iPower Inc. Form 10-K

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 2024-09-20

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 UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

 FORM 10-K

 (Mark One)

 annual Report UNDER Section 13 or 15(d) of the Securities Exchange Act of 1934

 For the Fiscal Year June 30, 2024

 OR

 Transition Report UNDER Section 13 or 15(d) of the Securities Exchange Act of 1934

 For the transition period from ______________ to
______________

 Commission file number: 001-40391

 iPower Inc.

 (Exact name of registrant as specified in its charter)

 Nevada

 82-5144171

 (State or other jurisdiction of

 (I.R.S. Employer

 incorporation or organization)

 Identification Number)

 8798 9th Street

 Rancho Cucamonga, CA 91730

 (Address of principal executive offices) (Zip Code)

 ( 626) 863-7344

 Registrant's telephone number, including
area code

 Securities registered pursuant to Section 12(b) of the Act:

 Title of each class

 Trading Symbol(s)

 Name of each exchange on which registered

 Common Stock

 IPW

 The Nasdaq Stock Market LLC

 Securities registered pursuant to section 12(g)
of the Act: NONE

 Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

 Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes No

has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such fi les). Yes No

is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company,"
and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large accelerated filer

 Accelerated filer

 Non-accelerated filer

 Smaller reporting company

 Emerging growth company

 If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.

has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report.

 If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements.

 Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's
executive officers during the relevant recovery period pursuant to §240.10D-1(b).

is a shell company (as defined in Rule 12b-2 of the Act) Yes No

 On December 30, 2022, the last business day of
the registrant's most recently completed second fiscal quarter, the aggregate market value of the voting and non-voting common equity
held by non-affiliates was $ 3,953,680 based on the closing sale price of the registrant's common stock on such date as reported
on The Nasdaq Capital Market.

 The number of shares outstanding of the registrant's
common stock on September 20, 2024 was 31,425,290.

 iPOWER INC.

 Page

 Item 1.

 Business

 Item 1A.

 Risk Factors

 Item 1B.

 Unresolved Staff Comments

 Item 1C.

 Cybersecurity

 Item 2.

 Properties

 Item 3.

 Legal Proceedings

 Item 4.

 Mine Safety Disclosures

 Item 5.

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item 6.

 [Reserved]

 Item 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item 7A.

 Quantitative and Qualitative Disclosures About Market Risk

 Item 8.

 Financial Statements and Supplementary Data

 Item 9.

 Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

 Item 9A.

 Controls and Procedures

 Item 9B.

 Other Information

 Item 9C.

 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Item 10.

 Directors, Executive Officers and Corporate Governance

 Item 11.

 Executive Compensation

 Item 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13.

 Certain Relationship and Related Transactions, and Director Independence

 Item 14.

 Principal Accounting Fees and Services

 Item 15.

 Exhibit and Financial Statement Schedules

 Item 16.

 Form 10–K Summary

 SIGNATURES

 i

 FORWARD LOOKING STATEMENTS

 This Annual Report on Form
10-K (including the section regarding Management's Discussion and Analysis and Results of Operations, the "Annual Report")
contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act,
and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements are based on our management's
belief and assumptions and on information currently available to our management. Although we believe that the expectations reflected in
these forward-looking statements are reasonable, these statements relate to future events or our future financial performance, and involve
known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements
to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking

 Forward-looking statements
include statements concerning the following:

 our inability to predict or anticipate the occurrence and duration of any economic and business consequences that may be caused by any epidemic, including the ongoing COVID-19 pandemic;

 our inability to predict or anticipate the duration or long-term economic effect of the ongoing conflict between Ukraine and Russia and any potential supply chain issues that may result;

 our limited operating history;

 our future results of operations;

 our current and future capital requirements necessary to support our efforts to open or acquire new complimentary businesses and channels of trade;

 our cash needs and financial plans;

 our competitive position;

 seasonality and how it may impact consumer behavior and resulting sales;

 our dependence on consumer interest in growing crops with the equipment and other products that we offer;

 evolving laws surrounding cannabis on a local, state, and federal level;

 the effectiveness of our internal controls;

 our dependence on third parties to manufacture and sell us inventory;

 our ability to maintain or protect our intellectual property;

 our ability to innovate and develop new intellectual property to continue enhancing our product and service offerings;

 our ability to protect our systems from unauthorized intrusions or theft of proprietary information;

 our ability to retain key members of our executive team;

 our ability to maintain our relationships with third-party vendors and suppliers;

 our ability to internally develop products and intellectual property;

 our ability to achieve expected technological advances by us or by third parties and our ability to leverage such advances;

 our potential growth opportunities;

 interpretations of current laws and the passage of future laws;

 acceptance of our business model by investors;

 the accuracy of our estimates regarding expenses and capital requirements;

 our ability to sell additional products and services to customers;

 our ability to adequately support growth;

 our ability to ensure consistency in the quality of our products and the quality and costs of our supply chain, including management of freight costs;

 any disruption to third party sales platforms, including Amazon.com, Walmart and eBay, through which we derive approximately 99% of our current revenues; and

 potential disruption of our business and supply chain as a result of any conflicts or trade wars between China and the U.S., as well as increased tariffs on the products which we import.

 ii

 In some cases, you can identify
forward-looking statements by terminology such as "may," "will," "should," "expects,"
"intends," "plans," "anticipates," "believes," "estimates," "predicts,"
"potential," "continue" or the negative of these terms or other comparable terminology. These statements are only
predictions. You should not place undue reliance on forward-looking statements, because they involve known and unknown risks, uncertainties,
and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual
results to differ materially from current expectations include, among other things, those listed in the reports we file with the Securities
and Exchange Commission, or the SEC. Actual events or results may vary significantly from those implied or projected by the forward-looking
statements due to these risk factors. No forward-looking statement is a guarantee of future performance. You should read this Annual Report,
the documents that we reference in this Annual Report and the documentation we have filed as exhibits thereto with the SEC, with the understanding
that our actual future results and circumstances may be materially different from what we expect.

 Forward-looking statements
are made based on management's beliefs, estimates, and opinions on the date the statements are made, and we undertake no obligation
to update forward-looking statements if these beliefs, estimates, and opinions or other circumstances should change, except as may be
required by applicable law. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot
guarantee future results, levels of activity, performance, or achievements.

 Unless the context otherwise
requires, the terms "the Company," "we," "us," and/or "our" in this Annual Report refer
to iPower Inc.

 iii

 ITEM 1. DESCRIPTION OF BUSINESS

 Our Business

 iPower Inc. (formerly BZRTH, Inc.),
a California-based corporation, was formed in Nevada in April 2018 ("iPower," "we," or "us"). Driven
by tech and data, iPower is an online retailer and supplier of consumer home, pet, garden products, outdoor and consumer electronics,
as well as a provider of value-added ecommerce services for third-party products and brands. iPower's capabilities include a full spectrum
of online channels, robust fulfillment capacity, a network of warehouses serving the U.S., competitive last mile delivery partners and
a differentiated business intelligence platform. With these capabilities, iPower efficiently moves a diverse catalog of SKUs from its
supply chain partners to end consumers every day, providing the best value to customers in the U.S. and other countries. Our sales channels
currently include Amazon Vendor, Amazon 3P, Walmart.com, Tiktok, Temu, and other market places as well as our e-commerce websites such
as simpledeluxe.com and more, We are expanding our categories through product development, our SuperSuite supply chain partner and future
acquisitions. We anticipate continuing to expand our reach across the United States and internationally through organic growth. iPower
has developed a set of methodologies driven by proprietary data formulas to effectively bring products to market and increase sales.

 We are actively developing
in-house branded products and through supply chain partners, which to date include iPower, Simple Deluxe and other
brands and consist of products such as home goods, fans, pet products, outdoor, gardening and consumer electronics, some of which have
been designated as Amazon Choice products and category best sellers, among others. For the fiscal year ended June 30, 2024, our top five
product categories accounted for 68% of total sales. While we continue to focus on our top product categories, we are working to expand
our product catalog to include new and adjacent categories through in-house products and our supply chain partners driven by market data
analytics.

 Products

 iPower offers essential products
in the home, pet, outdoor, gardening, and consumer electronics categories. The Company has established its own in-house branded products
as well as third-party brands from supply chain partners which are made available for purchase through our various sales channels. These
products range from hydroponic-related items, fans, shelving, pet supplies, outdoor lifestyle products and consumer electronics, some
of which have been designated as Amazon best seller product leaders, and for which numerous products have been designated "Amazon's
Choice" and "#1 Best Seller." This year, we expanded our in-house catalog to include more general home goods products,
with home goods making up our largest meta category.

 Our Industry is Large and Rapidly Growing

 Our principal industry opportunity
is in the retail sale and distribution of consumer goods. Our primary subcategories include consumer home, pet, hydroponics and
gardening products, outdoor and consumer electronics. Hydroponics supplies generally include grow light systems; advanced heating, ventilation
and air conditioning ("HVAC") systems; water pumps, heaters, chillers and filters; nutrient and fertilizer delivery systems;
and various growing media typically made from soil, rock wool or coconut fiber, among others. General gardening supplies generally include
environmental sensors and controls and nutrients among others. Home goods supplies currently include commercial fans, floor and wall fans,
storage and shelving units, and chairs among others.

 The home goods industry has
become a significant category we sell into. Grandview Research estimated that the size of the home goods market in the US was $740 billion
in 2020 and should reach close to $1,037 billion by 2025, with a CAGR of 6. 6 %.

