.

The adoption of this standard

did not have a material impact on its consolidated financial statements.

In October 2023, the FASB issued ASU 2023-06,

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This ASU incorporates

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.

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.

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.

the disclosure or presentation requirements of a variety of Topics in the Codification.

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.

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.

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 June 2022, FASB issued ASU 2022-03, Fair

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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

As of the date of this report, the Company has

not exercised the option to purchase additional voting units from Xiao and TPA.

28 unchanged sentences

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 six months ended December 31, 2024

and 2023, the impact of GSM’s activities were immaterial to the Company’s unaudited condensed consolidated financial statements.

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 nine months ended March 31, 2025 and 2024, the impact

of GSM’s activities were immaterial to the Company’s unaudited condensed consolidated financial statements.

Note 4 – Variable interest entity

9 unchanged sentences

support to the VIE for the periods presented where the Company was not otherwise contractually required to provide such support.

As of December 31, 2024 and June 30, 2024, there

As of March 31, 2025 and June 30, 2024, there

was no pledge or collateralization of the VIE assets that would be used to settle obligations of the VIE.

5 unchanged sentences

Schedule of VIE’s assets and liabilities

December 31, 2024

March 31, 2025

June 30, 2024

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The operating results of the VIE were as follows

for the three and six months ended December 31, 2024:

for the three and nine months ended March 31, 2025:

Schedule of operating results of the VIE

Net loss after elimination of intercompany transactions

The operating results of the VIE were as follows for the three

and six months ended December 31, 2023:

$ ( 485,078 )

$ ( 669,296 )

The operating results of the VIE were as follows for the three and

nine months ended March 31, 2024:

Net income (loss) after elimination of intercompany transactions

For the three and six months ended December 31,

$ ( 327,984 )

For the three and nine months ended March 31,

2025, the VIE contributed approximately $ 0.4 million and $ 2.6 million of revenue and $ 0.4 million and $ 0.9 million of net loss before

For the three and six months ended December 31, 2023, the VIE contributed approximately $ 1.8 million and $ 3.9 million of

revenue and $ 0.15 million and $ 0.2 million of net loss before elimination, respectively.

For the three and nine months ended March 31, 2024, the VIE contributed approximately $ 1.6 million and $ 5.5 million of revenue

and $ 0.1 million and $ 0.3 million of net loss before elimination, respectively.

Note 5 – Accounts receivable, net

2 unchanged sentences

Schedule of accounts receivable

December 31, 2024

March 31, 2025

June 30, 2024

5 unchanged sentences

accounts receivable are summarized below:

Schedule of changes in allowance for credit losses on

accounts receivable

Schedule of changes in allowance for credit losses on accounts receivable

Allowance for

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Balance at December 31, 2023

Allowance recorded during the three months ended March 31, 2024

Balance at March 31, 2024

Balance at June 30, 2024

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Balance at December 31, 2024

Allowance recorded during the three months ended March 31, 2025

Balance at March 31, 2025

Note 6 – Inventories, net

As of December 31, 2024 and June 30, 2024, inventories

As of March 31, 2025 and June 30, 2024, inventories

consisted of finished goods ready for sale, net of allowance for obsolescence, amounted to $ 9,772,699 and $ 10,546,273 , respectively.

For the three and six months ended December 31,

For the three and nine months ended March 31,

2025, the Company recorded inventory reserve expense of $ 0 and $ 288,474 , respectively.

For the three and six months ended December 31,

For the three and nine months ended March 31, 2024,

the Company recorded inventory reserve expense of $ 0 and $ 222,755 , respectively.

As of December 31, 2024 and June 30, 2024,

allowance for obsolescence was $ 936,299 and $ 647,825 , respectively.

As of March 31, 2025 and June 30, 2024, allowance for

obsolescence was $ 936,299 and $ 647,825 , respectively.

Note 7 – Prepayments and other current assets, net

As of December 31, 2024 and June 30, 2024, prepayments and other current

As of March 31, 2025 and June 30, 2024, prepayments and other current

assets consisted of the following:

Schedule of prepayments and other current

December 31, 2024

Schedule of prepayments and other current assets

March 31, 2025

June 30, 2024

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Other receivables consisted of delivery fees of

$ 64 and $ 3,995 from a third party for using the Company’s courier accounts at December 31, 2024 and June 30, 2024.

