What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-10-09 compared with 2024-09-20 · 199 added, 205 removed, 519 unchanged (44% of the section changed)

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is an online supplier of consumer goods, including hydroponics equipment, general gardening supplies, and consumer home goods.

the operations of our e-commerce platforms and channel partners, our combined 121,000 square foot fulfillment centers in Rancho Cucamonga

and Los Angeles, California, we believe we are one of the leading marketers, distributors and retailers in the consumer gardening and

home goods categories, based on management’s estimates.

Our core strategy continues to focus on expanding our geographic reach across

the United States and internationally through organic growth, both in terms of expanding customer base as well as brand and product development.

iPower has developed a set of methodologies driven by proprietary data formulas to effectively bring products to market and sales.

We are actively developing our

in-house branded products and through supply chain partners, which to date include the iPower and Simple Deluxe

the operations of our e-commerce platforms and channel partners, 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.

We are actively developing

our in-house branded products and through supply chain partners, which to date include the iPower and Simple Deluxe

brands and more, some of which have been designated as Amazon best seller product leaders and Amazon Choice products, among others.

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Recent Developments

On June 18, 2024, we closed

on the Registered Direct offering of 2,083,334 Shares and a concurrent Private Placement of Warrants to purchase 2,083,334 Warrant Shares,

which were sold for gross aggregate proceeds of $5,000,002.

The Shares were sold pursuant to a prospectus supplement, filed on June 18,

2024, to the Registration Statement on Form S-3, originally filed on September 25, 2023, with the SEC (File No.

333-274665), and declared

effective by the SEC on September 29, 2023.

The Warrants, which were issued pursuant to an exemption from registration under Section 4(a)(2)

or Regulation D of the Securities Act, have a term of five years and are immediately exercisable at $2.40 per share.

The Shares and Warrants

were sold to a Purchase Agreement to a securities purchase agreement, dated June 16, 2024, between the Company and the purchaser.

Capital Partners, LLC acted as Placement Agent, pursuant to a Placement Agency Agreement.

The Company paid the Placement Agent as compensation

a cash fee equal to 6.5% of the gross proceeds of the Offering plus reimbursement of certain expenses and legal fees.

On July 9, 2024, as required

by the Purchase Agreement, we filed a resale registration statement on Form S-1 with the SEC (the "Resale Form S-1").

an amendment on July 23, 2024, the Resale Form S-1 was declared effective by the SEC on July 26, 2024.

Adoption of Digital Treasury Strategy

On June 17, 2025, the Company

adopted a digital asset reserve, allocation and development strategy (the “Digital Treasury Strategy”) with the plan of creating

a Digital Treasury Strategy business.

To date, we have not effectuated the Digital Treasury Strategy business and do not know if it will

be effectuated.

As this Digital Treasury Strategy is a new planned addition to our business model, we cannot predict its success or know

whether we will continue with this strategy for the long term.

The Company will provide additional updates to shareholders when and if

we do effectuate such strategy.

RESULTS OF OPERATIONS

For the fiscal years ended June, 2024 and

For the fiscal years ended June 30, 2025

The following table presents

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Comprehensive loss attributable to iPower Inc.

$ (4,717,775 )

$ (1,676,431 )

Gross profit % of revenues

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While pricing remained stable,

the decreased revenue mainly resulted from a slight decrease in sales volume.

the decreased revenue mainly resulted from a decrease in sales volume during the year ended June 30, 2025 as the Company offered less

promotions due to lower inventory level as compared to the year ended June 30, 2024.

In addition, the Company also experienced significant

decrease in amazon orders due to uncertainty over tariffs during the second half of the fiscal year

ended June 30, 2025.

Costs of Goods Sold

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year ended June 30, 2025 decreased 22.53% to $37,149,085 as compared to $47,950,117 for the year ended June 30, 2024.

The decrease was

mainly due to the decrease in sales, freight costs, and lowered product costs resulted from management’s efforts on supply chain

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.

Gross profit was $28,993,694

for the year ended June 30, 2025 as compared to $38,121,368 for the year ended June 30, 2024.

The gross profit ratio increased to 45.61%

The gross profit ratio decreased to 43.84%

for the year ended June 30, 2025 from 44.29% for the year ended June 30, 2024.

The increase in gross profit ratio was mainly driven by

the decrease in costs of goods sold during the year ended June 30, 2024, as discussed above.

The decrease in the

gross profit ratio was mainly driven by the combination of the increase in the logistics service costs and decrease in costs of goods

sold during the year ended June 30, 2025, as discussed above.