 Research and Development

 The Company has not incurred
any significant research and development ("R&D") expenses during the fiscal year ended June 30, 2024. We do most of our
development work in conjunction with our supply chain partners and our manufacturing partners, where we co-engineer designs with their
development teams. We plan to increase our investments in R&D relating to the improvement of existing products and the development
and addition of new product lines.

 Customers and Suppliers

 We have a diverse customer
base, with residential gardeners and home goods consumers constituting a significant portion of our customer base and thus the largest
portion of our total sales. We sell to both commercial and home cultivators growing specialty crops, as well as in the home goods category.
At present, sales to customers through Amazon and other third-party online platforms accounts for almost all of our annual sales.

 We do not manufacture any of the
products we sell through our distribution channels. We purchase our products from many different suppliers, including manufacturers and
distributors in the U.S. and Southeast Asia. For the years ended June 30, 2024 and 2023, one supplier accounted for 10% and 27% of the
Company's total purchases, respectively. We do not have any long-term supply agreements.

 Manufacturers

 We obtain both our branded
proprietary products and distributed products from third party suppliers. Our products are sourced from well diversified suppliers and
manufacturers, with approximately 90% sourced from China. Quality control is a critical priority for our team charged with ensuring the
supply of the products from our suppliers, specifically those coming from China. We seek to ensure the highest level of quality control
for our products through routine factory visits, spot testing and continual, ongoing supplier due diligence.

 For distributed products
that are sourced from third-party suppliers, our experienced internal sourcing team is charged with maintaining strong relationships
with current suppliers, while also constantly tracking current and future market trends and reviewing offerings of new
suppliers.

 We do not have exclusive purchase
agreements with many of our suppliers. Based on our knowledge and communication with our suppliers, we believe some of our suppliers may
sell directly to the retail market or to our wholesale customers.

 Demand for Products

 We believe that demand for
iPower's products is strong for several reasons. Consumer interest in hydroponics for in home gardening as a hobby and lifestyle
choice surged in interest during the Covid-19 pandemic and the current employer work-from-home policies have allowed consumers to continue
to expand upon their interests in at home gardening. Our non-hydroponics product lines are also seeing strong demand as the categories
we participate in are primarily in large markets with a fragmented supply base. We also believe that our expertise in product development
and supply chain management has created a catalog well suited to gaining market share in these categories. In addition, our relationship
with our largest channel partner, Amazon, has also led to a strong demand environment. Working as a supplier on Amazon's Vendor
Central platform, we are confident that we have demonstrated our ability to supply products that consumers want, in sufficient volumes,
enabling us to meet the stringent operating metrics required by Amazon. We believe these has allowed us to gain share from other suppliers
in our various channels.

 E-Commerce Strategy

 The Company continues to grow
and develop its e-commerce platforms, including simpledeluxe.com and more, where we sell our in house and third party products. In addition
to our websites, we offer products to consumers through established e-commerce channels such as Amazon, eBay, Tiktok, Temu and Walmart.
Through these portals we offer various consumer products for sale. Online shoppers can have the ability to peruse our various product
categories such as gardening equipment, home fans and furnishing, shelving, outdoor lifestyle products, and pet products, providing consumers
with an easy and quick method to find the exact products they need. In addition to these sections, our webstores offer customers periodic
flash deals, best value recommendations and clearance sale items. Each product listed on the site contains product descriptions, product
reviews and a picture so the consumer can make an informed and educated purchase. Our product filters allow the consumer to search by
brand, manufacturer, or by price. Consumers can shop online day and night and have their purchases shipped directly to the location of
their choice, or simply elect to use our website as a resource. Google advertising, social media advertising and email list marketing,
in addition to auto-ship functionality, are the primary mechanisms we employ to drive traffic to our e-commerce platforms and the other
portals through which we make our products available for sale, including Amazon.com, Tiktok, Temu, eBay and Walmart. At present, more
than 90% of our total sales occur through Amazon.com.

 Large Established Distribution Infrastructure

 We have worked to develop
a highly developed distribution network through our distribution centers in California as well as partner fulfillment centers across the
United States. We work with a network of third-party common carrier trucking/freight companies that service our customers throughout the
U.S., Canada and across the globe. We receive daily customer orders via our business-to-business e-commerce platform. Orders are then
routed to the applicable distribution center and packed for shipments. Most of our customer orders are shipped within one business day
of order receipt.

 Competition

 The markets in which we sell
our products are highly competitive and fragmented. Our key competitors include many local and national vendors of home and gardening
supplies, local product resellers of hydroponic and other specialty growing equipment, as well as other online product resellers on large
online marketplaces such as Amazon.com and Walmart.com. We compete with companies that have greater capital resources, facilities, and
diversity of product lines. Our competitors could also introduce products and as manufacturers are able to sell equipment directly to
consumers, our distributors could cease selling products to us.

 Notwithstanding the foregoing,
we believe that our pricing, inventory and product availability, and overall customer service provide us with the ability to compete in
this marketplace. We believe that we have the following core competitive advantages over our competitors:

 In addition to our in-house branded products, we distribute products from third-party brands, ensuring that whatever a customer's particular need may be, they need look no further than iPower for their product needs.

 Our knowledgeable and experienced sales team can provide guidance and insights, whether dealing with a seasoned commercial entity or a first-time purchaser looking to get their grow operations off the ground.

 The convenience of our e-commerce platform allows customers to shop from the comfort of their own home and have their purchases shipped directly to them.

 We believe that our prominent position as a supplier to Amazon means that our products are prominently featured on the world's most important retailer

 We view ourselves as an industry leader, offering products and new technologies from the largest and most trusted names in the business, as well as our own in-house branded products.

 Moreover, we expect that as
we continue to grow our business, we will achieve an economy of scale and, as such, will be able to further optimize and expand supply
chains, which will enable us to continue to maintain competitive pricing options and deliver the array of items that our customers require.
Through supply chain and industry competency, support services, and through our relationships with suppliers, distributors, vendors, and
logistics partners, we believe we can maintain and increase our growth trajectory.

 Intellectual Property and Proprietary Rights

 Our intellectual property
primarily consists of our brands and their related trademarks, domain names, websites, customer lists and affiliations, as well as our
marketing intangibles, product know-how and technology. We also hold rights to website addresses related to our business, including websites
that are actively used in our daily business operations, such as Zenhydro.com and simpledeluxe.com. We own federally registered trademarks
for "iPower" and "Simple Deluxe," which correspond to our current in-house branded products.

 Government Regulation

 We sell products, including
hydroponic gardening products, that end users may purchase for use in new and emerging industries or segments, including the growing of
cannabis and hemp, that may not grow or achieve market acceptance in a manner that we can predict. The demand for these products depends
on the uncertain growth of these industries or segments.

 In addition, we sell products
that end users may purchase for use in industries or segments, including the growing of cannabis and hemp, that are subject to varying,
inconsistent, and rapidly changing laws, regulations, administrative practices, enforcement approaches, judicial interpretations, and
consumer perceptions. For example, certain countries and a total of 46 U.S. states plus the District of Columbia have adopted frameworks,
in varying forms, that authorize, regulate, and tax the cultivation, processing, sale, and use of cannabis for medicinal and/or non-medicinal
use, as well as hemp and CBD, while the U.S. Controlled Substances Act and the laws of other U.S. states prohibit growing cannabis. In
addition, with the passage of the Farm Bill in December 2018, hemp cultivation is now broadly permitted. The 2018 Farm Bill explicitly
allows the transfer of hemp-derived products across state lines for commercial or other purposes. It also puts no restrictions on the
sale, transport, or possession of hemp-derived products, so long as those items are produced in a manner consistent with the law. While
we do not know the percentage or actual usage of our products for purposes of growing cannabis or hemp-derived products, for those users
who intend to use the Company's products to grow hemp-derived CBD medicinal products, the 2018 Farm Bill officially removed hemp
from the list of controlled substances. While we note that the 2018 Farm Bill has not changed the regulatory authority of the Food and
Drug Administration as concerns cannabis and cannabis-derived products, and that such products continue to remain subject to the same
regulatory requirements as FDA-regulated products, we nonetheless believe the passage of the 2018 Farm Bill will allow
the Company to expand its marketplace opportunities.

 Our gardening products, including
our hydroponic gardening products, are multi-purpose products designed and intended for growing a wide range of plants and are purchased
by cultivators who may grow any variety of plants, including cannabis and hemp. Although the demand for our products may be negatively
impacted depending on how laws, regulations, administrative practices, enforcement approaches, judicial interpretations, and consumer
perceptions develop, we cannot reasonably predict the nature of such developments or the effect, if any, that such developments could
have on our business. The changing laws may cause us to experience additional capital expenditures as we adapt our business to meet the
requirements of the evolving legal and regulatory landscape.

 We believe that the growth
in licensed cannabis cultivation facilities and the growth in organically grown produce will increase the general demand for hydroponics
products, including the hobbyist consumer segment that we serve. Further, we believe our dedication to providing consumers with innovative
and cutting-edge products tailored to their individual needs, combined with our industry knowledge and customer service, has positioned
iPower to take advantage of the domestic and international growth anticipated for hydroponic products.

