What changed in this filing

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Item 1. Financial Statements

2025-11-14 compared with 2025-05-15 · 828 added, 925 removed, 694 unchanged (72% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

As of March 31, 2025

and June 30, 2024

As of September 30, 2025 and June 30, 2025

September 30,

Current assets

Cash and cash equivalents

Cash and cash equivalent

Accounts receivable, net

3 unchanged sentences

Non-current assets

Right of use - non-current

Right of use assets - non-current

Property and equipment, net

Deferred tax assets, net

Investment in joint ventures

Intangible assets, net

5 unchanged sentences

Other payables and accrued liabilities

Lease liability - current

Short-term loan payable

Lease liabilities - current

Short-term loan payable - related party

3 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 March 31, 2025 and June 30, 2024

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

**Common stock, $ 0.001 par value;

180,000,000 shares authorized;

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

1,049,790 and 1,045,330 shares issued and outstanding at September 30, 2025 and June 30, 2025

Additional paid in capital

Accumulated deficit

Accumulated deficits

( 15,732,537 )

1 unchanged sentence

Non-controlling interest

Accumulated other comprehensive loss

Accumulated other comprehensive loss (income)

Total stockholders' equity

Total liabilities and stockholders' equity

The accompanying

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

Unless otherwise indicated, all shares of common stock and per share

numbers in the unaudited condensed consolidated financial statements and notes below have been adjusted retroactively to reflect the

1-for-30 reverse stock split effected on October 27, 2025, for all periods presented (see Note 14 for details).

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

and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income

For the Three and Nine Months

Ended March 31, 2025 and 2024

For the Three Months

Ended March 31,

For the Nine Months

Ended March 31,

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss

For the Three Months Ended September 30, 2025 and 2024

For the Three Months Ended September 30,

Product sales

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Total operating expenses

(LOSS) INCOME FROM OPERATIONS

LOSS FROM OPERATIONS

( 1,695,179 )

( 2,746,434 )

OTHER INCOME (EXPENSE)

Interest expenses

Loss on equity method investment

Other non-operating income (expenses)

Total other expenses, net

(LOSS) INCOME BEFORE INCOME TAXES

PROVISION FOR INCOME TAX EXPENSE (BENEFIT)

NET (LOSS) INCOME

Loss on equity method investments

Loss on deconsolidation of VIE

Other non-operating income

Total other income, net

LOSS BEFORE INCOME TAXES

( 2,668,629 )

PROVISION FOR INCOME TAX BENEFIT

( 2,032,117 )

Non-controlling interest

NET (LOSS) INCOME ATTRIBUTABLE TO IPOWER INC.

OTHER COMPREHENSIVE (LOSS) INCOME

NET LOSS ATTRIBUTABLE TO IPOWER INC.

$ ( 533,648 )

$ ( 2,029,281 )

OTHER COMPREHENSIVE INCOME (LOSS)

Foreign currency translation adjustments

COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO IPOWER INC.

COMPREHENSIVE LOSS ATTRIBUTABLE TO IPOWER INC.

$ ( 508,705 )

$ ( 2,084,335 )

WEIGHTED AVERAGE NUMBER OF COMMON STOCK

(LOSSES) EARNINGS PER SHARE

The accompanying

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

LOSSES PER SHARE

Unless otherwise indicated, all share of common stock and per share

numbers in the unaudited condensed consolidated financial statements and notes below have been adjusted retroactively to reflect the

1-for-30 reverse stock split effected on October 27, 2025, for all periods presented (see Note 14 for details).

The accompanying notes are

an integral part of these unaudited condensed consolidated financial statements.

and Subsidiaries

Condensed Consolidated Statements of Changes in Stockholders' Equity

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

Unaudited Condensed

Consolidated Statements of Changes in Stockholders' Equity

For the Three Months Ended September 30, 2025 and 2024

**Common Stock

Additional Paid in

1 unchanged sentence

Non-controlling

Accumulated other Comprehensive income

Comprehensive

Balance, June 30, 2025

$ ( 15,198,889 )

$ ( 210,406 )

( 2,029,281 )

( 2,032,117 )

Stock-based compensation

Foreign currency

translation adjustments

Balance, September 30, 2024,

$ ( 12,259,882 )

$ ( 265,460 )

Net income (loss)

Stock-based compensation

Foreign currency

translation adjustments

Balance, December 31, 2024,

$ ( 12,041,063 )

$ ( 109,330 )

Reversal of unvested stock-based

Foreign currency

translation adjustments

Balance, March 31, 2025, unaudited

$ ( 12,380,662 )

Restricted shares issued for vested

Foreign currency translation adjustments

Balance, September 30, 2025, Unaudited

$ ( 15,732,537 )

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( 2,029,281 )

Stock-based compensation

Foreign currency

translation adjustments

Balance, September 30, 2023,

( 2,032,117 )

( 1,914,828 )

( 1,917,983 )

Stock-based compensation

Foreign currency

translation adjustments

Balance, December 31, 2023,

$ ( 11,903,785 )

$ ( 223,096 )

Net income (loss)

Stock-based compensation

Restricted shares issued for vested

Foreign currency

translation adjustments

Balance, March 31, 2024, unaudited

Foreign currency translation adjustments

Balance, September 30, 2024, Unaudited

$ ( 12,259,882 )

$ ( 265,460 )

The accompanying notes

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

Unless otherwise indicated, all share of common stock and per share

numbers in the unaudited condensed consolidated financial statements and notes below have been adjusted retroactively to reflect the

1-for-30 reverse stock split effected on October 27, 2025, for all periods presented (see Note 14 for details).

The accompanying notes are

an integral part of these unaudited condensed consolidated financial statements.

and Subsidiaries

1 unchanged sentence

Consolidated Statements of Cash Flows

For the Nine Months Ended

March 31, 2025 and 2024

For the Nine Months Ended March 31,

For the Three Months Ended September 30, 2025 and 2024

For the Three Months Ended

September 30, 2025 and 2024

CASH FLOWS FROM OPERATING ACTIVITIES:

1 unchanged sentence

$ ( 2,032,117 )

Adjustments to reconcile net loss to cash (used in)

provided by operating activities:

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

Depreciation and amortization expense

2 unchanged sentences

Loss on equity method investment

Stock-based compensation (reversal) expense

Stock-based compensation expense

Gain on foreign currency exchange rates

Loss on deconsolidation of VIE

Amortization of operating lease right of use assets

2 unchanged sentences

Accounts receivable

( 2,772,149 )

Deferred tax assets

Prepayments and other current assets, net

Non-current prepayments and other non-current assets

other non-current assets

Accounts payable

( 3,476,465 )

Other payables and accrued liabilities

( 2,874,417 )

Other payables and accrued liabilities

Operating lease liabilities

( 1,455,440 )

( 1,208,551 )

Income taxes payable

Net cash (used in) provided by operating activities

Net cash provided by (used in) operating activities

( 1,415,643 )

CASH FLOWS FROM INVESTING ACTIVITIES:

Deconsolidation of VIE

Investment in joint venture

Prepayments for software development

( 1,519,928 )

Net cash used in investing activities

4 unchanged sentences

Payments on short-term loans - related party

( 2,000,000 )

Payments on short-term loans

( 1,750,000 )

Proceeds from revolving loan

5 unchanged sentences

( 3,308,599 )

EFFECT OF EXCHANGE RATES ON CASH

EFFECT OF EXCHANGE RATE ON CASH

CHANGES IN CASH AND CASH EQUIVALENT

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SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING TRANSACTIONS:

Termination of operating leases

Right of use assets acquired under new operating leases

The accompanying

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

Right of use assets derecognized due to termination of operating leases

$ ( 374,737 )

The accompanying notes are

an integral part of these unaudited condensed consolidated financial statements.

Notes to Unaudited Condensed Consolidated Financial

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

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

As of September 30, 2025 and June 30, 2025 and for

the Three Months Ended September 30, 2025 and 2024

Note 1 - Nature of business and organization

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of consumer home, garden and other products and accessories mainly in the North America.

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

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

(“E Marketing”), an entity incorporated in

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

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

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

the equity ownership of its variable interest entity, Global Product Marketing Inc.

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

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

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

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

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

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

equity ownership of its variable interest entity, Global Product Marketing Inc.

(“GPM”), an entity which was incorporated

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

On January 13, 2022, the Company entered into

a joint venture agreement and formed a Nevada limited liability company, Box Harmony, LLC (“Box Harmony”), for the principal

purpose of providing logistics services primarily for foreign-based manufacturers or distributors who desire to sell their products online

in the United States, with such logistics services to include, without limitation, receiving, storing and transporting such products.

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

in or otherwise controlling Box Harmony.

On January 13, 2022, the Company entered into a joint

venture agreement and formed a Nevada limited liability company, Box Harmony, LLC (“Box Harmony”), for the principal purpose

of providing logistics services primarily for foreign-based manufacturers or distributors who desire to sell their products online in

the United States, with such logistics services to include, without limitation, receiving, storing and transporting such products.

Company owns 40% of the equity interest in Box Harmony, retaining significant influence, but does not own a majority equity interest in

or otherwise control Box Harmony.

See details at Note 3 below.

On February 10, 2022, the Company entered into

another joint venture agreement and formed a Nevada limited liability company, Global Social Media, LLC (“GSM”), for the principal

On February 10, 2022, the Company entered into another

joint venture agreement and formed a Nevada limited liability company, Global Social Media, LLC (“GSM”), for the principal

purpose of creating a social media platform in order to provide content and services to assist businesses, including the Company and other

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equity holders, Li Zanyu and Xie Jing (together with White Cherry, the “Sellers”), Anivia, Fly Elephant Limited, a Hong Kong

company, Dayourenzai (Shenzhen) Technology Co., Ltd., and Daheshou (Shenzhen) Information Technology Co., Ltd.

