What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-10-09 compared with 2024-09-20 · 629 added, 506 removed, 1082 unchanged (51% of the section changed)

2 unchanged sentences

Report of Independent Registered Public Accounting Firm PCAOB ID ( 7000 )

Report of Independent Registered Public Accounting Firm PCAOB ID ( 1195 )

Consolidated Balance Sheets as of June 30, 2025 and 2024

3 unchanged sentences

Notes to Consolidated Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of iPower, Inc.

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Opinion on the Consolidated Financial Statements

We have audited the accompanying

consolidated balance sheets of iPower, Inc.

and its subsidiaries (the “Company”) as of June 30, 2024 and 2023, and the related

consolidated statements of operations and comprehensive loss, changes in stockholders’ equity, and cash flows for each of the years

in the two-year period ended June 30, 2024 and the related notes (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company

as of June 30, 2024 and 2023, and the results of their operations and their cash flows for each of the years in the two-year period ended

June 30, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated

balance sheet of iPower, Inc.

and its subsidiaries (the “Company”) as of June 30, 2025, and the related consolidated statements

of operations and comprehensive loss, changes in stockholders’ equity, and cash flows for year ended June 30, 2025 and the related

notes (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements present

fairly, in all material respects, the financial position of the Company as of June 30, 2025, and the results of their operations and their

cash flows for the year ended June 30, 2025, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight

Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance

with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether

the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to

have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required

to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness

of the Company’s internal control over financial reporting.

These consolidated financial statements are the

responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial

statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)

(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated

financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we

engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding

of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing

procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing

procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures

in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates

made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

We have served as the Company’s auditor since 2020.

Our audit included performing procedures to assess

the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the

consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides

a reasonable basis for our opinion.

/s/ HTL International, LLC

We have served as the Company’s auditor

Houston, Texas

October 9, 2025

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Board of Directors and Stockholders of

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated

balance sheet of iPower, Inc.

and its subsidiaries (the “Company”) as of June 30, 2024, and the related consolidated statements

of operations and comprehensive loss, changes in stockholders’ equity, and cash flows for year ended June 30, 2024 and the related

notes (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements present

fairly, in all material respects, the financial position of the Company as of June 30, 2024, and the results of their operations and their

cash flows for the year ended June 30, 2024, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the

responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial

statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United

States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and

the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated

financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we

engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding

of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess

the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the

consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides

a reasonable basis for our opinion.

We have served as the Company’s auditor

since 2020 until June 2025.

Irvine, California

September 20, 2024

and Subsidiaries

Balance Sheets

As of June 30, 2024

Consolidated Balance

As of June 30, 2025 and June 30, 2024

Current assets

8 unchanged sentences

Deferred tax assets, net

Investment in joint venture

Intangible assets, net

5 unchanged sentences

Other payables and accrued liabilities

Advance from shareholders

Lease liability - current

1 unchanged sentence

Short-term loan payable - related party

Long-term promissory note payable - current portion

Revolving loan payable, net

2 unchanged sentences

Non-current liabilities

Long-term revolving loan payable, net

Lease liability - non-current

5 unchanged sentences

20,000,000 shares authorized;

0 shares issued and outstanding at

June 30, 2024 and 2023

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

Common stock, $ 0.001 par value;

9 unchanged sentences

Total liabilities and stockholders' equity

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

The accompanying notes are an integral part of these consolidated financial

and Subsidiaries

Statements of Operations and Comprehensive Loss

For the Years Ended June

30, 2024 and 2023

For the Years Ended June 30,

Consolidated Statements of Operations and Comprehensive Loss

For the Years Ended June 30, 2025 and 2024

For the year Ended June 30,

Product sales

Service income

Total revenues

COST OF REVENUES

Product costs

Service costs

Total cost of revenues

OPERATING EXPENSES:

1 unchanged sentence

General and administrative

Impairment loss - goodwill

Total operating expenses

LOSS FROM OPERATIONS

INCOME (LOSS) FROM OPERATIONS

( 5,865,762 )

1 unchanged sentence

Interest expenses

( 1,066,280 )

Loss on equity method investment

Other non-operating income (loss)

Other non-operating income (expenses)

Total other expenses, net

( 1,184,030 )

LOSS BEFORE INCOME TAXES

INCOME (LOSS) BEFORE INCOME TAXES

( 6,232,035 )

( 1,792,813 )

PROVISION FOR INCOME TAX BENEFIT

PROVISION FOR INCOME TAX EXPENSE (BENEFIT)

( 1,254,489 )

NET INCOME (LOSS)

( 4,977,546 )

1 unchanged sentence

Non-controlling interest

NET LOSS ATTRIBUTABLE TO iPOWER INC.

NET INCOME (LOSS) ATTRIBUTABLE TO IPOWER INC.

( 4,968,288 )

( 1,528,159 )

OTHER COMPREHENSIVE LOSS

OTHER COMPREHENSIVE INCOME (LOSS)

Foreign currency translation adjustments

COMPREHENSIVE LOSS ATTRIBUTABLE TO iPOWER INC.

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO IPOWER INC.

$ ( 4,717,775 )

1 unchanged sentence

WEIGHTED AVERAGE NUMBER OF COMMON STOCK

LOSSES PER SHARE

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

EARNINGS (LOSSES) PER SHARE

The accompanying notes are an integral part of these consolidated financial

and Subsidiaries

2 unchanged sentences

For the Years Ended June 30, 2025 and 2024

Additional Paid in

Retained Earnings (Accumulated

Accumulated other Comprehensive income

Non-controlling

Accumulated other Comprehensive

Paid in Capital

income (loss)

Balance, June 30, 2024

2 unchanged sentences

( 4,968,288 )

Stock-based compensation

Restricted shares issued for vested

Common stock issued for cash, net

of issuance costs

Capital injection to DHS

Settled offering cost

(See Note 17)

( 4,977,546 )

( 1,300,000 )

Returned and cancelled shares

Foreign currency

translation adjustments

Stock-based compensation

Foreign currency translation adjustments

Balance, June 30, 2025

$ ( 15,198,889 )

$ ( 210,406 )

Balance, June 30, 2023

1 unchanged sentence

( 1,528,159 )

( 1,541,448 )

Stock-based compensation

Restricted shares issued for vested

Foreign currency

translation adjustments

Restricted shares issued for vested RSUs

Common stock issued for cash, net of issuance costs

Capital injection to DHS

Settled offering cost

( 1,300,000 )

Returned and cancelled shares

Foreign currency translation adjustments

Balance, June 30, 2024

$ ( 10,230,601 )

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

$ ( 210,406 )

The accompanying notes are an integral part of these consolidated financial

and Subsidiaries

1 unchanged sentence

of Cash Flows

For the Years Ended June

30, 2024 and 2023

For the Years Ended June 30, 2025 and 2024

For the Years Ended June 30

7 unchanged sentences

Loss on equity method investment

Impairment loss - goodwill

Stock-based compensation expense

5 unchanged sentences

( 1,278,857 )

Prepayments and other current assets

Prepayments and other current assets, net

other non-current assets

1 unchanged sentence

( 4,084,607 )

( 2,017,841 )

Other payables and accrued liabilities

( 1,684,961 )

( 1,728,632 )

Operating lease liabilities

2 unchanged sentences

Income taxes payable

Net cash provided by operating activities

Net cash (used in) provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of equipment

Disposal of equipment

Investment in joint venture

Prepayments for software development

( 1,519,928 )

Net cash used in investing activities

( 2,042,250 )

CASH FLOWS FROM FINANCING ACTIVITIES:

1 unchanged sentence

Advance from shareholders

Payments of offering cost settlement (See Note 17)

Net proceeds from sale of common stock (See Note 14)

Proceeds from related parties

Payments to related parties

Payments of offering cost settlement

Net proceeds from sale of common stock

Proceeds from short-term loans - related party

Proceeds from short-term loans

Payment on investment payable

( 1,500,000 )

Payments on short-term loans - related party

2 unchanged sentences

( 1,750,000 )

( 2,159,767 )

Proceeds from revolving loan

6 unchanged sentences

EFFECT OF EXCHANGE RATE ON CASH

CHANGES IN CASH

CHANGES IN CASH AND CASH EQUIVALENT

( 5,369,947 )

CASH AND CASH EQUIVALENT, beginning of period

4 unchanged sentences

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING TRANSACTIONS:

Shares returned and cancelled (See Note 17)

Shares returned and cancelled

Termination of operating leases

Right of use assets acquired under new operating leases

The accompanying

notes are an integral part of these consolidated financial statements.

