[{"_1":2,"_3":-5,"_4":-5},"loaderData",{"_5":6,"_7":8},"actionData","errors","root",{"_101":102},"en-item",{"_9":10,"_10":11},"kind","item",{"_12":13,"_14":15,"_16":17,"_18":19,"_20":21,"_22":23,"_24":25,"_26":27,"_28":29,"_30":31,"_32":31,"_33":34,"_35":36,"_37":38,"_39":40,"_41":42,"_43":44,"_45":46,"_47":-5,"_48":49,"_50":-5,"_51":-5,"_52":53,"_54":55,"_56":57,"_58":42,"_59":42,"_60":61,"_62":42,"_63":64},"id","bloxlz4sps2t62m1ehsyiopxa","revision",3,"title","iPower Inc. 2026财年净亏损1162万美元，持有15.1比特币","originalTitle","iPower Inc. (0001830072) (Filer)","summary","iPower Inc. 2026财年营收下降68.4%至1995万美元，净亏损扩大至1162万美元。公司持有约481.8万美元现金及15.1比特币，同时面临数字资产波动、供应链中断、市场竞争等多重风险。公司还进行了多次股票拆分，并与关联方存在多项交易。","reason","iPower Inc. 2026财年营收大幅下滑68.4%，净亏损扩大至1162万美元，同时持有约481.8万美元现金及15.1比特币，面临数字资产波动、供应链中断、市场竞争等多重风险。","source",{"_12":92,"_93":94,"_9":95,"_96":42,"_97":98,"_99":100},"links",{"_89":90,"_77":91},"publishedAt","2026-10-02T20:23:39.000Z","discoveredAt","2026-10-02T21:21:07.701Z","timelineAt","category","ai-products","tags",[83,84,85,86,87,88],"stockSymbols",[82],"score",65,"selected",true,"channel","news","story",{"_73":74,"_16":17},"x","readingMode","full","author","language","body",{"_64":76,"_77":-5,"_78":79,"_80":81},"outline",[],"relatedStories",[75],"indexable","markdownAvailable","group",{"_65":66,"_45":67,"_68":69,"_70":71,"_72":71},"hasTranslation","bodyLanguage","zh","factId","fcc47vd7aH-c",{"_73":74,"_16":17},"reportCount",1,"additionalSourceCount",0,"developmentCount","publicId","ba53c4e1-f0aa-4c55-9b34-5ad892651725",{"_73":74,"_16":17},"

美国

证券交易委员会

华盛顿特区 20549

表格 10-K

\n \n \n \n \n

☒

年度报告根据《1934年证券交易法》第13或15(d)条

截至 2026年6月30日的财年

或

\n \n \n \n \n

☐

T过渡报告根据《1934年证券交易法》第13或15(d)条

过渡期从 ______________ 至 ______________

委员会文件编号: 001-40391

iPower Inc.

(注册人章程中指定的全名)

\n \n \n \n \n \n \n \n \n

内华达州		82-5144171
(注册或组织的州或其它司法管辖区)		(I.R.S. 雇主识别号)

8798 9th Street

兰乔库卡蒙加, CA 91730

(主要执行办公室地址) (邮政编码)

(626) 863-7344

(注册人的电话号码，包括地区代码)

根据《法案》第12(b)条注册的证券:

\n \n \n \n \n \n \n \n \n \n \n \n \n

每类证券的名称		交易符号		每种证券注册的交易所名称
普通股		IPW		纳斯达克股票市场有限责任公司

根据《法案》第12(g)条注册的证券: 无

通过勾选方框表明注册人是否为《证券法》第405条中定义的知名资深发行人。是 ☐否\n☒

通过勾选方框表明注册人是否不需要根据《法案》第13条或第15(d)条提交报告。是 ☐\n否 ☒

通过勾选方框表明注册人(1)是否已提交根据《1934年证券交易法》第13条或第15(d)条在前12个月内(或注册人需要提交此类报告的较短期间)要求提交的所有报告，以及(2)是否在过去90天内一直受此类提交要求的约束。是 ☒ 否 ☐

通过勾选方框表明注册人是否在前12个月内(或注册人需要提交此类文件的较短期间)已提交了根据S-T条例第405条(本章第232.405条)要求提交的每个交互式数据文件。是 ☒\n否 ☐

通过勾选方框表明注册人是大型加速提交者、加速提交者、非加速提交者、较小报告公司或新兴成长公司。请参见《交易法》第12b-2条中对“大型加速提交者”、“加速提交者”、“较小报告公司”和“新兴成长公司”的定义。

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

大型加速提交者	☐	加速提交者	☐
非加速提交者	☒	较小报告公司	☒
		新兴成长公司	☐

如果为新兴成长公司，请通过勾选方框表明注册人是否已选择不使用根据《交易法》第13(a)条提供的任何新修订的财务会计标准的延长过渡期。 ☐

通过勾选方框表明注册人是否已提交了其管理层对财务报告内部控制有效性的评估报告，并根据《萨班斯-奥克斯利法案》第404(b)条(15 U.S.C. 7262(b))由为其出具或签发审计报告的注册公共会计公司进行了鉴证。 ☐

如果证券根据《法案》第12(b)条注册，请通过复选标记表明在备案中包含的注册人的财务报表是否反映了对先前发布的财务报表的更正。☐

通过复选标记表明这些更正中的任何一项是否为需要对注册人在相关恢复期内根据§240.10D-1(b)获得的任何高管的基于激励的薪酬进行恢复分析的重新表述。☐

通过复选标记表明注册人是否为壳公司（根据《法案》第12b-2条的定义）是 ☐ 否 ☒

在2025年12月31日，注册人最近完成的第二个财政季度的最后一个营业日，非关联方持有的有投票权和无投票权普通股的总市场价值为$4,224,031，基于该日注册人普通股的收盘售价，该价格在纳斯达克资本市场报告中有所体现。

注册人普通股在2026年10月2日的流通股数量为1,262,584。

iPOWER INC.

		页码
	第一部分

项目 1。	业务	1
项目 1A。	风险因素	6
项目 1B。	未解决的工作人员意见	38
项目 1C。	网络安全	39
项目 2。	财产	39
项目 3。	法律诉讼	40
项目 4。	煤矿安全披露	40

	第二部分

项目 5。	注册人普通股的市场、相关股东事项和发行人购买权益证券	41
项目 6。	[保留]	42
项目 7。	管理层讨论与分析财务状况和经营成果	42
项目 7A。	关于市场风险的定量和定性披露	54
项目 8。	财务报表和补充数据	54
项目 9。	与会计师在会计和财务披露方面的变更和分歧	55
项目 9A。	内部控制和程序	55
项目 9B。	其他信息	56
项目 9C。	关于阻止检查的外国司法管辖区的披露	56

	第三部分

项目 10。	董事、高管和公司治理	57
项目 11。	高管薪酬	62
项目 12。	某些有益所有人和管理层的证券所有权及相关股东事项	64
项目 13。	某些关系和相关交易，以及董事独立性	65
项目 14。	主要会计费用和业务	67

	第四部分

项目 15。	附录和财务报表附表	68
项目 16。	10-K表格摘要	72
	签名	73

前瞻性声明

这份10-K年度报告（包括有关管理层讨论与分析及运营结果的章节，“年度报告”）根据1933年证券法（“证券法”）第27A条以及1934年证券交易法（“交易法”）第21E条包含前瞻性声明。这些声明涉及未来事件或我们的未来财务表现，并涉及已知和未知的风险、不确定性及其他因素，其中一些可能超出我们的控制或预测范围，可能导致实际结果、活动水平、表现或成就与前瞻性声明所表达或暗示的任何未来结果、活动水平、表现或成就有实质性差异。

在某些情况下，您可以通过诸如“可能”、“将”、“应该”、“预期”、“意图”、“计划”、“预期”、“相信”、“估计”、“预测”、“潜力”、“继续”或这些术语的否定形式或其他类似术语来识别前瞻性声明，尽管并非所有前瞻性声明都包含这些识别词。我们的前瞻性声明可能包括但不限于以下内容：

	·	我们关于将加密货币作为储备资产进行收购和使用的策略和计划；

	·	我们的财务和业务表现，包括我们的财务预测和业务指标；

	·	宏观经济状况，包括劳资纠纷、美元贬值、资本市场波动、美中关系、通货膨胀影响和全球供应链的中断；

	·	美国和其他政府实施的关税和贸易壁垒以及其他报复性措施；

	·	我们战略、未来运营、财务状况、预计收入和损失、预测、预计成本、前景和计划的变更；

	·	供应链成本的增加，包括原材料、采购和运输；

	·	我们无法预见未来市场需求和客户未来需求；

	·	零部件短缺、供应商生产能力不足、自然灾害或疫情对我们的采购运营和供应链的影响；

	·	我们满足产品预期交付时间和履行客户订单的能力；

	·	我们未来的资本需求和现金的来源和用途；

	·	我们满足未来资本支出并偿还近期债务义务的能力；

	·	我们为运营获得资金和筹集资本的能力；

	·	我们进入资本市场和信贷市场的能力；

	·	我们预期的财务表现，包括毛利，以及预计未来运营结果将在可预见的未来按季度波动的预期；

	·	我们预计的资本支出、营收成本和其他未来费用，以及满足公司流动性需求的资金来源；

	·	我们维持普通股在纳斯达克上市的能力；

	·	技术、网络安全和数据隐私风险；

	·	激烈的市场竞争；

	·	地缘政治状况，包括美国和中国的政治不稳定、动乱和制裁、战争、冲突，包括俄罗斯和乌克兰之间的持续冲突、中东的冲突，以及中国和台湾之间日益紧张的关系；

	·	legislative and regulatory risks, including those relating to the recent enactment of the One Big Beautiful Bill Act;

	·	uncertainties and risks relating to new trade regulations, including tariffs and export control regulations;

	·	the market price and value of digital assets are highly volatile, which may materially and adversely affect the value of our digital asset holdings and our financial condition;

	·	the regulatory environment governing digital assets is evolving, uncertain, and subject to change, which could adversely affect our business, financial condition, and results of operations;

	·	reputational risks; and

	·	other risks and uncertainties described in the Annual Report, including those\ndetailed under the section entitled “Risk Factors”.

We caution readers not to place undue reliance upon\nany such forward-looking statements, which speak only as of the date they are made. We disclaim any obligation, except as specifically\nrequired by law and the rules of the SEC, to publicly update or revise any such statements to reflect any change in company expectations\nor in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results\nwill differ from those set forth in the forward-looking statements.

Our business, financial condition, results of operations\nand prospects may change. We may not update these forward-looking statements, even though our situation may change in the future, unless\nwe have obligations under the federal securities laws to update and disclose material developments related to previously disclosed information.\nAlthough we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results,\nlevels of activity, performance, or achievements.

Unless the context otherwise\nrequires, the terms “the Company,” “we,” “us,” and/or “our” in this Annual Report refer\nto iPower Inc. and its subsidiaries.

iii

Risk Factor Summary

The risks described under the\nheading “Risk Factors” of this Annual Report on Form 10-K may cause us to be unable to realize the full\nbenefits of our strengths and/or may cause us to be unable to successfully execute all or part of our strategy. Some of the more significant\nchallenges we face include:

Risks Related to Our Business and Products

	·	We sell proprietary brand offerings, as well as third party brands, which could expose us to various risks.
	·	Our competitors and potential competitors may develop products and technologies that are more effective or commercially attractive than our products.
	·	We may not be able to successfully develop new products or improve existing products or maintain our effectiveness in reaching consumers through rapidly evolving communication vehicles.
	·	The availability and cost of transportation for our products is vital to our success, and the loss of availability or increase in the cost of transportation or freight costs could have an unfavorable impact on our business, results of operations, financial condition, and cash flows.
	·	The ongoing conflict between Russia and Ukraine may adversely affect our business, financial condition, or results of operations.
	·	任何流行病或大流行病（包括但不限于 COVID-19 或类似传染病）的发生，以及相关感染的任何再次爆发，无论是在美国、中国还是其他地区，以及为减轻其影响所做的努力，都可能对我们的业务、流动性、运营、财务状况、供应商、供应商和物流合作伙伴的业务以及我们的证券价格产生不利影响。
	·	我们目前的经营历史有限，股东和潜在投资者无法据此评估我们的业务或做出投资决策，我们刚刚开始实施我们的数字资产储备策略。
	·	我们几乎所有的销售都是通过合作伙伴和第三方平台间接进行的，包括亚马逊、Temu、沃尔玛和eBay；如果在这些第三方平台上销售的努力受到干扰，可能会严重影响我们的业务。
	·	不利的经济状况可能对我们的业务产生不利影响。
	·	通胀加剧、利率上升以及其他经济状况（包括潜在的经济衰退和信贷市场中断）可能对我们的业务产生负面影响。
	·	美国和全球的经济状况波动或疲软可能对我们的业务和经营成果产生不利影响。
	·	政府应对通胀的努力，以及由通胀经济环境引起的其他利率压力，可能导致融资成本上升。
	·	我们严重依赖进入中国市场以生产我们的产品；如果美中贸易关系进一步恶化，且持续的贸易战继续，我们的供应链，从而我们的运营和收入，可能会受到不利影响。
	·	我们面临激烈的竞争，这可能阻碍我们发展或增加客户群。
	·	如果我们需要额外资金来资助业务扩张，我们可能无法以对我们有利的条件获得足够的资金，可能被迫限制业务扩张。
	·	我们的业务在很大程度上依赖于我们高管的努力，如果我们失去他们的服务，我们的业务可能会受到严重干扰。
	·	如果我们无法吸引和留住高素质的人才，我们可能无法成功实施我们的业务战略。
	·	为了增加我们的销售和营销基础设施，我们需要扩大公司的规模，我们可能会在管理这种增长时遇到困难。
	·	收购、其他战略联盟和投资可能导致运营困难、股权稀释和其他有害后果，可能对我们的业务和经营成果产生不利影响。
	·	我们持续投资和开发新的自有品牌产品线本质上具有风险，并可能干扰我们的现有业务。
	·	如果我们无法有效执行电子商务业务的供应链，我们的声誉和经营成果可能会受到损害。
	·	我们相当一部分销售发生在亚马逊上，因此如果我们的公司遭遇亚马逊的任何负面行动，我们的销售可能会受到严重影响。
	·	\n 我们依赖第三方制造商可能会影响我们的业务。 \n

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	·	我们对某些产品有限的供应商基础和集中客户可能造成业务中断，并对我们的财务结果产生不利影响。
	·	我们的设施或我们的供应商的设施运营出现重大中断可能会影响我们生产产品和为客户提供服务的能力，这可能对收入和盈利产生不利影响。
	·	如果我们的供应商无法以足够的数量、及时且在可接受的成本下获得原材料，我们销售产品的能力可能会受到损害。
	·	供应商获取的原材料供应中断或价格上涨可能对我们的经营成果产生不利影响。
	·	如果目前或未来向我们当前或未来业务所处的零售市场直接销售的供应商加强这些努力并停止或减少通过我们销售，我们销售某些产品的能力可能会受到损害。
	·	如果我们的信息系统未能充分运行，或者我们成为数据泄露或网络攻击的受害者，我们的运营可能会受到损害。
	·	我们收集、处理、存储、使用和分享来自我们网站和产品购买者和用户的信息。收集和使用个人信息，以及分析和共享用户数据和唯一标识符以用于广告，使我们面临立法和监管负担，可能使我们面临责任，我们实际或被认为未能充分保护消费者数据可能会损害我们的品牌、我们在市场上的声誉和我们的业务。
	·	我们可能无法充分保护对我们业务至关重要的知识产权和其他专有权利。
	·	我们可能无法开发、许可或收购新产品，提升现有产品的功能以跟上快速变化的技术和客户需求，或成功管理向新产品线的过渡，所有这些都可能对我们的业务、财务状况和经营成果产生重大不利影响。
	·	我们已识别出我们在财务报告内部控制方面的某些重大缺陷，未来可能会出现重大缺陷，或者可能无法在未来保持有效的内部控制体系，因此我们可能无法准确报告我们的财务状况或经营成果，这可能对投资者对我们信心产生不利影响，并因此影响我们普通股的价值。
	·	我们最近实施了我们的数字资产储备策略，这使我们面临各种风险，包括与持有比特币和其他加密货币资产相关的风险，包括以下内容：

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	o	比特币和其他数字资产是高度波动的资产。
	o	比特币不支付利息或股息。
	o	我们的比特币和其他数字资产持有量可能对我们的财务结果和我们上市证券的市场价格产生重大影响。
	o	如果我们购买比特币或其他数字资产，此类收购将主要通过股权和债务融资的收益完成。
	o	数字资产储备策略对我们来说是新的，尚未经过测试，我们无法保证其成功或成功实施。
	o	我们将面临交易对手风险，特别是与我们的托管人相关的风险。
	o	更广泛的数字资产行业面临交易对手风险，这可能对比特币和其他加密货币或数字资产的采用率、价格和使用产生不利影响。
	o	我们的比特币或其他数字货币持仓的会计处理方式的变化可能会产生重大会计影响，包括增加我们业绩的波动性。

与我们业务相关的普遍风险因素

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	·	诉讼可能对我们的业务、财务状况和经营成果产生不利影响。
	·	如果针对我们提起产品责任诉讼，我们可能会承担重大责任。
	·	我们可能无法获得足以覆盖所有重大风险敞口的保险覆盖。
	·	我们税务准备金的意外变化、新税法的实施或额外税务责任的暴露可能会影响我们的盈利能力及现金流。
	·	我们某些产品按季节性销售，这会导致我们的现金流、库存和应付账款出现波动。
	·	如果我们无法准确预测客户对我们产品的市场需求并管理我们的库存，我们的经营成果可能会受到重大损害。
	·	如果第三方未能履行其合同、监管和其他义务，可能会对我们的业务产生不利影响。
	·	我们当前和未来产品市场的规模尚未精确确定，可能比我们估计的要小。
	·	俄罗斯与乌克兰以及中东的冲突可能会加剧“风险因素”部分中描述的许多其他风险。

与我们普通股相关的风险

\n \n \n \n \n \n \n \n \n

	·	如果我们未能遵守纳斯达克证券市场持续上市要求，可能导致我们的普通股被退市，这可能对我们的证券市场价格和流动性产生不利影响，并可能产生其他不利影响。
	·	我们普通股在未来公开市场上的销售可能会导致我们普通股的市场价格下跌。

与我们普通股相关的普遍风险因素

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	·	持有我们普通股存在风险，包括股市波动。
	·	我们短期内不打算支付股息，因此您获得投资回报的能力将取决于我们普通股价格的上涨。
	·	为了支持我们业务的增长，我们可能需要额外资本，而该资本可能无法以可接受的条件获得，甚至可能无法获得。
	·	作为一家上市公司，我们在维护与证券交易委员会（SEC）和纳斯达克相关的报告要求方面将面临更高的成本，我们的管理层需要投入大量时间来遵守我们的上市公司报告责任和公司治理实践。
	·	由于是上市公司，我们有义务开发和维护适当的财务报告内部控制，任何未能维持这些内部控制的充分性都可能损害投资者对我们公司的信心，从而影响我们普通股的价值。
	·	我们是《证券法》定义的较小报告公司，如果我们利用某些适用于“较小报告公司”的披露要求豁免，这可能使我们的证券对投资者的吸引力降低，并可能使我们与其他上市公司的业绩比较更加困难。
	·	如果我们未来发行额外的股权或股权关联证券，我们的股东将面临进一步的股权稀释。
	·	如果证券或行业分析师不发布有关我们业务的研究或报告，或者他们对我们普通股的建议发生不利变化，我们的普通股市场价格和交易量可能会下跌。
	·	作为一家积极交易的纳斯达克上市公司，我们普通股的市场价格可能会波动。
	·	在本公司清算或解散的情况下，股东可能无法收回其投资的全部或任何部分。

PART I

ITEM 1. DESCRIPTION OF BUSINESS

我们的业务

iPower Inc. 是一家以技术与数据为驱动的基础设施公司，其基础包括供应链服务、现实世界中的商业活动，以及基于合作伙伴的物流和履约能力。公司利用其内部软件、数据和运营经验，以及采购、物流、履约、仓储和商业合作伙伴网络，以支持供应链服务、商业基础设施和相关业务机会。

在我们的供应链、软件和运营基础上，iPower 正在追求人工智能基础设施的收购、融资、设备租赁及相关机会，这是当前的战略重点。公司还持有有限的数字资产储备金，我们从 2025 年 12 月开始通过购买数字资产实施这一策略。管理层目前正在减少某些数字资产的敞口，并优先考虑直接的人工智能基础设施及相关运营机会，具体取决于公司受控担保账户中持有资产的限制条件。

数字资产储备金和资本配置策略

iPower 于 2025 年 6 月采用了初始的数字资产储备金（“DAT”）策略，并从 2025 年 12 月开始实施 DAT 策略。DAT 策略最初旨在为数字资产的潜在增值提供有限的资产负债表敞口，并分散我们部分储备金资产。这一总体策略用于管理我们的公司储备金和资本配置活动。该策略由公司管理层在董事会批准的政策下进行监督，旨在保持灵活性，同时帮助我们管理资本配置。我们的目的不是运营数字资产投资基金、交易所、经纪交易商、投资顾问业务或客户托管业务。我们目前没有聘请外部投资经理来监督或建议我们的投资。我们的 DAT 资产由 BitGo Trust Company, Inc. 保管，这是一家南达科他州特许的信托公司，是一家全方位服务的数字资产基础设施公司。

2025 年 12 月，我们以约 132.5 万美元的价格购买了约 15.1 个比特币，以及约 301.1 个以太币，价格约为 88.4 万美元。2026 年 6 月，我们以约 100 万美元购买了 USDai，并随后将 USDai 转换或质押为 sUSDai，这是一种与 USD.AI 协议相关的收益型金库/份额代币，以获得与人工智能基础设施融资相关的潜在回报。2026 年 8 月 14 日，我们以约 1,002,381 美元的价格出售了所有 sUSDai，并以约 563,391 美元的价格出售了所有以太币。

我们不为比特币、以太坊、USDai、sUSDai、其他数字资产或现金设定固定的目标百分比或最低分配比例。我们原始融资文件中包含的分配百分比是合同规定的资金使用和抵押要求，并非永久的储备分配目标。根据我们的董事会批准的政策、适用法律和融资文件，管理层会根据运营流动性、债务偿还和抵押要求、市场波动性和流动性、托管和协议风险、预期的风险调整后回报以及可用的运营机会，确定批准资产类别的理想构成。

在适用的受控账户中持有的几乎所有数字资产、现金和其他财产，以及相关收益，均质押给抵押代理人（可转换债券投资者的关联方），以使可转换债券持有人受益。

2026年7月6日，我们修订了与投资者（如下文所述）的购买协议（如下文所述），允许未来额外的可选交割（在购买协议中定义）的收益用于管理层决定的任何一般企业用途。因此，来自额外可选交割的收益不受固定数字资产分配的限制，可用于营运资金、偿还债务、人工智能基础设施和其他企业用途。已存放在受控抵押账户中的资产仍受适用的托管控制安排和优先担保权益的约束。

管理层确定受控账户内的理想资产构成，并可以要求涉及批准资产的购买、销售、赎回和再平衡。抵押代理人对被冻结账户有合同控制权，托管人根据托管控制安排，按照抵押代理人的指示行事。账户内的销售或赎回会改变抵押品的形式，但不会释放它。除非根据融资文件的规定释放，现金或其他收益仍处于质押状态。

在审查了我们数字资产持仓的表现、流动性及风险以及直接人工智能基础设施机会的可用性后，管理层已将我们当前的资本分配优先事项从额外的被动数字资产积累转向人工智能基础设施的收购、融资、设备租赁及相关运营机会。我们没有自动或定期的数字资产购买计划，也不承诺维持最低数量的数字资产。

截至2026年10月1日，我们仍持有比特币，但根据我们的政策和融资文件，未来可能会保留、减少或出售该头寸。

截至2026年10月1日，我们持有的数字资产和受控账户现金金额如下表所示。

资产	\n 购置 \n 金额		单位			\n 参考 \n 价格		\n 参考 \n 值	状态
美元		–		$	4,817,911.37		$	1.00	$	4,817,911.37		存放在受控账户中
比特币	$	1,325,400			15.11524045 BTC		$	84,554.15	$	1,278,056.38		持有
\n 受控账户中持有的总资产 \n 受控账户		–			–			–	$	6,095,967.75	*	\n 包括现金和 \n 数字资产

* 公司提供的截至2026年10月1日的数值。

全球经济动荡

目前，我们的大多数产品要么来自美国，要么来自中国，但俄罗斯和乌克兰之间的军事冲突以及中东地区的持续冲突可能会增加供应链中断的可能性，并阻碍我们找到所需的产品来销售给客户。到目前为止，由于全球经济的总体混乱，我们在购买新库存的速度上有所下降，同时由于运输延误导致成本增加，产品在我们仓库设施中的停留时间增加，从而导致利润减少。此外，供应链中断可能会使我们更难找到有利的价格和可靠的产品来源，这将给我们的成本带来上行压力，并增加我们可能无法获得继续销售给客户的库存和所需服务的风险。

最新进展

2025年12月22日，公司与ATW Digital Asset Opportunities XIV（“投资者”）签订了证券购买协议（“购买协议”），根据该协议，投资者同意购买总额为3000万美元的6%原始折扣（OID）可转换票据设施（“可转换票据设施”），其中投资者同意最初购买（i）总额为5184024美元的A系列可转换票据，以及根据A系列可转换票据条款发行的普通股，依据《证券法》第4(a)(2)条和根据该法颁布的第506(b)条条例提供的证券登记豁免，以及（ii）总额为1815976美元的B系列可转换票据，以及根据B系列可转换票据条款发行的普通股，在一份目前有效的S-3表格（文件编号333-274665）注册直接发行中，该表格于2023年9月29日由证券交易委员会（SEC）宣布生效。此外，根据购买协议，双方在重新销售注册声明生效后，完成了额外500万美元的A系列可转换票据（“额外A系列票据”）的交易。\n\n2026年7月6日，公司和投资者签订了购买协议的修订案，目的是（i）将该设施下可用资金增加额外的原始本金金额200万美元，以及（ii）取消通过该设施获得的任何额外资金的使用限制。

2026年7月6日和2026年9月15日，公司和投资者完成了与投资者的额外选择性交割。在额外选择性交割中，公司收到470万美元（不包括费用和开支），以换取向投资者发行总额为500万美元的A系列可转换票据，前提是满足所有适用的交割条件，包括重新销售注册声明的有效性以及不存在任何违约事件。在额外选择性交割中发行的A系列票据是根据《证券法》第D条例规定的登记豁免发行的。

到目前为止，除了2025年12月发行的B系列可转换票据外，公司已累计发行了15,184,024美元的A系列可转换票据，根据可转换票据设施，仍有15,000,000美元的额外A系列票据可供发行。Digital Offering LLC担任了发行代理，并从每笔完成的可转换票据交易中获得6%的现金佣金。截至2026年10月2日，投资者已将总计9,359,580美元的A系列票据转换为股份，总计转换了849,697股，按反向股票分割后的平均每股转换价格为11.02美元（考虑了2026年5月22日进行的1比8反向股票分割和2026年8月7日进行的1比9反向股票分割的影响）。\n

根据购买协议和A系列票据，公司的某些子公司需要与投资者签订担保协议。其中一家子公司，iPower Smart LLC，于2025年12月23日与投资者签订了担保协议（“担保协议”）。在公司最近成立iPower AI LLC后，公司根据2026年7月21日签署的担保协议加入书，将iPower AI LLC加入到担保协议中。\n

2026年2月1日，公司与其当时全资拥有的子公司Global Product Marketing, Inc.（一家内华达州公司，“GPM”）签订了软件资产转让协议（“软件资产转让协议”），根据该协议，GPM将其在软件资产（协议中定义）中的全部权利、所有权和利益转让给了公司，iPower承担了与软件资产相关的所有未结供应商应付账款。此外，软件资产转让协议授予GPM一项非独占的、全球范围的、不可撤销的、免版税的许可，允许其使用、复制和修改授权软件，从而使iPower和GPM能够在今后继续在软件开发方面进行合作。此外，如果GPM重新销售原始软件代码（协议中定义），GPM应向iPower支付与该销售相关的所得的50%。此后，2026年2月1日，公司与ETTS AI Investment LLC（一家内华达州有限责任公司，“ETTS AI”）签订了股票购买协议，根据该协议，公司以230万美元的本票（“本票”）将其在GPM及其下属实体中的全部股权利益出售给ETTS AI。本票在七年之内全额偿还，可随时提前偿还，并且可以根据2026年2月1日签署的供应和分销协议（“供应和分销协议”）中规定的采购订单（如下所述）从时间到时间进行偿还，该供应和分销协议由公司、GPM和ETTS AI签订。

根据供应和分销协议，公司和GPM同意，公司在美国、加拿大和墨西哥为所有历史上从iPower向GPM分销的现有SKU（库存单位）担任独家供应商，从而使iPower能够继续担任GPM的供应商，同时剥离与GPM销售职能相关的成本中心。作为供应商，iPower将向作为分销商的GPM收取每种产品的双方同意的价格，并有权在净成本基础上增加最多15%的利润率。此外，GPM将向iPower收取合作营销费用，该费用将在双方随后达成的协议中定义。根据供应和分销协议，所有购买者订单的付款应在GPM收到客户付款后七天内支付，而被标识为“利润率”（即GPM购买的SKU的公司成本×利润率）的金额可以按1:1的比例作为信用/抵扣，用于抵消根据本票协议应付的未结金额。供应和分销协议的期限为五年，并在之后自动续签两年期，除非在该期限到期前90天提供通知。此外，供应和分销协议包含标准的免责、赔偿和其他此类协议中常见的条款。

2026年6月30日，公司、GPM和ETTS AI根据《供应和分销协议》签署了一份补充协议（“补充协议”），根据该协议，GPM承担了应付给公司供应商的2,007,366.86美元应付账款，以换取获得等额的公司现有库存。此外，补充协议使公司和GPM免除了根据供应和分销协议相互承担的独家采购和分销义务。

2026年5月22日，公司实施了1股对8股的反向股票分割，根据该分割，每八股已发行和流通的分割前股票自动重新分类为一股分割后股票，面值不变，导致已发行的股权奖励、认股权证和行权价格按比例调整（“5月反向分割”）。

2026年8月7日，公司实施了1股对9股的反向股票分割，根据该分割，每九股已发行和流通的分割前股票自动重新分类为一股分割后股票，面值不变，导致已发行的股权奖励、认股权证和行权价格按比例调整（“8月反向分割”，与8月反向分割和5月反向分割合称为“反向分割”）。除非另有说明，本年度报告中包含的所有信息均已调整以反映反向分割。反向分割对普通股或优先股的授权股份数量没有影响。

供应链战略 我们的供应链业务战略是为品牌、制造商和其他企业客户提供技术驱动的采购、物流和履约服务。我们还在积极开发新产品以满足市场需求，拓宽我们的产品范围，并支持我们分销业务的增长。我们计划利用我们在采购、供应商管理和美国分销方面的经验，开发一个轻资产的服务平台，将我们的运营能力与第三方仓储、运输和履约网络相结合。通过战略合作伙伴关系和选择性收购，我们寻求拓宽我们的服务范围，扩大客户基础，并加强从产品开发和采购到交付的供应链活动协调能力。我们还打算整合数据驱动的工具和自动化技术，以提高库存规划、订单管理和物流效率。我们的目标是通过产品销售和供应链服务创造收入，同时帮助客户简化运营并进入美国市场，而无需在自有基础设施上进行大量投资。

大型成熟分销基础设施

我们通过在美国各地的合作伙伴履约中心建立了高度发达的分销网络。我们与一家第三方普通承运人卡车/货运公司网络合作，为美国各地的客户提供服务。我们通过企业对企业供应链平台履行日常客户订单。然后将订单路由到相应的分销中心并打包发货。我们大多数客户订单在收到订单后一天内发货。

公司架构

自2018年成立以来，我们一直以iPower Inc.（前身为BZRTH Inc.）的名义开展业务，并随后收购了BizRight LLC的资产和部分负债。2021年5月18日，该公司收购了其可变利益实体E Marketing Solution Inc.（“E Marketing”）100%的股权所有权，E Marketing是一家在加利福尼亚州注册的公司，由公司的一位少数股东拥有。因此，E Marketing成为公司的全资子公司。2021年5月18日，公司收购了其可变利益实体Global Product Marketing Inc.（“GPM”）100%的股权所有权，GPM是一家于2020年9月4日在内华达州注册的公司，由公司董事长、首席执行官兼总裁Chenlong Tan以及公司的一位股东拥有。因此，GPM成为公司的全资子公司。为了多样化并促进公司的市场营销和研发活动，公司利用E Marketing和GPM来执行和开展与市场营销、银行和现金管理相关的某些业务方面。

2022年1月13日，公司签订了合资协议并成立了一家内华达州有限责任公司Box Harmony, LLC（“Box Harmony”），其主要目的是为希望在美国在线销售产品的外国制造商或经销商提供物流服务，此类物流服务包括但不限于接收、存储和运输此类产品。公司持有Box Harmony 40%的股权，保留重大影响，但并未持有其多数股权或以其他方式控制Box Harmony。

2022年2月10日，公司签订了另一份合资协议并成立了一家内华达州有限责任公司Global Social Media, LLC（“GSM”），其主要目的是创建一个社交媒体平台，以向包括公司和其他企业在内的企业提供内容和服务，帮助其进行产品推广。公司持有GSM 60%的股权并控制其运营。

2022年2月15日，公司根据一份股份转让框架协议（“转让协议”）的条款，收购了Anivia Limited（“Anivia”）100%的普通股，Anivia是一家根据英属维尔京群岛法律成立的公司（“BVI”），该协议由公司、White Cherry Limited（一家BVI公司，“White Cherry”）、White Cherry的股东李赞宇和谢静（与White Cherry合称为“卖方”）、Anivia、Fly Elephant Limited（一家香港公司）、大宇宙（深圳）科技有限公司（“DYRZ”）和大手（深圳）信息技术有限公司（“DHS”）于2022年2月15日签署。Anivia拥有Fly Elephant Limited 100%的股权，而Fly Elephant Limited又拥有位于中华人民共和国（“中国”）的公司大宇宙（深圳）科技有限公司（“DYRZ”）100%的股权，DYRZ是Fly Elephant Limited的全资外国企业（“WFOE”）。通过合并财务报表第4号注释中总结的合同安排，该WFOE控制了DHS的业务、收入和利润，DHS是一家根据中国法律成立并位于中国深圳的公司。

2025年6月3日，公司签订了合资协议并成立了一家内华达州有限责任公司United Package NV, LLC（“United Package”），其主要目的是生产包装材料，以满足美国企业对可靠、可持续和成本效益高的供应链解决方案日益增长的需求，而无需依赖海外制造。公司持有United Package约44%的股权，保留重大影响，但并未持有其多数股权或以其他方式控制United Package。2025年9月8日，公司签署了有限责任运营协议的第1号修正案（“修正案”），以明确公司在协议期限内向United Package提供初始生产材料和设备以及公司位于Rancho Cucamonga设施的使用，作为公司持有United Package 2,280股A类投票权单位的对价。United Package将负责设施使用的月租金支付。

2025年8月4日，公司通过其全资子公司DYRZ与公司的可变利益实体DHS及其注册股东签订了协议（“VIE合同终止协议”）。DHS此前根据某些合同安排（“VIE协议”）被合并到公司的财务报表中，这些协议使DYRZ能够对DHS实施有效控制。在签署VIE合同终止协议后，DYRZ不再拥有、运营或控制DHS，公司此前由DHS进行的相关服务和活动现在将由iPower和其他承包商根据需要进行，作为精简运营和提高结构效率的一部分。

2025年10月15日，公司与其子公司签订了协议（“重组协议”），以修改其公司结构，使公司的消费品和物流业务在GPM运营。根据重组协议，公司将E Marketing和United Package的股权转移给了GPM。签署重组协议不会对公司的合并财务报表产生任何影响。

2025年10月23日，公司成立了iPower Smart LLC，这是一家特拉华州有限责任公司（“Smart LLC”）。Smart LLC主要从事数字资金管理业务。

2026年1月29日，公司成立了iPower Nexus Inc，这是一家内华达州公司（“Nexus”）。Nexus主要从事供应链管理业务。

2026年2月1日，公司与内华达州有限责任公司ETTS AI Investment LLC（“ETTS AI”）签订了股票购买协议（“SPA”），根据该协议，公司将其在GPM及其下属实体的股权出售给ETTS AI，以换取一张230万美元的期票（“期票”）

2026年7月15日，公司成立了两家全资子公司：IPW Commerce LLC，这是一家特拉华州有限责任公司，以及iPower AI LLC，这是一家特拉华州有限责任公司（统称为“新子公司”）。新子公司成立的目的是将公司的电子商务和人工智能业务与公司其余业务分开，新子公司的成立并未导致公司管理层或资本结构的任何变化。

iPower及其相关子公司的组织结构如下：

$\"\"$

公司信息

公司是一家内华达州公司，于2018年4月11日以BZRTH Inc的名称成立。2020年9月4日，我们向内华达州提交了修正案，将公司名称变更为iPower Inc。

我们的主要办公地址位于加利福尼亚州Rancho Cucamonga市9th Street 8798号，邮编91730，电话号码为(626) 863-7344。我们的网站是www.meetipower.com。本网站上的信息不应被视为引用并入，也不是本年度报告的一部分。

人力资源

我们保持精简的组织结构，并利用员工、顾问、独立承包商和第三方服务提供商的组合来支持我们的运营。这种灵活的运营模式使我们能够获得专业技能，并根据运营和战略需求调整资源。我们努力吸引和留住具有与我们业务相关经验的合格人员和服务提供商，我们认为我们目前的人力资源足以支持我们的现有运营和战略计划。

截至2026年6月30日，我们共有2名全职员工和2名兼职员工及顾问。

第1A项。风险因素

投资我们的证券涉及很高的风险。在决定投资我们的证券之前，请仔细考虑以下所有风险，以及本年度报告中包含的其他信息，包括我们的财务报表和相关附注。如果发生以下任何事件，我们的业务、财务状况和运营结果可能会受到重大不利影响。在这种情况下，我们证券的交易价格可能会下跌，您可能会损失全部或部分投资。

\n与我们的数字资产储备策略相关的风险

我们的DAT策略使我们面临各种风险，包括与比特币相关的风险。

我们的DAT策略使我们面临各种风险，包括以下风险：

我们的数字资产受到优先担保权益的约束，不能自由用于我们的用途或股东的用途。我们的数字资产、受控账户中的现金及相关收益受到优先担保权益的约束，不能自由用于我们或我们的普通股股东。几乎所有在相关受控账户中持有的数字资产、现金和其他财产，以及相关收益，均已质押给担保代理机构（可转换债券投资者的关联方），以使可转换债券持有人受益。担保代理机构对被冻结的托管账户具有合同控制权。在账户内出售、赎回或转换数字资产为现金不会释放担保物；所产生的现金仍处于质押状态。只有在满足适用的释放条件或获得必要的同意后，我们才能提取或使用担保物。如果发生可转换债券中定义的违约事件，担保代理机构可以在我们普通股股东能够获得任何剩余价值之前，接管并处置担保物，并将所得用于偿还担保债务。因此，我们的受控账户资产的总价值不应被视为不受限制的现金或可供普通股股东使用的净资产价值。

比特币和其他数字资产是高度波动的资产。比特币（或BTC）和以太坊（或ETH）是高度波动的资产。在本年度报告日期前的12个月内，比特币在Coinbase交易所（比特币的主要市场）的交易价格在约57,725美元至126,279美元之间。比特币的交易价格在之前的时期大幅下降，未来可能会再次出现此类下跌。

比特币不支付利息或股息。比特币不支付利息或其他回报，我们只有在出售比特币或实施创造收入渠道的策略时，才能从比特币持仓中产生现金。即使我们追求任何此类策略，我们可能仍无法从比特币持仓中创造收入渠道或其他方式产生现金，而且任何此类策略可能会使我们面临额外的风险。

虽然我们的DAT策略是新的，\n但我们的比特币持仓可能会显著影响我们的财务结果和上市证券的市场价格。我们购买的任何比特币持仓都可能显著影响我们的财务结果。如果我们继续投资比特币并在未来增加总体比特币持仓，它们将对我们的财务结果和上市证券的市场价格产生更大的影响。

我们打算主要通过股权和债务融资的收益来购买比特币。我们实现DAT策略目标的能力在很大程度上取决于我们获得股权和债务融资的能力。如果我们无法以有利的条款或根本无法获得股权或债务融资，我们可能无法成功执行我们的DAT策略。

我们的DAT策略尚未经过测试，我们不能保证它会成功。随着我们推出新的DAT策略，我们需要不断审视获取和持有BTC和ETH策略的风险和收益。该策略尚未在长时间内或在不同的市场条件下进行测试。例如，尽管我们认为由于BTC的供应量有限，长期来看它有可能作为对冲通胀的工具，但在近期通胀率上升期间，BTC的短期价格出现了下降。如果BTC或ETH价格下跌，或我们的DAT策略其他方面证明不成功，我们的财务状况、经营成果以及上市证券的市场价格将受到重大不利影响。

我们将面临交易对手风险，特别是与我们的托管人相关的风险。尽管我们会实施各种旨在缓解交易对手风险的措施，包括将我们拥有的大部分数字资产存储在机构级托管人的托管账户中，并协商旨在确立我们对托管持有的比特币的所有权不受托管人债权人索赔影响的合同安排，但适用于托管账户中数字资产持有的适用破产法尚未完全发展。如果我们的托管持有的BTC或ETH在任何此类托管人进入破产、接管或类似破产程序时被视作托管人的资产，我们可能被视作该托管人的普通无担保债权人，这将阻碍我们行使对这些数字资产的所有权权利，或延迟或阻碍我们获取我们的数字资产持仓，这最终可能导致部分或全部比特币相关价值的损失，这可能对我们财务状况以及上市证券的市场价格产生重大不利影响。

更广泛的数字资产行业面临交易对手风险，这可能对BTC、ETH或稳定币的采用率、价格和使用产生不利影响。 一系列近期与数字资产行业公司相关的高调破产、关闭、清算、监管执法行动和其他事件凸显了持有和交易数字资产所面临的交易对手风险。尽管这些破产、关闭、清算和其他事件并未导致我们比特币的任何损失或被挪用，也没有对我们在BTC或ETH的访问产生不利影响，但它们在短期内可能已对比特币的采用率和使用产生负面影响。未来数字资产行业参与者发生更多破产、关闭、清算、监管执法行动或其他事件，可能会进一步对BTC或ETH的采用率、价格和使用产生负面影响，限制我们通过BTC或ETH抵押获得融资的可用性，或产生或暴露更多的交易对手风险。

Changes in the accounting\ntreatment of our bitcoin holdings could have significant accounting impacts, including increasing the volatility of our results. Our\ndigital asset holdings and related transactions may create significant volatility in our reported results and our historical financial\nstatements do not reflect all recent developments. Our financial statements through June 30, 2026 reflected our BTC and ETH acquisitions\nand related fair-value changes, along with our June 2026 USDai acquisition and subsequent conversion or staking into sUSDai. However,\nthey do not reflect our August 2026 instructions to redeem sUSDai and sell ETH. We adopted ASU 2023-08 on July 1, 2025 and record qualifying\ndigital assets at fair value, with realized and unrealized changes recognized in earnings. As a result, changes in digital asset values\nand any sale or redemption may materially increase volatility in our reported earnings. The accounting and valuation treatment of sUSDai\nand related redemption proceeds may involve judgment and may differ from the value displayed by the custodian or protocol dashboard.

The broader digital assets industry,\nincluding the technology associated with digital assets, the rate of adoption and development of, and use cases for, digital assets, market\nperception of digital assets, and the legal, regulatory, and accounting treatment of digital assets are constantly developing and changing,\nand there may be additional risks in the future that are not possible to predict.

Digital assets can be highly volatile assets,\nand, in the event we develop significant digital asset holdings, fluctuations in the price are likely to influence our financial results\nand the market price of our listed securities.