 Corporate Structure

 We have been conducting business
as iPower Inc. (formerly BZRTH Inc.) since our formation in 2018 and subsequent acquisition of the assets, and certain liabilities, of
BizRight LLC. In order to diversify and facilitate the Company's marketing and research and development activities, we used two
variable interest entities, E Marketing Solution Inc. ("E Marketing") and Global Products Marketing Inc. ("GPM"),
to perform and conduct certain aspects of our business relative to marketing, banking and cash management. E-Marketing and GPM were wholly
owned by one of our shareholders, Shanshan Huang, and one of our founders and majority shareholders, Chenlong Tan. On May 18, 2021, the
Company entered into equity purchase agreements with the shareholders of E Marketing and GPM, pursuant to which we acquired 100% of the
equity interests of each of E Marketing and GPM for nominal consideration and E Marketing and GPM became our wholly owned subsidiaries.

 On February 15, 2022, the
Company acquired Anivia Limited ("Anivia"). Anivia indirectly owns Dayourenzai (Shenzhen) Technology Co., Ltd., a corporation
located in the People's Republic of China ("PRC"), which is a wholly foreign-owned enterprise of Fly Elephant Limited.
Dayourenzai (Shenzhen) Technology Co., Ltd. Controls, through contractual arrangements, the business, revenues, and profits of Daheshou
(Shenzhen) Information Technology Co., Ltd., a company organized under the laws of the PRC and is located in Shenzhen, China ("DHS").
DHS is principally engaged in selling a wide range of products and providing merchandizing and logistics services in the PRC. In 2023,
iPower purchased approximately 90% of its products and supplies from or through DHS.

 In addition, on February 10,
2022 and January 14, 2022, respectively, we entered into joint venture agreements with Global Social Medial, LLC, a Nevada limited liability
company formed in 2022 which provides social media platform and services to assist business in product marketing ("GSM"),
and Box Harmony, LLC, a Nevada limited liability company formed in 2022 which provides logistics services primarily for foreign-based
manufacturers and 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 ("Box Harmony"). We have a 60% equity interest in GSM and a
40% equity interest in Box Harmony.

 Corporate Information

 The Company, a Nevada corporation,
was formed on April 11, 2018 under the name BZRTH Inc. On September 4, 2020, we filed a Certificate of Amendment with the State of Nevada
changing our name to iPower Inc.

 Our principal offices are
located at 8798 9th Street, Rancho Cucamonga, CA 91730, and our phone number is (626) 863-7344. Our business website is www.meetipower.com
and our e-commerce websites are www. Zenhydro.com and www.simpledeluxe.com. Information contained on our websites should not be deemed
incorporated by reference and is not a part of this Annual Report.

 Employees

 As of September 20, 2024,
we have a total of 60 full-time and four part-time employees and consultants. None or our employees are subject to collective bargaining
agreements.

 ITEM 1A. RISK FACTORS

 An investment in our securities involves a
high degree of risk. You should carefully consider all of the risks described below, together with the other information contained in
this Annual Report, including our financial statements and related notes, before making a decision to invest in our securities. If any
of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event,
the trading price of our securities could decline, and you could lose all or part of your investment.

 Summary Risk Factors

 The risks described under
the heading " Risk Factors " beginning on page 5 of this Annual Report on Form 10-K may cause us to be unable to realize the
full benefits of our strengths and/or may cause us to be unable to successfully execute all or part of our strategy. Some of the more
significant challenges we face include:

 Our founders, officers and directors may control, and may continue to control,
our company for the foreseeable future, including the outcome of matters requiring stockholder approval.

 The Company faces intense competition in the hydroponics marketplace which could prohibit us from developing or increasing our customer base beyond present levels.

 Our ability to ensure consistency in the quality of our products and supply chain.

 Approximately 99% of our current revenues are derived from sales of our products through online third-party platforms, including Amazon.com, Tiktok, Temu, Walmart, and eBay; any disruption to these business channels could be detrimental to our business.

 Potential disruption of our business and supply chain that may be caused by any conflicts, trade wars or currency fluctuations or tariffs between China and the U.S.

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

 The ongoing conflict between Russia and Ukraine may adversely affect our business, financial condition, results from operations, or the businesses of our suppliers, vendors and logistics partners.

 The occurrence of any epidemic, including the COVID-19 pandemic or any pandemic alike, and any resurgence in related infections, whether in the U.S., China or elsewhere, along with any efforts to mitigate their impact could have an adverse effect on our business, liquidity, operations, financial condition, the business of our suppliers, vendors and logistic partners, and the price of our securities.

 In the event we require additional capital resources to fund our enterprise, we may not be able to obtain sufficient capital and may be forced to limit the expansion of our operations.

 Certain of our products may be purchased for use in new and emerging industries or segments, such as cannabis, and may be subject to varying, inconsistent and rapidly changing laws, regulations, administrative practices, enforcement approaches, judicial interpretations and consumer perceptions.

 Our business depends significantly on the continuing efforts of our management team and our business may be impacted if we should lose their services.

 Certain relationships, acquisitions, strategic alliances and investments could result in operating issues, dilutions and other harmful or unintended consequences which may adversely impact our business and the results of our operations.

 Our continued investment and development in our in-house branded products are inherently risky and could disrupt our ongoing business.

 If the Company is unable to maintain and continue to develop our e-commerce platform, our reputation and operating results may be materially harmed.

 As the bulk of our sales are carried out through e-commerce, we are subject to certain cyber security risks, including hacking and stealing of customer and confidential data.

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

 There is a myriad of risks, including stock market volatility, inherent in owning our securities.

 Risks Related to Our Business and Products

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

 We rely on different intellectual
property rights, including trade secrets and trademarks and the strength of our proprietary brands, which we consider important to our
business. If we are unable to protect or preserve the value of our intellectual property rights for any reason, or if we fail to maintain
our brand image due to actual or perceived product or service quality issues, adverse publicity, governmental investigations or litigation,
or other reasons, our brand and reputation could be damaged, and our business may be harmed.

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

 potential mandatory or voluntary product recalls in the event of product defects or other issues;

 the measures we take may not effectively or sufficiently protect and/or maintain the intellectual property, and proprietary rights associated with our products and business;

 we may be required to heavily invest in marketing such proprietary branded products;

 our ability to successfully innovate and obtain, maintain, protect and enforce our intellectual property and proprietary rights (including defending against counterfeit, knock offs, grey-market, infringing or otherwise unauthorized goods); and

 our ability to successfully navigate and avoid claims related to the intellectual property and proprietary rights of third parties, which, if successful, could force us to modify or discontinue products, pay significant damages or enter into expensive licensing arrangements with the prevailing party, in addition to other harm, including to our reputation or financial results.

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

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

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

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

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

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

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

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

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

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

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

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

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

 The occurrence of any epidemic or pandemic,
including but not limited to COVID-19 or similar infectious diseases, and any resurgence in related infections, whether in the U.S., China
or elsewhere, along with efforts to mitigate their impact, could adversely affect our business, liquidity, operations, financial condition,
the business of our suppliers, vendors and logistic partners, and the price of our securities.

 The emergence of any epidemic
or pandemic, and the measures taken to combat such health crises by public health authorities and governments at local, national, and
international levels, may have significant adverse effects on our business. These measures, which may directly or indirectly impact our
operations, include but are not limited to:

 Voluntary or mandatory quarantines;

 Restrictions on travel;

 Limitations on gatherings in public places;

 Temporary closures of non-essential businesses;

 Supply chain disruptions; and

 Changes in consumer behavior and spending patterns.

 In the event of a future epidemic
or pandemic, we cannot predict the duration of such an outbreak, the effectiveness of our response, or the full extent of the disruption
to our operations. The impact may vary depending on the nature and severity of the health crisis, as well as the specific measures implemented
to contain its spread and mitigate its effects.

 Furthermore, even after an
epidemic or pandemic subsides, we may continue to experience adverse effects to our business as a result of a pandemic's overall
global economic impact, including any recession, economic downturn or increased unemployment that has occurred or may occur in the future.

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

 Our business prospects are
difficult to predict given our limited operating history and unproven business strategy. While we inherited in 2018 the business of our
predecessor entity, BizRight LLC, an entity through which we acquired certain assets and assumed certain liabilities, we did not begin
operations under iPower Inc. (formerly BZRTH Inc.) until our formation in April 2018. Thereafter, we launched our e-commerce platforms,
www. Zenhydro.com and www.simpledeluxe.com, where we sell our own in-house branded products, marketed under the iPower and Simple Deluxe
brands, and provide distribution for hundreds of other brands manufactured by a number of third-party vendors. Accordingly, the operation
of our e-commerce platform, branding and marketing of our own in-house branded products, and our relationships with third-party vendors
and suppliers have been limited. If we are unable to effectively maintain our relationships with third-party vendors and suppliers, manage
our e-commerce operations, as well as other sales platforms/distribution network, our business is unlikely to succeed. Our business should
be viewed in light of these risks, challenges and uncertainties.

 An estimated 99% of our sales are carried
out through third-party platforms, including Amazon.com, Tiktok, Walmart and eBay; any disruption in our selling efforts on such third
party platforms could substantially disrupt our business.

 While we maintain our own
websites, Zenhydro.com and simpledeluxe.com, as well as our offline wholesale department, which together account for approximately
1% of our sales, the bulk of our overall sales, or approximately 99%, occurred on third party platforms such as Amazon.com, Tiktok, Walmart
eBay and other platforms. As such, should we experience a disruption in our sales on third party platforms, or should such third party
platforms somehow come to rank us unfavorably or fail to list our products, this could negatively affect our overall sales and, thus,
negatively impact our overall revenues.