The accompanying notes are an integral part of these consolidated

financial statements.

Notes to Consolidated Financial Statements

12 unchanged sentences

As a result, GPM became the Company’s wholly owned subsidiary.

On May 18, 2021, the Company acquired 100% of the

equity ownership of its variable interest entity, E Marketing Solution Inc.

(“E Marketing”), an entity incorporated in California

and owned by one of the shareholders of the Company.

On May 18, 2021, the Company acquired 100% of

the equity ownership of its variable interest entity, E Marketing Solution Inc.

(“E Marketing”), an entity incorporated in

California and owned by one of the shareholders of the Company.

As a result, E Marketing became the Company’s wholly owned subsidiary.

26 unchanged sentences

See details on Note 4 below.

On June 3, 2025, the Company entered into a joint

venture agreement and formed a Nevada limited liability company, United Package NV, LLC (“United Package”), for the principal

purpose of producing packaging materials to serve the rapidly growing demands of U.S.

businesses seeking reliable, sustainable, and cost-effective

supply chain solutions without reliance on offshore manufacturing.

The Company owns approximately 44 % of the equity interest in United

Package, retaining significant influence, but does not own a majority equity interest in or otherwise control United Package.

at Note 3 below.

Note 2 – Basis of Presentation and Summary

12 unchanged sentences

Prior Period Reclassification

Certain prior year amounts in the consolidated

balance sheets and statements of cash flows have been reclassified to conform to the current year presentation, including reclassifications

made in the presentation of non-current assets, current liabilities, and cash flows from operating activities.

These reclassifications

had no impact on the prior year net loss or stockholders’ equity.

Certain prior period amounts in the consolidated

balance sheets and statements of operations have been reclassified to conform to the current period presentation, including reclassifications

made in the presentation of investment in joint ventures, service income and costs.

These reclassifications had no impact on the prior

year’s financial statements as a whole.

Emerging Growth Company Status

46 unchanged sentences

The equity accounts were stated at their historical rates.

The average translation rates applied to statements of operations and comprehensive loss accounts for the year ended June 30,

2024 was 7.2103 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 consolidated balance sheet.

The average translation rates applied to statements of operations and comprehensive loss accounts for the year ended June 30, 2025 was

7.2143 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 consolidated balance sheet.

Cash and cash equivalents

7 unchanged sentences

Management believes our Company is not exposed to any significant credit risk with respect to its cash.

As of June 30, 2025, the Company’s restricted

cash balance included approximately $ 19,151 frozen by governmental authorities in connection with a lawsuit in China.

Such funds are not

available for the Company’s general use until the restrictions are released.

See Note 17 below for details.

Accounts receivable, net

2 unchanged sentences

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.

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

18 unchanged sentences

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.

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 recent tariff policy.

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

During the year ended June 30, 2025, 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 year ended June 30, 2025 and 2024, the credit losses

was $ 1,569,031 and $ 285,386 , respectively.

Equity method investment

The Company accounts for its ownership interest

in Box Harmony, a 40 % owned joint venture, following the equity method of accounting, in accordance with ASC 323, Investments —

Equity Method and Joint Ventures.

Under this method, the carrying cost is initially recorded at cost and then increased or decreased by

recording its percentage of gain or loss in Box Harmony’s statement of operations and a corresponding charge or credit to the carrying

value of the asset.

in Box Harmony, a 40 % owned joint venture, and United Package NV LLC, a 44 % owned joint venture, following the equity method of accounting,

in accordance with ASC 323, Investments — Equity Method and Joint Ventures.

Under this method, the carrying cost is initially recorded

at cost and then increased or decreased by recording its percentage of gain or loss in joint ventures’ statement of operations and

a corresponding charge or credit to the carrying value of the asset.

Variable interest entities

27 unchanged sentences

to conduct an evaluation of goodwill impairment for the Company as a whole at the consolidated reporting unit level as of June 30, 2022.

which evaluation was conducted prior to the Company’s filing of its Annual Report on Form 10-K for the period ended June 30, 2022.

This evaluation was completed prior to the Company’s filing of its Annual Report on Form 10-K for the period ended June 30, 2022.

Due to the decrease in the Company’s share price subsequent to the filing of the June 30, 2022 Form 10-K and the net loss incurred

6 unchanged sentences

goodwill is partially impaired.

During the period ended June 30, 2024, the Company

performed a qualitative and quantitative goodwill impairment analysis following the steps laid out in ASC 350-20-35-3C and noted no goodwill

As of June 30, 2024 and 2023, the goodwill balance amounted to $ 3,034,110 and $ 3,034,110 , respectively.

During the years ended June 30, 2025 and 2024,

the Company engaged an independent third-party valuation firm to perform a qualitative and quantitative goodwill impairment analysis following

the steps laid out in ASC 350-20-35-3C and noted no goodwill impairment.

As of June 30, 2025 and 2024, the goodwill balance amounted to

$ 3,034,110 and $ 3,034,110 , respectively.

Intangible Assets, net

17 unchanged sentences

fair value determinations.

As of June 30, 2024 and 2023, there were no indicators of impairment.

The Company did no t record any impairment charge for the years ended June 30, 2025 and 2024.

Fair values of financial instruments

25 unchanged sentences

We measure certain non-financial assets on a non-recurring basis, including goodwill.

a result of those measurements, we recognized an impairment charge of $3.1 million during the year ended June 30, 2023 as follows:

of June 30, 2025 and 2024, the Company had goodwill of $3,034,110 as follows:

Schedule of fair value of financial assets and liabilities

Goodwill, with a total carrying value of $6.1

million, was written down to its fair value of $3.0 million, resulting in an impairment charge of $3,060,034, which was recorded in earnings

for the year ended June 30, 2023.

The fair value of goodwill was determined based on the discounted cash flow method, which is an income

approach, which required the use of inputs that were unobservable in the marketplace (Level 3), including a discount rate that would be

used by a market participant, projections of revenues and cash flows with the revised projections reflecting the increase in freight and

storage costs in the current interim quarter, among others.

The fair value of goodwill was determined based

on the discounted cash flow method, which is an income approach, which required the use of inputs that were unobservable in the marketplace

(Level 3), including a discount rate that would be used by a market participant, projections of revenues and cash flows, among others.

Revenue recognition

6 unchanged sentences

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.

Return allowances, which reduce product revenue by the

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

The Company evaluates the criteria of ASC 606

3 unchanged sentences

to provide a specified good or service and the Company has discretion in establishing the price, revenue is recorded at gross.

Payments received prior to the delivery of goods to customers are recorded

as customer deposits.

Payments received prior to the delivery of goods to customers are

recorded as customer deposits.

The Company periodically provides incentive offers

5 unchanged sentences

Sales discounts are recorded in the period in

which the related sale is recognized.

which the related sales are recorded.

Sales return allowances are estimated based on historical amounts and are recorded upon recognizing

1 unchanged sentence

Shipping and handling costs are recorded as selling expenses.

Advertising costs

Advertising costs are expensed as incurred.

advertising and promotional costs included in selling and fulfillment expenses for the years ended June 30, 2024 and 2023 were $ 4,271,311

and $ 5,331,152 , respectively.