Digital assets can be highly volatile\nassets, and, in the event we develop significant holdings, fluctuations in the price are likely to influence our financial results and\nthe market price of our listed securities. Our financial results and the market price of our listed securities would be adversely affected,\nand our business and financial condition would be negatively impacted, if we hold substantial digital assets and the price decreased substantially,\nincluding as a result of:

\n \n \n \n \n \n \n \n \n

	·	decreased user and investor confidence in our digital asset holdings, including due to the various factors described herein;
	·	investment and trading activities, such as (i) trading activities of highly active retail and institutional users, speculators, miners and investors; (ii) actual or expected significant dispositions of digital assets by large holders, including the expected liquidation of digital assets associated with entities that have filed for bankruptcy protection and the transfer and sale of digital assets associated with significant hacks, seizures, or forfeitures, such as the transfers of BTC to (a) creditors of the hacked cryptocurrency exchange Mt. Gox which distribution began in July 2024, (b) claimants following proceedings related to a 2016 hack of Bitfinex—which claims are currently being adjudicated, (c) the German government following the seizure of about 50,000 bitcoin in January 2024 from the operator of Movie2k.to, or (d) the Northern District Court of California granting the U.S. Department of Justice in January 2025 the right to liquidate 69,370 bitcoin seized from the Silk Road marketplace; and (iii) actual or perceived manipulation of the spot or derivative markets for bitcoin or spot bitcoin exchange-traded products (“ETPs”);

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	·	negative publicity, media or social media coverage, or sentiment due to events in or relating to, or perception of, digital asset or the broader digital assets industry, for example, (i) public perception that bitcoin can be used as a vehicle to circumvent sanctions, including sanctions imposed on Russia or certain regions related to the ongoing conflict between Russia and Ukraine, or to fund criminal or terrorist activities, such as the purported use of digital assets by Hamas to fund its terrorist attack against Israel in October 2023; (ii) expected or pending civil, criminal, regulatory enforcement or other high profile actions against major participants in the bitcoin ecosystem, including the SEC’s enforcement actions against Coinbase, Inc. and Binance Holdings Ltd.; (iii) additional filings for bankruptcy protection or bankruptcy proceedings of major digital asset industry participants, such as the bankruptcy proceeding of FTX Trading and its affiliates; and (iv) the actual or perceived environmental impact of bitcoin and related activities, including environmental concerns raised by private individuals, governmental and non-governmental organizations, and other actors related to the energy resources consumed in the bitcoin mining process;
	·	changes in consumer preferences and the perceived value or prospects of bitcoin;
	·	competition from other digital assets that exhibit better speed, security, scalability, or energy efficiency, that feature other more favored characteristics, that are backed by governments, including the U.S. government, or reserves of fiat currencies, or that represent ownership or security interests in physical assets;
	·	a decrease in the price of other digital assets, including stablecoins, or the crash or unavailability of stablecoins that are used as a medium of exchange for bitcoin purchase and sale transactions, such as the crash of the stablecoin Terra USD in 2022, to the extent the decrease in the price of such other digital assets or the unavailability of such stablecoins may cause a decrease in the price of bitcoin or adversely affect investor confidence in digital assets generally;
	·	the identification of Satoshi Nakamoto, the pseudonymous person or persons who developed bitcoin, or the transfer of substantial amounts of bitcoin from bitcoin wallets attributed to Mr. Nakamoto;
	·	developments relating to the Bitcoin protocol, including (i) changes to the Bitcoin protocol that impact its security, speed, scalability, usability, or value, such as changes to the cryptographic security protocol underpinning the Bitcoin blockchain, changes to the maximum number of bitcoin outstanding, changes to the mutability of transactions, changes relating to the size of blockchain blocks, and similar changes, (ii) failures to make upgrades to the Bitcoin protocol to adapt to security, technological, legal or other challenges, and (iii) changes to the Bitcoin protocol that introduce software bugs, security risks or other elements that adversely affect bitcoin;
	·	disruptions, failures, unavailability, or interruptions in service of trading venues for bitcoin, such as, for example, the announcement by the digital asset exchange FTX Trading that it would freeze withdrawals and transfers from its accounts and subsequent filing for bankruptcy protection and the SEC enforcement action brought against Binance Holdings Ltd., which has now been dropped but which initially sought to freeze all of its assets during the pendency of the enforcement action and has since resulted in Binance discontinuing all fiat deposits and withdrawals in the U.S.;
	·	the filing for bankruptcy protection by, liquidation of, or market concerns about the financial viability of digital asset custodians, trading venues, lending platforms, investment funds, or other digital asset industry participants, such as the filing for bankruptcy protection by digital asset trading venues FTX Trading and BlockFi and digital asset lending platforms Celsius Network and Voyager Digital Holdings in 2022, the ordered liquidation of the digital asset investment fund Three Arrows Capital in 2022, the announced liquidation of Silvergate Bank in 2023, the government-mandated closure and sale of Signature Bank in 2023, the placement of Prime Trust, LLC into receivership following a cease-and-desist order issued by the Nevada Department of Business and Industry in 2023, and the exit of Binance from the U.S. market as part of its settlement with the Department of Justice and other federal regulatory agencies;
	·	regulatory, legislative, enforcement and judicial actions that adversely affect the price, ownership, transferability, trading volumes, legality or public perception of bitcoin, or that adversely affect the operations of or otherwise prevent digital asset custodians, trading venues, lending platforms or other digital assets industry participants from operating in a manner that allows them to continue to deliver services to the digital assets industry;
	·	further reductions in mining rewards of bitcoin, including due to block reward halving events, which are events that occur after a specific period of time (approximately once every four years, the most recent of which occurred in April 2024) that reduce the block reward earned by “miners” who validate bitcoin transactions; increases in the costs associated with bitcoin mining, including increases in electricity costs and hardware and software used in mining; new or enhanced regulation or taxation of bitcoin mining, which could further increase the costs associated with bitcoin mining, any of which may cause a decline in support for the Bitcoin network;
	·	transaction congestion and fees associated with processing transactions on the Bitcoin network;
	·	macroeconomic changes, such as changes in the level of interest rates and inflation, fiscal and monetary policies of governments, trade restrictions, and fiat currency devaluations;
	·	developments in mathematics or technology, including in digital computing, algebraic geometry and quantum computing, that could result in the cryptography used by the Bitcoin blockchain becoming insecure or ineffective; and
	·	changes in national and international economic and political conditions, including, without limitation, federal government policies, trade tariffs and trade disputes, the adverse impacts attributable to the current conflict between Russia and Ukraine and the economic sanctions adopted in response to the conflict, and the broadening of the Israel-Hamas conflict to other countries in the Middle East.

Bitcoin and other digital assets are novel assets, and are subject\nto significant legal, commercial, regulatory and technical uncertainty.

Bitcoin and other digital assets\nare relatively novel and are subject to significant uncertainty, which could adversely impact their price. The application of state and\nfederal securities laws and other laws and regulations to digital assets is evolving, and it is possible that regulators in the United\nStates or foreign countries may interpret or apply existing laws and regulations in a manner that adversely affects the price of bitcoin\nor the ability of individuals or institutions such as us to own or transfer bitcoin.

The U.S. federal government, states,\nregulatory agencies, and foreign countries may also enact new laws and regulations, or pursue regulatory, legislative, enforcement or\njudicial actions, that could materially impact the price of bitcoin or the ability of individuals or institutions such as us to own or\ntransfer bitcoin. For example, within the past several years:

\n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	·	President Trump signed an executive order instructing a working group comprised of representatives from key federal agencies to evaluate measures that can be taken to provide regulatory clarity and certainty built on technology-neutral regulations for individuals and firms involved in digital assets, including through well-defined jurisdictional regulatory boundaries and the working group recently released a report outlining a proposed framework for regulating the digital asset market in the U.S.;
	·	the European Union adopted Markets in Crypto Assets Regulation (“MiCA”), a comprehensive digital asset regulatory framework for the issuance and use of digital assets, like bitcoin;
	·	in June 2023, the SEC filed complaints against Binance Holdings Ltd. (“Binance”) and Coinbase, Inc., and their respective affiliated entities, relating to, among other claims, that each party was operating as an unregistered securities exchange, broker, dealer, and clearing agency;
	·	in November 2023, the SEC filed a complaint against Payward Inc. and Payward Ventures Inc., together known as Kraken, alleging, among other claims, that Kraken’s crypto trading platform was operating as an unregistered securities exchange, broker, dealer, and clearing agency;
	·	in June 2023, the United Kingdom adopted and implemented the Financial Services and Markets Act 2023 (“FSMA 2023”), which regulates market activities in “cryptoassets”;
	·	in November 2023, Binance and its then chief executive officer reached a settlement with the U.S. Department of Justice, CFTC, the U.S. Department of Treasury’s Office of Foreign Asset Control, and the Financial Crimes Enforcement Network to resolve a multi-year investigation by the agencies and a civil suit brought by the CFTC, pursuant to which Binance Holdings Ltd. agreed to, among other things, pay $4.3 billion in penalties across the four agencies and to discontinue its operations in the United States;
	·	in May 2025, the SEC dismissed its civil enforcement action, which included charges of operating unregistered exchanges, broker-dealers and clearing agencies, as well as charges of the unregistered offer and sale of securities, against Binance, its related entities BAM Trading Services Inc. and BAM Management US Holdings Inc, and its founder, Changpeng Zhao; and
	·	in China, the People’s Bank of China and the National Development and Reform Commission have outlawed cryptocurrency mining and declared all cryptocurrency transactions illegal within the country.

It is not possible to predict\nwhether, or when, new laws will be enacted that change the legal framework governing digital assets or provide additional authorities\nto the SEC or other regulators, or whether, or when, any other federal, state or foreign legislative bodies will take any similar actions.\nIt is also not possible to predict the nature of any such additional laws or authorities, how additional legislation or regulatory oversight\nmight impact the ability of digital asset markets to function, the willingness of financial and other institutions to continue to provide\nservices to the digital assets industry, or how any new laws or regulations, or changes to existing laws or regulations, might impact\nthe value of digital assets generally and bitcoin specifically. The consequences of any new law or regulation relating to digital assets\nand digital asset activities could adversely affect the market price of bitcoin, as well as our ability to hold or transact in bitcoin,\nand in turn adversely affect the market price of our listed securities.

Moreover, the risks of engaging\nin the DAT Strategy are relatively novel and have created, and could continue to create, complications due to the lack of experience that\nthird parties have with companies engaging in such a strategy, such as increased costs of director and officer liability insurance or\nthe potential inability to obtain such coverage on acceptable terms in the future.

The growth of the digital assets\nindustry in general, and the use and acceptance of BTC or ETH in particular, may also impact the price of BTC or ETH and is subject to\na high degree of uncertainty. The pace of worldwide growth in the adoption and use of BTC, ETH or other cryptocurrency may depend, for\ninstance, on public familiarity with digital assets, ease of buying, accessing or gaining exposure to BTC, ETH or other cryptocurrency,\ninstitutional demand for cryptocurrency as an investment asset, the participation of traditional financial institutions in the digital\nassets industry, consumer demand for BTC or ETH as a store of value or means of payment, and the availability and popularity of alternatives\nto BTC or ETH. Even if growth in bitcoin adoption occurs in the near or medium-term, there is no assurance that bitcoin usage will continue\nto grow over the long-term.

Because digital assets have no\nphysical existence beyond the record of transactions on the Bitcoin or other blockchain, a variety of technical factors related to the\nBTC blockchain could also impact the price of BTC. For example, malicious attacks by miners, inadequate mining fees to incentivize validating\nof bitcoin transactions, hard “forks” of the Bitcoin blockchain into multiple blockchains, and advances in digital computing,\nalgebraic geometry, and quantum computing could undercut the integrity of the Bitcoin blockchain and negatively affect the price of bitcoin.\nThe liquidity of bitcoin may also be reduced and damage to the public perception of bitcoin may occur, if financial institutions were\nto deny or limit banking services to businesses that hold bitcoin, provide bitcoin-related services or accept bitcoin as payment, which\ncould also decrease the price of bitcoin. Actions by U.S. banking regulators, such as the issuance in February 2023 by Federal banking\nagencies of the “Interagency Liquidity Risk Statement,” which cautioned banks on contagion risks posed by providing services\nto digital assets customers, and similar actions, have in the past resulted in or contributed to reductions in access to banking services\nfor bitcoin-related customers and service providers, or the willingness of traditional financial institution to participate in markets\nfor digital assets. The liquidity of bitcoin may also be impacted to the extent that changes in applicable laws and regulatory requirements\nnegatively impact the ability of exchanges and trading venues to provide services for bitcoin and other digital assets.

From time to time, we may hold\nUSDai and sUSDai. Such holdings of USDai and sUSDai would expose us to risks specific to the USD.AI protocol and sUSDai’s yield-bearing\nand redemption mechanics. In addition to the risks associated with our DAT Strategy and digital asset holdings described above, our holdings\nof USDai and staked USDai, or sUSDai, will be subject to risks specific to the USD.AI protocol, including risks relating to the protocol’s\nreserve, staking, share-pricing, lending and redemption mechanics. Although USDai is intended to function as a fully backed synthetic\ndollar, it is not cash or an insured bank deposit, and its redeemability depends on the continued availability and operation of the protocol’s\nsupported stablecoin reserves, swap adapters and related processes. sUSDai is a yield-bearing vault/share token rather than a stablecoin,\nand its value, yield and redemption proceeds depend on the performance, valuation and liquidity of underlying lending positions, unallocated\nUSDai and protocol-administered share-pricing methodology. Redemptions of sUSDai may be asynchronous, queued, subject to timelocks and\nserviced periodically, and the redemption share price may be lower than the deposit share price or the value reflected in accrued yield,\nincluding if underlying loans default, collateral values are impaired, liquidity is unavailable, or the applicable position managers,\nadministrators or governance-controlled processes do not operate as expected. Any inability to redeem USDai or sUSDai when needed, any\nshortfall between expected and realized redemption value or yield, or any adverse change in the USD.AI protocol, its collateral, loan\nperformance, reserves or redemption process could reduce the value or liquidity of these holdings and adversely affect our liquidity,\nfinancial condition and results of operations.

Our historical financial statements do not reflect the potential\nvariability in earnings that we may experience in the future relating to our bitcoin holdings.

We only recently commenced our\nDAT Strategy. As a result, our historical financial statements do not reflect the potential variability in earnings that we may experience\nin the future from holding or selling significant amounts of bitcoin.

The price of bitcoin has historically\nbeen subject to dramatic price fluctuations and is highly volatile. In December 2023, the FASB issued ASU 2023-08, which we adopted effective\nJuly 1, 2025. We determine the fair value of our bitcoin based on quoted (unadjusted) prices on the Coinbase exchange (our principal market\nfor bitcoin).

ASU 2023-08 requires us to measure\nour bitcoin holdings at fair value in our statement of financial position, and to recognize gains and losses from changes in the fair\nvalue of our digital assets in net income each reporting period. ASU 2023-08 also requires us to provide certain interim and annual disclosures\nwith respect to our digital asset holdings. ASU 2023-08 does not permit retrospective restatement of prior periods. Accordingly, changes\nin the fair value of our digital assets may significantly affect the carrying value of our digital assets on our balance sheet and our\nresults of operations from period to period.

As a result of our adoption of\nASU 2023-08, changes in the fair value of our bitcoin and other digital assets are recognized in net income in each reporting period.\nAccordingly, due in particular to the volatility in the price of bitcoin and other digital assets, our holdings of digital assets may\nincrease the volatility of our financial results, and our results for periods following our adoption of ASU 2023-08 may not be directly\ncomparable to periods prior to our adoption of the guidance.

Because we may purchase additional\nbitcoin in future periods and increase our overall holdings of BTC, ETH or other digital assets, we expect that the proportion of our\ntotal assets represented by our DAT holdings will increase in the future. As a result, due in particular to the fair value accounting\nrequired by ASU 2023-08, volatility in our earnings may be significantly more than what we experienced in prior periods.

The availability of spot exchange traded products\n(“ETPs”) for bitcoin and other digital assets may adversely affect the market price of our listed securities.

Although bitcoin and other digital\nassets have experienced a surge of investor attention since bitcoin was invented in 2008, until recently investors in the United States\nhad limited means to gain direct exposure to bitcoin and other digital assets through traditional investment channels, and instead generally\nwere only able to hold bitcoin or other digital assets through “hosted” wallets provided by digital asset service providers\nor through “unhosted” wallets that expose the investor to risks associated with loss or hacking of their private keys. Given\nthe relative novelty of digital assets, general lack of familiarity with the processes needed to hold bitcoin directly, as well as the\npotential reluctance of financial planners and advisers to recommend direct bitcoin holdings to their retail customers because of the\nmanner in which such holdings are custodied, some investors have sought exposure to bitcoin through investment vehicles that hold bitcoin\nand issue shares representing fractional undivided interests in their underlying bitcoin holdings. These vehicles, which were previously\noffered only to “accredited investors” on a private placement basis, have in the past traded at substantial premiums to net\nasset value, possibly due to the relative scarcity of traditional investment vehicles providing investment exposure to bitcoin.

On January 10, 2024, the SEC approved\nthe listing and trading of spot bitcoin ETPs, the shares of which can be sold in public offerings and are traded on U.S. national securities\nexchanges. The approved ETPs commenced trading directly to the public on January 11, 2024, with a trading volume of $4.6 billion on the\nfirst trading day. Additionally, on May 23, 2024, the SEC approved rule changes permitting the listing and trading of spot ETPs that invest\nin ether, the main crypto asset supporting the Ethereum blockchain. The approved spot ETPs commenced trading directly to the public on\nJuly 23, 2024. The listing and trading of spot ETPs for ether offers investors another alternative to gain exposure to digital assets,\nwhich could result in a decline in the trading price of bitcoin as well as a decline in the value of our common stock relative to the\nvalue of our bitcoin.

Although we are an operating company,\nand we believe we offer a different value proposition than a bitcoin investment vehicle such as a spot bitcoin ETP, investors may nevertheless\nview our common stock as an alternative to an investment in an ETP, and choose to purchase shares of a spot bitcoin ETP instead of our\ncommon stock. They may do so for a variety of reasons, including if they believe that ETPs offer a “pure play” exposure to\nbitcoin that is generally not subject to federal income tax at the entity level as we are, or the other risk factors applicable to an\noperating business, such as ours. Additionally, unlike spot bitcoin ETPs, we (i) do not seek for our shares of common stock to track the\nvalue of the underlying bitcoin or other digital asset we hold before payment of expenses and liabilities, (ii) do not benefit from various\nexemptions and relief under the Securities Exchange Act of 1934, as amended, including Regulation M, and other securities laws, which\nenable ETPs to continuously align the value of their shares to the price of the underlying assets they hold through share creation and\nredemption, (iii) are a Nevada corporation rather than a statutory trust, and do not operate pursuant to a trust agreement that would\nrequire us to pursue one or more stated investment objectives, and (iv) are not required to provide daily transparency as to our bitcoin\nholdings or our daily net asset value. Furthermore, recommendations by broker-dealers to buy, hold, or sell complex products and non-traditional\nETPs, or an investment strategy involving such products, may be subject to additional or heightened scrutiny that would not be applicable\nto broker-dealers making recommendations with respect to our common stock. Based on how we are viewed in the market relative to ETPs,\nand other vehicles which offer economic exposure to bitcoin, such as bitcoin futures exchange-traded funds (“ETFs”), leveraged\nbitcoin futures ETFs, and similar vehicles offered on international exchanges, any premium or discount in our common stock relative to\nthe value of our bitcoin holdings may increase or decrease in different market conditions.

As a result of the foregoing factors,\navailability of spot ETPs for bitcoin and other digital assets could have a material adverse effect on the market price of our listed\nsecurities.

Our DAT Strategy subjects us to enhanced regulatory oversight.

As noted above, several spot bitcoin\nETPs have received approval from the SEC to list their shares on a U.S. national securities exchange with continuous share creation and\nredemption at net asset value. Even though we are not, and do not function in the manner of, a spot bitcoin ETP, it is possible that we\nnevertheless could face regulatory scrutiny from the SEC or other federal or state agencies due to our bitcoin holdings.

In addition, there has been increasing\nfocus on the extent to which digital assets can be used to launder the proceeds of illegal activities, fund criminal or terrorist activities,\nor circumvent sanctions regimes, including those sanctions imposed in response to the ongoing conflict between Russia and Ukraine. While\nwe have implemented and maintain policies and procedures reasonably designed to promote compliance with applicable anti-money laundering\nand sanctions laws and regulations and take care to only acquire our bitcoin through entities subject to anti-money laundering regulation\nand related compliance rules in the United States, if we are found to have purchased any of our bitcoin from bad actors that have used\nbitcoin to launder money or persons subject to sanctions, we may be subject to regulatory proceedings and any further transactions or\ndealings in bitcoin by us may be restricted or prohibited.

Our bitcoin holdings will serve\nas collateral securing our outstanding indebtedness to the Investors. In addition, we may incur indebtedness or enter into other financial\ninstruments in the future that may be collateralized by our bitcoin or other digital asset holdings. We may also consider pursuing strategies\nto create income streams or otherwise generate funds using our digital asset holdings. These types of bitcoin- and cryptocurrency-related\ntransactions are the subject of enhanced regulatory oversight. These and any other bitcoin- or cryptocurrency-related transactions we\nmay enter into, beyond simply acquiring and holding BTC or ETH, may subject us to additional regulatory compliance requirements and scrutiny,\nincluding under federal and state money services regulations, money transmitter licensing requirements and various commodity and securities\nlaws and regulations.

Additional laws, guidance and\npolicies may be issued by domestic and foreign regulators following the filing for Chapter 11 bankruptcy protection by FTX, one of the\nworld’s largest cryptocurrency exchanges, in November 2022, which brought increased regulatory scrutiny to the digital asset industry.\nIncreased enforcement activity and changes in the regulatory environment, including changing interpretations and the implementation of\nnew or varying regulatory requirements by the government or any new legislation affecting bitcoin, as well as enforcement actions involving\nor impacting our trading venues, counterparties and custodians, may impose significant costs or significantly limit our ability to hold\nand transact in bitcoin or other digital assets.

In addition, private actors that\nare wary of bitcoin, other digital assets, or the regulatory concerns associated with digital assets in general have in the past taken\nand may in the future take further actions that may have an adverse effect on our business or the market price of our listed securities.

Due to the unregulated nature and lack of transparency\nsurrounding the operations of many bitcoin and digital asset trading venues, such trading venues may experience greater fraud, security\nfailures or regulatory or operational problems than trading venues for more established asset classes, which may result in a loss of confidence\nin bitcoin trading venues and adversely affect the value of our bitcoin.

Bitcoin and other digital asset\ntrading venues are relatively new and, in many cases, unregulated. Furthermore, there are many digital asset trading venues which do not\nprovide the public with significant information regarding their ownership structure, management teams, corporate practices and regulatory\ncompliance. As a result, the marketplace may lose confidence in BTC, ETH or other digital asset trading venues, including prominent exchanges\nthat handle a significant volume of digital asset trading and/or are subject to regulatory oversight, in the event one or more bitcoin\ntrading venues cease or pause for a prolonged period the trading of bitcoin or other digital assets, or experience fraud, significant\nvolumes of withdrawal, security failures or operational problems.

In 2019 there were reports claiming\nthat 80-95% of bitcoin trading volume on trading venues was false or non-economic in nature, with specific focus on unregulated exchanges\nlocated outside of the United States. The SEC also alleged as part of its June 5, 2023 complaint against Binance Holdings Ltd. that Binance\ncommitted strategic and targeted “wash trading” through its affiliates to artificially inflate the volume of certain digital\nassets traded on its exchange. The SEC has also brought recent actions against individuals and digital asset market participants alleging\nthat such persons artificially increased trading volumes in certain digital assets through wash trades, or repeated buying and selling\nof the same assets in fictitious transactions to manipulate their underlying trading price. Such reports and allegations may indicate\nthat the bitcoin market is significantly smaller than expected and that the United States makes up a significantly larger percentage of\nthe bitcoin market than is commonly understood. Any actual or perceived wash trading in the bitcoin market, and any other fraudulent or\nmanipulative acts and practices, could adversely affect the value of our bitcoin. Negative perception, a lack of stability in the broader\nbitcoin markets and the closure, temporary shutdown or operational disruption of bitcoin trading venues, lending institutions, institutional\ninvestors, institutional miners, custodians, or other major participants in the bitcoin ecosystem, due to fraud, business failure, cybersecurity\nevents, government-mandated regulation, bankruptcy, or for any other reason, may result in a decline in confidence in bitcoin and the\nbroader bitcoin ecosystem and greater volatility in the price of bitcoin. For example, in 2022, each of Celsius Network, Voyager Digital,\nThree Arrows Capital, FTX, and BlockFi filed for bankruptcy, after which the market prices of bitcoin and other digital assets significantly\ndeclined. In addition, in June 2023, the SEC announced enforcement actions against Coinbase, Inc., and Binance Holdings Ltd., two providers\nof large trading venues for digital assets, which similarly was followed by a decrease in the market price of bitcoin and other digital\nassets. These were followed in November 2023, by an SEC enforcement action against Payward Inc. and Payward Ventures Inc., together known\nas Kraken, another large trading venue for digital assets. As the price of our listed securities is affected by the value of our bitcoin\nholdings, the failure of a major participant in the bitcoin ecosystem could have a material adverse effect on the market price of our\nlisted securities.

The concentration of our bitcoin holdings enhances the risks inherent\nin our DAT Strategy.

While we only just recently began\nour acquisition of bitcoin, we anticipate that the concentration of our bitcoin holdings will limit the risk mitigation that we could\nachieve if we were to purchase a more diversified portfolio of treasury assets, and the absence of diversification enhances the risks\ninherent in our DAT Strategy. Any future significant declines in the price of bitcoin would have a pronounced impact on our financial\ncondition than if we used our cash to purchase a more diverse portfolio of assets.

The emergence or growth of other digital assets,\nincluding those with significant private or public sector backing, could have a negative impact on the price of bitcoin and adversely\naffect our business.

As a result of our DAT Strategy,\nour digital assets have been concentrated in BTC and ETH holdings. Accordingly, the emergence or growth of digital assets other than BTC\nor ETH may have a material adverse effect on our financial condition. However, there are numerous alternative digital assets and many\nentities, including consortiums and financial institutions, are researching and investing resources into private or permissioned blockchain\nplatforms or digital assets that do not use proof-of-work mining like the Bitcoin network. For example, in late 2022, the Ethereum network\ntransitioned to a “proof-of-stake” mechanism for validating transactions that requires significantly less computing power\nthan proof-of-work mining. The Ethereum network has completed another major upgrade since then and may undertake additional upgrades in\nthe future. If the mechanisms for validating transactions in Ethereum and other alternative digital assets are perceived as superior to\nproof-of-work mining, those digital assets could gain market share relative to bitcoin.

Other alternative digital assets\nthat compete with bitcoin in certain ways include “stablecoins,” which are designed to maintain a constant price because of,\nfor instance, their issuers’ promise to hold high-quality liquid assets (such as U.S. dollar deposits and short-term U.S. treasury\nsecurities) equal to the total value of stablecoins in circulation. Stablecoins have grown rapidly as an alternative to bitcoin and other\ndigital assets as a medium of exchange and store of value, particularly on digital asset trading platforms.

Additionally, central banks in\nsome countries have started to introduce digital forms of legal tender. For example, China’s CBDC project was made available to\nconsumers in January 2022, and governments including the United States, the United Kingdom, the European Union, and Israel have been discussing\nthe potential creation of new CBDCs. Whether or not they incorporate blockchain or similar technology, CBDCs, as legal tender in the issuing\njurisdiction, could also compete with, or replace, bitcoin and other digital assets as a medium of exchange or store of value. As a result,\nthe emergence or growth of these or other digital assets could cause the market price of bitcoin to decrease, which could have a material\nadverse effect on our business, prospects, financial condition, and operating results.

When acquired, our bitcoin holdings will be\nless liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent\nas cash and cash equivalents.

Historically, the bitcoin market\nhas been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currencies markets,\nrelative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal\ncontrol failures at exchanges, and various other risks inherent in its entirely electronic, virtual form and decentralized network. During\ntimes of market instability, we may not be able to sell our bitcoin at favorable prices or at all. For example, a number of bitcoin trading\nvenues temporarily halted deposits and withdrawals in 2022. As a result, our bitcoin holdings may not be able to serve as a source of\nliquidity for us to the same extent as cash and cash equivalents. Further, bitcoin we hold with our custodians and transact with our trade\nexecution partners does not enjoy the same protections as are available to cash or securities deposited with or transacted by institutions\nsubject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation. Additionally, we\nmay be unable to enter into term loans or other capital raising transactions collateralized by our unencumbered bitcoin or otherwise generate\nfunds using our bitcoin holdings, including in particular during times of market instability or when the price of bitcoin has declined\nsignificantly. If we are unable to sell our bitcoin, enter into additional capital raising transactions, including capital raising transactions\nusing bitcoin as collateral, or otherwise generate funds using our bitcoin holdings, or if we are forced to sell our bitcoin at a significant\nloss, in order to meet our working capital requirements, our business and financial condition could be negatively impacted.

If we or our third-party service providers experience a security\nbreach or cyberattack and unauthorized parties obtain access to our bitcoin, or if our private keys are lost or destroyed, or other similar\ncircumstances or events occur, we may lose some or all of our bitcoin and our financial condition and results of operations could be materially\nadversely affected.

Substantially all of the bitcoin\nwe own is held in custody accounts at institutional-grade digital asset custodians. Security breaches and cyberattacks are of particular\nconcern with respect to our bitcoin. Bitcoin and other blockchain-based cryptocurrencies and the entities that provide services to participants\nin the bitcoin ecosystem have been, and may in the future be, subject to security breaches, cyberattacks, or other malicious activities.\nFor example, in October 2021 it was reported that hackers exploited a flaw in the account recovery process and stole from the accounts\nof at least 6,000 customers of the Coinbase exchange, although the flaw was subsequently fixed and Coinbase reimbursed affected customers.\nSimilarly, in November 2022, hackers exploited weaknesses in the security architecture of the FTX Trading digital asset exchange and reportedly\nstole over $400 million in digital assets from customers. A successful security breach or cyberattack could result in:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	·	a partial or total loss of our bitcoin in a manner that may not be covered by insurance or the liability provisions of the custody agreements with the custodians who hold our bitcoin;
	·	harm to our reputation and brand;
	·	improper disclosure of data and violations of applicable data privacy and other laws; or
	·	significant regulatory scrutiny, investigations, fines, penalties, and other legal, regulatory, contractual and financial exposure.

Further, any actual or perceived\ndata security breach or cybersecurity attack directed at other companies with digital assets or companies that operate digital asset networks,\nregardless of whether we are directly impacted, could lead to a general loss of confidence in the broader Bitcoin blockchain ecosystem\nor in the use of the Bitcoin network to conduct financial transactions, which could negatively impact us.

Attacks upon systems across a\nvariety of industries, including industries related to bitcoin, are increasing in frequency, persistence, and sophistication, and, in\nmany cases, are being conducted by sophisticated, well-funded and organized groups and individuals, including state actors. The techniques\nused to obtain unauthorized, improper or illegal access to systems and information (including personal data and digital assets), disable\nor degrade services, or sabotage systems are constantly evolving, may be difficult to detect quickly, and often are not recognized or\ndetected until after they have been launched against a target. These attacks may occur on our systems or those of our third-party service\nproviders or partners. We may experience breaches of our security measures due to human error, malfeasance, insider threats, system errors\nor vulnerabilities or other irregularities. Threats can come from a variety of sources, including criminal hackers, hacktivists, state-sponsored\nintrusions, industrial espionage, and insiders. In addition, certain types of attacks could harm us even if our systems are left undisturbed.\nFor example, certain threats are designed to remain dormant or undetectable, sometimes for extended periods of time, or until launched\nagainst a target and we may not be able to implement adequate preventative measures. Further, there has been an increase in such activities\ndue to the increase in work-from-home arrangements since the onset of the COVID-19 pandemic. The risk of cyberattacks could also be increased\nby cyberwarfare in connection with the ongoing Russia-Ukraine and Israel-Hamas conflicts, or other future conflicts, including potential\nproliferation of malware into systems unrelated to such conflicts. Any future breach of our operations or those of others in the bitcoin\nindustry, including third-party services on which we rely, could materially and adversely affect our business.

We face risks relating to the custody of our\nbitcoin, including the loss or destruction of private keys required to access our bitcoin and cyberattacks or other data loss relating\nto our bitcoin.

We hold, or will hold, our bitcoin\nwith regulated custodians that have duties to safeguard our private keys. Our custodial services contracts do not restrict our ability\nto reallocate our bitcoin among our custodians, and our bitcoin holdings may be concentrated with a single custodian from time to time.\nIn light of the significant amount of bitcoin we hold, we continually seek to engage additional custodians to achieve a greater degree\nof diversification in the custody of our bitcoin as the extent of potential risk of loss is dependent, in part, on the degree of diversification.\nIf there is a decrease in the availability of digital asset custodians that we believe can safely custody our bitcoin, for example, due\nto regulatory developments or enforcement actions that cause custodians to discontinue or limit their services in the United States, we\nmay need to enter into agreements that are less favorable than our current agreements or take other measures to custody our bitcoin, and\nour ability to seek a greater degree of diversification in the use of custodial services would be materially adversely affected.

The insurance that covers losses\nof our bitcoin holdings covers only a small fraction of the value of the entirety of our bitcoin holdings, and there can be no guarantee\nthat such insurance will be maintained as part of the custodial services we have or that such coverage will cover losses with respect\nto our bitcoin. Moreover, our use of custodians exposes us to the risk that the bitcoin our custodians hold on our behalf could be subject\nto insolvency proceedings and we could be treated as a general unsecured creditor of the custodian, inhibiting our ability to exercise\nownership rights with respect to such bitcoin. Any loss associated with such insolvency proceedings is unlikely to be covered by any insurance\ncoverage we maintain related to our bitcoin.

Bitcoin is controllable only by\nthe possessor of both the unique public key and private key(s) relating to the local or online digital wallet in which the bitcoin is\nheld. While the Bitcoin blockchain ledger requires a public key relating to a digital wallet to be published when used in a transaction,\nprivate keys must be safeguarded and kept private in order to prevent a third party from accessing the bitcoin held in such wallet. To\nthe extent the private key(s) for a digital wallet are lost, destroyed, or otherwise compromised and no backup of the private key(s) is\naccessible, neither we nor our custodians will be able to access the bitcoin held in the related digital wallet. Furthermore, we cannot\nprovide assurance that our digital wallets, nor the digital wallets of our custodians held on our behalf, will not be compromised as a\nresult of a cyberattack. The bitcoin and blockchain ledger, as well as other digital assets and blockchain technologies, have been, and\nmay in the future be, subject to security breaches, cyberattacks, or other malicious activities.

Regulatory change reclassifying bitcoin as a\nsecurity could lead to our classification as an “investment company” under the Investment Company Act of 1940 and could adversely\naffect the market price of bitcoin and the market price of our listed securities.

While we are only just commencing\nour DAT Strategy, in the future our assets may be concentrated in bitcoin holdings. While senior SEC officials have stated their view\nthat bitcoin is not a “security” for purposes of the federal securities laws, a contrary determination by the SEC could lead\nto our classification as an “investment company” under the Investment Company Act of 1940, which would subject us to significant\nadditional regulatory controls that could have a material adverse effect on our ability to execute on our DAT Strategy, and our business\nand operations and may also require us to substantially change the manner in which we conduct our business.

In addition, if bitcoin is determined\nto constitute a security for purposes of the federal securities laws, the additional regulatory restrictions imposed by such a determination\ncould adversely affect the market price of bitcoin and in turn adversely affect the market price of our listed securities.

We monitor our assets and income\nin order to conduct our business activities in a manner such that we do not fall within the definition of “investment company”\nunder the 1940 Act or would qualify under one of the exemptions or exclusions provided by the 1940 Act and corresponding SEC rules. If\nbitcoin is determined to be a security for purposes of the federal securities laws, we would take steps to reduce our holdings of bitcoin\nas a percentage of our total assets. These steps may include, among others, selling bitcoin that we might otherwise hold for the long\nterm and deploying our cash in assets that are not considered to be investment securities under the 1940 Act, in which case we may be\nforced to sell our bitcoin at unattractive prices. We may also seek to acquire additional assets that are not considered to be investment\nsecurities under the 1940 Act, and we may need to incur debt, issue additional equity or enter into other financing arrangements that\nare not otherwise attractive to our business. Any of these actions could have a material adverse effect on our results of operations and\nfinancial condition. Moreover, we can make no assurance that we would successfully be able to take the necessary steps to avoid meeting\nthe definition of “investment company” under the 1940 Act and becoming subject to its requirements. If bitcoin is determined\nto constitute a security for purposes of the federal securities laws, and if we are not able to come within an available exemption or\nexclusion under the 1940 Act, then we would have to register as an investment company and require us to change the manner in which we\nconduct our business. In addition, such a determination could adversely affect the market price of bitcoin and in turn adversely affect\nthe market price of our common stock.

We are not subject to legal and regulatory obligations\nthat apply to investment companies such as mutual funds and exchange-traded funds, or to obligations applicable to investment advisers.

Mutual funds, ETFs and their directors\nand management are subject to extensive regulation as “investment companies” and “investment advisers” under U.S.\nfederal and state law; this regulation is intended for the benefit and protection of investors. We are not subject to, and do not otherwise\nvoluntarily comply with, these laws and regulations. This means, among other things, that the execution of or changes to our Treasury\nReserve Policy or our DAT Strategy, our use of leverage, the manner in which our bitcoin is custodied, our ability to engage in transactions\nwith affiliated parties and our operating and investment activities generally are not subject to the extensive legal and regulatory requirements\nand prohibitions that apply to investment companies and investment advisers. For example, although a significant change to our DAT Strategy\nwould require the approval of our board of directors, no shareholder or regulatory approval would be necessary. Consequently, our board\nof directors has broad discretion over the investment, leverage and cash management policies it authorizes, whether in respect of our\nbitcoin holdings or other activities we may pursue, and has the power to change our current policies, including our strategy of acquiring\nand holding bitcoin.

Our DAT Strategy exposes us to risk of non-performance by counterparties.

Our DAT Strategy exposes us to\nthe risk of non-performance by counterparties, whether contractual or otherwise. Risk of non-performance includes inability or refusal\nof a counterparty to perform because of a deterioration in the counterparty’s financial condition and liquidity or for any other\nreason. For example, our execution partners, custodians, or other counterparties might fail to perform in accordance with the terms of\nour agreements with them, which could result in a loss of bitcoin, a loss of the opportunity to generate funds, or other losses.

Our primary counterparty risk\nwith respect to our bitcoin is custodian performance obligations under the various custody arrangements we have entered into. A series\nof recent high-profile bankruptcies, closures, liquidations, regulatory enforcement actions and other events relating to companies operating\nin the digital asset industry, including the filings for bankruptcy protection by Three Arrows Capital, Celsius Network, Voyager Digital,\nFTX Trading and Genesis Global Capital, the closure or liquidation of certain financial institutions that provided lending and other services\nto the digital assets industry, including Signature Bank and Silvergate Bank, SEC enforcement actions against Coinbase, Inc., Binance\nHoldings Ltd., and Kraken, the placement of Prime Trust, LLC into receivership following a cease-and-desist order issued by Nevada’s\nDepartment of Business and Industry, and the filing and subsequent settlement of a civil fraud lawsuit by the New York Attorney General\nagainst Genesis Global Capital, its parent company Digital Currency Group, Inc., and former partner Gemini Trust Company have highlighted\nthe perceived and actual counterparty risk applicable to digital asset ownership and trading. Although these bankruptcies, closures and\nliquidations have not resulted in any loss or misappropriation of our bitcoin, nor have such events adversely impacted our access to our\nbitcoin, legal precedent created in these bankruptcy and other proceedings may increase the risk of future rulings adverse to our interests\nin the event one or more of our custodians becomes a debtor in a bankruptcy case or is the subject of other liquidation, insolvency or\nsimilar proceedings.

While our custodians are subject\nto regulatory regimes intended to protect customers in the event of a custodial bankruptcy, receivership or similar insolvency proceeding,\nno assurance can be provided that our custodially-held bitcoin will not become part of the custodian’s insolvency estate if one\nor more of our custodians enters bankruptcy, receivership or similar insolvency proceedings. Additionally, if we pursue any strategies\nto create income streams or otherwise generate funds using our bitcoin holdings, we would become subject to additional counterparty risks.\nAny significant non-performance by counterparties, including in particular the custodians with which we custody substantially all of our\nbitcoin, could have a material adverse effect on our business, prospects, financial condition, and operating results.

Our financial results and the market price of our common stock may\nbe affected by the price of Bitcoin.

As part of our capital allocation\nstrategy for assets that are not required to provide working capital for our ongoing operations, we have invested and may continue to\ninvest in bitcoin. After closing on the sale of Series A Convertible Notes and Series B Convertibles, we purchased and sold digital assets,\nwhich will remain in a controlled account. The price of bitcoin has historically been subject to dramatic price fluctuations and is highly\nvolatile. Moreover, digital assets, such as bitcoin, are relatively novel and the application of securities laws and other regulations\nto such assets is unclear in many respects. It is possible that regulators may interpret laws in a manner that adversely affects the\nliquidity or value of bitcoin.

Any decrease in the fair value of bitcoin would result in a loss recognized in our net income for the applicable\nreporting period, which could be material to our financial results, which may create significant volatility in our reported earnings.\nAny decrease in reported earnings or increased volatility of such earnings could have a material adverse effect on the market price of\nour common stock. In addition, accounting guidance applicable to digital assets may continue to evolve, and any future changes in the\nmanner in which we account for our bitcoin assets could have a material adverse effect on our financial results and the market price\nof our common stock.

In addition, if investors view\nthe value of our common stock as dependent upon or linked to the value or change in the value of our bitcoin holdings, the price of bitcoin\nmay significantly influence the market price of our common stock.

The price of our common stock has been and may continue to be volatile\nand fluctuate substantially, which could result in substantial losses for purchasers of our common stock.

Our stock price has been and is\nlikely to continue to be volatile. The stock market in general has experienced extreme volatility that has often been unrelated to the\noperating performance of particular companies. With the adoption of our new bitcoin treasury strategy, we expect to see additional volatility.\nAs a result of this volatility, you may not be able to sell your common stock. The market price for our common stock may be influenced\nby many factors, including:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	·	our bitcoin treasury strategy;
	·	the success of competitive products, services or technologies;
	·	regulatory or legal developments in the United States and other countries;
	·	the recruitment or departure of key personnel;
	·	actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;
	·	variations in our financial results or those of companies that are perceived to be similar to us;
	·	general economic, industry and market conditions; and
	·	the other factors described in this “Risk Factors’’ section.

Our bitcoin holdings are less liquid than our existing cash and cash\nequivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.

Historically, the crypto markets\nhave been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currencies markets,\nrelative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal\ncontrol failures at exchanges, and various other risks inherent in its entirely electronic, virtual form and decentralized network. During\ntimes of market instability, we may not be able to sell our bitcoin at favorable prices or at all. Further, bitcoin we hold with our custodians\nand transact with our trade execution partners does not enjoy the same protections as are available to cash or securities deposited with\nor transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection\nCorporation. Additionally, we may be unable to enter into term loans or other capital raising transactions collateralized by our digital\nassets or otherwise generate funds using our bitcoin holdings, including in particular during times of market instability or when the\nprice of bitcoin has declined significantly. If we are unable to sell our bitcoin, enter into additional capital raising transactions\nusing bitcoin as collateral, or otherwise generate funds using our bitcoin holdings, or if we are forced to sell our bitcoin at a significant\nloss, in order to meet our working capital requirements, our business and financial condition could be negatively impacted.

We are not subject to legal and regulatory obligations that apply\nto investment companies such as mutual funds and exchange-traded funds, or to obligations applicable to investment advisers.

Mutual funds, exchange-traded\nfunds and their directors and management are subject to extensive regulation as “investment companies” and “investment\nadvisers” under U.S. federal and state law; this regulation is intended for the benefit and protection of investors. We are not\nsubject to, and do not otherwise voluntarily comply with, these laws and regulations. This means, among other things, that the execution\nof or changes to our DAT Strategy, our use of leverage, the manner in which our bitcoin is custodied, our ability to engage in transactions\nwith affiliated parties and our operating and investment activities generally are not subject to the extensive legal and regulatory requirements\nand prohibitions that apply to investment companies and investment advisers. For example, although a significant change to our Treasury\nReserve Policy would require the approval of our board of directors, no stockholder or regulatory approval would be necessary. Consequently,\nour board of directors has broad discretion over the investment, leverage and cash management policies it authorizes, whether in respect\nof our bitcoin holdings or other activities we may pursue, and has the power to change our current policies, including our strategy of\nacquiring and holding digital assets.

We face other risks related to our DAT Strategy.