Operating Expenses

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The decrease was

mainly due to the combination of a decrease in selling and fulfillment expenses of $4.33 million, including vendor warranty credits for

prior year purchases of $2.48 million recorded during the year ended June 30, 2024 and decreased costs related to advertising, merchant

fees, delivery fees, rental expenses, storage costs and fulfillment workforce, a decrease in general and administrative expenses of $0.67

million, which included payroll expenses, stock-based compensation expense, insurance expenses, legal fees related to the Boustead case,

and other operating expenses including expenses associated with being a publicly traded company, and a decrease of $3.06 million of impairment

loss on goodwill triggered by a decrease in the Company’s share price of its common stock and the net loss incurred during the quarter

ended September 30, 2022.

We have seen decreased operating expenses during the year ended June 30, 2024;

however, we can provide no assurance

that this trend will continue.

mainly due to the combination of a decrease in selling and fulfillment expenses of $4.8 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 $0.5 million,

which included payroll expenses, stock-based compensation expense, insurance expenses, allowance for credit losses, travel expenses and

other operating expenses.

The increase in general and administrative expenses was mainly due to the expansion of our vendor network and

development of the SuperSuite platform and an increased allowance for credit losses and inventory reserves of $1.2 million.

Loss from Operations

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for the year ended June 30, 2025 as compared to $962,892 for the year ended June 30, 2024.

The decrease was due to combination of the

decrease in operating expenses and the increase in gross profit as discussed above.

The decrease was due to the decrease in operating

expenses and in gross profit as discussed above.

Other Expenses

Other expenses consist of

interest expense and other non-operating income (expenses).

Other expenses for the year ended June 30, 2024 were $829,921 as

compared to $1,184,030 for the year ended June 30, 2023.

The decrease in other expenses was mainly due to decrease in other

non-operating loss of $71,761, and in interest, including amortization of debt discount, on the revolving loan of $277,855 during

the year ended June 30, 2024 resulted from the decreasing loan balance.

Other expenses consist of interest

expense and other non-operating income (expenses).

Other expenses for the year ended June 30, 2025 were $366,273 as compared to $829,921

for the year ended June 30, 2024.

The decrease in other expenses was mainly due to decrease in other non-operating loss of $120,258, and

in interest, including amortization of debt discount, on the revolving loan of $352,224 during the year ended June 30, 2024 as a result

of the decreasing balance on the revolving loan.

Net Loss Attributable to iPower Inc.

Net loss attributable to iPower

for the year ended June 30, 2024 was $1,528,159 as compared to $11,965,390 for the year ended June 30, 2023, representing a decrease

for the year ended June 30, 2025 was $4,968,288 as compared to $1,528,159 for the year ended June 30, 2024, representing an increase

of net loss of $3,440,129.

The decrease was primarily due to the increase in gross profit and decrease in operating expenses as discussed

The increase was primarily due to the decrease in gross profit and operating expenses as discussed above.

Comprehensive loss Attributable to iPower

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for the year ended June 30, 2025 was $4,717,775 as compared to $1,676,431 for the year ended June 30, 2024, representing

a decrease of comprehensive loss of $10,356,771.

The decrease was due to the reasons discussed above, along with other comprehensive loss

an increase of comprehensive loss of $3,041,344.

The increase was due to the reasons discussed above, along with other comprehensive income

of $250,513 as a result of foreign currency translation adjustments resulting from the translation of RMB, the functional currency of

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We had cash and cash equivalents of $2,007,890 as of June 30, 2025, representing a $5,369,947

increase from $3,735,642 in cash as of June 30, 2023.

The cash increase was primarily the result of the cash we received in the Registered

Direct in June 2024.

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.

Based on our current operating

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Currently, we have approximately $1.8 million in unused

credit under the revolving line with JPM, which will be expired and we are in negotiations on a renewal in November 2024.

credit under the revolving line with JPM.

Given our current working

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our working capital was $4.9 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.

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.

Operating Activities

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products, to employees for compensation, and other general expenses.

Net cash provided by operating activities for the years ended June

30, 2024 and 2023 was $6,164,076 and $9,211,269, respectively.

The decrease in cash provided by operating activities mainly resulted from

a decrease in cash received from customers and an increase in cash paid for cost of revenues and operating expenses.

Net cash (used in) provided by operating activities for the years

ended June 30, 2025 and 2024 was $(579,187) and $6,164,076, respectively.

The decrease in cash provided by operating activities mainly

resulted from a combination of an increase in net loss , a decrease in cash received from customers and an increase in cash paid for cost

of revenues and operating expenses.