 Any disruption in our supply chain, including
an increase in shipping and/or storage costs, and the consistency and availability of our supply chain, could negatively affect our revenues
and overall business strategy.

 Any disruption in our supply
chain, including an increase in shipping and/or storage costs, and changes in the consistency and availability of our supply chain, could
negatively affect our revenues and overall business strategy. For example, during the COVID-19 pandemic, some manufacturing plants closed
and work at other plants was curtailed in many places where we sourced our products and some of our suppliers had to temporarily close
a facility for disinfecting after employees tested positive for COVID-19, and others faced staffing shortages from employees who were
sick or apprehensive about coming to work during the pandemic. Additionally, we have experienced that the ability of our suppliers to
ship their goods to us became difficult as transportation networks and distribution facilities had reduced capacity and were dealing with
changes in the types of goods being shipped. All of these factors caused an increase in shipping costs and affected the availability of
inventories to meet our sales demand during those times.

 Thus, the difficulties experienced
by our suppliers have resulted in longer purchase lead times, increased inventory build up as a result of shipping delays, along with
increased ocean freight and storage costs. Nonetheless, we have continued to deliver products to our customers and the fact that we do
not significantly depend on any one supplier has helped to lessen any disruptions. Nonetheless, should there be any further disruption,
it may negatively affect our inventory and delay our ability to timely deliver merchandise to our stores and customers, which in turn
will adversely affect our revenues and results of operations. If the difficulties experienced by our suppliers and us continues, we cannot
guarantee that we will be able to locate alternative sources of supply for our merchandise on acceptable terms, or at all. If we are unable
to purchase appropriate amounts of inventory, our business and results of operations may be materially and adversely affected.

 Poor economic conditions could adversely
affect our business.

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

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

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

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

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

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

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

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

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

 We are heavily reliant on
manufacturers in China to produce many of the goods we sell. Approximately 90% of the products we purchased for resale during the fiscal
year ended June 30, 2024 were manufactured in and imported from China. At present, we have 11 suppliers in the U.S. and more than 130
suppliers in China. However, all of the goods sourced in China were purchased through our VIE, DHS. The U.S. and China have been involved
in ongoing trade disputes, resulting in increased tariffs when such goods arrive in the U.S., among other things. Any changes in U.S.
trade policy, or an escalation in the ongoing trade disputes, could trigger retaliatory actions, resulting in "trade wars"
and an increase in costs for goods imported into the United States. Such actions could disrupt our supply chain. In addition, increased
tariffs could, in turn, reduce customer demand for such products as such tariffs could cause us to have to increase the price at which
we sell our goods, or it could result in trading partners limiting their trade with the United States. To date, iPower has absorbed some
of the costs related to increased tariffs. However, should we be unable to continue to absorb such costs, or should we need to pass all
such costs on to consumers, such increase could cut into our competitive advantage and our volume of sales activity in the United States
could be materially reduced. Any such reduction may materially and adversely affect our sales and our business.

 Our China-based subsidiaries, Dayourenzi
(Shenzhen) Technology Co., Ltd. and Daheshou (Shenzhen) Information Technology Co., Ltd., through which we procure the majority of our
inventory and overseas logistical support, are owned through contractual agreements, as required by the laws of the PRC. As a result,
the Chinese government could potentially exercise significant oversight and/or discretion over the business and operations of our China-based
subsidiaries and could potentially intervene in or influence the operations of those businesses at any time.

 We recently acquired two China-based
subsidiaries, Dayourenzi (Shenzhen) Technology Co., Ltd. (the WFOE") and Daheshou (Shenzhen) Information Technology Co., Ltd. (the
"Operating Company"). (The WFOE and the Operating Company together are referred to as our "China-based Subsidiaries").
The Operating Company has historically provided the bulk of our China-based procurement and logistical needs and we believe its acquisition
will serve to streamline our procurement of goods and shipping, as well as reduce costs by bringing these services in house. Our China-based
subsidiaries are owned by us through contractual arrangements with our Hong Kong subsidiary, Fly Elephant Limited, and its parent company,
Anivia Limited, a British Virgin Islands company. In addition, our China-based subsidiaries may be at risk of influence by the PRC government
as they are subject to the laws, rules and regulations of the PRC, which can be complex and evolve rapidly. The PRC government has the
power to exercise significant oversight and discretion over the conduct of our China-based Subsidiaries, and the regulations to which
they are subject may change rapidly and with little notice to us or our shareholders. As a result, the application, interpretation, and
enforcement of new and existing laws and regulations in the PRC are often uncertain. In addition, these laws and regulations may be interpreted
and applied inconsistently by different agencies or authorities, and inconsistently with our own policies and practices. New laws, regulations
and other government directives in the PRC may also be costly to comply with, and such compliance or any associated inquiries or investigations
or any other government actions may, as regards our China-based subsidiaries:

 Delay or impede development,

 Result in negative publicity or increase our operating costs,

 Require significant management time and attention, and

 Subject us to remedies, administrative penalties and even criminal liabilities that may harm our business, including fines assessed for our current or historical operations, or demands or orders that we modify or even cease our China-based business practices.

 The promulgation of new laws
or regulations, or the new interpretation of existing laws and regulations, could restrict or otherwise unfavorably impact the ability
or manner in which we conduct the business of our China based subsidiaries and could require us to change certain aspects of their business
to ensure compliance, which could delay our procurement of goods, reduce revenues, increase costs, or subject us to additional liabilities.
To the extent any new or more stringent measures are required to be implemented in the PRC, our business, financial condition, and results
of operations could be adversely affected.

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

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

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

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

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

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

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

 Our ability to compete in
the highly competitive hydroponics and gardening industry depends in large part upon our ability to attract highly qualified managerial
and sales personnel. In order to induce valuable employees to come and work for us and to remain with us, we may provide employees with
stock options, restricted stock, restricted stock units that vest over time. The value to employees of such incentive stock and stock
options that vest over time will be significantly affected by movements in our stock price that we will not be able to control and may
at any time be insufficient to counteract more lucrative offers our employees may receive from other companies. Our success also depends
on our ability to continue to attract, retain and motivate highly skilled junior, mid-level and senior personnel. Certain of our executive
officers have employment agreements but these agreements do not guarantee us the continued services of such employees. Further, we do
not currently offer any health care or retirement benefits to any of our employees, and many of our more established competitors may offer
more competitive compensation packages for the kind of personnel that is critical to our company's survival and success. If we have
difficulty identifying, attracting, hiring, training and retaining such qualified personnel, or incur significant costs in order to do
so, our business and financial results could be negatively impacted. For example, offering competitive compensation packages may significantly
increase our operating expenses and negatively impact our gross profits. Further, the loss of our executive officers or our other key
personnel, particularly with little or no notice, could cause delays on business developments and projects and could have an adverse impact
on our customers and industry relationships, our business, operating results, or financial condition.

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

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

 Certain of our products may be purchased
for use in the cannabis industry and/or be subject to varying, inconsistent, and rapidly changing laws, regulations, administrative practices,
enforcement approaches, judicial interpretations, and consumer perceptions.

 Our hydroponic gardening products
are multi-purpose products designed and intended for growing a wide range of plants and are generally purchased from retailers by end
users who may grow any variety of vegetables and plants, including cannabis. As such, we sell hydroponic gardening products that end users
may purchase for use in a variety of industries or segments, including the growing of cannabis. The cannabis industry is subject to varying,
inconsistent and rapidly changing laws, regulations, administrative practices, enforcement approaches, judicial interpretations and consumer
perceptions. For example, certain countries and a total of 46 U.S. states plus the District of Columbia have adopted frameworks that authorize,
regulate and tax the cultivation, processing, sale and use of cannabis for medicinal and/or non-medicinal use, including legalization
of hemp and CBD, while the U.S. Controlled Substances Act and the laws of U.S. states prohibit growing cannabis.

 We act solely as a supplier
and distributor of hydroponics equipment and supplies, and at no time do we engage in the cultivation, sale, distribution or dispensing
of cannabis or any cannabis products or accessories. In addition, we believe that none of our hydroponic equipment and supplies or any
other products we sell would be considered paraphernalia under federal drug paraphernalia laws. Similar to Amazon and eBay, we do not
advertise or promote our products on our website for use in growing cannabis, nor do we screen or otherwise track how our customers use
our products – whether it is to grow flowers, fruits, vegetables or cannabis.

 We are unaware of any threatened
or actual law enforcement activity against manufacturers, distributors or retailers of hydroponic supplies that could potentially be used
by participants in the cannabis industry, and do not believe that our operations directly or indirectly violate aid and abet violations
of the Controlled Substances Act (including Section 856) or other federal laws (including conspiracy laws, money laundering laws, or RICO.
Nevertheless, a theoretical risk exists that our activities could be deemed to be facilitating the selling or distribution of cannabis
in violation of the Federal Controlled Substances Act, or to constitute aiding or abetting, or being an accessory to, a violation of that
Act. Federal authorities have not focused their resources on such tangential or secondary violations of the Act, nor have they threatened
to do so, with respect to the sale of equipment that might be used by cannabis gardeners, or with respect to any supplies marketed to
participants in the emerging medical cannabis industry. We are unaware of such a broad application of the Controlled Substances Act by
federal authorities.

 If the federal government
were to change its practices, or were to expend its resources attacking providers of equipment that could be usable by participants in
the medical or recreational cannabis industry, such action could have a materially adverse effect on our operations, our customers, or
the sale of our products. In addition, we could be faced with or required to expend substantial resources in an effort to comply with
new and changing laws and regulations. Such necessary capital expenditures could negatively affect our earnings and competitive position.