$ 10,698 and $ 3,995 from a third party for using the Company’s courier accounts at March

31, 2025 and June 30, 2024.

The changes in allowance for credit losses on

other receivables are summarized below:

Schedule of changes in allowance for credit losses on

other receivables

Allowance for Credit Losses

Schedule of changes in allowance for credit losses on other receivables

Allowance for

Credit Losses

Balance at June 30, 2023

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Balance at December 31, 2023

Allowance recorded during the three months ended March 31, 2024

Balance at March 31, 2024

Balance at June 30, 2024

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Balance at December 31, 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.

Allowance recorded during the three months ended March 31, 2025

Balance at March 31, 2025

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 for credit losses.

Note 8 – Intangible assets, net

As of December 31, 2024 and June 30, 2024, intangible

As of March 31, 2025 and June 30, 2024, intangible

assets, net, consisted of the following:

Schedule of intangible

December 31, 2024

Schedule of intangible assets, net

March 31, 2025

June 30, 2024

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15, 2022 through acquisition of Anivia.

The weighted average remaining life for finite-lived intangible assets at December 31, 2024 was

approximately 5.70 years.

The amortization expense for the three and six months ended December 31, 2024 was $ 162,343 and $ 324,686 , respectively.

The amortization expense for the three and six months ended December 31, 2023 was $ 162,343 and $ 324,686 , respectively.

At December 31,

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:

The weighted average remaining life for finite-lived intangible assets at March 31, 2025 was approximately

The amortization expense for the three and nine months ended March 31, 2025 was $ 162,343 and $ 487,028 , respectively.

The amortization

expense for the three and nine months ended March 31, 2024 was $ 162,343 and $ 487,028 , respectively.

At March 31, 2025, 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,

2025 (excluding the first nine months of the fiscal year ending June 30, 2025)

Intangible assets, net

Note 9 – Other payables and accrued liabilities

As of December 31, 2024 and June 30, 2024, other payables and accrued

As of March 31, 2025 and June 30, 2024, other payables and accrued

liabilities consisted of the following:

Schedule of other payables and accrued

December 31, 2024

Schedule of other payables and accrued liabilities

March 31, 2025

June 30, 2024

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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

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.

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.

On October 7, 2022, the Company entered into a

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to the terms hereof.” The borrowing rate is SOFR plus 2.25% to 2.50% depending on utilization of the borrowing availability.

As of December 31, 2024, the outstanding amount

of the ABL, which was classified as long-term revolving loan payable, including interest payable, was $ 4,042,400 .

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 .

As of March 31, 2025, the outstanding amount of

the ABL, which was classified as long-term revolving loan payable, including interest payable, was $ 3,573,896 .

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 .

Below is a summary of the interest expense recorded

for the three and six months ended December 31, 2024 and 2023:

for the three and nine months ended March 31, 2025 and 2024:

Schedule of interest expense

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

Accrued interest

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Amortization of debt discount

As of December 31, 2024, the Company was

in compliance with the ABL covenants.

As of March 31, 2025, the Company was in compliance

with the ABL covenants.

Promissory note payable

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the Company paid the fourth installment of $ 875,000 .

For the six months ended December 31, 2024, the Company recorded accrued interest

of $ 0 and amortization of note premium of $ 0 .

For the six months ended December 31, 2023, the Company recorded accrued interest of $ 32,813

For the nine months ended March 31, 2025, the Company recorded accrued interest of

$ 0 and amortization of note premium of $ 0 .

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 December 31, 2024 and June 30, 2024, the total outstanding balance of the Purchase Note

For the nine months ended March 31, 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 March 31, 2025 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

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 and six months ended December 31, 2024, the Company recorded accrued interest of $ 0 .

For the three and six months ended December 31, 2023, the Company recorded accrued interest of $ 26,128 and $ 32,189 , respectively.

of December 31, 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”).

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 and nine months ended March 31, 2025,

the Company recorded accrued interest of $ 0 .

For the three and nine months ended March 31, 2024, the Company recorded accrued interest

of $ 723 and $ 32,911 , respectively.

As of March 31, 2025, 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

Pursuant to the agreement, the Investor agreed to loan the Company the amount requested.