Cost of revenue

2 unchanged sentences

Operating expenses

Operating expenses, which consist of selling and fulfillment and general

and administrative expenses, are expensed as incurred.

Vendor warranty credits resulting from refund of returns on quality issues are

recorded to offset merchant selling fees.

During the years ended June 30, 2024 and 2023, the Company recorded vendor credit of $ 2.48 million and $ 0 , respectively.

Operating expenses, which consist of selling and

fulfillment and general and administrative expenses, including inventory reserves, are expensed as incurred.

Vendor warranty credits resulting

from refund of returns on quality issues are recorded to offset selling and fulfillment expenses.

During the years ended June 30, 2025

and 2024, the Company recorded vendor credit of $0 million and $2.48 million, respectively.

Advertising costs are expensed as incurred.

advertising and promotional costs included in selling and fulfillment expenses for the years ended June 30, 2025 and 2024 were $ 3,351,814

and $ 4,271,311 , respectively.

Inventory, net

Inventory consists of finished goods ready for

sale and is stated at the lower of cost or market.

sale and is stated at the lower of cost or net realizable value.

The Company values its inventory using the weighted average costing method.

The Company’s

policy is to include as a part of inventory and cost of goods sold any freight incurred to ship the product from its vendors to warehouses.

Outbound freight costs related to shipping costs to customers are considered periodic costs and are reflected in selling and fulfillment

The Company regularly reviews inventory and considers forecasts of future demand, market conditions and product obsolescence.

The Company’s policy is to include as a part of inventory and cost of goods sold any freight incurred to ship the product from its

vendors to warehouses.

The Company regularly reviews inventory and considers forecasts of future demand, market conditions and product

obsolescence.

If the estimated realizable value of the inventory

19 unchanged sentences

to additional paid in capital upon closing of the offering.

As of June 30, 2024 and 2023, $ 0 and $ 0 of deferred offering costs were

included in the consolidated balance sheets, respectively.

As of June 30, 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 years ended June

30, 2024 and 2023, sales through Amazon to Canada and other foreign countries were approximately 9.2 % and 10 % of the Company’s total

During the year ended June 30, 2024, sales of hydroponic products, including ventilation and grow light systems, was approximately

22 % of the Company’s total sales and the remaining 78 % consisted of general gardening, home goods, and other products and accessories.

During the year ended June 30, 2023, sales of hydroponic products, including ventilation and grow light systems, was approximately 23 %

of the Company’s total sales and the remaining 77 % consisted of general gardening, home goods, and other products and accessories.

As of June 30, 2024 and 2023, the Company had approximately $ 1.9 and $ 1.6 million of inventory stored in China.

The Company’s majority

of long-lived assets are located in California, United States, majority of the deferred tax assets are US related, and a majority of the

Company’s revenues are derived from within the United States.

The Company follows ASC Topic 280, Segment Reporting.

The Company’s Chief Executive Officer, who serves as the Chief Operating Decision Maker (“CODM”), 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.

Significant expense categories regularly provided to and reviewed by the CODMs are those

presented in the consolidated statements of comprehensive income.

The Company does not distinguish between markets or segments for the

purpose of internal reporting.

For the years ended June 30, 2025 and 2024, sales through Amazon to Canada and other foreign countries

were approximately 7.2 % and 9.2 % of the Company’s total sales.

During the year ended June 30, 2025, sales of hydroponic products,

including ventilation and grow light systems, was approximately 19 % of the Company’s total sales and the remaining 81 % consisted

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

During the year ended June 30, 2024, sales of hydroponic products,

including ventilation and grow light systems, was approximately 22 % of the Company’s total sales and the remaining 78 % consisted

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

As of June 30, 2025 and 2024, the Company had approximately $ 1 .0

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

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

113 unchanged sentences

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,

1 unchanged sentence

Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.

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.

ASU incorporates certain U.S.

Securities and Exchange Commission (SEC) disclosure requirements into the FASB Accounting Standards Codification™

(“Codification”).

The amendments in the ASU are expected to clarify or improve disclosure and presentation requirements of

a variety of Codification Topics, allow users to more easily compare entities subject to the SEC’s existing disclosures with those

entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC’s regulations.

In SEC Release No.

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.

33-10532, Disclosure Update and Simplification, issued August 17, 2018, the SEC referred certain of its disclosure

requirements that overlap with, but require incremental information to, generally accepted accounting principles to the FASB for potential

incorporation into the Codification.

The ASU incorporates into the Codification 14 of the 27 disclosures referred by the SEC.

They modify the disclosure or presentation requirements

of a variety of Topics in the Codification.

the 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.

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.

However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations,

the amendments will be removed from the Codification and not become effective for any entity.

The Company does not expect the adoption

of this standard to have a material impact on its consolidated financial statements.

In September 2022, FASB issued ASU 2022-04, Liabilities—Supplier

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This standard is effective for fiscal years beginning after December

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

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

In August 2020, the FASB issued ASU 2020-06, “Debt

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method of transition.

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

The adoption of this standard did not have a material impact on its consolidated financial statements.

In March 2020 and January 2021, the FASB issued

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of Topic 848, Reference Rate Reform to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic

The Company does not expect the adoption of this standard to have a material impact on the Company’s consolidated financial statements.

Subsequent events

The Company evaluated subsequent events and transactions

that occurred after the balance sheet date through the date that the consolidated financial statements are available to be issued.

subsequent events that required recognition or additional disclosure in the consolidated financial statements are presented therein.

The adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

Note 3 - Joint Ventures

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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

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

The LLC Agreement prohibits the issuance of additional

Equity Units and certain other actions unless approved in advance by the Company, that a noncontrolling right that would not be substantive

to overcome the majority voting interests held by TPA and Xiao.

In January 2023, TPA and Xiao transferred their 60% equity units to a

third party without consideration as the LLC was still in development stage and did not have significant operations.

The transfer of equity

did not have any impact on the LLC’s financial statements.

As of the date of this report, the option right

had been expired and the Company had not exercised the option to purchase additional voting units from Xiao and TPA.

The LLC Agreement

prohibits the issuance of additional Equity Units and certain other actions unless approved in advance by the Company, that a noncontrolling

right that would not be substantive to overcome the majority voting interests held by TPA and Xiao.

In January 2023, TPA and Xiao transferred

their 60% equity units to a third party without consideration as the LLC was still in development stage and did not have significant operations.

The transfer of equity did not have any impact on the LLC’s financial statements.

As a result, the Company owns 40 % of the equity

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of the asset.

As of June 30, 2025 and 2024, the carrying value of the investment in Box Harmony was $ 13,264 and $ 27,605 .

Global Social Media, LLC

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

United Package NV, LLC

On June 3, 2025, the Company, Custom Cup Factory,

Inc., a California corporation (“CCF”), and Yi Yang (“Yang”) entered into the Limited Liability Company Operating

Agreement (the “Operating Agreement”) of United Package NV, LLC, a Nevada limited liability corporation (“United Package”).

United Package will focus on the domestic production

of packaging materials to serve the rapidly growing demands of U.S.

businesses seeking reliable, sustainable, and cost-effective supply

chain solutions without reliance on offshore manufacturing.

Pursuant to the terms of the Operating Agreement, the Company owns 2,280 Class

A Voting Units (as defined in the Operating Agreement) of United Package in consideration for the Company’s contribution of equipment

and facility, Yang owns 1,140 Class A Voting Units of the Joint Venture in consideration for Yang’s commitment to manage the business

of United Package and CCF owns 1,710 Class A Voting Units of United Package in consideration for CCF’s contribution of its marketing

expertise, existing sales channel and customer list.

As a result, the Company owns approximately 44 %

of the equity interest in United Package with significant influence but does not own a majority equity interest or otherwise control

of United Package.

The Company accounts for its ownership interest in United Package following the equity method of accounting, in accordance

with ASC 323, Investments —Equity Method and Joint Ventures.