Anivia owns 100% of the

equity of Fly Elephant Limited, which in turn owns 100% of the equity of Dayourenzai (Shenzhen) Technology Co., Ltd., a corporation located

in the People’s Republic of China (“PRC”), which is a wholly foreign-owned enterprise (“WFOE”) of Fly Elephant

The WFOE controls, through contractual arrangements summarized in Note 4 below, the business, revenues and profits of Daheshou

(Shenzhen) Information Technology Co., Ltd., a company organized under the Laws of the PRC (“DHS”) and located in Shenzhen,

company, Dayourenzai (Shenzhen) Technology Co., Ltd.

(“DYRZ”), and Daheshou (Shenzhen) Information Technology Co., Ltd.

Anivia owns 100% of the equity of Fly Elephant Limited, which in turn owns 100% of the equity of DYRZ, a corporation located in the People’s

Republic of China (“PRC”), which is a wholly foreign-owned enterprise (“WFOE”) of Fly Elephant Limited.

controls, through contractual arrangements summarized in Note 4 below, the business, revenues and profits of DHS, a company organized

under the Laws of the PRC and located in Shenzhen, China.

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.

See details at Note 3 below.

On October 15, 2025, the Company executed an agreement

(the “Restructuring Agreement” ) with its subsidiaries to modify its corporate structure so that the Company’s consumer goods

and logistics business be operated out of GPM.

Pursuant to the Restructuring Agreement, the Company transferred its ownership in E Marketing

and United Package to GPM.

Execution of the Restructuring Agreement does not have any impact on the consolidated financial statements of

Note 2 – Basis of Presentation and Summary

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Basis of presentation

The unaudited condensed consolidated financial

statements include the accounts of the Company and its subsidiaries and variable interest entity and have been prepared in accordance

with accounting principles generally accepted in the United States of America (“U.S.

The unaudited condensed consolidated financial statements

include the accounts of the Company and its subsidiaries and VIE and have been prepared in accordance with accounting principles generally

accepted in the United States of America (“U.S.

GAAP”) and the requirements of the U.S.

Securities and Exchange Commission (“SEC”) for interim reporting.

As permitted under those rules, certain footnotes or other

financial information that are normally required by U.S.

Securities and Exchange Commission

(“SEC”) for interim reporting.

As permitted under those rules, certain footnotes or other financial information that are normally

required by U.S.

GAAP can be condensed or omitted.

These unaudited condensed consolidated financial

statements have been prepared on the same basis as its annual consolidated financial statements and, in the opinion of management, reflect

all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of the Company’s financial

These interim results are not necessarily indicative of the results to be expected for the fiscal year ending June 30, 2025,

or for any other interim period or for any other future year.

These unaudited condensed consolidated financial statements have been prepared on the

same basis as its annual consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only

of normal recurring adjustments, which are necessary for the fair statement of the Company’s financial information.

These interim

results are not necessarily indicative of the results to be expected for the fiscal year ending June 30, 2026, or for any other interim

period or for any other future year.

All intercompany balances and transactions have been eliminated in consolidation.

These unaudited condensed consolidated financial

statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included

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

These unaudited condensed consolidated financial statements

should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the

Annual Report for the year ended June 30, 2025, which are included in Form 10-K filed with the SEC on October 9, 2025.

Principles of Consolidation

The unaudited condensed consolidated financial

statements include the accounts of the Company and its subsidiaries, E Marketing Solution Inc., Global Product Marketing Inc., Global

Social Media, LLC, and Anivia Limited and its subsidiaries and VIE, including Fly Elephant Limited, Dayourenzai (Shenzhen) Technology

Co., Ltd., and Daheshou (Shenzhen) Information Technology Co., Ltd.

statements include the accounts of the Company and its subsidiaries, E Marketing, GPM, GSM, and Anivia Limited and its subsidiaries and

VIE, including Fly Elephant Limited, DYRZ and DHS.

All inter-company balances and transactions have been eliminated.

Prior Period Reclassification

Certain prior period amounts in the unaudited

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

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

These reclassifications

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

Emerging Growth Company Status

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Foreign currency translation and transactions

The reporting and functional currency of iPower

and its subsidiaries is the U.S.

The reporting and functional currency of iPower and

its subsidiaries is the U.S.

dollar (USD).

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the results of operations as incurred.

The balance sheet amounts of the VIE, with the

exception of equity, on March 31, 2025, were translated at 7.2096 RMB to $1.00.

The balance sheet amounts of the WFOE, with the exception

of equity, on September 30, 2025, were translated at 7.119 RMB to $1.00.

The equity accounts were stated at their historical rates.

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

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

30, 2025 was 7.157 RMB to $1.00.

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as cash on hand and financial institution and financial service company deposits.

From time to time, the Company may maintain bank

balances in interest bearing accounts in excess of the $250,000, which is currently the maximum amount insured by the FDIC for interest

bearing accounts (there is currently no insurance limit for deposits in noninterest bearing accounts).

The Company has not experienced

any losses with respect to cash.

From time to time, the Company may maintain bank balances

in interest bearing accounts in excess of $250,000, which is currently the maximum amount insured by the FDIC for interest bearing

accounts (there is currently no insurance limit for deposits in noninterest bearing accounts).

The Company has not experienced any losses

with respect to cash.

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

Accounts receivable, net

Accounts receivable

During the ordinary course of business, the Company

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determine if an allowance for credit loss is required.

The Company evaluates the creditworthiness of

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

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

The Company evaluates the creditworthiness of all

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

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

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

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

Accounts receivable are recognized and

carried at carrying amount less an allowance for credit losses, if any.

The Company maintains an allowance for credit losses

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

The Company reviews the

collectability of its receivables on a regular and ongoing basis.

The Company has also included in calculation of allowance for

credit losses the potential impact of the overall economic conditions on our customers’ industry and businesses and their

ability to pay our accounts receivable.

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

against the allowance.

The Company also considers external factors to the specific customer, including current conditions and

forecasts of economic conditions, including the potential impact of the COVID-19 pandemic and the recent tariff policy.

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

In late October 2024, the

Company determined that the collectability of certain refundable amounts withheld by sales channel partners was remote so we

recorded additional allowance for credit losses.

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

Accounts receivable are recognized and carried

at carrying amount less an allowance for credit losses, if any.

The Company maintains an allowance for credit losses resulting from

the inability of its customers to make required payments based on contractual terms.

The Company reviews the collectability of its

receivables on a regular and ongoing basis.

The Company has also included in its calculation of allowance for credit losses the

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

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

The Company also

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

the potential impact of the COVID-19 pandemic.

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

allowance for credit losses.

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 the Company recorded additional allowance for credit losses up

to $ 1,924,417 .

quarter ended September 30, 2025 and 2024, the credit losses was $ 49,713

and $ 1,475,594 ,

2 unchanged sentences

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 Box Harmony’s statement of operations and

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

Variable interest entities

On February 15, 2022, the Company acquired 100%

of the ordinary shares of Anivia and its subsidiaries, including Daheshou (Shenzhen) Information Technology Co., Ltd., a company organized

under the Laws of the PRC (“DHS”).

Pursuant to the terms of the Agreements, the Company does not have direct ownership in

DHS but is actively involved in DHS’s operations as the sole manager to direct the activities and significantly impact DHS’s

economic performance.

DHS’s operational funding has been provided by the Company following the February 15, 2022 acquisition.

the term of the Agreements, the Company bears all the risk of loss and has the right to receive all of the benefits from DHS.

based on the determination that the Company is the primary beneficiary of DHS, in accordance with ASC 810-10-25-38A through 25-38J, DHS

is considered a VIE of the Company and the financial statements of DHS have been consolidated from the date such control existed, February

Goodwill represents the excess of the purchase

price over the fair value of assets acquired and liabilities assumed.

of the ordinary shares of Anivia and its subsidiaries, including DHS.

Pursuant to the terms of the Agreements, the Company does not have

direct ownership in DHS but is actively involved in DHS’s operations as the sole manager to direct the activities and significantly

impact DHS’s economic performance.

DHS’s operational funding has been provided by the Company following the February 15, 2022

During the term of the Agreements, the Company bears all the risk of loss and has the right to receive all of the benefits

As such, based on the determination that the Company is the primary beneficiary of DHS, in accordance with ASC 810-10-25-38A

through 25-38J, DHS is considered a VIE of the Company and the financial statements of DHS have been consolidated from the date such control

existed, February 15, 2022.

On August 4, 2025, the Company entered into a Variable

Interest Entity (“VIE”) Contract Termination Agreement with the VIE, pursuant to which all VIE agreements were terminated.

As a result, the Company no longer has a controlling financial interest in the VIE.

In accordance with ASC 810-10-40, Consolidation

— Deconsolidation of a Subsidiary or Derecognition of a Group of Assets , the Company deconsolidated the VIE as of the termination

Upon deconsolidation, the Company derecognized all

assets and liabilities of the VIE from its consolidated balance sheet.

Because the Company retains no ownership interest or continuing

involvement in the VIE following the termination of the agreements, no retained interest was recognized.

Goodwill represents the excess of the purchase price

over the fair value of assets acquired and liabilities assumed.

The Company accounts for goodwill under ASC Topic 350, Intangibles-Goodwill

Goodwill is not amortized but is reviewed for

potential impairment on an annual basis, or if events or circumstances indicate a potential impairment, at the reporting unit level.

Company’s review for impairment includes an assessment of qualitative factors to determine whether it is more likely than not that

the fair value of a reporting unit is less than its carrying value, including goodwill.

If it is determined that it is more likely than

not that the fair value of a reporting unit is less than its carrying value, including goodwill, a quantitative goodwill impairment test

is performed, which compares the fair value of the reporting unit with its carrying amounts, including goodwill.

If the fair value of

the reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired.

However, if the carrying amount

of the reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess, limited to the

total amount of goodwill allocated to that reporting unit.

