Cover
Cover - shares | 3 Months Ended | |
Sep. 30, 2023 | Nov. 14, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2024 | |
Current Fiscal Year End Date | --06-30 | |
Entity File Number | 001-40391 | |
Entity Registrant Name | iPower Inc. | |
Entity Central Index Key | 0001830072 | |
Entity Tax Identification Number | 82-5144171 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 8798 9th Street | |
Entity Address, City or Town | Rancho Cucamonga | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 91730 | |
City Area Code | (626) | |
Local Phone Number | 863-7344 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | IPW | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 29,764,374 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2023 | Jun. 30, 2023 |
Current assets | ||
Cash and cash equivalent | $ 2,729,161 | $ 3,735,642 |
Accounts receivable, net | 13,237,282 | 14,071,543 |
Inventories, net | 15,056,623 | 20,593,889 |
Prepayments and other current assets | 1,811,499 | 2,858,196 |
Total current assets | 32,834,565 | 41,259,270 |
Non-current assets | ||
Right of use - non-current | 7,763,712 | 7,837,345 |
Property and equipment, net | 496,901 | 536,418 |
Deferred tax assets | 2,432,439 | 2,155,250 |
Non-current prepayments | 461,034 | 531,456 |
Goodwill | 3,034,110 | 3,034,110 |
Investment in joint venture | 32,088 | 33,113 |
Intangible assets, net | 4,117,728 | 4,280,071 |
Other non-current assets | 417,639 | 427,254 |
Total non-current assets | 18,755,651 | 18,835,017 |
Total assets | 51,590,216 | 60,094,287 |
Current liabilities | ||
Accounts payable | 12,031,323 | 13,244,957 |
Credit cards payable | 693,327 | 366,781 |
Customer deposit | 362,826 | 350,595 |
Other payables and accrued liabilities | 3,292,581 | 4,831,067 |
Advance from shareholders | 84,718 | 85,200 |
Lease liability – current | 2,169,603 | 2,159,173 |
Short-term loan payable - related party | 1,006,060 | 0 |
Long-term promissory note payable – current portion | 1,149,961 | 2,017,852 |
Income taxes payable | 275,117 | 276,683 |
Total current liabilities | 21,065,516 | 23,332,308 |
Non-current liabilities | ||
Long-term revolving loan payable, net | 4,808,322 | 9,791,191 |
Lease liability - non-current | 6,023,813 | 6,106,047 |
Total non-current liabilities | 10,832,135 | 15,897,238 |
Total liabilities | 31,897,651 | 39,229,546 |
Commitments and contingency | ||
Stockholders' Equity | ||
Preferred stock, $0.001 par value; 20,000,000 shares authorized; 0 shares issued and outstanding at September 30, 2023 and June 30, 2023 | 0 | 0 |
Common stock, $0.001 par value; 180,000,000 shares authorized; 29,710,939 and 29,710,939 shares issued and outstanding at September 30, 2023 and June 30, 2023 | 29,712 | 29,712 |
Additional paid in capital | 29,742,402 | 29,624,520 |
Accumulated deficits | (9,988,957) | (8,702,442) |
Non-controlling interest | (27,751) | (24,915) |
Accumulated other comprehensive loss | (62,841) | (62,134) |
Total equity | 19,692,565 | 20,864,741 |
Total liabilities and equity | $ 51,590,216 | $ 60,094,287 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2023 | Jun. 30, 2023 |
Statement of Financial Position [Abstract] | ||
preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 180,000,000 | 180,000,000 |
Common stock, shares issued | 29,710,939 | 29,710,939 |
Common stock, shares outstanding | 29,710,939 | 29,710,939 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||
REVENUES | $ 26,508,374 | $ 26,022,673 |
TOTAL REVENUES | 26,508,374 | 26,022,673 |
COST OF REVENUES | 14,749,529 | 16,036,957 |
GROSS PROFIT | 11,758,845 | 9,985,716 |
OPERATING EXPENSES: | ||
Selling and fulfillment | 10,063,471 | 8,418,812 |
General and administrative | 2,964,051 | 3,100,176 |
Impairment loss - goodwill | 0 | 3,060,034 |
Total operating expenses | 13,027,522 | 14,579,022 |
LOSS FROM OPERATIONS | (1,268,677) | (4,593,306) |
OTHER INCOME (EXPENSE) | ||
Interest expenses | (228,365) | (248,041) |
Loss on equity method investment | (1,025) | (3,390) |
Other non-operating income | (67,166) | 211,760 |
Total other expenses, net | (296,556) | (39,671) |
LOSS BEFORE INCOME TAXES | (1,565,233) | (4,632,977) |
PROVISION FOR INCOME TAX BENEFIT | (275,882) | (447,796) |
NET LOSS | (1,289,351) | (4,185,181) |
Non-controlling interest | (2,836) | (2,805) |
NET LOSS ATTRIBUTABLE TO IPOWER INC. | (1,286,515) | (4,182,376) |
OTHER COMPREHENSIVE LOSS | ||
Foreign currency translation adjustments | (707) | (111,475) |
COMPREHENSIVE LOSS ATTRIBUTABLE TO IPOWER INC. | $ (1,287,222) | $ (4,293,851) |
WEIGHTED AVERAGE NUMBER OF COMMON STOCK | ||
Basic | 29,764,515 | 29,665,716 |
Diluted | 29,764,515 | 29,665,716 |
LOSSES PER SHARE | ||
Basic | $ (0.04) | $ (0.14) |
Diluted | $ (0.04) | $ (0.14) |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] | AOCI Attributable to Parent [Member] | Total |
Beginning balance, value at Jun. 30, 2022 | $ 29,573 | $ 29,111,863 | $ 3,262,948 | $ (13,232) | $ 5,678 | $ 32,396,830 |
Beginning balance, shares at Jun. 30, 2022 | 29,572,382 | |||||
Net loss | (4,182,376) | (2,805) | (4,185,181) | |||
Stock-based compensation | 137,882 | 137,882 | ||||
Foreign currency translation adjustments | (111,475) | (111,475) | ||||
Balance, September 30, 2022, unaudited at Sep. 30, 2022 | $ 29,573 | 29,249,745 | (919,428) | (16,037) | (105,797) | 28,238,056 |
Ending balance, shares at Sep. 30, 2022 | 29,572,382 | |||||
Beginning balance, value at Jun. 30, 2023 | $ 29,712 | 29,624,520 | (8,702,442) | (24,915) | (62,134) | 20,864,741 |
Beginning balance, shares at Jun. 30, 2023 | 29,710,939 | |||||
Net loss | (1,286,515) | (2,836) | (1,289,351) | |||
Stock-based compensation | 117,882 | 117,882 | ||||
Foreign currency translation adjustments | (707) | (707) | ||||
Balance, September 30, 2022, unaudited at Sep. 30, 2023 | $ 29,712 | $ 29,742,402 | $ (9,988,957) | $ (27,751) | $ (62,841) | $ 19,692,565 |
Ending balance, shares at Sep. 30, 2023 | 29,710,939 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (1,289,351) | $ (4,185,181) |
Adjustments to reconcile net (loss) income to cash provided by (used in) operating activities: | ||
Depreciation and amortization expense | 201,705 | 191,934 |
Inventory reserve | 105,192 | 74,998 |
Loss on equity method investment | 1,025 | 3,390 |
Impairment loss - goodwill | 0 | 3,060,034 |
Stock-based compensation expense | 117,882 | 137,882 |
Non-cash operating lease expense | 1,829 | 10,172 |
Amortization of debt premium / discount and non-cash financing costs | 53,726 | 53,623 |
Change in operating assets and liabilities | ||
Accounts receivable | 834,261 | (1,557,682) |
Inventories | 5,432,074 | 45,084 |
Deferred tax assets/liabilities | (277,189) | (668,075) |
Prepayments and other current assets | 1,046,697 | 2,280,700 |
Non-current prepayments | 70,422 | 107,917 |
Other non-current assets | 9,615 | (5,894) |
Accounts payable | (1,213,634) | 5,284,843 |
Credit cards payable | 326,546 | (656,562) |
Customer deposit | 12,231 | 75,491 |
Other payables and accrued liabilities | (1,379,124) | (3,856,115) |
Income taxes payable | (1,566) | (17,534) |
Net cash provided by operating activities | 4,052,341 | 379,025 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of equipment | 0 | (57,989) |
Net cash used in investing activities | 0 | (57,989) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from related parties | 0 | (82,500) |
Proceeds from short-term loans – related party | 2,000,000 | 31,385 |
Payments on short-term loan – related party | (1,000,000) | 0 |
Payments on short-term loans | (875,000) | 0 |
Proceeds from long-term loans | 0 | 2,811,729 |
Payments on long-term loans | (5,200,000) | 0 |
Net cash (used in ) provided by financing activities | (5,075,000) | 2,760,614 |
EFFECT OF EXCHANGE RATE ON CASH | 16,178 | (61,451) |
CHANGES IN CASH | (1,006,481) | 3,020,199 |
CASH AND CASH EQUIVALENT, beginning of period | 3,735,642 | 1,821,947 |
CASH AND CASH EQUIVALENT, end of period | 2,729,161 | 4,842,146 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for income tax | 0 | 55,000 |
Cash paid for interest | 0 | 0 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING TRANSACTIONS: | ||
Right of use assets acquired under new operating leases | $ 613,980 | $ 0 |
Nature of business and organiza
Nature of business and organization | 3 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of business and organization | Note 1 - Nature of business and organization iPower Inc., formerly known as BZRTH Inc., a Nevada corporation (the “Company”), was incorporated on April 11, 2018. The Company is principally engaged in the marketing and sale of consumer home, garden and other products and accessories mainly in the North America. On May 18, 2021, the Company acquired 100% of the equity ownership of its variable interest entity, E Marketing Solution Inc. (“E Marketing”), an entity incorporated in California and owned by one of the minority shareholders of the Company. As a result, E Marketing became the Company’s wholly owned subsidiary. On May 18, 2021, the Company acquired 100% of the equity ownership of its variable interest entity, Global Product Marketing Inc. (“GPM”), an entity which was incorporated in the State of Nevada on September 4, 2020, and was owned by Chenlong Tan, the Company’s Chairman, CEO and President, and one of the majority 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 venture agreement and formed a Nevada limited liability company, Box Harmony, LLC (“Box Harmony”), for the principal purpose of providing logistics services primarily for foreign-based manufacturers or distributors who desire to sell their products online in the United States, with such logistics services to include, without limitation, receiving, storing and transporting such products. The Company owns 40% of the equity interest in Box Harmony, retaining significant influence, but does not own a majority equity interest in or otherwise control Box Harmony. See details at Note 3 below. On February 10, 2022, the Company entered into another joint venture agreement and formed a Nevada limited liability company, Global Social Media, LLC (“GSM”), for the principal purpose of creating a social media platform in order to provide content and services to assist businesses, including the Company and other businesses, in marketing their products. The Company owns 60% of the equity interest in GSM and controls its operations. See details at Note 3 below. On February 15, 2022, the Company acquired 100% of the ordinary shares of Anivia Limited (“Anivia”), a corporation organized under the laws of the British Virgin Islands (“BVI”), in accordance with the terms of a share transfer framework agreement (the “Transfer Agreement”), dated February 15, 2022, by and between the Company, White Cherry Limited, a BVI company (“White Cherry”), White Cherry’s equity holders, Li Zanyu and Xie Jing (together with White Cherry, the “Sellers”), Anivia, Fly Elephant Limited, a Hong Kong company, Dayourenzai (Shenzhen) Technology Co., Ltd., and Daheshou (Shenzhen) Information Technology Co., Ltd. Anivia owns 100% of the equity of Fly Elephant Limited, which in turn owns 100% of the equity of Dayourenzai (Shenzhen) Technology Co., Ltd., a corporation located in the People’s Republic of China (“PRC”) and which is a wholly foreign-owned enterprise (“WFOE”) of Fly Elephant Limited. The WFOE controls, through contractual arrangements summarized in Note 4 below, the business, revenues and profits of Daheshou (Shenzhen) Information Technology Co., Ltd., a company organized under the Laws of the PRC (“DHS”) and located in Shenzhen, China. See details on Note 4 below. |
Basis of Presentation and Summa
Basis of Presentation and Summary of significant accounting policies | 3 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of significant accounting policies | Note 2 – Basis of Presentation and Summary of significant accounting policies Basis of presentation The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries and VIE and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These unaudited condensed consolidated financial statements have been prepared on the same basis as its annual consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of the Company’s financial information. These interim results are not necessarily indicative of the results to be expected for the fiscal year ending June 30, 2024, or for any other interim period or for any other future year. All intercompany balances and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Annual Report for the year ended June 30, 2023, which are included in Form 10-K filed with the SEC on September 14, 2023. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries, E Marketing Solution Inc., Global Product Marketing Inc., Global Social Media, LLC, and Anivia Limited and its subsidiaries and VIE, including Fly Elephant Limited, Dayourenzai (Shenzhen) Technology Co., Ltd., and Daheshou (Shenzhen) Information Technology Co., Ltd. All inter-company balances and transactions have been eliminated. Emerging Growth Company Status The company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of utilizing the emerging growth company reduced reporting requirements difficult. Use of estimates and assumptions The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities reported and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the 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 the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or 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 and its subsidiaries is the U.S. dollar (USD). iPower’s WFOE and VIE in China uses the local currency, Renminbi (“RMB”), as its functional currency. Assets and liabilities of the VIE are translated at the current exchange rate as quoted by the People’s Bank of China (the “PBOC”) at the end of the period. Income and expense accounts are translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income (loss) in the statement of changes in stockholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. The balance sheet amounts of the VIE, with the exception of equity, on September 30, 2023, were translated at 7.2948 7.2406 Cash and cash equivalents Cash and cash equivalents consist of amounts held as cash on hand and bank deposits. From time to time, the Company may maintain bank balances in interest bearing accounts in excess of the $250,000, which is currently the maximum amount insured by the FDIC for interest bearing accounts (there is currently no insurance limit for deposits in noninterest bearing accounts). The Company has not experienced any losses with respect to cash. Management believes our Company is not exposed to any significant credit risk with respect to its cash. Accounts receivable, net During the ordinary course of business, the Company extends unsecured credit to its customers. Accounts receivable are stated at the amount the Company expects to collect from customers. Management reviews its accounts receivable balances each reporting period to determine if an allowance for credit loss is required. The Company evaluates the creditworthiness of all of its customers individually before accepting them and continuously monitors the recoverability of accounts receivable. If there are any indicators that a customer may not make payment, the Company may consider making provision for non-collectability for that particular customer. At the same time, the Company may cease further sales or services to such customer. The following are some of the factors that the Company develops allowance for credit losses: · 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. Accounts receivable are recognized and carried at carrying amount less an allowance for credit losses, if any. The Company maintains an allowance for credit losses resulting from the inability of its customers to make required payments based on contractual terms. The Company reviews the collectability of its receivables on a regular and ongoing basis. The Company has also included in calculation of allowance for credit losses the potential impact of the COVID-19 pandemic on our customers’ businesses and their ability to pay their accounts receivable. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. The Company also considers external factors to the specific customer, including current conditions and forecasts of economic conditions, including the potential impact of the COVID-19 pandemic. In the event we recover amounts previously written off, we will reduce the specific allowance for credit losses. Equity method investment The Company accounts for its ownership interest in Box Harmony, a 40 Business Combination On February 15, 2022, the Company acquired 100% of the ordinary shares of Anivia and its subsidiaries, including the VIE. The Company applies the acquisition method of accounting for business combinations. Under the acquisition method, the acquiring entity in a business combination recognizes 100% of the assets acquired and liabilities assumed at their acquisition date fair values. Management utilizes valuation techniques appropriate for the asset or liability being measured in determining these fair values. Any excess of the purchase price over amounts allocated to assets acquired, including identifiable intangible assets, and liabilities assumed is recorded as goodwill. Where amounts allocated to assets acquired and liabilities assumed is greater than the purchase price, a bargain purchase gain is recognized. Acquisition-related costs are expensed as incurred. See Note 4 for details regarding the acquisition. Variable interest entities On February 15, 2022, the Company acquired 100% of the ordinary shares of Anivia and its subsidiaries, including Daheshou (Shenzhen) Information Technology Co., Ltd., a company organized under the Laws of the PRC (“DHS”). Pursuant to the terms of the Agreements, the Company does not have direct ownership in DHS but is actively involved in DHS’s operations as the sole manager to direct the activities and significantly impact DHS’s economic performance. DHS’s operational funding has been provided by the Company following the February 15, 2022 acquisition. During the term of the Agreements, the Company bears all the risk of loss and has the right to receive all of the benefits from DHS. As such, based on the determination that the Company is the primary beneficiary of DHS, in accordance with ASC 810-10-25-38A through 25-38J, DHS is considered a VIE of the Company and the financial statements of DHS have been consolidated from the date such control existed, February 15, 2022. See Note 4 and Note 5 for details regarding the acquisition. Goodwill Goodwill represents the excess of the purchase price over the fair value of assets acquired and liabilities assumed. The Company accounts for goodwill under ASC Topic 350, Intangibles-Goodwill and Other Goodwill is not amortized but is reviewed for potential impairment on an annual basis, or if events or circumstances indicate a potential impairment, at the reporting unit level. The Company’s review for impairment includes an assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill. If it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill, a quantitative goodwill impairment test is performed, which compares the fair value of the reporting unit with its carrying amounts, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. However, if the carrying amount of the reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company engaged an independent third-party valuation firm in August 2022 to conduct an evaluation of goodwill impairment for the Company as a whole at the consolidated reporting unit level as of June 30, 2022, which evaluation was conducted prior to the Company’s filing of its Annual Report on Form 10-K for the period ended June 30, 2022. Due to the decrease in the Company’s share price subsequent to the filing of the June 30, 2022 Form 10-K and the net loss incurred during the quarter ended September 30, 2022, the Company engaged the same valuation firm to review goodwill for impairment. Based on this review, the Company concluded an impairment loss of $ 3,060,034 During the period ended September 30, 2023, the Company performed a qualitative goodwill impairment analysis following the steps laid out in ASC 350-20-35-3C and noted no goodwill impairment. As of September 30, 2023 and 2022, the goodwill balance amounted to $ 3,034,110 3,034,110 Intangible Assets, net Finite life intangible assets at September 30, 2023 include covenant not to compete, supplier relationship, and software recognized as part of the acquisition of Anivia. Intangible assets are recorded at the estimated fair value of these items at the date of acquisition, February 15, 2022. Intangible assets are amortized on a straight-line basis over their estimated useful life as followings: Schedule of estimated useful life Useful Life Covenant Not to Compete 10 Supplier relationship 6 Software 5 The Company reviews the recoverability of long-lived assets, including intangible assets, when events or changes in circumstances occur that indicate the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the ability to recover the carrying value of the asset from the expected future pretax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations. As of September 30, 2023 and 2022, there were no indicators of impairment. Fair values of financial instruments ASC 825, “Disclosures about Fair Value of Financial Instruments,” requires disclosure of fair value information about financial instruments. ASC 820, “Fair Value Measurements” defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and all other current assets and liabilities approximate fair values due to their short-term nature. On February 15, 2022, as part of the consideration for the acquisition of Anivia, the Company issued a two-year unsecured 6% subordinated promissory note, payable in equal semi-annual installments commencing August 15, 2022 (the “Purchase Note”). The principal amount of the Purchase Note was $ 3.5 million 3.6 million Schedule of assumptions for financial instruments Corporate bond yield 3.1% Risk-free rate 1.6% Liquidity premium 0.4% Discount rate 3.5% As of September 30, 2023, the outstanding balance of the Purchase Note was $ 1,149,961 875,000 19,023 255,938 For other financial instruments to be reported at fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines the fair value of its financial instruments based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; Level 2 – Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and Level 3 – Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data. The Company does not have any assets or liabilities measured at fair value on a recurring basis. We measure certain non-financial assets on a non-recurring basis, including goodwill. As a result of those measurements, we recognized an impairment charge of $3.1 million during the year ended June 30, 2023 as follows: Schedule of assumptions for financial instruments Total Fair Level 1 Level 2 Level 3 Total Goodwill $ 3,034,110 $ – $ – $ 3,034,110 $ 3,060,034 Total $ 3,034,110 $ – $ – $ 3,034,110 $ 3,060,034 Goodwill, with a total carrying value of $6.1 million, was written down to its fair value of $3.0 million, resulting in an impairment charge of $3,060,034, which was recorded in earnings for the year ended June 30, 2023. The fair value of goodwill was determined based on the discounted cash flow method, which is an income approach, which required the use of inputs that were unobservable in the marketplace (Level 3), including a discount rate that would be used by a market participant, projections of revenues and cash flows with the revised projections reflecting the increase in freight and storage costs in the current interim quarter, among others. Revenue recognition The Company recognizes revenue from product sales revenues, net of promotional discounts and return allowances, when the following revenue recognition criteria are met: a contract has been identified, separate performance obligations are identified, the transaction price is determined, the transaction price is allocated to separate performance obligations and revenue is recognized upon satisfying each performance obligation. The Company transfers the risk of loss or damage upon shipment, therefore, revenue from product sales is recognized when it is shipped to the customer. Return allowances, which reduce product revenue by the Company’s best estimate of expected product returns, are estimated using historical experience. The Company evaluates the criteria of ASC 606 - Revenue Recognition Principal Agent Considerations in determining whether it is appropriate to record the gross amount of product sales and related costs or the net amount earned as commissions. Generally, when the Company is primarily responsible for fulfilling the promise to provide a specified good or service, the Company is subject to inventory risk before the good or service has been transferred to a customer and the Company has discretion in establishing the price, revenue is recorded at gross. Payments received prior to the delivery of goods to customers are recorded as customer deposits. The Company periodically provides incentive offers to its customers to encourage purchases. Such offers include current discount offers, such as percentage discounts off current purchases and other similar offers. Current discount offers, when accepted by the Company’s customers, are treated as a reduction to the purchase price of the related transaction. Sales discounts are recorded in the period in which the related sale is recognized. Sales return allowances are estimated based on historical amounts and are recorded upon recognizing the related sales. Shipping and handling costs are recorded as selling expenses. Advertising costs Advertising costs are expensed as incurred. Total advertising and promotional costs included in selling and fulfillment expenses for the three months ended September 30, 2023 and 2022 were $ 1,570,742 1,166,349 Cost of revenue Cost of revenue mainly consists of costs for purchases of products and related inbound freight and delivery fees. Operating expenses Operating expenses, which consist of selling and fulfillment and general and administrative expenses, are expensed as incurred. Inventory, net Inventory consists of finished goods ready for sale and is stated at the lower of cost or market. The Company values its inventory using the weighted average costing method. The Company’s policy is to include as a part of inventory and cost of goods sold any freight incurred to ship the product from its vendors to warehouses. Outbound freight costs related to shipping costs to customers are considered periodic costs and are reflected in selling and fulfillment expenses. The Company regularly reviews inventory and considers forecasts of future demand, market conditions and product obsolescence. If the estimated realizable value of the inventory is less than cost, the Company makes provisions in order to reduce its carrying value to its estimated market value. The Company also reviews inventory for slow moving inventory and obsolescence and records allowance for obsolescence. Debt Issuance Costs Costs incurred in connection with the issuance of debt are deferred and amortized as interest expense over the term of the related debt using the effective interest method. To the extent that the debt is outstanding, these amounts are reflected in the unaudited condensed consolidated balance sheets as direct deductions from the carrying amount of the outstanding borrowings. Segment reporting The Company follows ASC 280, Segment Reporting. The Company’s chief operating decision maker, the Chief Executive Officer, reviews the consolidated results of operations when making decisions about allocating resources and assessing the performance of the Company as a whole and, hence, the Company has only one reportable segment. The Company does not distinguish between markets or segments for the purpose of internal reporting. For the three months ended September 30, 2023 and 2022, sales through Amazon to Canada and other foreign countries were approximately 8.2 9.8 16.8 83.2 53 47 1.4 million 1.6 Leases The Company records right-of-use (“ROU”) assets and related lease obligations on the balance sheet. ROU assets represent our right to use an underlying asset for the lease terms and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company generally uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Stock-based Compensation The Company applies ASC No. 718, “Compensation-Stock Compensation,” which requires that share-based payment transactions with employees and nonemployees, upon adoption of ASU 2018-07, be measured based on the grant date fair value of the equity instrument and recognized as compensation expense over the requisite service period, with a corresponding addition to equity. Under this method, compensation costs related to employee share options or similar equity instruments is measured at the grant date based on the fair value of the award and is recognized over the period during which an employee is required to provide service in exchange for the award, which generally is the vesting period. In addition to the requisite service period, the Company also evaluates the performance condition and market condition under ASC 718-10-20. For an award which contains both a performance and a market condition, and where both conditions must be satisfied for the award to vest, the market condition is incorporated into the fair value of the award, and that fair value is recognized over the employee’s requisite service period or nonemployee’s vesting period if it is probable the performance condition will be met. If the performance condition is ultimately not met, compensation costs related to the award should not be recognized (or should be reversed) because the vesting condition in the award has not been satisfied. The Company will recognize forfeitures of such equity-based compensation as they occur. Income taxes The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their perspective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company has analyzed filing positions in each of the federal and state jurisdictions where the Company is required to file income tax returns, as well as open tax years in such jurisdictions. The Company has identified the U.S. federal jurisdiction, and the states of Nevada and California, as its “major” tax jurisdictions. However, the Company has certain tax attribute carryforwards which will remain subject to review and adjustment by the relevant tax authorities until the statute of limitations closes with respect to the year in which such attributes are utilized. The Company believes that our income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740, Income Taxes. The Company’s policy for recording interest and penalties associated with income-based tax audits is to record such items as a component of income taxes. Commitments and contingencies In the ordinary course of business, the Company is subject to certain contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters, such as government investigations and tax matters. The Company recognizes a liability for such contingency if it determines it is probable that a loss has occurred and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments including historical and specific facts and circumstances of each matter. Earnings per share Basic earnings per share are computed by dividing net income attributable to holders of common stock by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share reflect the potential dilution that could occur if securities to issue common stock were exercised. Recently issued accounting pronouncements In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative. This ASU incorporates certain U.S. Securities and Exchange Commission (SEC) disclosure requirements into the FASB Accounting Standards Codification™ (“Codification”). The amendments in the ASU are expected to clarify or improve disclosure and presentation requirements of a variety of Codification Topics, allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC’s regulations. In SEC Release No. 33-10532, Disclosure Update and Simplification, issued August 17, 2018, the SEC referred certain of its disclosure requirements that overlap with, but require incremental information to, generally accepted accounting principles to the FASB for potential incorporation into the Codification. The ASU incorporates into the Codification 14 of the 27 disclosures referred by the SEC. They modify the disclosure or presentation requirements of a variety of Topics in the Codification. The requirements are relatively narrow in nature. Some of the amendments represent clarifications to, or technical corrections of, the current requirements. Because of the variety of Topics amended, a broad range of entities may be affected by one or more of those amendments. For entities subject to the SEC’s existing disclosure requirements and for entities required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be the date on which the SEC removes that related disclosure from its rules. For all other entities, the amendments will be effective two years later. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective for any entity. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. In September 2022, FASB issued ASU 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. The amendments in this ASU require that a company that uses a supplier finance program in connection with the purchase of goods or services disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. ASU 2022-04 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2022, except for the rollforward of the supplier finance program obligations, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. An entity should apply ASU No. 2022-04 retrospectively to all periods in which a balance sheet is presented, except for the obligation rollforward, which should be applied prospectively. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In June 2022, FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments in this ASU clarify the guidance in ASC 820 on the fair value measurement of an equity security that is subject to a contractual sale restriction and require specific disclosures related to such an equity security. This standard is effective for fiscal years beginning after December 15, 2024. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606) as if the entity had originated the contracts. The guidance is effective for fiscal years beginning after December 15, 2023, with early application permitted. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. In March 2020 and January 2021, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope, respectively (collectively, “Topic 848”). Topic 848 provides optional expedients and exceptions for apply |
Joint Ventures
Joint Ventures | 3 Months Ended |
Sep. 30, 2023 | |
Joint Ventures | |
Joint Ventures | Note 3 - Joint Ventures Box Harmony, LLC On January 13, 2022, the Company entered into a joint venture agreement (the “Joint Venture Agreement”) with Titanium Plus Autoparts, Inc., a California corporation (“TPA”), Tony Chiu (“Chiu”) and Bin Xiao (“Xiao”). Pursuant to the terms of the Joint Venture Agreement, the parties formed a Nevada limited liability company, Box Harmony, LLC (“Box Harmony”), for the principal purpose of providing logistic services primarily for foreign-based manufacturers or distributors who desire to sell their products online in the United States, with such logistic services to include, without limitation, receiving, storing and transporting such products. Following entry into the Joint Venture Agreement, Box Harmony issued a total of 6,000 certificated units of membership interest, designated as Class A voting units (“Equity Units”), as 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 Box Harmony with the use and access to certain warehouse facilities leased by the Company (see below), and (ii) TPA received 1,200 Equity Units in exchange for (a) $1,200 and contributing the TPA IP License referred to below, (b) its existing and future customer contracts, and (c) granting Box Harmony the use of shipping accounts (FedEx and UPS) and all other TPA carrier contracts, and (iii) Xiao received 2,400 Equity Units in exchange for $2,400 and his agreement to manage the day to day operations of Box Harmony. Under the terms of the Box Harmony limited liability operating agreement (the “LLC Agreement”), TPA and Xiao each granted to the Company an unconditional and irrevocable right and option to purchase from Xiao and TPA at any time within the first 18 months following January 13, 2022, up to 1,200 Class A voting units, at an exercise price of $550 per Class A voting unit, for a total exercise price of up to $660,000. If such option is fully exercised, the Company would own 3,600 Equity Units or 60% of the total outstanding Equity Units. As of the date of this report, the Company had not exercised the option to purchase additional voting units from Xiao and TPA. The LLC Agreement prohibits the issuance of additional Equity Units and certain other actions unless approved in advance by the Company, that a noncontrolling right that would not be substantive to overcome the majority voting interests held by TPA and Xiao. In January 2023, TPA and Xiao transferred their 60% equity units to a third party without consideration as the LLC was still in development stage and did not have significant operations. The transfer of equity did not have any impact on the LLC’s financial statements. As a result, the Company owns 40 Global Social Media, LLC On February 10, 2022, the Company entered into a joint venture agreement with Bro Angel, LLC, Ji Shin and Bing Luo (the “GSM Joint Venture Agreement”). Pursuant to the terms of the GSM Joint Venture Agreement, the parties formed a Nevada limited liability company, Global Social Media, LLC (“GSM”), for the principal purpose of providing a social media platform, contents and services to assist businesses, including the Company and other businesses, in marketing their products. Following entry into the GSM Joint Venture Agreement, GSM issued 10,000 certificated units of membership interest (the “GSM Equity Units”), of which the Company was issued 6,000 GSM 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. The LLC Agreement prohibits the issuance of additional Equity Units and certain other actions unless approved in advance by Bro Angel, creating a noncontrolling right that would not be substantive to overcome the majority voting interests held by the Company. As of the date of this report, the members had not completed the capital contributions and no receivables were recorded. Pursuant to the terms of the Agreements, the Company owns 60 |
Acquisition of Anivia Limited a
Acquisition of Anivia Limited and Subsidiaries and Variable Interest Entity | 3 Months Ended |
Sep. 30, 2023 | |
Acquisition Of Anivia Limited And Subsidiaries And Variable Interest Entity | |
Acquisition of Anivia Limited and Subsidiaries and Variable Interest Entity | Note 4 - Acquisition of Anivia Limited and Subsidiaries and Variable Interest Entity On February 15, 2022, the Company acquired 100% of the ordinary shares of Anivia Limited (“Anivia”), a corporation organized under the laws of the British Virgin Islands (“BVI”), in accordance with the terms of a share transfer framework agreement (the “Transfer Agreement”), dated February 15, 2022, by and between the Company, White Cherry Limited, a BVI company (“White Cherry”), White Cherry’s equity holders, Li Zanyu and Xie Jing (together with White Cherry, the “Sellers”), Anivia, Fly Elephant Limited, a Hong Kong company, Dayourenzai (Shenzhen) Technology Co., Ltd. and Daheshou (Shenzhen) Information Technology Co., Ltd. Anivia owns 100% of the equity of Fly Elephant Limited, which in turn owns 100% of the equity of Dayourenzai (Shenzhen) Technology Co., Ltd., a corporation located in the People’s Republic of China (“PRC”) and which is a wholly foreign-owned enterprise (“WFOE”) of Fly Elephant Limited. The WFOE controls, through contractual arrangements summarized below, the business, revenues and profits of Daheshou (Shenzhen) Information Technology Co., Ltd., a company organized under the Laws of the PRC (“DHS”) and located in Shenzhen, China. The contractual arrangements between the WFOE and DHS are established through a variable interest operating entity structure, which is reflected in (i) an exclusive business cooperation agreement, dated December 15, 2021, between the WFOE and DHS, (ii) an exclusive equity interest pledge agreement, dated December 15, 2021, between the WFOE and DHS in which the equity of DHS was pledged to the WFOE, (iii) an exclusive option agreement, dated December 15, 2021, between the WFOE, DHS and its equity holders, Li Zanyu and Xie Jing (the “Equity Holders), pursuant to which the Equity Holders give the WFOE the irrevocable and exclusive right to purchase the equity interests in DHS, and (iii) a power of attorney, dated December 15, 2021, pursuant to which Li Zanyu and Xie Jing, the holders of 100% of the equity interest of DHS, granted the WFOE all voting and other rights to their equity interest in DHS. According to the exclusive business cooperation agreement, in consideration for the services provided by the WFOE, DHS shall pay a service fee to the WFOE on annual basis (or at any time agreed by the Parties). The service fees for each year (or for any other period agreed to by the Parties) shall consist of a management fee and a fee for services provided, which shall be reasonably determined by the WFOE based on the nature, complexity, time, and other market and operation factors. The WFOE may provide a separate confirmation letter and/or invoice to DHS to indicate the amount of service fees due for each service period; or the amount of services fees may be as set forth in the relevant contracts separately executed by the Parties. DHS is principally engaged in selling a wide range of products and providing logistic services in the PRC. Pursuant to the terms of the Agreements, the Company does not have direct ownership in DHS but is actively involved in DHS’s operations as the sole manager to direct the activities and significantly impact DHS’s economic performance. As such, based on the determination that the Company is the primary beneficiary of DHS, in accordance with ASC 810-10-25-38A through 25-38J, DHS is considered a variable interest entity (“VIE”) of the Company and the financial statements of DHS have been consolidated from the date such control existed, February 15, 2022. Total fair value of the consideration for the transaction was $ 10,629,000 3,500,000 3,083,700 1,500,000 JP Morgan Chase Bank, the Company’s senior secured lender (“JPM”), consented to the transaction. In conjunction with obtaining JPM’s consent, the Company delivered an amendment to the pledge and security agreement with JPM, pursuant to which the Company pledged to JPM 65% of the equity interest of Anivia Limited, Fly Elephant Limited and the WFOE. On October 7, 2022, in conjunction with the Company’s entry into the Second Amendment to the Credit Agreement, the Company’s promissory note holder, White Cherry Limited, an exempted company incorporated under the laws of the British Virgin Islands (“White Cherry”), entered into an amendment (the “Amendment”) to the subordination agreement, originally dated March 9, 2022 (the “Subordination Agreement”). The Amendment to the Subordination Agreement was amended solely for purposes of adjusting the definition of payment conditions under Section 2 of the Subordination Agreement such that “payment conditions” shall be deemed satisfied in connection with a permitted payment if (a) no event of default has occurred under the credit agreement and is continuing and (b) the Company shall have Excess Availability in the 30 days prior to the payment (as defined in the Second Amendment to the Credit Agreement) of no less than $7,500,000. In addition, in conjunction with the closing of the transaction, the WFOE entered into an employment agreement with Li Zanyu, dated February 15, 2022 (the “Employment Agreement”), pursuant to which Mr. Li has been appointed to serve as general manager of the WFOE for a term of 10 years (through February 14, 2032), with annual base compensation of up to 500,000 RMB plus bonus as may be determined by the WFOE from time to time, in its sole discretion, based on Mr. Li’s performance. During such employment, Mr. Li may not engage in other employment without the consent of the WFOE. The acquisition of Anivia was accounted for as a business combination under ASC 805. As the acquirer for accounting purposes, the Company has estimated the fair value of Anivia and its subsidiaries’ assets acquired and conformed the accounting policies of Anivia to its own accounting policies. The Company applied the income approach and cost approach in determining the fair value of the intangible assets, which intangible assets consisted of a covenant not to compete, supplier relationship and software. The fair value of the remaining assets acquired and liabilities assumed were not significantly different from their carrying values at the acquisition date. In addition, pursuant to the Transfer Agreement, the Sellers made certain representations and warranties, including that other than the items presented on the balance sheet on February 15, 2022, DHS, the operating VIE, was not subject to any loans, debts, liabilities, guarantees or other contingent liabilities at the Closing date. In the event of any breach of any of the representations and warranties, the sellers shall bear joint and several liability for any direct or indirect losses suffered by the Company as a result thereof. The Company recognized an approximately $ 6.1 million 54,702 50,000 The following information summarizes the purchase consideration and allocation of the fair values assigned to the assets at the purchase date, February 15, 2022: Schedule of allocation of acquisition price Fair Value of Purchase Price: Cash $ 1,500,000 Promissory note issued 3,600,627 Common stock issued 5,528,373 Total purchase consideration $ 10,629,000 Purchase Price Allocation: Covenant not to compete $ 3,459,120 Supplier relationship 1,179,246 Software 534,591 Current assets 1,784,113 Property and equipment 46,548 Rent deposit 52,707 ROU asset 234,578 Goodwill 6,094,144 Deferred tax liabilities (1,389,113 ) Current liabilities (1,143,076 ) Lease liability (223,858 ) Total purchase consideration $ 10,629,000 In October 2022, the $1.5 million cash portion of the consideration, which was presented as investment payable, was fully paid off. The results of operations of Anivia since February 16, 2022 have been included in the Company's consolidated financial statements. |
Variable interest entity
Variable interest entity | 3 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable interest entity | Note 5 – Variable interest entity Effective February 15, 2022, upon acquisition of Anivia, the Company assumed the contractual arrangements between the WFOE and DHS through a variable interest operating entity structure. See Note 4 for details. The Company did not provide financial or other support to the VIE for the periods presented where the Company was not otherwise contractually required to provide such support. As of September 30, 2023 and 2022, there was no pledge or collateralization of the VIE assets that would be used to settle obligations of the VIE. The carrying amounts of the assets, liabilities and the results of operations of the VIE included in the Company’s unaudited condensed consolidated balance sheets and statements of operations and comprehensive income after the elimination of intercompany balances and transactions with the VIE are as follows: The carrying amount of the VIE’s assets and liabilities were as follows for the periods indicated: Schedule of carrying amount of the VIE’s assets and liabilities September 30, 2023 June 30, 2023 Cash in bank $ 308,366 $ 341,774 Prepayments and other receivables $ 421,006 $ 664,886 Rent deposit $ 72,009 $ 81,624 Office equipment, net $ 28,751 $ 33,774 Right of use – noncurrent $ 573,259 $ 6,104 Deferred tax assets $ – $ 64,510 Advance from shareholders $ 84,718 $ 85,200 Accounts payable $ 5,494 $ 6,278 Lease liability $ 576,827 $ 4,758 Income tax payable $ 275,117 $ 276,683 Other payables and accrued liabilities $ 411,018 $ 344,735 The operating results of the VIE were as follows for the three months ended September 30, 2023: Schedule of operating results of the VIE September 30, 2023 Revenue $ – Net loss after elimination of intercompany transactions $ 419,343 The operating results of the VIE were as follows for the three months ended September 30, 2022 : September 30, 2022 Revenue $ – Net loss after elimination of intercompany transactions $ 733,617 For the three months ended September 30, 2023, the VIE contributed approximately $ 2.1 million 0.05 million 3.2 million 0.6 million |
Accounts receivable, net
Accounts receivable, net | 3 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Accounts receivable, net | Note 6 – Accounts receivable, net Accounts receivable for the Company consisted of the following as of the dates indicated below: Schedule of accounts receivable September 30, 2023 June 30, 2023 Accounts receivable $ 13,307,282 $ 14,141,543 Less: allowance for credit losses (70,000 ) (70,000 ) Total accounts receivable $ 13,237,282 $ 14,071,543 The changes in allowance for credit losses on accounts receivable are summarized below: Schedule of allowance for credit losses Allowance for Credit Losses Balance at June 30, 2022 $ 70,000 Allowance recorded during the three months ended September 30, 2022 – Balance at September 30, 2022 $ 70,000 Balance at June 30, 2023 $ 70,000 Allowance recorded during the three months ended September 30, 2023 – Balance at September 30, 2023 $ 70,000 |
Inventories, net
Inventories, net | 3 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories, net | Note 7 – Inventories, net As of September 30, 2023 and June 30, 2023, inventories consisted of finished goods ready for sale, net of allowance for obsolescence, amounted to $ 15,056,623 20,593,889 For the three months ended September 30, 2023 and 2022, the Company recorded inventory reserve expense of $ 105,192 74,998 664,092 558,899 |
Prepayments and other current a
Prepayments and other current assets, net | 3 Months Ended |
Sep. 30, 2023 | |
Prepayments And Other Current Assets Net | |
Prepayments and other current assets, net | Note 8 – Prepayments and other current assets, net As of September 30, 2023 and June 30, 2023, prepayments and other current assets consisted of the following: Schedule of prepayments and other current assets September 30, 2023 June 30, 2023 Advance to suppliers $ 1,036,012 $ 1,668,173 Prepaid income taxes 41,987 45,718 Prepaid expenses and other receivables 982,628 1,393,433 Less: Allowance for credit losses (249,128 ) (249,128 ) Total $ 1,811,499 $ 2,858,196 Other receivables consisted of delivery fees of $ 58,954 165,962 The changes in allowance for credit losses on other receivables are summarized below: Schedule of allowance for credit losses on other receivables Allowance for Credit Losses Balance at June 30, 2022 $ – Allowance recorded during the three months ended September 30, 2022 – Balance at September 30, 2022 – Balance at June 30, 2023 249,128 Allowance recorded during the three months ended September 30, 2023 – Balance at September 30, 2023 $ 249,128 |
Non-current prepayments
Non-current prepayments | 3 Months Ended |
Sep. 30, 2023 | |
Non-current Prepayments | |
Non-current prepayments | Note 9 – Non-current prepayments Non-current prepayments included $ 420,411 40,623 461,034 531,456 70,422 107,917 |
Intangible assets, net
Intangible assets, net | 3 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets, net | Note 10 – Intangible assets, net As of September 30, 2023 and June 30, 2023, intangible assets, net, consisted of the following: Schedule of intangible assets September 30, 2023 June 30, 2023 Covenant not to compete $ 3,459,120 $ 3,459,120 Supplier relationships 1,179,246 1,179,246 Software 534,591 534,591 Accumulated amortization (1,055,229 ) (892,886 ) Total $ 4,117,728 $ 4,280,071 The intangible assets were acquired on February 15, 2022 through acquisition of Anivia. The weighted average remaining life for finite-lived intangible assets at September 30, 2023 was approximately 6.95 162,343 162,343 Schedule of future amortization Year Ending June 30, Amount 2024 $ 487,028 2025 649,371 2026 649,371 2027 609,277 2028 468,750 Thereafter 1,253,931 Intangible assets, net $ 4,117,728 |
Other payables and accrued liab
Other payables and accrued liabilities | 3 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Other payables and accrued liabilities | Note 11 – Other payables and accrued liabilities As of September 30, 2023 and June 30, 2023, other payables and accrued liabilities consisted of the following: Schedule of other payables and accrued liabilities September 30, 2023 June 30, 2023 Accrued payables for inventory in transit $ 1,310,603 $ 2,948,551 Accrued Amazon fees 1,117,136 915,319 Sales taxes payable 388,968 448,433 Payroll liabilities 193,190 222,962 Other accrued liabilities and payables 282,684 295,802 Total $ 3,292,581 $ 4,831,067 The Company’s controlled VIE, DHS, facilitates the Company in the process of inventory procurement. During the three months ended September 30, 2023 and 2022, the Company purchased a total of $ 0 31,385 0 0 |
Loans payable
Loans payable | 3 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Loans payable | Note 12 – Loans payable Long-term loan Asset-based revolving loan On November 12, 2021, the Company entered into a Credit Agreement with JPMorgan Chase Bank, N.A. (“JPMorgan”), as administrative agent, issuing bank and swingline lender, for an asset-based revolving loan (“ABL”) of up to $25 million with key terms listed as follows: · 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 Up to the lesser of (i) 65% of cost of eligible inventory or (ii) 85% of net orderly liquidation value of eligible inventory · 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 includes an accordion feature that allows the Company to borrow up to an additional $25.0 million. To secure complete payment and performance of the secured obligations, the Company granted a security interest in all of its right, title and interest in, to and under all of the Company’s assets as collateral to the ABL. Upon closing of the ABL, the Company paid $ 796,035 Below is a summary of the interest expense recorded for the three months ended September 30, 2023 and 2022: Schedule of interest expense 2023 2022 Accrued interest $ 133,615 $ 156,255 Credit utilization fees 15,525 6,762 Amortization of debt discount 66,305 66,305 Total $ 215,445 $ 229,322 As of September 30, 2023 and June 30, 2023, the outstanding amount of the revolving loan payable, net of debt discount and including interest payable was $ 4,808,322 9,791,191 On October 7, 2022, the Company entered into a second amendment to the credit agreement and consent (the “Second Amendment to the Credit Agreement”), originally dated November 12, 2021, as amended, with JPMorgan. The Company entered into the Second Amendment to the Credit Agreement primarily for the purpose of changing the interest rate repayment calculations from LIBOR to the Secured Overnight Financing Rate, or SOFR, which adjustment had originally been anticipated under the terms of the original Credit Agreement. In addition, two of the negative covenants set forth in the original Credit Agreement were amended in order to (i) adjust the definition of “Covenant Testing Trigger Period” to increase the required cash availability from $3,000,000 to $4,000,000, or 10% of the aggregate revolving commitment for the preceding 30 days, and (ii) require that the Company will not and will not permit any of its subsidiaries, after reasonable due diligence and due inquiry, to knowingly sell their products, inventory or services directly to any commercial businesses that grow or cultivate cannabis; it being acknowledged, however, that the Company does not generally conduct due diligence on its individual retail customers. On November 11, 2022, the Company and JPMorgan entered into a default waiver and consent agreement (the “Waiver Letter”) pursuant to which the parties recognized that the Company was in default on its failure to satisfy the minimum Excess Availability requirement of $7,500,000, as defined in the Credit Agreement, and deliver a certificate to JPMorgan accurately reflecting the Excess Availability (together, the “Existing Defaults”). Under the terms of the Waiver Letter, JPMorgan agreed to waive the right to enforce an event of default based on the aforementioned Existing Defaults. As of September 30, 2023, the Company was in compliance with the ABL covenants. Promissory note payable On February 15, 2022, as part of the consideration for the acquisition of Anivia, the Company issued a two-year unsecured 6% subordinated promissory note, payable in equal semi-annual installments commencing August 15, 2022 (the “Purchase Note”). The principal amount of the Purchase Note was $ 3.5 million 3.6 million 875,000 875,000 875,000 19,688 12,579 52,500 12,682 255,938 19,023 1,149,961 1,149,961 0 236,250 31,602 2,017,852 2,017,852 0 Short-term loan payable On July 8, 2023, the Company entered into an agreement with White Cherry Limited (“White Cherry”), a BVI company owned by the former owner of DHS, for an on-demand, unsecured and subordinated loan (“On-demand Loan”). Pursuant to the agreement, White Cherry agreed to loan the Company the amount requested. The On-demand Loan bears interest at the rate of the Secured Overnight Financing Rate, or SOFR, plus 1% per annum. The On-demand Loan is due in 30 days upon receipt of White Cherry’s notice of repayment. On July 16, 2023, the Company borrowed $ 2 million 1 million 6,060 1,006,060 |
Related party transactions
Related party transactions | 3 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related party transactions | Note 13 - Related party transactions Starting from March 2022 to January 2023, the Company subleased 50,000 square feet of its warehouse space to Box Harmony, LLC, which is a 40% owned joint venture of the Company as disclosed in Note 1 and Note 2 above. For the three months ended September 30, 2023 and 2022, the Company received and recorded sublease fee of $ 0 247,500 0 0 On February 15, 2022, the Company assumed $ 92,246 84,718 85,200 On July 8, 2023, the Company entered into an agreement with White Cherry for an on demand loan. See Note 12 above for details. |
Income taxes
Income taxes | 3 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Note 14 – Income taxes In addition to corporate income taxes in the United States, upon completion of the acquisition of Anivia in February 2022, the Company is subject to corporate income taxes in People’s Republic of China (“PRC”). Anivia and its subsidiaries are subject to BVI or Hong Kong income taxes but did not have any operations for the year ended June 30, 2022. DHS, the operating VIE of Anivia, is considered a Controlled Foreign Corporation (CFC) defined under IRC Sec. 957(a) since the Company indirectly owns more than 50% voting control of DHS as a result of the Transfer Agreement. Therefore, DHS is subject to the Global Intangible Low-Taxed Income (or GILTI) Tax. DHS is subject to 5% tax rate in PRC. The Company made an election to apply the GILTI high-tax exclusion for DHS under the Final Regulations (T.D. 9902). As the result of the election, no GILTI tax was recorded as of September 30, 2023 and 2022. In addition, as a result of the acquisition, the Company booked a $6,094,144 of goodwill. Since the acquisition was a stock acquisition, the Goodwill is not deductible for tax purposes. The income tax provision for the three months ended September 30, 2023 and 2022 consisted of the following: Schedule of provision for income tax September 30, 2023 September 30, 2022 Current: Federal $ (1,705 ) $ – State 12,470 9,921 Foreign – – Total current income tax provision 10,765 9,921 Deferred: Federal (284,648 ) (169,467 ) State (66,624 ) (103,145 ) Foreign 64,625 (185,105 ) Total deferred taxes (286,647 ) (457,717 ) Total provision for income taxes $ (275,882 ) $ (447,796 ) The Company is subject to U.S. federal income tax as well as state income tax in certain jurisdictions. The tax years 2018 to 2021 remain open to examination by the major taxing jurisdictions to which the Company is subject. The following is a reconciliation of income tax expenses at the effective rate to income tax at the calculated statutory rates: Schedule of reconciliation of effective income tax rate September 30, 2023 September 30, 2022 Statutory tax rate Federal 21.00% 21.00% State (net of federal benefit) 5.82% 5.85% Foreign tax rate difference (4.88% ) 3.91% Impairment loss on goodwill – permanent difference – (17.8% ) Net effect of state income tax deduction and other permanent differences (4.31% ) (3.29% ) Effective tax rate 17.63% 9.67% As of September 30, 2023, prepaid income taxes to US tax authorities and income tax payable to Chinese tax authorities was $ 41,987 275,117 45,718 276,683 The tax effects of temporary differences which give rise to significant portions of the deferred taxes are summarized as follows: Schedule of deferred taxes September 30, 2023 June 30, 2023 Deferred tax assets 263A calculation $ 174,841 $ 239,142 Inventory reserve 178,121 149,907 State taxes 2,619 2,435 Accrued expenses 330,325 273,589 ROU assets / liabilities 114,298 115,125 Net Operation loss 2,381,758 2,173,221 Disallowed interest expense 194,172 163,381 Stock-based compensation 239,344 207,726 Valuation allowance (64,145 ) – Others 85,596 85,596 Total deferred tax assets 3,636,929 3,410,122 Deferred tax liabilities Depreciation (98,484 ) (105,323 ) Intangible assets acquired (1,106,006 ) (1,149,549 ) Total deferred tax liabilities (1,204,490 ) (1,254,872 ) Net deferred tax assets $ 2,432,439 $ 2,155,250 For the three months ended September 30, 2023, the Company recorded $ 64,145 |
Earnings per share
Earnings per share | 3 Months Ended |
Sep. 30, 2023 | |
LOSSES PER SHARE | |
Earnings per share | Note 15 – Earnings per share The following table sets forth the computation of basic and diluted earnings per share for the periods presented: Schedule of computation of basic and diluted earnings per share For the three months ended 2023 2022 Numerator: Net loss attributable to iPower Inc. $ (1,286,515 ) $ (4,182,376 ) Denominator: Weighted-average shares used in computing basic and diluted earnings per share* $ 29,764,515 $ 29,665,716 Losses per share of ordinary shares - basic and diluted $ (0.04 ) $ (0.14 ) * Due to the ani-dilutive effect, the computation of basic and diluted EPS did not include the shares underlying the exercise of warrants and unvested RSUs as the Company had a net loss for the three months ended September 30, 2023 and 2022. * The computation of diluted EPS did not include the shares underlying the exercise of options granted as none of the options were vested as September 30, 2023 and 2022. * For the three months ended September 30, 2023 and 2022, 66,366 166,176 |
Equity
Equity | 3 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Equity | Note 16 – Equity Common Stock As of September 30, 2023, the total authorized shares of capital stock were 200,000,000 shares consisting of 180,000,000 20,000,000 0.001 The holders of Common Stock shall be entitled to one vote per share in voting to the election of directors and all other corporate purposes. Subject to the express terms of any outstanding series of Preferred Stock, dividends may be paid in cash or otherwise with respect to the holders of Common Stock out of the assets of the Company legally available therefor, upon the terms, and subject to the limitations, as the Board of Directors of the Company (the “Board of Directors”) may determine. In the event of a liquidation or dissolution of the Company, subject to the express terms of any outstanding series of Preferred Stock, the holders of Common Stock shall be entitled to share in the distribution of any remaining assets available for distribution to the holders of Common Stock ratably in proportion to the total number of shares of Common Stock then issued and outstanding. During the year ended June 30, 2023, the Company issued 138,557 On February 15, 2022, as part of the consideration for the acquisition of Anivia and subsidiaries, as further described in Note 4, the Company issued 3,083,700 2.27 5,528,373 As of September 30, 2023 and June 30, 2023, there were 29,710,939 29,710,939 Preferred Stock The Preferred Stock was authorized as “blank check” series of Preferred Stock, providing that the Board of Directors is expressly authorized, subject to limitations prescribed by law, by resolution or resolutions and by filing a certificate pursuant to the applicable law of the State of Nevada, to provide, out of the authorized but unissued shares of Preferred Stock, for series of Preferred Stock, and to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof. As of September 30, 2023 and June 30, 2023, respectively, there were no Equity Incentive Plan On May 5, 2021, the Company’s Board of Directors adopted, and its stockholders approved and ratified, the iPower Inc. Amended and Restated 2020 Equity Incentive Plan (the “Plan”). The Plan allows for the issuance of up to 5,000,000 Restricted Stock Unit Following completion of the IPO on May 11, 2021, pursuant to their letter agreements, the Company awarded 46,546 49,600 7,500 27,500 no 75,462 38,793 58,152 22,500 Information relating to RSU grants is summarized as follows: 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, 2023 38,793 RSUs granted 49,600 $ 43,152 RSUs forfeited – RSUs vested (12,931 ) RSUs granted, but not vested, at September 30, 2023 75,462 _____________________ (1) The total fair value was based on the current stock price on the grant date. As of September 30, 2023, of the 244,942 178,576 66,366 Stock Option On May 12, 2022, the Compensation Committee of the Board of Directors approved an incentive plan for the Company’s executive officers consisting of a cash performance bonus of $ 60,000 3,000,000 330,000 1.12 The estimated achievement status of the operational milestones as of September 30, 2023 was as follows: Revenue in Fiscal Year Operating Income in Fiscal Year Milestone (in Millions) Achievement Status Milestone (in Millions) Achievement Status $ 90 Probable $ 6 Probable $ 100 Probable $ 8 Probable $ 125 Probable $ 10 Probable $ 150 Probable $ 12 Probable $ 200 Probable $ 16 – $ 250 – $ 20 – The Company evaluated the performance condition and market condition under ASC 718-10-20. The Option Grants are considered an award containing a performance and a market condition and both conditions (in this case at least one of the performance conditions) must be satisfied for the award to vest. The market condition is incorporated into the fair value of the award, and that fair value is recognized over the longer of the implied service period or requisite service period if it is probable that one of the performance conditions will be met. In relation to the five awards deemed probable to vest, the recognition period ranges from 2.93 years to 9.64 years. If the performance condition is ultimately not met, compensation cost related to the award should not be recognized (or should be reversed to the extent any expense has been recognized related to such tranche) because the vesting condition in the award would not have been satisfied. On the grant date, a Monte Carlo simulation was used to determine for each tranche (i) a fixed amount of expense for such tranche and (ii) the future time when the market capitalization milestone for such tranche was expected to be achieved. Separately, based on a subjective assessment of our future financial performance, each quarter we determine whether it is probable that the Company will achieve each operational milestone that has not previously been achieved or deemed probable of achievement and, if so, the future time when the Company expects to achieve that operational milestone. The Monte Carlo simulation utilized the following inputs: · Stock Price - $ 1.12 · Volatility – 95.65 · Term – 10 · Risk Free Rate of Return – 2.93 · Dividend Yield – 0 The total fair value of the Option Grants was $3.2 million of which, at September 30, 2023, $2.3 million is deemed probable of vesting. As of September 30, 2023, none 110,382 110,382 |
Warrants
Warrants | 3 Months Ended |
Sep. 30, 2023 | |
Warrants | |
Warrants | Note 17 – Warrants On January 27, 2021, the Company completed a private placement offering pursuant to which the Company sold to two accredited investors an aggregate of $3,000,000 in Convertible Notes and warrants to purchase shares of Class A Common Stock equaling 80% of the number of shares of Class A Common Stock issuable upon conversion of the Convertible Notes. The convertible note warrants are exercisable for a period of three years from the IPO completion date at a per share exercise price equal to the IPO. In accordance with the terms of the warrants, in the event the Convertible Notes are repaid in cash by the Company, the warrants issued in conjunction with the Convertible Notes will expire and have no further value. The outstanding warrants held by the Convertible Note investors were reclassified to additional paid in capital as the terms became fixed upon closing of the IPO. Through September 30, 2023, none of the private placement investors exercised any of their warrants. As such, as of September 30, 2023 and June 30, 2023, the number of shares issuable under the outstanding warrants was 685,715 5.00 |
Concentration of risk
Concentration of risk | 3 Months Ended |
Sep. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
Concentration of risk | Note 18 - Concentration of risk Credit risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. As of September 30, 2023 and June 30, 2023, $ 2,729,161 3,735,642 1.1 million 2.7 million Accounts receivable are typically unsecured and derived from revenue earned from customers, thereby exposing the Company to credit risk. The risk is mitigated by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances. The Company maintains reserves for estimated credit losses, and such losses have generally been within expectations. The business of DHS, the Company’s VIE, may be impacted by Chinese economic conditions, changes in regulations and laws, and other uncertainties. Customer and vendor concentration risk For the three months ended September 30, 2023 and 2022, Amazon Vendor and Amazon Seller customers accounted for 91 91 93 95 For the three months ended September 30, 2023 and 2022, one supplier accounted for 15 19 50 49 |
Commitments and contingencies
Commitments and contingencies | 3 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Note 19 - Commitments and contingencies Lease commitments The Company has entered into a lease agreement for office and warehouse space with a lease period from December 1, 2018 until December 31, 2020. On August 24, 2020, the Company negotiated for new terms to extend the lease through December 21, 2023 at the rate of approximately $42,000 per month. On September 1, 2020, in addition to the primary fulfillment center, the Company leased a second fulfillment center in City of Industry, California. The base rental fee was $27,921 to $29,910 per month through October 31, 2023. On February 15, 2022, upon completion of the acquisition of Anivia Limited, the Company assumed an operating lease for offices located in the People’s Republic of China. In July 2023, the Company renewed the lease contract for its existing office plus additional office space. The lease term is for three years expiring on July 14, 2026. The total base rental fee for these offices is approximately $19,406 per month. On July 28, 2021, the Company entered into a Lease agreement (the “Lease Agreement”) with 9th & Vineyard, LLC, a Delaware limited liability company (the “Landlord”), to lease from the Landlord approximately 99,347 square feet of space located at 8798 9th Street, Rancho Cucamonga, California (the “Premises”). The term of the Lease Agreement is for 62 months, commencing on the date on which the Landlord completes certain prescribed improvements on the property (the “Rent Commencement Date”). The Lease Agreement does not provide for an option to renew. In addition, the Company will be responsible for its pro rata share of certain costs, including utility costs, insurance and common area costs, as further detailed in the Lease Agreement. Following the Rent Commencement Date, the first two months of the Base Rent will be abated. The lease was not started under the original agreement as the construction was not completed. On February 23, 2022, the Company entered into an amended agreement to extend the lease term to 74 months. Under the amended agreement, the lease commenced on February 10, 2022, with rent payments commencing May 11, 2022 and the lease expiring on May 31, 2028. The base rental fee is $114,249, increasing gradually over time to $140,079 per month through the expiration date of May 31, 2028. On May 1, 2022, the Company leased another fulfillment center in Duarte, California. The base rental fee is $56,000 to $59,410 per month through April 30, 2025. The Company’s total commitment for the full term of these leases is $ 12,649,053 7,763,712 7,837,345 8,193,416 8,265,220 Three months Ended September 30, 2023 and 2022: Schedule of lease cost and other information Lease cost 9/30/2023 9/30/2022 Operating lease cost (included in G&A in the Company's statement of operations) $ 792,826 $ 779,233 Other information Cash paid for amounts included in the measurement of lease liabilities $ 792,317 $ 769,061 Remaining term in years 0.08 – 4.67 0.83 – 5.67 Average discount rate - operating leases 5 - 8% 5 - 8% The supplemental balance sheet information related to leases for the period is as follows: Schedule of supplemental balance sheet information related to leases Operating leases 9/30/2023 6/30/2023 Right of use asset - non-current $ 7,763,712 $ 7,837,345 Lease Liability – current 2,169,603 2,159,173 Lease Liability - non-current 6,023,813 6,106,047 Total operating lease liabilities $ 8,193,416 $ 8,265,220 Maturities of the Company’s lease liabilities are as follows: Schedule of maturities of lease liabilities Operating Lease For Year ending June 30: 2024 $ 1,926,465 2025 2,313,210 2026 1,766,797 2027 1,596,275 2028 1,459,407 Less: Imputed interest/present value discount (868,738 ) Present value of lease liabilities $ 8,193,416 Contingencies Except as disclosed below, the Company is not currently a party to any material legal proceedings, investigation or claims. As the Company may, from time to time, be involved in legal matters arising in the ordinary course of its business, there can be no assurance that such matters will not arise in the future or that any such matters in which the Company is involved, or which may arise in the ordinary course of the Company’s business, will not at some point proceed to litigation or that such litigation will not have a material adverse effect on the business, financial condition or results of operations of the Company. Pursuant to an engagement agreement, dated and effective August 31, 2020 (the “Engagement Agreement”), with Boustead Securities LLC (“Boustead”), the Company engaged Boustead to act as its exclusive placement agent for private placements of its securities and as a potential underwriter for its initial public offering. On February 28, 2021, the Company informed Boustead that it was terminating the Engagement Agreement and any continuing obligations the Company may have had under its terms. On April 15, 2021, the Company provided formal written notice to Boustead of its termination of the Engagement Agreement and all obligations thereunder, effective immediately. On April 30, 2021, Boustead filed a statement of claim with the Financial Institute Regulatory Authority, or FINRA, demanding to arbitrate the dispute, and is seeking, among other things, monetary damages against the Company and D.A. Davidson & Co. (who acted as underwriter in the Company’s IPO). This matter is presently scheduled to hold its evidentiary hearing before a FINRA arbitration panel during the first two weeks of March 2024. The Company has agreed to indemnify D.A. Davidson & Co. and the other underwriters against any liability or expense they may incur or be subject to arising out of the Boustead dispute. Additionally, Chenlong Tan, the Company’s Chairman, President and Chief Executive Officer and a beneficial owner more than 5% of the Company’s Common Stock, has agreed to reimburse the Company for any judgments, fines and amounts paid or actually incurred by the Company or an indemnitee in connection with such legal action or in connection with any settlement agreement entered into by the Company or an indemnitee up to a maximum of $3.5 million in the aggregate, with the sole source of funding of such reimbursement to come from sales of shares then owned by Mr. Tan. The Company cannot reasonably estimate the amount of potential exposure as of the date of this report. In an effort to contain or slow the COVID-19 outbreak, authorities across the world have implemented various measures, some of which have been subsequently rescinded or modified, including travel bans, stay-at-home orders and shutdowns of certain businesses. The Company anticipates that these actions and the global health crisis caused by the COVID-19 outbreak, including any resurgences, will continue to negatively impact global economic activity. While the COVID-19 outbreak has not had a material adverse impact on the Company’s operations to date, it is difficult to predict all of the positive or negative impacts the COVID-19 outbreak may have on the Company’s business in the future. In February 2022, the Russian Federation began conducting military operations against Ukraine, and in October 2023, an armed conflict between Hamas-led Palestinian militant groups and Israeli military forces began. While we do not do business in those regions, the military conflict in Ukraine and in Israel has resulted in global economic uncertainty and increased the cost of various commodities. In response to these types of events, should they directly impact our supply chain or other operations, we may experience or be exposed to supply chain disruptions which could cause us to seek alternate sources for product supply or suffer consequences that are unexpected and difficult to mitigate. Any of these risks might have a materially adverse impact on our business operations and our financial position or results of operations. Although, it is difficult to predict the impact that these factors may have on our business in the future, they did not have a material effect on our results of operations, financial condition, or liquidity for the three months ended September 30, 2023 and 2022. On April 13, 2020, the Company entered into an agreement with Royal Business Bank (the “Lender”) for a total amount of $175,500, pursuant to which the Company issued a promissory note to the Lender (the “PPP Note”). The loan was made pursuant to the Payroll Protection Program established as part of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”). On March 22, 2021, the $175,500 PPP Note due to Royal Business Bank was fully forgiven by the SBA. The Company is required to retain PPP loan documentation through 2026 and permit authorized representatives of the SBA to access such files upon request. Should the SBA conduct such a review and reject all or some of the Company’s judgments pertaining to satisfying PPP loan eligibility or forgiveness conditions, the Company may be required to adjust previously reported amounts and disclosures in its consolidated financial statements. |
Subsequent events
Subsequent events | 3 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent events | Note 20 - Subsequent events The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the unaudited condensed consolidated financial statements were available to be issued. Other than as set forth below, there were no material subsequent events that required recognition or additional disclosure in the unaudited condensed consolidated financial statements presented. On October 31, 2023, the lease agreement for a fulfillment center in City of Industry, California expired, and the Company did not renew the lease. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of significant accounting policies (Policies) | 3 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries and VIE and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These unaudited condensed consolidated financial statements have been prepared on the same basis as its annual consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of the Company’s financial information. These interim results are not necessarily indicative of the results to be expected for the fiscal year ending June 30, 2024, or for any other interim period or for any other future year. All intercompany balances and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Annual Report for the year ended June 30, 2023, which are included in Form 10-K filed with the SEC on September 14, 2023. |
Principles of Consolidation | Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries, E Marketing Solution Inc., Global Product Marketing Inc., Global Social Media, LLC, and Anivia Limited and its subsidiaries and VIE, including Fly Elephant Limited, Dayourenzai (Shenzhen) Technology Co., Ltd., and Daheshou (Shenzhen) Information Technology Co., Ltd. All inter-company balances and transactions have been eliminated. |
Emerging Growth Company Status | Emerging Growth Company Status The company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of utilizing the emerging growth company reduced reporting requirements difficult. |
Use of estimates and assumptions | Use of estimates and assumptions The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities reported and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the 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 the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. |
Foreign currency translation and transactions | Foreign currency translation and transactions The reporting and functional currency of iPower and its subsidiaries is the U.S. dollar (USD). iPower’s WFOE and VIE in China uses the local currency, Renminbi (“RMB”), as its functional currency. Assets and liabilities of the VIE are translated at the current exchange rate as quoted by the People’s Bank of China (the “PBOC”) at the end of the period. Income and expense accounts are translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income (loss) in the statement of changes in stockholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. The balance sheet amounts of the VIE, with the exception of equity, on September 30, 2023, were translated at 7.2948 7.2406 |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents consist of amounts held as cash on hand and bank deposits. From time to time, the Company may maintain bank balances in interest bearing accounts in excess of the $250,000, which is currently the maximum amount insured by the FDIC for interest bearing accounts (there is currently no insurance limit for deposits in noninterest bearing accounts). The Company has not experienced any losses with respect to cash. Management believes our Company is not exposed to any significant credit risk with respect to its cash. |
Accounts receivable, net | Accounts receivable, net During the ordinary course of business, the Company extends unsecured credit to its customers. Accounts receivable are stated at the amount the Company expects to collect from customers. Management reviews its accounts receivable balances each reporting period to determine if an allowance for credit loss is required. The Company evaluates the creditworthiness of all of its customers individually before accepting them and continuously monitors the recoverability of accounts receivable. If there are any indicators that a customer may not make payment, the Company may consider making provision for non-collectability for that particular customer. At the same time, the Company may cease further sales or services to such customer. The following are some of the factors that the Company develops allowance for credit losses: · 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. Accounts receivable are recognized and carried at carrying amount less an allowance for credit losses, if any. The Company maintains an allowance for credit losses resulting from the inability of its customers to make required payments based on contractual terms. The Company reviews the collectability of its receivables on a regular and ongoing basis. The Company has also included in calculation of allowance for credit losses the potential impact of the COVID-19 pandemic on our customers’ businesses and their ability to pay their accounts receivable. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. The Company also considers external factors to the specific customer, including current conditions and forecasts of economic conditions, including the potential impact of the COVID-19 pandemic. In the event we recover amounts previously written off, we will reduce the specific allowance for credit losses. |
Equity method investment | Equity method investment The Company accounts for its ownership interest in Box Harmony, a 40 |
Business Combination | Business Combination On February 15, 2022, the Company acquired 100% of the ordinary shares of Anivia and its subsidiaries, including the VIE. The Company applies the acquisition method of accounting for business combinations. Under the acquisition method, the acquiring entity in a business combination recognizes 100% of the assets acquired and liabilities assumed at their acquisition date fair values. Management utilizes valuation techniques appropriate for the asset or liability being measured in determining these fair values. Any excess of the purchase price over amounts allocated to assets acquired, including identifiable intangible assets, and liabilities assumed is recorded as goodwill. Where amounts allocated to assets acquired and liabilities assumed is greater than the purchase price, a bargain purchase gain is recognized. Acquisition-related costs are expensed as incurred. See Note 4 for details regarding the acquisition. |
Variable interest entities | Variable interest entities On February 15, 2022, the Company acquired 100% of the ordinary shares of Anivia and its subsidiaries, including Daheshou (Shenzhen) Information Technology Co., Ltd., a company organized under the Laws of the PRC (“DHS”). Pursuant to the terms of the Agreements, the Company does not have direct ownership in DHS but is actively involved in DHS’s operations as the sole manager to direct the activities and significantly impact DHS’s economic performance. DHS’s operational funding has been provided by the Company following the February 15, 2022 acquisition. During the term of the Agreements, the Company bears all the risk of loss and has the right to receive all of the benefits from DHS. As such, based on the determination that the Company is the primary beneficiary of DHS, in accordance with ASC 810-10-25-38A through 25-38J, DHS is considered a VIE of the Company and the financial statements of DHS have been consolidated from the date such control existed, February 15, 2022. See Note 4 and Note 5 for details regarding the acquisition. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the fair value of assets acquired and liabilities assumed. The Company accounts for goodwill under ASC Topic 350, Intangibles-Goodwill and Other Goodwill is not amortized but is reviewed for potential impairment on an annual basis, or if events or circumstances indicate a potential impairment, at the reporting unit level. The Company’s review for impairment includes an assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill. If it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill, a quantitative goodwill impairment test is performed, which compares the fair value of the reporting unit with its carrying amounts, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. However, if the carrying amount of the reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company engaged an independent third-party valuation firm in August 2022 to conduct an evaluation of goodwill impairment for the Company as a whole at the consolidated reporting unit level as of June 30, 2022, which evaluation was conducted prior to the Company’s filing of its Annual Report on Form 10-K for the period ended June 30, 2022. Due to the decrease in the Company’s share price subsequent to the filing of the June 30, 2022 Form 10-K and the net loss incurred during the quarter ended September 30, 2022, the Company engaged the same valuation firm to review goodwill for impairment. Based on this review, the Company concluded an impairment loss of $ 3,060,034 During the period ended September 30, 2023, the Company performed a qualitative goodwill impairment analysis following the steps laid out in ASC 350-20-35-3C and noted no goodwill impairment. As of September 30, 2023 and 2022, the goodwill balance amounted to $ 3,034,110 3,034,110 |
Intangible Assets, net | Intangible Assets, net Finite life intangible assets at September 30, 2023 include covenant not to compete, supplier relationship, and software recognized as part of the acquisition of Anivia. Intangible assets are recorded at the estimated fair value of these items at the date of acquisition, February 15, 2022. Intangible assets are amortized on a straight-line basis over their estimated useful life as followings: Schedule of estimated useful life Useful Life Covenant Not to Compete 10 Supplier relationship 6 Software 5 The Company reviews the recoverability of long-lived assets, including intangible assets, when events or changes in circumstances occur that indicate the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the ability to recover the carrying value of the asset from the expected future pretax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations. As of September 30, 2023 and 2022, there were no indicators of impairment. |
Fair values of financial instruments | Fair values of financial instruments ASC 825, “Disclosures about Fair Value of Financial Instruments,” requires disclosure of fair value information about financial instruments. ASC 820, “Fair Value Measurements” defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and all other current assets and liabilities approximate fair values due to their short-term nature. On February 15, 2022, as part of the consideration for the acquisition of Anivia, the Company issued a two-year unsecured 6% subordinated promissory note, payable in equal semi-annual installments commencing August 15, 2022 (the “Purchase Note”). The principal amount of the Purchase Note was $ 3.5 million 3.6 million Schedule of assumptions for financial instruments Corporate bond yield 3.1% Risk-free rate 1.6% Liquidity premium 0.4% Discount rate 3.5% As of September 30, 2023, the outstanding balance of the Purchase Note was $ 1,149,961 875,000 19,023 255,938 For other financial instruments to be reported at fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines the fair value of its financial instruments based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; Level 2 – Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and Level 3 – Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data. The Company does not have any assets or liabilities measured at fair value on a recurring basis. We measure certain non-financial assets on a non-recurring basis, including goodwill. As a result of those measurements, we recognized an impairment charge of $3.1 million during the year ended June 30, 2023 as follows: Schedule of assumptions for financial instruments Total Fair Level 1 Level 2 Level 3 Total Goodwill $ 3,034,110 $ – $ – $ 3,034,110 $ 3,060,034 Total $ 3,034,110 $ – $ – $ 3,034,110 $ 3,060,034 Goodwill, with a total carrying value of $6.1 million, was written down to its fair value of $3.0 million, resulting in an impairment charge of $3,060,034, which was recorded in earnings for the year ended June 30, 2023. The fair value of goodwill was determined based on the discounted cash flow method, which is an income approach, which required the use of inputs that were unobservable in the marketplace (Level 3), including a discount rate that would be used by a market participant, projections of revenues and cash flows with the revised projections reflecting the increase in freight and storage costs in the current interim quarter, among others. |
Revenue recognition | Revenue recognition The Company recognizes revenue from product sales revenues, net of promotional discounts and return allowances, when the following revenue recognition criteria are met: a contract has been identified, separate performance obligations are identified, the transaction price is determined, the transaction price is allocated to separate performance obligations and revenue is recognized upon satisfying each performance obligation. The Company transfers the risk of loss or damage upon shipment, therefore, revenue from product sales is recognized when it is shipped to the customer. Return allowances, which reduce product revenue by the Company’s best estimate of expected product returns, are estimated using historical experience. The Company evaluates the criteria of ASC 606 - Revenue Recognition Principal Agent Considerations in determining whether it is appropriate to record the gross amount of product sales and related costs or the net amount earned as commissions. Generally, when the Company is primarily responsible for fulfilling the promise to provide a specified good or service, the Company is subject to inventory risk before the good or service has been transferred to a customer and the Company has discretion in establishing the price, revenue is recorded at gross. Payments received prior to the delivery of goods to customers are recorded as customer deposits. The Company periodically provides incentive offers to its customers to encourage purchases. Such offers include current discount offers, such as percentage discounts off current purchases and other similar offers. Current discount offers, when accepted by the Company’s customers, are treated as a reduction to the purchase price of the related transaction. Sales discounts are recorded in the period in which the related sale is recognized. Sales return allowances are estimated based on historical amounts and are recorded upon recognizing the related sales. Shipping and handling costs are recorded as selling expenses. |
Advertising costs | Advertising costs Advertising costs are expensed as incurred. Total advertising and promotional costs included in selling and fulfillment expenses for the three months ended September 30, 2023 and 2022 were $ 1,570,742 1,166,349 |
Cost of revenue | Cost of revenue Cost of revenue mainly consists of costs for purchases of products and related inbound freight and delivery fees. |
Operating expenses | Operating expenses Operating expenses, which consist of selling and fulfillment and general and administrative expenses, are expensed as incurred. |
Inventory, net | Inventory, net Inventory consists of finished goods ready for sale and is stated at the lower of cost or market. The Company values its inventory using the weighted average costing method. The Company’s policy is to include as a part of inventory and cost of goods sold any freight incurred to ship the product from its vendors to warehouses. Outbound freight costs related to shipping costs to customers are considered periodic costs and are reflected in selling and fulfillment expenses. The Company regularly reviews inventory and considers forecasts of future demand, market conditions and product obsolescence. If the estimated realizable value of the inventory is less than cost, the Company makes provisions in order to reduce its carrying value to its estimated market value. The Company also reviews inventory for slow moving inventory and obsolescence and records allowance for obsolescence. |
Debt Issuance Costs | Debt Issuance Costs Costs incurred in connection with the issuance of debt are deferred and amortized as interest expense over the term of the related debt using the effective interest method. To the extent that the debt is outstanding, these amounts are reflected in the unaudited condensed consolidated balance sheets as direct deductions from the carrying amount of the outstanding borrowings. |
Segment reporting | Segment reporting The Company follows ASC 280, Segment Reporting. The Company’s chief operating decision maker, the Chief Executive Officer, reviews the consolidated results of operations when making decisions about allocating resources and assessing the performance of the Company as a whole and, hence, the Company has only one reportable segment. The Company does not distinguish between markets or segments for the purpose of internal reporting. For the three months ended September 30, 2023 and 2022, sales through Amazon to Canada and other foreign countries were approximately 8.2 9.8 16.8 83.2 53 47 1.4 million 1.6 |
Leases | Leases The Company records right-of-use (“ROU”) assets and related lease obligations on the balance sheet. ROU assets represent our right to use an underlying asset for the lease terms and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company generally uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. |
Stock-based Compensation | Stock-based Compensation The Company applies ASC No. 718, “Compensation-Stock Compensation,” which requires that share-based payment transactions with employees and nonemployees, upon adoption of ASU 2018-07, be measured based on the grant date fair value of the equity instrument and recognized as compensation expense over the requisite service period, with a corresponding addition to equity. Under this method, compensation costs related to employee share options or similar equity instruments is measured at the grant date based on the fair value of the award and is recognized over the period during which an employee is required to provide service in exchange for the award, which generally is the vesting period. In addition to the requisite service period, the Company also evaluates the performance condition and market condition under ASC 718-10-20. For an award which contains both a performance and a market condition, and where both conditions must be satisfied for the award to vest, the market condition is incorporated into the fair value of the award, and that fair value is recognized over the employee’s requisite service period or nonemployee’s vesting period if it is probable the performance condition will be met. If the performance condition is ultimately not met, compensation costs related to the award should not be recognized (or should be reversed) because the vesting condition in the award has not been satisfied. The Company will recognize forfeitures of such equity-based compensation as they occur. |
Income taxes | Income taxes The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their perspective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company has analyzed filing positions in each of the federal and state jurisdictions where the Company is required to file income tax returns, as well as open tax years in such jurisdictions. The Company has identified the U.S. federal jurisdiction, and the states of Nevada and California, as its “major” tax jurisdictions. However, the Company has certain tax attribute carryforwards which will remain subject to review and adjustment by the relevant tax authorities until the statute of limitations closes with respect to the year in which such attributes are utilized. The Company believes that our income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740, Income Taxes. The Company’s policy for recording interest and penalties associated with income-based tax audits is to record such items as a component of income taxes. |
Commitments and contingencies | Commitments and contingencies In the ordinary course of business, the Company is subject to certain contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters, such as government investigations and tax matters. The Company recognizes a liability for such contingency if it determines it is probable that a loss has occurred and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments including historical and specific facts and circumstances of each matter. |
Earnings per share | Earnings per share Basic earnings per share are computed by dividing net income attributable to holders of common stock by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share reflect the potential dilution that could occur if securities to issue common stock were exercised. |
Recently issued accounting pronouncements | Recently issued accounting pronouncements In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative. This ASU incorporates certain U.S. Securities and Exchange Commission (SEC) disclosure requirements into the FASB Accounting Standards Codification™ (“Codification”). The amendments in the ASU are expected to clarify or improve disclosure and presentation requirements of a variety of Codification Topics, allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC’s regulations. In SEC Release No. 33-10532, Disclosure Update and Simplification, issued August 17, 2018, the SEC referred certain of its disclosure requirements that overlap with, but require incremental information to, generally accepted accounting principles to the FASB for potential incorporation into the Codification. The ASU incorporates into the Codification 14 of the 27 disclosures referred by the SEC. They modify the disclosure or presentation requirements of a variety of Topics in the Codification. The requirements are relatively narrow in nature. Some of the amendments represent clarifications to, or technical corrections of, the current requirements. Because of the variety of Topics amended, a broad range of entities may be affected by one or more of those amendments. For entities subject to the SEC’s existing disclosure requirements and for entities required to file or furnish financial statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be the date on which the SEC removes that related disclosure from its rules. For all other entities, the amendments will be effective two years later. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective for any entity. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. In September 2022, FASB issued ASU 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations. The amendments in this ASU require that a company that uses a supplier finance program in connection with the purchase of goods or services disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. ASU 2022-04 is effective for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2022, except for the rollforward of the supplier finance program obligations, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. An entity should apply ASU No. 2022-04 retrospectively to all periods in which a balance sheet is presented, except for the obligation rollforward, which should be applied prospectively. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In June 2022, FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments in this ASU clarify the guidance in ASC 820 on the fair value measurement of an equity security that is subject to a contractual sale restriction and require specific disclosures related to such an equity security. This standard is effective for fiscal years beginning after December 15, 2024. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606) as if the entity had originated the contracts. The guidance is effective for fiscal years beginning after December 15, 2023, with early application permitted. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. In March 2020 and January 2021, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope, respectively (collectively, “Topic 848”). Topic 848 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by Topic 848 are effective for all entities as of March 12, 2020 through December 31, 2022. In December 2022, the FASB issued ASU 2022-06, Reference Rate reform (Topic 848): Deferral of the Sunset Date of Topic 848, which deferred the sunset date of Topic 848, Reference Rate Reform to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The Company does not expect the adoption of this standard to have a material impact on the Company's consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40).” This ASU reduces the number of accounting models for convertible debt instruments and convertible preferred stock, as well as amend the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. In addition, this ASU improves and amends the related EPS guidance. This standard is effective for the Company on July 1, 2024, including interim periods within those fiscal years. Adoption is either a modified retrospective method or a fully retrospective method of transition. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” which eliminates step two from the goodwill impairment test. Under ASU 2017-04, an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value up to the amount of goodwill allocated to that reporting unit. ASU 2017-04 became effective for accelerated filing companies for annual periods or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. All other entities, including not-for-profit entities, that are adopting the amendments in this Update should do so for their annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2022. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company has adopted ASU 2017-04. See the disclosures above on Goodwill for further details. The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows. |
Subsequent events | Subsequent events The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the consolidated financial statements are available to be issued. Material subsequent events that required recognition or additional disclosure in the unaudited condensed consolidated financial statements are presented. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of significant accounting policies (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful life | Schedule of estimated useful life Useful Life Covenant Not to Compete 10 Supplier relationship 6 Software 5 |
Schedule of assumptions for financial instruments | Schedule of assumptions for financial instruments Corporate bond yield 3.1% Risk-free rate 1.6% Liquidity premium 0.4% Discount rate 3.5% |
Schedule of assumptions for financial instruments | Schedule of assumptions for financial instruments Total Fair Level 1 Level 2 Level 3 Total Goodwill $ 3,034,110 $ – $ – $ 3,034,110 $ 3,060,034 Total $ 3,034,110 $ – $ – $ 3,034,110 $ 3,060,034 |
Acquisition of Anivia Limited_2
Acquisition of Anivia Limited and Subsidiaries and Variable Interest Entity (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Acquisition Of Anivia Limited And Subsidiaries And Variable Interest Entity | |
Schedule of allocation of acquisition price | Schedule of allocation of acquisition price Fair Value of Purchase Price: Cash $ 1,500,000 Promissory note issued 3,600,627 Common stock issued 5,528,373 Total purchase consideration $ 10,629,000 Purchase Price Allocation: Covenant not to compete $ 3,459,120 Supplier relationship 1,179,246 Software 534,591 Current assets 1,784,113 Property and equipment 46,548 Rent deposit 52,707 ROU asset 234,578 Goodwill 6,094,144 Deferred tax liabilities (1,389,113 ) Current liabilities (1,143,076 ) Lease liability (223,858 ) Total purchase consideration $ 10,629,000 |
Variable interest entity (Table
Variable interest entity (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of carrying amount of the VIE’s assets and liabilities | Schedule of carrying amount of the VIE’s assets and liabilities September 30, 2023 June 30, 2023 Cash in bank $ 308,366 $ 341,774 Prepayments and other receivables $ 421,006 $ 664,886 Rent deposit $ 72,009 $ 81,624 Office equipment, net $ 28,751 $ 33,774 Right of use – noncurrent $ 573,259 $ 6,104 Deferred tax assets $ – $ 64,510 Advance from shareholders $ 84,718 $ 85,200 Accounts payable $ 5,494 $ 6,278 Lease liability $ 576,827 $ 4,758 Income tax payable $ 275,117 $ 276,683 Other payables and accrued liabilities $ 411,018 $ 344,735 |
Schedule of operating results of the VIE | Schedule of operating results of the VIE September 30, 2023 Revenue $ – Net loss after elimination of intercompany transactions $ 419,343 The operating results of the VIE were as follows for the three months ended September 30, 2022 : September 30, 2022 Revenue $ – Net loss after elimination of intercompany transactions $ 733,617 |
Accounts receivable, net (Table
Accounts receivable, net (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Schedule of accounts receivable | Schedule of accounts receivable September 30, 2023 June 30, 2023 Accounts receivable $ 13,307,282 $ 14,141,543 Less: allowance for credit losses (70,000 ) (70,000 ) Total accounts receivable $ 13,237,282 $ 14,071,543 |
Schedule of allowance for credit losses | Schedule of allowance for credit losses Allowance for Credit Losses Balance at June 30, 2022 $ 70,000 Allowance recorded during the three months ended September 30, 2022 – Balance at September 30, 2022 $ 70,000 Balance at June 30, 2023 $ 70,000 Allowance recorded during the three months ended September 30, 2023 – Balance at September 30, 2023 $ 70,000 |
Prepayments and other current_2
Prepayments and other current assets, net (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Prepayments And Other Current Assets Net | |
Schedule of prepayments and other current assets | Schedule of prepayments and other current assets September 30, 2023 June 30, 2023 Advance to suppliers $ 1,036,012 $ 1,668,173 Prepaid income taxes 41,987 45,718 Prepaid expenses and other receivables 982,628 1,393,433 Less: Allowance for credit losses (249,128 ) (249,128 ) Total $ 1,811,499 $ 2,858,196 |
Schedule of allowance for credit losses on other receivables | Schedule of allowance for credit losses on other receivables Allowance for Credit Losses Balance at June 30, 2022 $ – Allowance recorded during the three months ended September 30, 2022 – Balance at September 30, 2022 – Balance at June 30, 2023 249,128 Allowance recorded during the three months ended September 30, 2023 – Balance at September 30, 2023 $ 249,128 |
Intangible assets, net (Tables)
Intangible assets, net (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Schedule of intangible assets September 30, 2023 June 30, 2023 Covenant not to compete $ 3,459,120 $ 3,459,120 Supplier relationships 1,179,246 1,179,246 Software 534,591 534,591 Accumulated amortization (1,055,229 ) (892,886 ) Total $ 4,117,728 $ 4,280,071 |
Schedule of future amortization | Schedule of future amortization Year Ending June 30, Amount 2024 $ 487,028 2025 649,371 2026 649,371 2027 609,277 2028 468,750 Thereafter 1,253,931 Intangible assets, net $ 4,117,728 |
Other payables and accrued li_2
Other payables and accrued liabilities (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of other payables and accrued liabilities | Schedule of other payables and accrued liabilities September 30, 2023 June 30, 2023 Accrued payables for inventory in transit $ 1,310,603 $ 2,948,551 Accrued Amazon fees 1,117,136 915,319 Sales taxes payable 388,968 448,433 Payroll liabilities 193,190 222,962 Other accrued liabilities and payables 282,684 295,802 Total $ 3,292,581 $ 4,831,067 |
Loans payable (Tables)
Loans payable (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of interest expense | Schedule of interest expense 2023 2022 Accrued interest $ 133,615 $ 156,255 Credit utilization fees 15,525 6,762 Amortization of debt discount 66,305 66,305 Total $ 215,445 $ 229,322 |
Income taxes (Tables)
Income taxes (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of provision for income tax | Schedule of provision for income tax September 30, 2023 September 30, 2022 Current: Federal $ (1,705 ) $ – State 12,470 9,921 Foreign – – Total current income tax provision 10,765 9,921 Deferred: Federal (284,648 ) (169,467 ) State (66,624 ) (103,145 ) Foreign 64,625 (185,105 ) Total deferred taxes (286,647 ) (457,717 ) Total provision for income taxes $ (275,882 ) $ (447,796 ) |
Schedule of reconciliation of effective income tax rate | Schedule of reconciliation of effective income tax rate September 30, 2023 September 30, 2022 Statutory tax rate Federal 21.00% 21.00% State (net of federal benefit) 5.82% 5.85% Foreign tax rate difference (4.88% ) 3.91% Impairment loss on goodwill – permanent difference – (17.8% ) Net effect of state income tax deduction and other permanent differences (4.31% ) (3.29% ) Effective tax rate 17.63% 9.67% |
Schedule of deferred taxes | Schedule of deferred taxes September 30, 2023 June 30, 2023 Deferred tax assets 263A calculation $ 174,841 $ 239,142 Inventory reserve 178,121 149,907 State taxes 2,619 2,435 Accrued expenses 330,325 273,589 ROU assets / liabilities 114,298 115,125 Net Operation loss 2,381,758 2,173,221 Disallowed interest expense 194,172 163,381 Stock-based compensation 239,344 207,726 Valuation allowance (64,145 ) – Others 85,596 85,596 Total deferred tax assets 3,636,929 3,410,122 Deferred tax liabilities Depreciation (98,484 ) (105,323 ) Intangible assets acquired (1,106,006 ) (1,149,549 ) Total deferred tax liabilities (1,204,490 ) (1,254,872 ) Net deferred tax assets $ 2,432,439 $ 2,155,250 |
Earnings per share (Tables)
Earnings per share (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
LOSSES PER SHARE | |
Schedule of computation of basic and diluted earnings per share | Schedule of computation of basic and diluted earnings per share For the three months ended 2023 2022 Numerator: Net loss attributable to iPower Inc. $ (1,286,515 ) $ (4,182,376 ) Denominator: Weighted-average shares used in computing basic and diluted earnings per share* $ 29,764,515 $ 29,665,716 Losses per share of ordinary shares - basic and diluted $ (0.04 ) $ (0.14 ) |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of RSU activity | 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, 2023 38,793 RSUs granted 49,600 $ 43,152 RSUs forfeited – RSUs vested (12,931 ) RSUs granted, but not vested, at September 30, 2023 75,462 _____________________ (1) The total fair value was based on the current stock price on the grant date. |
Commitments and contingencies (
Commitments and contingencies (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of lease cost and other information | Schedule of lease cost and other information Lease cost 9/30/2023 9/30/2022 Operating lease cost (included in G&A in the Company's statement of operations) $ 792,826 $ 779,233 Other information Cash paid for amounts included in the measurement of lease liabilities $ 792,317 $ 769,061 Remaining term in years 0.08 – 4.67 0.83 – 5.67 Average discount rate - operating leases 5 - 8% 5 - 8% |
Schedule of supplemental balance sheet information related to leases | Schedule of supplemental balance sheet information related to leases Operating leases 9/30/2023 6/30/2023 Right of use asset - non-current $ 7,763,712 $ 7,837,345 Lease Liability – current 2,169,603 2,159,173 Lease Liability - non-current 6,023,813 6,106,047 Total operating lease liabilities $ 8,193,416 $ 8,265,220 |
Schedule of maturities of lease liabilities | Schedule of maturities of lease liabilities Operating Lease For Year ending June 30: 2024 $ 1,926,465 2025 2,313,210 2026 1,766,797 2027 1,596,275 2028 1,459,407 Less: Imputed interest/present value discount (868,738 ) Present value of lease liabilities $ 8,193,416 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of significant accounting policies (Details - Useful Lives) | Sep. 30, 2023 |
Finite-Lived Intangible Assets [Line Items] | |
Intangible asset, Useful life | 6 years 11 months 12 days |
Noncompete Agreements [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible asset, Useful life | 10 years |
Supplier Relationship [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible asset, Useful life | 6 years |
Software [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible asset, Useful life | 5 years |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of significant accounting policies (Details - Assumptions) - Anivia Purchase Note [Member] | Feb. 15, 2022 |
Corporate Bond Yield [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Fair value of financial instruments | 3.1% |
Measurement Input, Risk Free Interest Rate [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Fair value of financial instruments | 1.6% |
Liquidity Premium [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Fair value of financial instruments | 0.4% |
Measurement Input, Discount Rate [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Fair value of financial instruments | 3.5% |
Basis of Presentation and Sum_6
Basis of Presentation and Summary of significant accounting policies (Details - Fair Values of Financial Instruments) - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Platform Operator, Crypto-Asset [Line Items] | ||
Goodwill impairment loss | $ 0 | $ 3,060,034 |
Goodwill [Member] | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Goodwill impairment loss | 3,060,034 | |
Fair Value, Recurring [Member] | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Goodwill impairment loss | 3,060,034 | |
Fair Value, Inputs, Level 1, Level 2, and Level 3 [Member] | Fair Value, Recurring [Member] | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Assets | 3,034,110 | |
Fair Value, Inputs, Level 1, Level 2, and Level 3 [Member] | Fair Value, Recurring [Member] | Goodwill [Member] | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Assets | 3,034,110 | |
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Assets | 0 | |
Fair Value, Inputs, Level 1 [Member] | Fair Value, Recurring [Member] | Goodwill [Member] | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Assets | 0 | |
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Assets | 0 | |
Fair Value, Inputs, Level 2 [Member] | Fair Value, Recurring [Member] | Goodwill [Member] | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Assets | 0 | |
Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Assets | 3,034,110 | |
Fair Value, Inputs, Level 3 [Member] | Fair Value, Recurring [Member] | Goodwill [Member] | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Assets | $ 3,034,110 |
Basis of Presentation and Sum_7
Basis of Presentation and Summary of significant accounting policies (Details Narrative) | 3 Months Ended | |||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Feb. 15, 2022 USD ($) | |
Product Information [Line Items] | ||||
Goodwill impairment loss | $ 3,060,034 | |||
Goodwill | $ 3,034,110 | 3,034,110 | $ 3,034,110 | |
Advertising Expense | 1,570,742 | $ 1,166,349 | ||
CHINA | ||||
Product Information [Line Items] | ||||
Inventory gross | $ 1,400,000 | $ 1,600 | ||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Hydroponic Products [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk percentage | 16.80% | 53% | ||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | General Gardening [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk percentage | 83.20% | |||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Other Products [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk percentage | 47% | |||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Amazon Sales To Canada And Other Foreign Countries [Member] | ||||
Product Information [Line Items] | ||||
Concentration risk percentage | 8.20% | 9.80% | ||
Anivia Purchase Note [Member] | ||||
Product Information [Line Items] | ||||
Principal amount of the purchase note | $ 3,500,000 | |||
Fair value of the purchase note | $ 3,600,000 | |||
Long term debt balance | $ 1,149,961 | |||
Anivia Purchase Note [Member] | Principal Portion [Member] | ||||
Product Information [Line Items] | ||||
Long term debt balance | 875,000 | |||
Anivia Purchase Note [Member] | Premium Portion [Member] | ||||
Product Information [Line Items] | ||||
Long term debt balance | 19,023 | |||
Anivia Purchase Note [Member] | Accrued Interest [Member] | ||||
Product Information [Line Items] | ||||
Long term debt balance | $ 255,938 | |||
Box Harmony [Member] | ||||
Product Information [Line Items] | ||||
Qwnership interest | 40% | |||
China, Yuan Renminbi | ||||
Product Information [Line Items] | ||||
Translation rate | 7.2948 | |||
Translation rate during period | 7.2406 |
Joint Ventures (Details Narrati
Joint Ventures (Details Narrative) | Sep. 30, 2023 |
Box Harmony [Member] | |
Equity interest | 40% |
GPM [Member] | |
Equity interest | 60% |
Acquisition of Anivia Limited_3
Acquisition of Anivia Limited and Subsidiaries and Variable Interest Entity (Details - Acquisition allocation) - USD ($) | Feb. 15, 2022 | Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 |
Restructuring Cost and Reserve [Line Items] | ||||
Goodwill | $ 3,034,110 | $ 3,034,110 | $ 3,034,110 | |
Anivia [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Cash | $ 1,500,000 | |||
Promissory note issued | 3,600,627 | |||
Common stock issued | 5,528,373 | |||
Total purchase consideration | 10,629,000 | |||
Current assets | 1,784,113 | |||
Property and equipment | 46,548 | |||
Rent deposit | 52,707 | |||
ROU asset | 234,578 | |||
Goodwill | 6,094,144 | |||
Deferred tax liabilities | (1,389,113) | |||
Current liabilities | (1,143,076) | |||
Lease liability | (223,858) | |||
Total purchase consideration | 10,629,000 | |||
Anivia [Member] | Noncompete Agreements [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Software | 3,459,120 | |||
Anivia [Member] | Supplier Relationship [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Software | 1,179,246 | |||
Anivia [Member] | Software [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Software | $ 534,591 |
Acquisition of Anivia Limited_4
Acquisition of Anivia Limited and Subsidiaries and Variable Interest Entity (Details Narrative) - USD ($) | Feb. 15, 2022 | Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 |
Restructuring Cost and Reserve [Line Items] | ||||
Goodwill | $ 3,034,110 | $ 3,034,110 | $ 3,034,110 | |
Anivia [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Fair value of the consideration | $ 10,629,000 | |||
Additional cash | 1,500,000 | |||
Goodwill | $ 6,094,144 | |||
Anivia [Member] | Restricted Stock [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Number of shares issued for acquisition | 3,083,700 | |||
Anivia [Member] | Purchase Note [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Notes issued | $ 3,500,000 | |||
Aniva [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Goodwill | 6,100,000 | |||
General and administrative expense | 54,702 | |||
Aniva [Member] | JPM [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Payments of financing cost | $ 50,000 |
Variable interest entity (Detai
Variable interest entity (Details - Assets and Liabilities) - USD ($) | Sep. 30, 2023 | Jun. 30, 2023 | Feb. 15, 2022 |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Right of use – noncurrent | $ 7,763,712 | $ 7,837,345 | |
Deferred tax assets | 3,636,929 | 3,410,122 | |
Advance from shareholders | 84,718 | 85,200 | $ 92,246 |
Accounts payable | 12,031,323 | 13,244,957 | |
Lease liability | 8,193,416 | 8,265,220 | |
Income tax payable | 275,117 | 276,683 | |
Variable Interest Entity, Primary Beneficiary [Member] | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Cash in bank | 308,366 | 341,774 | |
Prepayments and other receivables | 421,006 | 664,886 | |
Rent deposit | 72,009 | 81,624 | |
Office equipment, net | 28,751 | 33,774 | |
Right of use – noncurrent | 573,259 | 6,104 | |
Deferred tax assets | 0 | 64,510 | |
Advance from shareholders | 84,718 | 85,200 | |
Accounts payable | 5,494 | 6,278 | |
Lease liability | 576,827 | 4,758 | |
Income tax payable | 275,117 | 276,683 | |
Other payables and accrued liabilities | $ 411,018 | $ 344,735 |
Variable interest entity (Det_2
Variable interest entity (Details - VIE Operations) - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Revenue | $ 26,508,374 | $ 26,022,673 |
Net loss after elimination of intercompany transactions | 1,286,515 | 4,182,376 |
Variable Interest Entity, Primary Beneficiary [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Revenue | 0 | 0 |
Net loss after elimination of intercompany transactions | $ (419,343) | $ 733,617 |
Variable interest entity (Det_3
Variable interest entity (Details Narrative) - Variable Interest Entity, Primary Beneficiary [Member] - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Revenue before consolidation | $ 2,100,000 | $ 3,200,000 |
Net income | $ 50,000 | $ 600,000 |
Accounts receivable, net (Detai
Accounts receivable, net (Details) - USD ($) | Sep. 30, 2023 | Jun. 30, 2023 |
Receivables [Abstract] | ||
Accounts receivable | $ 13,307,282 | $ 14,141,543 |
Less: allowance for credit losses | (70,000) | (70,000) |
Total accounts receivable | $ 13,237,282 | $ 14,071,543 |
Accounts receivable, net (Det_2
Accounts receivable, net (Details 1) - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Receivables [Abstract] | ||
Balance at June 30, 2023, Beginning balance | $ 70,000 | $ 70,000 |
Allowance recorded during the three months ended September 30, 2023 | 0 | 0 |
Balance at September 30, 2023, Ending balance | $ 70,000 | $ 70,000 |
Inventories, net (Details Narra
Inventories, net (Details Narrative) - USD ($) | 3 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | |
Inventory Disclosure [Abstract] | |||
Inventory, net | $ 15,056,623 | $ 20,593,889 | |
Inventory reserve expense | 105,192 | $ 74,998 | |
Allowance for obsolescence | $ 664,092 | $ 558,899 |
Prepayments and other current_3
Prepayments and other current assets, net (Details) - USD ($) | Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2022 |
Prepayments and other current assets | $ 1,811,499 | $ 2,858,196 | ||
Less: Allowance for credit losses | (249,128) | (249,128) | $ 0 | $ 0 |
Advance To Suppliers [Member] | ||||
Prepayments and other current assets | 1,036,012 | 1,668,173 | ||
Prepaid Income Taxes [Member] | ||||
Prepayments and other current assets | 41,987 | 45,718 | ||
Prepaid Expenses And Other Receivables [Member] | ||||
Prepayments and other current assets | $ 982,628 | $ 1,393,433 |
Prepayments and other current_4
Prepayments and other current assets, net (Details - Credit losses) - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Prepayments And Other Current Assets Net | ||
Beginning balance | $ 249,128 | $ 0 |
Allowance recorded during the three months ended | 0 | 0 |
Ending balance | $ 249,128 | $ 0 |
Prepayments and other current_5
Prepayments and other current assets, net (Details Narrative) - USD ($) | Sep. 30, 2023 | Jun. 30, 2023 |
Prepayments And Other Current Assets Net | ||
Delivery fees receivable | $ 58,954 | $ 165,962 |
Non-current prepayments (Detail
Non-current prepayments (Details Narrative) - USD ($) | 3 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | |
Offsetting Assets [Line Items] | |||
Non-current prepayments | $ 461,034 | $ 531,456 | |
Amortization expenses | 70,422 | $ 107,917 | |
Product Sourcing [Member] | |||
Offsetting Assets [Line Items] | |||
Non-current prepayments | 420,411 | ||
Car Payment [Member] | |||
Offsetting Assets [Line Items] | |||
Non-current prepayments | $ 40,623 |
Intangible assets, net (Details
Intangible assets, net (Details - Schedule of intangible assets) - USD ($) | Sep. 30, 2023 | Jun. 30, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated amortization | $ (1,055,229) | $ (892,886) |
Intangible assets, net | 4,117,728 | 4,280,071 |
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 3,459,120 | 3,459,120 |
Supplier Relationship [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 1,179,246 | 1,179,246 |
Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 534,591 | $ 534,591 |
Intangible assets, net (Detail
Intangible assets, net (Details - Future Amortization) - USD ($) | Sep. 30, 2023 | Jun. 30, 2023 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 | $ 487,028 | |
2025 | 649,371 | |
2026 | 649,371 | |
2027 | 609,277 | |
2028 | 468,750 | |
Thereafter | 1,253,931 | |
Intangible assets, net | $ 4,117,728 | $ 4,280,071 |
Intangible assets, net (Detai_2
Intangible assets, net (Details Narrative) - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Weighted average remaining life for finite-lived intangible assets | 6 years 11 months 12 days | |
Amortization expense | $ 162,343 | $ 162,343 |
Other payables and accrued li_3
Other payables and accrued liabilities (Details) - USD ($) | Sep. 30, 2023 | Jun. 30, 2023 |
Payables and Accruals [Abstract] | ||
Accrued payables for inventory in transit | $ 1,310,603 | $ 2,948,551 |
Accrued Amazon fees | 1,117,136 | 915,319 |
Sales taxes payable | 388,968 | 448,433 |
Payroll liabilities | 193,190 | 222,962 |
Other accrued liabilities and payables | 282,684 | 295,802 |
Total | $ 3,292,581 | $ 4,831,067 |
Other payables and accrued li_4
Other payables and accrued liabilities (Details Narrative) - One Vendor [Member] - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Purchase amount | $ 0 | $ 31,385 |
Other accounts payable | $ 0 | $ 0 |
Loans payable (Details - Intere
Loans payable (Details - Interest expense) - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Debt Disclosure [Abstract] | ||
Accrued interest | $ 133,615 | $ 156,255 |
Credit utilization fees | 15,525 | 6,762 |
Amortization of debt discount | 66,305 | 66,305 |
Total | $ 215,445 | $ 229,322 |
Loans payable (Details Narrativ
Loans payable (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||||||||
Jul. 31, 2023 | Nov. 12, 2021 | Aug. 31, 2023 | Feb. 28, 2023 | Oct. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Jul. 16, 2023 | Jun. 30, 2023 | Feb. 15, 2022 | |
Line of Credit Facility [Line Items] | ||||||||||
Amortization of Debt Discount (Premium) | $ 53,726 | $ 53,623 | ||||||||
White Cherry Limited [Member] | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Interest Expense, Debt | 6,060 | |||||||||
Debt borrowed | $ 2,000,000 | |||||||||
Debt repaid | $ 1,000,000 | |||||||||
Outstanding balance of the On-demand Loan | 1,006,060 | |||||||||
Anivia Purchase Note [Member] | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Debt Instrument, Face Amount | $ 3,500,000 | |||||||||
Debt Instrument, Fair Value Disclosure | $ 3,600,000 | |||||||||
Repayments of Debt | $ 875,000 | $ 875,000 | $ 875,000 | |||||||
Interest Expense, Debt | 19,688 | 52,500 | ||||||||
Amortization of Debt Discount (Premium) | 12,579 | $ 12,682 | ||||||||
Interest Payable, Current | 255,938 | |||||||||
Debt Instrument, Unamortized Premium | 19,023 | |||||||||
Notes Payable, Noncurrent | 1,149,961 | |||||||||
Long-Term Debt, Current Maturities | 1,149,961 | |||||||||
Long-Term Debt, Excluding Current Maturities | 0 | |||||||||
Note payable balance | $ 2,017,852 | |||||||||
Note payable - current | 2,017,852 | |||||||||
Note payable - noncurrent | 0 | |||||||||
Debt borrowed | 1,149,961 | |||||||||
Anivia Purchase Note [Member] | Accrued Interest [Member] | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Note payable balance | 236,250 | |||||||||
Debt borrowed | 255,938 | |||||||||
Anivia Purchase Note [Member] | Unamortized Premium [Member] | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Note payable balance | 31,602 | |||||||||
Asset-based Revolving Loan [Member] | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Maturity date | Nov. 12, 2024 | |||||||||
Payments of financing cost | $ 796,035 | |||||||||
Interest payable | $ 4,808,322 | $ 9,791,191 |
Related party transactions (Det
Related party transactions (Details Narrative) - USD ($) | 3 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | Feb. 15, 2022 | |
Related Party Transaction [Line Items] | ||||
Sublease fee | $ 0 | $ 247,500 | ||
Advance from shareholders | 84,718 | $ 85,200 | $ 92,246 | |
Box Harmony [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other receivable | $ 0 | $ 0 |
Income taxes (Details)
Income taxes (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Current: | ||
Federal | $ (1,705) | $ 0 |
State | 12,470 | 9,921 |
Foreign | 0 | 0 |
Total current income tax provision | 10,765 | 9,921 |
Deferred: | ||
Federal | (284,648) | (169,467) |
State | (66,624) | (103,145) |
Foreign | 64,625 | (185,105) |
Total deferred taxes | (286,647) | (457,717) |
Total provision for income taxes | $ (275,882) | $ (447,796) |
Income taxes (Details - Reconci
Income taxes (Details - Reconcilation of effective income tax rate) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||
Federal | 21% | 21% |
State (net of federal benefit) | 5.82% | 5.85% |
Foreign tax rate difference | (4.88%) | 3.91% |
Impairment loss on goodwill – permanent difference | 0% | (17.80%) |
Net effect of state income tax deduction and other permanent differences | (4.31%) | (3.29%) |
Effective tax rate | 17.63% | 9.67% |
Income taxes (Details - Deferre
Income taxes (Details - Deferred taxes) - USD ($) | Sep. 30, 2023 | Jun. 30, 2023 |
Deferred tax assets | ||
263A calculation | $ 174,841 | $ 239,142 |
Inventory reserve | 178,121 | 149,907 |
State taxes | 2,619 | 2,435 |
Accrued expenses | 330,325 | 273,589 |
ROU assets / liabilities | 114,298 | 115,125 |
Net Operation loss | 2,381,758 | 2,173,221 |
Disallowed interest expense | 194,172 | 163,381 |
Stock-based compensation | 239,344 | 207,726 |
Valuation allowance | (64,145) | 0 |
Others | 85,596 | 85,596 |
Total deferred tax assets | 3,636,929 | 3,410,122 |
Deferred tax liabilities | ||
Depreciation | (98,484) | (105,323) |
Intangible assets acquired | (1,106,006) | (1,149,549) |
Total deferred tax liabilities | (1,204,490) | (1,254,872) |
Net deferred tax assets | $ 2,432,439 | $ 2,155,250 |
Income taxes (Details Narrative
Income taxes (Details Narrative) - USD ($) | Sep. 30, 2023 | Jun. 30, 2023 |
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance | $ 64,145 | $ 0 |
U S Tax Authorities [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Prepaid taxes | 41,987 | 45,718 |
Chinese Tax Authorities [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Prepaid taxes | $ 275,117 | $ 276,683 |
Earnings per share (Details)
Earnings per share (Details) - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
LOSSES PER SHARE | ||
Net loss attributable to iPower Inc. | $ (1,286,515) | $ (4,182,376) |
Weighted-average shares used in computing basic earnings per share | 29,764,515 | 29,665,716 |
Weighted-average shares used in computing diluted earnings per share | 29,764,515 | 29,665,716 |
Losses per share of ordinary shares, Basic | $ (0.04) | $ (0.14) |
Losses per share of ordinary shares, Diluted | $ (0.04) | $ (0.14) |
Earnings per share (Details Nar
Earnings per share (Details Narrative) - shares | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
LOSSES PER SHARE | ||
Unissued shares of restricted stock units | 66,366 | 166,176 |
Equity (Details)
Equity (Details) - Restricted Stock Units (RSUs) [Member] | 3 Months Ended | |
Sep. 30, 2023 USD ($) shares | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
RSUs granted but not vested, Beginning balance | 38,793 | |
RSUs granted | 49,600 | |
Total fair market value of RSUs issued as compensation, RSUs granted but not vested | $ | $ 43,152 | [1] |
RSUs forfeited | 0 | |
RSUs vested | (12,931) | |
RSUs granted but not vested, Ending balance | 75,462 | |
[1]The total fair value was based on the current stock price on the grant date. |
Equity (Details Narrative)
Equity (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||||
May 12, 2022 | Feb. 15, 2022 | May 11, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | May 13, 2022 | |
Class of Stock [Line Items] | |||||||
Common stock, shares authorized | 180,000,000 | 180,000,000 | |||||
Preferred stock shares authorized | 20,000,000 | 20,000,000 | |||||
preferred stock, par value | $ 0.001 | $ 0.001 | |||||
Common stock, par value | $ 0.001 | $ 0.001 | |||||
Common stock, shares issued | 29,710,939 | 29,710,939 | |||||
Common stock, shares outstanding | 29,710,939 | 29,710,939 | |||||
Preferred stock shares issued | 0 | 0 | |||||
Preferred stock shares outstanding | 0 | 0 | |||||
Stock-based compensation expense | $ 117,882 | $ 137,882 | |||||
Unamortized expense | $ 58,152 | $ 22,500 | |||||
Cash performance bonus | $ 60,000 | ||||||
Exercise price | $ 1.12 | ||||||
Share price | $ 1.12 | ||||||
Volatility | 95.65% | ||||||
Term | 10 years | ||||||
Risk free rate of return | 2.93% | ||||||
Dividend yield | 0% | ||||||
Options vested | 0 | ||||||
Chenlong Tan [Member] | |||||||
Class of Stock [Line Items] | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Net of Forfeitures | 3,000,000 | ||||||
Mr Vassily [Member] | |||||||
Class of Stock [Line Items] | |||||||
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Net of Forfeitures | 330,000 | ||||||
Equity Incentive Plan [Member] | |||||||
Class of Stock [Line Items] | |||||||
Number of shares authorized | 5,000,000 | ||||||
Common Stock [Member] | |||||||
Class of Stock [Line Items] | |||||||
Stock issued for RSU's vested | 178,576 | ||||||
Stock to be issued for RSU's vested | 66,366 | ||||||
Anivia [Member] | Restricted Stock [Member] | |||||||
Class of Stock [Line Items] | |||||||
Number of shares issued for acquisition | 3,083,700 | ||||||
Restricted shares per share | $ 2.27 | ||||||
Number of shares issued for acquisition, value | $ 5,528,373 | ||||||
Stock Issued For Vested R S Us [Member] | |||||||
Class of Stock [Line Items] | |||||||
Number of restricted shares | 138,557 | ||||||
Restricted Stock Units (RSUs) [Member] | |||||||
Class of Stock [Line Items] | |||||||
Number of restricted shares | 49,600 | ||||||
Stock-based compensation expense | $ 7,500 | $ 27,500 | |||||
Number of restricted shares, forfeited | 0 | 0 | |||||
Unvested RSUs | 75,462 | 38,793 | |||||
Conversion of RSUs vested, shares | 244,942 | ||||||
Restricted Stock Units (RSUs) [Member] | Various Parties [Member] | |||||||
Class of Stock [Line Items] | |||||||
Number of restricted shares | 46,546 | ||||||
Options Granted [Member] | |||||||
Class of Stock [Line Items] | |||||||
Stock-based compensation expense | $ 110,382 | $ 110,382 |
Warrants (Details Narrative)
Warrants (Details Narrative) - $ / shares | Sep. 30, 2023 | Jun. 30, 2023 |
Warrants | ||
Warrants outstanding | 685,715 | 685,715 |
Average exercise price | $ 5 | $ 5 |
Concentration of risk (Details
Concentration of risk (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | |
Concentration Risk [Line Items] | |||
Cash and cash equivalents | $ 2,729,161 | $ 3,735,642 | |
Cash, uninsured amount | $ 1,100,000 | $ 2,700,000 | |
Total Purchases [Member] | Product Concentration Risk [Member] | One Supplier [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 15% | 19% | |
Accounts Payable [Member] | Product Concentration Risk [Member] | One Supplier [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 50% | 49% | |
Amazon Vendor And Amazon Seller [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 91% | 91% | |
Amazon Vendor And Amazon Seller [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 93% | 95% |
Commitments and contingencies_2
Commitments and contingencies (Details - Lease cost) - USD ($) | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease cost | $ 792,826 | $ 779,233 |
Cash paid for amounts included in the measurement of lease liabilities | $ 792,317 | $ 769,061 |
Remaining lease term in years | 0.08 – 4.67 | 0.83 – 5.67 |
Average discount rate - operating leases | 5 - 8% | 5 - 8% |
Commitments and contingencies_3
Commitments and contingencies (Details - Balance Sheet) - USD ($) | Sep. 30, 2023 | Jun. 30, 2023 |
Commitments and Contingencies Disclosure [Abstract] | ||
Right of use asset - non-current | $ 7,763,712 | $ 7,837,345 |
Lease Liability – current | 2,169,603 | 2,159,173 |
Lease Liability - non-current | 6,023,813 | 6,106,047 |
Total operating lease liabilities | $ 8,193,416 | $ 8,265,220 |
Commitments and contingencies_4
Commitments and contingencies (Details - Lease maturity) - USD ($) | Sep. 30, 2023 | Jun. 30, 2023 |
Commitments and Contingencies Disclosure [Abstract] | ||
2024 | $ 1,926,465 | |
2025 | 2,313,210 | |
2026 | 1,766,797 | |
2027 | 1,596,275 | |
2028 | 1,459,407 | |
Less: Imputed interest/present value discount | (868,738) | |
Present value of lease liabilities | $ 8,193,416 | $ 8,265,220 |
Commitments and contingencies_5
Commitments and contingencies (Details Narrative) - USD ($) | Sep. 30, 2023 | Jun. 30, 2023 |
Commitments and Contingencies Disclosure [Abstract] | ||
Contractual Obligation | $ 12,649,053 | |
Right of use - non-current | 7,763,712 | $ 7,837,345 |
Operating Lease, Liability | $ 8,193,416 | $ 8,265,220 |