Under this method, the carrying cost is initially recorded at cost

and then increased or decreased by recording its percentage of gain or loss in its statement of operations and a corresponding charge

or credit to the carrying value of the asset.

As of June 30, 2025, the Company had invested total amount of $ 371,917

to United Package.

Note 4 – Variable interest entity

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and liabilities were as follows for the years indicated:

Schedule of carrying amount of the VIE’s assets and liabilities

Schedule of VIE’s assets and liabilities

June 30, 2025

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Right of use – noncurrent

Deferred tax assets

Advance from shareholders

Accounts payable

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Net loss after elimination of intercompany transactions

For the year ended June 30, 2024, the VIE contributed approximately

$ 7.1 million of revenue and $ 0.5 million of net loss before elimination.

For the year ended June 30, 2025, the VIE contributed

approximately $ 2.8

million of revenue and $ 0.9

million of net loss before elimination.

For the year ended June 30, 2024, the VIE contributed approximately $ 7.1

$ 7 .0 million of revenue and $ 1.4 million of net loss before elimination.

million of revenue and $ 0.5

million of net loss before elimination.

Note 5 – Accounts receivable, net

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allowance for credit losses

( 1,924,417 )

Total accounts receivable

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accounts receivable are summarized below:

Schedule of changes in allowance for credit losses

Schedule of changes in allowance for credit losses on accounts receivable

Allowance for

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Other receivables consisted of delivery fees of

$ 3,995 and $ 165,962 and receivables from one and two unrelated parties for their use of the Company’s courier accounts at June 30,

2024 and 2023.

$ 18,699 and $ 3,995 and receivables from unrelated parties for their use of the Company’s courier accounts at June 30, 2025 and 2024,

respectively.

The changes in allowance for credit losses on

other receivables are summarized below:

Schedule of changes in allowance for credit losses on

other receivables

Schedule of changes in allowance for credit losses on other receivables

Allowance for Credit Losses

Balance at June 30, 2023

Allowance recorded during the year ended June 30, 2023

Balance at June 30, 2023

Allowance reversed during the year ended June 30, 2024

Balance at June 30, 2024

During the year ended June 30,2024, the Company

collected $ 249,128

of aged other receivables and recorded a reduction of bad debts expense as a reversal of the allowance of credit loss.

Allowance recorded during the year ended June 30, 2025

Balance at June 30, 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 of credit losses.

Note 8 – Intangible assets, net

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net, consisted of the following:

Schedule of intangible assets,

Schedule of intangible assets, net

June 30, 2025

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( 2,191,628 )

( 1,542,257 )

The intangible assets were acquired on February

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At June 30, 2025,

finite-lived intangible assets are expected to be amortized over their estimated useful lives, which ranges from a period of five to 10

finite-lived intangible assets are expected to be amortized over their estimated useful lives, which ranges from a period of 5 to

10 years, and the estimated remaining amortization expense for each of the five succeeding years thereafter is as follows:

Schedule of estimated remaining amortization expense

Schedule of amortization expense

Year Ending June 30,

Intangible assets, net

During the year ended June 30, 2025, the Company entered into software

development agreements with a third-party developer.

In connection with these agreements, the Company made payments of $ 1.5 million for

development fees.

As of June 30, 2025, such payments were recorded as a non-current prepayment and are included in Other non-current assets

in the accompanying consolidated balance sheet.

The related amounts will be reclassified from prepaid assets to intangible assets upon

completion and acceptance of the developed software.

Note 9 – Other payables and accrued liabilities

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Sales taxes payable

Payroll liabilities

Accrued payroll and related expenses

Settlement payable

Other payables

The Company’s controlled VIE, DHS, facilitates

the Company in the process of inventory procurement.

During the years ended June 30, 2024 and 2023, the Company purchased a total of $ 0

and $ 31,385 , respectively, in inventories from a supplier which had a payment term of 90 days with a 2% premium on the purchase price.

As of June 30, 2024 and 2023, the outstanding balance included in other payables to this supplier was $ 0 and $ 0 , which was presented as

financing cash flows from short term loans on the statement of cash flows.

Note 10 – Loans payable

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As of June 30, 2025, the outstanding amount of

the revolving loan payable, net of debt discount and including interest payable was $ 5,500,739 and $ 9,791,191 , respectively.

the ABL, which was classified as current revolving loan payable, including interest payable, was $ 3,737,602 .

As of June 30, 2024, the

outstanding amount of the revolving loan payable, net of debt discount and including interest payable, was $ 5,500,739 .

On February 16, 2022, in connection with the acquisition

of Anivia Limited, the Company and JPM entered into an amendment to the Pledge and Security Agreement, pursuant to which the Company pledged

65% of its ownership interest in Anivia Limited and its subsidiaries.

On October 7, 2022, the Company entered into a

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entered into a default waiver and consent agreement (the “Waiver Letter”) pursuant to which the parties recognized that the

Company was in default on its failure to satisfy the minimum Excess Availability requirement of $7,500,000, as defined in the Credit Agreement,

and deliver a certificate to JPMorgan accurately reflecting the Excess Availability (together, the “Existing Defaults”).

the terms of the Waiver Letter, JPMorgan 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.

Company was in default on its failure to satisfy the minimum Excess Availability requirement of $7,500,000, as defined in the Credit

Agreement, and deliver a certificate to JPMorgan accurately reflecting the Excess Availability (together, the “Existing Defaults”).

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

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 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.

On February 15, 2022, as part of the consideration

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

commencing August 15, 2022 (the “Purchase Note”).

The principal amount of the Purchase Note was $ 3.5 million with a fair value

of $ 3.6 million as of February 15, 2022.

In October 2022, the Company paid the first installment of $ 875,000 .

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

And in February 2023, the

Company paid the second installment of $ 875,000 .

In August 2023, the Company paid the third installment of $ 875,000 .

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

For the 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 June 30, 2024, the total outstanding balance of the Purchase Note was $ 0 .

In February 2024,

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

For the year ended June 30, 2024, the Company recorded accrued interest of $ 39,429

and amortization of note premium of $ 31,602 .

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 was 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

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”).

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.

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is due in 30 days upon receipt of White Cherry’s notice of repayment.

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 .

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, 2025 and 2024, the Company

recorded interest of $ 0 and $ 32,911 , respectively.

As of June 30, 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 Loan 2”).

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 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 .

As of the date of this report, the On-demand Loan 2 had been fully paid off.

On April 1, 2024, the

Company borrowed $ 350,000

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

As of June 30, 2024, the outstanding balance of the On-demand Loan 2, including accrued interest of $ 7,615 , was $ 491,214 .

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 Company.

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 .

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

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

RP Loan was $ 0 and $ 350,000 .

Note 11 - Related party transactions

Starting from March 2022 to January 2023, the

Company subleased 50,000 square feet of its warehouse space to Box Harmony, LLC, which is a 40% owned joint venture of the Company as

disclosed in Note 1 and Note 2 above.

For the year ended June 30, 2024 and 2023, the Company received and recorded sublease fee of $ 0

and $ 359,373 as other non-operating income, respectively.

As of June 30, 2024 and 2023, other receivables due from Box Harmony was $ 0

and 0 , respectively.

During the period ended June 30, 2024, the

Company started selling products through MII Strategy Inc.

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

short-term loan from an entity owned by Mr.

Allan Huang, one of the majority shareholders of the Company.

See Note 10 above for details.

During the year ended June 30, 2024, the Company

started selling products through MII Strategy Inc.

(“MII”), a company owned by the Company’s CEO, Mr.

Chenlong Tan.

For the year ended June 30, 2024, the amount sold through MII was $ 95,376 .

As of June 30, 2024, the total amount due

from MII was $ 56,406 .

On February 15, 2022, the Company assumed $ 92,246

of advance from shareholders of DHS through acquisition of Anivia.

This amount was for capital injection pending capital inspection by

the local government in accordance with the PRC rules.