During the nine months ended March 31, 2025 and

2024, the Company performed a qualitative goodwill impairment analysis following the steps laid out in ASC 350-20-35-3C and noted no goodwill

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

Intangible Assets, net

Finite life intangible assets at March 31, 2025

Goodwill is not amortized but is reviewed for potential

impairment on an annual basis, or if events or circumstances indicate a potential impairment, at the reporting unit level.

The Company’s

review for impairment includes an assessment of qualitative factors to determine whether it is more likely than not that the fair value

of a reporting unit is less than its carrying value, including goodwill.

If it is determined that it is more likely than not that the

fair value of a reporting unit is less than its carrying value, including goodwill, a quantitative goodwill impairment test is performed,

which compares the fair value of the reporting unit with its carrying amounts, including goodwill.

If the fair value of the reporting

unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired.

However, if the carrying amount of the reporting

unit exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess, limited to the total amount of goodwill

allocated to that reporting unit.

During the three months ended September 30, 2025

and 2024, the Company performed a qualitative goodwill impairment analysis following the steps laid out in ASC 350-20-35-3C and

noted no goodwill impairment.

As of September 30, 2025 and June 30, 2025, the goodwill balance amounted to $ 3,034,110

and $ 3,034,110 , respectively.

Intangible assets

Finite life intangible assets at September 30, 2025

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

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value determinations.

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

Fair value of financial instruments

ASC 825, “Disclosures about Fair Value of

Financial Instruments,” requires disclosure of fair value information about financial instruments.

The Company did no t record any impairment charge for the three months ended September 30, 2025 and 2024.

Fair values of financial instruments

ASC 825, “Disclosures about Fair Value of Financial

Instruments,” requires disclosure of fair value information about financial instruments.

ASC 820, “Fair Value Measurements”

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accounts receivable, accounts payable and all other current assets and liabilities approximate fair values due to their short-term nature.

For other financial instruments to be reported

at fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable

For other financial instruments to be reported at

fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable

inputs to the extent possible.

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in one of the following levels:

Level 1 – Inputs are unadjusted, quoted

prices in active markets for identical assets or liabilities at the measurement date;

Level 1 – Inputs are unadjusted, quoted prices

in active markets for identical assets or liabilities at the measurement date;

Level 2 – Inputs are observable, unadjusted

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

a result of those measurements, as of September 30, 2025 and June 30, 2025, the Company had goodwill with a carry book value of $3,034,110,

which approximated its fair value:

Schedule of fair value of financial assets and liabilities

The fair value of goodwill was determined based on

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

(Level 3), including a discount rate that would be used by a market participant, projections of revenues and cash flows with the revised

projections reflecting the increase in freight and storage costs in the current interim quarter, among others.

Revenue recognition

The Company recognizes revenues from service and

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

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

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

The Company recognizes revenues from service and product

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

a contract has been

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

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

The Company transfers the risk

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

The Company evaluates the criteria of ASC 606

- Revenue Recognition Principal Agent Considerations in determining whether it is appropriate to record the gross amount of product sales

and related costs or the net amount earned as commissions.

Generally, when the Company is primarily responsible for fulfilling the promise

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

The Company evaluates the criteria of ASC 606 - Revenue

Recognition Principal Agent Considerations in determining whether it is appropriate to record the gross amount of product sales and related

costs or the net amount earned as commissions.

Generally, when the Company is primarily responsible for fulfilling the promise to provide

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

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

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price of the related transaction.

Sales discounts are recorded in the period in

which the related sales are recorded.

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

the related sales.

Sales discounts are recorded in the period in which

the related sales are recorded.

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

related sales.

Shipping and handling costs are recorded as selling expenses.

Advertising costs

Advertising costs are expensed as incurred.

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

2024 were as following.

Schedule of advertising costs

Three Months Ended

Nine Months Ended

Advertising and promotion

Cost of revenue

Cost of product sales revenue mainly consists

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

Cost of service

income consists of direct fees charged by outside service providers.

Cost of revenue mainly consists of costs for purchases

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

Operating expenses

Operating expenses, which consist of selling and

fulfillment and general and administrative expenses, are expensed as incurred.

Vendor warranty credits resulting from refund of returns

on quality issues are recorded to offset merchant selling fees.

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

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

Inventory, net

Inventory consists of finished goods ready for

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

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 merchant selling fees.

During the three months ended September 30, 2025

and 2024, the Company did not have any vendor credits.

Outbound freight costs related to shipping costs to customers are considered periodic

costs and are reflected in selling and fulfillment expenses.

Advertising costs are expensed as incurred.

advertising and promotional costs included in selling and fulfillment expenses for the three months ended September 30, 2025 and 2024

were $ 809,990 and $ 651,125 , respectively.

Inventory consists of finished goods ready for sale

and is stated at the lower of cost or market.

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

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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.

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Debt issuance costs

Costs incurred in connection with the issuance

of debt are deferred and amortized as interest expense over the term of the related debt using the effective interest method.

Costs incurred in connection with the issuance of

debt are deferred and amortized as interest expense over the term of the related debt using the effective interest method.

To the extent

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of determination.

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

balance sheets.

As of September 30, 2025 and June 30, 2025, there were no deferred offering costs included in the consolidated balance

Segment reporting

The Company follows ASC 280, Segment

The Company’s chief operating decision maker, the Chief Executive Officer, reviews the consolidated results of

operations when making decisions about allocating resources and assessing the performance of the Company as a whole and, hence, the

Company has only one reportable segment.

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

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

approximately 6.3 %

The Company follows ASC 280, Segment Reporting.

The Company’s chief operating decision maker, the Chief Executive Officer, reviews the consolidated results of operations when

making decisions about allocating resources and assessing the performance of the Company as a whole and, hence, the Company has only

one reportable segment.

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

three months ended September 30, 2025 and 2024, sales through Amazon to Canada and other foreign countries were approximately 5.1 %

of the Company’s total sales, respectively.

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

including ventilation and grow light systems, was approximately 15.9 %

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

During the three months ended September 30, 2025, sales of hydroponic products, including

ventilation and grow light systems, were approximately 9.0 %

of the Company’s total sales and the remaining 91.0 %

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

During the nine months ended March 31, 2024, sales

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

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

During the three months ended September 30, 2024,

sales of hydroponic products, including ventilation and grow light systems, were approximately 17.2 %

of the Company’s total sales and the remaining 82.8 %

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

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

had approximately $ 1.3

As of September 30, 2025 and June 30, 2025, the

Company had approximately $ 0.5

million and $ 1.0

million of inventory stored in China.

million of inventory stored in China, respectively.

The Company’s majority of long-lived assets are located in California, United States,

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

assets and related lease obligations on the balance sheet.

assets and related lease obligations on our balance sheet.

ROU assets represent our right to use an underlying

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costs related to the award should not be recognized (or should be reversed) because the vesting condition in the award has not been satisfied.

The Company also revisits the anticipated timing for meeting the performance conditions.

As per ASC 718-10-55-78, if the expected number

of awards to vest and the fair value remain the same under the new estimates, with the adjustment solely impacting the timing of recognition,

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

The Company will recognize forfeitures of such

equity-based compensation as they occur.

The Company accounts for income taxes under the

asset and liability method.

Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences

between the financial statement carrying amounts of existing assets and liabilities and their perspective tax bases.

Deferred tax assets

and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences

are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income

in the period that includes the enactment date.

The Company will recognize forfeitures of such equity-based

compensation as they occur.

The Company accounts for income taxes under the asset

and liability method.

Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between

the financial statement carrying amounts of existing assets and liabilities and their perspective tax bases.

Deferred tax assets and liabilities

are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected

to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the

period that includes the enactment date.

A valuation allowance must be established for deferred tax assets when it is more-likely-than-not

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

In assessing the recoverability

of its deferred tax assets, the Company evaluates available positive and negative evidence to estimate whether it is more likely than

not that sufficient future taxable income will be generated to permit use of the existing deferred tax assets in each taxing jurisdiction.

The Company believes that our income tax filing

positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material change to its

financial position.

The Company believes that our income tax filing positions

and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material change to its financial

Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740, Income Taxes.

Company’s policy for recording interest and penalties associated with income-based tax audits is to record such items as a component

of income taxes.

The Company’s

policy for recording interest and penalties associated with income-based tax audits is to record such items as a component of income taxes.

Commitments and contingencies

In the ordinary course of business, the Company

is subject to certain contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of

matters, such as government investigations and tax matters.

The Company recognizes a liability for such contingency if it determines it

is probable that a loss has occurred and a reasonable estimate of the loss can be made.

The Company may consider many factors in making

these assessments including historical and specific facts and circumstances of each matter.

In the ordinary course of business, the Company is

subject to certain contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters,

such as government investigations and tax matters.

The Company recognizes a liability for such contingency if it determines it is probable

that a loss has occurred and a reasonable estimate of the loss can be made.

The Company may consider many factors in making these assessments

including historical and specific facts and circumstances of each matter.

Earnings per share

Basic earnings per share is computed by dividing

net income attributable to holders of common stock by the weighted average number of shares of common stock outstanding during the year.

Diluted earnings per share reflect the potential dilution that could occur if securities to issue common stock were exercised.

Basic earnings per share is computed by dividing net

income attributable to holders of common stock by the weighted average number of shares of common stock outstanding during the year.

earnings per share reflect the potential dilution that could occur if securities to issue common stock were exercised.

Recently issued accounting pronouncements

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

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

Disaggregation of Income

Statement Expenses.

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

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

The FASB further clarified the effective date in January 2025

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

Disaggregation Disclosures (Subtopic 220-40):

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

ASU 2024-03 is effective

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

2027, with early adoption permitted.

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

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

on its consolidated financial statements.

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

Improvements to Income Tax Disclosures.