 Although the demand for our
products may be negatively impacted depending on how laws, regulations, administrative practices, enforcement approaches, judicial interpretations
and consumer perceptions develop, we cannot reasonably predict the nature of such developments or the effect, if any, that such developments
could have on our business.

 Continued federal intervention in certain
segments of the cannabis industry may have a negative impact on us.

 Although we expect minimal
impact on the Company from any federal government crackdown on cannabis providers, a disruption to the cannabis industry could cause some
potential customers to be more reluctant to invest in growing equipment, including equipment we sell. Moreover, the federal government's
tactics may change or have unforeseen effects, which could be detrimental to our business.

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

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

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

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

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

 If we are unable to effectively execute
our e-commerce business, our reputation and operating results may be harmed.

 We sell certain of our products
over the internet through our e-commerce platforms, www. Zenhydro.com and www.simpledeluxe.com. The success of our e-commerce business
depends on our investment in this platform, consumer preferences and buying trends relating to e-commerce, and our ability to both maintain
the continuous operation of our online store and our fulfillment operations and provide a shopping experience that will generate orders
and return visits to our online store.

 We are also vulnerable to
certain additional risks and uncertainties associated with our e-commerce business, including: changes in required technology interfaces;
website downtime and other technical failures; costs and technical issues associated with website software, systems and technology investments
and upgrades; data and system security; system failures, disruptions and breaches and the costs to address and remedy such failures, disruptions
or breaches; computer viruses; and changes in and compliance with applicable federal and state regulations. In addition, our efforts to
remain competitive with technology trends, including the use of new or improved technology, creative user interfaces and other e-commerce
marketing tools such as paid search and mobile applications, among others, may increase our costs and may not increase sales or attract
consumers. Our failure to successfully respond to these risks and uncertainties might adversely affect the sales of our e-commerce business,
as well as damage our reputation and brands.

 In addition, the success of
our e-commerce business and the satisfaction of our customers depends on their timely receipt of our products and their ability to pick
up their desired products from one of our garden centers. The efficient delivery and/or pick up of our products requires that our garden
and distribution centers have adequate capacity to support the current level of e-commerce operations and any anticipated increased levels
that may occur as a result of the growth of our e-commerce business. If we encounter difficulties with our garden and distribution centers,
or if any garden and distribution centers shut down for any reason, including as a result of fire or other natural disaster, or pursuant
to expanded stay-at-home orders or other restrictions due to any potential pandemic, we could face shortages of inventory, which would
result in our inability to properly our online store. Such a situation could cause us to incur significantly higher costs and lead to
longer lead times associated with distributing products to our customers, which could cause us to lose customers. Experiencing any of
these issues could have a material adverse effect on our business and harm our reputation.

 A substantial proportion of our sales occur
on Amazon and, as such, should our Company experience any negative actions by Amazon, our sales could be significantly affected.

 A significant proportion of
our sales occur on the Amazon.com platform. For the years ended June 30, 2024 and 2023, Amazon Vendor and Amazon Seller customers accounted
for 90% and 91% of the Company's total revenues, respectively, and as of June 30, 2024 and 2023, accounts receivable from Amazon Vendor
and Amazon Seller accounted for 91% and 95% of the Company's total accounts receivable, respectively. Any disruption in our sales
or accessibility to Amazon, or any negative action taken by Amazon related to our sales, could negatively affect our business.

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

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

 In addition, if one or more
of our third-party manufacturers becomes insolvent or unwilling to continue to manufacture products of acceptable quality, at acceptable
costs and in a timely manner, our ability to deliver products to our retail customers could be significantly impaired. Substitute manufacturers
may not be available or, if available, may be unwilling or unable to manufacture the products we need on acceptable terms. Moreover, if
customer demand for our products increases, we may be unable to secure sufficient additional capacity from our current third-party manufacturers,
or others, on commercially reasonable terms, or at all.

 Our reliance on a limited base of suppliers
for certain products, such as light ballasts, may result in disruptions to our business and adversely affect our financial results.

 We rely on a limited number of
suppliers for certain of our products and supplies. For the years ended June 30, 2024 and 2023, one supplier accounted for 10% and 27%
of the Company's total purchases, respectively. Such reliance on a limited number of suppliers may increase our risk of experiencing disruptions
in our business. As we do not have any long-term supply agreements, in the event we are unable to maintain supplier arrangements and relationships,
if we are unable to contract with suppliers at the quantity and quality levels needed for our business, if any of our key suppliers becomes
insolvent or experience other financial distress including with respect to staffing and shipping of products, we could experience disruptions
in our supply chain, which could have a material adverse effect on our financial condition, results of operations and cash flows.

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

 A significant interruption in the operation
of our or our suppliers' facilities could impact our capacity to produce products and service our customers, which could adversely
affect revenues and earnings.

 Operations at our and our
suppliers' facilities are subject to disruption for a variety of reasons, including fire, flooding or other natural disasters, disease
outbreaks or pandemics, acts of war, terrorism, government shut-downs and work stoppages. A significant interruption in the operation
of our or our suppliers' facilities, especially for those products manufactured at a limited number of facilities, such as fertilizer
and liquid products, could significantly impact our capacity to sell products and service our customers in a timely manner, which could
have a material adverse effect on our customer relationships, revenues, earnings, and financial position.

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

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

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

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

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

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

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

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

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

 Additionally, in the normal
course of our business, we collect, store, and transmit proprietary and confidential information regarding our customers, employees, suppliers
and others, including personal information. An operational failure or breach of security from increasingly sophisticated cyber threats
could lead to loss, misuse or unauthorized disclosure of this information about our employees or customers, which may result in regulatory
or other legal proceedings, and have a material adverse effect on our business and reputation. We also may not have the resources or technical
sophistication to anticipate or prevent rapidly evolving types of cyber-attacks. Any such attacks or precautionary measures taken
to prevent anticipated attacks may result in increasing costs, including costs for additional technologies, training, and third-party
consultants. The losses incurred from a breach of data security and operational failures as well as the precautionary measures required
to address this evolving risk may adversely impact our financial condition, results of operations and cash flows.

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

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

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

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

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

 We also are subject to certain
contractual obligations to indemnify and hold harmless advertisers, marketing technology companies and other users of our data from the
costs or consequences of noncompliance with privacy-related laws, regulations, self-regulatory requirements or other legal obligations,
or inadvertent or unauthorized use or disclosure of data that we store or handle as part of providing our products.

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

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

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

 We may not be able to develop, license or
acquire new products, enhance the capabilities of our existing products to keep pace with rapidly changing technology and customer requirements,
or successfully manage the transition to new product offerings, any of which could have a material adverse effect on our business, financial
condition, and results of operations.

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

 The hydroponics industry is
characterized by rapid technological change and innovation. New technologies, techniques or products may emerge that might offer better
combinations of price and performance or better address customer requirements as compared to our current or future products, as well as
those products of third-party vendors that we make available for sale. Competitors who have greater financial, marketing and sales resources
than we do may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards,
or customer requirements. Any new product we identify for internal development, licensing or acquisition may require additional development
efforts prior to commercial sale. Due to the significant lead time and complexity involved in bringing a new product to the market, we
are required to make a number of assumptions and estimates regarding the commercial feasibility of a new product. These assumptions and
estimates may prove incorrect, resulting in our introduction of a product that is not competitive at the time of launch. We anticipate
that we will face increased competition in the future as existing companies and competitors develop new or improved products and as new
companies enter the market with new technologies and sales mechanisms which we may be unable to adopt or offer for sale. Our ability to
mitigate downward pressure on the prices of the products that we offer for sale will be dependent on our ability to maintain and/or increase
the value we offer to suppliers, vendors, strategic partners, and consumers. All new products are prone to risks of failure inherent in
hydroponic technology development. In addition, we cannot assure you that any such products that we develop or offer for sale will be
manufactured or produced economically, successfully commercialized or widely accepted in the marketplace. The expenses or losses associated
with unsuccessful product development or launch activities, or a lack of market acceptance of new products, could adversely affect our
business, financial condition, and results of operation.

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

 We have identified certain material weaknesses
in our internal control over financial reporting and may experience material weaknesses in the future or otherwise fail to maintain an
effective system of internal controls in the future, as a result of which, we may not be able to accurately report our financial condition
or results of operations which may adversely affect investor confidence in us and, as a result, the value of our common stock.

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

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

 We cannot assure you that
there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future. Any
failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition
or results of operations. The effectiveness of our controls and procedures may be limited by a variety of factors, including:

 faulty human judgment and simple errors, omissions, or mistakes;

 fraudulent action of an individual or collusion of two or more people;

 inappropriate management override of procedures; and

 the possibility that any enhancements to controls and procedures may still not be adequate to assure timely and accurate financial control.

 Our management and independent
registered public accounting firm has not performed an evaluation of our internal control over financial reporting during any period in
accordance with the provisions under Section 404(b) of Sarbanes-Oxley Act. Had we performed an evaluation and had our independent
registered public accounting firm performed an audit of our internal control over financial reporting in accordance with the provisions
of Sarbanes-Oxley Act, additional control deficiencies amounting to material weaknesses may have been identified. If we fail to remedy
any material weakness, our financial statements may be inaccurate, our access to the capital markets may be restricted and the trading
price of our common stock may suffer.