During the quarter ended June 30, 2024, DHS had completed and fulfilled the capital

injection requirement.

As of June 30, 2024 and 2023, the balance of advance from shareholders was $ 0 and $ 85,200 , respectively.

As of June 30, 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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See Note 10 above for details.

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

short-term loan from an entity owned by Mr.

Allan Huang, one of the majority shareholders of the Company.

See Note 10 above for

On June 3, 2025, the Company, Custom Cup Factory,

(“CCF”) and Ms.

Yi Yang, our new director appointed on June 6, 2025, entered into the Limited Liability Company Operating

Agreement (the “Operating Agreement”) of United Package NV, LLC, a Nevada limited liability corporation (the “Joint

The Joint Venture will focus on the domestic production of packaging materials to serve the rapidly growing demands of

businesses seeking reliable, sustainable, and cost-effective supply chain solutions without reliance on offshore manufacturing.

Note 3 above for details.

In addition, Ms.

Yang’s entity,

(“Pacelor”), manages a warehouse and provide fulfillment services for the Company and receives a monthly

service fee, which fluctuates from month to month, of approximately $200,000.

Yang is the Founder and Chief Executive Officer of Pacelor.

For the year ended June 30, 2025, the Company received $ 202,922

service from Pacelor after it became the related party of Pacelor on June 6, 2025 and the accounts payable to Pacelor as of June 30,

2025 was 78,831 .

Yang’s another entity, Pacelor NV Inc.

(“Pacelor NV”) also provides marketing services for the Company.

June 30, 2025, the outstanding accounts payable to Pacelor NV was $ 315,019 .

Note 12 – Income taxes

In addition to corporate income taxes in the

United States, upon completion of the acquisition of Anivia in February 2022, the Company is subject to corporate income taxes in

People’s Republic of China (“PRC”).

Anivia and its subsidiaries were subject to BVI or Hong Kong income taxes but

did not have any operations for the year ended June 30, 2024 and 2023.

DHS, the operating VIE of Anivia, is considered a Controlled

Foreign Corporation (CFC) defined under IRC Sec.

957(a) since the Company indirectly owns more than 50% voting control of DHS as a

result of the Transfer Agreement.

Therefore, DHS is subject to the GILTI Tax.

DHS is subject to 5% tax rate in PRC until December

Since DHS had tested losses during the year ended June 30, 2024 and 2023 and no

GILTI tax was recorded for as of June 30, 2024 and 2023, the Company is not eligible for the GILTI high-tax exclusion.

as a result of the acquisition, the Company booked a $ 6,094,144

In addition to corporate income taxes in the United

States, upon completion of the acquisition of Anivia in February 2022, the Company is subject to corporate income taxes in the People’s

Republic of China (“PRC”).

Anivia and its subsidiaries were subject to BVI or Hong Kong income taxes but did not have any

operations for the year ended June 30, 2025 and 2024.

DHS, the operating VIE of Anivia, is considered a Controlled Foreign Corporation

(CFC) defined under IRC Sec.

957(a) since the Company indirectly owns more than 50% voting control of DHS as a result of the Transfer

Therefore, DHS is subject to the Global Intangible Low-Taxed Income Tax (“GILTI”).

DHS is subject to 5% tax rate

in PRC until December 31, 2027.

Since DHS had tested losses during the year ended June 30, 2025 and 2024 and no GILTI tax was recorded

for as of June 30, 2025 and 2024, the Company is not eligible for the GILTI high-tax exclusion.

In addition, as a result of the acquisition,

the Company booked a $ 6,094,144 of goodwill.

Since the acquisition was a stock acquisition, the Goodwill is not deductible for tax purposes.

1 unchanged sentence

30, 2025 and 2024 consisted of the following:

Schedule of provision for income tax

Schedule of income tax provision

June 30, 2025

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State (net of federal benefit)

Impairment loss on goodwill – permanent difference

Prior year adjustment and permanent differences

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give rise to significant portions of the deferred taxes are summarized as follows:

Schedule of deferred tax assets

Schedule of deferred taxes

Deferred tax assets

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Intangible assets acquired

( 1,149,549 )

Total deferred tax liabilities

( 1,054,484 )

( 1,254,872 )

Net deferred tax assets

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earnings per share for the years presented:

Schedule of computation of basic and diluted

earnings per share

Schedule of computation of basic and diluted earnings per share

For the year ended

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Earnings per share of ordinary shares - basic and diluted

Due to the ani-dilutive effect, the computation of basic

and diluted EPS did not include the shares underlying the exercise of warrants and RSUs as the Company had a net loss for the year

ended June 30, 2024.

The computation of diluted EPS did not include the shares

underlying the exercise of options granted as none of the options were vested and the exercise price of the options was higher than

the market price as of June 30, 2024 and 2023.

For the year ended June 30, 2024, 44,285 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 earnings (losses) per share

when the shares are fully vested.

For the year ended June 30, 2023, 53,435 vested 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 earnings (loss) per share when the shares

are fully vested.

Due to the ani-dilutive effect, the computation of basic and diluted EPS did not include the shares underlying the exercise of warrants and RSUs as the Company had a net loss for the year ended June 30, 2025 and 2024.

The computation of diluted

EPS did not include the shares underlying the exercise of options granted as none of the options were vested and the exercise price

of the options was higher than the market price as of June 30, 2025 and 2024.

For the year ended June 30, 2025, 77,454 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 earnings (losses) per share when the shares are fully vested.

For the year ended June 30, 2024, 44,285 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 earnings (loss) per share when the shares are fully vested.

Note 14 – Equity

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issued and outstanding.

During the year ended June 30, 2023, the Company

issued 138,557 shares of restricted common stock for RSUs vested.

During the year ended June 30, 2024, the Company

issued 107,293 shares of restricted common stock for RSUs vested.

On June 18, 2024, the Company closed on a

registered direct offering (the “Registered Direct”) of 2,083,334 shares

of common stock (the “Shares”) and a concurrent private placement (“Private Placement,” and together with

the Registered Direct, the “Offering”) of warrants (the “Warrants”) to purchase 2,083,334 shares

of common stock (the “Warrant Shares”), which were sold for gross aggregate proceeds of $ 5,000,002 .

The Shares were sold pursuant to a prospectus supplement, filed on June 18, 2024, to the Registration Statement on Form S-3,

originally filed on September 25, 2023, with the SEC (File No.

During the year ended June 30, 2025 and 2024,

the Company issued 0 and 107,293 shares of restricted common stock for RSUs vested, respectively.

On June 18, 2024, the Company closed on a registered

direct offering (the “Registered Direct”) of 2,083,334 shares of common stock (the “Shares”) and a concurrent

private placement (“Private Placement,” and together with the Registered Direct, the “Offering”) of warrants (the

“Warrants”) to purchase 2,083,334 shares of common stock (the “Warrant Shares”), which were sold for gross aggregate

proceeds of $ 5,000,002 .

The Shares were sold pursuant to a prospectus supplement, filed on June 18, 2024, to the Registration Statement

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

333-274665) and declared effective by the SEC on September

The Warrants, which were issued pursuant to an exemption from registration pursuant to Section 4(a)(2) or Regulation D on the

Securities Act, have a term of five

years and are immediately exercisable at $ 2.40 per

The Shares and Warrants were sold to a purchaser pursuant to a securities purchase agreement, dated June 16, 2024, between

the Company and the purchaser (the “Purchase Agreement”).

Roth Capital Partners, LLC (the “Placement Agent”)

acted as placement agent, pursuant to a placement agency agreement between the Company and the Placement Agent dated June 16, 2024

(the “Placement Agency Agreement”).

The Company paid the Placement Agent as compensation a cash fee equal to 6.5 %

of the gross proceeds of the Offering plus reimbursement of certain expenses and legal fees.

The net proceeds of the Offering, after

deducting $ 456,913 , the Placement Agent’s fees and expenses and other direct offering costs paid by the Company, was $ 4,543,089 .