Under this ASU, public business entities must annually “(1) disclose specific categories

in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect

of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income [or loss] by the

applicable statutory income tax rate).” This ASU’s amendments are effective for public business entities for annual periods

beginning after December 15, 2024.

For entities other than public business entities, the amendments are effective for annual periods beginning

In July 2025, the FASB issued ASU 2025-05, Financial

Instruments — Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets.

The ASU provides

a practical expedient and accounting policy election for measuring expected credit losses on certain trade receivables and contract assets

arising under ASC 606.

The amendments are effective for fiscal years beginning after December 15, 2025, and interim periods within those

fiscal years, with early adoption permitted.

The Company is currently evaluating the impact of this ASU on its measurement of expected

credit losses.

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

to Income Tax Disclosures.

Under this ASU, public business entities must annually “(1) disclose specific categories in the rate

reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those

reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income [or loss] by the applicable

statutory income tax rate).” This ASU’s amendments are effective for public business entities for annual periods beginning

after December 15, 2024.

Entities are permitted to early adopt the standard “for annual financial statements that have not yet been

issued or made available for issuance.” The amendments should be applied on a prospective basis.

For entities other than public business entities, the amendments are effective for annual periods beginning after

December 15, 2025.

Entities are permitted to early adopt the standard “for annual financial statements that have not yet been issued

or made available for issuance.” The amendments should be applied on a prospective basis.

Retrospective application is permitted.

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

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

In November 2023, The FASB issued ASU 2023-07, Segment

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

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

Disclosure Improvements:

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

Improvements:

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

This ASU incorporates

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

The amendments in the ASU are expected to clarify or improve disclosure and presentation requirements of a variety of Codification Topics,

allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously

subject to the requirements, and align the requirements in the Codification with the SEC’s regulations.

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

(“Codification”).

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

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

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

In SEC Release No.

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.

In June 2022, FASB issued ASU 2022-03, Fair

Value Measurement (Topic 820):

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 June 2022, FASB issued ASU 2022-03, Fair Value

Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.

The amendments in

this ASU clarify the guidance in ASC 820 on the fair value measurement of an equity security that is subject to a contractual sale restriction

The amendments in this

ASU clarify the guidance in ASC 820 on the fair value measurement of an equity security that is subject to a contractual sale restriction

and require specific disclosures related to such an equity security.

This standard is effective for fiscal years beginning after December

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 March 2020 and January 2021, the FASB issued ASU

2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting and ASU No.

2021-01, Reference Rate Reform (Topic 848):

Scope, respectively (collectively, “Topic 848”).

Topic 848 provides optional expedients

and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference the London Interbank Offered

Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform.

The expedients and

exceptions provided by Topic 848 are effective for all entities as of March 12, 2020 through December 31, 2022.

In December 2022, the

FASB issued ASU 2022-06, Reference Rate reform (Topic 848):

Deferral of the Sunset Date of Topic 848, which deferred the sunset date of

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

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

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

– Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity

(Subtopic 815-40).” This ASU reduces the number of accounting models for convertible debt instruments and convertible preferred

stock, as well as amend the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based

accounting conclusions.

In addition, this ASU improves and amends the related EPS guidance.

This standard is effective for the Company

on July 1, 2024, including interim periods within those fiscal years.

Adoption is either a modified retrospective method or a fully retrospective

method of transition.

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

The Company does not believe other recently issued

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statements of operations and cash flows.

Subsequent events

The Company evaluated subsequent events and transactions

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

subsequent events that required recognition or additional disclosure in the unaudited condensed consolidated financial statements are

Note 3 - Joint Ventures

Box Harmony, LLC

On January 13, 2022, the Company entered into

a joint venture agreement (the “Joint Venture Agreement”) with Titanium Plus Autoparts, Inc., a California corporation (“TPA”),

On January 13, 2022, the Company entered into a joint

venture agreement (the “Joint Venture Agreement”) with Titanium Plus Autoparts, Inc., a California corporation (“TPA”),

Tony Chiu (“Chiu”) and Bin Xiao (“Xiao”).

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2,400 Equity Units in exchange for $2,400 and his agreement to manage the day to day operations of Box Harmony.

Under the terms of the Box Harmony limited liability

operating agreement (the “LLC Agreement”), TPA and Xiao each granted to the Company an unconditional and irrevocable right

and option to purchase from Xiao and TPA at any time within the first 18 months following January 13, 2022, up to 1,200 Class A voting

units, at an exercise price of $550 per Class A voting unit, for a total exercise price of up to $660,000.

If such option is fully exercised,

the Company would own 3,600 Equity Units or 60% of the total outstanding Equity Units.

As of the date of this report, the Company has

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

The LLC Agreement prohibits the issuance of additional

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

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

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

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

The transfer of equity

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

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

interest in Box Harmony with significant influence but does not own a majority equity interest or otherwise control of Box Harmony.

Company accounts for its ownership interest in Box Harmony following the equity method of accounting, in accordance with ASC 323, Investments

—Equity Method and Joint Ventures.

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

by recording its percentage of gain or loss in its statement of operations and a corresponding charge or credit to the carrying value

of the asset.

Under the terms of the Box Harmony limited

liability operating agreement (the “LLC Agreement”), TPA and Xiao each granted to the Company an unconditional and

irrevocable right and option to purchase from Xiao and TPA at any time within the first 18 months following January 13, 2022, up to

1,200 Class A voting units, at an exercise price of $550 per Class A voting unit, for a total exercise price of up to $660,000.

such option is fully exercised, the Company would own 3,600 Equity Units or 60% of the total outstanding Equity Units.

date of this report, the Company had not exercised the option to purchase additional voting units from Xiao and TPA.

Agreement prohibits the issuance of additional Equity Units and certain other actions unless approved in advance by the Company.

January 2023, TPA and Xiao transferred their 60% equity units to a third party without consideration as the LLC was still in the

development stage and did not have significant operations.

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

financial statements.

As a result, the Company owns 40 %

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

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

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

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

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

or credit to the carrying value of the asset.

As of September 30, 2025 and June 30, 2025, the carrying value of the investment in Box

Harmony was $ 13,264 and $ 13,264 , respectively.

Global Social Media, LLC

On February 10, 2022, the Company entered into

a joint venture agreement with Bro Angel, LLC, Ji Shin and Bing Luo (the “GSM Joint Venture Agreement”).

Pursuant to the terms

of the GSM Joint Venture Agreement, the parties formed a Nevada limited liability company, Global Social Media, LLC (“GSM”),

On February 10, 2022, the Company entered into a joint

venture agreement with Bro Angel, LLC, Ji Shin and Bing Luo (the “GSM Joint Venture Agreement”).

Pursuant to the terms of

the GSM Joint Venture Agreement, the parties formed a Nevada limited liability company, Global Social Media, LLC (“GSM”),

for the principal purpose of providing a social media platform, contents and services to assist businesses, including the Company and

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creating a noncontrolling right that would not be substantive to overcome the majority voting interests held by the Company.

As of the date of this report, the members had not completed the capital

contributions and no receivables were recorded.

As of the date of this report, the members had not

completed the capital contributions and no receivables were recorded.

Pursuant to the terms of the Agreements, the

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of the equity interest in GSM and control of GSM’s operations.

Based on ASU 2015-02, the Company consolidates GSM into its financial

statements due to its majority equity ownership and control over operations.

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

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

Based on ASU 2015-02, the Company consolidates GSM into its

financial statements due to its majority equity ownership and control over operations.

For the three months ended September 30, 2025

and 2024, the impact of GSM’s activities were immaterial to the Company’s unaudited condensed consolidated financial

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 focuses 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 September 30, 2025 and June 30, 2025, the Company had invested total of $ 665,443

and $ 371,917 to United Package, respectively.

Note 4 – Variable Interest Entity

Effective February 15, 2022, upon acquisition

of Anivia, the Company assumed the contractual arrangements between the WFOE and DHS through a variable interest operating entity structure.

On September 26, 2024, Mr.

Effective February 15, 2022, upon acquisition of Anivia,

the Company assumed the contractual arrangements between the WFOE and DHS through a variable interest operating entity structure.

26, 2024, Mr.

Zanyu Li, the equity owner of DHS transferred his shares to Ms.

Liu has become the Manager

and Legal Representative of DHS and assumed all responsibilities and obligations of Mr.

The transfer of equity ownership did

not change the control the Company had on the VIE, therefore there was no impact on the Company’s financial statements.

The Company did not provide financial or other

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

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

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

The carrying amounts of the assets, liabilities

and the results of operations of the VIE included in the Company’s unaudited condensed consolidated balance sheets and statements

of operations and comprehensive income after the elimination of intercompany balances and transactions with the VIE are as follows:

The carrying amount of the VIE’s assets

and liabilities were as follows for the periods indicated:

Liu has become the Manager and Legal Representative

of DHS and assumed all responsibilities and obligations of Mr.

The transfer of equity ownership did not change the control the

Company had on the VIE, therefore there was no impact on the Company’s financial statements.

The Company did not provide financial or other support

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

On August 4, 2025, the Company entered into

a VIE Contract Termination Agreement with the VIE, pursuant to which all VIE agreements were

As a result, the Company no longer has a controlling financial interest in the VIE.

In accordance with ASC 810-10-40, Consolidation

— Deconsolidation of a Subsidiary or Derecognition of a Group of Assets , the Company deconsolidated the VIE as of the termination

Upon deconsolidation, the Company derecognized

all assets and liabilities of the VIE from its consolidated balance sheet.

Because the Company retains no ownership interest or continuing

involvement in the VIE following the termination of the agreements, no retained interest was recognized.

Comparative information for the prior period has not

been adjusted, as the deconsolidation does not represent a discontinued operation under ASC 205-20.

As of June 30, 2025, there was no pledge or collateralization of the VIE assets that would be used to settle obligations of the VIE.