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 and six months ended December 31,

2024, the Company recorded interest expense of $ 0 and $ 3,733 , respectively.

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 and nine months ended March 31, 2025, the Company recorded interest expense

of $ 0 and $ 3,733 , respectively.

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 December 31, 2024, the On-demand Loan 2 had been fully paid off.

As of March 31, 2025, the On-demand Loan 2 had been fully paid off.

On April 1, 2024, the Company borrowed $ 350,000

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RP Loan bears no interest and is due upon receipt of request of repayment.

As of December 31, 2024 and June 30, 2024, the outstanding

balance of the RP Loan was $ 350,000 .

As of March 31, 2025 and June 30, 2024, the outstanding balance

of the RP Loan was $ 0 and $ 350,000 .

Note 11 - Related party transactions

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Chenlong Tan.

As of December 31, 2024 and June 30, 2024, the total amount due from MII was $ 0 and $ 56,406 .

As of March 31, 2025 and June 30, 2024, the total amount due from MII was $ 0 and $ 56,406 .

On July 8, 2023, the Company entered into an agreement

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December 31, 2027.

Since DHS had losses during the six months ended December 31, 2024 and 2023 and the year ended June 30, 2024, no GILTI

tax was recorded as of December 31, 2024 and June 30, 2024.

Since DHS had losses during the nine months ended March 31, 2025 and 2024 and the year ended June 30, 2024, no GILTI

tax was recorded as of March 31, 2025 and June 30, 2024.

The Company is not eligible for the GILTI high-tax exclusion.

as a result of the acquisition, the Company recognized goodwill in the amount of $ 6,094,144 .

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 and six months ended December 31,

For the three and nine months ended March 31,

2025, as a result of the Company’s inability to establish a reliable estimate for annual effective tax rate, the Company calculated

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in Accounting Standards Codification (ASC) 740-270-30-18.

The income tax provision for the three and six

months ended December 31, 2024 and 2023 consisted of the following:

The income tax provision for the three and nine

months ended March 31, 2025 and 2024 consisted of the following:

Schedule of income tax provision

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

Total current income tax provision

Total deferred taxes

Total provision for income taxes

$ ( 688,939 )

Total provision for income tax expense (benefit)

$ ( 489,984 )

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jurisdictions to which the Company is subject.

For the three and six months ended December 31,

2024, The Company recorded income tax expense (benefit) of $ 120,511 and $ ( 516,001 ) , respectively, reflecting an effective tax rate of

For the three and nine months ended March

31, 2025, the Company recorded income tax expense (benefit) of $ 26,017

and $ ( 489,984 ) , respectively,

For the three and six months ended December 31, 2023, The Company recorded income tax (benefit) of

$ ( 688,939 ) and $ ( 964,821 ) , respectively, with effective tax rates of ( 26.43 ) % and ( 23.13 ) %, respectively.

reflecting an effective tax rate of ( 8.22 )%

respectively.

For the three and nine months ended March 31, 2024, The Company recorded income tax expense (benefit) of $ 377,147

and $ ( 587,674 ), respectively, with

effective tax rates of 27.14 %

respectively.

The Company's effective tax rates for the three

and six months ended December 31, 2024 and 2023 differ from the federal statutory rate of 21%, primarily due to U.S.

state income tax

deduction, other permanent differences and the impact of foreign jurisdictions subject to a full valuation allowance.

As of December 31, 2024, prepaid income taxes

to US tax authorities and income tax payable to Chinese tax authorities was $ 16,687 and $ 274,946 .97, 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.

and nine months ended March 31, 2025 and 2024 differ from the federal statutory rate of 21%, primarily due to U.S.

state income tax deduction,

other permanent differences and the impact of foreign jurisdictions subject to a full valuation allowance.

For the three months ended

March 31, 2025, the company’s effective tax rate was (8.22)%, which was resulting from reversal of non-vesting stock based compensation

expense discussed in Note 14 below.