The Company calculated the fair value of the

Warrants at $ 3.1

million , with a relative fair value of $ 1.7 million after allocation of the fair value of the Shares, using the Black-Scholes Model with the following variables:

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

The Shares and Warrants were sold to a purchaser

pursuant to a securities purchase agreement, dated June 16, 2024, between the Company and the purchaser (the “Purchase Agreement”).

Roth Capital Partners, LLC (the “Placement Agent”) acted as placement agent, pursuant to a placement agency agreement between

the Company and the Placement Agent dated June 16, 2024 (the “Placement Agency Agreement”).

The Company paid the Placement

Agent as compensation a cash fee equal to 6.5% of the gross proceeds of the Offering plus reimbursement of certain expenses and legal

The net proceeds of the Offering, after deducting $ 456,913 , the Placement Agent’s fees and expenses and other direct offering

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

The Company calculated the fair value of the Warrants

at $ 3.1 million , with a relative fair value of $ 1.7 million after allocation of the fair value of the Shares, using the Black-Scholes

Model with the following variables:

Stock Price - $ 2.0

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Pursuant to the Warrant agreement, except for

some fundamental transactions within the Company’s control, in no event shall the Company be required to net cash settle the

The Company considered and followed the rules and guidelines under ASC 480-10 and ASC 815 and concluded that the Warrants

should be classified and recorded as equity.

Further, as the warrants were issued as part of the Offering, the relative fair value

of the Warrants was included in the gross proceeds and recorded as additional paid-in capital.

some fundamental transactions within the Company’s control, in no event shall the Company be required to net cash settle the Warrants.

The Company considered and followed the rules and guidelines under ASC 480-10 and ASC 815 and concluded that the Warrants should be classified

and recorded as equity.

Further, as the warrants were issued as part of the Offering, the relative fair value of the Warrants was included

in the gross proceeds and recorded as additional paid-in capital.

As of June 30, 2025, none of the warrants had been exercised.

On June 18, 2024, as disclosed in Note 17 below,

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As of June 30, 2025 and 2024, there were 31,359,899

and 29,710,939 shares of Common Stock issued and outstanding, respectively.

shares of Common Stock issued and outstanding, respectively.

Preferred Stock

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During the year ended

June 30, 2024, the Company granted additional 62,600 shares of RSUs.

For the year ended June 30, 2024 and 2023, the Company recorded $ 71,014

and $ 71,268 of stock-based compensation expense.

There was no forfeiture of RSUs occurred during the year ended June 30, 2024 and 2023.

As of June 30, 2024 and 2023, the unvested number of RSUs was 3,250 and 38,793 and the unamortized expense was $ 1,788 and $ 22,500 , respectively.

June 30, 2025 and 2024, the Company granted additional 88,094 and 62,600 shares of RSUs, respectively.

For the year ended June 30, 2025

and 2024, the Company recorded $ 93,455 and $ 71,014 of stock-based compensation expense.

There was no forfeiture of RSUs occurred during

the year ended June 30, 2025 and 2024.

As of June 30, 2025 and 2024, the unvested number of RSUs was 13,890 and 3,250 and the unamortized

expense was $ 8,333 and $ 1,788 , respectively.

Information relating to RSU grants is summarized

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As of June 30, 2025, of the 407,608 vested RSUs,

285,869 shares, including 107,293 shares issued during the current year, of Common Stock were issued, and 44,285 shares were to be issued

in the next fiscal year.

285,869 shares of Common Stock were issued (no shares were issued during the current year), and 121,739 shares were to be issued in the

As of June 30, 2024, of the 330,154 vested RSUs, 285,869 shares, including 107,293 shares issued during the current year,

of Common Stock were issued, and 44,285 shares were to be issued.

On May 12, 2022, the Compensation Committee of

the Board of Directors approved an incentive plan for the Company’s executive officers consisting of a cash performance bonus of

(i) a $ 60,000

to be awarded to Kevin Vassily, CFO of the Company, and (ii) grants of stock options (the “Option Grants”) in the amount

of (a) 3,000,000

shares to Chenlong Tan, CEO and (b) 330,000

shares to Mr.

The Option Grants, which were issued on May 13, 2022, have an exercise price of $ 1.12 ,

a contractual term of 10 years and consist of six vesting tranches with a vesting schedule based entirely on the attainment of both operational

milestones (performance conditions) and market conditions, assuming continued employment of the recipients through each vesting date.

Each of the six vesting tranches of the Option Grants will vest when both (i) the market capitalization milestone for such tranche, which

begins at $150 million for the first tranche and increases by increments of $50 million through the fourth tranche and $100 million

thereafter (based on achieving such market capitalization for five consecutive trading days), has been achieved, and (ii) any one of

the following six operational milestones focused on revenue or any one of the six operational milestones focused on operating income

have been achieved during a given fiscal year.

(i) a $ 60,000 to be awarded to Kevin Vassily, CFO of the Company, and (ii) grants of stock options (the “Option Grants”) in

the amount of (a) 3,000,000 shares to Chenlong Tan, CEO and (b) 330,000 shares to Mr.

The Option Grants, which were issued on

May 13, 2022, have an exercise price of $ 1.12 , a contractual term of 10 years and consist of six vesting tranches with a vesting schedule

based entirely on the attainment of both operational milestones (performance conditions) and market conditions, assuming continued employment

of the recipients through each vesting date.

Each of the six vesting tranches of the Option Grants will vest when both (i) the market

capitalization milestone for such tranche, which begins at $150 million for the first tranche and increases by increments of $50 million

through the fourth tranche and $100 million thereafter (based on achieving such market capitalization for five consecutive trading days),

has been achieved, and (ii) any one of the following six operational milestones focused on revenue or any one of the six operational milestones

focused on operating income have been achieved during a given fiscal year.

The achievement status of the operational

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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

vest, the recognition period ranges from 2.93 years to 9.64 years.

If the performance condition is ultimately not met, compensation cost

related to the award should not be recognized (or should be reversed to the extent any expense has been recognized related to such tranche)

because the vesting condition in the award would not have been satisfied.

In relation to the four awards deemed probable to

vest, the recognition period ranges from five to six years.

If the performance condition is ultimately not met, compensation cost related

to the award should not be recognized (or should be reversed to the extent any expense has been recognized related to such tranche) because

the vesting conditions in the award would not have been satisfied.

On the grant date, a Monte Carlo simulation was

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The total fair value of the Option Grants was

$3.2 million of which, at June 30, 2024 and 2023, $2.3 million is deemed probable of vesting.

As of June 30, 2024 and 2023, none of the

options had vested.

For the year ended June 30, 2024 and 2023, the Company recorded $ 441,528 and $ 441,528 of stock-based compensation

expense related to the Option Grants.

Unrecognized compensation cost related to tranches probable of vesting is approximately $1.3 million

and will be recognized over two years to nine years, depending on the tranche.

$3.2 million of which, at June 30, 2025, $1.0 million is deemed probable of vesting.

During the year ended June 30, 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 had changed with the new estimate, the adjustment affected the recognition value and years to vest.

the Company had reversed $701,807 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 June 30, 2025 and 2024, none of the options had vested.

For the year ended

June 30, 2025 and 2024, the Company recorded $(468,778) and $441,528 of stock-based compensation expense related to the Option Grants.

As of June 30, 2025, unrecognized compensation cost related to tranches probable of vesting is approximately $1,032,737 and will be recognized

over five years to six years, depending on the tranche.

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

“Board”) of the Company, based on the recommendation of the compensation committee of the Board, approved a grant of 1,200,000

stock options (the “2024 Stock Options”) issuable to Chenlong Tan, the Company’s Chief Executive Officer, pursuant to

the terms of the iPower Inc.

Amended and Restated 2020 Equity Incentive Plan (the “Plan”).

Following the Board’s approval,

Tan and the Company entered into a stock option award agreement (the "Stock Option Award Agreement").