Our DAT Strategy exposes us to\nvarious risks, including the following:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	·	bitcoin and other digital assets are subject to significant legal, commercial, regulatory, and technical uncertainty, and our DAT Strategy could subject us to enhanced regulatory oversight;
	·	regulatory changes could impact our ability to operate validators or receive rewards;
	·	regulatory scrutiny of the Company’s activities may increase, potentially limiting our operations;
	·	potential litigation risks exist related to smart contract vulnerabilities, validator operations, or our business activities;
	·	uncertainty around bitcoin’s regulatory status may impact our ability to list on certain exchanges;
	·	changes in political administration may not guarantee a favorable regulatory environment for bitcoin;
	·	increased regulatory focus on Layer-1 blockchains beyond Bitcoin and Ethereum could result in new compliance requirements.

Risks Related to Our Business and Products

We sell proprietary brand offerings, as well\nas third party brands, which could expose us to various risks.

We rely on different intellectual\nproperty rights, including trade secrets and trademarks and the strength of our proprietary brands, which we consider important to our\nbusiness. If we are unable to protect or preserve the value of our intellectual property rights for any reason, or if we fail to maintain\nour brand image due to actual or perceived product or service quality issues, adverse publicity, governmental investigations or litigation,\nor other reasons, our brand and reputation could be damaged, and our business may be harmed.

Although we believe that our proprietary\nbrand products offer significant value to our customers at each price point and provide us with higher gross margins than sales of comparable\nthird-party branded products, expanding our proprietary brand offerings subjects us to certain specific risks in addition to those discussed\nelsewhere in this section, such as:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	·	potential mandatory or voluntary product recalls in the event of product defects or other issues;
	·	the measures we take may not effectively or sufficiently protect and/or maintain the intellectual property, and proprietary rights associated with our products and business;
	·	we may be required to heavily invest in marketing such proprietary branded products;
	·	our ability to successfully innovate and obtain, maintain, protect and enforce our intellectual property and proprietary rights (including defending against counterfeit, knock offs, grey-market, infringing or otherwise unauthorized goods); and
	·	our ability to successfully navigate and avoid claims related to the intellectual property and proprietary rights of third parties, which, if successful, could force us to modify or discontinue products, pay significant damages or enter into expensive licensing arrangements with the prevailing party, in addition to other harm, including to our reputation or financial results.

An increase in sales of our proprietary\nbrands may also adversely affect our sales of the products of certain of our vendors which may, in turn, adversely affect our relationship\nwith such vendors. Our failure to adequately address some or all of these risks could have a material adverse effect on our business,\nresults of operations and financial condition.

Our competitors and potential competitors may\ndevelop products and technologies that are more effective or commercially attractive than our products.

Our products compete against national\nand regional products and in-house branded products produced by various suppliers, many of which are established companies that provide\nproducts that perform functions similar to our products. Our competitors may develop or market products that are more effective or commercially\nattractive than our current or future products. Some of our competitors have substantially greater financial, operational, marketing,\nand technical resources than we do. Moreover, some of these competitors may offer a broader array of products and sell their products\nat prices lower than ours and may have greater name recognition. In addition, if demand for our specialty indoor gardening supplies and\nproducts continues to grow, we may face competition from new entrants into our field. Due to this competition, there is no assurance that\nwe will not encounter difficulties in generating or increasing revenues and capturing market share. In addition, increased competition\nmay lead to reduced prices and/or margins for products we sell. We may not have the financial resources, relationships with key suppliers,\ntechnical expertise or marketing, distribution, or support capabilities to compete successfully in the future.

We may not be able to successfully develop new\nproducts or improve existing products or maintain our effectiveness in reaching consumers through rapidly evolving communication vehicles.

Our future success depends, in\npart, upon our ability to improve our existing products and to develop, manufacture and market new products to meet evolving consumer\nneeds. We cannot be certain that we will be successful in developing, manufacturing and marketing new products or product innovations\nwhich satisfy consumer needs or achieve market acceptance, or that we will develop, manufacture and market new products or product innovations\nin a timely manner. If we fail to successfully develop, manufacture and market new products or product innovations, or if we fail to reach\nexisting and potential consumers, our ability to maintain or grow our market share may be adversely affected, which in turn could materially\nadversely affect our business, financial condition and results of operations. In addition, the development and introduction of new products\nand product innovations require substantial research, development, and marketing expenditures, which we may be unable to recoup if such\nnew products or innovations do not achieve market acceptance.

Many of the products we distribute\nand market, such as our fertilizers and nutrients, contain ingredients that are subject to regulatory approval or registration with certain\nU.S. state regulators. The need to obtain such approval or registration could delay the launch of new products or product innovations\nthat contain ingredients or otherwise prevent us from developing and manufacturing certain products and product innovations.

The availability and cost of transportation\nfor our products is vital to our success, and the loss of availability or increase in the cost of transportation or freight costs could\nhave an unfavorable impact on our business, results of operations, financial condition, and cash flows.

Our ability to obtain adequate\nand reasonably priced means of transportation to import and distribute our products is a key factor in our success. Delays in transportation,\nincluding weather-related delays and disruptions due to a pandemic or similar public health emergency, could have a material adverse effect\non our business and results of operations. Further, higher fuel costs and increased line haul costs due to industry capacity constraints,\ncustomer delivery requirements and a more restrictive regulatory environment, could negatively impact our financial results. If we were\nunable to pass higher freight costs to our customers in the form of price increases, those higher costs could have a material adverse\neffect on our business, results of operations, financial condition and cash flows. Further, an increase in the selling prices for our\nproducts resulting from a pass-through of increased freight costs could also have an adverse impact on the volume of products we sell,\nand as a result, our business, financial condition, and operating results may suffer.

The ongoing conflict between Russia and Ukraine\nmay adversely affect our business, financial condition, or results of operations.

On February 24, 2022, Russia initiated\na military offensive in Ukraine. While neither Ukraine nor Russia is a key supplier of ours, the scope, intensity, duration and outcome\nof the ongoing war is uncertain and its continuation or escalation could have a material adverse effect on iPower due to the general impact\non the global supply chain and prices of certain commodities. While we presently have no business or direct trade relationships with entities\nlocated in Russia or Ukraine, the ongoing conflict between Russia and Ukraine could potentially cause supply chain disruptions that could\ndisrupt our business should any of our end-suppliers rely on supplies, products or shipments from those regions.

In response to the war, the United\nStates, other North Atlantic Treaty Organization (“NATO”) member states, as well as non-member states, have announced targeted\neconomic sanctions on Russia, certain Russian citizens and enterprises. Any continuation or escalation of the war may trigger a series\nof additional economic and other sanctions. Certain companies have experienced negative reactions from their investors, employees, customers,\nor other stakeholders as a result of their action or inaction related to the war between Russia and Ukraine. We continue to monitor the\nreactions of our investors, employees, customers and other stakeholders and, as of the date of this report, have neither experienced any\nmaterial adverse financial impacts nor suffered from the loss of key customers or employees.

In addition, the risk of cybersecurity\nincidents has increased in connection with the ongoing war, driven by justifications such as retaliation for the sanctions imposed in\nconjunction with the war, or in response to certain companies’ continued operations in Russia. For example, the war has been accompanied\nby cyberattacks against the Ukrainian government and other countries in the region. It is possible that these attacks could have collateral\neffects on additional critical infrastructure and financial institutions globally, which could adversely affect our operations and could\nincrease the frequency and severity of cyber-based attacks against our information technology systems. While we have taken actions to\nmitigate such potential risks, the proliferation of malware from the war into systems unrelated to the war or cyberattacks against U.S.\ncompanies in retaliation for U.S. sanctions against Russia or U.S. support of Ukraine, could also adversely affect our operations.

We insure ourselves against many\ntypes of risks; however, while this insurance may mitigate certain of the risks associated with the ongoing war, our level of insurance\nmay not cover all losses we could incur. The potential effects of these conditions could have a material adverse effect on our business,\nresults of operations and financial condition.

The occurrence of any epidemic or pandemic,\nincluding but not limited to COVID-19 or similar infectious diseases, and any resurgence in related infections, whether in the U.S., China\nor elsewhere, along with efforts to mitigate their impact, could adversely affect our business, liquidity, operations, financial condition,\nthe business of our suppliers, vendors and logistic partners, and the price of our securities.

The emergence of any epidemic\nor pandemic, and the measures taken to combat such health crises by public health authorities and governments at local, national, and\ninternational levels, may have significant adverse effects on our business. These measures, which may directly or indirectly impact our\noperations, include but are not limited to:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	·	Voluntary or mandatory quarantines;
	·	Restrictions on travel;
	·	Limitations on gatherings in public places;
	·	Temporary closures of non-essential businesses;
	·	Supply chain disruptions; and
	·	Changes in consumer behavior and spending patterns.

In the event of a future epidemic\nor pandemic, we cannot predict the duration of such an outbreak, the effectiveness of our response, or the full extent of the disruption\nto our operations. The impact may vary depending on the nature and severity of the health crisis, as well as the specific measures implemented\nto contain its spread and mitigate its effects.

Furthermore, even after an epidemic\nor pandemic subsides, we may continue to experience adverse effects to our business as a result of a pandemic’s overall global economic\nimpact, including any recession, economic downturn or increased unemployment that has occurred or may occur in the future.

We have a limited operating history on which\nstockholders and potential investors can evaluate our business or base an investment decision.

Our business prospects are difficult\nto predict given our limited operating history and unproven business strategy. While we inherited in 2018 the business of our predecessor\nentity, BizRight LLC, an entity through which we acquired certain assets and assumed certain liabilities, we did not begin operations\nunder iPower Inc. (formerly BZRTH Inc.) until our formation in April 2018. If we are unable to effectively maintain our relationships\nwith third-party vendors and suppliers, manage our e-commerce supply chain operations, as well as other sales platforms/distribution network,\nour business is unlikely to succeed. Our business should be viewed in light of these risks, challenges and uncertainties. In addition,\nwe only began implementing our DAT strategy in December 2025, so, we have only limited experience in that area and cannot assure investors\nthat we will be successful in executing on this strategy.

Poor economic conditions could adversely affect\nour business.

Uncertain global economic conditions,\nparticularly in light of the COVID-19 pandemic, could adversely affect our business. During the COVID-19 pandemic, some of the effects\nof which are still ongoing, there have been ongoing negative global economic trends, such as decreased consumer and business spending,\nhigher than normal unemployment levels and declining consumer and business confidence. All of these issues have posed challenges to our\nbusiness and could result in declining revenues, profitability and cash flow. Although we continue to devote significant resources to\nsupport our brands, unfavorable economic conditions may negatively affect demand for our products. Our most price-sensitive customers\nmay trade down to lower priced products during challenging economic times or if current economic conditions worsen, while other customers\nmay reduce discretionary spending during periods of economic uncertainty, which could reduce sales volumes of our products in favor of\nour competitors’ products or result in a shift in our product mix from higher margin to lower margin products.

Heightened inflation, increased interest rates\nand other economic conditions including potential recession and credit market disruptions could negatively impact our business.

Customer demand for our products\nmay be influenced by heightened inflation, increased interest rates and other weak economic conditions including recessionary conditions\nand credit market disruptions and volatility. Continued weak economic conditions may cause a decrease in demand for our products from\nour customers. In addition, these economic conditions may adversely impact certain customers, suppliers and other vendors who are highly\nleveraged. Accordingly, in an environment of heightened inflation, increased interest rates or other recessionary pressures, our business,\nfinancial condition and results of operation may be adversely impacted.

Volatile or weakened economic conditions in\nthe U.S. and globally may adversely affect our business and operating results. Moreover, while the recent banking crisis involving the\nclosure of Silicon Valley Bank (“SVB”) and other small banks did not have a material direct impact on our business, continued\ninstability in the global banking system may result in additional bank failures, as well as volatility of global financial markets, either\nof which may adversely impact our business and financial condition.

Our overall performance depends\nin part on U.S. and international macroeconomic conditions. The U.S. and other key international economies, including China, have experienced\nand may in the future experience significant economic and market downturns in which economic activity is impacted by falling demand for\na variety of goods and services, restricted credit, poor liquidity, reduced corporate profitability, volatility in credit, equity and\nforeign exchange markets, inflation, bankruptcies and overall uncertainty with respect to the economy. These economic conditions can arise\nsuddenly and the full impact of such conditions are impossible to predict. In addition, geopolitical and domestic political developments,\nsuch as existing and potential trade wars and other events beyond our control, such as the war in Ukraine and the trade war between the\nU.S. and China, can increase levels of political and economic unpredictability globally and increase the volatility of global financial\nmarkets.

Moreover, there has been recent\nturmoil in the global banking system. For example, in March 2023, SVB was closed by the California Department of Financial Protection\nand Innovation, which appointed the Federal Deposit Insurance Corporation, or the FDIC, as receiver. First-Citizens Bank & Trust Company\nthen assumed all of SVB’s customer deposits and certain other liabilities and acquired substantially all of SVB’s loans and\ncertain other assets from the FDIC. While the closure of SVB, and the subsequent failures of Signature Bank, First Republic Bank and Heartland\nTri-State Bank, did not have a material direct impact on our business, continued instability in the global banking system may result in\nadditional bank failures, as well as volatility of global financial markets, either of which may adversely impact our business and financial\ncondition.

Government efforts to combat inflation, along\nwith other interest rate pressures arising from an inflationary economic environment, could lead to higher financing costs.

Inflation has risen on a global\nbasis, the U.S. has been experiencing historically high levels of inflation, and government entities have taken various actions to combat\ninflation, such as by raising interest rate benchmarks. Government entities may continue their efforts, or implement additional efforts,\nto combat inflation, which could include, among other things, continuing to raise interest rate benchmarks or maintaining interest rate\nbenchmarks at elevated levels. Such government efforts, along with other interest rate pressures arising from an inflationary economic\nenvironment, could lead to higher financing costs and have a material adverse effect on our business, financial condition and results\nof operations.

We rely heavily on our access to the China markets\nfor the production of our products; should U.S. and China trade relations further deteriorate, and should the ongoing trade war continue,\nour supply chain, and thus our operations and revenues, could be subject to deleterious effects.

We are heavily reliant on manufacturers\nin China to produce many of the goods we sell. Most of products we purchased for resale during the fiscal year ended June 30, 2026 were\nmanufactured in and imported from China while others are domestically sourced. The U.S. and China have been involved in ongoing\ntrade disputes, resulting in increased tariffs when such goods arrive in the U.S., among other things. Any changes in U.S. trade policy,\nor an escalation in the ongoing trade disputes, could trigger retaliatory actions, resulting in “trade wars” and an increase\nin costs for goods imported into the United States. Such actions could disrupt our supply chain. In addition, increased tariffs could,\nin turn, reduce customer demand for such products as such tariffs could cause us to have to increase the price at which we sell our goods,\nor it could result in trading partners limiting their trade with the United States. To date, iPower has absorbed some of the costs related\nto increased tariffs. We also passed some costs on to consumers, such increase could cut into our competitive advantage and our volume\nof sales activity in the United States could be materially reduced. Any such reduction may materially and adversely affect our sales and\nour business.

We face intense competition that could prohibit\nus from developing or increasing our customer base.

The industry is highly competitive.\nWe may compete with companies that have greater capital resources and facilities. More established companies with much greater financial\nresources which do not currently compete with us may be able to easily adapt their existing operations to sell similar products. Our competitors\nmay also introduce new, and manufacturers may sell equipment direct to consumers. Due to this competition, there is no assurance that\nwe will not encounter difficulties in increasing revenues and maintaining and/or increasing market share. In addition, increased competition\nmay lead to reduced prices and/or margins for products we sell.

If we need additional capital to fund the expansion\nof our operations, we may not be able to obtain sufficient capital on terms favorable to us and may be forced to limit the expansion of\nour operations.

In connection with our growth\nstrategies, we may experience increased capital needs and, accordingly, we may not have sufficient capital to fund the future expansion\nof our operations without additional capital investments. There can be no assurance that additional capital will be available to us on\nterms favorable to us or at all. If we cannot obtain sufficient capital to fund our expansion, we may be forced to limit the scope of\nour acquisitions and growth prospects.

Our business depends substantially on the continuing\nefforts of our executive officers and our business may be severely disrupted if we lose their services.

Our future success depends substantially\non the continued services of our executive officers, especially our Chairman, Chief Executive Officer, President and Interim Chief Financial\nOfficer, Chenlong Tan. We do not presently maintain key man life insurance on any of our executive officers or directors, although we\nintend to obtain such insurance in the near future. If one or more of our executive officers are unable or unwilling to continue in their\npresent positions, we may not be able to replace them readily, if at all. The loss of any of our executive officers could cause our business\nto be disrupted, and we may incur additional and unforeseen expenses to recruit and retain new officers.

If we are not successful in attracting and retaining\nhighly qualified personnel, we may not be able to successfully implement our business strategy.

Our ability to compete in the\nhighly competitive industry depends in large part upon our ability to attract highly qualified managerial and sales personnel. In order\nto induce valuable employees to come and work for us and to remain with us, we may provide employees with stock options, restricted stock,\nrestricted stock units that vest over time. The value to employees of such incentive stock and stock options that vest over time will\nbe significantly affected by movements in our stock price that we will not be able to control and may at any time be insufficient to counteract\nmore lucrative offers our employees may receive from other companies. Our success also depends on our ability to continue to attract,\nretain and motivate highly skilled junior, mid-level and senior personnel. Certain of our executive officers have employment agreements\nbut these agreements do not guarantee us the continued services of such employees. Further, we do not currently offer any health care\nor retirement benefits to any of our employees, and many of our more established competitors may offer more competitive compensation packages\nfor the kind of personnel that is critical to our company’s survival and success. If we have difficulty identifying, attracting,\nhiring, training and retaining such qualified personnel, or incur significant costs in order to do so, our business and financial results\ncould be negatively impacted. For example, offering competitive compensation packages may significantly increase our operating expenses\nand negatively impact our gross profits. Further, the loss of our executive officers or our other key personnel, particularly with little\nor no notice, could cause delays on business developments and projects and could have an adverse impact on our customers and industry\nrelationships, our business, operating results, or financial condition.

In order to increase our sales and marketing\ninfrastructure, we will need to grow the size of our organization, and we may experience difficulties in managing this growth.

As we continue to work to increase\nour presence across the market, we will need to expand the size of our employee base for managerial, operational, sales, marketing, financial,\nhuman resources, and other areas of specialization. Future growth would impose significant added responsibilities on members of management,\nincluding the need to identify, recruit, maintain, motivate, and integrate additional employees. In addition, our management may have\nto divert a disproportionate amount of its attention away from our day-to-day activities and devote a substantial amount of time to managing\nthese growth activities. Our future financial performance and our ability to continue to grow our operation and effectively compete in\nthe industry will depend in part on our ability to effectively manage any future growth.

Acquisitions, other strategic alliances, and\ninvestments could result in operating difficulties, dilution, and other harmful consequences that may adversely impact our business and\nresults of operations.

Acquisitions are an important\nelement of our overall corporate development strategy and use of capital, and such transactions could be material to our financial condition\nand results of operations. We expect to continue to evaluate and enter into discussions regarding a wide array of potential acquisition\ntargets and strategic transactions. The areas where we may face risks in connection with such acquisitions include, but are not limited\nto, the failure to successfully further develop the acquired business, the implementation or remediation of controls, procedures and policies\nat the acquired business, the transition of employees, operations, users and customers onto our existing platforms, and cultural challenges\nassociated with integrating employees from the acquired business into our organization, and the continued retention of such employees\ngoing forward. Our failure to address these risks or other problems encountered in connection with our acquisitions could cause us to\nfail to realize the anticipated benefits of such acquisitions, investments or alliances, incur unanticipated liabilities, and harm our\nbusiness generally.

Our acquisitions could also result\nin dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities or amortization expenses, or impairment\nof goodwill and purchased long-lived assets, and restructuring charges, any of which could harm our financial condition or results of\noperations and cash flows. In addition, the anticipated benefits and synergies of many of our acquisitions may not materialize.

Our ongoing investment in and development of\nour new in-house branded product line is inherently risky and could disrupt our ongoing businesses.

We have invested and expect to\ncontinue to invest in our own in-house branded product lines. Such endeavors may involve significant risks and uncertainties, including\ninsufficient revenues to offset liabilities assumed and expenses associated with this new investment, inadequate return of capital on\nour investment, and unidentified issues not discovered in our assessment of such strategy and offerings. Because this venture is inherently\nrisky, no assurance can be given that such strategy and offerings will be successful and will not adversely affect our reputation, financial\ncondition, and operating results.

Our reliance on third-party manufacturers could harm our business.

We rely on third parties to manufacture\ncertain of our products. This reliance generates a number of risks, including decreased control over the production process, which could\nlead to production delays or interruptions and inferior product quality control. In addition, performance problems at these third-party\nmanufacturers could lead to cost overruns, shortages, or other problems, which could increase our costs of production or result in delivery\ndelays to our customers.

In addition, if one or more of\nour third-party manufacturers becomes insolvent or unwilling to continue to manufacture products of acceptable quality, at acceptable\ncosts and in a timely manner, our ability to deliver products to our retail customers could be significantly impaired. Substitute manufacturers\nmay not be available or, if available, may be unwilling or unable to manufacture the products we need on acceptable terms. Moreover, if\ncustomer demand for our products increases, we may be unable to secure sufficient additional capacity from our current third-party manufacturers,\nor others, on commercially reasonable terms, or at all.

Our reliance on a limited base of suppliers\nfor certain products may result in disruptions to our business and adversely affect our financial results.

We rely on a limited number of\nsuppliers for certain of our products and supplies. Such reliance on a limited number of suppliers may increase our risk of experiencing\ndisruptions in our business. As we do not have any long-term supply agreements, in the event we are unable to maintain supplier arrangements\nand relationships, if we are unable to contract with suppliers at the quantity and quality levels needed for our business, if any of our\nkey suppliers becomes insolvent or experience other financial distress including with respect to staffing and shipping of products, we\ncould experience disruptions in our supply chain, which could have a material adverse effect on our financial condition, results of operations\nand cash flows.

Although we continue to implement\nrisk-mitigation strategies for single-source suppliers, we rely on a limited number of suppliers for certain of our products. If we are\nunable to maintain supplier arrangements and relationships, if we are unable to contract with suppliers at the quantity and quality levels\nneeded for our business, or if any of our key suppliers becomes insolvent or experience other financial distress, we could experience\ndisruptions in production, which could have a material adverse effect on our financial condition, results of operations and cash flows.

A significant interruption in the operation\nof our or our suppliers’ facilities could impact our capacity to produce products and service our customers, which could adversely\naffect revenues and earnings.

Operations at our and our suppliers’\nfacilities are subject to disruption for a variety of reasons, including fire, flooding or other natural disasters, disease outbreaks\nor pandemics, acts of war, terrorism, government shut-downs and work stoppages. A significant interruption in the operation of our or\nour suppliers’ facilities, especially for those products manufactured at a limited number of facilities, such as fertilizer and\nliquid products, could significantly impact our capacity to sell products and service our customers in a timely manner, which could have\na material adverse effect on our customer relationships, revenues, earnings, and financial position.

If our suppliers are unable to source raw materials\nin sufficient quantities, on a timely basis, and at acceptable costs, our ability to sell our products may be harmed.

The manufacture of some of our\nproducts is complex and requires precise high-quality manufacturing that is difficult to achieve. We have in the past, and may in the\nfuture, experience difficulties in manufacturing our products on a timely basis and in sufficient quantities. These difficulties have\nprimarily related to difficulties associated with ramping up production of newly introduced products and may result in increased delivery\nlead-times and increased costs of manufacturing these products. Our failure to achieve and maintain the required high manufacturing standards\ncould result in further delays or failures in product testing or delivery, cost overruns, product recalls or withdrawals, increased warranty\ncosts or other problems that could harm our business and prospects.

In determining the required quantities\nof our products and the manufacturing schedule, we must make significant judgments and estimates based on historical experience, inventory\nlevels, current market trends and other related factors. Because of the inherent nature of estimates, there could be significant differences\nbetween our estimates and the actual amounts of products we require, which could harm our business and results of operations.

Disruptions in availability or increases in\nthe prices of raw materials sourced by suppliers could adversely affect our results of operations.

We source many of our product\ncomponents from outside of the United States. The general availability and price of those components can be affected by numerous forces\nbeyond our control, including political instability, the conflict between Russia and Ukraine, trade restrictions and other government\nregulations, duties and tariffs, price controls, changes in currency exchange rates and weather. A significant disruption in the availability\nof any of our key product components could negatively impact our business. In addition, increases in the prices of key commodities and\nother raw materials could adversely affect our ability to manage our cost structure. Market conditions may limit our ability to raise\nselling prices to offset increases in our raw material costs. Our proprietary technologies can limit our ability to locate or utilize\nalternative inputs for certain products. For certain inputs, new sources of supply may have to be qualified under regulatory standards,\nwhich can require additional investment and delay bringing a product to market.

If our suppliers that currently, or in the future,\nsell directly to the retail market in which we conduct our current or future business, enhance these efforts and cease or decrease their\nsales through us, our ability to sell certain products could be harmed.

Our distribution and sales and\nmarketing capabilities provide significant value to our suppliers. Distributed brand suppliers sell through us in order to access thousands\nof retail and commercial customers across the United States with short order lead times, no minimum order quantity on individual items,\nfree or minimal freight expense and trade credit terms. Based on our knowledge and communication with our suppliers, we believe some of\nour suppliers sell directly to the retail market. If these suppliers were to cease working with us or proceed to enhance their direct-to-customer\nefforts, our product offerings, reputation, operation and business could be materially adversely affected.

Our operations may be impaired if our information\ntechnology systems fail to perform adequately or if we are the subject of a data breach or cyber-attack.

We rely on information technology\nsystems to conduct our business, including communicating with employees and our key commercial customers, ordering, and managing materials\nfrom suppliers, shipping products to customers and analyzing and reporting results of operations. While we have taken steps to ensure\nthe security of our information technology systems, our systems may nevertheless be vulnerable to computer viruses, security breaches\nand other disruptions from unauthorized users. If our information technology systems are damaged or cease to function properly for an\nextended period of time, whether as a result of a significant cyber incident or otherwise, our ability to communicate internally as well\nas with our retail customers could be significantly impaired, which may adversely impact our business.

Additionally, in the normal course\nof our business, we collect, store, and transmit proprietary and confidential information regarding our customers, employees, suppliers\nand others, including personal information. An operational failure or breach of security from increasingly sophisticated cyber threats\ncould lead to loss, misuse or unauthorized disclosure of this information about our employees or customers, which may result in regulatory\nor other legal proceedings, and have a material adverse effect on our business and reputation. We also may not have the resources or technical\nsophistication to anticipate or prevent rapidly evolving types of cyber-attacks. Any such attacks or precautionary measures taken to prevent\nanticipated attacks may result in increasing costs, including costs for additional technologies, training, and third-party consultants.\nThe losses incurred from a breach of data security and operational failures as well as the precautionary measures required to address\nthis evolving risk may adversely impact our financial condition, results of operations and cash flows.

We collect, process, store, use, and share information\ncollected from or about purchasers and users of our website and products. The collection and use of personal information, and analysis\nand sharing of user data and unique identifiers to inform advertising subject us to legislative and regulatory burdens, may expose us\nto liability, and our actual or perceived failure to adequately protect consumer data could harm our brand, our reputation in the marketplace\nand our business.

A wide variety of provincial,\nstate, national, foreign, and international laws and regulations apply to the collection, use, retention, protection, disclosure, transfer,\nand other processing of personal information. These privacy and data protection-related laws and regulations are evolving, extensive,\nand complex. Compliance with these laws and regulations can be costly and can delay or impede the development and offering of new products.\nIn addition, the interpretation and application of privacy and data protection-related laws in some cases is uncertain, and our legal\nand regulatory obligations are subject to frequent changes, including the potential for various regulator or other governmental bodies\nto enact new or additional laws or regulations, to issue rulings that invalidate prior laws or regulations, or to increase penalties.

We engage in interest-based advertising\non our e-commerce website. U.S. and foreign governments have enacted or are considering legislation related to digital advertising and\nwe expect to see an increase in legislation and regulation related to digital advertising, the collection and use of user data and unique\ndevice identifiers, such as IP address, and other data protection and privacy regulation. Such laws and legislation could affect our costs\nof doing business.

Further, while we strive to publish\nand prominently display privacy policies that are accurate, comprehensive, and fully implemented, we cannot assure you that our privacy\npolicies and other statements regarding our practices will be sufficient to protect us from liability or adverse publicity relating to\nthe privacy and security of information about consumers or their devices. Any failure or perceived failure by us to comply with our privacy\npolicies, our privacy-related obligations to consumers or other third parties, or our privacy-related legal obligations, including laws\nand regulations regulating privacy, data security, or consumer protection, or any compromise of security that results in the unauthorized\nrelease or transfer of personal information, may result in proceedings or actions against us, legal liability, governmental enforcement\nactions, and litigation. Furthermore, any such proceedings or actions, or public statements against us by consumer advocacy groups or\nothers, could cause our customers to lose trust in us, which could have an adverse effect on our business.

Additionally, if third parties\nwe work with, such as customers, advertisers, vendors or developers, violate our contractual limitations on data use or sharing, applicable\nlaws or our policies, such violations may also put consumers’ information at risk and could in turn have an adverse effect on our\nbusiness. If third parties improperly obtain and use the information from or about our consumers or their devices, we may be required\nto expend significant resources to resolve these problems.

We also are subject to certain\ncontractual obligations to indemnify and hold harmless advertisers, marketing technology companies and other users of our data from the\ncosts or consequences of noncompliance with privacy-related laws, regulations, self-regulatory requirements or other legal obligations,\nor inadvertent or unauthorized use or disclosure of data that we store or handle as part of providing our products.

We may not be able to adequately protect our\nintellectual property and other proprietary rights that are material to our business.

Our ability to compete effectively\ndepends in part on intellectual property rights we own or license, particularly our registered brand names. We have not sought to register\nevery one of our marks either in the United States or other countries in which such mark is used. Furthermore, because of the differences\nin foreign intellectual property or proprietary rights laws, we may not receive the same protection in other countries as we would in\nthe United States with respect to the registered brand names we hold. If we are unable to protect our intellectual property, proprietary\ninformation and/or brand names, we could suffer a material adverse effect on our business, financial condition and results of operations.\nIn addition, we may be required to license additional intellectual property and technology from third parties, which may be expensive.

Litigation may be necessary to\nenforce our intellectual property rights and protect our proprietary information, or to defend against claims by third parties that our\nproducts or services infringe their intellectual property rights. Any litigation or claims brought by or against us could result in substantial\ncosts and diversion of our resources. A successful claim of intellectual property infringement against us, or any other successful challenge\nto the use of our intellectual property, could subject us to damages or prevent us from providing certain products or services, or using\ncertain of our recognized brand names, which could have a material adverse effect on our business, financial condition, and results of\noperations.

We may not be able to develop, license or acquire\nnew products, enhance the capabilities of our existing products to keep pace with rapidly changing technology and customer requirements,\nor successfully manage the transition to new product offerings, any of which could have a material adverse effect on our business, financial\ncondition, and results of operations.

Our success depends on our ability\nto develop, license, or acquire and commercialize additional products and to develop new applications for our technologies in existing\nand new markets, while improving the performance and cost-effectiveness of our existing products, in each case in ways that address current\nand anticipated customer requirements. We intend to develop and commercialize additional products through our research and development\nprogram and by licensing or acquiring additional products and technologies from third parties. Such success is dependent upon several\nfactors, including functionality, competitive pricing, ease of use, the safety and efficacy of our products and our ability to identify,\nselect and acquire the rights to products and technologies on terms that are acceptable to us.

The industry is characterized\nby rapid technological change and innovation. New technologies, techniques or products may emerge that might offer better combinations\nof price and performance or better address customer requirements as compared to our current or future products, as well as those products\nof third-party vendors that we make available for sale. Competitors who have greater financial, marketing and sales resources than we\ndo may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards, or customer\nrequirements. Any new product we identify for internal development, licensing or acquisition may require additional development efforts\nprior to commercial sale. Due to the significant lead time and complexity involved in bringing a new product to the market, we are required\nto make a number of assumptions and estimates regarding the commercial feasibility of a new product. These assumptions and estimates may\nprove incorrect, resulting in our introduction of a product that is not competitive at the time of launch. We anticipate that we will\nface increased competition in the future as existing companies and competitors develop new or improved products and as new companies enter\nthe market with new technologies and sales mechanisms which we may be unable to adopt or offer for sale. Our ability to mitigate downward\npressure on the prices of the products that we offer for sale will be dependent on our ability to maintain and/or increase the value we\noffer to suppliers, vendors, strategic partners, and consumers. In addition, we cannot assure you that any such products that we develop\nor offer for sale will be manufactured or produced economically, successfully commercialized or widely accepted in the marketplace. The\nexpenses or losses associated with unsuccessful product development or launch activities, or a lack of market acceptance of new products,\ncould adversely affect our business, financial condition, and results of operation.

Our ability to attract new customers\nand increase revenue from existing customers depends in large part on our ability to enhance and improve our own products, maintain relationships\nwith other vendors and suppliers, and to make compelling new products available for sale through our enterprise. Any new product that\nwe develop or offer for sale may not be introduced in a timely or cost-effective manner, may contain defects or may not achieve the marketplace\nacceptance necessary to generate significant revenue. If we are unable to successfully develop, license or acquire new products to make\navailable for sale, enhance our existing inventory offerings to meet customer requirements, or otherwise gain market acceptance, our business\nand financial condition and results of operation would be harmed.

We have identified certain material weaknesses\nin our internal control over financial reporting and may experience material weaknesses in the future or otherwise fail to maintain an\neffective system of internal controls in the future, as a result of which, we may not be able to accurately report our financial condition\nor results of operations which may adversely affect investor confidence in us and, as a result, the value of our common stock.

Effective internal controls over\nfinancial reporting are necessary for us to provide reliable financial reports. If we cannot maintain effective controls and reliable\nfinancial reports, our business and operating results could be harmed. Our management has conducted an evaluation of the effectiveness\nof our internal controls over financial reporting and concluded that our internal controls over financial reporting were not effective\nbecause, among other things, our controls related to the financial statements closing process were not adequately designed or appropriately\nimplemented to identify material misstatements in our financial reporting on a timely basis.

Management has evaluated remediation\nplans for the deficiency and has implemented changes to address the material weakness identified, including hiring additional accountants\nand consultants and implementing controls and procedures over financial reporting process.

We cannot assure you that there\nwill not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure\nto maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition\nor results of operations. The effectiveness of our controls and procedures may be limited by a variety of factors, including:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	·	faulty human judgment and simple errors, omissions, or mistakes;
	·	fraudulent action of an individual or collusion of two or more people;
	·	inappropriate management override of procedures; and
	·	the possibility that any enhancements to controls and procedures may still not be adequate to assure timely and accurate financial control.

Our independent registered public\naccounting firm has not performed an audit of, or expressed an opinion on, the effectiveness of our internal control over financial reporting\npursuant to Section 404(b) of Sarbanes-Oxley Act. Had our independent registered public accounting firm performed an audit of our internal\ncontrol over financial reporting in accordance with the provisions of Sarbanes-Oxley Act, additional control deficiencies amounting to\nmaterial weaknesses may have been identified. If we fail to remedy any material weakness, our financial statements may be inaccurate,\nour access to the capital markets may be restricted and the trading price of our common stock may suffer.

Changes in U.S. and international trade\npolicies, particularly with respect to China, could materially and adversely impact our business and results of operations.

All of\nour products are manufactured and supplied by unaffiliated third parties, most of which are located in China. In addition, two of our\nsubsidiaries are based in China. The U.S. government has made statements and taken certain actions that may lead to changes in U.S. and\ninternational trade policies towards China. It remains unclear what additional actions, if any, will be taken by the U.S. or other governments\nwith respect to international trade agreements, the imposition of tariffs on goods imported into the United States, tax policy related\nto international commerce, or other trade matters.

We are\nclosely monitoring the changes in international trade policy, which may be subject to rapid changes and fluctuation, and are assessing\nthe potential impact of these and other trade policy changes on our business operations and financial performance. In February and March\n2025, the U.S. administration imposed an additional 20% duty on Chinese imports. Subsequently, authorities in China announced tariffs\nover selected U.S. products and regulatory investigation against U.S. companies in response to the tariff imposed by the U.S. Furthermore,\non April 2, 2025, President Trump announced that the United States would impose a 10% tariff on all countries, effective on April 5, 2025,\nand an individualized reciprocal higher tariff on countries with which the United States has the largest trade deficits, including a 34%\nadditional reciprocal tariff on goods imported from China that brings the total tariff rate to 54%. On April 4, 2025, the Foreign Ministry\nof China announced that China would impose a retaliatory 34% tariff on goods imported from the United States starting on April 10, 2025.\nThen on April 10, the U.S. announced it would charge 145% tariffs on goods imported from China, while the Chinese government announced\nthat it would impose 125% tariffs on U.S. exports to China. Any unfavorable government policies on international trade, such as capital\ncontrols or tariffs, and any uncertainty resulting from the changing nature of such policies, may affect the demand for our products and\nservices, impact the competitive position of our products or prevent us from selling products in certain countries. If any new tariffs,\nlegislation and/or regulations are implemented, or if existing trade agreements are renegotiated or, in particular, if the U.S. government\ntakes additional retaliatory trade actions due to the recent U.S.-China trade tension, such changes could have an adverse effect on our\nbusiness, financial condition and results of operations.

The extent\nand duration of any tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various\nfactors, such as negotiations between the United States and China and/or other countries, the response of such countries, exemptions or\nexclusions that may be granted, availability and cost of alternative sources of supply of materials we purchase from companies in China\nor other countries targeted with tariffs.

Our business is dependent, in part, on our\nongoing commercial relationship with GPM, and any deterioration of that relationship could materially adversely affect our business.

On\nFebruary 1, 2026, the Company transferred certain software assets from GPM to the Company and subsequently sold all of its equity interests\nin GPM and its underlying entities to ETTS AI in exchange for a $2.3 million promissory note. Concurrently, the parties entered into a\nSupply and Distribution Agreement pursuant to which the Company continued to supply products to GPM following the divestiture. On June\n30, 2026, the Company, GPM and ETTS AI entered into a supplement to the Supply and Distribution Agreement pursuant to which GPM assumed\napproximately $2.0 million of supplier accounts payable in exchange for acquiring an equal amount of inventory from the Company. The supplement\nalso terminated the exclusive sourcing and distribution arrangements between the Company and GPM.

Following\nthe sale of GPM, we continue to maintain a significant commercial relationship with GPM pursuant to the Supply and Distribution Agreement\nand other related arrangements. As a result, a significant portion of our current and future revenues, cash flows and business activities\nmay be dependent upon purchases made by GPM, GPM’s ability to market and distribute products, and GPM’s continued demand for\nthe products and services we provide.

Any\nreduction in orders from GPM, deterioration in GPM’s financial condition, inability of GPM to satisfy its payment obligations, operational\ndisruptions, changes in GPM’s business strategy, loss of key customers by GPM, regulatory issues affecting GPM, or termination,\nmodification or non-renewal of the Supply and Distribution Agreement or other related arrangements could reduce our revenue and profitability\nand adversely affect our business, financial condition and results of operations. In addition, because GPM is no longer a wholly owned\nsubsidiary of the Company, we do not control GPM’s management, strategic decisions or operational activities and may be unable to\ninfluence decisions that could adversely impact our business relationship with GPM.

Furthermore,\nif our business becomes increasingly dependent on GPM or a limited number of customers or distribution partners, our customer concentration\nrisk may increase. The loss of GPM or a significant reduction in business conducted through GPM may require us to identify and develop\nalternative customers, distribution channels or business relationships, which may not be available on favorable terms, if at all, and\nmay require substantial time, cost and management attention. Any failure to successfully replace revenues generated through GPM could\nhave a material adverse effect on our business, financial condition, cash flows and results of operations.

General Risk Factors Related to Our Business

Litigation may adversely affect our business,\nfinancial condition, and results of operations.

From time to time in the normal\ncourse of our business operations, we may become subject to litigation that may result in liability material to our financial statements\nas a whole or may negatively affect our operating results if changes to our business operations are required. The cost to defend such\nlitigation may be significant and may require a diversion of our resources. There also may be adverse publicity associated with litigation\nthat could negatively affect customer perception of our business, regardless of whether the allegations are valid or whether we are ultimately\nfound liable. As a result, litigation may adversely affect our business, financial condition, and results of operations. Since inception,\naside from a dispute with the placement agent of our 2020-2021 pre-IPO private placements, which dispute has been settled as of the date\nof this Annual Report, the Company has not been a party to any material litigation. See “Item 3. Legal Proceedings” for additional\ninformation.

If product liability lawsuits are brought against\nus, we may incur substantial liabilities.

We face a potential risk of product\nliability resulting from the sale of our products. For example, we may be sued if any product we sell allegedly causes injury or is found\nto be otherwise unsuitable during product testing, manufacturing, marketing, or sale. Any such product liability claim may include allegations\nof defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability, and\na breach of warranties. Claims could also be asserted under state consumer protection acts. If we cannot successfully defend ourselves\nagainst product liability claims, we may incur substantial liabilities. Even successful defense would require significant financial and\nmanagement resources. Regardless of the merits or eventual outcome, liability claims may result in:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	·	decreased demand for products that we may offer for sale;
	·	injury to our reputation;
	·	costs to defend the related litigation;
	·	a diversion of management’s time and our resources;
	·	substantial monetary awards to customers, product users, or other claimants;
	·	product recalls, withdrawals or labeling, marketing or promotional restrictions; and
	·	a decline in the value of our stock.

Our inability to obtain and retain\nsufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit\nthe commercialization of products we develop. We do not maintain any product liability insurance. Even if we obtain product liability\ninsurance in the future, we may have to pay amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations\nor that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts.

We may not be able to obtain insurance coverage\nadequate to cover all significant risk exposures.

During the ordinary course of\nbusiness, we anticipate that we will be exposed to certain liabilities that are unique to the products we provide. We currently maintain\nvarious insurance policies, including general liability, umbrella liability, business personal property and business income, and directors\nand officers liability insurance policies, but there can be no assurance that we will acquire or maintain insurance for certain risks,\nthat the amount of our insurance coverage will be adequate to cover all claims or liabilities, or that we will not be forced to bear substantial\ncosts resulting from risks and uncertainties of business. It is also not possible to obtain insurance to protect against all operational\nrisks and liabilities. The failure to obtain and maintain adequate insurance coverage on terms favorable to us, or at all, could have\na material adverse effect on our business, financial condition, and results of operations.

Unanticipated changes in our tax provisions,\nthe adoption of new tax legislation or exposure to additional tax liabilities could affect our profitability and cash flows.

In the event there are significant\nchanges in federal or state tax law provisions, or in the event there is new and additional tax legislation adopted, we could be exposed\nto additional tax liabilities. Such additional tax liabilities could have an effect on our net income and profit margins.

Certain of our products sell on a seasonal basis,\nresulting in fluctuations in our cash flow, inventory, and accounts payable.

As a result of the seasonality\nof certain products, such as planting equipment, ventilation equipment, grow light systems, or harvesting equipment related to certain\nproduce that grows on a seasonal basis, our business is likely to cause cash and cash equivalents, inventory, and accounts payable to\nfluctuate, resulting in changes in our working capital.

Our results of operations could be materially\nharmed if we are unable to accurately forecast customer demand for our products and manage our inventory.

We seek to maintain sufficient\nlevels of inventory in order to protect ourselves from supply interruptions. To ensure adequate inventory supply and manage our operations\nwith our third-party vendors, manufacturers and suppliers, we forecast anticipated materials requirements and demand for our products\nin order to predict inventory needs and then place orders with our suppliers based on these predictions. Our ability to accurately forecast\ndemand for our products could be negatively affected by many factors, including our limited historical commercial experience, rapid growth,\nfailure to accurately manage our expansion strategy, product introductions by competitors, an increase or decrease in customer demand\nfor our products, our failure to accurately forecast customer acceptance of new products, unanticipated changes in general market conditions\nor regulatory matters and weakening of economic conditions or consumer confidence in future economic conditions.