The following table summarizes the carrying amounts

of the VIE’s assets and liabilities derecognized as of August 4, 2025 and the carrying amount of the VIE’s assets and liabilities

as of June 30, 2025:

Schedule of VIE’s assets and liabilities

March 31, 2025

Deconsolidation

June 30, 2025

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Office equipment, net

Right of use – noncurrent

Accounts payable

Lease liability

Income tax payable

Other payables and accrued liabilities

The operating results of the VIE were as follows

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

Upon deconsolidation, the Company recorded $ 39,624 loss on deconsolidation of VIE.

The operating results of the VIE were as follows for

the three months ended September 30, 2025 and 2024:

Schedule of operating results of the VIE

Net loss after elimination of intercompany transactions

$ ( 485,078 )

$ ( 669,296 )

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

nine months ended March 31, 2024:

For the three months ended

September 30, 2025

September 30, 2024

Net income (loss) after elimination of intercompany transactions

$ ( 327,984 )

For the three and nine months ended March 31,

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

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

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

Note 5 – Accounts receivable, net

Accounts receivable for the Company consisted

of the following as of the dates indicated below:

Note 5 – Accounts Receivable

Accounts receivable for the Company consisted of the

following as of the dates indicated below:

Schedule of accounts receivable

March 31, 2025

September 30, 2025

June 30, 2025

2 unchanged sentences

( 1,974,130 )

( 1,924,417 )

Total accounts receivable

The changes in allowance for credit losses on

accounts receivable are summarized below:

The changes in allowance for credit losses on accounts

receivable are summarized below:

Schedule of changes in allowance for credit losses on accounts receivable

4 unchanged sentences

Balance at September 30, 2024

Allowance recorded during the three months ended December 31, 2023

Balance at December 31, 2023

Allowance recorded during the three months ended March 31, 2024

Balance at March 31, 2024

Balance at June 30, 2025

1 unchanged sentence

Balance at September 30, 2025

Allowance recorded during the three months ended December 31, 2024

Balance at December 31, 2024

Allowance recorded during the three months ended March 31, 2025

Balance at March 31, 2025

Note 6 – Inventories, net

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

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

For the three and nine months ended March 31,

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

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

Note 6 – Inventories

As of September 30, 2025 and June 30, 2025, inventories

consisting of finished goods ready for sale, net of allowance for obsolescence, amounted to $ 4,332,605 and $ 8,131,203 , respectively.

For the three months ended September 30, 2025 and

2024, the Company recorded inventory reserve expense of $ 58,453 and $ 288,474 , respectively.

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

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

Note 7 – Prepayments and other current assets, net

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

As of September 30, 2025 and June 30, 2025,

allowance for obsolescence was $ 370,921 and $ 312,468 , respectively.

Note 7 – Prepayments and Other Current Assets

As of September 30, 2025 and June 30, 2025, prepayments and other current

assets consisted of the following:

Schedule of prepayments and other current assets

March 31, 2025

September 30, 2025

June 30, 2025

4 unchanged sentences

Other receivables consisted of delivery fees of $ 22,574

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

31, 2025 and June 30, 2024.

The changes in allowance for credit losses on

other receivables are summarized below:

Schedule of changes in allowance for credit losses on other receivables

Allowance for

Credit Losses

Balance at June 30, 2023

Allowance recorded during the three months ended September 30, 2023

Balance at September 30, 2023

Allowance recorded during the three months ended December 31, 2023

Balance at December 31, 2023

Allowance recorded during the three months ended March 31, 2024

Balance at March 31, 2024

Balance at June 30, 2024

Allowance recorded during the three months ended September 30, 2024

Balance at September 30, 2024

Allowance recorded during the three months ended December 31, 2024

Balance at December 31, 2024

Allowance recorded during the three months ended March 31, 2025

Balance at March 31, 2025

During the year ended June 30, 2024, the Company collected

$ 249,128 of aged other receivables and recorded a reduction of bad debts expense as a reversal of the allowance for credit losses.

Note 8 – Intangible assets, net

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

and $ 18,699 from a third party for using the Company’s

courier accounts at September 30, 2025 and June 30, 2025, respectively.

Note 8 – Intangible Assets

As of September 30, 2025 and June 30, 2025, intangible

assets, net, consisted of the following:

Schedule of intangible assets, net

March 31, 2025

September 30, 2025

June 30, 2025

6 unchanged sentences

2022 through acquisition of Anivia.

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

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

The amortization

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

At March 31, 2025, finite-lived intangible

assets are expected to be amortized over their estimated useful lives, which ranges from a period of five to 10 years, and the estimated

remaining amortization expense for each of the five succeeding years thereafter is as follows:

The weighted average remaining life for finite-lived intangible assets at September 30, 2025 was approximately

The amortization expense for the three months ended September 30, 2025 and 2024 was $ 162,343 and $ 162,343 , respectively.

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

Schedule of amortization expense

Year Ending June 30,

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

Intangible assets, net

Note 9 – Other Payables and Accrued Liabilities

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

As of September 30, 2025 and June 30, 2025, other payables and accrued

liabilities consisted of the following:

Schedule of other payables and accrued liabilities

March 31, 2025

September 30, 2025

June 30, 2025

1 unchanged sentence

Credit cards payable

Customer deposit

Customer deposits

Accrued Amazon fees

Sales taxes payable

Payroll liabilities

Settlement payable

Accrued payroll and related expenses

Other accrued liabilities and payables

2 unchanged sentences

Asset-based revolving loan

On November 12, 2021, the Company entered into

a Credit Agreement with JPMorgan Chase Bank, N.A.

(“JPMorgan”), as administrative agent, issuing bank and swingline lender,

for an asset-based revolving loan (“ABL”) of up to $25 million with key terms listed as follows:

On November 12, 2021, the Company entered into a Credit

Agreement with JPMorgan Chase Bank, N.A.

(“JPMorgan”), as administrative agent, issuing bank and swingline lender, for an

asset-based revolving loan (“ABL”) of up to $25 million with key terms listed as follows:

Borrowing base equal to the sum of

14 unchanged sentences

ABL as interest expense.

On October 7, 2022, the Company entered into a

second amendment to the credit agreement and consent (the “Second Amendment to the Credit Agreement”), originally dated November

Below is a summary of the interest expense recorded

for the three months ended September 30, 2025 and 2024:

Schedule of interest expense

Accrued interest

Credit utilization fees

Amortization of debt discount

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 second

amendment to the credit agreement and consent (the “Second Amendment to the Credit Agreement”), originally dated November

12, 2021, as amended, with JPMorgan.

The Company entered into the Second Amendment to the Credit Agreement primarily for the purpose of

changing the interest rate repayment calculations from LIBOR to the Secured Overnight Financing Rate, or SOFR, which adjustment had originally

been anticipated under the terms of the original Credit Agreement.

In addition, two of the negative covenants set forth in the original

Credit Agreement were amended in order to (i) adjust the definition of “Covenant Testing Trigger Period” to increase the required

cash availability from $3,000,000 to $4,000,000, or 10% of the aggregate revolving commitment for the preceding 30 days, and (ii) require

that the Company will not and will not permit any of its subsidiaries, after reasonable due diligence and due inquiry, to knowingly sell

their products, inventory or services directly to any commercial businesses that grow or cultivate cannabis;

it being acknowledged, however,

that the Company does not generally conduct due diligence on its individual retail customers.

The Company entered into the Second Amendment to the Credit Agreement primarily for the purpose

of changing the interest rate repayment calculations from LIBOR to the Secured Overnight Financing Rate, or SOFR, which adjustment had

originally been anticipated under the terms of the original Credit Agreement.

In addition, two of the negative covenants set forth in

the original Credit Agreement were amended in order to (i) adjust the definition of “Covenant Testing Trigger Period” to

increase the required cash availability from $3,000,000 to $4,000,000, or 10% of the aggregate revolving commitment for the preceding

30 days, and (ii) require that the Company will not and will not permit any of its subsidiaries, after reasonable due diligence and due

inquiry, to knowingly sell their products, inventory or services directly to any commercial businesses that grows or cultivates cannabis;

it being acknowledged, however, that the Company does not generally conduct due diligence on its individual retail customers.

On November 8, 2024, the Company entered into

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

As of March 31, 2025, the outstanding amount of

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

As of June 30, 2024, the

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

Below is a summary of the interest expense recorded

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

Schedule of interest expense

Three Months Ended March 31,

Nine Months Ended March 31,

Accrued interest

Credit utilization fees

Amortization of debt discount

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

with the ABL covenants.

Promissory note payable

On February 15, 2022, as part of the consideration

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

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

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

of $ 3.6 million as of February 15, 2022.

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

And in February 2023, the

Company paid the second installment of $ 875,000 .

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

In February 2024,

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

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

$ 0 and amortization of note premium of $ 0 .

For the nine months ended March 31, 2024, the Company recorded accrued interest of $ 39,429

and amortization of note premium of $ 31,602 .

In February 2024, the note premium was fully amortized, and the outstanding balance of the

principal and accrued interest of $ 275,679 was fully paid off.

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

the Purchase Note was $ 0 .

As of September 30, 2025 and June 30, 2025, the

outstanding amount of the ABL, which was classified as current revolving loan payable, including interest payable, was $ 1,449,438 and

$ 3,737,602 , respectively.

As of September 30, 2025, the Company was in default

as a result of covenant violations under the ABL facility.

Short-term loan payable

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

with White Cherry Limited (“White Cherry”), a BVI company owned by the former owner of DHS, for an on-demand, unsecured and

subordinated loan (“On-demand Loan”).

Pursuant to the agreement, White Cherry agreed to loan the Company the amount requested.

The On-demand Loan bears interest at the rate of the Secured Overnight Financing Rate, or SOFR, plus 1% per annum.