According to the Stock Option Award Agreement,

and subject to the terms and conditions of the Stock Option Award Agreement and the Plan, upon vesting of the 2024 Stock Options, Mr.

Tan will have the option to purchase common stock, par value $ 0.001 per share of the Company, at an exercise price of $ 1.43 per share

(which is 110% of the Fair Market Value of the stock on the grant date).

The 2024 Stock Options have a term of 10 years and will vest

30,000 2024 Stock Options vested on the grant date (August 29, 2024), and 32,500 2024 Stock Options will vest on the first

day of each month from September 1, 2024, to August 1, 2027.

On the grant date, a Black-Scholes Model was used

to determine the fair value of the 2024 Stock Options with the following inputs:

Stock Price - $ 1.30

Exercise Price - $ 1.43

Volatility – 101 %

Expected Term – 5.71 years

Risk Free Rate of Return – 3.66 %

Dividend Yield – 0 %

The total fair value of the 2024 Stock Options

was $1.22 million as of the grant date.

For the year ended June 30, 2025, 355,000 stock options were vested and the Company recorded $ 362,325

as stock compensation expense.

As of June 30, 2025, the unrecognized compensation cost of the 2024 Stock Options was approximately $0.86

million and will be recognized monthly through August 1, 2027.

Note 15 – Warrant liabilities

On January 27, 2021, the Company completed a

private placement offering pursuant to which the Company sold to two accredited investors an aggregate of $3,000,000 in Convertible

Notes and warrants to purchase shares of Class A Common Stock equaling 80% of the number of shares of Class A Common Stock issuable

upon conversion of the Convertible Notes.

The convertible note warrants are exercisable for a period of three years from

the IPO completion date at a per share exercise price equal to the IPO.

In accordance with the terms of the warrants, in the event

the Convertible Notes are repaid in cash by the Company, the warrants issued in conjunction with the Convertible Notes will expire

and have no further value.

The outstanding warrants held by the

Convertible Note investors were reclassified to additional paid in capital as the terms became fixed upon closing of the IPO.

Through June 30, 2024, none of the private placement investors exercised any of their warrants and the warrants were expired in May

As such, as of June 30, 2024 and 2023, the number of shares issuable under the outstanding convertible note warrants was 0

and 685,715 ,

with an average exercise price of $ 5.00

On January 27, 2021, the Company completed a private

placement offering pursuant to which the Company sold to two accredited investors an aggregate of $3,000,000 in Convertible Notes and

warrants to purchase shares of Class A Common Stock equaling 80% of the number of shares of Class A Common Stock issuable upon conversion

of the Convertible Notes.

The convertible note warrants are exercisable for a period of three years from the IPO completion date at a

per share exercise price equal to the IPO.

In accordance with the terms of the warrants, in the event the Convertible Notes are repaid

in cash by the Company, the warrants issued in conjunction with the Convertible Notes will expire and have no further value.

The outstanding warrants held by the Convertible

Note investors were reclassified to additional paid in capital as the terms became fixed upon closing of the IPO.

Through 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 June 30, 2025 and 2024.

Note 16 - Concentration of risk

Financial instruments that potentially subject

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

As of June 30, 2024 and 2023, $ 7,377,837

and $ 3,735,642 ,

respectively, were deposited with various major financial institutions and financial services companies in the United States and

the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, and accounts

As of June 30, 2025 and 2024, $ 1,774,296 and

$ 7,219,296 , respectively, were deposited with various financial institutions and financial services companies in the United States and

Accounts at each institution in the United States are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000.

The Company had approximately $ 5.8

million and $ 2.7

million, respectively, in excess of the FDIC insurance limit, as of June 30, 2024 and 2023.

The Company had approximately $ 1.4 million and $ 5.8 million , respectively, in excess of the FDIC insurance limit, as of June 30, 2025

Accounts receivable are typically unsecured and

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may be impacted by Chinese economic conditions, changes in regulations and laws, and other uncertainties.

Customer and vendor concentration risk

and vendor concentration risk

For the years ended June 30, 2025 and 2024, Amazon

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accounts receivable from Amazon Vendor and Amazon Seller accounted for 72 % and 91 % of the Company’s total accounts receivable.

For the years ended June 30, 2024 and 2023,

one supplier accounted for 10 %

For the year ended June 30, 2025, two suppliers

accounted for 14 % and 11 % of the Company's total purchases, respectively.

For the year ended June 30, 2024, one supplier accounted for

10 % of the Company's total purchases, respectively.

As of June 30, 2024 and 2023, accounts payable to one supplier accounted for 36 %

of the Company’s total accounts payable, net of credits of $1.7 million, respectively.

Note 17 - Commitments and contingencies

Lease commitments

As of June 30, 2025 and 2024, accounts payable to one supplier accounted for 10 % and

36 % of the Company’s total accounts payable, respectively.

Note 17 - Leases

The Company has entered into a lease agreement

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The total base rental fee for these offices is approximately $19,406 per month.

In September 2024, the Company terminated

the lease of office space in Shenzhen China and incurred termination costs of approximately $ 143,000 , which was recorded as rental expense

for the year ended June 30, 2025.

On July 28, 2021, the Company entered into a Lease

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

Total commitment for the full term of these leases

is $ 12,651,376 .

The financial statements reflected $ 6,124,163 and $ 7,837,345 , respectively, of operating lease right-of-use assets, and

$ 6,549,110 and $ 8,265,220 , respectively, of operating lease liabilities as of June 30, 2024 and 2023.

As of June 30, 2025, the lease

had been terminated.

In September 2024, DHS entered into a sublease

agreement with a third-party entity for office space in Shenzhen.

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

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

The operating lease right-of-use assets and operating

lease liabilities as of June 30, 2025 and 2024 were as follows:

Years Ended June 30, 2025 and 2024:

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

Short-term lease expenses

Other information

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Present value of lease liabilities

Contingencies

Note 18 - Commitments and contingencies

Except as disclosed below, the Company is not

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or results of operations of the Company.

Pursuant to an engagement agreement, dated

and effective August 31, 2020 (the “Engagement Agreement”), with Boustead Securities LLC (“Boustead”), the

Company engaged Boustead to act as its exclusive placement agent for private placements of its securities and as a potential

underwriter for its initial public offering.

On February 28, 2021, the Company informed Boustead that it was terminating the

Engagement Agreement and any continuing obligations the Company may have had under its terms.

On April 15, 2021, the Company

provided formal written notice to Boustead of its termination of the Engagement Agreement and all obligations thereunder, effective

On April 30, 2021, Boustead filed a statement of claim with the Financial Institute Regulatory Authority, or FINRA,

demanding to arbitrate the dispute, and seeking, among other things, monetary damages against the Company and D.A.

Pursuant to an engagement agreement, dated and

effective August 31, 2020 (the “Engagement Agreement”), with Boustead Securities LLC (“Boustead”), the Company

engaged Boustead to act as its exclusive placement agent for private placements of its securities and as a potential underwriter for its

initial public offering.

On February 28, 2021, the Company informed Boustead that it was terminating the Engagement Agreement and any

continuing obligations the Company may have had under its terms.

On April 15, 2021, the Company provided formal written notice to Boustead

of its termination of the Engagement Agreement and all obligations thereunder, effective immediately.

On April 30, 2021, Boustead filed

a statement of claim with the Financial Institute Regulatory Authority, or FINRA, demanding to arbitrate the dispute, and seeking, among

other things, monetary damages against the Company and D.A.

Davidson & Co.

(who acted as underwriter in the Company’s IPO).

As part of the IPO closing, the Company agreed to indemnify D.A.

and the other underwriters against any liability or expense they may incur or be subject to arising out of the Boustead

Additionally, Chenlong Tan, the Company’s Chairman, President and Chief Executive Officer and a beneficial owner more

than 5% of the Company’s Common Stock, agreed to reimburse the Company for any judgments, fines and amounts paid or actually

incurred by the Company or an indemnitee in connection with such legal action or in connection with any settlement agreement entered

into by the Company or an indemnitee up to a maximum of $3.5 million in the aggregate, with the sole source of funding of such

reimbursement to come from sales of shares then owned by Mr.