As of March 31, 2025, income taxes payable to

US tax authorities and income tax payable to Chinese tax authorities was $ 401 and $ 278,368 , 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

1 unchanged sentence

Schedule of deferred taxes

December 31, 2024

March 31, 2025

June 30, 2024

4 unchanged sentences

ROU assets / liabilities

Net operating loss

Net operating losses

Disallowed interest expense

1 unchanged sentence

Valuation allowance

Allowance for credit loss

Allowance for credit losses

Total deferred tax assets

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Total deferred tax liabilities

( 1,054,484 )

Net deferred tax assets

For the six months ended December 31, 2024 and 2023,

For the nine months ended March 31, 2025 and 2024,

the Company recorded $ 47,248 and $ 64,990 of valuation allowance to reduce deferred tax assets for the losses incurred by DHS.

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The following table sets forth the computation of basic and diluted

earnings per share for the periods presented:

(losses) earnings per share for the periods presented:

Schedule of computation of basic and diluted earnings per share

Three Months Ended December 31,

Six Months Ended December 31,

Net loss attributable to iPower Inc.

Three Months Ended March 31,

Nine Months Ended March 31,

Net (loss) income attributable to iPower Inc.

$ ( 339,599 )

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Weighted-average shares used in computing basic and diluted earnings per share*

Losses per share of ordinary shares - basic and diluted

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/or the warrants and options were out of the money (the exercise price is higher than

the market price) for the three and six months ended December 31, 2024 and 2023.

For the three and six

months ended December 31, 2024, 89,199 and 107,347 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.

For the three and six months ended December 31, 2023, 40,981 and 107,347 vested but unissued shares of restricted stock units under the 2020 Equity Incentive Plan (as discussed in Note 16) are considered issued shares and therefore are included in the computation of basic losses per share when the shares are fully vested.

(Losses) earnings per share of ordinary shares - basic and

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/or the warrants and options were out of the money (the exercise price is higher than the market price) for the three and nine months ended March 31, 2025 and 2024.

For the three and nine months ended March 31, 2025, 17,857 and 62,771 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.

For the three and nine months ended March 31, 2024, 25,331 and 28,635 vested but unissued shares of restricted stock units under the 2020 Equity Incentive Plan (as discussed in Note 16) 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

As of December 31, 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

As of March 31, 2025, 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.

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costs paid by the Company, was $ 4,543,089 .

The Company calculated the fair value of the

Warrants at $ 3.1 million at the grant date, 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:

The Company calculated the fair value of the Warrants

at $ 3.1 million at the grant date, 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

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The Share Cancellation was completed in June 2024 and the par value of $ 542 was reduced against additional paid-in

As of December 31, 2024 and June 30, 2024, there

As of March 31, 2025 and June 30, 2024, there

were 31,359,899 shares of Common Stock issued and outstanding.

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and the qualifications, limitations or restrictions thereof.

As of December 31, 2024 and June 30, 2024, respectively, there were no shares

As of March 31, 2025 and June 30, 2024, respectively, there were no shares

of Preferred Stock issued and outstanding.

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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

During the six months ended December 31, 2024, the Company granted an additional 71,427 shares of RSUs.

For the three and six months

ended December 31, 2024, the Company recorded $ 22,500 and $ 54,288 of stock-based compensation expense.

There was no forfeiture of RSUs

occurred during the six months ended December 31, 2024 and 2023.

As of December 31, 2024 and June 30, 2024, the unvested number of RSUs

was 29,763 and 3,250 and the unamortized expense was $ 37,500 and $ 1,788 , respectively.

During the nine months ended March 31, 2025, the Company granted an additional 71,427 shares of RSUs.

For the three and nine months

ended March 31, 2025, the Company recorded $ 22,500 and $ 76,788 of stock-based compensation expense.

There was no forfeiture of RSUs occurred

during the nine months ended March 31, 2025 and 2024.

As of March 31, 2025 and June 30, 2024, the unvested number of RSUs was 11,906 and

3,250 and the unamortized expense was $ 15,000 and $ 1,788 , respectively.

Information relating to RSU grants is summarized

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RSUs forfeited

RSUs granted, but not vested, at December 31, 2024

RSUs granted, but not vested, at March 31, 2025

_____________________

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

As of December 31, 2024, of the 375,068 vested

RSUs, 285,869 shares of Common Stock were issued, and 89,199 shares were to be issued in the near future.

As of March 31, 2025, of the 392,924 vested RSUs,

285,869 shares of Common Stock were issued, and 107,055 shares were to be issued in the near future.