 General Risk Factors Related to Our Business

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

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

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

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

 decreased demand for products that we may offer for sale;

 injury to our reputation;

 costs to defend the related litigation;

 a diversion of management's time and our resources;

 substantial monetary awards to trial participants or patients;

 product recalls, withdrawals or labeling, marketing or promotional restrictions; and

 a decline in the value of our stock.

 Our inability to obtain and
retain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent
or inhibit the commercialization of products we develop. We do not maintain any product liability insurance. Even if we obtain product
liability insurance in the future, we may have to pay amounts awarded by a court or negotiated in a settlement that exceed our coverage
limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts.

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

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

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

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

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

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

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

 We seek to maintain sufficient
levels of inventory in order to protect ourselves from supply interruptions. To ensure adequate inventory supply and manage our operations
with our third-party vendors, manufacturers and suppliers, we forecast anticipated materials requirements and demand for our products
in order to predict inventory needs and then place orders with our suppliers based on these predictions. Our ability to accurately forecast
demand for our products could be negatively affected by many factors, including our limited historical commercial experience, rapid growth,
failure to accurately manage our expansion strategy, product introductions by competitors, an increase or decrease in customer demand
for our products, our failure to accurately forecast customer acceptance of new products, unanticipated changes in general market conditions
or regulatory matters and weakening of economic conditions or consumer confidence in future economic conditions.

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

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

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

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

 Our estimates of the total
addressable markets for our current products, products under development and third-party products that we offer for sale are based on
a number of internal and third party estimates and the assumed prices at which we can sell such products in markets that have not been
established or that we have not yet entered. While we believe our assumptions and the data underlying our estimates are reasonable, these
assumptions and estimates may not be correct and the conditions supporting our assumptions or estimates may change at any time, thereby
reducing the predictive accuracy of these estimates. As a result, our estimates of the total addressable market for our current or future
products may prove to be incorrect. If the actual number of consumers who would benefit from the products we offer, the price at which
we can sell such products, or the total addressable market for such products is smaller than we have estimated, it may impair our sales
growth and have an adverse impact on our business.

 The conflict between Russia and Ukraine
may have the effect of heightening many of the other risks described in this "Risk Factors" section.

 To the extent the conflict
between Russia and Ukraine may adversely affect our business and financial results, it may also have the effect of heightening many of
the other risks described in this "Risk Factors" section, as well as other risks which we may not be currently aware of.

 Risks Related to Doing Business with the Cannabis
Industry

 While our business includes both the hobbyist
gardener, and is not exclusively reliant on the cannabis grower, our growth is nonetheless substantially dependent on the growth
and stabilization of the U.S. cannabis market. New California regulations caused licensing shortages and future regulations may create
other limitations that decrease the demand for our products. State level regulations adopted in the future may adversely impact our business.

 The base of growers in the
U.S. has grown over the past 20 years since the legalization of cannabis for medical uses in states such as California, Colorado,
Michigan, Nevada, New Jersey, Oregon, and Washington, with a large number of those growers depending on products similar to those we distribute.
The U.S. cannabis market is still in its infancy and early adopter states such as California, Colorado and Washington represent a large
portion of historical industry revenues. If the U.S. cannabis cultivation market does not grow as expected, our business, financial condition
and results of operations could be adversely impacted.

 Cannabis remains illegal under
U.S. federal law, with it listed as a Schedule I substance under the Controlled Substances Act (CSA). Notwithstanding laws in various
states permitting certain cannabis activities, all activities, including possession, distribution, processing and manufacturing of cannabis
and investment in, and financial services or transactions involving proceeds of, or promoting such activities remain illegal under various
U.S. federal criminal and civil laws and regulations, including the CSA, as well as laws and regulations of several states that have not
legalized some or any cannabis activities to date. Compliance with applicable state laws regarding cannabis activities does not protect
us from federal prosecution or other enforcement action, such as seizure or forfeiture remedies, nor does it provide any defense to such
prosecution or action. Cannabis activities conducted in or related to conduct in multiple states may potentially face a higher level of
scrutiny from federal authorities. Penalties for violating federal drug, conspiracy, aiding, abetting, bank fraud and/or money laundering
laws may include prison, fines, and seizure/forfeiture of property used in connection with cannabis activities, including proceeds derived
from such activities.

 In addition to sales through
our own platforms, www. Zenhydro.com and www.simpledeluxe.com, we sell our products through third-party retailers and resellers. However,
it is evident to us that the movement towards the legalization of cannabis in the U.S. and its legalization in Canada has ultimately had
a significant and positive impact on our industry. We are not currently subject directly to any state laws or regulations controlling
participants in the legal cannabis industry. However, regulation of the cannabis industry does impact those that we believe represent
many end-users for our products and, accordingly, there can be no assurance that changes in regulation of the industry and more rigorous
enforcement by federal authorities will not have a material adverse effect on us.

 Legislation and regulations pertaining to
the use and cultivation of cannabis are enacted on both the state and federal government level within the United States. As a result,
the laws governing the cultivation and use of cannabis may be subject to change. Any new laws and regulations limiting the use or cultivation
of cannabis and any enforcement actions by state and federal governments could indirectly reduce demand for our products and may impact
our current and planned future operations.

 Individual state laws regarding
the cultivation and possession of cannabis for adult and medical uses conflict with federal laws prohibiting the cultivation, possession
and use of cannabis for any purpose. A number of states have passed legislation legalizing or decriminalizing cannabis for adult-use,
other states have enacted legislation specifically permitting the cultivation and use of cannabis for medicinal purposes, and several
states have enacted legislation permitting cannabis cultivation and use for both adult and medicinal purposes. Evolving federal and state
laws and regulations pertaining to the use or cultivation of cannabis, as well active enforcement by federal or state authorities of the
laws and regulations governing the use and cultivation of cannabis may indirectly and adversely affect our business, our revenues, and
our profits.

 Certain of our products may be purchased
for use in new and emerging industries and/or be subject to varying, inconsistent, and rapidly changing laws, regulations, administrative
practices, enforcement approaches, judicial interpretations, future scientific research and public perception.

 In addition to selling our
products through our own online platforms, www. Zenhydro.com and www.simpledeluxe.com, we sell products, including hydroponic gardening
products, through third-party retailers and resellers. End users may purchase these products for use in new and emerging industries that
may not achieve market acceptance in a manner that we can predict. The demand for these products is dependent on the growth of these industries,
which is uncertain, as well as the laws governing the growth, possession, and use of cannabis by adults for both adult and medical use.

 Laws and regulations affecting
the U.S. cannabis industry are continually changing, which could detrimentally affect our growth, revenues, results of operations and
success generally. Local, state, and federal cannabis laws and regulations are broad in scope and subject to evolving interpretations,
which could require the end users of certain of our products or us to incur substantial costs associated with compliance or to alter our
respective business plans. In addition, violations of these laws, or allegations of such violations, could disrupt our business and result
in a material adverse effect on our results of operation and financial condition.

 Scientific research related
to the benefits of cannabis remains in its early stages, is subject to a number of important assumptions, and may prove to be inaccurate.
Future research studies and clinical trials may reach negative conclusions regarding the viability, safety, efficacy, dosing, social acceptance
or other facts and perceptions related to medical cannabis, which could materially impact the demand for our products.

 The public's perception
of cannabis may significantly impact the cannabis industry's success. Both the medical and adult-use of cannabis are controversial
topics, and there is no guarantee that future scientific research, publicity, regulations, medical opinion, and public opinion relating
to cannabis will be favorable. The cannabis industry is an early-stage business that is constantly evolving with no guarantee of viability.
The market for medical and adult-use of cannabis is uncertain, and any adverse or negative publicity, scientific research, limiting regulations,
medical opinion and public opinion (whether or not accurate or with merit) relating to the consumption of cannabis, whether in the United
States or internationally, may have a material adverse effect on our operational results, consumer base, and financial results. Among
other things, such a shift in public opinion could cause state jurisdictions to abandon initiatives or proposals to legalize medical or
adult cannabis or adopt new laws or regulations restricting or prohibiting the medical or adult-use of cannabis where it is now legal,
thereby limiting the Cannabis Industry Participants.

 Demand for our products may
be negatively impacted depending on how laws, regulations, administrative practices, enforcement approaches, judicial interpretations,
and consumer perceptions develop. We cannot predict the nature of such developments or the effect, if any, that such developments could
have on our business.

 Our indirect involvement in the cannabis
industry could affect the public's perception of us and be detrimental to our reputation.

 Damage to our reputation can
be the result of the actual or perceived occurrence of any number of events, and could include any negative publicity, whether true or
not. Cannabis has often been associated with various other narcotics, violence and criminal activities, the risk of which is that our
retailers and resellers that transact with those businesses might attract negative publicity. There is also risk that the action(s) of
other participants, companies and service providers in the cannabis industry may negatively affect the reputation of the industry as a
whole and thereby negatively impact our reputation. The increased use of social media and other web-based tools used to generate, publish
and discuss user-generated content and to connect with other users has made it increasingly easier for individuals and groups to communicate
and share opinions and views with regard to cannabis companies and their activities, whether true or not and the cannabis industry in
general, whether true or not. We do not ultimately have direct control over how the cannabis industry is perceived by others. Reputation
loss may result in decreased investor confidence, increased challenges in developing and maintaining community relations and an impediment
to our overall ability to advance our business strategy and realize our growth prospects, thereby having a material adverse impact on
our business.