Investing Activities

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2025 and 2024, net cash used in investing activities was $2,042,250 and $0, respectively.

The decrease in cash used in investing activities

was because the Company did not purchase any additional equipment during the year ended June 30, 2024, whereas such equipment had been

purchased in the same period during 2023.

The increase was mainly due to the prepayments

made for software developments and investment in joint venture during the year ended June 30, 2025

Financing Activities

Net cash used in financing activities

was $2,397,801 and $7,153,620, respectively, for the years ended June 30, 2024 and 2023.

The decrease in net cash used in financing activities

was primarily due to a combination of increase in proceeds from our registered offering and loans and our payment of approximately $16.8

(1) $3.8 million to pay off the notes payable to White Cherry;

(2) $12 million to pay down the outstanding balance of the

asset-based revolving loan facility with JPM;

and (3) $1.0 million of offering cost settlement payment to Boustead.

Net cash used in financing

activities was $2,999,362 and $2,397,801 for the years ended June 30, 2025 and 2024, respectively.

The increase in net cash outflows was

primarily attributable to lower financing inflows in fiscal 2025 as compared to fiscal 2024.

Financing activities during fiscal 2024 included

significant sources of cash that did not recur in fiscal 2025, including $4.5 million in net proceeds from the issuance of common stock

and $2.4 million in proceeds from related party borrowings.

These inflows were partially offset in fiscal 2024 by net repayments of $5.1

million on revolving loans and $3.75 million on short-term borrowings.

OFF-BALANCE SHEET ARRANGEMENTS

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Revenue recognition

The Company recognizes revenue from service and product sales revenues,

net of promotional discounts and return allowances, when the following revenue recognition criteria are met:

a contract has been identified,

separate performance obligations are identified, the transaction price is determined, the transaction price is allocated to separate performance

obligations and revenue is recognized upon satisfying each performance obligation.

The Company transfers the risk of loss or damage upon

shipment or completion of service, therefore, revenue from product sales is recognized when it is shipped to the customer and the revenue

from services is recognized upon completion of services.

For the years ended June 30, 2024 and 2023, the revenues from services were immaterial.

Return allowances, which reduce product revenue by the Company’s best estimate of expected product returns, are estimated using

historical experience.

The Company recognizes revenue

from service and product sales revenues, net of promotional discounts and return allowances, when the following revenue recognition criteria

a contract has been identified, separate performance obligations are identified, the transaction price is determined, the transaction

price is allocated to separate performance obligations and revenue is recognized upon satisfying each performance obligation.

transfers the risk of loss or damage upon shipment or completion of service, therefore, revenue from product sales is recognized when

it is shipped to the customer and the revenue from services is recognized upon completion of services.

Return allowances, which reduce

product revenue by the Company’s best estimate of expected product returns, are estimated using historical experience.

The Company evaluates the

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Accounts receivable, net

ordinary course of business, the Company extends unsecured credit to its customers.

Accounts receivable are stated at the amount the Company

expects to collect from customers.

Management reviews its accounts receivable balances each reporting period to determine if an allowance

for credit loss is required.

evaluates the creditworthiness of all of its customers individually before accepting them and continuously monitors the recoverability

of accounts receivable.

If there are any indicators that a customer may not make payment, the Company may consider making provision for

non-collectability for that particular customer.

During the ordinary course

of business, the Company extends unsecured credit to its customers.

Accounts receivable are stated at the amount the Company expects to

collect from customers.

Management reviews its accounts receivable balances each reporting period to determine if an allowance for credit

losses is required.

The Company evaluates the

creditworthiness of all of its customers individually before accepting them and continuously monitors the recoverability of accounts receivable.

If there are any indicators that a customer may not make payment, the Company may consider making provision for non-collectability for

that particular customer.

At the same time, the Company may cease further sales or services to such customer.

following are some of the factors that the Company develops allowance for credit losses:

The following are some of

the factors that the Company develops allowance for credit losses:

the customer fails to comply with its payment schedule;

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

receivable are recognized and carried at carrying amount less an allowance for credit losses, if any.

The Company maintains an allowance

for credit losses resulting from the inability of its customers to make required payments based on contractual terms.

The Company reviews

the collectability of its receivables on a regular and ongoing basis.

The Company has also included in calculation of allowance for credit

losses the potential impact of the COVID-19 pandemic on our customers’ businesses and their ability to pay their accounts receivable.

After all attempts to collect a receivable have failed, the receivable is written off against the allowance.