Inventory levels in excess of\ncustomer demand, including as a result of our introduction of product enhancements, may result in a portion of our inventory becoming\nobsolete or expiring, as well as inventory write-downs or write-offs, which could have a material adverse effect on our business, financial\ncondition and results of operations. Conversely, if we underestimate customer demand for our and those third-party products we offer for\nsale, vendors, manufacturers, and suppliers may not be able to deliver those materials necessary to meet our requirements, which could\nresult in inadequate inventory levels or interruptions, delays or cancellations of deliveries to our customers, any of which would damage\nour reputation, customer relationships and business. In addition, several products that we offer for sale may require lengthy order lead\ntimes, and additional supplies or materials may not be available when required on terms that are acceptable to us, or at all, and our\nthird-party manufacturers and suppliers may not be able to allocate sufficient capacity in order to meet our increased requirements, any\nof which could have an adverse effect on our ability to meet customer demand for our products and our business, financial condition and\nresults of operations.

The failure of third parties to meet their contractual,\nregulatory, and other obligations could adversely affect our business.

We rely on suppliers, vendors,\noutsourcing partners, consultants, alliance partners and other third parties to research, develop, manufacture and commercialize our products.\nUsing these third parties poses a number of risks, such as: (i) they may not perform to our standards or legal requirements; (ii) they\nmay not produce reliable results; (iii) they may not perform in a timely manner; (iv) they may not maintain confidentiality of our proprietary\ninformation; (v) disputes may arise with respect to ownership of rights to technology developed with our partners; and (vi) disagreements\ncould cause delays in, or termination of, the research, development or commercialization of our products or result in litigation or arbitration.\nMoreover, some third parties are located in markets subject to political and social risk, corruption, infrastructure problems and natural\ndisasters, in addition to country-specific privacy and data security risk given current legal and regulatory environments. Failure of\nthird parties to meet their contractual, regulatory and other obligations may have a material adverse effect on our business, financial\ncondition and results of operations.

The sizes of the markets for our current and\nfuture products have not been established with precision and may be smaller than we estimate.

Our estimates of the total addressable\nmarkets for our current products, products under development and third-party products that we offer for sale are based on a number of\ninternal and third party estimates and the assumed prices at which we can sell such products in markets that have not been established\nor that we have not yet entered. While we believe our assumptions and the data underlying our estimates are reasonable, these assumptions\nand estimates may not be correct and the conditions supporting our assumptions or estimates may change at any time, thereby reducing the\npredictive accuracy of these estimates. As a result, our estimates of the total addressable market for our current or future products\nmay prove to be incorrect. If the actual number of consumers who would benefit from the products we offer, the price at which we can sell\nsuch products, or the total addressable market for such products is smaller than we have estimated, it may impair our sales growth and\nhave an adverse impact on our business.

The conflict between Russia and Ukraine and\nthe war in the Middle East may have the effect of heightening many of the other risks described in this “Risk Factors” section.

To the extent the conflict between\nRussia and Ukraine and the war in the Middle East may adversely affect our business and financial results, it may also have the effect\nof heightening many of the other risks described in this “Risk Factors” section, as well as other risks which we may not be\ncurrently aware of.

Risks Related to Our Common Stock

If we fail to comply with the continued listing\nrequirements of the Nasdaq Stock Market, it could result in our common stock being delisted, which could adversely affect the market price\nand liquidity of our securities and could have other adverse effects.

On January\n2, 2025, the Company received a letter from the Nasdaq Listing Qualifications Staff of The Nasdaq Stock Market LLC (“Nasdaq”)\nstating that for the 30 consecutive business day period between November 15, 2024 to December 31, 2024, the Company’s common stock\nhad failed to maintain a minimum closing bid price of $1.00 per share, as required for continued listing on The Nasdaq Capital Market\npursuant to Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A),\nthe Company has an initial period of 180 calendar days, or until July 1, 2025 (the “Compliance Period”), to regain compliance\nwith the Minimum Bid Price Requirement. To regain compliance, the closing bid price of the Company’s common stock must meet or exceed\n$1.00 per share for a minimum of ten consecutive trading days, unless such period is extended by Nasdaq.

In accordance with Nasdaq Rules,\nthe Company was provided with an initial period of 180 calendar days, or until July 1, 2025 (the “Initial Grace Period”),\nto regain compliance with the Bid Price Requirement. Since the Initial Grace Period was coming to an end and the Company had not yet regained\ncompliance, on June 12, 2025, the Company submitted a plan of compliance (the “Plan of Compliance”) to Nasdaq seeking an additional\n180-day grace period (the \"Additional Grace Period\") to regain compliance with the Bid Price Requirement. The Plan of Compliance\nset forth the steps the Company would take to regain compliance with the Bid Price Requirement within the additional 180-day period, including\neffectuating a reverse split of its common stock, if deemed necessary. On July 2, 2025, the Company received formal approval from Nasdaq\ngranting it an additional 180 days, or until December 29, 2025 (the “Compliance Date”), to regain compliance with the Bid\nPrice Requirement. As of the Compliance Date, the Company had regained compliance with the Bid Price Requirement.

There can be no assurance that\nthe Company will continue to satisfy the minimum bid price requirement or any other applicable continued listing standards and requirements\nof Nasdaq, including, without limitation, requirements relating to stockholders’ equity, market value of publicly held shares, minimum\nnumber of public stockholders, or governance standards. If the Company fails to maintain compliance with any such continued listing requirements,\nits securities could be subject to delisting, which would severely impact the market price and liquidity of its common stock, limit the\nCompany’s ability to issue additional securities or secure financing, and have a material adverse effect on its business, financial\ncondition, and operating results.

Future sales of our common stock in the public\nmarket could cause the market price of our common stock to decline.

As a public company, sales of\na substantial number of shares of our common stock in the public market, or the perception that these sales might occur, could depress\nthe market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities.

Sales of substantial amounts of our common stock\nin the public market, or the perception that such sales could occur, could depress the market price of our common stock.

We have previously issued, or\nmay in the future issue, shares of our common stock, warrants to purchase shares of our common stock, or other securities convertible\ninto or exchangeable for common stock in connection with private placements, registered direct offerings, or other financing transactions.\nPursuant to registration rights granted to certain investors, we have filed or may be required to file one or more registration statements,\nincluding resale prospectuses, with the SEC to register the resale of such shares from time to time.

The sale of a significant number\nof shares of our common stock by selling stockholders in the public market, or the accumulation of such shares, could materially and adversely\naffect the market price of our common stock. In addition, the perception in the public markets that these sales may occur—whether\nor not driven by the registration of such shares for resale—could in and of itself cause the market price of our common stock to\ndecline. We cannot predict the timing, amount, or effect, if any, that future sales of these shares of common stock, or the availability\nof these shares for resale, will have on the trading price of our securities.

General Risk Factors Related to our Common Stock

There are risks, including stock market volatility,\ninherent in owning our common stock.

The market price and volume of\nour common stock have been, and may continue to be, subject to significant fluctuations. These fluctuations may arise from general stock\nmarket conditions, the impact of risk factors described herein on our results of operations and financial position, or a change in opinion\nin the market regarding our business prospects or other factors, many of which may be outside our immediate control.

We do not intend to pay dividends for the foreseeable\nfuture and, as a result, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.

The decision to pay cash dividends\non our common stock rests with our board of directors and will depend on our earnings, unencumbered cash, capital requirements and financial\ncondition. We do not anticipate declaring any dividends in the foreseeable future, as we intend to use any excess cash to fund our operations\nand growth. Investors in our common stock should not expect to receive dividend income on their investment, and investors will be dependent\non the appreciation of our common stock to earn a return on their investment.

We may require additional capital to support the growth of our business,\nand this capital might not be available on acceptable terms, if at all.

We cannot be certain when or if\nour operations will generate sufficient cash to fully fund our ongoing operations or the growth of our business. We intend to continue\nto make investments to support our business, which may require us to engage in equity or debt financing to secure additional funds. Additional\nfinancing may not be available on terms favorable to us, if at all. If adequate funds are not available on acceptable terms, we may be\nunable to invest in future growth opportunities, which could harm our business, operating results and financial condition. If we incur\nadditional debt, the debt holders would have rights senior to holders of common stock to make claims on our assets, and the terms of any\ndebt could restrict our operations, including our ability to pay dividends on our common stock. Furthermore, if we issue additional equity\nsecurities, stockholders will experience dilution, and the new equity securities could have rights senior to those of our common stock.\nBecause our decision to issue securities in the future will depend on numerous considerations, including factors beyond our control, we\ncannot predict or estimate the amount, timing, or nature of any future issuances of debt or equity securities. As a result, our stockholders\nbear the risk of future issuances of debt or equity securities reducing the value of our common stock and diluting their interests.

As a public company, we are subject to increased\ncosts in relation to maintaining SEC and Nasdaq-related reporting requirements and our management is required to devote substantial time\nto compliance with our public company reporting responsibilities and corporate governance practices.

As a Nasdaq-listed public company,\nwe face significant legal, accounting, and other expenses that we did not incur as a private company, which we expect to further increase\nnow that we are no longer an “emerging growth company.” The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer\nProtection Act, the listing requirements of the Nasdaq Stock Market, and other applicable securities rules and regulations impose various\nrequirements on public companies. Our management and other personnel devote a substantial amount of time to ensuring compliance with these\nrequirements. Moreover, these rules and regulations increase our legal and financial compliance costs and make some activities more time-consuming\nand costly as compared to when we were operating as a private company. As a newly public company, we are unable to predict or estimate\nthe amount of additional costs we will incur as a public company or the specific timing of such costs.

As a result of being a public company, we are\nobligated to develop and maintain proper and effective internal controls over financial reporting, and any failure to maintain the adequacy\nof these internal controls may adversely affect investor confidence in our Company and, as a result, the value of our common stock.

We are required, pursuant to Section\n404 of the Sarbanes-Oxley Act of 2002, or Section 404, to furnish a report by management on the effectiveness of our internal control\nover financial reporting for the fiscal year ending June 30, 2026. This assessment needs to include disclosure of any material weaknesses\nidentified by our management in our internal control over financial reporting. In addition, our independent registered public accounting\nfirm will be required to attest to the effectiveness of our internal control over financial reporting in our first annual report required\nto be filed with the SEC following the date we are no longer a “smaller reporting company.” We have recently commenced the\ncostly and challenging process of compiling the system and processing documentation necessary to perform the evaluation needed to comply\nwith Section 404, but we may not be able to complete our evaluation, testing and any required remediation in a timely fashion once initiated.\nOur compliance with Section 404 requires that we incur substantial accounting expenses and expend significant management efforts. We currently\ndo not have an internal audit group, and we will need to hire additional accounting and financial staff with appropriate public company\nexperience and technical accounting knowledge and compile the system and process documentation necessary to perform the evaluation needed\nto comply with Section 404.

During the evaluation and testing\nprocess of our internal controls, if we identify one or more material weaknesses in our internal control over financial reporting, we\nwill be unable to certify that our internal control over financial reporting is effective. We cannot assure you that there will not be\nmaterial weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any failure to maintain\ninternal control over financial reporting could severely inhibit our ability to accurately report our financial condition or results of\noperations. If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered\npublic accounting firm determines we have a material weakness or significant deficiency in our internal control over financial reporting,\nwe could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our common stock could\ndecline, and we could be subject to sanctions or investigations by the Nasdaq Stock Market, the SEC or other regulatory authorities. Failure\nto remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control\nsystems required of public companies, could also restrict our future access to the capital markets.

We are a smaller reporting company within the\nmeaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to “smaller\nreporting companies,” this could make our securities less attractive to investors and may make it more difficult to compare our\nperformance with other public companies.

We are a “smaller reporting\ncompany” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure\nobligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting\ncompany until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates exceeds $250 million\nas of the prior June 30, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the market value of our\ncommon stock held by non-affiliates exceeds $700 million as of the prior June 30. To the extent we take advantage of such reduced disclosure\nobligations, it may also make comparison of our financial statements with other public companies difficult or impossible. After we are\nno longer a “smaller reporting company,” we expect to incur additional management time and cost to comply with the more stringent\nreporting requirements applicable to companies that are deemed accelerated filers or large accelerated filers, including complying with\nthe auditor attestation requirements of Section 404. We cannot predict or estimate the amount of additional costs we may incur or the\ntiming of such costs.

Our stockholders will experience further dilution\nif we issue additional equity or equity-linked securities in the future.

If we issue additional shares\nof common stock, or securities convertible into or exchangeable or exercisable for shares of common stock, our stockholders will experience\nadditional dilution, and any such issuances may result in downward pressure on the price of our common stock. As a result, investors who\nmay purchase shares or other securities in the future could have rights superior to existing stockholders.

If securities or industry analysts do not publish\nresearch or reports about our business, or if they adversely change their recommendations regarding our common stock, the market price\nfor our common stock and trading volume could decline.

The trading market for our common\nstock is influenced by research or reports that industry or securities analysts publish about our business. If industry or securities\nanalysts decide to cover us and in the future downgrade our common stock, the market price for our securities would likely decline. If\none or more of these analysts cease to cover us or fail to regularly publish reports on us, we could lose visibility in the financial\nmarkets, which in turn could cause the market price or trading volume for our common stock to decline.

As an actively traded Nasdaq-listed company,\nthe market price of our common stock may be volatile.

As our securities are publicly-traded\nand even though an active market for our common stock has developed, the market price for our common stock may be volatile and subject\nto wide fluctuations in response to factors including the following:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	·	actual or anticipated fluctuations in our quarterly or annual operating results;
	·	changes in financial operational estimates or projections;
	·	conditions in markets generally;
	·	changes in the economic performance or market valuations of companies similar to ours; and
	·	general economic or political conditions in the United States and elsewhere.

The securities market has from\ntime to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies.\nThese market fluctuations may also materially and adversely affect the market price of shares of our common stock.

In the event of liquidation or dissolution of\nour company, stockholders may not recoup all or any portion of their investment.

In the event of a liquidation,\ndissolution or winding-up of our Company, whether voluntary or involuntary, the proceeds and/or assets of our Company remaining after\ngiving effect to such transaction, and the payment of all of our debts and liabilities will be distributed to the holders of common stock\non a pro rata basis. There can be no assurance that we will have available assets to pay to the holders of common stock, or any amounts,\nupon such a liquidation, dissolution or winding-up of our Company. In this event, stockholders could lose some or all of their investment.

ITEM 1B. Unresolved\nStaff Comments

None.

ITEM 1C. Cybersecurity

Risk\nmanagement program

Cybersecurity risk management\nis an integral part of our overall enterprise risk management program. The Company manages cybersecurity and data protection through a\ncontinuously evolving program. Our cybersecurity risk management program is designed to provide a framework for assessing, identifying\nand managing cybersecurity threats and incidents, including threats and incidents associated with the use of services provided by third-party\nservice providers, and to facilitate coordination across different departments of our Company. Our processes include steps for assessing\nthe severity of a cybersecurity threat, identifying the source of a cybersecurity threat, including whether the cybersecurity threat is\nassociated with a third-party service provider, and implementing cybersecurity countermeasures and mitigation strategies and informing\nmanagement and the board of directors of material cybersecurity threats and incidents.

Governance

The\nboard of directors has oversight for the most significant risks facing us and for our processes to identify, prioritize, assess, manage\nand mitigate those risks. The\naudit committee of the board of directors (the “Audit Committee”) has been designated by our board of directors to oversee\ncybersecurity risks. Management is responsible for identifying, considering and assessing material cybersecurity risks on an ongoing\nbasis, establishing processes designed to ensure that such potential cybersecurity risk exposures are monitored, putting in place mitigation\nmeasures and maintaining cybersecurity programs. Our cybersecurity program is overseen by our Chief Executive Officer, who consults with\nand seeks guidance from industry professionals, as appropriate. Management regularly updates the Audit Committee on our cybersecurity\nprograms, which includes cybersecurity risks and mitigation strategies, vulnerability management, and on-going cybersecurity projects.

As\nof June 30, 2026, we did not identify any cybersecurity incidents that materially affected or are reasonably likely to materially affect\nour business strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks\nfrom cybersecurity threats, or provide assurances that we have not experienced an undetected cybersecurity incident. It is possible that\nwe may not implement appropriate controls if we do not detect a particular risk. In addition, security controls, no matter how well designed\nor implemented, may only mitigate and not fully eliminate the risks. Even when a risk is detected, disruptive events may not always be\nimmediately and thoroughly interpreted and acted upon. For more information about these risks, please see “Risk Factors -\nRisks Related to our Business and Products” in Item 1A of this Form10-K.

ITEM 2. PROPERTIES

Our principal offices, which\nalso serve as a fulfillment center, are located at 8798 9^th Street, Rancho Cucamonga, California. There we lease approximately\n99,347 square feet of space, which is used for the storage and distribution of products. The term of the Rancho Cucamonga lease is for\n74 months. The lease commenced on February 10, 2022, with rent payments commencing after the first three months, and the expiration date\nis May 31, 2028. The base rental fee is $114,249 to $140,079 per month through the expiration date, May 31, 2028. On April 13, 2026, we\nentered into a sublease agreement (the “Sublease Agreement”) to sublease part of the warehouse for a term of 25 months, commencing\nMay 1, 2026 and ending May 31, 2028. Pursuant to the Sublease Agreement, the sublessee will pay Base Rent of $62,500 to $112,710, calculated\nbased on space used, to the Company monthly.

In addition, we leased a fulfilment\ncenter at 2397 Bateman Avenue, Duarte, CA 91010, which consists of approximately 49,500 square feet of space, with a base rental fee of\n$56,000 to $59,410 per month. The lease term expired on April 30, 2025, and the Company did not renew the lease.

On February 15, 2022, upon\ncompletion of the acquisition of Anivia, the Company assumed an operating lease of offices in the PRC. In July 2023, the Company renewed\nthe lease contract for its existing office plus additional office space. The lease term is for three years expiring on July 14, 2026.\nThe total base rental fee for these offices is approximately $19,406 per month. In September 2024, the Company terminated the lease contract\nof the office space.

ITEM 3. LEGAL PROCEEDINGS

We are not presently a party to\nany pending or other threatened legal proceedings or claims against us that we believe will have a material adverse effect on our business,\nfinancial condition, or operating results. Nonetheless, we may from time to time become involved in legal proceedings in the\nordinary course of business.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY,\nRELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is listed on\nThe Nasdaq Capital Market, or Nasdaq, under the symbol “IPW,” where we commenced trading on May 14, 2021. Prior to that time,\nour common stock was not traded on any exchange or quoted on any over the counter market.

Shareholders

As of October 2, 2026 we\nhad 29 holders of record of our common stock and 1,262,584 shares of common stock outstanding.

Dividends

We have never paid cash dividends\non our common stock. Holders of our common stock are entitled to receive dividends, if any, declared and paid from time to time by the\nboard of directors out of funds legally available. We intend to retain any earnings for the operation and expansion of our business and\ndo not anticipate paying cash dividends on our common stock in the foreseeable future. Any future determination as to the payment of cash\ndividends will depend upon future earnings, results of operations, capital requirements, our financial condition, and other factors that\nour board of directors may consider.

Equity Compensation Plans

2020 Amended Equity Incentive Plan

The total number of underlying\nshares of the Company’s common stock available for grant to directors, officers, key employees and consultants of the Company or\na subsidiary of the Company under the Company’s Amended and Restated 2020 Equity Inventive Plan (the “2020 Amended Equity\nIncentive Plan”) was 50,000,000 shares (627,315 shares on a post reverse split basis, taking into account the May 22, 2026 and\nAugust 7, 2026 reverse stock splits). Grants made under the 2020 Amended Equity Incentive Plan must be approved by the Company’s\nboard of directors.

The following table provides information\nas of June 30, 2026 about our equity compensation plans and arrangements.

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Plan category	Number of \nsecurities to be \nissued upon \nexercise of \noutstanding \noptions, \nwarrants and \nrights		Weighted- \naverage \nexercise price of \noutstanding \noptions, \nwarrants and \nrights			Number of \nsecurities \nremaining \navailable for \nfuture issuance \nunder equity \ncompensation \nplans
Equity compensation plans approved by security holders		3,939		$	1,288.70		553,949
Equity compensation plans not approved by security holders		–			–		–
Total		3,939		$	1,288.70		553,949

Recent Sales of Unregistered Securities

None.

Issuer Purchases of Equity Securities

On February 10, 2026, the\nboard of directors of the Company authorized a share repurchase program of up to $2.0 million of the Company’s common stock (the\n“Share Buyback Program”). On May 26, 2026, the Company executed the documents required to implement a trading plan in connection\nwith the Share Buyback Program. The repurchase program does not obligate the Company to acquire any specific number of shares and may\nbe suspended or discontinued at any time.

As of June 30, 2026, the Company\nrepurchased an aggregate of 1,346 shares of its common stock for approximately $41,755 in open-market transactions under the Share Buyback\nProgram.

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Period	(a) \n Total number of shares purchased		(b) \n Average price paid per share	(c) \n Total number of shares purchased as part of publicly announced plans or programs		(d) \n Maximum number of shares (or approximate dollar value) of shares that may yet be purchased under the plans or programs
May 2026		100		$	36.33		100	$	1,996,367
June 2026		1,246		$	30.58		1,246	$	1,958,245
Total		1,346		$	31.02		1,346	$	1,958,245

Use of Proceeds

None.

ITEM 6. [Reserved]

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS\nOF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and\nAnalysis of Financial Condition and Results of Operations (the “MD&A”) should be read in conjunction with our financial\nstatements and the related notes thereto included elsewhere herein. The MD&A contains forward-looking statements that involve risks\nand uncertainties, such as statements of our plans, objectives, expectations, and intentions. Any statements that are not statements of\nhistorical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,”\n“anticipate,” “target,” “estimate,” “expect,” and the like, and/or future-tense or conditional\nconstructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify\ncertain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause\nactual results or events to differ materially from those expressed or implied by the forward-looking statements in this Annual Report.\nOur actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result\nof several factors.

Historical results may not indicate future performance.\nOur forward-looking statements reflect our current views about future events, are based on assumptions and are subject to known and unknown\nrisks and uncertainties that could cause actual results to differ materially from those contemplated by these statements. We undertake\nno obligation to publicly update or revise any forward-looking statements, including any changes that might result from any facts, events,\nor circumstances after the date hereof that may bear upon forward-looking statements. Furthermore, we cannot guarantee future results,\nevents, levels of activity, performance, or achievements.

Overview

iPower is a technology- and data-driven infrastructure\ncompany with a foundation in supply chain services, real-world commerce, and partner-based logistics and fulfillment capabilities. The\nCompany leverages its internal software, data, and operational experience, together with a network of procurement, logistics, fulfillment,\nwarehousing, and commerce partners, to support supply chain services, commerce infrastructure, and related business opportunities.

Building on our supply chain, software and operating\nfoundation, iPower is pursuing AI infrastructure acquisition, financing, equipment leasing and related opportunities as a current strategic\nfocus. The Company also maintains a limited DAT position that we began implementing through digital asset purchases beginning in December\n2025. Management is currently reducing certain digital asset exposure and prioritizing direct AI infrastructure and related operating\nopportunities, subject to the restrictions applicable to assets held in the Company’s controlled collateral account.

Digital Asset Treasury and Capital Allocation Strategy

iPower adopted an initial Digital Asset Treasury strategy\nin June 2025 and began implementing the DAT strategy through purchases beginning in December 2025. The DAT strategy was initially intended\nto provide limited balance-sheet exposure to potential appreciation in digital assets and to diversify a portion of our treasury assets.\nThis overall strategy serves to govern our corporate treasury and capital-allocation activity. The strategy, which is overseen by Company\nmanagement within board-approved policies, is intended to be flexible while helping us manage our capital allocation. Our purpose is not\nto operate a digital asset investment fund, exchange, broker-dealer, investment advisory business or customer custody business. We do\nnot presently engage an external investment manager to oversee or advise on our investments. Our DAT assets are held with BitGo Trust\nCompany, Inc., a South Dakota chartered trust company, which is a full service digital asset infrastructure company.

In December 2025, we acquired\napproximately 15.1 Bitcoin for approximately $1.325 million and approximately 301.1 Ethereum for approximately $0.884 million. In June\n2026, we acquired approximately $1.0 million of USDai and subsequently converted or staked the USDai into sUSDai, a yield-bearing vault/share\ntoken associated with the USD.AI protocol, in order to obtain exposure to potential returns associated with AI infrastructure financing.\nWe sold all sUSDai for approximately $1,002,381 and all Ethereum for approximately $563,391 on August 14, 2026.

Recent Developments

Effective October 27, 2025,\nthe Company effectuated the 1-for-30 reverse stock split of its common stock (the “2025 Reverse Split”), under which every\n30 issued and outstanding pre-split shares were automatically reclassified into one post-split share with no change in par value, resulting\nin a proportionate adjustment to outstanding equity awards, warrants and exercise prices.

On December 22, 2025, the\nCompany entered into the Purchase Agreement with the Investor providing for the purchase by the Investor of a 6% original issue discount\n(OID) convertible note facility in the aggregate original principal amount of $30,000,000, in which the Investor agreed to initially purchase\n(i) a Series A Convertible Note in the aggregate original principal amount of $5,184,024, and shares of common stock issuable pursuant\nto the terms of the Series A Convertible Notes in reliance upon the exemption from securities registration afforded by Section 4(a)(2)\nof the Securities Act, and Rule 506(b) of Regulation D as promulgated thereunder, and (ii) $1,815,976 aggregate principal amount of a\nSeries B Convertible Note, and shares of common stock issuable pursuant to the terms of the Series B Convertible Notes in a registered\ndirect offering pursuant to a currently effective shelf registration statement on Form S-3 (File No. 333-274665), which was declared effective\nby the SEC on September 29, 2023. In addition, pursuant to the Purchase Agreement, the parties closed on an additional $5,000,000 of Series\nA Convertible Notes upon effectiveness of a resale registration statement. On July 6, 2026, the Company and the Investor entered into\nan amendment to the Purchase Agreement for purposes of (i) increasing funds available under the facility by an additional original principal\namount of $2,000,000 and (ii) removing restrictions on the use of proceeds for any additional funds obtained through the facility.

On July 6, 2026, and\nSeptember 15, 2026, the Company and Investor consummated Additional Optional Closings. At the Additional Optional Closings, the Company\nreceived $4,700,000, excluding fees and expenses, in exchange for issuing a total of $5,000,000 aggregate principal amount of Series A\nNotes to the Investor after satisfaction of all applicable closing conditions, including the effectiveness of the resale registration\nstatement and the absence of any Event of Default. The Series A Notes issued at the Additional Optional Closings were issued pursuant\nto an exemption from registration in accordance with Regulation D of the Securities Act.

To date, in addition\nto the Series B convertible note sold in December 2025, the Company has sold a total of $15,184,024 in Series A convertible notes, with\nan additional $15,000,000 in Additional Series A Notes remaining available for issuance under the Convertible Note Facility. Digital Offering\nLLC has acted as placement agent and receives a 6% cash commission for each closing consummated under the Convertible Note Facility. As\nof October 2, 2026, the Investor has converted a total of $9,359,580 of the Series A Notes, resulting in the conversion of a total\nof 849,697 shares at an average conversion price per share of $11.02 on a post-reverse stock split basis (accounting for a 1-for-8 reverse\nstock split effectuated May 22, 2026 and a 1-for-9 reverse stock split effectuated August 7, 2026).

Pursuant to the Purchase Agreement\nand the Series A Notes, certain subsidiaries of the Company are required to enter into a guaranty in favor of the Investor. One such subsidiary,\niPower Smart LLC, entered into a guaranty in favor of the Investor dated December 23, 2025 (the “Guaranty”). In connection\nwith the Company’s recent formation of iPower AI LLC, the Company has joined iPower AI LLC to the Guaranty pursuant to a Joinder\nto Guaranty dated July 21, 2026.

On February 1, 2026, the Company entered into a Software\nAsset Transfer Agreement with its then-wholly owned subsidiary, Global Product Marketing, Inc., a Nevada corporation, pursuant to which\nGPM assigned, transferred and conveyed to the Company all of GPM’s right, title and interest in its Software Assets (as defined\nin the agreement), and iPower assumed all outstanding vendor payables related to the Software Assets. In addition, the Software Asset\nTransfer Agreement granted GPM a non-exclusive worldwide, perpetual, irrevocable and royalty free license to use, reproduce and modify\nthe licensed software, thus allowing iPower and GPM to collaborate in the software development on a going forward basis. Further, in the\nevent GPM resells the Original Software code (as defined in the agreement), GPM shall pay iPower 50% of the proceeds received in relation\nto such sale. Thereafter, on February 1, 2026, the Company entered into a stock purchase agreement with ETTS AI Investment LLC, a Nevada\nlimited liability company (“ETTS AI”), pursuant to which the Company sold all of its equity interest in GPM and its underlying\nentities to ETTS AI in exchange for a $2.3 million promissory note (the “Promissory Note”). The Promissory Note is repayable\nin full in seven years, may be prepaid at any time, and repayment may be credited from time to time by purchase orders (as described below)\nmade under a Supply and Distribution Agreement, dated February 1, 2026, between the Company, GPM and ETTS AI.

Under the Supply and Distribution\nAgreement, the Company and GPM agreed that the Company would act as exclusive supplier in the United States, Canada and Mexico for all\nexisting SKUs that have historically been distributed from iPower to GPM, thus allowing iPower to continue in its role of supplier to\nGPM while divesting of the cost center associated with GPM’s sales function. As supplier, iPower will charge GPM, as distributor,\na price mutually agreed on for each product and has the right to add up to 15% margin on top of the net cost. In addition, GPM will charge\niPower a cooperative marketing fee, which will be defined in a subsequent agreement between the parties. Under the Supply and Distribution\nAgreement, payment on all purchaser orders are due within seven days of GPM’s receipt of payment from its customers and amounts\nidentified as “Margin” (i.e., the Company’s cost x margin on the SKUs purchased by GPM) may be applied on a dollar-for-dollar\nas a credit/offset against the outstanding amounts owed under the Promissory Note. The Supply and Distribution Agreement has a term of\nfive years and automatically renews thereafter for subsequent two year terms, unless 90 days’ notice is provided prior to the expiration\nof such term. In addition, the Supply and Distribution Agreement contains standard limitation on liability, indemnification and other\nprovisions standard for an agreement of this nature.

On June 30, 2026, the Company, GPM and ETTS AI entered\ninto a supplement to the Supply and Distribution Agreement pursuant to which GPM assumed $2,007,366.86 of accounts payable owed to the\nCompany’s suppliers in exchange for acquiring an equal amount of the Company’s existing inventory. Additionally, the Supplement\nreleases the Company and GPM from exclusive sourcing and distribution obligations owed to one another under the Supply and Distribution\nAgreement.

Effective May 22, 2026, the Company implemented a\n1-for-8 reverse stock split of its common stock, under which every eight issued and outstanding pre-split shares were automatically reclassified\ninto one post-split share with no change in par value, resulting in a proportionate adjustment to outstanding equity awards, warrants,\nand exercise prices.

Effective August 7, 2026, the Company implemented a 1-for-9 reverse\nsplit of its common stock, under which every nine issued and outstanding pre-split shares were automatically reclassified into one post-split\nshare with no change in par value, resulting in a proportionate adjustment to outstanding equity awards, warrants and exercise prices\n(the “August Reverse Split,” with the August Reverse Split, the May Reverse Split, and the 2025 Reverse Split together referred\nto as the “Reverse Splits).

RESULTS OF OPERATIONS

For the fiscal years ended June 30, 2026 and\n2025

The following table presents certain\nconsolidated statements of operations information and presentation of that data as a percentage of change from period to period.

	Year Ended June 30, 2026			Year Ended June 30, 2025		Variance
Revenues - product sales	$	18,423,316			58,600,334		(68.6%	)
Revenues - service income		1,533,622			4,624,473		(66.8%	)
		19,956,938			63,224,807		(68.4%	)

Cost of revenues - product costs		14,584,960			31,897,029		(54.3%	)
Cost of revenues - service costs		1,332,681			3,957,883		(66.3%	)
		15,917,641			35,854,912		(55.6%	)

Gross profit		4,039,297			27,369,895		(85.2%	)
Operating expenses		18,467,579			33,699,897		(45.2%	)
Operating loss		(14,428,282	)		(6,330,002	)	127.9%
Other expenses		(2,060,571	)		(367,439	)	460.8%
Loss before income taxes		(16,488,853	)		(6,697,441	)	146.2%
Income tax benefit		(3,079,172	)		(1,348,313	)	128.4%
Net loss from continuing operations		(13,409,681	)		(5,349,128	)	150.7%
Discontinued operations, net of tax		1,787,119			371,582		380.9%
Net loss		(11,622,562	)		(4,977,546	)	133.5%
Non-controlling interest		(320	)		(9,258	)	(96.5%	)
Net loss attributable to iPower Inc.		(11,622,242	)		(4,968,288	)	133.9%
Other comprehensive loss		(1,786	)		250,513		(100.7%	)
Comprehensive loss attributable to iPower Inc.	$	(11,624,028	)		(4,717,775	)	146.4%

Gross profit % of revenues - product sales		20.8%			45.6%
Gross profit % of revenues - service income		13.1%			14.4%
Operating loss % of revenues		(72.3%	)		(10.0%	)
Net loss attributable to iPower Inc. % of revenues		(58.2%	)		(7.9%	)

Revenues

Revenues\nfor the year ended June 30, 2026 decreased 68.4% to $19,956,938 as compared to $63,224,807 for the year ended June 30, 2025. While pricing\nremained stable, the decrease was mainly due to the combination of decreased orders from Amazon and disruption of product supply during\nthe year ended June 30, 2026. The Company also experienced a significant decrease in Amazon orders due to uncertainty over tariffs during\nthe year ended June 30, 2026. In addition, The Company completed a sale of its subsidiaries on February 1, 2026.

Costs of Goods Sold

Costs of revenues for the year\nended June 30, 2026 decreased 55.6% to $15,917,641 as compared to $35,854,912 for the year ended June 30, 2025. The decrease was primarily\ndue to a combination of the costs related to the logistics service income and the decrease in product sales as discussed above.

Gross Profit

Gross profit was $4,039,297 for\nthe year ended June 30, 2026 as compared to $27,369,895 for the year ended June 30, 2025. While the overall gross profit ratio of the\ntotal sales revenues decreased to 20.2% for the year ended June 30, 2026 from 43.3% for the year ended June 30, 2025, the gross profit\nratio of product sales revenue for the year ended June 30, 2026 and 2025 was 20.8% and 45.6%, respectively. The decrease in the gross\nprofit ratio was primarily driven by the decrease in the logistics service income, increase in product costs and the changes in the Company’s\nbusiness strategy resulting from the sale of the Company’s subsidiaries, as discussed above.

Operating Expenses

Operating expenses for the\nyear ended June 30, 2026 decreased 45.2% to $18,467,579 as compared to $33,699,897 for the year ended June 30, 2025. The decrease was\nmainly due to the combination of (i)a decrease in selling and fulfillment expenses of $12.5 million as a result of decreased sales and\ncosts related to advertising, merchant fees, rental expenses and delivery fees, (ii) a decrease in general and administrative expenses\nof $5.7 million, which included payroll expenses, stock-based compensation expense, insurance expenses, allowance for credit losses, travel\nexpenses and other operating expenses, and partially offset by $3.0 million of goodwill impairment loss recorded during the year. The\ndecrease in general and administrative expenses was primarily attributable to the implementation of cost-cutting measures during the current\nperiod, compared to the prior-year period, which included expenses related to the expansion of the Company’s vendor network, development\nof the SuperSuite platform, allowance for credit losses and inventory reserves. In addition, the decrease was attributable to changes\nin the Company’s business strategy resulting from the sale of the Company’s subsidiaries, as discussed above.

Loss from Operations

Loss from operations was $14,428,282\nfor the year ended June 30, 2026 as compared to $6,330,002 for the year ended June 30, 2025. The increase in loss was primary due to the\ncombination of decrease in sales and operating expenses as discussed above.

Other Expenses

Other expenses consists of\ninterest expense and other non-operating income (expenses). Other expenses for the year ended June 30, 2026 was $2,060,571 as compared\nto $367,439 for the year ended June 30, 2025. The increase was primarily attributable to an approximately $2.3 million loss on extinguishment\nof debt associated with conversions of convertible notes, an approximately $0.9 million unrealized loss on digital assets, and an approximately\n$0.4 million increase in interest expense, partially offset by an approximately $0.4 million increase in other non-operating income, $0.8\nmillion of refunds for Employee Retention Credits, and an approximately $0.7 million gain from the change in fair value of derivative\nliabilities.

Net Loss Attributable to iPower Inc.

Net loss attributable to iPower\nInc. for the year ended June 30, 2026 was $11,622,242 as compared to $4,968,288 for the year ended June 30, 2025, representing an increase\nin net loss of $6,653,954, which was primarily due to the combination of increase in loss from operations, the increase in other expenses,\nand partially offset by the gain from discontinued operations resulting from the sale of the Company’s subsidiaries, as discussed\nabove.

Comprehensive loss Attributable to iPower\nInc.

Comprehensive loss attributable\nto iPower Inc. for the year ended June 30, 2026 was $11,624,028 as compared to $4,717,775 for the year ended June 30, 2025, representing\nan increase in comprehensive loss of $6,906,253, which was due to the reasons discussed above, along with a decrease in other comprehensive\nincome of $252,299 as a result of foreign currency translation adjustments resulting from the translation of RMB, the functional currency\nof our subsidiary and VIE in the PRC, to USD, the reporting currency of the Company.

LIQUIDITY AND CAPITAL RESOURCES

Sources of Liquidity

During the fiscal year ended\nJune 30, 2026 we primarily funded our operations with cash and cash equivalents generated from operations, as well as through the convertible\nnote facility established in December 2025. We had cash and cash equivalents of $478,042 as of June 30, 2026, representing a $1,199,837\ndecrease from $1,677,879 in cash as of June 30, 2025. The cash decrease was primarily due to the combined result of cash provided by operating\nactivities, cash used in investing activities and financing activities resulting from our payments to pay off the JPM revolving line of\ncredit and proceeds from convertible notes.

In assessing our liquidity\nrequirements for the twelve months following the issuance of these consolidated financial statements, management considered the\nCompany’s expected cash flows from operations, available financing sources, and significant contractual obligations. The\nCompany has approximately $4.7 million of financing proceeds raised subsequent to June 30, 2026, as well as approximately $15.0\nmillion of remaining optional financing capacity under its existing financing arrangement, subject to the investors’ election\nand the satisfaction or waiver of applicable closing conditions. The Company’s significant cash requirements include\napproximately $5.8 million of convertible notes outstanding, which do not mature until December 2027 through September 2028,\nalthough the notes require monthly interest payments and may be converted into common stock in accordance with their terms, and\napproximately $0.8 million of net lease payments expected during fiscal 2027. Although the Company incurred a net loss of\napproximately $11.6 million and negative operating cash flows during the year ended June 30, 2026, management expects its future\ncash requirements to be reduced as a result of the cost reductions and other completed restructuring actions.

Based on the Company’s\ncurrent operating plan, cash and cash equivalents, expected cash flows from operations, financing proceeds received subsequent to year-end,\nand expected cash requirements, management believes that the Company will have sufficient liquidity to meet its obligations and fund\nits operations for at least the next twelve months. However, the Company’s liquidity and ability to meet its obligations and fund\nits capital requirements are dependent on its future financial performance, which is subject to general economic, financial and other\nfactors beyond its control, including inflation and a potential recession. The Company’s anticipated funding requirements could\nincrease as a result of such factors. See “Risk Factors” in this Annual Report.

Given our current working\ncapital position, we believe we will be able to manage through the current challenges by managing payment terms with customers and vendors.

Working Capital

As of June 30, 2026 and 2025,\nour working capital was $3.4 million and $4.9 million, respectively. The historical seasonality in our business during the year can cause\ncash and cash equivalents, inventory and accounts payable to fluctuate, resulting in changes in our working capital. We anticipate that\npast historical trends will remain in place through the balance of the fiscal year with working capital remaining near this level for\nthe foreseeable future.

Cash Flows

Operating Activities

Our largest source of cash\nprovided by operations is from the sale of products. Our primary uses of cash from operating activities include payments to suppliers\nfor products, payments to employees for compensation, and other general expenses. Net cash used in operating activities for the years\nended June 30, 2026 and 2025 was $163,466 and $579,187, respectively. The decrease in cash used in operating activities mainly resulted\nfrom an increase in non-cash adjustments to net loss and cash paid for cost of revenues and operating expenses, which was partially offset\nby an increase in cash received from customers.

Investing Activities

For the years ended June 30,\n2026 and 2025, net cash used in investing activities was $4,681,625 and $2,042,250, respectively. The increase was mainly due to deconsolidation\nof our VIE and subsidiaries cash, payments made for investment in a joint venture, purchase of digital assets, and prepayments made for\nsoftware developments during the year ended June 30, 2026.

Financing Activities

Net cash provided by (used\nin) in financing activities was $6,543,407 and ($2,999,362), respectively, for the years ended June 30, 2026 and 2025. The increase in\nnet cash provided by financing activities was primarily due to a combination of proceeds from the Company’s convertible note financing\nand payments made on the revolving loan.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance\nsheet arrangements (as that term is defined in Item 303 of Regulation S-K) that are reasonably likely to have a current or future material\neffect on our financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

We prepare our consolidated\nfinancial statements in accordance with accounting principles generally accepted in the United States, or GAAP and pursuant to the rules\nand regulations of the SEC. The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates\nand assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could\ndiffer from those estimates. In some cases, changes in the accounting estimates are reasonably likely to occur from period to period.\nAccordingly, actual results could differ materially from our estimates. To the extent that there are material differences between these\nestimates and actual results, our financial condition and results of operations will be affected. We base our estimates on experience\nand other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. We\nrefer to accounting estimates of this type as critical accounting policies, which we discuss further below. While our significant accounting\npolicies are more fully described in Note 2 to our audited consolidated financial statements, we believe that the following accounting\npolicies are critical to the process of making significant judgments and estimates in the preparation of our audited consolidated financial\nstatements.

Revenue recognition

The Company recognizes revenue\nfrom service and product sales revenues, net of promotional discounts and return allowances, when the following revenue recognition criteria\nare met: a contract has been identified, separate performance obligations are identified, the transaction price is determined, the transaction\nprice is allocated to separate performance obligations and revenue is recognized upon satisfying each performance obligation. The Company\ntransfers the risk of loss or damage upon shipment or completion of service, therefore, revenue from product sales is recognized when\nit is shipped to the customer and the revenue from services is recognized upon completion of services. Return allowances, which reduce\nproduct revenue by the Company’s best estimate of expected product returns, are estimated using historical experience.

The Company evaluates the criteria\nof ASC 606 - Revenue Recognition Principal Agent Considerations in determining whether it is appropriate to record the gross amount of\nproduct sales and related costs or the net amount earned as commissions. Generally, when the Company is primarily responsible for fulfilling\nthe 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\ncustomers are recorded as customer deposits.

The Company periodically provides\nincentive offers to its customers to encourage purchases. Such offers include current discount offers, such as percentage discounts off\ncurrent purchases and other similar offers. Current discount offers, when accepted by the Company’s customers, are treated as a\nreduction to the purchase price of the related transaction.

Sales discounts are recorded in\nthe period in which the related sale is recognized. Sales return allowances are estimated based on historical amounts and are recorded\nupon recognizing the related sales. Shipping and handling costs are recorded as selling expenses.

Accounts receivable

During the ordinary course of\nbusiness, the Company extends unsecured credit to its customers. Accounts receivable are stated at the amount the Company expects to collect\nfrom customers. Management reviews its accounts receivable balances each reporting period to determine if an allowance for credit losses\nis required.

The Company evaluates the creditworthiness\nof all of its customers individually before accepting them and continuously monitors the recoverability of accounts receivable. If there\nare any indicators that a customer may not make payment, the Company may consider making provision for non-collectability for that particular\ncustomer. At the same time, the Company may cease further sales or services to such customer. The following are some of the factors that\nthe Company develops allowance for credit losses:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	·	the customer fails to comply with its payment schedule;

	·	the customer is in serious financial difficulty;

	·	a significant dispute with the customer has occurred regarding job progress or other matters;

	·	the customer breaches any of its contractual obligations;

	·	the customer appears to be financially distressed due to economic or legal factors;

	·	the business between the customer and the Company is not active; and

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

Accounts receivable are recognized\nand carried at carrying amount less an allowance for credit losses, if any. The Company maintains an allowance for credit losses resulting\nfrom the inability of its customers to make required payments based on contractual terms. The Company reviews the collectability of its\nreceivables on a regular and ongoing basis. The Company has also included in calculation of allowance for credit losses the potential\nimpact of the overall economic conditions on our customers’ industry and businesses and their ability to pay our accounts receivable.\nAfter all attempts to collect a receivable have failed, the receivable is written off against the allowance. The Company also considers\nexternal factors to the specific customer, including current conditions and forecasts of economic conditions, including the potential\nimpact of the recent tariff policy. In the event we recover amounts previously written off, we will reduce the specific allowance for\ncredit losses.