 In addition, third parties
with whom we may do business could perceive that they are exposed to reputational risk as a result of the involvement of some of our customers
in the cannabis business. Failure to establish or maintain business relationships due to reputational risk arising in connection with
the nature of our business could have a material adverse effect on our business, financial condition and results of operations.

 Businesses involved in the cannabis industry,
and investments in such businesses, are subject to a variety of laws and regulations related to money laundering, financial recordkeeping,
and proceeds of crimes.

 We sell our products through
our websites, www. Zenhydro.com and www.simpledeluxe.com, as well as through online third-party retail platforms which do not exclusively
sell to customers operating in the cannabis industry. Nonetheless, some of our customers may be using our products for purposes of cultivating
cannabis. Investments in the U.S. cannabis industry are subject to a variety of laws and regulations that involve money laundering, financial
recordkeeping and proceeds of crime, including the BSA, as amended by the U.S. PATRIOT Act, other anti-money laundering laws, and any
related or similar rules, regulations or guidelines, issued, administered or enforced by governmental authorities in the United States.
In February 2014, the Financial Crimes Enforcement Network of the Treasury Department ("FinCEN") issued a memorandum
(the "FinCEN Memo") providing guidance to banks seeking to provide services to cannabis businesses. The FinCEN Memo outlines
circumstances under which banks may provide services to cannabis businesses without risking prosecution for violation of U.S. federal
money laundering laws. It refers to supplementary guidance that Deputy Attorney General Cole issued to U.S. federal prosecutors relating
to the prosecution of U.S. money laundering offenses predicated on cannabis violations of the CSA and outlines extensive due diligence
and reporting requirements, which most banks have viewed as onerous. On June 29, 2020, FinCEN issued additional guidance for financial
institutions conducting due diligence and filing suspicious activity reports in connection with hemp-related business customers. While
these guidelines clarify that financial institutions are not required to file suspicious activity reports solely based on a customer's
hemp-related business operations, which must be operating lawfully under applicable state law and regulations, these requirements can
still present challenges for certain end users of our products to establish and maintain banking connections, and restrictions on cannabis-related
banking activities remain. In September 2019, the United States House of Representatives passed the SAFE Banking Act, which would
permit commercial banks to offer services to cannabis companies that are in compliance with state law, but the Senate has not taken up
the SAFE Banking Act or other similar legislation.

 Risks Related to Our Common Stock

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

 Our common stock is currently listed on the Nasdaq
Capital Market. Continued listing of a security on Nasdaq is conditioned upon compliance with various continued listing standards. Although
we believe we currently meet all of the Nasdaq continued listing requirements, there can be no assurance that we will be able to comply
with the applicable listing standards in the future. If we fail to meet any of the applicable listing requirements, and fail to regain
compliance in any compliance periods provided by Nasdaq, our common stock can be delisted by Nasdaq, which could adversely affect the
market price and liquidity of our securities and could have other adverse effects, including but not limited to (i) reducing the liquidity
and market price of our common stock; (ii) reducing the number of investors willing to hold or acquire our common stock, which could negatively
impact our ability to raise equity financing; (iii) limiting our ability to use a registration statement to offer and sell freely tradable
securities, thereby preventing us from accessing the public capital markets; and (iv) impairing our ability to provide equity incentives
to our employees.

 Our founders, officers and directors may
control, and may continue to control, our company for the foreseeable future, including the outcome of matters requiring stockholder
approval.

 Our founders, officers and
directors collectively will beneficially own approximately 50% of our outstanding shares of common stock. As a result, such individuals
may, for the foreseeable future, have the ability, acting together, to control the election of our directors and the outcome of corporate
actions requiring stockholder approval, such as: (i) a merger or a sale of our company, (ii) a sale of all or substantially all of our
assets, and (iii) amendments to our articles of incorporation and bylaws. This concentration of voting power and control could have a
significant effect in delaying, deferring, or preventing an action that might otherwise be beneficial to our other stockholders and be
disadvantageous to our stockholders with interests different from those entities and individuals. Certain of these individuals also have
significant control over our business, policies and affairs as officers or directors of our company. Therefore, you should not invest
in reliance on your ability to have any control over our company. See "Item 12. Security Ownership of Certain Beneficial Owners
and Management and Related Stockholder Matters" for further discussion of the stockholding of our founders and principal stockholders.

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

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

 Sales of substantial amounts of our common
stock by the selling stockholder in the Private Placement (as defined below) or the perception that these sales could occur, could adversely
affect the price of our common stock.

 On June 18, 2024, we closed
on a registered direct offering (the "Registered Direct") of 2,083,334 shares of common stock (the "Shares") and
a concurrent private placement ("Private Placement," and together with the Registered Direct, the "Offering")
of warrants (the "Warrants") to purchase 2,083,334 shares of common stock (the "Warrant Shares"), which were sold
for gross aggregate proceeds of $5,000,002. According to the stock purchase agreement entered into by the Company and investor thereof
during the Offering, on July 9, 2024, we filed a Form S-1 to register the resale, from time to time, of up to an aggregate of 2,083,334
Warrant Shares, issuable upon the exercise of the Warrants issued in the Private Placement by the selling stockholder named thereto (the
"Resale Prospectus").

 The sale by the selling stockholder
of a significant number of shares of common stock could have a material adverse effect on the market price of our common stock. In addition,
the perception in the public markets that the selling stockholder may sell all or a portion of its shares as a result of the registration
of such shares for resale pursuant to the Resale Prospectus could also in and of itself have a material adverse effect on the market price
of our common stock. We cannot predict the effect, if any, that market sales of those shares of common stock or the availability of those
shares of common stock for resale will have on the market price of our common stock.

 General Risk Factors Related to our Common Stock

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

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

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

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

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

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

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

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

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

 We are required, pursuant to Section 404
of the Sarbanes-Oxley Act of 2002, or Section 404, to furnish a report by management on the effectiveness of our internal control over
financial reporting for the fiscal year ending June 30, 2024. This assessment needs to include disclosure of any material weaknesses identified
by our management in our internal control over financial reporting. In addition, our independent registered public accounting firm will
be required to attest to the effectiveness of our internal control over financial reporting in our first annual report required to be
filed with the SEC following the date we are no longer an "emerging growth company." We have recently commenced the costly
and challenging process of compiling the system and processing documentation necessary to perform the evaluation needed to comply with
Section 404, but we may not be able to complete our evaluation, testing and any required remediation in a timely fashion once initiated.
Our compliance with Section 404 requires that we incur substantial accounting expenses and expend significant management efforts.
We currently do not have an internal audit group, and we will need to hire additional accounting and financial staff with appropriate
public company experience and technical accounting knowledge and compile the system and process documentation necessary to perform the
evaluation needed to comply with Section 404.

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

 We are an emerging growth company and a
smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements
available to "emerging growth companies" or "smaller reporting companies," this could make our securities less
attractive to investors and may make it more difficult to compare our performance with other public companies.

 We are an "emerging
growth company," as defined in the Jumpstart Our Business Startups Act of 2012, or JOBS Act, and, for as long as we continue to
be an "emerging growth company," we intend to take advantage of certain exemptions from various reporting requirements applicable
to other public companies but not to "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 our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote
on executive compensation and stockholder approval of any golden parachute payments not previously approved. We could be an "emerging
growth company" for up to five years following the effectiveness of this registration statement, or until the earliest of (i) the
last day of the first fiscal year in which our annual gross revenues exceed $1.235 billion, (ii) the date that we become a "large
accelerated filer" as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that
is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii)
the date on which we have issued more than $1.0 billion in non-convertible debt during the preceding three year period.

 Additionally, we are a "smaller
reporting company" as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain
reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain
a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held by non-affiliates
exceeds $250 million as of the prior June 30, or (2) our annual revenues exceeded $100 million during such completed fiscal year and the
market value of our common stock held by non-affiliates exceeds $700 million as of the prior June 30. To the extent we take advantage
of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult
or impossible. After we are no longer an "emerging growth company," we expect to incur additional management time and cost
to comply with the more stringent reporting requirements applicable to companies that are deemed accelerated filers or large accelerated
filers, including complying with the auditor attestation requirements of Section 404. We cannot predict or estimate the amount of additional
costs we may incur or the timing of such costs.

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

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

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

 The trading market for our
common stock is influenced by research or reports that industry or securities analysts publish about our business. If industry or securities
analysts decide to cover us and in the future downgrade our common stock, the market price for our securities would likely decline. If
one or more of these analysts cease to cover us or fail to regularly publish reports on us, we could lose visibility in the financial
markets, which in turn could cause the market price or trading volume for our common stock to decline.

 Now that we are an actively-traded Nasdaq-listed
company, the market price of our common stock may be volatile.

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

 actual or anticipated fluctuations in our quarterly or annual operating results;

 changes in financial operational estimates or projections;

 conditions in markets generally;

 changes in the economic performance or market valuations of companies similar to ours; and

 general economic or political conditions in the United States and elsewhere.

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

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

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

 ITEM 1B. Unresolved
Staff Comments.

 None.

 ITEM 1C. Cybersecurity.

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

 The board of directors has
oversight for the most significant risks facing us and for our processes to identify, prioritize, assess, manage and mitigate those risks.
The audit committee of the board of directors (the "Audit Committee") has been designated by our board of directors to oversee
cybersecurity risks. The Audit Committee receives regular updates on cybersecurity and information technology matters and related risk
exposures from our management. The board of directors also receives periodic updates from management and the Audit Committee on cybersecurity
risks. Management is responsible for identifying, considering and assessing material cybersecurity risks on an ongoing basis, establishing
processes designed to ensure that such potential cybersecurity risk exposures are monitored, putting in place mitigation measures and
maintaining cybersecurity programs. Our cybersecurity programs are under the direction of our Chief Executive Officer. Management regularly
updates the Audit Committee on our cybersecurity programs, which includes cybersecurity risks and mitigation strategies, vulnerability
management, and on-going cybersecurity projects.