On May 12, 2022, the Compensation Committee of

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The estimated achievement status of the operational

milestones as of December 31, 2024 was as follows:

milestones as of March 31, 2025 was as follows:

Revenue in Fiscal Year

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service period if it is probable that one of the performance conditions will be met.

In relation to the five awards deemed probable to

In relation to the two awards deemed probable to

vest, the recognition period ranges from 5.30 years to 5.72 years.

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$3.2 million of which, at December 31, 2023, $2.3 million is deemed probable of vesting.

During the quarter ended December 31, 2024, the

During the quarter ended March 31, 2025, the

Company reassessed the expected timing of meeting the performance conditions.

According to ASC 718-10-55-78, since the number of awards

expected to vest and the fair value remained unchanged with the new estimate, the adjustment only affected the recognition timing.

the Company will apply the prospective approach to record the adjustment.

As of December 31, 2024, none of the options had

For the three and six months ended December 31, 2024, the Company recorded $ 75,302 and $ 185,684 of stock-based compensation expense

related to the Option Grants.

For the three and six months ended December 31, 2023, the Company recorded $ 110,382 and $ 220,764 of stock-based

According to ASC 718-10-55-78, since the number of

awards expected to vest and the fair value had changed with the new estimate, the adjustment affected the recognition value and

years to vest.

Therefore, the Company had reversed $674,720 of the expenses recorded for non-vesting tranches and applied the

prospective approach to record adjustment on tranches expected to be vested in future periods.

As of March 31, 2025, none

of the options had vested.

For the three and nine months ended March 31, 2025, the Company recorded $ ( 668,065 )

and $ ( 482,381 ) of stock-based

compensation expense related to the Option Grants.

As of December 31, 2024, unrecognized compensation cost related to tranches probable

of vesting is approximately $1.1 million and will be recognized over two years to nine years, depending on the tranche.

For the three and nine months ended March 31, 2024, the Company recorded $ 110,382

and $ 331,146

of stock-based compensation expense related to the Option Grants.

As of March 31, 2025, unrecognized compensation cost related to

tranches probable of vesting is approximately $ 145,144

and will be recognized over five

years to six years , depending on the tranche.

On August 29, 2024, the board of directors (the

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Dividend Yield – 0 %

The total fair value of the 2024 Stock Options

was $1.22 million as of the grant date.

For the three and six months ended December 31, 2024, 97,500 and 160,000 stock options were vested

and the Company recorded $ 99,512 and $ 163,302 as stock compensation expense.

As of December 31, 2024, the unrecognized compensation cost

of the 2024 Stock Options was approximately $1.06 million and will be recognized monthly through August 1, 2027.

The total fair value of the 2024 Stock Options was

$1.22 million as of the grant date.

For the three and nine months ended March 31, 2025, 97,500 and 257,500 stock options were vested and

the Company recorded $ 99,512 and $ 262,813 as stock compensation expense.

As of March 31, 2025, the unrecognized compensation cost of the

2024 Stock Options was approximately $0.96 million and will be recognized monthly through August 1, 2027.

Note 15 – Warrant liabilities

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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 December 31,

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 the term of the warrants,

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 December 31, 2024 and June 30, 2024.

As such, there were no warrants

outstanding as of March 31, 2025 and June 30, 2024.

Note 16 - Concentration of risk

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the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.

As of December 31, 2024 and June 30, 2024, $ 2,877,457

As of March 31, 2025 and June 30, 2024, $ 2,192,255

and $ 7,377,837 , respectively, were deposited with various major financial institutions in the United States and PRC.

2 unchanged sentences

The Company had approximately

$ 1.4 million and $ 5.8 million , respectively, in excess of the FDIC insurance limit, as of December 31, 2024 and June 30, 2024.

$ 1.4 million and $ 5.8 million , respectively, in excess of the FDIC insurance limit, as of March 31, 2025 and June 30, 2024.

Accounts receivable are typically unsecured and

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Customer and vendor concentration risk

For the six months ended December 31, 2024 and

For the nine months ended March 31, 2025 and 2024,

Amazon Vendor and Amazon Seller customers accounted for 85 % and 91 % of the Company's total revenues, respectively.

As of December

31, 2024 and June 30, 2024, accounts receivable from Amazon Vendor and Amazon Seller accounted for 80 % and 91 % of the Company’s

total accounts receivable.