The Company also considers

external factors to the specific customer, including current conditions and forecasts of economic conditions, including the potential

impact of the COVID-19 pandemic.

In the event we recover amounts previously written off, we will reduce the specific allowance for credit

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

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.

event we recover amounts previously written off, we will reduce the specific allowance for credit losses.

Inventory, net

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and the financial statements of DHS have been consolidated from the date such control existed, February 15, 2022.

See Note 4 for details on acquisition.

See Note 4 for details

on acquisition.

Goodwill represents the excess

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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

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 June 30, 2024, there were no indicators of impairment.

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 years ended June 30, 2025 and 2024.

Stock-based Compensation

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to the amount expected to be realized.

As a result of the implementation

of certain provisions of ASC 740, Income Taxes (“ASC 740”), which clarifies the accounting and disclosure for uncertainty

in tax position, as defined, ASC 740 seeks to reduce the diversity in practice associated with certain aspects of the recognition and

measurement related to accounting for income taxes.

The Company has adopted the provisions of ASC 740 since its inception on April 11,

2018, and has subsequently analyzed filing positions in each of the federal and state jurisdictions where the Company is required to file

income tax returns, as well as open tax years in such jurisdictions.

The Company has analyzed filing

positions in each of the federal and state jurisdictions where the Company is required to file income tax returns, as well as open tax

years in such jurisdictions.

The Company has identified the U.S.

federal jurisdiction and the

states of Nevada and California as its “major” tax jurisdictions.

However, the Company has certain tax attribute carryforwards

which will remain subject to review and adjustment by the relevant tax authorities until the statute of limitations closes with respect

to the year in which such attributes are utilized.

federal jurisdiction, and the states of Nevada and California, as its

“major” tax jurisdictions.

However, the Company has certain tax attribute carryforwards which will remain subject to review

and adjustment by the relevant tax authorities until the statute of limitations closes with respect to the year in which such attributes

are utilized.

The Company believes that

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The Company does not expect the adoption of this standard to have a material impact on its consolidated financial

In October 2021, the FASB

issued ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.

This ASU clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business

combination in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606) as if the entity had originated the

The guidance is effective for fiscal years beginning after December 15, 2023, with early application permitted.

does not expect the adoption of this standard to have a material impact on our consolidated financial statements.

In August 2020, the

FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging –

Contracts in Entity’s Own Equity (Subtopic 815-40).” This ASU reduces the number of accounting models for convertible debt

instruments and convertible preferred stock, as well as amend the guidance for the derivatives scope exception for contracts in an entity’s

In August 2020, the FASB issued

ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts

in Entity’s Own Equity (Subtopic 815-40).” This ASU reduces the number of accounting models for convertible debt instruments

and convertible preferred stock, as well as amend the guidance for the derivatives scope exception for contracts in an entity’s

own equity to reduce form-over-substance-based accounting conclusions.

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financial statements.

In January 2017, the FASB

issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill Impairment,” which

eliminates step two from the goodwill impairment test.

Under ASU 2017-04, an entity should recognize an impairment charge for the amount

by which the carrying amount of a reporting unit exceeds its fair value up to the amount of goodwill allocated to that reporting unit.

ASU 2017-04 became effective for accelerated filing companies for annual periods or any interim goodwill impairment tests in

fiscal years beginning after December 15, 2019.

All other entities, including not-for-profit entities, that are adopting the amendments

in this Update should do so for their annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2022.

Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.

Company has adopted ASU 2017-04.

See disclosures above on Goodwill for further details.

The Company does not believe

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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 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 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 to be amortized over three years as financing expenses,

the term of the ABL.

In addition, the ABL

includes an accordion feature that allows the Company to borrow up to an additional $25 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 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 three years as financing expenses, the term of the ABL.

Below is a summary of the

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Under the terms of the Waiver Letter, JPM agreed to waive the right to enforce an event of default based on the aforementioned Existing

As of June 30, 2024 and 2023, the Company was in compliance with the ABL covenants.

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

However, as of June 30, 2025, the Company

was in default as a result of covenant violations under the ABL facility.

On November 8, 2024, the

Company entered into a third amendment (the “Third Amendment”) to that certain credit agreement, initially entered into by

and among the Company and its subsidiaries and JPMorgan Chase Bank, N.A., as administrative agent for the Lender and a lender (the “Administrative

Agent” or “Lender”), on November 12, 2021 (the “Credit Agreement”).