The On-demand Loan

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

On July 16, 2023, the Company borrowed $ 2 million from White

Cherry and repaid $ 1 million on July 31, 2023 and $ 1 million on January 31, 2024.

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

the Company recorded accrued interest of $ 0 .

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

of $ 723 and $ 32,911 , respectively.

As of March 31, 2025, the outstanding balance of the On-demand Loan was fully paid off.

On April 8, 2024, the Company entered into an

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

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.

3 unchanged sentences

of the Investor’s notice of repayment.

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

of $ 0 and $ 3,733 , respectively.

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

was $ 491,214 .

As of March 31, 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.

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

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

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

For the three months ended September 30, 2024, the Company recorded interest expense of

As of September 30, 2025 and June 30, 2025, the On-demand Loan 2 had been fully paid off.

On July 9, 2025, the Company borrowed $ 500,000

as a short-term loan (“RP Loan 2”) from an entity owned by Mr.

Allan Huang, one of the majority shareholders of the

The RP Loan 2 bears no interest and is due upon receipt of request of repayment.

As of September 30, 2025, the outstanding

balance of the RP Loan was $ 500,000 .

Note 11 - Related Party Transactions

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

short-term loan from an entity owned by Mr.

On July 9, 2025, the Company borrowed $ 500,000

as a short-term loan from an entity owned by Mr.

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

See Note 10 above for details.

During the year ended June 30, 2024, the Company

started selling products through MII Strategy Inc.

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

Chenlong Tan.

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

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

with White Cherry for an on demand loan.

See Note 10 above for details.

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 provides fulfillment services for the Company and receives a monthly

service fee, which fluctuates from month to month.

Yang is the Founder and Chief Executive Officer of Pacelor.

Pacelor has become a related party of the Company since June 6, 2025.

For the three months ended September 30, 2025, the Company

received $ 435,155

service from Pacelor.

As of September 30, 2025 and June 30, 2025, the (prepayment) accounts payable to Pacelor was $( 66,014 )

and $ 78,831 ,

respectively.

Yang’s other entity, Pacelor NV Inc.

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

As of September 30, 2025 and June 30, 2025, the outstanding accounts payable to Pacelor NV was $ 315,019

and $ 315,019 ,

respectively.

Note 12 – Income Taxes

In addition to corporate income taxes in the United

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

Republic of China (“PRC”).

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

for the year ended June 30, 2022 in those jurisdictions.

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

(CFC) defined under IRC Sec.

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

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

DHS is subject to 5% tax rate in PRC until

December 31, 2027.

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

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

In addition to corporate income taxes in the

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

People’s Republic of China (“PRC”).

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

did not have any operations in those jurisdictions for the year ended June 30, 2022.

The Company’s

subsidiary in China, Dayourenzai (Shenzhen) Technology Co., Ltd.

(“WFOE”), is subject to the Global Intangible Low-Taxed

Income (or GILTI) Tax.

WFOE is subject to 5% tax rate in PRC until December 31, 2027.

Since WFOE had losses during the three months

ended September 30, 2025 and 2024 and the year ended June 30, 2025, no GILTI tax was recorded as of September 30, 2025 and June 30,

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

In addition, as

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

Since the acquisition was a stock acquisition,

the Goodwill is not deductible for tax purposes.

For the three and nine months ended March 31,

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

income tax expense using the actual effective tax rate year to date, as opposed to the estimated annual effective tax rate, as provided

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

The income tax provision for the three and nine

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

In addition, as a result of the acquisition, the Company

recognized goodwill in the amount of $ 6,094,144 .

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

For the three months ended September 30, 2025, as

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

tax expense using the actual effective tax rate year to date, as opposed to the estimated annual effective tax rate, as provided in Accounting

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

The income tax provision for the three months ended

September 30, 2025 and 2024 consisted of the following:

Schedule of income tax provision

Three Months Ended March 31,

Nine Months Ended March 31,

September 30, 2025

September 30, 2024

Total current income tax provision

Total deferred taxes

Total provision for income tax expense (benefit)

Total provision for income taxes

$ ( 463,584 )

1 unchanged sentence

The Company is subject to U.S.

federal income

tax as well as state income tax in certain jurisdictions.

The tax years 2019 to 2023 remain open to examination by the major taxing

jurisdictions to which the Company is subject.

For the three and nine months ended March

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

and $ ( 489,984 ) , respectively,

reflecting an effective tax rate of ( 8.22 )%

respectively.

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

and $ ( 587,674 ), respectively, with

effective tax rates of 27.14 %

respectively.

The Company's effective tax rates for the three

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

state income tax deduction,

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

For the three months ended

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

expense discussed in Note 14 below.

As of March 31, 2025, income taxes payable to

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

As of June 30, 2024, prepaid

income taxes to US tax authorities and income tax payable to Chinese tax authorities was $ 31,496

federal income tax

as well as state income tax in certain jurisdictions.

The tax years 2020 to 2024 remain open to examination by the major taxing jurisdictions

to which the Company is subject.

The following is a reconciliation of income tax expenses at the effective rate to income tax at the calculated

statutory rates:

Schedule of reconciliation of effective income tax rate

September 30, 2025

September 30, 2024

Statutory tax rate

State (net of federal benefit)

Foreign tax rate difference

Reversal of over accrued income taxes of prior years for VIE

Net effect of state income tax deduction and other permanent differences

Effective tax rate

As of September 30, 2025, prepaid income taxes

to US tax authorities was $ 11,499 .

As of June 30, 2025, prepaid income taxes to US tax authorities and income tax payable to Chinese tax authorities was $ 19,073

and $ 280,155 ,

respectively.

The tax effects of temporary differences which

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

The tax effects of temporary differences which give

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

Schedule of deferred taxes

March 31, 2025

September 30, 2025

June 30, 2025

4 unchanged sentences

ROU assets / liabilities

Net operating losses

Net operating loss

Disallowed interest expense

1 unchanged sentence

Valuation allowance

Allowance for credit losses

Allowance for credit loss

Total deferred tax assets

Deferred tax liabilities

Unrealized gain/loss

Intangible assets acquired

Total deferred tax liabilities

( 1,054,484 )

Net deferred tax assets

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

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

Note 13 – Earnings Per Share

The following table sets forth the computation of basic and diluted

(losses) earnings per share for the periods presented:

The following table sets forth the computation of basic and diluted earnings

per share for the periods presented:

Schedule of computation of basic and diluted earnings per share

Three Months Ended March 31,

Nine Months Ended March 31,

Net (loss) income attributable to iPower Inc.

$ ( 339,599 )

For the three months ended

September 30,

Net loss attributable to iPower Inc.

$ ( 533,648 )

1 unchanged sentence

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

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

Due to the anti-dilutive effect, the computation of basic and diluted EPS did not include the shares underlying the exercise of warrants, options, and unvested RSUs as the Company had a net loss/or the warrants and options were out of the money (the exercise price is higher than the market price) for the three and nine months ended March 31, 2025 and 2024.

For the three and nine months ended March 31, 2025, 17,857 and 62,771 vested but unissued shares of restricted stock units under the 2020 Equity Incentive Plan (as discussed in Note 14) are considered issued shares and therefore are included in the computation of basic losses per share when the shares are fully vested.

For the three and nine months ended March 31, 2024, 25,331 and 28,635 vested but unissued shares of restricted stock units under the 2020 Equity Incentive Plan (as discussed in Note 16) are considered issued shares and therefore are included in the computation of basic losses per share when the shares are fully vested.

Losses per share of ordinary shares - basic and diluted

For the three months ended September 30, 2025 and 2024, 4,166 and 71,343 vested but unissued shares of restricted stock units under the 2020 Equity Incentive Plan (as discussed in Note 14) are considered issued shares and therefore are included in the computation of basic losses per share when the shares are fully vested.

Note 14 – Equity

As of March 31, 2025, the total authorized shares

As of September 30, 2025, the total authorized shares

of capital stock were 200,000,000 shares consisting of 180,000,000 shares of Common Stock (“Common Stock”) and 20,000,000

shares of preferred stock (the “Preferred Stock”), each with a par value of $ 0.001 per share.

The holders of Common Stock shall be entitled

to one vote per share in voting to the election of directors and all other corporate purposes.

The holders of Common Stock shall be entitled to one

vote per share in voting to the election of directors and all other corporate purposes.

Subject to the express terms of any outstanding

6 unchanged sentences

issued and outstanding.

During the year ended June 30, 2024, the Company

issued 107,293 shares of restricted Common Stock for RSUs vested.

On October 27, 2025, the Company effectuated the 1-for-30

Reverse Stock Split.

When the Reverse Stock Split becomes effective, every thirty (30) shares of the Company’s issued and outstanding

Common Stock immediately prior to the Effective Time will automatically be reclassified into one (1) share of Common Stock, without any

change in the par value per share.

The Reverse Stock Split did not change the total number of authorized shares of Common Stock or preferred

As a result, unless otherwise indicated, all references to common stock, restricted stock units, warrants and options to purchase

common stock, share data, per-share data, and related information have been retroactively adjusted, where applicable in the unaudited

condensed consolidated financial statements and notes, to reflect the 1-for-30 reverse stock split of the Company’s common stock

as if the split had occurred at the beginning of the earliest period presented.

During the three months ended September 30,

2025, the Company issued 4,460

shares of restricted Common Stock for RSUs vested.

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

17 unchanged sentences

The Company calculated the fair value of the Warrants

at $ 3.1 million at the grant date, with a relative fair value of $ 1.7 million after allocation of the fair value of the Shares, using

the Black-Scholes Model with the following variables:

Stock Price - $ 2.00

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

Model with the following variables:

Stock Price - $ 2.00 (pre-reverse-split price)

Exercise Price - $ 2.40

(pre-reverse-split price)

Volatility – 104 %

1 unchanged sentence

Risk Free Rate of Return – 4.24 %

Pursuant to the Warrant agreement, except for

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

Pursuant to the Warrant agreement, except for some

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

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

2 unchanged sentences

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

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

in order to recoup the settlement payment made to Boustead Securities, LLC, the Company’s Chief Executive Officer and co-founder,

Lawrence Tan, along with co-founder Allan Huang, returned a total of 541,667 shares to the Company for cancellation (the “Share

Cancellation”).

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

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

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

As of September 30 and June 30, 2025, none of the warrants had been

On June 18, 2024, in

order to recoup the settlement payment made to Boustead Securities, LLC, the Company’s Chief Executive Officer and co-founder, Lawrence

Tan, along with co-founder Allan Huang, returned a total of 18,056 shares to the Company for cancellation (the “Share Cancellation”).

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

As of September 30, 2025 and June 30, 2025,

there were 1,049,790

and 1,045,330

shares of Common Stock issued and outstanding.

Preferred Stock

5 unchanged sentences

and the qualifications, limitations or restrictions thereof.

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

As of September 30, 2025 and June 30, 2025, respectively, there were no shares

of Preferred Stock issued and outstanding.

12 unchanged sentences

Restricted Stock Unit

Following completion of the IPO on May 11, 2021,

pursuant to their letter agreements, the Company awarded 46,546 restricted stock units (“RSUs”) under the Plan to its independent

directors, its Chief Financial Officer, and certain other employees and consultants, all of which vested over 12 months following the

grant date and were subject to other restrictions until the filing of a Registration Statement on Form S-8 registering the shares.

fair value of the RSUs was determined based on $5.00 per share, the initial listing price of the Company’s Common Stock on the grant

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

For the three and nine months

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

There was no forfeiture of RSUs occurred

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

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

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

Information relating to RSU grants is summarized

During the three months ended September 30, 2025

and 2024, the Company granted an additional 1,607

shares of RSUs, respectively.

For the three months ended September 30, 2025 and 2024, the Company recorded $ 10,000

of stock-based compensation expense.

There was no forfeiture of RSUs occurred during the three months ended September 30, 2025 and 2024.

As of September 30, 2025 and June 30, 2025, the unvested number of RSUs was 1,529

and the unamortized expense was $ 28,333

and $ 8,333 ,

respectively.

Information relating to RSU grants is summarized as

For the three months ended September 30, 2025:

Schedule of RSU activity

Total RSUs Issued

Market Value of

RSUs Issued as Compensation

Total Fair Market Value of RSUs Issued as Compensation (1)

RSUs granted, but not vested, at June 30, 2025

RSUs forfeited

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

RSUs granted, but not vested, at September 30, 2025

_____________________

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

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

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

On May 12, 2022, the Compensation Committee of

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

$ 60,000 to be awarded to Kevin Vassily, CFO of the Company, and grants of stock option (the “Option Grants”) exercisable to

purchase (i) 3,000,000 shares of Common Stock to Chenlong Tan, CEO and (ii) 330,000 shares of Common Stock to Mr.

Grants, which were issued on May 13, 2022, have an exercise price of $ 1.12 , a contractual term of 10 years, and consist of six vesting

tranches with a vesting schedule based entirely on the attainment of both operational milestones (performance conditions) and market conditions,

assuming continued employment of the recipients through each vesting date.

Each of the six vesting tranches of the Option Grants will

vest when both (i) the market capitalization milestone for such tranche, which begins at $150 million for the first tranche and increases

by increments of $50 million through the fourth tranche and $100 million thereafter (based on achieving such market capitalization for

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

any one of the six operational milestones focused on operating income have been achieved during a given fiscal year.

The estimated achievement status of the operational

milestones as of March 31, 2025 was as follows:

As of September 30, 2025, of the 14,128

vested RSUs, 13,989

shares of Common Stock were issued, and 139

shares were to be issued in the near future.

As of June 30, 2025, of the 13,587 vested RSUs, 9,529 shares of Common Stock were issued, and 4,058 shares were to be issued in the near future.

For the three months ended September 30, 2024:

Total RSUs Issued

Total Fair Market Value of RSUs Issued as Compensation (1)

RSUs granted, but not vested, at June 30, 2024

RSUs forfeited

RSUs granted, but not vested, at September 30, 2024

____________________

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

As of September 30, 2024, of the 11,908 vested RSUs, 9,529 shares

of Common Stock were issued, and 2,379 shares were to be issued in the near future.

On May 12, 2022, the Compensation Committee of the

Board of Directors approved an incentive plan for the Company’s executive officers consisting of a cash performance bonus of $ 60,000

to be awarded to Kevin Vassily, CFO of the Company, and grants of stock option (the “Option Grants”) exercisable to purchase

(i) 100,000 shares of Common Stock to Chenlong Tan, CEO and (ii) 11,000 shares of Common Stock to Mr.

The Option Grants, which

were issued on May 13, 2022, have an exercise price of $ 33.6 , a contractual term of 10 years, and consist of six vesting tranches with

a vesting schedule based entirely on the attainment of both operational milestones (performance conditions) and market conditions, assuming

continued employment of the recipients through each vesting date.

Each of the six vesting tranches of the Option Grants will vest when

both (i) the market capitalization milestone for such tranche, which begins at $150 million for the first tranche and increases by increments

of $50 million through the fourth tranche and $100 million thereafter (based on achieving such market capitalization for five consecutive

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

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

The estimated achievement status of the operational milestones as

of September 30, 2025 was as follows:

Revenue in Fiscal Year

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

In relation to the two awards deemed probable to

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

If the performance condition is ultimately not met, compensation cost

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

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

On the grant date, a Monte Carlo simulation was

used to determine for each tranche (i) a fixed amount of expense for such tranche and (ii) the future time when the market capitalization

milestone for such tranche was expected to be achieved.

Separately, based on a subjective assessment of our future financial performance,

each quarter we determine whether it is probable that the Company will achieve each operational milestone that has not previously been

achieved or deemed probable of achievement and, if so, the future time when the Company expects to achieve that operational milestone.

The Monte Carlo simulation utilized the following inputs:

Stock Price - $ 1.12

In relation to the five 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 condition in the award would not have been satisfied.

On the grant date, a Monte Carlo simulation was used

to determine for each tranche (i) a fixed amount of expense for such tranche and (ii) the future time when the market capitalization milestone

for such tranche was expected to be achieved.

Separately, based on a subjective assessment of our future financial performance, each quarter

we determine whether it is probable that the Company will achieve each operational milestone that has not previously been achieved or

deemed probable of achievement and, if so, the future time when the Company expects to achieve that operational milestone.

The Monte Carlo

simulation utilized the following inputs:

Stock Price - $ 1.12 (pre-reverse-split price)

Volatility – 95.65 %

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Dividend Yield – 0 %

The total fair value of the Option Grants was

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

During the quarter ended March 31, 2025, the

Company reassessed the expected timing of meeting the performance conditions.

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

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

years to vest.

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

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

As of March 31, 2025, none

of the options had vested.

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

and $ ( 482,381 ) of stock-based

compensation expense related to the Option Grants.

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

The total fair value of the Option Grants was $ 3.2 million of which, at September 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 September 30, 2025, none of the options had vested.

For the three months ended

September 30, 2025 and 2024, the Company recorded $ 40,691

and $ 110,382

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

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

As of September 30, 2025, unrecognized compensation cost related to

tranches probable of vesting is approximately $ 992,045

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.

and will be recognized over five 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 40,000 stock options (the

“2024 Stock Options”) issuable to Chenlong Tan, the Company’s Chief Executive Officer, pursuant to the terms of the

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").

Following the Board’s approval, Mr.

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.

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

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

price of $ 42.9

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

The 2024 Stock Options have a term of 10

years and will vest as follows:

2024 Stock Options vested on the grant date (August 29, 2024), and 1,084

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

Stock Price - $ 1.30 (pre-reverse-split price)

Exercise Price - $ 1.43

(pre-reverse-split price)

Volatility – 101 %

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$ 1.22 million as of the grant date.

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

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

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

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

Note 15 – Warrant liabilities

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 March 31, 2025 and June 30, 2024.

For the three months ended September 30, 2025 and 2024, 3,250

stock options were vested and the Company recorded $ 99,512

as stock compensation expense, respectively.

As of September 30, 2025, the unrecognized compensation cost of the 2024 Stock Options was

approximately $ 0.76 million and will be recognized monthly through August 1, 2027.

Note 15 - 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 March 31, 2025 and June 30, 2024, $ 2,192,255

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

Accounts at each

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

Financial instruments that potentially subject the

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

As of September 30, 2025 and June 30, 2025,

and $ 1,774,296 ,

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

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

The Company had approximately $ 0.4

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

Accounts receivable are typically unsecured and

derived from revenue earned from customers, thereby exposing the Company to credit risk.

The risk is mitigated by the Company’s

assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances.

The Company maintains reserves

for estimated credit losses, and such losses have generally been within expectations.

The business of DHS, the Company’s VIE,

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

million and $ 1.4

million, respectively, in excess of the FDIC insurance limit, as of September 30, 2025 and June 30, 2025.

Accounts receivable are typically unsecured and derived

from revenue earned from customers, thereby exposing the Company to credit risk.

The risk is mitigated by the Company’s assessment

of its customers’ creditworthiness and its ongoing monitoring of outstanding balances.

The Company maintains reserves for estimated

credit losses, and such losses have generally been within expectations.

The business of WFOE in China may be impacted

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

Customer and vendor concentration risk

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

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

As of March 31, 2025

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

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

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

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

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

Note 17 - Commitments and contingencies

Lease commitments

The Company has entered into a lease agreement

for office and warehouse space with a lease period from December 1, 2018 until December 31, 2020.

On August 24, 2020, the Company negotiated

for new terms to extend the lease through December 21, 2023 at the rate of approximately $42,000 per month.

On December 21, 2023, the

lease expired without renewal.

On September 1, 2020, in addition to the primary

fulfillment center, the Company leased a second fulfillment center in City of Industry, California.

The base rental fee was $27,921 to

$29,910 per month through October 31, 2023.

On October 31, 2023, the lease expired without renewal.

For the three months ended September 30, 2025

and 2024, Amazon Vendor and Amazon Seller customers accounted for 70 %

of the Company's total revenues, respectively.

As of September 30, 2025 and June 30, 2025, respectively, accounts receivable from

Amazon Vendor and Amazon Seller accounted for 73 %

of the Company’s total accounts receivable.

For the three months ended September 30, 2025 and

2024, one supplier accounted for 66 %

of the Company's total purchases, respectively.

As of September 30, 2025 and June 30, 2025, accounts payable to one supplier accounted

of the Company’s total accounts payable.

Note 16 - Leases

On February 15, 2022, upon completion of the acquisition

of Anivia Limited, the Company assumed an operating lease for offices located in the People’s Republic of China.

In July 2023, the

Company renewed the lease contract for its existing office plus additional office space.

The lease term is for three years expiring on

July 14, 2026.

In July 2023,

the Company renewed the lease contract for its existing office plus additional office space.

The lease term is for three years expiring

on July 14, 2026.

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

10 unchanged sentences

as further detailed in the Lease Agreement.

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

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

The lease did not start under the original agreement

3 unchanged sentences

expiring on May 31, 2028.

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

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

date of May 31, 2028.

2 unchanged sentences

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

The lease term expired on April

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

In September 2024, DHS entered into a sublease

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

The lease had been expired without

renewal since May 1, 2025.

In September 2024, DHS entered into a sublease agreement

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

The lease term is for one year from October 1, 2024 to September 30, 2025.

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

The Company’s total commitment for the full

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

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

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

Three months Ended March 31, 2025 and 2024:

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

Schedule of lease cost and other information

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

Other information

Cash paid for amounts included in the measurement of lease liabilities

Remaining term in years

Average discount rate - operating leases

Nine months Ended March 31, 2025 and 2024:

For the Three Months Ended

September 30,

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

Short-term lease expenses

Other information

2 unchanged sentences

Average discount rate - operating leases

The supplemental balance sheet information related to leases for the

period is as follows:

The supplemental balance sheet information related to leases for the period

is as follows:

Schedule of supplemental balance sheet information related to leases

1 unchanged sentence

Right of use asset - non-current

Lease Liability – current

Lease Liability - non-current

Lease Liabilities – current

Lease Liabilities - non-current

Total operating lease liabilities

3 unchanged sentences

For Year ending June 30:

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

Imputed interest/present value discount

Present value of lease liabilities

Contingencies

Except as disclosed below, the Company is not

currently a party to any material legal proceedings, investigation or claims.

As the Company may, from time to time, be involved in legal

matters arising in the ordinary course of its business, there can be no assurance that such matters will not arise in the future or that

any such matters in which the Company is involved, or which may arise in the ordinary course of the Company’s business, will not

at some point proceed to litigation or that such litigation will not have a material adverse effect on the business, financial condition

or results of operations of the Company.

Pursuant to an engagement agreement, dated and

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

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

initial public offering.

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

continuing obligations the Company may have had under its terms.

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

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

On April 30, 2021, Boustead filed

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

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

Davidson & Co.

(who acted as underwriter in the Company’s

The Company has agreed to indemnify D.A.

Davidson & Co.

and the other underwriters against any liability or expense they may

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

Additionally, Chenlong Tan, the Company’s Chairman, President and Chief

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

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

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

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

As of March 31, 2024, the Company cannot

reasonably estimate the amount of potential exposure.

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.

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 March 31, 2025, the Settlement Amount had been paid off and the parties have formally withdrawn all of the complaints that were

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

In conjunction with entry into the Settlement

Agreement, the Company’s CEO and co-founder, Chenlong Tan, and Allan Huang, also a co-founder of the Company, entered into a pledge

agreement (the “Pledge Agreement”) with the Company pursuant to which they each pledged 1,300,000 shares of their iPower common

stock, for a total of 2,600,000 shares (the “Pledged Shares”), in order that the Company may, from time to time, sell such

Pledged Shares into the market on behalf of Messrs.

Tan and Huang in order to recoup the Settlement Amount.

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

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.

At present the majority of our products are sourced

either in the United States or China.

On April 10, 2025, the U.S.

announced it would be imposing tariffs of 145% on all goods imported

from China, and the Chinese government countered by imposing 125% tariffs on all goods exported from the U.S.

On May 12, 2025,

the United States and China announced a 90-day pause on most of their recent tariffs on each other.

The combined U.S.

tariff rate on Chinese

imports will be cut to 30% from 145%, while China’s levies on U.S.

imports will fall to 10% from 125%.

We anticipate general economic

disruption and uncertainty surrounding trade stability during the near term.

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

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

In addition, in

February 2022, the Russian Federation began conducting military operations against Ukraine, and in October 2023, an armed conflict between

Hamas-led Palestinian militant groups and Israeli military forces began, both of which have since escalated into prolonged wars.

we do not do business in those regions, the military conflicts in Ukraine and the Middle East have resulted in global economic uncertainty

and increased the cost of various commodities.

In response to these types of events, should they directly impact our supply chain or other

operations, we may experience or be exposed to supply chain disruptions which could cause us to seek alternate sources for product supply

or suffer consequences that are unexpected and difficult to mitigate.

Any of these risks might have a materially adverse impact on our

business operations and our financial position or results of operations.

Although, it is difficult to predict the impact that these factors

may have on our business in the future, we have experienced a delay in, as well as an increase in costs in shipping, resulting in increased

inventory levels in our warehouse facilities, thus resulting in reduced profits.

In addition, supply chain disruptions may put upward

pressure on our costs and increase the risk that we may be unable to acquire the materials and services we need to continue to acquire

and distribute certain products.

On April 13, 2020, the Company entered into an

agreement with Royal Business Bank (the “Lender”) for a total amount of $175,500, pursuant to a promissory note issued by

the Company to the Lender (the “PPP Note”).

The loan was made pursuant to the Payroll Protection Program established as part

of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”).

On March 22, 2021, the $175,500 PPP Note due to

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

Note 17 - Commitments and Contingencies

Except as disclosed below, the Company is not currently

a party to any material legal proceedings, investigation or claims.

As the Company may, from time to time, be involved in legal matters

arising in the ordinary course of its business, there can be no assurance that such matters will not arise in the future or that any such

matters in which the Company is involved, or which may arise in the ordinary course of the Company’s business, will not at some

point proceed to litigation or that such litigation will not have a material adverse effect on the business, financial condition or results

of operations of the Company.

In February 2022, the Russian Federation began conducting

military operations against Ukraine, and in October 2023, an armed conflict between Hamas-led Palestinian militant groups and Israeli

military forces began, both of which have since escalated into prolonged wars.

While we do not do business in those regions, the military

conflicts in Ukraine and in Israel have resulted in global economic uncertainty and increased the cost of various commodities.

to these types of events, should they directly impact our supply chain or other operations, we may experience or be exposed to supply

chain disruptions which could cause us to seek alternate sources for product supply or suffer consequences that are unexpected and difficult

Any of these risks might have a materially adverse impact on our business operations and our financial position or results

of operations.

Although, it is difficult to predict the impact that these factors may have on our business in the future, we have experienced

a delay in, as well as an increase in costs in shipping, and the resulting inventory level increase in our warehouse facilities, thus

resulting in reduced profits.

In addition, supply chain disruptions may put upward pressure on our costs and increase the risk that we

may be unable to acquire the materials and services we need to continue to make certain products.

On April 13, 2020, the Company entered into an agreement with Royal

Business Bank (the “Lender”) for a total amount of $175,500, pursuant to a promissory note issued by the Company to the Lender

(the “PPP Note”).

The loan was made pursuant to the Payroll Protection Program established as part of the Coronavirus Aid,

Relief and Economic Security Act (the “CARES Act”).

On March 22, 2021, the $175,500 PPP Note due to Royal Business Bank was

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

The Company is required to retain PPP loan documentation

1 unchanged sentence

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.

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

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

Note 18 - Subsequent Events

4 unchanged sentences

in the unaudited condensed consolidated financial statements presented.

Pursuant to such authority granted by the Company’s

stockholders at the Annual Meeting, held on June 23, 2025, the Board approved a reverse stock split of between one-for-twenty (1:20) and

one-for-thirty (1:30) (the “Reverse Stock Split”) of the Common Stock on October 13, 2025, subject to final determination

of the Company’s management.

Company management subsequently determined to effectuate a one-for-thirty (1:30) Reverse Stock Split

and on October 22, 2025, the Company filed a certificate of amendment to amend the Company’s certificate of incorporation (the “Certificate

of Amendment”) with the Secretary of State of the State of Nevada, with an effective date of October 27, 2025 (the “Effective

The Reverse Stock Split became effective at the start of trading on October 27, 2025 (the “Effective Time”).

At the Effective Time, every thirty (30) shares of the Company’s issued and outstanding Common Stock immediately prior to the Effective

Time shall automatically reclassified into one (1) share of Common Stock, without any change in the par value per share.

The Reverse Stock

Split did not change the total number of authorized shares of Common Stock or preferred stock.

As a result, all shares of Common Stock and per

share numbers in the unaudited condensed consolidated financial statements and notes have been adjusted retroactively to reflect the 1-for-30

Reverse Stock Split.

On November 12, 2025, the Company’s Compensation

Committee approved authorizing the Company to issue a grant of $800,000 in RSUs to its Chief Executive Officer, Mr.

Chenlong Tan, which

RSUs shall be calculated as of the grant date, have deferred settlement upon vesting, and shall vest in accordance with the vesting schedule

set forth in the Grant Agreement.

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

What changed 10-Q

Item 1. Financial Statements