iPower Inc.

iPower Inc. operates as a technology- and data-driven infrastructure company with a foundation in supply chain services, real-world commerce, and partner-based logistics and fulfillment capabilities. The Company leverages its internal software, data, and operational experience, together with a network of procurement, logistics, fulfillment, warehousing, and commerce partners, to support supply chain services, commerce infrastructure, and related business opportunities. Building on this foundation, iPower is pursuing AI infrastructure acquisition, financing, equipment leasing and related opportunities as a current strategic focus. The Company also maintains a limited digital asset treasury position that it began implementing through digital asset purchases beginning in December 2025. Management is currently reducing certain digital asset exposure and prioritizing direct AI infrastructure and related operating opportunities, subject to the restrictions applicable to assets held in the Company’s controlled collateral account.

The industry is highly competitive, with competition based on brand recognition, product quality, price, and innovation. iPower competes against national and regional products and in-house branded products produced by various suppliers, many of which are established companies with substantially greater financial, operational, marketing, and technical resources. Some competitors offer a broader array of products and sell at lower prices with greater name recognition. The Company's proprietary brand products offer significant value to customers at each price point and provide higher gross margins than sales of comparable third-party branded products. iPower's distribution and sales and marketing capabilities provide significant value to suppliers, who sell through the Company to access thousands of retail and commercial customers across the United States with short order lead times, no minimum order quantity on individual items, free or minimal freight expense and trade credit terms.

iPower generates revenue from product sales and supply chain services. The Company's supply chain business strategy is to expand its technology-enabled sourcing, logistics and fulfillment services for brands, manufacturers and other business customers. The Company fulfills daily customer orders via its business-to-business supply chain platform, with most customer orders shipped within one business day of order receipt. The Company's objective is to generate revenue from product sales and supply chain services while helping customers simplify operations and access U.S. markets without requiring substantial investment in owned infrastructure. The Company also maintains a limited digital asset treasury position, but its purpose is not to operate a digital asset investment fund, exchange, broker-dealer, investment advisory business or customer custody business.

For the fiscal year ended June 30, 2026, revenues from product sales were $18,423,316 ¹, compared to $58,600,334 ² in the prior year, a decrease of 68.6% ³. Revenues from service income were $1,533,622 ⁴ for fiscal 2026, compared to $4,624,473 ⁵ in fiscal 2025, a decrease of 66.8% ⁶. Cost of revenues for product costs were $14,584,960 ⁷ in fiscal 2026 versus $31,897,029 ⁸ in fiscal 2025, a decrease of 54.3% ⁹. Cost of revenues for service costs were $1,332,681 ¹⁰ in fiscal 2026 versus $3,957,883 ¹¹ in fiscal 2025, a decrease of 66.3% ¹². Gross profit for product sales was 20.8% ¹³ of revenues in fiscal 2026, compared to 45.6% ¹⁴ in fiscal 2025. Gross profit for service income was 13.1% ¹⁵ of revenues in fiscal 2026, compared to 14.4% ¹⁶ in fiscal 2025.

The Company has developed a highly developed distribution network through partner fulfillment centers across the United States, working with a network of third-party common carrier trucking/freight companies. iPower also formed United Package NV, LLC in June 2025 for the principal purpose of producing packaging materials to serve the demands of U.S. businesses seeking reliable, sustainable and cost-effective supply chain solutions without reliance on offshore manufacturing. The Company owns approximately 44% ¹⁷ of the equity interest in United Package. In addition, the Company formed iPower Nexus Inc. in January 2026, which is principally engaged in the supply chain management business. The Company also formed two wholly-owned subsidiaries in July 2026, IPW Commerce LLC and iPower AI LLC, to separate the Company’s e-commerce and artificial intelligence operations from the remainder of the Company’s business.