The Third Amendment to the Credit Agreement

amended, among other things, (i) the defined term “Aggregate Revolving Commitment” to mean $15,000,000, and (ii) extended

the maturity date to “November 8, 2027 or any earlier date on which the Revolving Commitments are reduced to zero or otherwise

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

availability.

Promissory note payable

On February 15, 2022, as part

of the consideration for the acquisition of Anivia, the Company issued a two-year unsecured 6% subordinated promissory note, payable in

equal semi-annual installments commencing August 15, 2022 (the “Purchase Note”).

The principal amount of the Purchase Note

was $3.5 million with a fair value of $3.6 million as of February 15, 2022, the issuance date.

In October 2022, the Company paid the first

installment of $875,000, and in February 2023, the Company paid the second installment of $875,000.

In August 2023, the Company paid the

third installment of $875,000.

On February 15, 2022, as

part of the consideration for the acquisition of Anivia, the Company issued a two-year unsecured 6% subordinated promissory note, payable

in equal semi-annual installments commencing August 15, 2022 (the “Purchase Note”).

The principal amount of the Purchase

Note was $3.5 million with a fair value of $3.6 million as of February 15, 2022, the issuance date.

In October 2022, the Company paid

the first installment of $875,000, and in February 2023, the Company paid the second installment of $875,000.

In August 2023, the Company

paid the third installment of $875,000.

In February 2024, the Company paid the fourth installment of $875,000.

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recorded accrued interest of $39,429 and amortization of note premium of $31,602.

As of June 30, 2024, the total outstanding balance

of the Purchase Note was $0.

As of June 30, 2023, including $236,250 of accrued interest and $31,602 of unamortized premium, the total

outstanding balance of the Purchase Note was $2,017,852, which is presented on the consolidated balance sheet as a current portion of

$2,017,852 and a non-current portion of $0.

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 June 30, 2025 and 2024, the total

outstanding balance of the Purchase Note was $0.

Short-term loans payable

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.

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%

The On-demand Loan is due in 30 days upon receipt of White Cherry’s notice of repayment.

2023, the Company borrowed $2,000,000 from White Cherry, repaid $1 million on July 31, 2023 and $1 million on January 31, 2024.

year ended June 30, 2024, the Company recorded interest of $32,911.

As of June 30, 2024, the outstanding balance of the On-demand Loan

was fully paid off.

8, 2024, the Company entered into an agreement with an unrelated accredited investor (the “Investor”) for an on-demand, unsecured

and subordinated loan (“On-demand Loan 2”).

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

The On-demand Loan 2 bears interest at the rate of the Secured Overnight Financing Rate, or SOFR, plus 1.5% per annum.

On-demand Loan 2 is due in 30 days upon receipt of the Investor’s notice of repayment.

For the year ended June 30, 2024, the Company

borrowed $483,599 and recorded interest expense of $7,615.

As of June 30, 2024, the outstanding balance of the On-demand Loan 2, including

accrued interest of $7,615, was $491,214.

1, 2024, the Company borrowed $350,000 short-term loan (“RP Loan”) from an entity owned by Mr.

Allan Huang, one of the majority

shareholders of the Company.

On July 16, 2023, the Company

borrowed $2,000,000 from White Cherry, repaid $1 million on July 31, 2023 and $1 million on January 31, 2024.

For the year ended June

30, 2024, the Company recorded interest of $32,911.

As of June 30, 2025, the outstanding balance of the On-demand Loan was fully paid

On April 8, 2024, the Company

entered into an agreement with an unrelated accredited investor (the “Investor”) for an on-demand, unsecured and subordinated

loan (“On-demand Loan 2”).

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

The On-demand

Loan 2 bears interest at the rate of the Secured Overnight Financing Rate, or SOFR, plus 1.5% per annum.

The On-demand Loan 2 is due in

30 days upon receipt of the Investor’s notice of repayment.

For the year ended June 30, 2024, the Company borrowed $483,599 and

recorded interest expense of $7,615.

For the year ended June 30, 2025, the Company recorded interest expense of $3,733 .

As of June 30,

2024, the outstanding balance of the On-demand Loan 2, including accrued interest of $7,615, was $491,214.

As of June 30, 2025, the On-demand

Loan 2 had been fully paid off.

On April 1, 2024, the Company

borrowed $350,000 short-term loan (“RP Loan”) from an entity owned by Mr.

Allan Huang, one of the majority shareholders of

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

As of June 30, 2024, the outstanding

balance of the RP Loan was $350,000.

As of June 30, 2025 and 2024, the outstanding

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

June 2024 Registered Direct Offering

43 unchanged sentences

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-K

Item 7. Management’s Discussion and Analysis