For the six months ended December 31, 2024 and

As of March 31, 2025

and June 30, 2024, accounts receivable from Amazon Vendor and Amazon Seller accounted for 84 % and 91 % of the Company’s total accounts

For the nine months ended March 31, 2025 and 2024,

one supplier accounted for 12 % and 10 % of the Company's total purchases, respectively.

As of December 31, 2024 and June 30, 2024,

accounts payable to one supplier accounted for 12 % and 42 % of the Company’s total accounts payable.

As of March 31, 2025 and June 30, 2024, accounts

payable to two suppliers accounted for 19 % ( 9 % and 9 %) and 45 % ( 36 % and 9 %) of the Company’s total accounts payable.

Note 17 - Commitments and contingencies

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as further detailed in the Lease Agreement.

In addition, following the Rent Commencement Date, the first two months of the Base Rent were

In addition, following the Rent Commencement Date, Base Rent for the first two months was

The lease did not start under the original agreement

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expiring on May 31, 2028.

The base rental fee is $114,249, increasing gradually over time to $140,079 per month through the expiration

The base rental fee was $114,249, increasing gradually over time to $140,079 per month through the expiration

date of May 31, 2028.

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The base rental fee is $56,000 to $59,410 per month through April 30, 2025.

The lease term expired on April

30, 2025 and the Company did not renew the lease.

In September 2024, DHS entered into a sublease

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The lease term is for one year from October 1, 2024 to September 30,

The lease is treated as short-term lease and the base rental fee is approximately $10,000 per month.

The lease is treated as a 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 $ 4,757,429 and $ 6,124,163 , respectively, of operating lease right-of-use

assets, and $ 5,153,380 and $ 6,549,110 , respectively, of operating lease liabilities as of December 31, 2024 and June 30, 2024.

Three months Ended December 31, 2024 and 2023:

term of the above leases is $ 12,651,376 .

The financial statements reflected $ 4,281,622 and $ 6,124,163 , respectively, of operating lease

right-of-use assets, and $ 4,659,637 and $ 6,549,110 , respectively, of operating lease liabilities as of March 31, 2025 and June 30, 2024.

Three months Ended March 31, 2025 and 2024:

Schedule of lease cost and other information

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Average discount rate - operating leases

Six months Ended December 31, 2024 and 2023:

Nine months Ended March 31, 2025 and 2024:

Operating lease cost (included in G&A in the Company's statement of operations)

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For Year ending June 30:

2025 (excluding the first nine months of the fiscal year ending June 30, 2025)

Imputed interest/present value discount

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sole source of funding of such reimbursement to come from sales of shares then owned by Mr.

As of December 31, 2023, the Company

cannot reasonably estimate the amount of potential exposure.

As of March 31, 2024, the Company cannot

reasonably estimate the amount of potential exposure.

On April 3, 2024, the Company and D.A.

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As of June 30, 2024, the outstanding balance of the Settlement Amount was $ 325,000 .

As of December 31, 2024, the Settlement Amount had been paid off and the parties have formally withdrawn all of the complaints that were

As of March 31, 2025, 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.

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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.

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.

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 surrounding trade stability during the near term.

While there may be a negative impact on sales revenues, we

are actively working on a cost-restructuring plan to reduce our costs and expenses in order to achieve profitability.

In addition, 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.

we do not do business in those regions, the military conflicts in Ukraine and the Middle East 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, resulting in increased

inventory levels 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 acquire

and distribute certain products.

On April 13, 2020, the Company entered into an

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in the unaudited condensed consolidated financial statements presented.

On January 2, 2025, the Company received a letter

from the Nasdaq Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”) stating that for the 30 consecutive

business day period between November 15, 2024 to December 31, 2024, the Company’s common stock had failed to maintain a minimum

closing bid price of $1.00 per share, as required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2)

(the “Minimum Bid Price Requirement”).

Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company has an initial period of

180 calendar days, or until July 1, 2025 (the “Compliance Period”), to regain compliance with the Minimum Bid Price Requirement.

To regain compliance, the closing bid price of the Company’s common stock must meet or exceed $1.00 per share for a minimum of ten

consecutive trading days, unless such period is extended by Nasdaq.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements