| Basis of Presentation and Summary of significant accounting policies | Note 2 – Basis of Presentation and Summary
of significant accounting policies Basis of presentation The accompanying financial statements have been
prepared in accordance with the generally accepted accounting principles in the United States of America (“U.S. GAAP”) and
pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). The Company’s fiscal year end date
is June 30. Principles of Consolidation The 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. Prior Period Reclassification Certain prior year amounts in the consolidated
balance sheets and statements of cash flows have been reclassified to conform to the current year presentation, including reclassifications
made in the presentation of non-current assets, current liabilities, and cash flows from operating activities. These reclassifications
had no impact on the prior year net loss or stockholders’ equity. 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 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 June 30, 2024, were translated at 7.2673 7.2103 Cash and cash equivalents Cash and cash equivalents consist of amounts held
as cash on hand and financial institution and financial service company deposits. From time to time, the Company may maintain bank
balances in interest bearing accounts in excess of the $250,000, which is currently the maximum amount insured by the FDIC for interest
bearing accounts (there is currently no insurance limit for deposits in noninterest bearing accounts). The Company has not experienced
any losses with respect to cash. 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; and
· 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 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 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 June 30, 2024, the Company
performed a qualitative and quantitative goodwill impairment analysis following the steps laid out in ASC 350-20-35-3C and noted no goodwill
impairment. As of June 30, 2024 and 2023, the goodwill balance amounted to $ 3,034,110 3,034,110 Intangible Assets, net Finite life intangible assets at June 30, 2024
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 follows:
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 the 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 June 30, 2024 and 2023, 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. 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 fair value of financial assets and liabilities
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 service and
product sales, net of promotional discounts and return allowances, when the following revenue recognition criteria are met: a contract
has been identified, separate performance obligations are identified, the transaction price is determined, the transaction price is allocated
to separate performance obligations and revenue is recognized upon satisfying each performance obligation. The Company transfers the risk
of loss or damage upon shipment or completion of service, therefore, revenue from product sales is recognized when it is shipped to the
customer and the revenue from services is recognized upon completion of services. For the years ended June 30, 2024 and 2023, the revenues
from services were immaterial. Return allowances, which reduce product revenue by the Company’s best estimate of expected product
returns, are estimated using historical experience. The Company evaluates the criteria of ASC 606
- Revenue Recognition Principal Agent Considerations in determining whether it is appropriate to record the gross amount of product sales
and related costs or the net amount earned as commissions. Generally, when the Company is primarily responsible for fulfilling the promise
to provide a specified good or service and the Company has discretion in establishing the price, revenue is recorded at gross. Payments received prior to the delivery of goods to customers are recorded
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 years ended June 30, 2024 and 2023 were $ 4,271,311 5,331,152 Cost of revenue Cost of revenue mainly consists of costs for purchases
of products, net of purchase discounts and rebates, and related inbound freight and delivery fees. Operating expenses Operating expenses, which consist of selling and fulfillment and general
and administrative expenses, are expensed as incurred. Vendor warranty credits resulting from refund of returns on quality issues are
recorded to offset merchant selling fees. During the years ended June 30, 2024 and 2023, the Company recorded vendor credit of $ 2.48 million 0 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 consolidated balance sheets as direct deductions from the carrying amount
of the outstanding borrowings. Equity offering costs The Company capitalizes certain legal, accounting
and other third-party fees that are directly related to an equity financing that is probable of successful completion until such financing
is consummated. After consummation of an equity financing, these costs are recorded as a reduction of the proceeds received as a result
of the offering. Should a planned equity financing be abandoned, terminated or significantly delayed, the deferred offering costs are
immediately written off to operating expenses in the consolidated statements of operations and comprehensive income (loss) in the period
of determination. For the years ended June 30, 2024 and 2023, $ 1,756,913 0 0 0 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 years ended June
30, 2024 and 2023, sales through Amazon to Canada and other foreign countries were approximately 9.2 10 22 78 23 77 1.9 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 cost 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 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 cost
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 December 2023, The FASB issued ASU 2023-09,
Improvements to Income Tax Disclosures. Under this ASU, public business entities must annually “(1) disclose specific categories
in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect
of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income [or loss] by the
applicable statutory income tax rate).” This ASU’s amendments are effective for public business entities for annual periods
beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning
after December 15, 2025. Entities are permitted to early adopt the standard “for annual financial statements that have not yet been
issued or made available for issuance.” The amendments should be applied on a prospective basis. Retrospective application is permitted.
The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. In November 2023, The FASB issued ASU 2023-07,
Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments apply to all public entities that are required
to report segment information in accordance with Topic 280, Segment Reporting. The amendments in this ASU are intended to improve reportable
segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The key amendments: 1. Require
that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating
decision maker (CODM) and included within each reported measure of segment profit or loss. 2. Require that a public entity disclose, on
an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition. The other segment
items category is the difference between segment revenue less the significant expenses disclosed and each reported measure of segment
profit or loss. 3. Require that a public entity provide all annual disclosures about a reportable segment’s profit or loss and assets
currently required by FASB Accounting Standards Codification® Topic 280, Segment Reporting, in interim periods. 4. Clarify that if
the CODM uses more than one measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate
resources, a public entity may report one or more of those additional measures of segment profit. However, at least one of the reported
segment profit or loss measures (or the single reported measure, if only one is disclosed) should be the measure that is most consistent
with the measurement principles used in measuring the corresponding amounts in the public entity’s consolidated financial statements.
5. Require that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s)
of segment profit or loss in assessing segment performance and deciding how to allocate resources. 6. Require that a public entity that
has a single reportable segment provide all the disclosures required by the amendments in the ASU and all existing segment disclosures
in Topic 280. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning
after December 15, 2024. Early adoption is permitted. A public entity should apply the amendments retrospectively to all prior periods
presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should
be based on the significant segment expense categories identified and disclosed in the period of adoption. The Company does not expect
the adoption of this standard to have a material impact on its consolidated financial statements. 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 impac |