Digital Assets

The Company accounts for its\ndigital assets, which, as of the date of this report, are comprised of Bitcoin (“BTC”) only, as indefinite-lived intangible\nassets in accordance with Accounting Standards Codification (“ASC”) Topic 350-60, “Intangibles—Goodwill and Other—Crypto\nAssets.” The Company has ownership of and control over its digital assets and may use third-party custodial services to secure it.\nThe Company’s digital assets are initially recorded at cost and are subsequently remeasured on the balance sheet at fair value.

The Company determines the fair\nvalue of its digital assets on a recurring basis in accordance with ASC Topic 820, “Fair Value Measurement,” based on quoted\nprices on the active exchange that the Company has determined is its principal market for such digital assets (Level 1 inputs). The Company\ndetermines the cost basis of digital assets using the specific identification of each unit received. Realized and unrealized gains and\nlosses from changes in the fair value of digital assets are recognized in the statement of operations.

Embedded derivative liability

The Company evaluates the embedded\nfeatures of its financial instruments, including its convertible notes payable in accordance with ASC Topic 480, “Distinguishing\nLiabilities from Equity,” and ASC Topic 815 “Derivatives and Hedging.” Certain conversion options and redemption\nfeatures are required to be bifurcated from their host instrument and accounted for as free-standing derivative financial instruments\nshould certain criteria be met. The Company applies significant judgment to identify and evaluate complex terms and conditions for its\nfinancial instruments to determine whether such instruments are derivatives or contain features that qualify as embedded derivatives.\nEmbedded derivatives must be separately measured from the host contract if all the requirements for bifurcation are met. The assessment\nof the conditions surrounding the bifurcation of embedded derivatives depends on the nature of the host contract and the features of the\nderivatives. Bifurcated embedded derivatives are recognized at fair value.

The following table provides a\nroll-forward of changes for financial instruments measured at fair value on a recurring basis for the year ended June 30, 2026:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n


Derivative Liability	Amount
Balance as of June 30, 2025	$	–
Initial fair value upon issuance of convertible notes		2,574,200
Extinguishment of derivative liability upon conversion of convertible notes		(1,285,400	)
Gain on change in fair value of derivative liability		(682,100	)
Balance as of June 30, 2026	$	606,700

Stock-based Compensation

The Company applies ASC No. 718,\n“Compensation-Stock Compensation,” which requires that share-based payment transactions with employees and nonemployees upon\nadoption of ASU 2018-07, be measured based on the grant date fair value of the equity instrument and recognized as compensation expense\nover the requisite service period, with a corresponding addition to equity. Under this method, compensation cost related to employee share\noptions or similar equity instruments is measured at the grant date based on the fair value of the award and is recognized over the period\nduring which an employee is required to provide service in exchange for the award, which generally is the vesting period. In addition\nto the requisite service period, the Company also evaluates the performance condition and market condition under ASC 718-10-20. For an\naward that contains both a performance and a market condition, and where both conditions must be satisfied in order for the award to vest,\nthe market condition is incorporated into the fair value of the award, and that fair value is recognized over the employee’s requisite\nservice period or nonemployee’s vesting period if it is probable that the performance condition will be met. If the performance\ncondition is ultimately not met, compensation cost related to the award should not be recognized (or should be reversed) because the vesting\ncondition in the award has not been satisfied.

The Company will recognize forfeitures\nof such equity-based compensation as they occur.

Income taxes

The Company accounts for income\ntaxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable\nto differences between the financial statement carrying amounts of existing assets and liabilities and their perspective tax bases. Deferred\ntax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary\ndifferences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized\nin income in the period that includes the enactment date. Valuation allowances are recorded, when necessary, to reduce deferred tax assets\nto the amount expected to be realized.

The Company has analyzed filing\npositions in each of the federal and state jurisdictions where the Company is required to file income tax returns, as well as open tax\nyears in such jurisdictions. The Company has identified the U.S. federal jurisdiction, and the states of Nevada and California, as its\n“major” tax jurisdictions. However, the Company has certain tax attribute carryforwards which will remain subject to review\nand adjustment by the relevant tax authorities until the statute of limitations closes with respect to the year in which such attributes\nare utilized.

The Company believes that our\nincome tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material\nchange to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740. The\nCompany’s policy for recording interest and penalties associated with income-based tax audits is to record such items as a component\nof income taxes.

Recently issued accounting pronouncements

Other\nthan as set forth under Note 2 to the consolidated financial statements under “Recently issued accounting pronouncements,”\nthe Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material\neffect on the consolidated financial position, statements of operations and cash flows.

Recent Financings

Asset-based revolving loan

On November 12, 2021, the Company\nentered into a Credit Agreement with JPMorgan Chase Bank, N.A. (“JPM”), as administrative agent, issuing bank and swingline\nlender, for an asset-based revolving loan (“ABL”) of up to $25 million with key terms listed as follows:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

·	Borrowing base equal to the sum of
	Ø	Up to 90% of eligible credit card receivables
	Ø	Up to 85% of eligible trade accounts receivable
	Ø	\n Up to the lesser of (i) 65% of cost of eligible inventory or (ii) 85% of\n net orderly liquidation value of eligible inventory \n
·	Interest rates of between LIBOR plus 2% and LIBOR plus 2.25% depending on utilization
·	Undrawn fee of between 0.25% and 0.375% depending on utilization
·	Maturity Date of November 12, 2024

In addition, the ABL included\nan accordion feature that allows the Company to borrow up to an additional $25.0 million. To secure complete payment and performance of\nthe secured obligations, the Company granted a security interest in all of its right, title and interest in, to and under all of the Company’s\nassets as collateral to the ABL. Upon closing of the ABL, the Company paid $796,035 in financing fees, including 2% of $25.0 million or\n$500,000 paid to its financial advisor. The financing fees are recorded as debt discount and are to be amortized over the three-year term\nof the ABL as interest expense.

Below is a summary of the interest\nexpense recorded for the years ended June 30, 2026 and 2025:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	2026		2025
Accrued interest	$	113,507		$	244,078
Credit utilization fees		18,636			57,052
Amortization of debt discount		–			125,906
Total	$	132,143		$	427,036

February 16, 2022, in connection\nwith the acquisition of Anivia Limited, the Company and JPM entered into an amendment to the Pledge and Security Agreement, pursuant to\nwhich the Company pledged 65% of its ownership interest in Anivia Limited and its subsidiaries.

On October 7, 2022, the Company\nentered into a second amendment to the credit agreement and consent (the “Second Amendment to the Credit Agreement”), originally\ndated November 12, 2021, as amended, with JPMorgan. The Company entered into the Second Amendment to the Credit Agreement primarily for\nthe purpose of changing the interest rate repayment calculations from LIBOR to the Secured Overnight Financing Rate, or SOFR, which adjustment\nhad originally been anticipated under the terms of the original Credit Agreement. In addition, two of the negative covenants set forth\nin the original Credit Agreement were amended in order to (i) adjust the definition of “Covenant Testing Trigger Period” to\nincrease the required cash availability from $3,000,000 to $4,000,000, or 10% of the aggregate revolving commitment for the preceding\n30 days, and (ii) require that the Company will not and will not permit any of its subsidiaries, after reasonable due diligence and due\ninquiry, to knowingly sell their products, inventory or services directly to any commercial businesses that grows or cultivates cannabis;\nit being acknowledged, however, that the Company does not generally conduct due diligence on its individual retail customers.

On November 8, 2024, the Company\nentered into a third amendment (the “Third Amendment”) to that certain credit agreement, initially entered into by and among\nthe Company and its subsidiaries and JPMorgan Chase Bank, N.A., as administrative agent for the Lender and a lender (the “Administrative\nAgent” or “Lender”), on November 12, 2021 (the “Credit Agreement”). The Third Amendment to the Credit Agreement\namended, among other things, (i) the defined term “Aggregate Revolving Commitment” to mean $15,000,000, and (ii) extended\nthe maturity date to “November 8, 2027 or any earlier date on which the Revolving Commitments are reduced to zero or otherwise terminated\npursuant to the terms hereof.” The borrowing rate is SOFR plus 2.25% to 2.50% depending on utilization of the borrowing availability.

On December 7, 2025, the Company\nrepaid in full the outstanding amount resulting in the termination of the ABL.

As of June 30, 2026 and 2025,\nthe outstanding amount of the ABL, which was classified as current revolving loan payable, including interest payable, was $0 and $3,737,602,\nrespectively.

Short-term loans payable

On April 8, 2024, the Company\nentered into an agreement with an unrelated accredited investor (the “Investor”) for an on-demand, unsecured and subordinated\nloan (“On-demand Loan 2”). Pursuant to the agreement, the Investor agreed to loan the Company the amount requested. The On-demand\nLoan 2 bears interest at the rate of the Secured Overnight Financing Rate, or SOFR, plus 1.5% per annum. The On-demand Loan 2 is due in\n30 days upon receipt of the Investor’s notice of repayment. For the years ended June 30, 2026 and 2025, the Company recorded interest\nexpense of $0 and $3,733, respectively. As of June 30, 2026 and 2025, the On-demand Loan 2 had been fully paid off.

On July 9, 2025, the Company\nborrowed $500,000 as a short-term loan (“RP Loan 2”) from an entity owned by Mr. Allan Huang, one of the shareholders of the\nCompany. The RP Loan 2 bears no interest and is due upon receipt of request of repayment. As of June 30, 2026, The RP Loan 2 had been\nfully paid off.

On November 24, 2025, the\nCompany issued three promissory notes totaling $2 million (the “Promissory Notes”) in exchange for gross proceeds of $2 million.\nThe Promissory Notes were entered into with certain investors and related parties, including an entity controlled by the Company’s\nCEO, Chenlong Tan. The Promissory Notes bear 6.5% interest per annum and are repayable upon the earlier of 90 days or the Company’s\nentry into new financing arrangements. The funds received in connection with the Company’s issuance of the Promissory Notes was\nused to pay off the Company’s existing ABL with JPMorgan Chase Bank, N.A. (“JPMorgan”). For year ended June 30, 2026,\nthe Company recorded interest expense of $29,250, respectively. As of June 30, 2026, the Promissory Notes had been fully paid off.

November 28, 2025, the Company\nborrowed $50,000 from an entity controlled by the Company’s CEO, Chenlong Tan, for short-term liquidity needs. The borrowing was\nnon-interest-bearing and repayable on demand. As of June 30, 2026, the borrowing had been fully repaid.

December 2025 Convertible Notes Offering

On December 22, 2025, the\nCompany entered into the Purchase Agreement with the Investor providing for the purchase by the Investor of a 6% original issue discount\n(OID) convertible note facility in the aggregate original principal amount of $30,000,000, in which the Investor agreed to initially purchase\n(i) a Series A Convertible Note in the aggregate original principal amount of $5,184,024, with shares of common stock issuable upon conversion\npursuant to the terms of the Series A Convertible Notes in reliance upon the exemption from securities registration afforded by Section\n4(a)(2) of the Securities Act, and Rule 506(b) of Regulation D as promulgated thereunder, and (ii) $1,815,976 aggregate principal amount\nof a Series B Convertible Note, and shares of common stock issuable upon conversion pursuant to the terms of the Series B Convertible\nNotes in a registered direct offering pursuant to a currently effective shelf registration statement on Form S-3 (File No. 333-274665),\nwhich was declared effective by the SEC on September 29, 2023. In addition, pursuant to the Purchase Agreement, the parties closed on\nan additional $5,000,000 of Series A Convertible Notes upon effectiveness of a resale registration statement. On July 6, 2026, the Company\nand the Investor entered into an amendment to the Purchase Agreement for purposes of (i) increasing funds available under the facility\nby an additional original principal amount of $2,000,000 and (ii) removing restrictions on the use of proceeds for any additional funds\nobtained through the facility.

As of the date of this Annual\nReport, in addition to the Series B convertible note sold in December 2025, the Company has sold a total of $15,184,024 in Series A convertible\nnotes, with an additional $15,000,000 in Additional Series A Notes remaining available for issuance under the Convertible Note Facility.\nDigital Offering LLC has acted as placement agent and receives a 6% cash commission for each closing consummated under the Convertible\nNote Facility. As of October 2, 2026, the Investor has converted a total of $9,359,580 of the Series A Notes, resulting in the conversion\nof a total of 849,697 shares at an average conversion price per share of $11.02 on a post-reverse stock split basis (accounting for a\n1-for-8 reverse stock split effectuated May 22, 2026 and a 1-for-9 reverse stock split effectuated August 7, 2026).

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES\nABOUT MARKET RISK

As a “smaller reporting\ncompany,” this item is not required.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Financial Statements

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Page

Report of Independent Registered Public Accounting Firm (PCAOB ID 7000)	F-1

Consolidated Balance Sheets as of June 30, 2026 and 2025	F-2

Consolidated Statements of Operations and Comprehensive Loss for the years ended June 30, 2026 and 2025	F-3

Consolidated Statements of Changes in Stockholders’ Equity for the years ended June 30, 2026 and 2025	F-4

Consolidated Statements of Cash Flows for the years ended June 30, 2026 and 2025	F-5

Notes to Consolidated Financial Statements	F-6

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

iPower Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated\nbalance sheets of iPower Inc. and its subsidiaries (the Company) as of June 30, 2026 and 2025, and the related consolidated statements\nof operations and comprehensive loss, changes in shareholders’ equity, and cash flows for each of the years in the two-year period\nended June 30, 2026, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated\nfinancial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2026 and 2025, and\nthe results of its operations and its cash flows for each of the years in the two-year period ended June 30, 2026, in conformity with\naccounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the\nresponsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial\nstatements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United\nStates) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and\nthe applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the\nstandards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated\nfinancial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we\nengaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding\nof internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s\ninternal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess\nthe risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures\nthat respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the\nconsolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by\nmanagement, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide\na reasonable basis for our opinion.

/s/ HTL International, LLC

We have served as the Company’s auditor since 2025.

Houston, Texas

October 2, 2026

F-1

iPower Inc. and Subsidiaries

Consolidated Balance\nSheets

As of June 30, 2026 and\n2025

\n \n \n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n


	June 30,		June 30,
	2026		2025

ASSETS
Current assets
Cash and cash equivalents	$	478,042		$	1,677,879
Accounts receivable, net		4,371,700			6,124,008
Inventories, net		–			8,131,203
Restricted cash - BitGo		3,252,140			–
Prepayments and other current assets, net		2,546,755			2,853,819
Current assets held for sale		–			587,402
Total current assets		10,648,637			19,374,311

Non-current assets
Operating lease right-of-use assets, net		2,641,366			3,915,539
Property and equipment, net		136,502			390,349
Deferred tax assets, net		6,148,956			3,724,462
Software under development		2,638,208			1,059,121
Goodwill		–			3,034,110
Investment in joint venture		12,773			13,264
Note receivable		1,690,137			–
Intangible assets, net		2,331,957			2,981,328
Digital assets		2,356,644			–
Other non-current assets		381,934			317,560
Non-current assets held for sale		–			832,723
Total non-current assets		18,338,477			16,268,456

Total assets	$	28,987,114		$	35,642,767

LIABILITIES AND EQUITY
Current liabilities
Accounts payable		3,539,303			6,786,159
Accounts payable – related parties		655,914			393,850
Other payables and accrued liabilities		1,586,017			1,893,124
Operating lease liability - current		1,483,163			1,361,111
Revolving loan payable, net		–			3,737,602
Income taxes payable		–			183,195
Current liabilities held for sale		–			97,757
Total current liabilities		7,264,397			14,452,798

Non-current liabilities
Convertible notes payable		2,742,837			–
Derivative liability - Conversion option		606,700			–
Operating lease liability - non-current		1,430,806			2,913,967
Total non-current liabilities		4,780,343			2,913,967

Total liabilities		12,044,740			17,366,765

Commitments and contingency		–			–

Stockholders’ Equity
Preferred stock, $0.001\n par value; 20,000,000\n shares authorized; 0\n shares issued and outstanding at June 30, 2026 and 2025		–			–
** Common stock, $0.001\n par value; 980,000,000\n shares authorized; 167,196\n and 14,518\n shares issued and outstanding at June 30, 2026 and 2025		169			15
Additional paid in capital		43,814,552			33,482,231
Treasury stock, at cost 1,346 and 0 shares held at June 30, 2026 and 2025		(41,755	)		–
Accumulated deficits		(26,821,131	)		(15,198,889	)
Non-controlling interest		(47,782	)		(47,462	)
Accumulated other comprehensive income		38,321			40,107
Total stockholders’ equity		16,942,374			18,276,002

Total liabilities and stockholders’ equity	$	28,987,114		$	35,642,767

\n\n \n \n

Unless otherwise indicated, all shares of common stock and per share numbers in the consolidated financial statements and notes below have been adjusted retroactively to reflect the reverse stock splits effected on October 27, 2025, May 22, 2026, and August 7, 2026, for all periods presented (see Note 17 for details).

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

F-2

iPower Inc. and Subsidiaries

Consolidated Statements of Operations and Comprehensive Loss

For the Years Ended June 30, 2026 and 2025


	For the Year Ended June 30,
	2026			2025

REVENUES
Product sales	$	18,423,316			$	58,600,334
Service income		1,533,622				4,624,473
Total revenues		19,956,938				63,224,807

COST OF REVENUES
Product costs		14,584,960				31,897,029
Service costs		1,332,681				3,957,883
Total cost of revenues		15,917,641				35,854,912

GROSS PROFIT		4,039,297				27,369,895

OPERATING EXPENSES:
Selling and fulfillment		8,921,987				21,461,508
General and administrative		6,511,482				12,238,389
Impairment loss - goodwill		3,034,110				–
Total operating expenses		18,467,579				33,699,897

LOSS FROM OPERATIONS		(14,428,282	)			(6,330,002	)

OTHER INCOME (EXPENSE)
Interest expenses		(851,837	)			(436,201	)
Loss on equity method investment		(490	)			(14,342	)
Loss on deconsolidation of VIE		(41,519	)			–
Unrealized loss on digital assets		(853,856	)			–
Change in fair value of derivative liability		682,100				–
Loss on extinguishment of convertible notes		(2,324,402	)			–
ERC refunds		804,004				–
Other non-operating income, net		525,429				83,104
Total other expenses, net		(2,060,571	)			(367,439	)

LOSS BEFORE INCOME TAXES		(16,488,853	)			(6,697,441	)

PROVISION FOR INCOME TAX BENEFIT		(3,079,172	)			(1,348,313	)
NET LOSS FROM CONTINUING OPERATIONS		(13,409,681	)			(5,349,128	)
DISCONTINUED OPERATIONS, NET OF TAX		1,787,119				371,582
NET LOSS		(11,622,562	)			(4,977,546	)

Non-controlling interest		(320	)			(9,258	)

NET LOSS ATTRIBUTABLE TO IPOWER INC.	$	(11,622,242	)		$	(4,968,288	)

OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustments		(1,786	)			250,513

COMPREHENSIVE LOSS ATTRIBUTABLE TO IPOWER INC.	$	(11,624,028	)		$	(4,717,775	)

WEIGHTED AVERAGE NUMBER OF COMMON STOCK
** Basic		33,671				14,558

** Diluted		33,671				14,558

EARNINGS (LOSSES) PER SHARE
Basic - continuing operations	$	(398.24	)		$	(366.80	)
Basic - discontinued operations		53.08				25.52
Total basic losses per share	$	(345.16	)		$	(341.28	)

Diluted - continuing operations	$	(398.24	)		$	(366.80	)
Diluted - discontinued operations		53.08				25.52
Total diluted losses per share	$	(345.16	)		$	(341.28	)

\n\n \n \n

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

F-3

iPower Inc. and Subsidiaries

Consolidated Statements\nof Changes in Stockholders’ Equity

For the Years Ended June 30, 2026 and 2025.


	** Common Stock			Treasury Stock			Additional Paid in		Retained Earnings (Accumulated		Non-controlling			Accumulated Other Comprehensive Income
	Shares			Amount			Amount		Capital		Deficit)			Interest			(Loss)		Total
Balance, June 30, 2025		14,518			$	15		$	–		$	33,482,231			$	(15,198,889	)	$	(47,462	)	$	40,107		$	18,276,002
Net loss		–				–			–			–				(11,622,242	)		(320	)		–			(11,622,562	)
Stock-based compensation		–				–			–			792,375				–			–			–			792,375
Shares issued for consulting services		5,231				5			–			389,976				–			–			–			389,981
Restricted shares issued for vested\n RSUs		554				1			–			(1	)			–			–			–			–
Common stock issued for conversions\n of note payable		148,234				148			–			9,149,971				–			–			–			9,150,119
Reverse-Split round up shares		5				–			–			–				–			–			–			–
Repurchase of common stock, at\n cost		(1,346	)			–			(41,755	)		–				–			–			–			(41,755	)
Foreign currency translation adjustments		–				–			–			–				–			–			(1,786	)		(1,786	)
Balance, June 30, 2026		167,196			$	169		$	(41,755	)	$	43,814,552			$	(26,821,131	)	$	(47,782	)	$	38,321		$	16,942,374



Balance, June 30, 2024		14,518			$	15		$	–		$	33,495,229			$	(10,230,601	)	$	(38,204	)	$	(210,406	)		23,016,033
Net loss		–				–			–			–				(4,968,288	)		(9,258	)		–			(4,977,546	)
Stock-based compensation		–				–			–			(12,998	)			–			–			–			(12,998	)
Foreign currency translation adjustments		–				–			–			–				–			–			250,513			250,513
Balance, June 30, 2025		14,518			$	15		$	–		$	33,482,231			$	(15,198,889	)	$	(47,462	)	$	40,107		$	18,276,002

\n\n \n \n

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

F-4

iPower Inc. and Subsidiaries

Consolidated Statements\nof Cash Flows

For the Years Ended June 30, 2026 and 2025


	For the Year Ended June 30,
	2026		2025

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(11,622,562	)	$	(4,977,546	)
Adjustments to reconcile net (loss)\n income to cash provided by (used in) operating activities:
Depreciation and amortization expense		761,328			779,976
Reversal of inventory reserve		(28,210	)		(335,358	)
Credit loss reserve		844,272			1,569,031
Loss on equity method investment		665,933			14,342
Stock-based compensation expense (reversal)		792,375			(12,998	)
Shares issued for consulting services		389,981			–
Loss on deconsolidation of VIE		41,519			–
Gain on disposition of subsidiaries		(1,613,936	)		–
Amortization of operating lease right of use assets		1,274,173			1,774,591
Change in FV of Derivative Liability		(682,100	)		–
Unrealized gain/loss on digital assets		853,856			–
Loss on extinguishment of convertible notes		2,324,402			–
Gain on sale of vehicle		(63,605	)		–
Impairment loss -goodwill		3,034,110			–
Discount on note receivable		499,016			–
Amortization of debt premium / discount and non-cash\n financing costs		395,701			125,906
Change in operating assets and liabilities
Accounts receivable		1,752,308			7,047,054
Inventories		8,159,413			2,750,428
Deferred tax assets		(2,424,494	)		(1,278,857	)
Prepayments and other current assets, net		(518,612	)		(764,676	)
Other non-current assets		(64,374	)		334,490
Accounts payable		(3,246,856	)		(4,640,051	)
Accounts payable – related parties		262,064			555,444
Other payables and accrued liabilities		(404,864	)		(1,684,961	)
Operating lease liabilities		(1,361,109	)		(1,839,999	)
Income taxes payable		(183,195	)		3,997
Net cash provided by (used in) operating activities		(163,466	)		(579,187	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Discontinued operations -cash sold		(83,545	)		–
Deconsolidation of VIE		(167,774	)		–
Proceeds from sale of fixed assets		192,000			13,183
Purchase of equipment		–			(163,588	)
Investment in joint venture		(293,526	)		(371,917	)
Purchase of digital assets held in Bitgo account		(3,210,500	)		–
Prepayments for software development		(1,118,280	)		(1,519,928	)
Net cash used in investing activities		(4,681,625	)		(2,042,250	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of offering cost settlement		–			(325,000	)
Treasury stock acquired		(41,755	)		–
Proceeds from short-term loans -related party		1,050,000			–
Proceeds from short-term loans		1,500,000			–
Payments on short-term loans - related party		(1,050,000	)		(350,000	)
Payments on short-term loans		(1,500,000	)		(483,599	)
Net proceeds from convertible note		10,256,833			–
Proceeds from revolving loan		3,669,797			8,359,237
Payments on revolving loan		(7,383,223	)		(10,200,000	)
Net cash provided by (used in) financing activities		6,501,652			(2,999,362	)

EFFECT OF EXCHANGE RATE ON CASH		65,731			250,852

CHANGES IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH		1,722,292			(5,369,947	)

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, beginning\n of period (1)		2,007,890			7,377,837

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end\n of period (1)	$	3,730,182		$	2,007,890

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income tax	$	–		$	–
Cash paid for interest	$	185,569		$	323,078

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING TRANSACTIONS:
Derivative liability - conversion option	$	606,700		$	–
Common stock issued for conversions of note payable		9,150,119			–
Right of use assets derecognized due to termination\n of operating leases		–			434,033
Note receivable from sale of subsidiaries		2,300,000			–
Transfer of inventories in exchange of assumption of\n accounts payable		2,007,367			–
Software under development transferred from GPM		460,807			–
Credits against note receivable		110,847			–
Discount on note receivable		499,016			–
Common stock issued for services		389,981			–

\n\n \n \n

(1)	Includes $330,011 cash\npresented in current assets held for sale on the consolidated balance sheet as of June 30, 2025.

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

F-5

iPower Inc.

Notes to Consolidated Financial Statements

As of June 30, 2026 and 2025 and for the Years Ended\nJune 30, 2026 and 2025

Note 1 - Nature of business and organization

iPower Inc., formerly known as BZRTH Inc., a Nevada\ncorporation (the “Company”), was incorporated on April 11, 2018. The Company is principally engaged in the marketing and sale\nof consumer home, garden and other products and accessories mainly in North America.

On May 18, 2021, the Company acquired 100% of the\nequity ownership of its variable interest entity, E Marketing Solution Inc. (“E Marketing”), an entity incorporated in California\nand 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\nthe equity ownership of its variable interest entity, Global Product Marketing Inc. (“GPM”), an entity which was incorporated\nin the State of Nevada on September 4, 2020, and was owned by Chenlong Tan, the Company’s Chairman, CEO, President and Interim CFO,\nand one of the shareholders of the Company. As a result, GPM became the Company’s wholly owned subsidiary.

On January 13, 2022, the Company entered into a joint\nventure agreement and formed a Nevada limited liability company, Box Harmony, LLC (“Box Harmony”), for the principal purpose\nof providing logistics services primarily for foreign-based manufacturers or distributors who desire to sell their products online in\nthe United States, with such logistics services to include, without limitation, receiving, storing and transporting such products. The\nCompany owns 40% of the equity interest in Box Harmony, retaining significant influence, but does not own a majority equity interest in\nor otherwise control Box Harmony. See details at Note 3 below.

On February 10, 2022, the Company entered into another\njoint venture agreement and formed a Nevada limited liability company, Global Social Media, LLC (“GSM”), for the principal\npurpose of creating a social media platform in order to provide content and services to assist businesses, including the Company and other\nbusinesses, in marketing their products. The Company owns 60% of the equity interest in GSM and controls its operations. See details at\nNote 3 below.

On February 15, 2022, the Company acquired 100% of\nthe ordinary shares of Anivia Limited (“Anivia”), a corporation organized under the laws of the British Virgin Islands (“BVI”),\nin accordance with the terms of a share transfer framework agreement (the “Transfer Agreement”), dated February 15, 2022,\nby and between the Company, White Cherry Limited, a BVI company (“White Cherry”), White Cherry’s equity holders, Li\nZanyu and Xie Jing (together with White Cherry, the “Sellers”), Anivia, Fly Elephant Limited, a Hong Kong company, Dayourenzai\n(Shenzhen) Technology Co., Ltd. (“DYRZ”), and Daheshou (Shenzhen) Information Technology Co., Ltd. (“DHS”). Anivia\nowns 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\nRepublic of China (“PRC”), which is a wholly foreign-owned enterprise (“WFOE”) of Fly Elephant Limited. The WFOE\ncontrols, through contractual arrangements summarized in Note 4 below, the business, revenues and profits of DHS, a company organized\nunder the Laws of the PRC and located in Shenzhen, China. See details on Note 4 below.

On August 4, 2025, the Company, through its wholly-owned subsidiary,\nDYRZ, entered into an agreement (the “VIE Contract Termination Agreement”) with the Company’s variable interest entity,\nDHS and its registered shareholders. DHS had previously been consolidated into the Company’s financial statements as a variable\ninterest entity pursuant to certain contractual arrangements (the “VIE Agreements”), which allowed DYRZ to exercise effective\ncontrol over DHS. Following entry into the VIE Contract Termination Agreement, DYRZ no longer owns, operates or controls DHS and Company-related\nservices and activities previously conducted by DHS will now be performed by iPower and other contractors, as needed, as part of an effort\nto streamline operations and improve structural efficiency. See details on Note 4 below.

On June 3, 2025, the Company entered into a joint\nventure agreement and formed a Nevada limited liability company, United Package NV, LLC (“United Package”), for the principal\npurpose of producing packaging materials to serve the rapidly growing demands of U.S. businesses seeking reliable, sustainable and cost-effective\nsupply chain solutions without reliance on offshore manufacturing. The Company owns approximately 44% of the equity interest in United\nPackage, retaining significant influence, but does not own a majority equity interest in or otherwise control United Package. See details\non Note 3 below.

F-6

On October 15, 2025, the Company executed an agreement\n(the “Restructuring Agreement”) with its subsidiaries to modify its corporate structure so that the Company’s consumer\ngoods and logistics business be operated out of GPM. Pursuant to the Restructuring Agreement, the Company transferred its ownership in\nE Marketing and United Package to GPM. Execution of the Restructuring Agreement does not have any impact on the consolidated financial\nstatements of the Company.

On October 23, 2025, the Company formed iPower\nSmart LLC, a Delaware limited liability company (’Smart LLC”). Smart LLC is wholly owned by the Company and principally engaged\nin digital treasury activities.

On January 29, 2026, the Company formed iPower\nNexus Inc., a Nevada corporation (‘Nexus”). Nexus is wholly owned by the Company and principally engaged in supply chain management\nbusiness.

On February 1, 2026, the Company entered into\na stock purchase agreement (the “SPA”) with ETTS AI Investment LLC, a Nevada limited liability company (“ETTS AI”),\npursuant to which the Company sold its equity interest in GPM and its underlying entities to ETTS AI in exchange for a $2.3 million promissory\nnote (the “Promissory Note”). As a result of the transaction, GPM and its underlying entities ceased to be subsidiaries of\nthe Company as of February 1, 2026. See details on Note 5 below.

Note 2 – Basis of Presentation and Summary\nof significant accounting policies

Basis of presentation

The accompanying financial statements have been\nprepared in accordance with the generally accepted accounting principles in the United States of America (“U.S. GAAP”) and\npursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). The Company’s fiscal year end date\nis June 30.

Principles of Consolidation

The consolidated financial statements include the\naccounts of the Company and its subsidiaries, GSM, Smart LLC, Nexus, and Anivia Limited. All inter-company balances and transactions have\nbeen eliminated.

Smaller Reporting Company Status

The Company is a “smaller reporting company,”\nas defined in Rule 12b-2 under the Exchange Act. As such, the Company is eligible to use certain reduced disclosure requirements applicable\nto smaller reporting companies. As a smaller reporting company, the Company may take advantage of certain scaled disclosure requirements,\nincluding reduced disclosure obligations regarding executive compensation and the ability to provide only two years of audited financial\nstatements. In addition, the Company may elect to use some or all of these accommodations for so long as it remains eligible to do so.\nThe Company’s reliance on these accommodations may make it more difficult for investors to compare our disclosures with those of\ncompanies that do not qualify as smaller reporting companies.

F-7

Use of estimates and assumptions

The preparation of financial statements in conformity\nwith U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities reported and disclosures\nof contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during\nthe periods presented. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at\nthe date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one\nor more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

Foreign currency translation and transactions

The reporting and functional currency of iPower\nand its subsidiaries is the U.S. dollar (USD). iPower’s WFOE and VIE in China each uses the local currency, Renminbi (“RMB”),\nas its functional currency. Assets and liabilities of the VIE are translated at the current exchange rate as quoted by the People’s\nBank of China (the “PBOC”) at the end of the period. Income and expense accounts are translated at the average translation\nrates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in\naccumulated other comprehensive income (loss) in the statement of changes in stockholders’ equity. Transaction gains and losses\nthat arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in\nthe results of operations as incurred.

The balance sheet amounts of the WFOE, with the exception\nof equity, on June 30, 2026, were translated at 6.7940 RMB to $1.00. The equity accounts were stated at their historical rates. The average\ntranslation rates applied to statements of operations and comprehensive income (loss) accounts for the year ended June 30, 2026 was 6.9951\nRMB to $1.00. Cash flows were also translated at average translation rates for the period and, therefore, amounts reported on the statement\nof cash flows would not necessarily agree with changes in the corresponding balances on the consolidated balance sheet.

Going Concern

The Company evaluates its ability to continue\nas a going concern in accordance with ASC 205-40, Presentation of Financial Statements—Going Concern. Management evaluates\nwhether conditions and events, considered in the aggregate, raise substantial doubt about the Company’s ability to continue as a\ngoing concern within one year after the date the consolidated financial statements are issued.

In performing this evaluation, management considers,\namong other factors, the Company’s current financial condition, liquidity and available sources of financing, obligations due or\nanticipated within the assessment period, historical and expected operating results and cash flows, and other relevant conditions and\nevents. When substantial doubt is raised, management evaluates whether its plans that are intended to mitigate those conditions and events,\nwhen implemented, will alleviate the substantial doubt. Such plans are considered only to the extent that it is probable that they will\nbe effectively implemented and, if implemented, will mitigate the conditions and events giving rise to substantial doubt.

As of June 30, 2026, the Company had cash and\ncash equivalents of $478,042 and\na working capital of $3.4 million. In assessing\nthe Company’s liquidity requirements for the twelve months following the issuance of these consolidated financial statements,\nmanagement considered the Company’s expected cash flows from operations, available financing sources, and significant\ncontractual obligations. The Company has approximately $4.7\nmillion of financing proceeds raised subsequent to June 30, 2026, as well as approximately $15.0 million of remaining optional\nfinancing capacity under its existing financing arrangement, subject to the investors’ election and the satisfaction or waiver\nof applicable closing conditions. The Company’s significant cash requirements include approximately $5.8 million of\nconvertible notes outstanding, which do not mature until December 2027 through September 2028, although the notes require monthly\ninterest payments and may be converted into common stock in accordance with their terms, and approximately $0.8 million of net lease\npayments expected during fiscal 2027. Although the Company incurred a net loss of approximately $11.6\nmillion and negative operating cash flows during the year ended June 30, 2026, management expects its future cash requirements to be\nreduced as a result of the cost reductions and other completed restructuring actions.

Based on the Company’s current operating plan,\ncash and cash equivalents, expected cash flows from operations, financing proceeds received subsequent to year-end, and expected cash\nrequirements, management believes that the Company will have sufficient liquidity to meet its obligations and fund its operations for\nat least the next twelve months. However, the Company’s liquidity and ability to meet its obligations and fund its capital requirements\nare dependent on its future financial performance, which is subject to general economic, financial and other factors beyond its control,\nincluding inflation and a potential recession.

Given the Company’s current working capital\nposition, management believes it will be able to manage through the current challenges by managing payment terms with customers and vendors.

Cash and cash equivalents

Cash and cash equivalents consist of amounts held\nas cash on hand and financial institution and financial service company deposits.

From time to time, the Company may maintain cash balances at financial\ninstitutions in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limit of $250,000 per depositor, per\ninsured bank, for each account ownership category. The Company has not experienced any losses with respect to such accounts. Management\nbelieves the Company is not exposed to any significant credit risk with respect to its cash deposits.

F-8

Restricted Cash

Restricted cash consists of cash that is subject\nto contractual restrictions on withdrawal or use. The Company’s restricted cash primarily represents cash held in a controlled account\nand pledged as collateral pursuant to the Company’s financing arrangements. Such amounts are restricted as to withdrawal and use\nin accordance with the terms of the applicable agreements.

For purposes of the consolidated statements of\ncash flows, the Company includes restricted cash together with cash and cash equivalents when reconciling the beginning-of-period and\nend-of-period amounts. Transfers between cash and cash equivalents and restricted cash are not presented as operating, investing, or financing\nactivities in the consolidated statements of cash flows.

The following table provides a reconciliation\nof cash, cash equivalents, and restricted cash reported within the Consolidated Balance Sheet that sums to the total of such amounts shown\nin the Consolidated Statement of Cash Flows:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of restricted cash
	June 30, 2026		June 30, 2025
Cash and cash equivalents	$	478,042		$	1,677,879
Cash and cash equivalents included in current assets held for sale		–			330,011
Restricted cash		3,252,140			–
Total cash, cash equivalents and restricted cash shown in the Consolidated Statement of Cash Flows	$	3,730,182		$	2,007,890

Accounts receivable

During the ordinary course of business, the Company\nextends unsecured credit to its customers. Accounts receivable are stated at the amount the Company expects to collect from customers,\nwhich includes the amount withheld by sales channel partners and refundable to the Company. Based on historical and expected loss rate\nand status of negotiations with the sales channel partner, management reviews its accounts receivable balances each reporting period to\ndetermine if an allowance for credit loss is required.

The Company evaluates the creditworthiness of all\nof its customers individually before accepting them and continuously monitors the recoverability of accounts receivable. If there are\nany indicators that a customer may not make payment, the Company may consider making provision for non-collectability for that particular\ncustomer. At the same time, the Company may cease further sales or services to such customer. The following are some of the factors that\nthe Company develops allowance for credit losses:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	·	the customer fails to comply with its payment schedule;

	·	the customer is in serious financial difficulty;

	·	a significant dispute with the customer has occurred regarding job progress or other matters;

	·	the customer breaches any of its contractual obligations;

	·	the customer appears to be financially distressed due to economic or legal factors;

	·	the business between the customer and the Company is not active; or

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

F-9

Accounts receivable are recognized and carried\nat carrying amount less an allowance for credit losses, if any. The Company maintains an allowance for credit losses resulting from the\ninability of its customers to make required payments based on contractual terms. The Company reviews the collectability of its receivables\non a regular and ongoing basis. The Company has also included in calculation of allowance for credit losses the potential impact of the\noverall economic conditions on our customers’ industry and businesses and their ability to pay our accounts receivable. After all\nattempts to collect a receivable have failed, the receivable is written off against the allowance. The Company also considers external\nfactors to the specific customer, including current conditions and forecasts of economic conditions, including the potential impact of\nthe recent tariff policy. In the event we recover amounts previously written off, we will reduce the specific allowance for credit losses.

Equity method investment

The Company accounts for its ownership interest in\nBox Harmony, a 40% owned joint venture, and United Package NV LLC, a 44% owned joint venture, following the equity method of accounting,\nin accordance with ASC 323, Investments — Equity Method and Joint Ventures. Under this method, the carrying cost is initially recorded\nat cost and then increased or decreased by recording its percentage of gain or loss in the joint ventures’ statement of operations\nand a corresponding charge or credit to the carrying value of the asset.

Digital Assets

The Company accounts for its digital assets,\nwhich, as of June 30, 2026, consisted of Bitcoin (“BTC”), Ethereum (“ETH”), and sUSDai, in accordance with\nAccounting Standards Codification (“ASC”) Topic 350-60, “Intangibles—Goodwill and Other—Crypto\nAssets.” The Company has ownership of and control over its digital assets and may use third-party custodial services to secure\nthem. Digital assets are initially recognized at cost and subsequently measured at fair value at each reporting date, with changes\nin fair value recognized in net income.

The Company determines the fair value of its digital\nassets on a recurring basis in accordance with ASC Topic 820, “Fair Value Measurement,” based on quoted prices on the active\nexchange that the Company has determined is its principal market for such digital assets (Level 1 inputs). The Company determines the\ncost basis of digital assets using the specific identification of each unit received. Realized and unrealized gains and losses from changes\nin the fair value of digital assets are recognized in the statement of operations.

Variable interest entities

On February 15, 2022, the Company acquired 100% of\nthe ordinary shares of Anivia and its subsidiaries, including DHS. Pursuant to the terms of the Agreements, the Company does not have\ndirect ownership in DHS but is actively involved in DHS’s operations as the sole manager to direct the activities and significantly\nimpact DHS’s economic performance. DHS’s operational funding has been provided by the Company following the February 15, 2022\nacquisition. During the term of the Agreements, the Company bears all the risk of loss and has the right to receive all of the benefits\nfrom DHS. As such, based on the determination that the Company is the primary beneficiary of DHS, in accordance with ASC 810-10-25-38A\nthrough 25-38J, DHS is considered a VIE of the Company and the financial statements of DHS have been consolidated from the date such control\nexisted, February 15, 2022.

On August 4, 2025, the Company entered into a Variable\nInterest Entity (“VIE”) Contract Termination Agreement with the VIE, pursuant to which all VIE agreements were terminated.\nAs a result, the Company no longer has a controlling financial interest in the VIE. In accordance with ASC 810-10-40, Consolidation\n— Deconsolidation of a Subsidiary or Derecognition of a Group of Assets, the Company deconsolidated the VIE as of the termination\ndate.

Upon deconsolidation, the Company derecognized all\nassets and liabilities of the VIE from its consolidated balance sheet. Because the Company retains no ownership interest or continuing\ninvolvement in the VIE following the termination of the agreements, no retained interest was recognized.

Goodwill

Goodwill represents the excess of the purchase price\nover the fair value of assets acquired and liabilities assumed. The Company accounts for goodwill under ASC Topic 350, Intangibles-Goodwill\nand Other.

Goodwill is not amortized but is reviewed for potential\nimpairment on an annual basis, or if events or circumstances indicate a potential impairment, at the reporting unit level. The Company’s\nreview for impairment includes an assessment of qualitative factors to determine whether it is more likely than not that the fair value\nof a reporting unit is less than its carrying value, including goodwill. If it is determined that it is more likely than not that the\nfair value of a reporting unit is less than its carrying value, including goodwill, a quantitative goodwill impairment test is performed,\nwhich compares the fair value of the reporting unit with its carrying amounts, including goodwill. If the fair value of the reporting\nunit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. However, if the carrying amount of the reporting\nunit exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess, limited to the total amount of goodwill\nallocated to that reporting unit.

F-10

During the year ended June 30, 2026, the Company\nperformed a goodwill impairment analysis following the steps laid out in ASC 350 and concluded that the carrying value of goodwill was\nimpaired, primarily due to a sustained decline in the Company’s share price and market capitalization. Accordingly, the Company\nrecognized a full goodwill impairment charge during the period. As of June 30, 2026 and 2025, the goodwill balance amounted to $0 and\n$3,034,110, respectively.

Intangible assets

Finite life intangible assets at June 30, 2026 included\na covenant not to compete, a supplier relationship, and software recognized as part of the acquisition of Anivia. Intangible assets are\nrecorded at the estimated fair value of these items at the date of acquisition, February 15, 2022. Intangible assets are amortized on\na straight-line basis over their estimated useful life as follows:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of estimated useful life
		Useful Life
Covenant Not to Compete		10 years
Supplier relationship		6 years
Software		5 years

The Company reviews the recoverability of long-lived\nassets, including intangible assets, when events or changes in circumstances occur that indicate the carrying value of the asset may not\nbe recoverable. The assessment of possible impairment is based on the ability to recover the carrying value of the asset from the expected\nfuture pretax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the\ncarrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. The\nmeasurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair\nvalue determinations. The Company did not record any impairment charge for the years ended June 30, 2026 and 2025.

Software development

The Company accounts for costs incurred to develop\nor obtain software for internal use in accordance with ASC 350-40, Intangibles—Goodwill and Other—Internal-Use Software.\nCosts incurred during the preliminary project stage are expensed as incurred. Costs incurred during the application development stage\nare capitalized when the preliminary project stage has been completed, management has authorized and committed to funding the project,\nand it is probable that the project will be completed and the software will be used to perform the function intended. Capitalizable costs\ninclude amounts paid to third-party developers and other costs directly associated with the development and implementation of the software.