As of June 30, 2023, the Company was not able to reasonably

estimate the amount of potential exposure.

On April 3, 2024, the

Company and D.A.

Davidson & Co entered into a settlement agreement and mutual release (the “Settlement Agreement”)

with Boustead Securities, LLC (“Boustead”) and its current and former employees, officers, directors, partners, agents

and affiliates, pursuant to which all parties agreed to release all claims in exchange for the Company’s payment of $ 1.3

million (the “Settlement Amount”) to Boustead.

The Settlement Agreement was entered into for purposes of settling in

full the FINRA Arbitration (FINRA Case No.

Davidson & Co.

and the other underwriters against any liability or

expense they may incur or be subject to arising out of the Boustead dispute.

Additionally, Chenlong Tan, the Company’s Chairman,

President and Chief Executive Officer and a beneficial owner more than 5% of the Company’s Common Stock, agreed to reimburse the

Company for any judgments, fines and amounts paid or actually incurred by the Company or an indemnitee in connection with such legal action

or in connection with any settlement agreement entered into by the Company or an indemnitee up to a maximum of $3.5 million in the aggregate,

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

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

& Co entered into a settlement agreement and mutual release (the “Settlement Agreement”) with Boustead Securities, LLC

(“Boustead”) and its current and former employees, officers, directors, partners, agents and affiliates, pursuant to which

all parties agreed to release all claims in exchange for the Company’s payment of $ 1.3 million (the “Settlement Amount”)

The Settlement Agreement was entered into for purposes of settling in full the FINRA Arbitration (FINRA Case No.

which had been brought by Boustead against the Company and D.A.

Davidson after

the Company opted not to complete its initial public offering with Boustead but instead engaged and completed its initial public

offering with D.A.

Pursuant to the terms of the Settlement Agreement, the Company is required to pay the

Settlement Amount in four equal installments of $325,000 on each of April 3, 2024, May 3, 2024, June 3, 2024 and July 3, 2024.

Within five days of its receipt of the final payment, or by July 8, 2024, Boustead will be obligated to dismiss the FINRA

Arbitration against the Company, with prejudice, after which time the Company will be required to dismiss, with prejudice, all

counterclaims brought by the Company against Boustead.

Davidson after the Company opted not to complete its initial public offering

with Boustead but instead engaged and completed its initial public offering with D.A.

Pursuant to the terms of the Settlement

Agreement, the Company is required to pay the Settlement Amount in four equal installments of $325,000 on each of April 3, 2024, May 3,

2024, June 3, 2024 and July 3, 2024.

Within five days of its receipt of the final payment, or by July 8, 2024, Boustead will be obligated

to dismiss the FINRA Arbitration against the Company, with prejudice, after which time the Company will be required to dismiss, with prejudice,

all counterclaims brought by the Company against Boustead.

For the year ended June 30, 2024, the Company considered and concluded that

the Settlement Amount of $ 1.3

million was incremental costs directly associated with the IPO under ASC 340-10-S99-1 and so recorded as offering costs against

additional paid-in capital.

As of June 30, 2024, the outstanding balance of the Settlement Amount

was $ 325,000 .

As of the date of this report, 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.

the Settlement Amount of $1.3 million was incremental costs directly associated with the IPO under ASC 340-10-S99-1 and so recorded as

offering costs against additional paid-in capital.

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

As of the date of this report, the Settlement Amount had been paid off and the parties have formally withdrawn all of the complaints that

were before FINRA, with prejudice, and the matter is settled in full.

In conjunction with entry into the Settlement

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On June 18, 2024, calculating the shares at $2.40,

Tan and Huang returned

a total of 541,667 shares as indemnification payment to the Company for cancellation (the “Share Cancellation”).

Cancellation was completed in June 2024.

Tan and Huang returned a total of 541,667 shares as indemnification payment to the Company for cancellation (the “Share

Cancellation”).

The Share Cancellation was completed in June 2024.

In addition, in February 2022, the Russian Federation

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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.

have experienced a delay in, as well as an increase in costs in shipping, thus resulting in reduced profits.

In addition, supply chain

disruptions may put upward pressure on our costs and increase the risk that we may be unable to acquire the materials and services we

need to continue to make certain products.

On April 13, 2020, the Company entered into an

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Royal Business Bank was fully forgiven by the Small Business Administration (“SBA”).

The Company is required to retain PPP loan documentation through 2026

and permit authorized representatives of the SBA to access such files upon request.

Should the SBA conduct such a review and reject all

or some of the Company’s judgments pertaining to satisfying PPP loan eligibility or forgiveness conditions, the Company may be required

to adjust previously reported amounts and disclosures in the consolidated financial statements.

The Company is required to retain PPP loan documentation

through 2026 and permit authorized representatives of the SBA to access such files upon request.

Should the SBA conduct such a review

and reject all or some of the Company’s judgments pertaining to satisfying PPP loan eligibility or forgiveness conditions, the Company

may be required to adjust previously reported amounts and disclosures in the consolidated financial statements.

Note 19 - Subsequent events

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that occurred after the balance sheet date through the date that the consolidated financial statements are available to be issued.

than the material subsequent events disclosed above in the notes to financial statements, no other material subsequent events that required

recognition or additional disclosure in the consolidated financial statements are presented.

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

“Board”) of the Company, based on the recommendation of the compensation committee of the Board, approved a grant of 1,200,000

stock options (the “Stock Options”) issuable to Chenlong Tan, the Company’s Chief Executive Officer, pursuant to the

terms of the iPower Inc.

Amended and Restated 2020 Equity Incentive Plan (the “Plan”).

Following the Board’s approval,

Tan and the Company entered into a stock option award agreement (the "Stock Option Award Agreement").

According to the Stock Option Award Agreement,

and subject to the terms and conditions of the Stock Option Award Agreement and the Plan, upon vesting of the Stock Options, Mr.

have the option to purchase common stock, par value $0.001 per share of the Company, at an exercise price of $1.43 per share (which is

110% of the Fair Market Value of the stock on the grant date).

The Stock Options have a term of five years and will vest as follows:

Stock Options vested on the grant date (August 29, 2024), and 32,500 Stock Options will vest on the first day of each month from September

1, 2024, to August 1, 2027.

than the material subsequent events disclosed above in the notes to financial statements and below, no other material subsequent events

that required recognition or additional disclosure in the consolidated financial statements are presented.

On August 4, 2025, the Company, through its wholly-owned

subsidiary, Dayourenzai (Shenzhen) Technology Co, Ltd.

(“DYRZ”), a company organized under the laws of the People’s

Republic of China (“PRC”), entered into an agreement (the “VIE Contract Termination Agreement”) with the Company’s

variable interest entity, Daheshou (Shenzhen) Information Technology Co., Ltd.

(“DHS”), a company organized under the laws

of the PRC, and its registered shareholders.

DHS had previously been consolidated into the Company’s financial statements as a variable

interest entity pursuant to certain contractual arrangements (the “VIE Agreements”), which allowed DYRZ to exercise effective

control over DHS.

Following entry into the VIE Contract Termination Agreement, DYRZ no longer owns, operates or controls DHS and Company-related

services and activities previously conducted by DHS will now be performed by the Company and other contractors, as needed, as part of

an effort to streamline operations and improve structural efficiency.

Historically, DHS has been principally engaged

in effectuating part of the Company’s PRC sales, supply chain, merchandizing and distribution services.

However, in recent years

the Company has improved efficiency and gradually transitioned much of the services performed by DHS to the Company and other contractors.

As such, the termination of the VIE structure reflects a strategic move toward operational simplification and is not expected to have

a material effect on the Company’s business and/or revenue streams being generated out of the PRC.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

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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 8. Financial Statements and Supplementary Data