On December 22, 2025, the Company entered into a Securities Purchase Agreement with ATW Digital Asset Opportunities XIV providing for the purchase of a 6% ¹⁸ original issue discount convertible note facility in the aggregate original principal amount of $30,000,000 ¹⁹. The Investor initially purchased a Series A Convertible Note in the aggregate original principal amount of $5,184,024 ²⁰ and $1,815,976 ²¹ aggregate principal amount of a Series B Convertible Note. The parties also closed on an additional $5,000,000 ²² of Series A Convertible Notes upon effectiveness of a resale registration statement. On July 6, 2026, the Company and the Investor amended the Purchase Agreement to increase funds available by an additional original principal amount of $2,000,000 ²³ and remove restrictions on the use of proceeds. On July 6, 2026 and September 15, 2026, the Company received $4,700,000 ²⁴, excluding fees and expenses, in exchange for issuing a total of $5,000,000 ²⁵ aggregate principal amount of Series A Convertible Notes. To date, the Company has sold a total of $15,184,024 ²⁶ in Series A convertible notes, with an additional $15,000,000 ²⁷ in Additional Series A Notes remaining available for issuance. As of October 2, 2026, the Investor has converted a total of $9,359,580 ²⁸ of the Series A Notes, resulting in the conversion of a total of 849,697 ²⁹ shares at an average conversion price per share of $11.02 ³⁰. On February 1, 2026, the Company sold all of its equity interest in Global Product Marketing, Inc. to ETTS AI Investment LLC in exchange for a $2.3 million ³¹ promissory note. On June 30, 2026, GPM assumed $2,007,366.86 ³² of accounts payable owed to the Company’s suppliers in exchange for acquiring an equal amount of the Company’s existing inventory. The Company also implemented a 1-for-8 ³³ reverse stock split effective May 22, 2026 and a 1-for-9 ³⁴ reverse stock split effective August 7, 2026. The board of directors authorized a share repurchase program of up to $2.0 million ³⁵ of the Company’s common stock, and as of June 30, 2026, the Company repurchased an aggregate of 1,346 ³⁶ shares for approximately $41,755 ³⁷.

Total revenues for the fiscal year ended June 30, 2026 decreased 68.4% ³⁸ to $19,956,938 ³⁹, compared to $63,224,807 ⁴⁰ in the prior year. Gross profit decreased 85.2% ⁴¹ to $4,039,297 ⁴² from $27,369,895 ⁴³. Operating expenses decreased 45.2% ⁴⁴ to $18,467,579 ⁴⁵ from $33,699,897 ⁴⁶. Operating loss was $(14,428,282) ⁴⁷ for fiscal 2026, compared to $(6,330,002) ⁴⁸ in fiscal 2025, an increase of 127.9% ⁴⁹. Other expenses were $(2,060,571) ⁵⁰ in fiscal 2026 versus $(367,439) ⁵¹ in fiscal 2025, an increase of 460.8% ⁵². Loss before income taxes was $(16,488,853) ⁵³ in fiscal 2026 versus $(6,697,441) ⁵⁴ in fiscal 2025, an increase of 146.2% ⁵⁵. Income tax benefit was $(3,079,172) ⁵⁶ in fiscal 2026 versus $(1,348,313) ⁵⁷ in fiscal 2025, an increase of 128.4% ⁵⁸. Net loss from continuing operations was $(13,409,681) ⁵⁹ in fiscal 2026 versus $(5,349,128) ⁶⁰ in fiscal 2025, an increase of 150.7% ⁶¹. Discontinued operations, net of tax, were $1,787,119 ⁶² in fiscal 2026 versus $371,582 ⁶³ in fiscal 2025, an increase of 380.9% ⁶⁴. Net loss was $(11,622,562) ⁶⁵ in fiscal 2026 versus $(4,977,546) ⁶⁶ in fiscal 2025, an increase of 133.5% ⁶⁷. Net loss attributable to iPower Inc. was $(11,622,242) ⁶⁸ in fiscal 2026 versus $(4,968,288) ⁶⁹ in fiscal 2025, an increase of 133.9% ⁷⁰. Comprehensive loss attributable to iPower Inc. was $(11,624,028) ⁷¹ in fiscal 2026 versus $(4,717,775) ⁷² in fiscal 2025, an increase of 146.4% ⁷³. Operating loss as a percentage of revenues was (72.3%) ⁷⁴ in fiscal 2026 versus (10.0%) ⁷⁵ in fiscal 2025. Net loss attributable to iPower Inc. as a percentage of revenues was (58.2%) ⁷⁶ in fiscal 2026 versus (7.9%) ⁷⁷ in fiscal 2025.

Management is currently reducing certain digital asset exposure and prioritizing direct AI infrastructure and related operating opportunities, subject to the restrictions applicable to assets held in the Company’s controlled collateral account. The Company is pursuing AI infrastructure acquisition, financing, equipment leasing and related opportunities as a current strategic focus. Management has shifted the current capital-allocation priority away from additional passive digital asset accumulation and toward AI infrastructure acquisition, financing, equipment leasing and related operating opportunities. The Company does not have an automatic or recurring digital asset purchase program and is not committed to maintaining a minimum amount of digital assets.

The Company intends to leverage its experience in procurement, supplier management and U.S. distribution to develop an asset-light service platform that combines its operating capabilities with third-party warehousing, transportation and fulfillment networks. Through strategic partnerships and selective acquisitions, the Company seeks to broaden its service offerings, expand its customer base and strengthen its ability to coordinate supply chain activities from product development and sourcing through delivery. The Company also intends to integrate data-driven tools and automation to improve inventory planning, order management and logistics efficiency. The Company is actively developing new products to address market demand, broaden its product offerings and support the growth of its distribution business.

The Company is pursuing AI infrastructure acquisition, financing, equipment leasing and related opportunities as a current strategic focus. In June 2026, the Company acquired approximately $1.0 million ⁷⁸ of USDai and subsequently converted or staked the USDai into sUSDai, a yield-bearing vault/share token associated with the USD.AI protocol, in order to obtain exposure to potential returns associated with AI infrastructure financing. The Company sold all sUSDai for approximately $1,002,381 ⁷⁹ and all Ethereum for approximately $563,391 ⁸⁰ on August 14, 2026. The Company formed iPower AI LLC in July 2026 to separate its artificial intelligence operations from the remainder of the Company’s business.

The Company's gross profit as a percentage of revenues for product sales decreased to 20.8% ⁸¹ in fiscal 2026 from 45.6% ⁸² in fiscal 2025. Gross profit as a percentage of revenues for service income decreased to 13.1% ⁸³ in fiscal 2026 from 14.4% ⁸⁴ in fiscal 2025. Operating loss as a percentage of revenues was (72.3%) ⁸⁵ in fiscal 2026 versus (10.0%) ⁸⁶ in fiscal 2025. Net loss attributable to iPower Inc. as a percentage of revenues was (58.2%) ⁸⁷ in fiscal 2026 versus (7.9%) ⁸⁸ in fiscal 2025.

The Company maintains a streamlined organizational structure and utilizes a combination of employees, consultants, independent contractors and third-party service providers to support its operations. As of June 30, 2026, the Company had a total of 2 ⁸⁹ full-time employees and 2 ⁹⁰ part-time employees and consultants. The Company's principal offices and fulfillment center are located at 8798 9th Street, Rancho Cucamonga, California, where it leases approximately 99,347 ⁹¹ square feet of space. The base rental fee is $114,249 ⁹² to $140,079 ⁹³ per month through the expiration date, May 31, 2028. On April 13, 2026, the Company entered into a sublease agreement to sublease part of the warehouse for a term of 25 ⁹⁴ months, with the sublessee paying Base Rent of $62,500 ⁹⁵ to $112,710 ⁹⁶ per month.

The board of directors authorized a share repurchase program of up to $2.0 million ⁹⁷ of the Company’s common stock. As of June 30, 2026, the Company repurchased an aggregate of 1,346 ⁹⁸ shares of its common stock for approximately $41,755 ⁹⁹ in open-market transactions under the Share Buyback Program. The Company does not anticipate declaring any dividends in the foreseeable future, as it intends to use any excess cash to fund its operations and growth. The Company has never paid cash dividends on its common stock.

The Company faces significant headwinds including the ongoing conflict between Russia and Ukraine and the conflict in the Middle East, which may increase the likelihood of supply chain interruptions and hinder the Company's ability to find products to sell. The Company has experienced a decrease in the speed with which it has been able to purchase new inventory, as well as an increase in costs due to delays in shipping, resulting in increased time products remain in warehouse facilities and reduced profits. The Company is heavily reliant on manufacturers in China to produce many of the goods it sells, and the U.S. and China have been involved in ongoing trade disputes, resulting in increased tariffs. In February and March 2025, the U.S. administration imposed an additional 20% ¹⁰⁰ duty on Chinese imports. On April 2, 2025, President Trump announced a 10% ¹⁰¹ tariff on all countries, effective on April 5, 2025, and a 34% ¹⁰² additional reciprocal tariff on goods imported from China, bringing the total tariff rate to 54% ¹⁰³. On April 10, the U.S. announced it would charge 145% ¹⁰⁴ tariffs on goods imported from China, while the Chinese government announced it would impose 125% ¹⁰⁵ tariffs on U.S. exports to China.

The Company's business is dependent, in part, on its ongoing commercial relationship with GPM, and any deterioration of that relationship could materially adversely affect its business. Following the sale of GPM, the Company continues to maintain a significant commercial relationship with GPM pursuant to the Supply and Distribution Agreement. A significant portion of the Company's current and future revenues, cash flows and business activities may be dependent upon purchases made by GPM, GPM's ability to market and distribute products, and GPM's continued demand for the products and services the Company provides. Any reduction in orders from GPM, deterioration in GPM's financial condition, inability of GPM to satisfy its payment obligations, or termination of the Supply and Distribution Agreement could reduce the Company's revenue and profitability.

The Company's digital asset treasury strategy exposes it to significant risks, including the high volatility of Bitcoin and other digital assets. Bitcoin has traded between approximately $57,725 ¹⁰⁶ and $126,279 ¹⁰⁷ per bitcoin on the Coinbase exchange during the 12 months preceding the date of the Annual Report. Substantially all digital assets, cash and other property held in the applicable controlled accounts are pledged to the Collateral Agent, an affiliate of the Convertible Note Investor, for the benefit of the holders of the Convertible Notes, and are not freely available for use. The Company's business is heavily reliant on manufacturers in China, and the U.S. and China trade disputes have resulted in increased tariffs, including a 145% ¹⁰⁸ tariff on goods imported from China announced on April 10, 2025. The Company's business is also dependent on its ongoing commercial relationship with GPM, and any reduction in orders from GPM or deterioration in GPM's financial condition could reduce revenue and profitability. The Company has identified material weaknesses in its internal control over financial reporting, which could result in inaccurate financial reporting and adversely affect investor confidence. The Company's common stock is subject to potential delisting from Nasdaq if it fails to maintain compliance with continued listing requirements, including the minimum bid price requirement.

Management's message emphasizes the Company's transformation into a technology- and data-driven infrastructure company with a foundation in supply chain services, real-world commerce, and partner-based logistics and fulfillment capabilities. The Company is pursuing AI infrastructure acquisition, financing, equipment leasing and related opportunities as a current strategic focus, while also maintaining a limited digital asset treasury position. Management has shifted the current capital-allocation priority away from additional passive digital asset accumulation and toward AI infrastructure acquisition, financing, equipment leasing and related operating opportunities. The Company is also focused on developing an asset-light service platform that combines its operating capabilities with third-party warehousing, transportation and fulfillment networks, and intends to integrate data-driven tools and automation to improve inventory planning, order management and logistics efficiency. Management has identified material weaknesses in internal control over financial reporting and has implemented changes to address them, including hiring additional accountants and consultants and implementing controls and procedures over the financial reporting process.