Costs incurred for training, data conversion,\nmaintenance, and other post-implementation activities are expensed as incurred. Capitalization ceases when the software is substantially\ncomplete and ready for its intended use. Capitalized internal-use software costs are amortized on a straight-line basis over their estimated\nuseful lives beginning when the software is ready for its intended use. The Company evaluates capitalized internal-use software for impairment\nwhen events or changes in circumstances indicate that the carrying amount may not be recoverable.

Embedded derivative liability

The Company evaluates the embedded features of its\nfinancial instruments, including its convertible notes payable in accordance with ASC Topic 480, “Distinguishing Liabilities\nfrom Equity,” and ASC Topic 815 “Derivatives and Hedging.” Certain conversion options and redemption features\nare required to be bifurcated from their host instrument and accounted for as free-standing derivative financial instruments should certain\ncriteria be met. The Company applies significant judgment to identify and evaluate complex terms and conditions for its financial instruments\nto determine whether such instruments are derivatives or contain features that qualify as embedded derivatives. Embedded derivatives must\nbe separately measured from the host contract if all the requirements for bifurcation are met. The assessment of the conditions surrounding\nthe bifurcation of embedded derivatives depends on the nature of the host contract and the features of the derivatives. Bifurcated embedded\nderivatives are recognized at fair value.

The following table provides a roll-forward of changes\nfor financial instruments measured at fair value on a recurring basis for the year ended June 30, 2026:

\n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of roll forward of\nchanges for financial instruments measured at fair value
Derivative Liability	Amount
Balance as of June 30, 2025	$	–
Initial fair value upon issuance of convertible notes		2,574,200
Extinguishment of derivative liability upon conversion of convertible notes		(1,285,400	)
Gain on change in fair value of derivative liability		(682,100	)
Balance as of June 30, 2026	$	606,700

F-11

Treasury stock

The Company accounts for treasury stock under the\ncost method in accordance with ASC 505-30, Equity — Treasury Stock. Shares of the Company’s common stock repurchased\nin the open market are recorded at cost and presented as a reduction of stockholders’ equity. Changes in the market value of treasury\nshares subsequent to repurchase are not recognized in the consolidated financial statements.

Fair values of financial instruments

ASC 825, “Disclosures about Fair Value of Financial\nInstruments,” requires disclosure of fair value information about financial instruments. ASC 820, “Fair Value Measurements”\ndefines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures\nabout fair value measurements.

The carrying amounts of cash and cash equivalents,\naccounts 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\nfair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable\ninputs to the extent possible. The Company determines the fair value of its financial instruments based on assumptions that market participants\nwould use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions\nin fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized\nin one of the following levels:

Level 1 – Inputs are unadjusted, quoted prices\nin active markets for identical assets or liabilities at the measurement date;

Level 2 – Inputs are observable, unadjusted\nquoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities\nin markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially\nthe full term of the related assets or liabilities; and

Level 3 – Unobservable inputs that are significant\nto the measurement of the fair value of the assets or liabilities that are supported by little or no market data.

The Company measures certain non-financial assets\non a non-recurring basis, including goodwill. As a result of those measurements, as of June 30, 2026 and 2025, the Company had goodwill\nwith a carry book value of $0 and $3,034,110, respectively.

The fair value of goodwill was determined based on\na combination of the market approach and the discounted cash flow method, which is an income approach, which required the use of inputs\nthat were unobservable in the marketplace (Level 3), including a discount rate that would be used by a market participant, projections\nof revenues and cash flows,\namong others.

The fair value of financial instruments measured on\na recurring basis as of June 30, 2026 consisted of the following:

\n \n \n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of fair value of financial derivative liability
	Fair Value Measurements as of June 30, 2026
	Total Fair Value			Level 1			Level 2		Level 3
Digital assets		2,356,644				2,356,644			–		–
Derivative liability	$	(606,700	)		$	–		$	–	$	(606,700	)
Total recurring fair value measurements	$	1,749,944			$	2,356,644		$	–	$	(606,700	)

F-12

Revenue recognition

The Company recognizes revenues from service and product\nsales, net of promotional discounts and return allowances, when the following revenue recognition criteria are met: a contract has been\nidentified, separate performance obligations are identified, the transaction price is determined, the transaction price is allocated to\nseparate performance obligations and revenue is recognized upon satisfying each performance obligation. The Company transfers the risk\nof loss or damage upon shipment or completion of service, therefore, revenue from product sales is recognized when it is shipped to the\ncustomer and the revenue from services is recognized upon completion of services. Return allowances, which reduce product revenue by the\nCompany’s best estimate of expected product returns, are estimated using historical experience.

The Company evaluates the criteria of ASC 606 - Revenue\nRecognition Principal Agent Considerations in determining whether it is appropriate to record the gross amount of product sales and related\ncosts or the net amount earned as commissions. Generally, when the Company is primarily responsible for fulfilling the promise to provide\na 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\nas customer deposits.

The Company periodically provides incentive offers\nto its customers to encourage purchases. Such offers include current discount offers, such as percentage discounts off current purchases\nand other similar offers. Current discount offers, when accepted by the Company’s customers, are treated as a reduction to the purchase\nprice of the related transaction.

Sales discounts are recorded in the period in which\nthe related sales are recorded. Sales return allowances are estimated based on historical amounts and are recorded upon recognizing the\nrelated sales. Shipping and handling costs are recorded as selling expenses.

Cost of revenue

Cost of revenue mainly consists of costs for purchases\nof products, net of purchase discounts and rebates, and related inbound freight and delivery fees.

Operating expenses

Operating expenses, which consist of selling and\nfulfillment and general and administrative expenses, including inventory reserves, are expensed as incurred. Vendor warranty credits resulting\nfrom refund of returns on quality issues are recorded to offset merchant selling fees. During the years ended June 30, 2026 and 2025,\nthe Company recorded vendor credit of $0 and $48,903, respectively. Outbound freight costs related to shipping costs to customers are\nconsidered periodic costs and are reflected in selling and fulfillment expenses.

Advertising costs are expensed as incurred. Total\nadvertising and promotional costs included in selling and fulfillment expenses for the years ended June 30, 2026 and 2025 were as following.

\n \n \n \n \n\n \n \n \n \n \n \n \n

Schedule of advertising costs
	2026		2025
Advertising and promotion	$	709,256		$	3,351,814

F-13

Inventories

Inventory consists of finished goods ready for\nsale and is stated at the lower of cost or net realizable value. The Company values its inventory using the weighted average costing method.\nThe Company’s policy is to include as a part of inventory and cost of goods sold any freight incurred to ship the product from its\nvendors to warehouses. The Company regularly reviews inventory and considers forecasts of future demand, market conditions and product\nobsolescence.

If the estimated realizable value of the inventory\nis less than cost, the Company makes provisions in order to reduce its carrying value to its estimated market value. The Company also\nreviews inventory for slow moving inventory and obsolescence and records allowance for obsolescence.

Debt issuance costs

Costs incurred in connection with the issuance of\ndebt are deferred and amortized as interest expense over the term of the related debt using the effective interest method. To the extent\nthat the debt is outstanding, these amounts are reflected in the consolidated balance sheets as direct deductions from the carrying amount\nof the outstanding borrowings.

Equity offering costs

The Company capitalizes certain legal, accounting\nand other third-party fees that are directly related to an equity financing that is probable of successful completion until such financing\nis consummated. After consummation of an equity financing, these costs are recorded as a reduction of the proceeds received as a result\nof the offering. Should a planned equity financing be abandoned, terminated or significantly delayed, the deferred offering costs are\nimmediately written off to operating expenses in the consolidated statements of operations and comprehensive income (loss) in the period\nof determination. As of June 30, 2026 and 2025, there were no deferred offering costs included in the consolidated balance sheets.

Segment reporting

The Company follows ASC 280, Segment\nReporting. The Company’s chief operating decision maker (“CODM”), the Chief Executive Officer, reviews the consolidated results of\noperations when making decisions about allocating resources and assessing the performance of the Company as a whole and, hence, the\nCompany has only one\nreportable segment. The Company does not distinguish between markets or segments for the purpose of internal reporting.

The CODM uses consolidated net income (loss),\nas reported in the consolidated statements of operations, as the measure of segment profit or loss in assessing segment performance and\nallocating resources. The significant expense categories and amounts regularly provided to the CODM are the consolidated expense categories\npresented in the Company’s consolidated statements of operations. Accordingly, the Company has not separately duplicated such information\nin this note and refers to the consolidated statements of operations for the significant segment expense information.

For the years ended June\n30, 2026 and 2025, sales through Amazon to Canada and other foreign countries were approximately 6.8% and 7.2% of the Company’s\ntotal sales, respectively. During the year ended June 30, 2026, sales of hydroponic products, including ventilation and grow light systems,\nwere approximately 10.0% of the Company’s total sales and the remaining 90.0% consisted of general gardening, home goods, and other\nproducts and accessories. During the year ended June 30, 2025, sales of hydroponic products, including ventilation and grow light systems,\nwere approximately 19% of the Company’s total sales and the remaining 81% consisted of general gardening, home goods, and other\nproducts and accessories. As of June 30, 2026 and 2025, the Company had approximately $0 and $1.0 million of inventory stored in China,\nrespectively. The Company’s majority of long-lived assets are located in the State of California, United States, a majority of the\ndeferred tax assets are US related, and a majority of the Company’s revenues are derived from within the United States.

F-14

Leases

The Company records right-of-use (“ROU”)\nassets and related lease obligations on our balance sheet.

ROU assets represent our right to use an underlying\nasset for the lease terms and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease\nROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the\nCompany’s leases do not provide an implicit rate, the Company generally uses its incremental borrowing rate based on the estimated\nrate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU\nasset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line\nbasis over the lease term.

Stock-based compensation

The Company applies ASC No. 718, “Compensation-Stock\nCompensation,” which requires that share-based payment transactions with employees and nonemployees, upon adoption of ASU 2018-07,\nbe measured based on the grant date fair value of the equity instrument and recognized as compensation expense over the requisite service\nperiod, with a corresponding addition to equity. Under this method, compensation costs related to employee share options or similar equity\ninstruments is measured at the grant date based on the fair value of the award and is recognized over the period during which an employee\nis required to provide service in exchange for the award, which generally is the vesting period. In addition to the requisite service\nperiod, the Company also evaluates the performance condition and market condition under ASC 718-10-20. For an award which contains both\na performance and a market condition, and where both conditions must be satisfied for the award to vest, the market condition is incorporated\ninto the fair value of the award, and that fair value is recognized over the employee’s requisite service period or nonemployee’s\nvesting period if it is probable the performance condition will be met. If the performance condition is ultimately not met, compensation\ncosts 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 will recognize forfeitures of such equity-based\ncompensation as they occur.

Income taxes

The Company accounts for income taxes under the\nasset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences\nbetween the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets\nand liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences\nare expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income\nin the period that includes the enactment date. A valuation allowance must be established for deferred tax assets when it is more-likely-than-not\n(a probability level of more than 50%) that they will not be realized. Valuation allowances are recorded, when necessary, to reduce deferred\ntax assets to the amount expected to be realized.

The Company has analyzed filing positions in each\nof the federal and state jurisdictions where the Company is required to file income tax returns, as well as open tax years in such jurisdictions.\nThe Company has identified the U.S. federal jurisdiction, and the states of Nevada and California, as its “major” tax jurisdictions.\nHowever, the Company has certain tax attribute carryforwards which will remain subject to review and adjustment by the relevant tax authorities\nuntil the statute of limitations closes with respect to the year in which such attributes are utilized.

F-15

The Company believes that our income tax filing positions\nand deductions will be sustained on audit and does not anticipate any adjustments that will result in a material change to its financial\nposition. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740, Income Taxes. The Company’s\npolicy for recording interest and penalties associated with income-based tax audits is to record such items as a component of income\ntaxes.

Employee Retention Credit

The Company accounts for refundable Employee Retention\nCredits (“ERC”) as government assistance. ERC amounts are recognized when the Company has reasonable assurance that it has\ncomplied with the applicable eligibility requirements and conditions of the program and that the credits are received and retained. Amounts\nrecognized are based on the credits received and are presented as other income in the consolidated statements of operations.

Commitments and contingencies

In the ordinary course of business, the Company is\nsubject to certain contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters,\nsuch as government investigations and tax matters. The Company recognizes a liability for such contingency if it determines it is probable\nthat a loss has occurred and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments\nincluding historical and specific facts and circumstances of each matter.

Earnings per share

Basic earnings per share is computed by dividing net income attributable\nto holders of common stock by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per\nshare give effect to potentially dilutive securities outstanding during the period using the treasury stock method or if-converted method,\nas applicable, except when their effect would be antidilutive.

Recently issued accounting pronouncements

In December 2025, the FASB issued ASU 2025-12,\nCodification Improvements, which makes technical corrections, clarifications and other incremental improvements to various Topics\nin the Accounting Standards Codification. The amendments include, among other matters, clarifications related to diluted earnings per\nshare and treasury stock. The amendments are generally effective for annual reporting periods beginning after December 15, 2026, and\ninterim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the\nimpact of adopting the amendments on its consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06,\nIntangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use\nSoftware, which modernizes the accounting for costs incurred to develop software for internal use. Among other changes, the amendments\nremove references to software development project stages and revise the guidance for determining when capitalization of software development\ncosts should begin. The amendments are effective for annual reporting periods beginning after December 15, 2027, and interim reporting\nperiods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of adopting\nthe amendments on its consolidated financial statements and related disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial\nInstruments — Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The ASU provides\na practical expedient and accounting policy election for measuring expected credit losses on certain trade receivables and contract assets\narising under ASC 606. The amendments are effective for fiscal years beginning after December 15, 2025, and interim periods within those\nfiscal years, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its measurement of expected\ncredit losses.

F-16

In November 2024, the FASB issued ASU 2024-03,\nIncome Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of\nIncome Statement Expenses, which requires public business entities to provide additional disclosures about certain expenses included\nin the income statement. The amendments require disclosure of specified expense categories included within relevant expense captions,\nincluding purchases of inventory, employee compensation, depreciation and intangible asset amortization, as applicable, as well as certain\nother qualitative and quantitative information. In January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03\nfor entities with non-calendar fiscal years. The amendments are effective for annual reporting periods beginning after December 15, 2026,\nand interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company\nis currently evaluating the impact of adopting the amendments on its consolidated financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09,\nImprovements to Income Tax Disclosures. Under this ASU, public business entities must annually “(1) disclose specific categories\nin the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect\nof those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income [or loss] by the\napplicable statutory income tax rate).” This ASU’s amendments are effective for public business entities for annual periods\nbeginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning\nafter December 15, 2025. Entities are permitted to early adopt the standard “for annual financial statements that have not yet been\nissued or made available for issuance.” The amendments should be applied on a prospective basis. Retrospective application is permitted.\nThe adoption of this standard did not have a material impact on its consolidated financial statements but resulted in additional income tax disclosures.

In October 2023, the FASB issued ASU 2023-06,\nDisclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. This ASU incorporates\ncertain U.S. Securities and Exchange Commission (SEC) disclosure requirements into the FASB Accounting Standards Codification™\n(“Codification”). The amendments in the ASU are expected to clarify or improve disclosure and presentation requirements of\na variety of Codification Topics, allow users to more easily compare entities subject to the SEC’s existing disclosures with those\nentities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC’s regulations.\nIn SEC Release No. 33-10532, Disclosure Update and Simplification, issued August 17, 2018, the SEC referred certain of its disclosure\nrequirements that overlap with, but require incremental information to, generally accepted accounting principles to the FASB for potential\nincorporation into the Codification. The ASU incorporates into the Codification 14 of the 27 disclosures referred by the SEC. They modify\nthe disclosure or presentation requirements of a variety of Topics in the Codification. The requirements are relatively narrow in nature.\nSome of the amendments represent clarifications to, or technical corrections of, the current requirements. Because of the variety of\nTopics amended, a broad range of entities may be affected by one or more of those amendments. For entities subject to the SEC’s\nexisting disclosure requirements and for entities required to file or furnish financial statements with or to the SEC in preparation\nfor the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date\nfor each amendment will be the date on which the SEC removes that related disclosure from its rules. For all other entities, the amendments\nwill be effective two years later. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations,\nthe amendments will be removed from the Codification and not become effective for any entity. The Company does not expect the adoption\nof this standard to have a material impact on its consolidated financial statements.

The Company does not believe other recently issued\nbut not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position,\nstatements of operations and cash flows.

F-17

Note 3 - Joint Ventures

Box Harmony, LLC

On January 13, 2022, the Company entered into a joint\nventure agreement (the “Joint Venture Agreement”) with Titanium Plus Autoparts, Inc., a California corporation (“TPA”),\nTony Chiu (“Chiu”) and Bin Xiao (“Xiao”). Pursuant to the terms of the Joint Venture Agreement, the parties formed\na Nevada limited liability company, Box Harmony, LLC (“Box Harmony”), for the principal purpose of providing logistic services\nprimarily for foreign-based manufacturers or distributors who desire to sell their products online in the United States, with such logistic\nservices to include, without limitation, receiving, storing and transporting such products.

Following entry into the Joint Venture Agreement,\nBox Harmony issued a total of 6,000 certificated units of membership interest, designated as Class A voting units (“Equity Units”),\nas follows: (i) the Company agreed to contribute $50,000 in cash in exchange for 2,400 Equity Units in Box Harmony and agreed to provide\nBox Harmony with the use and access to certain warehouse facilities leased by the Company (see below), and (ii) TPA received 1,200 Equity\nUnits in exchange for (a) $1,200 and contributing the TPA IP License referred to below, (b) its existing and future customer contracts,\nand (c) granting Box Harmony the use of shipping accounts (FedEx and UPS) and all other TPA carrier contracts, and (iii) Xiao received\n2,400 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\noperating agreement (the “LLC Agreement”), TPA and Xiao each granted to the Company an unconditional and irrevocable right\nand option to purchase (“Purchase Option”) from Xiao and TPA at any time within the first 18 months following January 13,\n2022, 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.\nIf 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\nof this report, the Purchase Option had expired, and the Company had not exercised its option to purchase additional voting units from\nXiao and TPA. The LLC Agreement prohibits the issuance of additional Equity Units and certain other actions unless approved in advance\nby the Company. In January 2023, TPA and Xiao transferred their 60% equity units to a third party without consideration as the LLC was\nstill in the development stage and did not have significant operations. The transfer of equity did not have any impact on the LLC’s\nfinancial statements.

As a result, the Company owns 40% of the equity interest\nin Box Harmony with significant influence but does not own a majority equity interest or otherwise control of Box Harmony. The Company\naccounts for its ownership interest in Box Harmony following the equity method of accounting, in accordance with ASC 323, Investments\n—Equity Method and Joint Ventures. Under this method, the carrying cost is initially recorded at cost and then increased or decreased\nby recording its percentage of gain or loss in its statement of operations and a corresponding charge or credit to the carrying value\nof the asset. As of June 30, 2026 and 2025, the carrying value of the investment in Box Harmony was $12,773 and $13,264, respectively.

Global Social Media, LLC

On February 10, 2022, the Company entered into a joint\nventure agreement with Bro Angel, LLC, Ji Shin and Bing Luo (the “GSM Joint Venture Agreement”). Pursuant to the terms of\nthe GSM Joint Venture Agreement, the parties formed a Nevada limited liability company, Global Social Media, LLC (“GSM”),\nfor the principal purpose of providing a social media platform, contents and services to assist businesses, including the Company and\nother businesses, in marketing their products.

F-18

Following entry into the GSM Joint Venture Agreement,\nGSM issued 10,000 certificated units of membership interest (the “GSM Equity Units”), of which the Company was issued 6,000\nGSM Equity Units and Bro Angel was issued 4,000 GSM Equity Units. Messrs. Shin and Luo are the owners of 100% of the equity of Bro Angel.\nThe LLC Agreement prohibits the issuance of additional Equity Units and certain other actions unless approved in advance by Bro Angel,\ncreating 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\nnot completed the capital contributions and no receivables have been recorded.

Pursuant to the terms of the Agreements, the Company\nowns 60% of the equity interest in GSM and control of GSM’s operations. In accordance with ASC 810, Consolidation, the Company consolidates\nGSM in its consolidated financial statements based on its controlling financial interest in GSM. For the years ended June 30, 2026 and\n2025, the impact of GSM’s activities was immaterial to the Company’s consolidated financial statements.

United Package NV, LLC

On June 3, 2025, the Company, Custom Cup Factory,\nInc., a California corporation (“CCF”), and Yi Yang (“Yang”) entered into the limited liability company operating\nagreement (the “Operating Agreement”) of United Package NV, LLC, a Nevada limited liability corporation (“United Package”).

United Package focuses on the domestic production\nof packaging materials to serve the rapidly growing demands of U.S. businesses seeking reliable, sustainable, and cost-effective supply\nchain solutions without reliance on offshore manufacturing. Pursuant to the terms of the Operating Agreement, the Company owns 2,280 Class\nA Voting Units (as defined in the Operating Agreement) of United Package in consideration for the Company’s contribution of equipment\nand facility, Yang owns 1,140 Class A Voting Units of United Package in consideration for Yang’s commitment to manage the business\nof United Package and CCF owns 1,710 Class A Voting Units of United Package in consideration for CCF’s contribution of its marketing\nexpertise, existing sales channel and customer list.

As a result of the above, the Company owns\napproximately 44%\nof the equity interest in United Package with significant influence but does not own a majority equity interest or otherwise control\nof United Package. The Company accounts for its ownership interest in United Package following the equity method of accounting, in\naccordance with ASC 323, Investments —Equity Method and Joint Ventures. Under this method, the carrying cost is initially\nrecorded at cost and then increased or decreased by recording its percentage of gain or loss in its statement of operations and a\ncorresponding charge or credit to the carrying value of the asset. During the years ended June 30, 2026 and 2025, the Company\ninvested $293,526\nand $371,916,\nrespectively. On October 15, 2025, pursuant to the Restructuring Agreement, the Company transferred its ownership in United Package\nto GPM and recorded a loss on investment of $665,443. On February 1, 2026, the Company sold its equity interest in GPM and its underlying entities, including United Package, to\nETTS AI. See details on Note 5 below.

F-19

Note 4 – Variable Interest Entity

Effective February 15, 2022, upon acquisition of Anivia,\nthe Company assumed the contractual arrangements between the WFOE and DHS through a variable interest operating entity structure. On September\n26, 2024, Mr. Zanyu Li, the equity owner of DHS, transferred his shares to Ms. Xiaoyun Liu. Ms. Liu has become the Manager and Legal Representative\nof DHS and assumed all responsibilities and obligations of Mr. Zanyu Li. The transfer of equity ownership did not change the control the\nCompany had on the VIE, therefore there was no impact on the Company’s financial statements.

The Company did not provide financial or other support\nto 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\nContract Termination Agreement with the VIE, pursuant to which all VIE agreements were terminated. As a result, the Company no longer\nhas a controlling financial interest in the VIE. In accordance with ASC 810-10-40, Consolidation — Deconsolidation of a Subsidiary\nor Derecognition of a Group of Assets, the Company deconsolidated the VIE as of the termination date.

Comparative information for the prior period has not\nbeen 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\nof the VIE assets that would be used to settle obligations of the VIE.

The following table summarizes the carrying amounts\nof the VIE’s assets and liabilities derecognized as of August 4, 2025 and the carrying amount of the VIE’s assets and liabilities\nas of June 30, 2025:

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of VIE’s assets and liabilities
	Deconsolidation		June 30, 2025
Cash in bank	$	165,243		$	311,852
Prepayments and other receivables	$	290		$	279
Rent deposit	$	–		$	9,772
Office equipment, net	$	3,652		$	3,562
Accounts payable	$	103,377		$	99,544
Income tax payable	$	–		$	280,155
Other payables and accrued liabilities	$	24,915		$	465,990

The Company recorded a $41,519 loss on deconsolidation of VIE for the\nyear ended June 30, 2026.

The operating results of the VIE were as follows for\nthe year ended June 30, 2026 and 2025:

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n

Schedule of operating results of the VIE
	2026		2025
Revenue	$	–		$	–
Net income (loss) after elimination of intercompany transactions	$	1,201,410		$	1,231,686

F-20

Note 5 – Discontinued Operation

On February 1, 2026, the Company entered into a software asset transfer\nagreement (the “Software Asset Transfer Agreement”) with its then-wholly owned subsidiary, Global Product Marketing, Inc.,\na Nevada corporation (“GPM”), pursuant to which GPM assigned, transferred and conveyed to the Company all of GPM’s right,\ntitle and interest in its Software Assets (as defined in the agreement), and the Company assumed all outstanding vendor payables related\nto the Software Assets. In addition, the Software Asset Transfer Agreement granted GPM a non-exclusive worldwide, perpetual, irrevocable\nand royalty free license to use, reproduce and modify the licensed software, thus allowing the Company and GPM to collaborate in the software\ndevelopment on a going forward basis. Further, in the event GPM resells the Original Software code (as defined in the agreement), GPM\nshall pay the Company 50% of the proceeds received in relation to such sale.

Thereafter, on February 1, 2026, the Company\nentered into a stock purchase agreement (the “SPA”) with a third party, ETTS AI Investment LLC, a Nevada limited\nliability company (“ETTS AI”), pursuant to which the Company sold its equity interest in GPM and its underlying entities\nto ETTS AI in exchange for a $2.3\nmillion promissory note (the “Promissory Note”). The Promissory Note is repayable in full in seven years, may be prepaid\nat any time, and repayment may be credited from time to time by purchase orders (as described below) made under a supply and\ndistribution agreement, dated February 1, 2026 (the “Supply and Distribution Agreement”), between the Company, GPM and\nETTS AI.

Under the Supply and Distribution Agreement, the\nCompany and GPM agreed that the Company will act as exclusive supplier in the United States, Canada and Mexico for all existing SKUs that\nhave historically been distributed from the Company to GPM, thus allowing the Company to continue in its role of supplier to GPM while\ndivesting of the cost center associated with GPM’s sales function. As supplier, the Company will charge GPM, as distributor, a price\nmutually agreed on for each product and has the right to add up to 15% margin on top of the net cost. In addition, GPM will charge the\nCompany a cooperative marketing fee, which will be defined in a subsequent agreement between the parties. Under the Supply and Distribution\nAgreement, payment on all purchase orders are due within seven days of GPM’s receipt of payment from its customers and amounts identified\nas “Margin” (i.e., the Company’s cost x margin on the SKUs purchased by GPM) may be applied on a dollar-for-dollar as\na credit/offset against the outstanding amounts owed under the Promissory Note. The Supply and Distribution Agreement has a term of five\nyears and automatically renews thereafter for subsequent two-year terms, unless 90 days’ notice is provided prior to the expiration\nof such term. In addition, the Supply and Distribution Agreement contains standard limitation on liability, indemnification and other\nprovisions standard for an agreement of this nature.

The sale of GPM represents a strategic shift that\nwill have a major effect on the Company’s operations and financial results. Due to this shift, for all periods presented, the consolidated\nfinancial statements reflect GPM’s financial results as discontinued operations in the consolidated statements of operations.

The following table summarizes the carrying amounts\nof GPM’s assets and liabilities and loss on disposal as of February 1, 2026:

\n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of VIE’s assets and liabilities
	Amount
Total assets	$	778,223
Total liabilities		(92,159	)
Net assets disposed		686,064
Total consideration		2,300,000
Gain on disposal	$	1,613,936

F-21

The following table presents components of discontinued\noperations, net of tax for the years ended June 30, 2026 and 2025:

\n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of discontinued operations
Component	Years Ended
	6/30/2026		6/30/2025
Income from discontinued operations	$	559,336		$	465,406
Gain on disposition of subsidiaries		1,613,936			–
Income tax expenses		386,153			93,824
Total discontinued operations, net of tax	$	1,787,119		$	371,582

The following table presents items from discontinued\noperations for the years ended June 30, 2026 and 2025 included within the consolidated statements of cash flows, including adjustments\nto reconcile net earnings to cash provided by (used in) operating activities:

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of income from discontinued operations
	Years Ended
	6/30/2026		6/30/2025
Income from discontinued operations	$	559,336		$	465,406
Gain on disposition of subsidiaries		1,613,936			–

Cash flows related to discontinued operations included $83,545 of cash\nused in investing activities for the year ended June 30, 2026. In addition, as part of the consideration received in connection with the\ndisposition of the subsidiaries, the Company received a $2.3 million promissory note, which represents a non-cash investing activity.\nThere were no financing activities related to discontinued operations for the years ended June 30, 2026 and 2025.

Note 6 – Accounts Receivable

Accounts receivable for the Company consisted of the\nfollowing as of the dates indicated below:

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of accounts receivable
	June 30, 2026			June 30, 2025
Accounts receivable	$	7,107,396			$	8,048,425
Less: allowance for credit losses		(2,735,696	)			(1,924,417	)
Total accounts receivable	$	4,371,700			$	6,124,008

The changes in allowance for credit losses on accounts\nreceivable are summarized below:

\n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n

Schedule of changes in allowance for credit losses on accounts receivable
	Allowance for Credit Losses
Balance at June 30, 2025	$	1,924,417
Allowance recorded during the year ended June 30, 2026		811,279
Balance at June 30, 2026	$	2,735,696

F-22

Note 7 – Inventories

As of June 30, 2026 and 2025, inventories consisting\nof finished goods ready for sale were as follows:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of inventory
	June 30, 2026		June 30, 2025
Finished goods	$	284,258		$	8,443,671
Less: Allowance for obsolescence		(284,258	)		(312,468	)

Total	$	–		$	8,131,203

On June 30, 2026, the Company entered into an\nagreement with GPM to transfer $2,007,367 of inventories in exchange for assumption of the same amount of accounts payable.

For the year ended June 30, 2026 and 2025, the\nCompany recorded inventory reserve expense of $(28,210)\nand $(335,358),\nrespectively. As of June 30, 2026 and 2025, allowance for obsolescence was $284,258\nand $312,468,\nrespectively.

Note 8 – Prepayments and Other Current Assets

As of June 30, 2026 and 2025, prepayments and other current assets consisted\nof the following:

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of prepayments and other current assets
	June 30, 2026		June 30, 2025
Advance to suppliers	$	871,966		$	1,787,296
Prepaid income taxes		99,954			19,072
Receivables – fulfillment fees		820,615			–
Prepaid expenses and other receivables		754,220			1,047,451
Less: Allowance for credit losses		–			–

Total	$	2,546,755		$	2,853,819

Note 9 - Digital Assets

On December 27, 2025, the Company purchased (1) 15.12\nBitcoin (BTC) at an average price of $87,686.33 per BTC, for a total amount of approximately $1,325,400 and (2) 301.09 Ethereum (ETH)\nat an average price of $2,934.67 per ETH, for a total amount of approximately $883,600. Pursuant to a Security and Pledge Agreement (the\n“Security Agreement”) by and among the Company, each of the direct and indirect Subsidiaries (as defined in the Security Agreement)\nof the Company (the “Guarantors”), and an entity that is an affiliate of the Convertible Note Investor, the Company granted\nto the Investor, for the ratable benefit of the Investor, a valid, perfected and enforceable first priority security interest in the cryptocurrency\nassets of the Company and the Guarantors, including without limitation all Crypto Collateral (as defined in the Security Agreement) and\nrelated assets. The Security Agreement and restrictions on related collateral assets expire upon full repayment or conversion\nof related convertible notes and maturity of the SPA described in Note 13 below.

The following table provides a roll-forward of digital\nassets measured at fair value on a recurring basis for the year ended June 30, 2026:

\n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of digital assets measured at fair value on a recurring basis
	Fair Value
Balance as of June 30, 2025	$	–
Purchase of BTC		1,325,400
Purchase of ETH		883,600
Purchase of sUSDai		1,001,500
Sales of BTC		–
Sales of ETH		–
Sales of sUSDai		–
Change in fair value of BTC		(441,278	)
Change in fair value of ETH		(411,078	)
Change in fair value of sUSDai		(1,500	)
Balance as of June 30, 2026	$	2,356,644

F-23

During the years ended June 30, 2026 and 2025, the\nCompany recognized a net unrealized loss of $853,856 and $0, respectively, on its digital asset holdings.

Digital assets consisted of the following at June\n30, 2026:

\n \n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of digital assets
	June 30, 2026
Digital assets held:	Units		Cost Basis			Fair Value
BTC		15.12		$	1,325,400		$	884,122
ETH		301.09			883,600			472,522
sUSDai		913,539.00			1,001,500			1,000,000
				$	3,210,500		$	2,356,644

Note 10 – Intangible Assets

As of June 30, 2026 and 2025, intangible assets, net,\nconsisted of the following:

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of intangible assets, net
	June 30, 2026			June 30, 2025
Covenant not to compete	$	3,459,120			$	3,459,120
Supplier relationships		1,179,246				1,179,246
Software		534,591				534,590
Accumulated amortization		(2,841,000	)			(2,191,628	)
Total	$	2,331,957			$	2,981,328

The intangible assets were acquired on February 15,\n2022 through the Company’s acquisition of Anivia. The weighted average remaining life for finite-lived intangible assets at June\n30, 2026 was approximately 4.2 years. The amortization expense for years ended June 30, 2026 and 2025 was $649,371 and $649,371, respectively.\nAt June 30, 2026, finite-lived intangible assets are expected to be amortized over their estimated useful lives, which ranges from a period\nof five to 10 years, and the estimated remaining amortization expense for each of the five succeeding years thereafter is as follows:

\n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of amortization expense
Year Ending June 30,	Amount
2027		609,277
2028		468,750
2029		345,912
2030		345,912
2031		345,912
Thereafter		216,194
Intangible assets, net	$	2,331,957

During the years ended June 30, 2026 and\n2025, the Company made cash prepayments of $1,118,280\nand $1,519,928,\nrespectively, for software development. The June 30, 2025 balance included $460,807 that was classified as held\nfor sale on the consolidated balance sheet.

As of June 30, 2026, software under\ndevelopment amounted to $2,638,208, including $460,807 acquired from GPM (See Note 5 above for additional information).\nAs of June 30, 2025, software under development amounted to $1,519,928,\nof which $460,807 was classified as held for sale.

F-24

Note 11 – Promissory Note Receivable

On February 1, 2026, the Company entered into\na stock purchase agreement (the “SPA”) with ETTS AI Investment LLC, a Nevada limited liability company (“ETTS AI”),\npursuant to which the Company sold its equity interest in GPM and its underlying entities to ETTS AI in exchange for a $2.3 million promissory\nnote (the “Promissory Note”). The Promissory Note is non-interest bearing and payable in full in seven years, may be prepaid\nat any time, and repayment may be credited from time to time by purchase orders made under a supply and distribution agreement, dated\nFebruary 1, 2026 (the “Supply and Distribution Agreement”), between the Company, GPM and ETTS AI.

Because the Promissory Note does not bear stated\ninterest and was initially expected to be repaid through credits arising from purchase orders under the Supply and Distribution Agreement,\nthe Company initially recorded the Promissory Note at its face amount. On June 30, 2026, the Company amended the Supply and Distribution\nAgreement with GPM and, as a result of the amended arrangement, determined that the Promissory Note was expected to be settled in cash\nwithin its original contractual term. Accordingly, the Promissory Note was discounted using an annual interest rate of 4.01% over its\nremaining contractual term of approximately 6.58 years, resulting in a carrying amount of approximately $1.69 million and a discount of\napproximately $0.5 million. The discount will be accreted to interest income over the remaining term of the Promissory Note using the\neffective interest method. Because the discount was recognized as of June 30, 2026, no related interest income was recognized during the\nyear ended June 30, 2026.

The Promissory Note is carried at amortized cost and is subject to\nthe current expected credit loss model under ASC 326, Financial Instruments—Credit Losses. The Company evaluates the collectibility\nof the Promissory Note at each reporting date based on relevant available information, including the debtor’s financial condition,\npayment history, expected future cash flows, the remaining contractual term of the Promissory Note, and current and reasonably supportable\nforecasts of economic conditions. As of June 30, 2026, management evaluated the expected credit losses associated with the Promissory\nNote and concluded that no allowance for credit losses was required based on its assessment of the debtor’s ability and intent to\nrepay the Promissory Note in accordance with its contractual terms.

During the year ended June 30, 2026, pursuant\nto the Supply and Distribution Agreement, the Company received a principal repayment of $110,847 under the Promissory Note.

As of June 30, 2026, the Promissory Note had a\nface amount of $2,189,153, an unamortized discount of $499,016, and a net carrying amount of $1,690,137.

Note 12 – Other Payables and Accrued Liabilities

As of June 30, 2026 and 2025, other payables and accrued liabilities consisted\nof the following:

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of other payables and accrued liabilities
	June 30, 2026		June 30, 2025
Accrued payables for inventory in transit	$	–		$	262,570
Credit cards payable		173,760			143,518
Customer deposits		630,386			291,995
Accrued Amazon fees		77,191			76,534
Sales taxes payable		637,308			433,604
Accrued payroll and related expenses		14,724			560,387
Other accrued liabilities and payables		52,648			124,516

Total	$	1,586,017		$	1,893,124

Note 13 – Loans Payable

Long-term Convertible Notes

On December 22, 2025, the Company entered into a\nsecurities purchase agreement (the “SPA”) with an accredited investor (the “Investor”) providing for a convertible\nnote facility in the aggregate original principal amount of up to $30,000,000\n(the “Convertible Note Facility”). At the initial closing on December 23, 2025, the Investor purchased (i) a Series A Senior\nSecured Convertible Promissory Note in the original principal amount of $5,184,024\n(the “Series A Note”), issued in a private placement under Rule 506(b) of Regulation D, and (ii) a Series B Senior Secured\nConvertible Promissory Note in the original principal amount of $1,815,976\n(the “Series B Note,” together with the Series A Note, the “Convertible Notes”), issued in a registered direct\noffering pursuant to the Company’s effective shelf registration statement on Form S-3. The total original principal amount of the\nConvertible Notes issued at the initial closing was $7,000,000.

F-25

The Notes were issued at a 6% original issue discount\n(“OID”), resulting in gross cash proceeds to the Company of $6,580,000. After deducting placement agent fees of $394,800 and\nlegal and other transaction expenses of $150,000, the Company received net proceeds of $6,035,200.

The Convertible Notes bear interest at a rate of 10%\nper annum (increasing to 17% per annum upon the occurrence and during the continuance of an Event of Default), with interest payable monthly\non the first Trading Day of each calendar month commencing January 1, 2026, in shares valued at the Alternate Conversion Price or, at\nthe Company’s election, in cash. The Convertible Notes mature on December 23, 2027.

The Convertible Notes are convertible into shares\nof Common Stock at a fixed Conversion Price of $1274.40 per share, subject to adjustment. The holder may elect to convert at an Alternate\nConversion Price equal to the lower of (i) the Conversion Price or (ii) the greater of the Floor Price or 95% of the lowest daily VWAP\nduring the seven consecutive Trading Days preceding conversion. During an Event of Default, the Alternate Conversion Price becomes the\nlower of (i) the Conversion Price or (ii) the greater of the Floor Price or 90% of the lowest daily VWAP during the ten consecutive Trading\nDays preceding conversion. The Floor Price is $163.44 per share, subject to downward adjustment every six months to the lower of the then-current\nFloor Price or 20% of the trading price. On March 23, 2026, the Conversion Price automatically resets to $1,019.52 if then above such\nlevel. The holder is subject to a 4.99% Beneficial Ownership Cap on outstanding Common Stock, which may be increased to 9.99% upon 61\ndays’ notice.

The Convertible Notes contain the following redemption\nfeatures: (i) upon an Event of Default, the holder may require redemption at 115% of the outstanding Conversion Amount; (ii) upon a Change\nof Control, the holder may require redemption at 110% of the Conversion Amount; (iii) upon a subsequent equity financing, the holder may\nrequire redemption of up to 20% of net proceeds at 110%; (iv) upon certain asset sales (only if Crypto Collateral Value falls below 150%\nof outstanding principal), the holder may require redemption of up to 20% of net proceeds at 110%; and (v) the Company may optionally\nredeem at 110% of the Conversion Amount (or 115% during an Event of Default period). The Convertible Notes also contain a modified full-ratchet\nanti-dilution provision whereby if the Company issues shares below the then-effective Conversion Price (other than Excluded Securities),\nthe Conversion Price is automatically reduced to 115% of the new issuance price.

The Convertible Notes are senior secured obligations\nof the Company, collateralized by all cryptocurrency digital assets of the Company and certain of its subsidiaries pursuant to a Security\nand Pledge Agreement. The Convertible Notes are guaranteed by all subsidiaries of the Company.

In connection with the issuance of the Convertible\nNotes, the Company entered into (i) a Security and Pledge Agreement, dated December 22, 2025, granting the Investor a first priority security\ninterest in the cryptocurrency digital assets of the Company and its subsidiaries; (ii) a Guaranty, dated December 23, 2025, pursuant\nto which all subsidiaries of the Company jointly and severally guarantee the Company’s obligations under the Convertible Notes;\nand (iii) a Registration Rights Agreement, dated December 23, 2025, requiring the Company to file a registration statement within 30 days\nof issuance to register the resale of Series A Conversion Shares and cause such registration statement to be declared effective within\n60 days, with liquidated damages of 1.5% of the holder’s original principal amount payable upon failure to meet these deadlines.

Pursuant to the SPA, on February 9, 2026, the Company\ndelivered an Additional Mandatory Closing Notice (as defined in the Purchase Agreement) to the Investor and, on February 10, 2026, consummated\nthe Additional Mandatory Closing in accordance with the Purchase Agreement, receiving $1,880,000 in exchange for issuing a $2,000,000\naggregate principal amount of the Additional Mandatory Series A Note to the Investor after satisfaction of all applicable closing conditions,\nincluding the effectiveness of the resale registration statement and the absence of any event of default.

On May 19, 2026, the Company consummated an Additional\nOptional Closing in accordance with the Purchase Agreement, receiving $2,820,000 in exchange for issuing a $3,000,000 aggregate principal\namount of the Additional Optional Series A Note to the Investor after satisfaction of all applicable closing conditions, including the\neffectiveness of the resale registration statement and the absence of any event of default.

Accounting and Fair Value Measurement for\nEmbedded Derivative Liability

The Company evaluated the embedded features within\nthe convertible note in accordance with ASC Topic 480 and ASC Topic 815. The Company determined that the following embedded features constitute\na compound derivative liability requiring bifurcation from the debt host: (i) the Conversion Option, which includes multiple pricing mechanisms\n(fixed conversion prices, Alternate Conversion Price based on 95% of lowest 7-day VWAP, Event of Default Conversion Price based on 90%\nof lowest 10-day VWAP, the Floor Price, the price resets, and anti-dilution adjustments); (ii) Interest Payment in Shares at the Alternate\nConversion Price; and (iii) cash-settled put options arising from various redemption features (Event of Default at 115% premium, Change\nof Control at 110% premium, Subsequent Placement at 110% premium, and Asset Sale at 110% premium).

F-26

These features are not clearly and closely related\nto the debt host, meet the definition of a derivative, and do not qualify for the derivative accounting exemptions. Accordingly, the embedded\nfeatures were bifurcated as a single compound derivative liability measured at fair value, with subsequent changes in fair value recognized\nin the consolidated statements of operations.

The initial fair value of the compound embedded\nderivative liability was determined using a Monte Carlo Simulation valuation model, considering various potential outcomes and\nscenarios. The model used the following assumptions: (i) dividend yield of 0%; (ii) expected volatility of 128% to 141%; (iii)\nrisk-free interest rate of approximately 3.5% to 4.1%; (iv) term of 2.0 years; (v) fair value of the common shares of $4.4 to $10.46\n(on pre-split basis) per share; and (vi) various probability assumptions.

At June 30, 2026, the Company remeasured the\nderivative liability using updated assumptions: (i) dividend yield of 0%; (ii) expected volatility of 116% to 124%; (iii) risk-free\ninterest rate of approximately 4.1%; (iv) remaining term of 1.5 to 1.9 years; (v) fair value of the common shares of $2.14 per share\n(on pre-split basis); and (vi) various probability assumptions.

Subsequent changes in fair value are recognized\nin the statement of operations for each reporting period. The issuance costs for the Convertible Notes, along with the fair value of the\nbifurcated embedded derivative liability, were collectively treated as a debt discount. Upon initial recognition, the total debt discount\nwas $4,317,367, consisting of the fair value of the bifurcated derivative liability of $2,574,200, the original issue discount of $720,000,\nand debt issuance costs of $1,023,167. The debt discount is being amortized to interest expense over the two-year term using the effective\ninterest method at an effective rate of approximately 6% to 23%.

During the year ended June 30, 2026, the holder\nconverted Convertible Notes with an aggregate fair value of $9,150,119, including $8,013,397 of principal plus underlying interest, into\n148,234 shares of Common Stock (on a post-reverse split basis). The conversions were effected at the Alternate Conversion Price on the\nrespective conversion dates. The Company accounted for each conversion as a partial extinguishment of the debt host and related embedded\nderivative liability, resulting in a loss on extinguishment of $2,324,402, representing the excess of the fair value of shares issued\nover the carrying amounts derecognized.

As of June 30, 2026, the remaining outstanding\nprincipal balance of the Convertible Notes was $3,986,603 and an unamortized debt discount of $1,243,766, resulting in a net carrying\namount of $2,742,837. Interest expense, including amortization of debt discount, recognized on the Convertible Notes during the year ended\nJune 30, 2026, was $690,444.

Long-term loan

Asset-based revolving loan

On November 12, 2021, the Company entered into a Credit\nAgreement with JPMorgan Chase Bank, N.A. (“JPMorgan”), as administrative agent, issuing bank and swingline lender, for an\nasset-based revolving loan (“ABL”) of up to $25 million with key terms listed as follows:

\n \n \n \n \n

Borrowing base equal to the sum of

\n \n \n \n \n \n \n \n \n \n \n \n \n

	Ø	Up to 90% of eligible credit card receivables
	Ø	Up to 85% of eligible trade accounts receivable
	Ø	Up to the lesser of (i) 65% of cost of eligible inventory or (ii) 85% of net orderly liquidation value of eligible inventory

\n \n \n \n \n \n \n \n \n \n \n \n \n

	·	Interest rates of between LIBOR plus 2% and LIBOR plus 2.25% depending on utilization
	·	Undrawn fee of between 0.25% and 0.375% depending on utilization
	·	Maturity Date of November 12, 2024

F-27

In addition, the ABL included an accordion feature\nthat allows the Company to borrow up to an additional $25.0 million. To secure complete payment and performance of the secured obligations,\nthe Company granted a security interest in all of its right, title and interest in, to and under all of the Company’s assets as\ncollateral to the ABL. Upon closing of the ABL, the Company paid $796,035 in financing fees including 2% of $25.0 million or $500,000\npaid to its financial advisor. The financing fees are recorded as debt discount and are to be amortized over the three-year term of the\nABL as interest expense.

Below is a summary of the interest expense recorded\nfor the years ended June 30, 2026 and 2025:

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of interest expense
	2026		2025
Accrued interest	$	113,507		$	244,078
Credit utilization fees		18,636			57,052
Amortization of debt discount		–			125,906
Total	$	132,143		$	427,036

On February 16, 2022, in connection with the acquisition\nof Anivia Limited, the Company and JPM entered into an amendment to the Pledge and Security Agreement, pursuant to which the Company pledged\n65% of its ownership interest in Anivia Limited and its subsidiaries.

On October 7, 2022, the Company entered into a second\namendment to the credit agreement and consent (the “Second Amendment to the Credit Agreement”), originally dated November\n12, 2021, as amended, with JPMorgan. The Company entered into the Second Amendment to the Credit Agreement primarily for the purpose of\nchanging the interest rate repayment calculations from LIBOR to the Secured Overnight Financing Rate, or SOFR, which adjustment had originally\nbeen anticipated under the terms of the original Credit Agreement. In addition, two of the negative covenants set forth in the original\nCredit Agreement were amended in order to (i) adjust the definition of “Covenant Testing Trigger Period” to increase the required\ncash availability from $3,000,000 to $4,000,000, or 10% of the aggregate revolving commitment for the preceding 30 days, and (ii) require\nthat the Company will not and will not permit any of its subsidiaries, after reasonable due diligence and due inquiry, to knowingly sell\ntheir products, inventory or services directly to any commercial businesses that grows or cultivates cannabis; it being acknowledged,\nhowever, that the Company does not generally conduct due diligence on its individual retail customers.

On November 8, 2024, the Company entered into a third\namendment (the “Third Amendment”) to that certain credit agreement, initially entered into by and among the Company and its\nsubsidiaries and JPMorgan Chase Bank, N.A., as administrative agent for the Lender and a lender (the “Administrative Agent”\nor “Lender”), on November 12, 2021 (the “Credit Agreement”). The Third Amendment to the Credit Agreement amended,\namong other things, (i) the defined term “Aggregate Revolving Commitment” to mean $15,000,000, and (ii) extended the maturity\ndate to “November 8, 2027 or any earlier date on which the Revolving Commitments are reduced to zero or otherwise terminated pursuant\nto the terms hereof.” The borrowing rate is SOFR plus 2.25% to 2.50% depending on utilization of the borrowing availability.

On December 7, 2025, the Company repaid in full the\noutstanding amount resulting in the termination of the ABL.

As of June 30, 2026 and 2025, the outstanding amount\nof the ABL, which was classified as current revolving loan payable, including interest payable, was $0 and $3,737,602, respectively.

F-28

Short-term loan payable

On July 9, 2025, the Company borrowed $500,000 as\na short-term loan (“RP Loan 2”) from an entity owned by Mr. Allan Huang, one of the shareholders of the Company.\nThe RP Loan 2 bears no interest and is due upon receipt of request of repayment. As of June 30, 2026, The RP Loan 2 had been fully paid\noff.

On November 24, 2025, the Company issued three\npromissory notes totaling $2.0 million (the “Promissory Notes”) in exchange for gross proceeds of $2.0 million. The Promissory\nNotes were entered into with certain investors and related parties, including an entity controlled by the Company’s CEO, Chenlong\nTan. The Promissory Notes bear 6.5% interest per annum and are repayable upon the earlier of 90 days or the Company’s entry into\nnew financing arrangements. The funds received in connection with the Company’s issuance of the Promissory Notes was used to pay\noff the Company’s existing ABL with JPMorgan Chase Bank, N.A. (“JPMorgan”). For year ended June 30, 2026, the Company\nrecorded interest expense of $29,250, respectively. As of June 30, 2026, the Promissory Notes had been fully paid off.

On November 28, 2025, the Company borrowed $50,000 from an entity controlled\nby the Company’s CEO, Chenlong Tan, for short-term liquidity needs. The borrowing was non-interest-bearing and repayable on demand.\nAs of June 30, 2026, the borrowing had been fully repaid.

Note 14 - Related Party Transactions

On July 9, 2025, the Company borrowed $500,000\nas a short-term loan from an entity owned by Mr. Allan Huang, one of the shareholders of the Company. See Note 13 above for details.

On November 24, 2025, the Company issued a Promissory\nNote in exchange for gross proceeds of $500,000 to an entity controlled by the Company’s CEO, Chenlong Tan. See Note 13 above for\ndetails.

On November 28, 2025, the Company borrowed $50,000\nfrom an entity controlled by the Company’s CEO, Chenlong Tan, for short-term liquidity needs. See Note 13 above for details.

On June 3, 2025, the Company, Custom Cup Factory,\nInc. (“CCF”) and Ms. Yi Yang, our new director appointed on June 6, 2025, entered into the Limited Liability Company Operating\nAgreement (the “Operating Agreement”) of United Package NV, LLC, a Nevada limited liability corporation (the “Joint\nVenture”). The Joint Venture will focus on the domestic production of packaging materials to serve the rapidly growing demands of\nU.S. businesses seeking reliable, sustainable, and cost-effective supply chain solutions without reliance on offshore manufacturing. See\nNote 3 above for details.

In addition, Ms. Yang’s entity, Pacelor\nInc. (“Pacelor”), manages a warehouse and provides fulfillment services for the Company and receives a monthly service fee,\nwhich fluctuates from month to month. Ms. Yang is the Founder and Chief Executive Officer of Pacelor. As a result, Pacelor has become\na related party of the Company since June 6, 2025. For the years ended June 30, 2026 and 2025, the Company received $3,394,399 and $202,922,\nrespectively, in services from Pacelor. As of June 30, 2026 and 2025, the accounts payable to Pacelor was $240,425 and $78,831, respectively.\nMs. Yang’s other entity, Pacelor NV Inc. (“Pacelor NV”) also provides marketing services for the Company. During the\nyear ended June 30, 2026, the Company recorded $100,470 of selling expense. As of June 30, 2026 and 2025, the outstanding accounts payable\nto Pacelor NV was $415,489 and $315,019, respectively.

F-29

Note 15 – Income Taxes

In addition to corporate income taxes in the United\nStates, upon completion of the acquisition of Anivia in February 2022, the Company is subject to corporate income taxes in People’s\nRepublic of China (“PRC”). Anivia and its subsidiaries are subject to BVI or Hong Kong income taxes but did not have any operations\nin those jurisdictions for the year ended June 30, 2022. The Company’s subsidiary in China, Dayourenzai (Shenzhen) Technology Co.,\nLtd. (“WFOE”), is subject to the Global Intangible Low-Taxed Income (or GILTI) Tax. WFOE is subject to 5% tax rate in PRC\nuntil December 31, 2027. Since WFOE had losses during the years ended June 30, 2026 and 2025, no GILTI tax was recorded as of June 30,\n2026 and 2025. The Company is not eligible for the GILTI high-tax exclusion.

For the years ended June 30, 2026 and 2025, the Company\nhad income tax benefit of $3,079,172 and $1,348,313, respectively.

The Company is subject to U.S. federal income\ntax as well as state income tax in certain jurisdictions. The tax years 2023 to 2025 remain open to examination by the major taxing\njurisdictions to which the Company is subject. The following is a reconciliation of income tax expenses at the effective rate to income\ntax at the calculated statutory rates:

Schedule of income tax reconciliation
	For the Year Ended June 30,
	2026		2025
	Amount			%	Amount	%
Statutory tax rate
Federal	$	3,462,659			21.00 %	$	1,406,463		21.00 %
State (net of federal benefit)		887,101			5.38 %		377,184		5.63 %
Foreign tax		(49,467	)		(0.3)%		(249,815	)	(3.73)%
Permanent differences		(705,723	)		(4.28)%		–		– %
Others		(515,398	)		(3.13)%		(185,519	)	(2.77)%
Effective tax rate	$	3,079,172			18.67 %	$	1,348,313		20.13 %

As of June 30, 2026, prepaid income taxes to US tax\nauthorities was $99,954. As of June 30, 2025, prepaid income taxes to US tax authorities and income tax payable to Chinese tax authorities\nwas $19,073 and $280,155, respectively.

The tax effects of temporary differences which give\nrise to significant portions of the deferred taxes are summarized as follows:

Schedule of deferred taxes
	June 30, 2026			June 30, 2025
Deferred tax assets
263A calculation	$	–			$	256,568
Inventory reserve		75,001				83,180
State taxes		3,797				4,844
Accrued expenses		21,745				21,750
ROU assets / liabilities		71,926				95,711
Net operating loss		4,627,370				2,962,954
Disallowed interest expense		403,565				311,662
Stock-based compensation		524,891				336,394
Unrealized gain/loss		230,654				–
Allowance for credit loss		720,427				512,289
Discount on note receivable		131,767				–
Total deferred tax assets		6,811,143				4,585,352

Deferred tax liabilities
Depreciation		(29,280	)			(56,648	)
Intangible assets acquired		(632,907	)			(804,242	)
Total deferred tax liabilities		(662,187	)			(860,890	)

Net deferred tax assets	$	6,148,956			$	3,724,462

The Company assesses the realizability of deferred tax assets based on\nall available positive and negative evidence, including historical results of operations, projected future taxable income, reversal of\nexisting temporary differences, and available tax planning strategies. Based on its assessment, the Company determined that it is more\nlikely than not that the deferred tax assets will be realized and, accordingly, no valuation allowance was recorded as of June 30, 2026\nand 2025.

F-30

Note 16 – Earnings Per Share

The following table sets forth the computation of basic and diluted earnings\nper share for the periods presented:

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of computation of basic and diluted earnings per share
	Year Ended June 30,
	2026			2025
Numerator:
Net loss attributable to iPower Inc.	$	(11,622,242	)		$	(4,968,288	)

Denominator:
Weighted-average shares used in computing basic and diluted earnings per share*		33,671				14,558

Losses per share of ordinary shares from continuing operations - basic and diluted	$	(398.24	)		$	(366.80	)
Losses per share of ordinary shares from discontinued operations - basic and diluted		53.08				25.52
Earnings (losses) per share of ordinary shares - basic and diluted	$	(345.16	)		$	(341.28	)

\n \n \n \n \n \n \n \n \n \n

*	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 for the years ended June 30, 2026 and 2025.

*	For the year ended June 30, 2025, 36 vested but unissued shares of\n restricted stock units under the 2020 Equity Incentive Plan (as discussed in Note 17) are considered issued shares and therefore\n included in the computation of basic earnings (losses) per share when the shares are fully vested.

Note 17 – Equity

Common Stock

As of June 30, 2026, the total authorized shares of\ncapital stock were 1,000,000,000 shares consisting of 980,000,000 shares of Common Stock (“Common Stock”) and 20,000,000 shares\nof 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\nvote per share in voting to the election of directors and all other corporate purposes. Subject to the express terms of any outstanding\nseries of Preferred Stock, dividends may be paid in cash or otherwise with respect to the holders of Common Stock out of the assets of\nthe Company legally available therefor, upon the terms, and subject to the limitations, as the Board of Directors of the Company (the\n“Board of Directors”) may determine. In the event of liquidation or dissolution of the Company, subject to the express terms\nof any outstanding series of Preferred Stock, the holders of Common Stock shall be entitled to share in the distribution of any remaining\nassets available for distribution to the holders of Common Stock ratably in proportion to the total number of shares of Common Stock then\nissued and outstanding.

On October 27, 2025, May 22, 2026, and August 7, 2026,\nthe Company effectuated the 1-for-30, 1-for-8, and 1-for-9 Reverse Stock Splits, respectively. When the Reverse Stock Splits became effective,\nthe Company’s issued and outstanding Common Stock immediately prior to the Effective Time automatically reclassified into one (1)\nshare of Common Stock, without any change in the par value per share. The Reverse Stock Splits did not change the total number of authorized\nshares of Common Stock or preferred stock. As a result, unless otherwise indicated, all references to common stock, restricted stock units,\nwarrants and options to purchase common stock, share data, per-share data, and related information have been retroactively adjusted, where\napplicable in the consolidated financial statements and notes, to reflect the reverse stock splits of the Company’s common stock\nas if the splits had occurred at the beginning of the earliest period presented.

F-31

On June 18, 2024, the Company closed on a registered\ndirect offering (the “Registered Direct”) of 965 shares of common stock (the “Shares”) and a concurrent private\nplacement (“Private Placement,” and together with the Registered Direct, the “Offering”) of warrants (the “Warrants”)\nto purchase 965 shares of common stock (the “Warrant Shares”), which were sold for gross aggregate proceeds of $5,000,002.\nThe Shares were sold pursuant to a prospectus supplement, filed on June 18, 2024, to the Registration Statement on Form S-3, originally\nfiled on September 25, 2023, with the SEC (File No. 333-274665) and declared effective by the SEC on September 29, 2023. The Warrants,\nwhich were issued pursuant to an exemption from registration pursuant to Section 4(a)(2) or Regulation D on the Securities Act, have a\nterm of five years and are immediately exercisable at $5,184.0 per share. The Shares and Warrants were sold to a purchaser pursuant to a\nsecurities purchase agreement, dated June 16, 2024, between the Company and the purchaser (the “Purchase Agreement”). Roth\nCapital Partners, LLC (the “Placement Agent”) acted as placement agent, pursuant to a placement agency agreement between the\nCompany and the Placement Agent dated June 16, 2024 (the “Placement Agency Agreement”). The Company paid the Placement Agent\nas compensation a cash fee equal to 6.5% of the gross proceeds of the Offering plus reimbursement of certain expenses and legal fees.\nThe net proceeds of the Offering, after deducting $456,913, the Placement Agent’s fees and expenses and other direct offering costs\npaid by the Company, was $4,543,089.

The Company calculated the fair value of the Warrants\nat $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\nModel with the following variables:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	·	Stock Price - $2.00\n (pre-reverse-split price; equivalent to $4,320.00 on a post-reverse-split basis)
	·	Exercise Price - $2.40\n (pre-reverse-split price; equivalent to $5,184.00 on a post-reverse-split basis)
	·	Volatility – 104%
	·	Term –5 years
	·	Risk Free Rate of Return – 4.24%

Pursuant to the Warrant agreement, except for some\nfundamental transactions within the Company’s control, in no event shall the Company be required to net cash settle the Warrants.\nThe Company considered and followed the rules and guidelines under ASC 480-10 and ASC 815 and concluded that the Warrants should be classified\nand recorded as equity. Further, as the warrants were issued as part of the Offering, the relative fair value of the Warrants was included\nin the gross proceeds and recorded as additional paid-in capital. As of June 30, 2026 and 2025, none of the warrants had been exercised.

On June 18, 2024, in order to recoup the settlement\npayment made to Boustead Securities, LLC, the Company’s Chief Executive Officer and co-founder, Chenlong Tan, along with co-founder\nAllan Huang, returned a total of 18,056 shares to the Company for cancellation (the “Share Cancellation”). The Share Cancellation\nwas completed in June 2024 and the par value of $542 was reduced against additional paid-in capital.

On December 21, 2025, holders of a majority of the\nCompany’s outstanding voting power (53.1%) approved (1) the Convertible Note Facility, (2) the issuance of in excess of 20% of the\nCompany’s outstanding common stock at a price less than the “Minimum Price” under Nasdaq Listing Rule 5635(d), (3) an\nincrease in authorized shares from 200,000,000 to 1,000,000,000, (4) authorization for the Board to approve one or more reverse stock\nsplits in the range of 1-for-250 shares, and (5) authorization for the Board to adopt a mirror preferred stock.

During the year ended June 30, 2026, the Company issued\nthe following common stock of the Company:

\n\n\n \n \n \n \n \n \n \n \n \n \n \n

	·	554 shares for vested RSUs;
	·	148,234 shares in connection with the conversion of $9,150,119 in aggregate fair value of convertible notes at a weighted-average conversion price of $61.73 per share;
	·	5,231 shares for services to consultants; and
	·	5 shares were issued as round-up shares in connection with the reverse stock split that became effective on October 27, 2025 and May 22, 2026.

F-32

As of June 30, 2026 and 2025, there were 168,542\nand 14,518\nshares of Common Stock issued, respectively, and 167,196\nand 14,518\nshares of common stock issued and outstanding, respectively.

During the year ended June 30, 2026, the Company\nrepurchased an aggregate of 1,346 shares of its common stock for approximately $41,755 in open-market transactions.

As of June 30, 2026, the Company held 1,346 shares\nof common stock in treasury at an aggregate cost of $41,755. The treasury shares are presented as a reduction of stockholders’\nequity in the accompanying consolidated balance sheet.

Preferred Stock

The Preferred Stock was authorized as “blank\ncheck” series of Preferred Stock, providing that the Board of Directors is expressly authorized, subject to limitations prescribed\nby law, by resolution or resolutions and by filing a certificate pursuant to the applicable law of the State of Nevada, to provide, out\nof the authorized but unissued shares of Preferred Stock, for series of Preferred Stock, and to establish from time to time the number\nof shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series\nand the qualifications, limitations or restrictions thereof. As of June 30, 2026 and 2025, there were no shares of Preferred Stock issued\nand outstanding.

Equity Incentive Plan

On May 5, 2021, the Company’s Board of\nDirectors adopted, and its stockholders approved and ratified, the iPower Inc. Amended and Restated 2020 Equity Incentive Plan (the\n“Plan”). The Plan allows for the issuance of up to 50,000,000\nshares of Common Stock (627,315 shares on a post reverse split basis, taking into account the May 22, 2026 and August 7, 2026\nreverse stock splits), whether in the form of stock options, restricted stock, restricted stock units, stock appreciation rights,\nperformance units, performance shares and other stock or cash awards. The general purpose of the Plan is to provide an incentive to\nthe Company’s directors, officers, employees, consultants and advisors by enabling them to share in the future growth of the\nCompany’s business. On November 16, 2021 and December 6, 2022, the Company filed a registration statement on Form S-8\nregistering all shares issuable under the Plan, which was subsequently amended on December 6, 2022 and September 15, 2023, November\n22, 2023, and April 17, 2026.

Restricted Stock Units

On November 12, 2025, the Company granted $800,000\nin RSUs as bonus to Chenlong Tan, the CEO of the Company. As a result, 1,127 RSUs, calculated based on the closing price, $709.85, on\nthe grant date, were issued to Mr. Tan. The RSUs vested immediately but contained a deferred settlement provision. As a result, settlement\nof the vested RSUs shall occur on the earliest of the following Code Section 409A-permitted payment events: (1) change of control of the\nCompany that qualifies as a “change in control event” as defined under Code Section 409A; (2) Reporting Person’s separation\nfrom service (subject to any required delay under the Amended and Restated 2020 Equity Incentive Plan; (3) upon the Reporting Person’s\ndeath or disability, or (4) in the event of an “unforeseeable financial emergency,” as defined under Code Section 409A.

During the years ended June 30, 2026 and 2025, the\nCompany granted an additional 2,480 and 41 shares of RSUs to the Company’s employees and directors, respectively.

For the years ended June 30, 2026 and 2025, the Company\nrecorded stock-based compensation expense of $866,667 and $93,455, respectively, related to the vesting of RSUs. As of June 30, 2026 and\n2025, the unvested number of RSUs was 868 and 7 and the unamortized expense was $33,333 and $8,333, respectively.

F-33

Information relating to RSU grants is summarized as\nfollows:

For year ended June 30, 2026:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of RSU activity
	Total RSUs Issued			Total Fair Market Value of RSUs Issued as Compensation (1)
RSUs granted, but not vested, at June 30, 2025		7
RSUs granted		2,480			$	891,670
RSUs forfeited		–
RSUs vested		(1,619	)
RSUs granted, but not vested, at June 30, 2026		868

_____________________

\n \n \n \n

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

As of June 30, 2025, of the 189 vested RSUs, 132 shares\nof Common Stock were issued, and 57 shares were issued during the year ended June 30, 2026.

Stock Option

On May 12, 2022, the Compensation Committee of the\nBoard of Directors approved an incentive plan for the Company’s executive officers consisting of a cash performance bonus of $60,000\nto be awarded to Kevin Vassily, CFO of the Company, and grants of stock option (the “Option Grants”) exercisable to purchase\n(i) 1,389 shares of Common Stock to Chenlong Tan, CEO and (ii) 153 shares of Common Stock to Mr. Vassily. The Option Grants, which were\nissued on May 13, 2022, have an exercise price of $2,419.2, a contractual term of 10 years, and consist of six vesting tranches with a\nvesting schedule based entirely on the attainment of both operational milestones (performance conditions) and market conditions, assuming\ncontinued employment of the recipients through each vesting date. Each of the six vesting tranches of the Option Grants will vest when\nboth (i) the market capitalization milestone for such tranche, which begins at $150 million for the first tranche and increases by increments\nof $50 million through the fourth tranche and $100 million thereafter (based on achieving such market capitalization for five consecutive\ntrading days), has been achieved, and (ii) any one of the following six operational milestones focused on revenue or any one of the six\noperational milestones focused on operating income have been achieved during a given fiscal year.

The estimated achievement status of the operational milestones as of June\n30, 2026 was as follows:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Revenue in Fiscal Year		Operating Income in Fiscal Year
Milestone (in Millions)			Achievement Status		Milestone (in Millions)			Achievement Status

$	90			Not probable		$	6		Not probable
$	100			Not probable		$	8		Not probable
$	125			Not probable		$	10		Not probable
$	150			Not probable		$	12		–
$	200			–		$	16		–
$	250			–		$	20		–

F-34

The Company evaluated the performance condition and\nmarket condition under ASC 718-10-20. The Option Grants are considered an award containing a performance and a market condition and both\nconditions (in this case at least one of the performance conditions) must be satisfied for the award to vest. The market condition is\nincorporated into the fair value of the award, and compensation cost is recognized over the requisite service period, which is based on\nthe implied service period derived from valuation model and one of the performance conditions probable achievement. If the performance\ncondition is ultimately not met, compensation cost related to the award should not be recognized (or should be reversed to the extent\nany 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\nto determine for each tranche (i) a fixed amount of expense for such tranche and (ii) the future time when the market capitalization milestone\nfor such tranche was expected to be achieved. Separately, based on a subjective assessment of our future financial performance, each quarter\nwe determine whether it is probable that the Company will achieve each operational milestone that has not previously been achieved or\ndeemed probable of achievement and, if so, the future time when the Company expects to achieve that operational milestone. The Monte Carlo\nsimulation utilized the following inputs:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	·	Stock Price - $1.12\n (pre-reverse-split price; equivalent to $2,419.20 on a post-reverse-split basis)
	·	Volatility – 95.65%
	·	Term –10 years
	·	Risk Free Rate of Return – 2.93%
	·	Dividend Yield – 0%

The total fair value of the Option Grants was\n$3.2 million. During the year ended June 30, 2026, the Company reassessed the expected timing of meeting the performance conditions and\nconcluded that none of the milestones was deemed probable of vesting. According to ASC 718-10-55-78, since the number of awards expected\nto vest and the fair value had changed with the new estimate, the adjustment affected the recognition value and years to vest. Therefore,\nthe Company had reversed $594,415 of the expenses recorded for non-vesting tranches and applied the prospective approach to record adjustment\non tranches expected to be vested in future periods. As of June 30, 2026, none of the options had vested. For the years ended June 30,\n2026 and 2025, the Company recorded $(472,343) and $(468,778), respectively, of stock-based compensation expense related to the Option\nGrants. As of June 30, 2026, unrecognized compensation cost related to tranches probable of vesting was $0.

On August 29, 2024, the board of directors (the “Board”)\nof the Company, based on the recommendation of the compensation committee of the Board, approved a grant of 556 stock options (the “2024\nStock Options”) issuable to Chenlong Tan, the Company’s Chief Executive Officer, pursuant to the terms of the iPower Inc.\nAmended and Restated 2020 Equity Incentive Plan (the “2020 Equity Incentive Plan”). Following the Board’s approval,\nMr. Tan and the Company entered into a stock option award agreement (the “Stock Option Award Agreement”).

According to the Stock Option Award Agreement, and\nsubject to the terms and conditions of the Stock Option Award Agreement and the Plan, upon vesting of the 2024 Stock Options, Mr. Tan\nwill have the option to purchase the Company’s Common Stock at an exercise price of $3,088.8 per share (which is 110% of the Fair\nMarket Value of the stock on the grant date). The 2024 Stock Options have a term of 10 years and will vest as follows: 14 shares vested\non the grant date (August 29, 2024), and 15 shares will vest on the first day of each month from September 1, 2024, to August 1, 2027.

F-35

On the grant date, a Black-Scholes Model was used\nto determine the fair value of the 2024 Stock Options with the following inputs:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	·	Stock Price - $1.30\n (pre-reverse-split price; equivalent to $2,808.00 on a post-reverse-split basis)
	·	Exercise Price - $1.43\n (pre-reverse-split price; equivalent to $3,088.80 on a post-reverse-split basis)
	·	Volatility – 101%
	·	Expected Term –5.71 years
	·	Risk Free Rate of Return – 3.66%
	·	Dividend Yield – 0%

The total fair value of the 2024 Stock Options was\n$1.22 million as of the grant date. For the years ended June 30, 2026 and 2025, 180 and 165 stock options, respectively, were vested and\nthe Company recorded $398,047 and $362,325 as stock compensation expense, respectively. As of June 30, 2026, the unrecognized compensation\ncost of the 2024 Stock Options was approximately $0.5 million and will be recognized monthly through August 1, 2027.

Note 18 - Concentration of Risk

Credit risk

Financial instruments that potentially subject\nthe Company to significant concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, digital assets,\nand accounts receivable.

As of June 30, 2026 and 2025, $478,042 and $1,677,879,\nrespectively, were deposited with various financial institutions and financial services companies in the United States and PRC. Accounts\nat each institution in the United States are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000. The Company\nhad approximately $0.05 million and $1.4 million, respectively, in excess of the FDIC insurance limit, as of June 30, 2026 and 2025.

As of June 30, 2026, the Company had approximately\n$3.25 million of restricted cash and $2.36 million of digital assets held with a single custodian, BitGo Trust Company. These assets are\nnot insured by the FDIC or the Securities Investor Protection Corporation (“SIPC”) and are subject to the control of the Collateral\nAgent pursuant to the Company’s financing arrangements. Accordingly, the Company is exposed to concentration and custodial risk\nassociated with these assets.

Accounts receivable are typically unsecured and\nderived from revenue earned from customers, thereby exposing the Company to credit risk. The risk is mitigated by the Company’s\nassessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances. The Company maintains an allowance\nfor estimated credit losses based on its assessment of collectibility.

Customer and vendor concentration risk

For years ended June 30, 2026 and 2025,\nAmazon Vendor and Amazon Seller customers accounted for 38%\nand 82%\nof the Company’s total revenues, respectively. For the year ended June 30, 2026, GPM accounted for approximately 37%\nof the Company’s total revenues. As of June 30, 2026 and 2025, accounts receivable from Amazon Vendor and Amazon Seller\naccounted for 62% and 72% of the Company’s total accounts receivable. As of June 30, 2026, accounts receivable from GPM accounted for approximately 34% of the Company’s total\naccounts receivable.

For the year ended June 30, 2026, one supplier\naccounted for 60.8% of the Company’s total purchases. For the year ended June 30, 2025, two suppliers accounted for 14% and 11%\nof the Company’s total purchases, respectively. As of June 30, 2026, accounts payable to three suppliers accounted for 26.3%, 16.5%, and\n12.5% of the Company’s total accounts payable. As of June 30, 2025, accounts payable to one supplier accounted for 10% of the Company’s\ntotal accounts payable.

F-36

Note 19 - Leases

On July 28, 2021, the Company entered into a Lease\nagreement (the “Lease Agreement”) with 9th & Vineyard, LLC, a Delaware limited liability company (the “Landlord”),\nto lease from the Landlord approximately 99,347 square feet of space located at 8798 9th Street, Rancho Cucamonga, California (the “Premises”).\nThe term of the Lease Agreement is for 62 months, commencing on the date on which the Landlord completes certain prescribed improvements\non the property (the “Rent Commencement Date”). The Lease Agreement does not provide for an option to renew. Under the Lease\nAgreement, the Company is responsible for its pro rata share of certain costs, including utility costs, insurance and common area costs,\nas further detailed in the Lease Agreement. In addition, following the Rent Commencement Date, the first two months of the Base Rent were\nabated.

The lease did not start under the original agreement\nas the construction was not completed. On February 23, 2022, the Company entered into an amended agreement to extend the lease term to\n74 months. Under the amended agreement, the lease commenced on February 10, 2022, with rent payments commencing May 11, 2022 and the\nlease expiring on May 31, 2028. The base rental fee is $114,249, increasing gradually over time to $140,079 per month through the expiration\ndate of May 31, 2028. On April 13, 2026, we entered into a sublease agreement (the “Sublease Agreement”) to sublease part\nof the warehouse for a term of 25 months, commencing May 1, 2026 and ending May 31, 2028. Pursuant to the Sublease Agreement, the sublessee\nwill pay Base Rent of $62,500 to $112,710, calculated based on space used, to the Company monthly. For the year ended June 30, 2026,\nthe Company recognized $168,750 of sublease income in other income.

On May 1, 2022, the Company leased another fulfillment\ncenter in Duarte, California. The base rental fee is $56,000 to $59,410 per month through April 30, 2025. The lease had been expired\nwithout renewal since May 1, 2025.

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of lease cost and other information
	For the Years Ended June 30,
	2026		2025
Lease cost
Operating lease cost (included in G&A in the Company’s statement of operations)	$	1,446,982		$	2,083,235
Short-term lease expenses		9,781			85,954

Other information
Cash paid for amounts included in the measurement of lease liabilities	$	1,533,918		$	2,216,896
Remaining term in years		1.92			2.92
Average discount rate - operating leases		5%			5%

The supplemental balance sheet information related to leases for the years\nis as follows:

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of supplemental balance sheet information related to leases
Operating leases	June 30, 2026		June 30, 2025
Right of use asset	$	2,641,366		$	3,915,539

Lease Liabilities – current		1,483,163			1,361,111
Lease Liabilities - non-current		1,430,806			2,913,967
Total operating lease liabilities	$	2,913,969		$	4,275,078

F-37

Maturities of the Company’s lease liabilities\nare as follows:

\n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Schedule of maturities of lease liabilities
	Operating
	Lease
For Year ending June 30:
2027		1,586,572
2028		1,459,411
Less: Imputed interest/present value discount		(132,014	)
Present value of lease liabilities	$	2,913,969

Note 20 - Commitments and Contingencies

The Company is not\ncurrently a party to any material legal proceedings, investigation or claims. As the Company may, from time to time, be involved in legal\nmatters arising in the ordinary course of its business, there can be no assurance that such matters will not arise in the future or that\nany such matters in which the Company is involved, or which may arise in the ordinary course of the Company’s business, will not\nat some point proceed to litigation or that such litigation will not have a material adverse effect on the business, financial condition\nor results of operations of the Company.

In connection with the issuance of the Convertible Notes, the Company\nentered into a Registration Rights Agreement with the investors. Pursuant to the agreement, the Company is required to file and maintain\nthe effectiveness of a registration statement covering the resale of certain shares of common stock issuable under the financing. The\nagreement provides for liquidated damages upon the occurrence of certain registration-related events, generally at a rate of 1.5% of the\napplicable principal amount, subject to the terms and limitations set forth in the agreement. In addition, the Convertible Notes contain\ncertain redemption provisions, including redemption premiums, and the related financing documents provide for a 6% placement-agent commission\non future closings.

On April 13, 2020, the Company entered into an\nagreement with Royal Business Bank (the “Lender”) for a total amount of $175,500, pursuant to a promissory note issued by\nthe Company to the Lender (the “PPP Note”). The loan was made pursuant to the Payroll Protection Program established as part\nof the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”). On March 22, 2021, the $175,500 PPP Note due to\nRoyal Business Bank was fully forgiven by the Small Business Administration (“SBA”).

The Company is required to retain PPP loan documentation\nthrough 2026 and permit authorized representatives of the SBA to access such files upon request. Should the SBA conduct such a review\nand reject all or some of the Company’s judgments pertaining to satisfying PPP loan eligibility or forgiveness conditions, the Company\nmay be required to adjust previously reported amounts and disclosures in the consolidated financial statements.

F-38

Note 21 - Subsequent Events

The Company evaluated subsequent events and transactions\nthrough the date the consolidated financial statements are issued. Other than as set forth below, there were no material subsequent events\nthat required recognition or additional disclosure in the consolidated financial statements presented.

On July 6, 2026, the Company and the Investor\nentered into an amendment to the Purchase Agreement for purposes of (i) increasing funds available under the facility by an additional\noriginal principal amount of $2,000,000 and (ii) removing restrictions on the use of proceeds for any additional funds obtained through\nthe facility.

On July 6, 2026 and September 15, 2026, pursuant\nto the Securities Purchase Agreement dated December 22, 2025 (the “Purchase Agreement”) with an institutional investor (the\n“Investor”), the Company and Investor consummated Additional Optional Closings. At the Additional Optional Closings, the Company\nreceived $4,700,000, excluding fees and expenses, in exchange for issuing a total of $5,000,000 aggregate principal amount of Series A\nNotes to the Investor after satisfaction of all applicable closing conditions, including the effectiveness of the resale registration\nstatement and the absence of any Event of Default. The Series A Notes issued at the Additional Optional Closings were issued pursuant\nto an exemption from registration in accordance with Regulation D of the Securities Act.

On July 15, 2026, the Company formed two wholly-owned\nsubsidiaries: IPW Commerce LLC, a Delaware limited liability company, and iPower AI LLC, a Delaware limited liability company (collectively,\nthe “New Subsidiaries”). The New Subsidiaries were formed to separate the Company’s e-commerce and artificial intelligence\noperations from the remainder of the Company’s business, and the formation of the New Subsidiaries did not result in any change\nto the Company’s management or capital structure.

Pursuant to the Purchase Agreement and the Series\nA Notes, certain subsidiaries of the Company are required to enter into a guaranty in favor of the Investor. One such subsidiary, iPower\nSmart LLC, entered into a guaranty in favor of the Investor dated December 23, 2025 (the “Guaranty”). In connection with the\nCompany’s recent formation of iPower AI LLC, the Company has joined iPower AI LLC to the Guaranty pursuant to a Joinder to Guaranty\ndated July 21, 2026.

Pursuant to authority granted by the Company’s\nstockholders, on July 16, 2026, the Board approved a reverse split of between one-for-two (1:2) and one-for-10 (1:10) (the “Reverse\nStock Split”) of the Common Stock, with the final split ratio to be set at the discretion of Company management. Thereafter, Company\nmanagement determined to set a Reverse Stock Split Ratio of one-for-nine (1:9) and on August 5, 2026, the Company filed a certificate\nof amendment to amend the Sixth Amended and Restated Articles of Incorporation of the Company (the “Certificate of Amendment”)\nwith the Secretary of State of the State of Nevada, with an effective date of August 7, 2026 (the “Effective Date”),\nto effect a 1:9 Reverse Stock Split. The Reverse Stock Split became effective at the start of trading on August 7, 2026 (the “Effective\nTime”). When the Reverse Stock Split became effective, every nine (9) shares of the Company’s issued and outstanding Common\nStock immediately prior to the Effective Time were automatically reclassified into one (1) share of Common Stock, without any change in\nthe par value per share. The Reverse Stock Split reduced the number of shares of Common Stock issuable upon the exercise or vesting of\nthe Company’s outstanding stock options and warrants in proportion to the ratio of the Reverse Stock Split, causing a proportionate\nincrease in the exercise prices of such stock options and warrants. Restricted stock units and other equity incentive plan grants were\nalso adjusted to reflect the reduced number of underlying shares. The Reverse Stock Split did not change the Company’s total number\nof authorized shares of Common Stock or preferred stock.

On August 14, 2026, the Company sold all sUSDai\nfor approximately $1,002,381 and all Ethereum for approximately $563,391.

On September 21, 2026, the Company’ shareholder\napproved a Third Amended and Restated 2020 Equity Incentive Plan to (i) adjust the total number of the Company’s shares reserved\nfor issuance under the plan to 50,000,000 shares and (ii) adopt an evergreen provision providing for a 5% automatic annual increase in\nthe shares of common stock available for issuance under the plan over a period of ten years.

During the period from July 1, 2026 to the\ndate of this report, the Company issued total of 386,785 shares of common stock to consultants for services and 707,214 shares upon conversion\nof the convertible notes.

F-39

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS\nON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

As required by Rule 13a-15 of\nthe Exchange Act, under the supervision and with the participation of our management, including our principal executive officer and principal\nfinancial officer, we evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures\nand internal control over financial reporting as of the end of the period covered by this Annual Report.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls\nand procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act that are designed to ensure that information required to\nbe disclosed in our reports filed or submitted to the SEC under the Exchange Act is recorded, processed, summarized and reported within\nthe time periods specified by the SEC’s rules and forms, and that information is accumulated and communicated to management, including\nthe principal executive and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. Our\nprincipal executive officer and principal financial officer evaluated the effectiveness of disclosure controls and procedures as of the\nend of the period covered by this Annual Report (the “Evaluation Date”), pursuant to Rule 13a-15(b) under the Exchange Act.\nBased on that evaluation, our principal executive officer and principal financial officer concluded that, as of the Evaluation Date, our\ndisclosure controls and procedures were not effective due to material weaknesses described in our report on internal control over financial\nreporting below.

Notwithstanding the existence\nof the material weaknesses, we believe that the consolidated financial statements included in this report fairly present in accordance\nwith U.S. GAAP, in all material respects, our financial condition, results of operations and cash flows for the periods presented in this\nAnnual Report.

Limitations on the Effectiveness of Controls

A control system, no matter how\nwell conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because\nof the inherent limitations in all controls systems, no evaluation of controls can provide absolute assurance that all control issues\nand instances of fraud, if any, within a company have been detected. Our disclosure controls and procedures are designed to provide reasonable\nassurance of achieving its objectives.

Management’s Report on Internal Control\nOver Financial Reporting

Our principal executive officer\nand our principal accounting and financial officer are responsible for establishing and maintaining adequate internal control over financial\nreporting, as such term is defined in Exchange Act Rules 13a-15(f). Management conducted an assessment of the effectiveness of our internal\ncontrol over financial reporting as of June 30, 2026. In making this assessment, management used the criteria described in Internal Control-Integrated\nFramework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based upon such assessment and\ndue to the existence of the material weaknesses in our internal control over financial reporting described below, our principal executive\nofficer and our principal accounting and financial officer have concluded that, as of June 30, 2026, our internal control over financial\nreporting was not effective because, among other things, our controls related to the financial statements closing process were not adequately\ndesigned or appropriately implemented to identify material misstatements in our financial reporting on a timely basis. Management has\nevaluated remediation plans to address these deficiencies and is implementing changes to address the material weakness identified, including\nhiring additional accountants and consultants and implementing controls and procedures over the financial reporting process.

It should be noted that any system\nof controls, however well designed and operated, can provide only reasonable and not absolute assurance that the objectives of the system\nare met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of certain events.\nBecause of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving\nits stated goals under all potential future conditions, regardless of how remote.

In light of the material weaknesses\ndescribed above, we performed additional analysis and other post-closing procedures to ensure our financial statements were prepared in\naccordance with generally accepted accounting principles. Accordingly, we believe that the consolidated financial statements included\nin this Annual Report fairly present in accordance with U.S. GAAP, in all material respects, our financial condition, results of operations\nand cash flows for the periods presented in this Annual Report.

Changes in Internal Control over Financial Reporting

There have been no changes in\nour internal controls over financial reporting that occurred during the fiscal year ended June 30, 2026 that have materially affected,\nor are reasonably likely to materially affect, our internal controls over financial reporting.

HTL International, LLC, our independent\nregistered public accounting firm, is not required to and has not provided an assessment of the design or effectiveness of our internal\ncontrols over financial reporting.

ITEM 9B. OTHER INFORMATION

During the quarter ended June\n30, 2026, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule\n10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE\nGOVERNANCE

Executive Officers and Directors

All of our directors hold office\nfor one-year terms until the election and qualification of their successors. Officers are appointed by our board of directors and serve\nat the discretion of the board of directors, subject to applicable employment agreements. The following table sets forth information relating\nto our executive officers and members of our board of directors.

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Name	Age	Position
Chenlong Tan	43	Chairman, Chief Executive Officer, Interim Chief Financial Officer, President, and Director
Yue Guo	39	Independent Director
Hanxi Li	39	Independent Director
Bennet Tchaikovsky	57	Independent Director
Yi Yang	40	Director

Chenlong Tan. Mr.\nTan cofounded our Company in 2018 and is the Chairman, Chief Executive Officer, Interim Chief Financial Officer, and President. He has\nheld the position of Chief Executive Officer since April 2018 and assumed the positions of Chairman, President and Interim Chief Financial\nOfficer in January 2020. Mr. Tan held the position of Interim Chief Financial Officer until January 2021, and again since June 2025. From\n2010 until 2018, Mr. Tan was the cofounder, Chief Executive Officer and Chief Information Officer at our predecessor, BizRight LLC, where\nhe built the business from the ground up to achieve $20 million in sales through data driven development. From 2002 until 2010, Mr. Tan\nserved as a Solution Architect and Senior Software Engineer at various companies, where he took a lead role, managing consultants, business\narchitects and project managers, in working with healthcare companies in completing scoping requirements, solution gathering and project\nmanagement, among other things. Mr. Tan received his B.Sc. at the University of Auckland in New Zealand, where he graduated with honors.

Yue Guo. Ms. Guo\nwas appointed to serve as a director on our board of directors on May 8, 2025. Ms. Guo is a seasoned technology and developer marketing\nexpert with 14 years of experience in the IT and internet industry, specializing in community building, product management, and strategic\ncontent operations. Currently a Senior Developer Marketing Manager at Amazon Web Services (AWS) China since May 2021, Ms. Guo has successfully\nled the establishment of the China Developer Center, achieving 1.2 million annual engagements and onboarding 30,000 new developers within\nthe first year. Before AWS, Ms. Guo was the Head of Developer Market at JD Cloud Technology, from October 2018 to May 2021, where they\nscaled a developer community to 10 million annual users, generated over 1,000 technical content pieces annually, and established key partnerships\nwith universities and tech foundations. At Baidu, Ms. Guo led the Apollo developer community, building the world’s largest autonomous\ndriving community with over 100,000 developers and launching a globally recognized autonomous driving curriculum in partnership with top\nuniversities. A recognized leader in the tech community, Ms. Guo has been an advisory member at OpenSourceCommunity and an expert committee\nmember at the China Open Source Promotion Union (COPU). They are also a member of the China Computer Federation (CCF) Programmer Culture\nCommittee and have represented AWS China in the LF AI & Data community. Ms. Guo’s core strengths include product strategy, content\noperations, community growth, and developer relations, with a proven track record of driving strategic initiatives that foster engagement,\nbrand visibility, and technical partnerships across major tech ecosystems. We believe that Ms. Guo’s extensive experience in computer\nscience and software will benefit the Company’s business and operations and make them a valuable member of the board of directors.

Hanxi Li. Ms. Li\nwas appointed to serve as a director on our board of directors on December 23, 2021 and serves as chair of our compensation committee.\nMs. Li has more than a decade of marketing experience working with Fortune 50 companies and international conferences. Since 2019, Ms.\nLi has served as Vice President of Marketing for Elegantz Productions LLC. In this role, she executed branding and marketing campaigns\ntargeting the United States region for Sequoia Capital and Xiaomi. She also formed a long-term partnership with ByteDance Ltd. and Ciwen\nMedia. From 2017 to 2018, she was the marketing director of the Company’s predecessor, Bizright LLC, where she was in charge of\nthe company’s branding and marketing strategies, including the expansion of the company’s social media marketing. From 2013\nto 2016, Ms. Li was a partner at a private video studio where she worked with top companies across industries, including Bluefocus, and\nexecuted a performance project in the China National Olympic Park. From 2011 to 2014, as publicity supervisor for the China National Convention\nCenter, Ms. Li led efforts for branding and media channels for national and international meetings. Her long track record as a successful\nmarketing leader makes her ideally suited to serving as a member of our board of directors.

Bennet Tchaikovsky. Mr.\nTchaikovsky serves as a member of our board of directors, a position he has held since May 2021, following completion of our initial public\noffering, and serves as chair of the audit committee. Since August 2014, Mr. Tchaikovsky has been a full-time professor at Irvine Valley\nCollege. From January 2022 to June 2024, Mr. Tchaikovsky served as a part-time accounting instructor at California State University, Fullerton.\nFrom January 2020 through December 2021, Mr. Tchaikovsky served as a member of the board of directors for Oriental Culture Holding Group,\nLtd. (Nasdaq: OCG). From February 2021 through July 2022, Mr. Tchaikovsky served as a member of the board of directors for Industrial\nHuman Capital, Inc. (NYSE: AXH). From September 2020 through December 2021, Mr. Tchaikovsky served as a part-time accounting instructor\nat Long Beach City College. From August 2018 to May 2019, Mr. Tchaikovsky was a part-time instructor at Chapman University. From November\n2013 to August 2019, Mr. Tchaikovsky served as a board member and chairman of the audit committee of Ener-Core, Inc. (OTCMKTS: ENCR).\nFrom August 2013 to May 2014, Mr. Tchaikovsky was a part-time faculty member of Irvine Valley College and a part-time faculty member of\nPasadena City College. Mr. Tchaikovsky has served as a director on the board of directors of China Jo-Jo Drugstores, Inc. (NASDAQ: CJJD)\nfrom August 2011 to January 2013 and as its chief financial officer from September 2009 to July 2011. From April 2010 to August 2013,\nMr. Tchaikovsky served as chief financial officer of VLOV, Inc. From May 2008 to April 2010, Mr. Tchaikovsky served as chief financial\nofficer of Skystar Bio-Pharmaceutical Company. From March 2008 to November 2009, Mr. Tchaikovsky served as a director on the board of\ndirectors of Ever-Glory International Group (Nasdaq: EVK), where he served as chairman of the audit committee and was a member of the\ncompensation committee. From December 2008 through November 2009, Mr. Tchaikovsky served as a director of Sino Clean Energy, Inc. Mr.\nTchaikovsky received his Juris Doctorate degree from Southwestern Law School in December 1996 and his Bachelor of Arts degree in Business\nEconomics from the University of California at Santa Barbara in August 1991. Mr. Tchaikovsky is an actively licensed Certified Public\nAccountant in California and is an actively licensed member of the California State Bar. We believe that Mr. Tchaikovsky’s extensive\nexperience in accounting and business will benefit the Company’s business and operations and make him a valuable member of the board\nof directors and its committees.

Yi Yang. Ms. Yang\nwas appointed to serve as a director on our board of directors on June 6, 2025. Ms. Yang has served as the Founder and Chief Executive\nOfficer of Custom Cup Factory, Inc. since 2020 and as the Founder and Chief Executive Officer of Pacelor since 2022. From 2017 until 2018,\nMs. Yang was founder and operator of Lebonbon, a boutique catering and event service company specializing in desserts, beverages, and\nparty/event execution. From 2010 until 2014, Ms. Yang was a personnel specialist with the United States Navy, where she managed personnel\nrecords, advancement testing and military benefits, among other duties. We believe that Ms. Yang’s extensive experience in packaging,\nwholesale and logistics will benefit the Company’s business and operations and make Ms. Yang a valuable member of the board of directors.

Family Relationships

There are no family relationships\namong any of our officers or directors.

Involvement in Certain Legal Proceedings

To our knowledge, during the past\nten years, none of our directors, executive officers, promoters, control persons, or nominees has:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	·	had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;
	·	been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
	·	been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;
	·	been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;
	·	been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
	·	been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Board Committees

Our board of directors has established\nan Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Each of these committees operates under\na charter that has been approved by our board of directors, as set forth below.

Audit Committee.\nOur Audit Committee consists of three independent directors. The members of the Audit Committee are Mr. Tchaikovsky, Ms. Guo and Ms. Li.\nThe Audit Committee consists exclusively of directors who are financially literate and Mr. Tchaikovsky serves as chair of the Audit Committee.\nAs a licensed certified public accountant, Mr. Tchaikovsky is considered an “audit committee financial expert” as defined\nby the SEC’s rules and regulations.

The audit committee responsibilities include:

\n \n \n \n \n \n \n \n \n \n \n \n \n\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	·	overseeing the compensation and work of and performance by our independent auditor and any other registered public accounting firm performing audit, review or attestation services for us;
	·	engaging, retaining and terminating our independent auditor and determining the terms thereof;
	·	assessing the qualifications, performance and independence of the independent auditor;
	·	evaluating whether the provision of permitted non-audit services is compatible with maintaining the auditor’s independence;
	·	reviewing and discussing the audit results, including any comments and recommendations of the independent auditor and the responses of management to such recommendations;
	·	reviewing and discussing the annual and quarterly financial statements with management and the independent auditor;
	·	producing a committee report for inclusion in applicable SEC filings;
	·	reviewing the adequacy and effectiveness of internal controls and procedures;
	·	establishing procedures regarding the receipt, retention and treatment of complaints received regarding the accounting, internal accounting controls, or auditing matters and conducting or authorizing investigations into any matters within the scope of the responsibility of the audit committee; and
	·	reviewing transactions with related persons for potential conflict of interest situations.

Compensation Committee.\nOur Compensation Committee consists of three independent directors. The members of the Compensation Committee are Ms. Li, Mr. Tchaikovsky\nand Ms. Guo. Ms. Li serves as the chair of the Compensation Committee. The committee has primary responsibility for:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	·	reviewing and recommending all elements and amounts of compensation for each executive officer, including any performance goals applicable to those executive officers;
	·	reviewing and recommending for approval the adoption, any amendment and termination of all cash and equity-based incentive compensation plans;
	·	once required by applicable law, causing to be prepared a committee report for inclusion in applicable SEC filings;
	·	approving any employment agreements, severance agreements or change of control agreements that are entered into with the Chief Executive Officer and certain executive officers; and
	·	reviewing and recommending the level and form of non-employee director compensation and benefits.

Nominating and Governance\nCommittee. The Nominating and Governance Committee consists of three independent directors. The members of the Nominating and\nGovernance Committee are Ms. Guo, Ms. Li and Mr. Tchaikovsky. Ms. Guo serves as chair of the Nominating and Corporate Governance Committee.\nThe Nominating and Corporate Governance Committee’s responsibilities include:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	·	recommending persons for election as directors by the stockholders;
	·	recommending persons for appointment as directors to the extent necessary to fill any vacancies or newly created directorships;
	·	reviewing annually the skills and characteristics required of directors and each incumbent director’s continued service on the board of directors;
	·	reviewing any stockholder proposals and nominations for directors;
	·	advising the board of directors on the appropriate structure and operations of the board of directors and its committees;
	·	reviewing and recommending standing board committee assignments;
	·	developing and recommending to the board of directors the Corporate Governance Guidelines, a Code of Business Conduct and Ethics and other corporate governance policies and programs and reviewing such guidelines, code and any other policies and programs at least annually;
	·	making recommendations to the board of directors as to determinations of director independence; and
	·	making recommendations to the board of directors regarding corporate governance based upon developments, trends, and best practices.

The Nominating and Governance\nCommittee will consider stockholder recommendations for candidates for the board of directors.

Code of Business Conduct and Ethics

The Company maintains a formal\nCode of Business Conduct and Ethics (the “Code”) that is applicable to every officer, director, employee and consultant (the\n“Employees”) of the Company and its affiliates. The Code reaffirms the high standards of business conduct required of all\nof the Company’s Employees.

Insider Trading Policy

The Company maintains an insider\ntrading policy to help the Company’s Employees comply with federal and state securities laws, prevent insider trading and govern\nthe terms and conditions at which the Employees can trade in the Company’s securities. On September 3, 2025, the board of directors\nof the Company adopted an amended and restated policy on insider trading (the “Amended and Restated Insider Trading Policy”).\nThe Amended and Restated Insider Trading Policy was updated in order to adjust the blackout period from three weeks before quarter end\nto two weeks before quarter end and update the requirements for establishing a 10b5-1 plan.

Incentive-Based Compensation Recovery (Clawback)\nPolicy

The Company maintains an incentive-based\ncompensation recovery (clawback) policy to enable the Company to recover erroneously awarded compensation in the event that the Company\nis required to prepare an accounting restatement.

Limitation of Directors Liability and Indemnification

The Nevada Revised Statutes (“NRS”)\nauthorizes corporations to limit or eliminate, subject to certain conditions, the personal liability of directors to corporations and\ntheir stockholders for monetary damages for breach of their fiduciary duties.

iPower maintains stand-alone director\nand officer liability insurance to cover liabilities our directors and officers may incur in connection with their services to us, including\nmatters arising under the Securities Act. In addition, Nevada law and our bylaws provide that we will indemnify our directors and officers\nwho, by reason of the fact that he or she is an officer or director, is involved in a legal proceeding of any nature.

There is no pending litigation\nor proceeding against any of our directors, officers, employees or agents in which indemnification will be required or permitted. We are\nnot aware of any threatened litigation or proceeding which may result in a claim for such indemnification.

Indemnification Agreements

To date, we have no specific indemnification\nagreements with our directors or executive officers. However, our officers and directors are entitled to indemnification through our bylaws\nand to the extent allowed pursuant to the NRS, federal securities law and our directors and officers liability insurance.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange\nAct requires our executive officers and directors, and persons who own more than 10% of our common stock, to file reports regarding ownership\nof, and transactions in, our securities with the SEC and to provide us with copies of those filings. Based solely on our review of the\ncopies of such forms furnished to us and written representations by our officers and directors regarding their compliance with applicable\nreporting requirements under Section 16(a) of the Exchange Act, we believe that all Section 16(a) filing requirements for our executive\nofficers, directors and 10% stockholders were met during the year ended June 30, 2026, except for the following:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Name		Late Reports
Yue Guo		Form 3
Yang Yi		Form 3

ITEM 11. EXECUTIVE COMPENSATION

Our named executive officers for the years ended June 30, 2026 and\n2025 were Chenlong Tan and Kevin Vassily.

Summary Compensation Table

The following table presents information\nregarding the total compensation earned by our executive officers who were serving as executive officers as of June 30, 2026, for services\nrendered in all capacities to us for the fiscal years ended June 30, 2026 and 2025.

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Name and Principal Position

Year

Salary

($USD)

Bonus

($USD)

Stock Based Awards

($USD)

Others

($USD)

Total

($USD)

Chenlong Tan

2026

264,000

–

1,198,047

–

1,462,047

Chairman, Chief Executive Officer, President and

Interim Chief Financial Officer

2025

264,000

–

362,325

62,647

(1)

688,972

Kevin Vassily

2026

–

Former Chief Financial Officer ⁽²⁾

2025

220,000

–

220,000

_________________________

\n \n \n \n \n \n \n \n \n

	(1)	Consists of the costs of leasing a car.
	(2)	Mr. Vassily resigned as the Company’s Chief Financial Officer on May 31, 2025, at which time Mr. Tan assumed the position of Interim Chief Financial Officer.

Employment Agreement with Chenlong Tan

On July 1, 2020, we entered into\nan employment agreement with our Chief Executive Officer, Chenlong Tan. Under Mr. Tan’s employment agreement, Mr. Tan receives base\ncompensation of $20,000 per month, is entitled to performance cash bonus compensation based on achievement of certain pre-determined goals,\nand from time to time may be granted restricted common shares and/or options to purchase shares of the Company’s common stock, subject\nto the board of directors or Compensation Committee approval. In addition, during the term of Mr. Tan’s employment agreement, we\nare also leasing a motor vehicle for Mr. Tan’s daily use. Mr. Tan is not entitled to any severance rights under his employment agreement.\nMr. Tan’s employment agreement has a term of five years, is thereafter renewable on an annual basis, and may be terminated upon\n30 days’ notice upon the mutual agreement of Mr. Tan and the Company.

Outstanding Equity Awards

Outstanding Equity Awards at June 30, 2026

The following table provides information\nregarding outstanding equity awards held by our named executive officers as of June 30, 2026.

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Options

Restricted Stock Unit Awards

Name

Grant Date

Number of securities Underlying Options (#)

Vested

Number of Securities Underlying Options (#)

Unvested

Option

Exercise

Price

($)

Option

Expiration

date

Number of Securities Underlying RSUs (#) Vested

Number of Securities Underlying RSUs(#) Unvested

Chenlong Tan

5/13/2022

–

1,389

2,419.2

5/12/2032

–

8/29/2024

345

211

3,088.8

8/28/2034

11/12/2025

–

1,127

Director Compensation

We reimburse all members of our\nboard of directors for their direct out of pocket expenses incurred in attending meetings of our board of directors. This table summarizes\nthe compensation paid to each of our independent directors who served in such capacity during the fiscal year ended June 30, 2026.

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Name	Fees Earned or \n Paid in Cash ($USD)		Stock Based \n Awards ($USD)			Others ($USD)		Total ($USD)
Bennet Tchaikovsky	$	20,000		$	20,000		$	–	$	40,000
Hanxi Li	$	10,000		$	10,000		$	–	$	20,000
Yue Guo	$	10,000		$	10,000		$	–	$	20,000
Yi Yang	$	–		$	–		$	–	$	–

Our independent directors each\nreceive (i) $10,000 annual cash compensation, payable in equal quarterly installments, and (ii) $10,000 in restricted stock units (“RSUs”),\nwhich were issued pursuant to our 2020 Amended Equity Incentive Plan. The RSUs vest quarterly in substantially equal installments. In\naddition, the chairman of our audit committee is entitled to receive an additional $10,000 in cash and $10,000 in RSUs, vested in equal\nquarterly installments. Directors will also be reimbursed for reasonable expenses incurred in connection with the performance of their\nduties.

Equity Incentive Plan

On October 15, 2020, the Company’s board of\ndirectors adopted, and its stockholders approved and ratified, the iPower Inc. 2020 Equity Incentive Plan. Further on May 5, 2021, the\nCompany’s Board of Directors adopted, and its stockholders approved and ratified, the iPower Inc. Amended and Restated 2020 Equity\nIncentive Plan (the “Plan”). The Plan allows for the issuance of up to 50,000,000 shares of Common Stock, whether in the form\nof stock options, restricted stock, restricted stock units, stock appreciation rights, performance units, performance shares and other\nstock or cash awards. The general purpose of the Plan is to provide an incentive to the Company’s directors, officers, employees,\nconsultants and advisors by enabling them to share in the future growth of the Company’s business. On November 16, 2021 and December\n6, 2022, the Company filed a registration statement on Form S-8 registering all shares issuable under the Plan, which was subsequently\namended on December 6, 2022 and September 15, 2023, November 22, 2023, and April 17, 2026.

The board of directors believes\nthat granting equity-based compensation serves to promote continuity of management and provide for a shared interest in the welfare, growth\nand development of the Company. The Company believes that the 2020 Amended Equity Incentive Plan will serve to advance the Company’s\ninterests by enhancing its ability to (i) attract and retain employees, consultants, directors and advisors who are able to contribute\nto the Company’s ongoing success and development, (ii) reward those employees, consultants, directors and advisors for their contributions\nto the Company, and (iii) encourage employees, consultants, directors and advisors to participate in the Company’s long-term growth\nand success.

In addition to the RSU grants\nreferenced above, on May 13, 2022, the Company granted stock options (the “Option Grants”) in the amount of (i) 1,389 shares\nto Chenlong Tan, our Chief Executive Officer and (ii) 153 shares to Kevin Vassily, our former Chief Financial Officer. The Option Grants\nhave an exercise price of $2,419.2 per share (the closing price on the grant date) and have a term of 10 years, will vest in stages upon\nthe Company’s achievement of certain pre-determined market capitalization and revenue or operating income targets set forth in the\ngrant agreements. Upon Mr. Vassily’s resignation, stock options for 153 shares granted to him had been forfeited.

On August 29, 2024, the Company\ngranted 556 shares of stock options (the “2024 Stock Options”) to Mr. Chenlong Tan, the Company’s Chief Executive Officer,\npursuant to the terms of the Amended and Restated 2020 Equity Incentive Plan (the “Plan”). The options have an exercise price\nof $3,088.8 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\nyears and will vest as follows: 14 shares vested on the grant date (August 29, 2024), and 15 shares will vest on the first day of each\nmonth from September 1, 2024, to August 1, 2027.

On November 12, 2025, the Company\ngranted $800,000 in RSUs as bonus to Chenlong Tan, the CEO of the Company. As a result, 1,127 RSUs, calculated based on the closing price,\n$709.85, on the grant date, were issued to Mr. Tan. The RSUs vested immediately but contained a deferred settlement provision. As a result,\nsettlement of the vested RSUs shall occur on the earliest of the following Code Section 409A-permitted payment events: (1) change of control\nof the Company that qualifies as a “change in control event” as defined under Code Section 409A; (2) Reporting Person’s\nseparation from service (subject to any required delay under the Amended and Restated 2020 Equity Incentive Plan; (3) upon the Reporting\nPerson’s death or disability, or (4) in the event of an “unforeseeable financial emergency,” as defined under Code Section\n409A.

During the years ended June 30,\n2026, the Company granted an additional 2,480 shares of RSUs to the Company’s employees and directors, respectively.

Granting of Certain Equity Awards Close in Time to the Release of\nMaterial Nonpublic Information

We do not grant equity awards\nin anticipation of the release of material nonpublic information that is likely to result in changes to the price of our common stock,\nand do not time the public release of such information based on award grant dates. During the last completed fiscal year, we have not\nmade awards to any named executive officer or director during the period beginning four business days before and ending one business day\nafter the filing of a Quarterly Report on Form 10-Q or our Annual Report on Form 10-K or the filing or furnishing of a Current Report\non Form 8-K, and we have not timed the disclosure of material nonpublic information for the purpose of affecting the value of executive\ncompensation.

ITEM 12. SECURITY OWNERSHIP\nOF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth\nthe number of shares of common stock beneficially owned as of October 2, 2026 by:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	·	each of our stockholders who is known by us to beneficially own 5% or more of our common stock;
	·	each of our executive officers;
	·	each of our directors; and
	·	all of our directors and current executives as a group.

Beneficial ownership is determined\nbased on the rules and regulations of the SEC. A person has beneficial ownership of shares if such individual has the power to vote and/or\ndispose of shares. This power may be sole or shared and direct or indirect. Applicable percentage ownership in the following table is\nbased on the total of 1,262,584 shares of common stock outstanding as of October 2, 2026. In computing the number of shares beneficially\nowned by a person and the percentage ownership of that person, shares of common stock subject to options or warrants held by that person\nthat are exercisable as of, or within sixty (60) days of, the date of this Annual Report are deemed to be outstanding and beneficially\nowned by such person. Such shares, however, are not deemed to be outstanding for purposes of computing the percentage ownership of any\nother person (s). Except as may be indicated in the footnotes to this table and pursuant to applicable community property laws, each person\nnamed in the table has sole voting and dispositive power with respect to the shares of common stock set forth opposite that person’s\nname. Unless indicated below, the address of each individual listed below is c/o iPower Inc., 8798 9th Street, Rancho Cucamonga, CA 91730.

Name of Beneficial Owner	No. of Shares Common Stock Beneficially Owned		Total Percentage of Common Stock Owned
Chenlong Tan ⁽¹⁾		5,160		0.41%
Yue Guo ⁽²⁾		116		*%
Hanxi Li ⁽³⁾		157		*%
Bennet Tchaikovsky ⁽⁴⁾		269		*%
Yi Yang ⁽⁵⁾		–		–
All Officers and Directors (5 Persons)		5, 702		0.45%

Beneficial Owners of more than 5%
–		–		–

_________________________

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

*	Less than 0.1%
(1)	Chenlong Tan is our co-Founder, Chairman, Chief Executive Officer and President. Mr. Tan’s holding consists of (i) 1,761 shares directly held by Mr. Tan; (ii) 1,852 shares held by a trust for the benefit of Mr. Tan and certain of his family members, (iii) 420 shares of options vested, and (iv) 1,127 shares of RSUs vested with deferred settlement. The aforementioned holdings do not include options to purchase 1,524 shares of common stock which remain subject to certain vesting conditions.
(2)	Ms. Guo is a member of our board of directors. Her holdings consist of (i) 116 shares of common stock and (ii) 152 RSUs which remain subject to vesting.
(3)	Ms. Li is a member of our board of directors. Her holdings consist of (i) 157 shares of common stock and (ii) 152 RSUs which remain subject to vesting.
(4)	Mr. Tchaikovsky is a member of our board of directors. His holdings consist of (i) 269 shares of common stock and (ii) 304 RSUs which remain subject to vesting.
(5)	Ms. Yang is a member of our board of directors.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS\nAND DIRECTOR INDEPENDENCE

Certain Relationships and Related Party Transactions

Unless described below, during\nthe last two fiscal years, there are no transactions or series of similar transactions to which we were a party or will be a party, in\nwhich:

\n \n \n \n \n \n \n \n \n

	·	the amounts involved exceed or will exceed $120,000; and
	·	any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family of any of the foregoing had, or will have, a direct or indirect material interest.

On November 24, 2025, the\nCompany issued three promissory notes totaling $2 million (the “Promissory Notes”) in exchange for gross proceeds of $2 million.\nThe Promissory Notes were entered into with certain investors and related parties, including $500,000 from an entity controlled by the\nCompany’s CEO, Chenlong Tan. The Promissory Notes bear 6.5% interest per annum and are repayable upon the earlier of 90 days or\nthe Company’s entry into new financing arrangements. The funds received in connection with the Company’s issuance of the Promissory\nNotes was used to pay off the Company’s existing ABL with JPMorgan Chase Bank, N.A. (“JPMorgan”). For year ended June\n30, 2026, the Company recorded interest expense of $29,250, respectively. As of June 30, 2026, the Promissory Notes had been fully paid\noff.

On November 28, 2025, the\nCompany borrowed $50,000 from an entity controlled by the Company’s CEO, Chenlong Tan, for short-term liquidity needs. The borrowing\nwas non-interest-bearing and repayable on demand. As of June 30, 2026, the borrowing had been fully repaid.

On June 3, 2025, the Company,\nCustom Cup Factory, Inc. (“CCF”) and Ms. Yi Yang, our new director appointed on June 6, 2025, entered into the Limited Liability\nCompany Operating Agreement (the “Operating Agreement”) of United Package NV, LLC, a Nevada limited liability corporation\n(the “Joint Venture”). The Joint Venture will focus on the domestic production of packaging materials to serve the rapidly\ngrowing demands of U.S. businesses seeking reliable, sustainable, and cost-effective supply chain solutions without reliance on offshore\nmanufacturing. See Note 3 above for details.

In addition, Ms. Yang’s\nentity, Pacelor Inc. (“Pacelor”), manages a warehouse and provides fulfillment services for the Company and receives a monthly\nservice fee, which fluctuates from month to month. Ms. Yang is the Founder and Chief Executive Officer of Pacelor. As a result, Pacelor\nhas become a related party of the Company since June 6, 2025. For the years ended June 30, 2026 and 2025, the Company received $3,394,399\nand $202,922, respectively, in services from Pacelor. As of June 30, 2026 and 2025, the accounts payable to Pacelor was $240,425 and $78,831,\nrespectively. Ms. Yang’s other entity, Pacelor NV Inc. (“Pacelor NV”) also provides marketing services for the Company.\nDuring the year ended June 30, 2026, the Company recorded $100,470 of selling expense. As of June 30, 2026 and 2025, the outstanding accounts\npayable to Pacelor NV was $415,489 and $315,019, respectively.

Independence of the Board\nof Directors

As required\nunder the listing standards of The Nasdaq Stock Market, LLC (Nasdaq), a majority of the members of a listed company’s board of directors\nmust qualify as “independent,” as affirmatively determined by the board of directors. The board of directors consults with\nour outside counsel to ensure that its determinations are consistent with relevant securities and other laws and regulations regarding\nthe definition of “independent,” including those set forth in pertinent listing standards of Nasdaq, as in effect from time\nto time.

The Board undertook a review of\nthe independence of each director. Based on information provided by each director concerning his or her background, employment, and affiliations,\nthe Board has determined that Mr. Tchaikovsky, Ms. Li and Ms. Guo do not have relationships that would interfere with the exercise of\nindependent judgment in carrying out the responsibilities of a director and that each of these directors is “independent”\nas that term is defined under the listing standards. In making these determinations, the Board considered the current and prior relationships\nthat each non-employee director has with the Company and all other facts and circumstances the Board deemed relevant in determining their\nindependence, including the beneficial ownership of our shares by each non-employee director and the transactions described in “Certain\nRelationships and Related Person Transactions.”

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The following table represents\nfees for professional audit services for the audit of the Company’s annual financial statements for the fiscal years ended June\n30, 2026 and 2025, rendered by HTL International, LLC, the Company’s current independent registered public accounting firm, and\nUHY LLP, the Company’s prior independent registered public accounting firm.

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Fiscal year ended June 30,
	2026		2025
Audit fees ¹	$	256,910		$	313,467
Audit-related fees ²		–			–
Tax fees		–			–
All other fees		–			–
Total fees	$	256,910		$	313,467

_________________________

\n \n \n \n \n \n \n \n \n

	1.	Audit fees consist of fees for professional services rendered by the principal accountant for the audit of the Company’s annual financial statements and review of the financial statements included in the Company’s Form 10-K and Form 10-Q and for services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements.
	2.	Audit-related fees consist primarily of fees for assurance and related services by the accountant that are reasonably related to the performance of the audit or review of the Company’s financial statements.

Audit Committee Pre-Approval Policies

The Audit Committee is tasked\nwith pre-approving any non-audit services proposed to be provided to the Company by the independent auditors.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Exhibit No.		Description

3.1		Sixth Amended and Restated Articles of Incorporation of iPower Inc. (incorporated by reference to Exhibit 3.3 to Amendment No. 3 to the Registration Statement on Form S-1 filed May 5, 2021).
3.2		Amendment to Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed October 21, 2025).
3.3		Third Amended and Restated Bylaws of iPower Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed June 11, 2025).
3.4		Certificate of Amendment to the Sixth Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed May 22, 2026).
3.5		Certificate of Amendment to the Sixth Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed August 5, 2026).
4.1		Certificate of Designation of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-1 filed February 2, 2021).
4.2		Form of Warrant (incorporated by Reference to Exhibit 4.1 to the Current Report on Form 8-K filed June 18, 2024).
4.3		Form of Series A Senior Secured Convertible Notes (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on December 23, 2025).
4.4		Form of Series B Senior Secured Convertible Notes (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed on December 23, 2025).
4.5		Form of Series A Convertible Note (incorporated by reference to Exhibit 10.1 to the Current Report dated February 10, 2026).
4.6		Form of Series A Convertible Note (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K dated May 19, 2026).
4.7		Description of Registrant’s Securities
10.1		2020 Amended and Restated Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to Amendment No. 3 to the Registration Statement on Form S-1 filed May 5, 2021).
10.2		Form of Sublease Agreement, dated as of December 1, 2018, between BZRTH, Inc. and BizRight, LLC (incorporated by reference to Exhibit 10.2 to the Registration Statement on Form S-1 filed February 2, 2021).
10.3		Asset Purchase Agreement, dated December 1, 2018, between BZRTH, Inc. and BizRight, LLC (incorporated by Reference to Exhibit 10.3 to the Registration Statement on Form S-1 filed February 2, 2021).
10.4		Loan and Security Agreement, dated May 3, 2019, between BZRTH, Inc. and WFC Fund, LLC (incorporated by reference to Exhibit 10.4 to the Registration Statement on Form S-1 filed February 2, 2021).
10.5		Consulting Agreement, dated February 1, 2020, between BZRTH, Inc. and Allan Huang (incorporated by reference to Exhibit 10.5 to Amendment No. 1 to the Registration Statement on Form S-1 filed April 15, 2021).
10.6		Note for PPP Loan, dated April 13, 2020, issued to Royal Business Bank (incorporated by reference to Exhibit 10.5 to the Registration Statement on Form S-1 filed February 1, 2021).
10.7		Loan Authorization and Agreement, dated April 18, 2020, between BZRTH, Inc. and U.S. Small Business Administration (incorporated by reference to Exhibit 10.6 to the Registration Statement on Form S-1 filed February 1, 2021).
10.8		Employment Agreement, dated July 1, 2020, between iPower Inc. and Chenlong Tan (incorporated by reference to Exhibit 10.7 to the Registration Statement on Form S-1 filed February 2, 2021).
10.9		Exclusive Business Cooperation Agreement, dated September 4, 2020, between iPower Inc. and Global Product Marketing Inc. (incorporated by reference to Exhibit 10.9 to the Registration Statement on Form S-1 filed February 2, 2021).
10.10		Restricted Stock Purchase Agreement, dated October 20, 2020, between iPower Inc. and Allan Huang (incorporated by reference to Exhibit 10.10 to the Registration Statement on Form S-1 filed February 2, 2021).

10.11		Restricted Stock Purchase Agreement, dated October 20, 2020, between iPower Inc. and Chenlong Tan (incorporated by reference to Exhibit 10.11 to the Registration Statement on Form S-1 filed February 2, 2021).
10.12		Amended and Restated Exclusive Business Cooperation Agreement, dated October 26, 2020, between iPower Inc. and E Marketing Solution Inc. (incorporated by reference to Exhibit 10.12 to the Registration Statement on Form S-1 filed February 2, 2021).
10.13		Receivables Purchase Agreement, dated November 16, 2020, between BZRTH, Inc. and WFC Fund, LLC (incorporated by reference to Exhibit 10.13 to the Registration Statement on Form S-1 filed February 2, 2021).
10.14		Form of Subscription Agreement for Series A Preferred Stock Offering (incorporated by reference to Exhibit 10.14 to the Registration Statement on Form S-1 filed February 2, 2021).
10.15		Board Letter Agreement, dated January 26, 2021, between iPower Inc. and Bennet Tchaikovsky (incorporated by reference to Exhibit 10.16 to the Registration Statement on Form S-1 filed February 2, 2021).
10.16		Form of Subscription Agreement for 6% Convertible Note and Warrants (incorporated by reference to exhibit 10.17 to the Registration Statement on Form S-1 filed February 2, 2021).
10.17		Convertible Note, dated January 27, 2021, issued to Wiseman Capital Management LLC (incorporated by reference to Exhibit 10.18 to the Registration Statement on Form S-1 filed February 2, 2021).
10.18		Convertible Note, dated January 27, 2021, issued to Bright Century Investment LLC (incorporated by reference to Exhibit 10.19 to the Registration Statement on Form S-1 filed February 2, 2021).
10.19		Indemnification Agreement, dated as of April 27, 2021, by and among iPower Inc. and D.A. Davidson & Co., Roth Capital Partners, LLC and US Tiger Securities, Inc. (incorporated by reference to Exhibit 10.23 to Amendment No. 3 to the Registration Statement on Form S-1 filed May 5, 2021).
10.20		Indemnification and Lock-Up Agreement, dated as of April 27, 2021, entered into by Chenlong Tan (incorporated by reference to Exhibit 10.24 to Amendment No. 3 to the Registration Statement on Form S-1 filed May 5, 2021).
10.21		E Marketing Solutions Inc. Equity Purchase Agreement, dated May 18, 2021, between iPower Inc. and Shanshan Huang (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed May 21, 2021).
10.22		Global Products Marketing Inc. Equity Purchase Agreement, dated May 18, 2021, between iPower Inc. and Chenlong Tan (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed May 21, 2021).
10.23		Lease Agreement, dated July 28, 2021, between iPower Inc. and 9^thand Vineyard LLC (incorporated by reference to Exhibit 10.1 to the Current Report filed August 2, 2021).
10.24		Form of Credit Agreement, dated as of November 12, 2021, between iPower Inc., its subsidiaries and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed November 15, 2021).
10.25		Form of Trademark Security Agreement, dated as of November 12, 2021, between iPower Inc., its subsidiaries and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q filed November 15, 2021).
10.26		Form of Pledge and Security Agreement, dated as of November 12, 2021, between iPower Inc., its subsidiaries and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q filed November 15, 2021).
10.27		Joint Venture Agreement (incorporated by Reference to Exhibit 10.1 to the Current Report on Form 8-K filed January 20, 2022).
10.28		Box Harmony LLC Agreement (incorporated by Reference to Exhibit 10.2 to the Current Report on Form 8-K filed January 20, 2022).
10.29		Facility and Use Access Agreement (incorporated by Reference to Exhibit 10.3 to the Current Report on Form 8-K filed January 20, 2022).
10.30		Consulting Agreement (incorporated by Reference to Exhibit 10.4 to the Current Report on Form 8-K filed January 20, 2022).
10.31		License Agreement (incorporated by Reference to Exhibit 10.5 to the Current Report on Form 8-K filed January 20, 2022).
10.32		Director Offer Letter (incorporated by Reference to Exhibit 10.6 to the Current Report on Form 8-K filed January 20, 2022).
10.33		Joint Venture Agreement, dated February 10, 2022, between iPower Inc., Bro Angel LLC, Jie Shan and Bing Luo (incorporated by Reference to Exhibit 10.1 to the Current Report on Form 8-K filed February 14, 2022).
10.34		Amended & Restated Limited Liability Company Operating Agreement of Global Social Media LLC, dated February 10, 2022, between Global Social Media LLC, iPower Inc., and Bro Angel LLC (incorporated by Reference to Exhibit 10.2 to the Current Report on Form 8-K filed February 14, 2022).

10.35		Intellectual Property License Agreement, dated February 10, 2022, between Bro Angel LLC and Global Social Media LLC (incorporated by Reference to Exhibit 10.3 to the Current Report on Form 8-K filed February 14, 2022).
10.36		Share Transfer Agreement, dated February 15, 2022, between iPower Inc., White Cherry Limited, Li Zanyu, Xie Jing, Anivia Limited, Fly Elephant Limited, Dayou Renzai (Shenzhen) Technology Co., Ltd. and Daheshou (Shenzhen) Information Technology Co., Ltd. (incorporated by Reference to Exhibit 10.1 to the Current Report on Form 8-K filed February 22, 2022).
10.37		Exclusive Business Cooperation Agreement, dated December 15, 2021, between Dayaorenzai (Shenzhen) Technology Co., Ltd. and Daheshou (Shenzhen) Information Technology Co., Ltd. (incorporated by Reference to Exhibit 10.3 to the Current Report on Form 8-K filed February 22, 2022).
10.38		Exclusive Equity Interest Pledge Agreement, dated December 15, 2021, between Dayao Renzai (Shenzhen) Technology Co., Ltd., Daheshou (Shenzhen) Information Technology Co., Ltd. and its equity holders (incorporated by Reference to Exhibit 10.4 to the Current Report on Form 8-K filed February 22, 2022).
10.39		Exclusive Option Agreement, dated December 15, 2021, between Dayao Renzai (Shenzhen) Technology Co., Ltd., Daheshou (Shenzhen) Information Technology Co., Ltd. and its equity holders (incorporated by Reference to Exhibit 10.5 to the Current Report on Form 8-K filed February 22, 2022).
10.40		Power of Attorney of Li Zanyu, dated December 15, 2021 (incorporated by Reference to Exhibit 10.6 to the Current Report on Form 8-K filed February 22, 2022).
10.41		JP Morgan Chase Consent Agreement, dated February 16, 2022 (incorporated by Reference to Exhibit 10.7 to the Current Report on Form 8-K filed February 22, 2022).
10.42		Amendment to Pledge and Security Agreement, dated February 16, 2022 (incorporated by Reference to Exhibit 10.8 to the Current Report on Form 8-K filed February 22, 2022).
10.43		Employment Contract, dated February 15, 2022, between Dayao Renzai (Shenzhen) Technology Co., Ltd. and Li Zanyu (incorporated by Reference to Exhibit 10.9 to the Current Report on Form 8-K filed February 22, 2022).
10.44		Second Amendment to the Credit Agreement, dated October 7, 2022, between iPower Inc., its subsidiaries and JPMorgan Chase Bank, N.A. (incorporated by Reference to Exhibit 10.1 to the Current Report on Form 8-K filed October 13, 2022).
10.45		Amendment to Subordination Agreement, dated October 7, 2022, between White Cherry Limited and JPMorgan Chase Bank, N.A. (incorporated by Reference to Exhibit 10.2 to the Current Report on Form 8-K filed October 13, 2022).
10.46		Form of Pledge Agreement between iPower Inc., Chenlong Tan and Allan Huang (incorporated by Reference to Exhibit 10.1 to the Current Report on Form 8-K filed April 9, 2024).
10.47		Form of Placement Agency Agreement (incorporated by Reference to Exhibit 10.1 to the Current Report on Form 8-K filed June 18, 2024).
10.48		Form of Purchase Agreement (incorporated by Reference to Exhibit 10.2 to the Current Report on Form 8-K filed June 18, 2024).
10.49		Third Amendment to the Credit Agreement, dated November 8, 2024, by and between iPower Inc., its subsidiaries and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on November 13, 2024).
10.50		Director Offer Letter, dated May 7, 2025, between iPower Inc. and Yue Guo (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on May 12, 2025).
10.51		Limited Liability Company Operating Agreement, dated June 3, 2025, among United Package NV, LLC and the Members named therein (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on June 6, 2025).
10.52		Director Offer Letter, dated June 5, 2025, between iPower Inc. and Yi Yang. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on June 9, 2025).
10.53		VIE Contract Termination Agreement, dated August 4, 2025, by and between Dayourenzai (Shenzhen) Technology Co. Ltd., Daheshou (Shenzhen) Information Technology Co. Ltd., Xiaoyun Liu and Jing Xie (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed August 12, 2025).
10.54		Form of Amendment No. 1 to United Package NV LLC Limited Liability Company Operating Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on September 9, 2025).
10.55		Form of Promissory Note (portions of this exhibit have been omitted due to confidentiality in accordance with Item 601(b)(2)(ii) of Regulation S-K) (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on December 1, 2025).

10.56		Form of Securities Purchase Agreement, dated December 22, 2025, between iPower Inc. and the Investor (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on December 23, 2025).
10.57		Form of Guaranty (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed on December 23, 2025).
10.58		Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed on December 23, 2025).
10.59		Software Asset Transfer Agreement, dated February 1, 2026, between iPower Inc. and Global Product Marketing, Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on February 2, 2026).
10.60		Stock Purchase Agreement, dated February 1, 2026, between iPower Inc. and ETTS AI Investment, LLC (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on February 2, 2026).
10.61		Promissory Note, dated February 1, 2026, between iPower Inc. and ETTS AI Investment LLC (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed on February 2, 2026).
10.62		Supply and Distribution Agreement, dated February 1, 2026, between iPower Inc., Global Product Marketing, Inc. and ETTS AI Investment LLC (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed on February 2, 2026).
10.63		Form of Series A Senior Secured Convertible Note (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on February 10, 2026).
10.64		Addendum to Promissory Note, by and between iPower Inc. and ETTS AI Investment LLC, dated March 26, 2026 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on March 31, 2026).
10.65		Sublease Agreement, dated April 2, 2026, between iPower Inc. and Dezheng Logistics Inc. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed onApril 17, 2026).
10.66		Form of Series A Senior Secured Convertible Note (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on May 19, 2026).
10.67		Supplement to Supply and Distribution Agreement, dated June 30, 2026, between iPower Inc., Global Product Marketing, Inc. and ETTS AI Investment LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on July 2, 2026).
10.68		Form of Series A Senior Secured Convertible Note (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on July 6, 2026).
10.69		Form of Amendment to Securities Purchase Agreement, dated July 6, 2026, between iPower Inc. and the investors named therein (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on July 6, 2026).
10.70		Form of Joinder to Guaranty, dated July 21, 2026 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on July 21, 2026).
10.71		Third Amended and Restated 2020 Equity Incentive Plan (incorporated\nby reference to Exhibit 10.1 to the Current Report on Form 8-K filed on September 22, 2026)
14.1		Code of Business Conduct and Ethics (incorporated by reference to Exhibit 14.1 to Amendment No. 1 to the Registration Statement on Form S-1 filed April 15, 2021).
19.1		Amended and Restated Insider Trading Policy (incorporated by reference to Exhibit 19.1 to the Current Report filed on September 9, 2025).
21.1		Subsidiaries
23.1*		Consent of Independent Registered Public Accounting Firm
31.1*		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
97		Incentive-Based Compensation Recovery (Clawback) Policy (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed December 1, 2023)

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

101.INS		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Schema Document
101.CAL		Inline XBRL Taxonomy Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Presentation Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith.

** Furnished herewith.

Item 16. Form 10-K Summary

None.

SIGNATURES

Pursuant to the requirements of Section 13 or\n15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf\nby the undersigned, thereunto duly authorized.

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	iPOWER INC.


	By:	/s/ Chenlong Tan
		Chenlong Tan
		Chairman of the Board of Directors,
		Chief Executive Officer, President and Interim Chief Financial Officer
Date: October 2, 2026		Principal Executive Officer and Principal Financial and Accounting Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this\nreport has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date

/s/ Chenlong Tan	Chairman of the Board of Directors, Chief Executive Officer, President and Interim Chief Financial Officer	October 2, 2026
Chenlong Tan	(principal executive officer and principal financial and accounting officer)

/s/ Bennet Tchaikovsky	Director	October 2, 2026
Bennet Tchaikovsky

/s/ Yue Guo	Director	October 2, 2026
Yue Guo

/s/ Hanxi Li	Director	October 2, 2026
Hanxi Li

/s/ Yi Yang	Director	October 2, 2026
Yi Yang

","original","zhKind","translation","complete",false,"IPW","公司与财报","宏观与美联储","政策与监管","观点与解读","其他","行业与主题","aihot","/items/bloxlz4sps2t62m1ehsyiopxa","https://www.sec.gov/Archives/edgar/data/1830072/000168316826007580/0001683168-26-007580-index.htm","rss-sec-xbrl","name","SEC · EDGAR 财务披露","rss","firstParty","iconUrl","/api/img-proxy?u=https%3A%2F%2Fwww.sec.gov%2Fthemes%2Fcustom%2Fuswds_sec%2Fassets%2Fimg%2Ffavicons%2Fapple-touch-icon.png&mode=avatar&exp=1791331200&sig=ee83409e3a5e31b1","iconSrcSet","/api/img-proxy?u=https%3A%2F%2Fwww.sec.gov%2Fthemes%2Fcustom%2Fuswds_sec%2Fassets%2Fimg%2Ffavicons%2Fapple-touch-icon.png&mode=avatar-48&exp=1791331200&sig=e4d3d1d90db05f20 48w, /api/img-proxy?u=https%3A%2F%2Fwww.sec.gov%2Fthemes%2Fcustom%2Fuswds_sec%2Fassets%2Fimg%2Ffavicons%2Fapple-touch-icon.png&mode=avatar-96&exp=1791331200&sig=949f05a902b03082 96w","changelogVersion","2026-10-01T08:00"]