 As of June 30, 2024,
we did not identify any cybersecurity incidents that materially affected or are reasonably likely to materially affect our business strategy,
results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats,
or provide assurances that we have not experienced an undetected cybersecurity incident. It is possible that we may not implement appropriate
controls if we do not detect a particular risk. In addition, security controls, no matter how well designed or implemented, may only mitigate
and not fully eliminate the risks. Even when a risk is detected, disruptive events may not always be immediately and thoroughly interpreted
and acted upon. For more information about these risks, please see "Risk Factors - Risks Related to our Business and Products"
in Item 1A of this Form10-K.

 ITEM 2. PROPERTIES

 Our principal offices, which also
serve as a fulfillment center, are located at 8798 9 th Street, Rancho Cucamonga, California. There we lease approximately 99,347
square feet of space, which is used for the storage and distribution of hydroponic equipment, lighting and garden accessories, home products,
pet products, other consumer products and other ancillary uses. The term of the Rancho Cucamonga lease is for 74 months. The lease commenced
on February 10, 2022, with rent payments commencing after the first three months, and the expiration date is May 31, 2028. The base rental
fee is $114,249 to $140,079 per month through the expiration date, May 31, 2028.

 In addition, we lease a fulfilment
center at 2397 Bateman Avenue, Duarte, CA 91010, which consists of approximately 49,500 square feet of space, with a base rental fee of
$56,000 to $59,410 per month. The term of this lease runs from May 1, 2022 through April 30, 2025.

 We previously leased 48,867
square feet of property at 2399 Bateman Avenue, Duarte, CA 91010, which was leased at the rate of approximately $42,000 per month. This
property previously served as both our principal offices as well as our primary fulfillment center. This lease expired on December 31,
2023 and we did not renew it.

 In addition to our primary
fulfillment centers in Rancho Cucamonga and Duarte, we maintained a 22,700 square foot fulfillment center located at 14750 E. Nelson Avenue,
Unit #I, Industry City, CA 91744, which we had leased at the rate of approximately $28,000 per month since September 2020. This lease
expired on October 31, 2023 and we did not renew it.

 On February 15, 2022, upon
completion of the acquisition of Anivia, the Company assumed an operating lease of offices in the PRC. The office space in the PRC is
located in Shenzhen and the term of this lease expires in July of 2026.

 ITEM 3. LEGAL PROCEEDINGS

 Legal Proceedings

 On April 3, 2024, the Company
and the underwriter of our initial public offering, D.A. Davidson & Co ("D.A. Davidson"), entered into a settlement agreement
and mutual release (the "Settlement Agreement") with Boustead Securities, LLC ("Boustead") and its current and
former employees, officers, directors, partners, agents and affiliates, pursuant to which all parties agreed to release all claims in
exchange for the Company's payment of $1.3 million (the "Settlement Amount") to Boustead. The Settlement Agreement was
entered into for purposes of settling in full the FINRA Arbitration (FINRA Case No. 22-01133) which had been brought by Boustead against
the Company and D.A. Davidson after the Company opted not to complete its initial public offering with Boustead but instead engaged and
completed its initial public offering with D.A. Davidson. In entering into the Settlement Agreement, the Company paid the Settlement Amount
in four equal installments of $325,000 on each of April 3, 2024, May 3, 2024, June 3, 2024 and July 3, 2024. As of the date of this Annual
Report, the parties have formally withdrawn all of the complaints that were before FINRA, with prejudice, and the matter is settled in
full.

 In addition, effective June
18, 2024, and pursuant to the agreement between our co-founder and chairman, Chenlong Tan and D.A. Davidson, Mr. Tan and co-founder, Allan
Huang, returned a total of 541,667 shares (the "Cancelled Shares") to the Company, all of which were cancelled following their
return. The Cancelled Shares, valued at $2.40 per share on the date of cancellation, served to cover the full value of the Settlement
Amount.

 Other than the above settlement,
we are not presently a party to any pending or other threatened legal proceedings or claims against us that we believe will have a material
adverse effect on our business, financial condition, or operating results. Nonetheless, we may from time to time become involved in legal
proceedings in the ordinary course of business.

 ITEM 4. MINE SAFETY DISCLOSURES

 Not applicable.

 ITEM 5. MARKET FOR REGISTRANT'S COMMON
EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

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

 Holders

 As of September 20, 2024,
we had 22 holders of record of our common stock and 31,425,290 shares of common stock outstanding.

 Dividends

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

 Equity Compensation Plans

 2020 Amended Equity Incentive Plan

 The total number of underlying
shares of the Company's common stock available for grant to directors, officers, key employees and consultants of the Company or
a subsidiary of the Company under the Company's Amended and Restated 2020 Equity Inventive Plan (the "2020 Amended Equity
Incentive Plan") was 10,000,000 shares. Grants made under the 2020 Amended Equity Incentive Plan must be approved by the Company's
board of directors.

 The following table provides
information as of June 30, 2024 about our equity compensation plans and arrangements.

 Plan category

 Number of
 securities to be
 issued upon
 exercise of
 outstanding
 options,
 warrants and
 rights

 Weighted-
 average
 exercise price of
 outstanding
 options,
 warrants and
 rights

 Number of
 securities
 remaining
 available for
 future issuance
 under equity
 compensation
 plans

 Equity compensation plans approved by security holders

 3,663,402

 $
 1.12

 6,336,598

 Equity compensation plans not approved by security holders

 –

 –

 –

 Total

 3,663,402

 $
 1.12

 6,336,598

 Recent Sales of Unregistered Securities

 Set forth below is information
regarding all securities issued by us within the past three years. Also included is the consideration received by us for such securities,
if any, and information relating to the section of the Securities Act, or rule of the SEC, under which exemption from registration was
claimed.

 On June 18, 2024, we closed
on the Registered Direct offering of 2,083,334 Shares and a concurrent Private Placement of Warrants to purchase 2,083,334 Warrant Shares,
which were sold for gross aggregate proceeds of $5,000,002. The Shares were sold pursuant to a prospectus supplement, filed on June 18,
2024, to the Registration Statement on Form S-3, originally filed on September 25, 2023, with the SEC (File No. 333-274665), and declared
effective by the SEC on September 29, 2023. The Warrants, which were issued pursuant to an exemption from registration under Section 4(a)(2)
or Regulation D of the Securities Act, have a term of five years and are immediately exercisable at $2.40 per share. The Shares and Warrants
were sold to a purchaser pursuant to a securities purchase agreement, dated June 16, 2024, between the Company and the purchaser (the
"Purchase Agreement"). Roth Capital Partners, LLC acted as placement agent (the "Placement Agent"), pursuant to a
placement agency agreement between the Company and the Placement Agent dated June 16, 2024 (the "Placement Agency Agreement").
The Company paid the Placement Agent as compensation a cash fee equal to 6.5% of the gross proceeds of the Offering plus reimbursement
of certain expenses and legal fees.

 On July 9, 2024, as required
by the Purchase Agreement, we filed a resale registration statement on Form S-1 with the SEC for purposes of registering the Warrant Shares
(the "Resale Form S-1"). Upon filing an amendment on July 23, 2024, the Resale Form S-1 was declared effective by the SEC on
July 26, 2024.

 On February 15, 2022,
pursuant to the terms of a share transfer framework agreement (the "Transfer Agreement") for acquisition of 100% of the ordinary
shares of Anivia Limited ("Anivia") and its subsidiaries and VIE, the Company issued 3,083,700 restricted shares (subject
to a lock-up period of 180 days and insider trading rules) of the Company's common stock to White Cherry Limited, a BVI company
("White Cherry"). The shares issued under the Transfer Agreement were issued in accordance with Regulation S of the Securities
Act. Please see Note 4 of the Notes to Consolidated Financial Statements for further details concerning the transaction.

 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 with a 6% interest per annum (the "Convertible Note") and warrants to purchase shares of Common Stock equaling 80% of
the number of shares of Class A Common Stock issuable upon conversion of the Convertible Notes. The warrants are exercisable for a period
of three years from the IPO completion date at a per share exercise price equal to the IPO. The Convertible Notes automatically converted
into the Company's common stock upon completion of a qualified IPO (the "Mandatory Conversion") or were repayable in
cash at the option of the holders of the Convertible Notes with repayment to commence six months after January 27, 2021. At the time of
our IPO, pursuant to their terms, the Convertible Notes converted at a price equal to the lesser of (a) a price representing a 30% discount
to the public offering price per share of the Common Stock in this Offering, or (b) a price representing a 30% discount to the price
per share equal to dividing $200 million by the total number of (x) outstanding shares of Common Stock immediately prior to the IPO, (y)
the number of Common Stock issuable upon conversion of the 34,500 shares of Series A Preferred Stock, and (z) the number of Common Stock
issuable upon conversion of all outstanding Convertible Notes. Any interest accrued on the Convertible Note will be waived upon conversion.
The Convertible Notes and warrants were sold pursuant to an exemption from registration under Rule 506(b) under Regulation D of the Securities
Act.

 In connection with the Convertible
Note offering, the Company issued placement agent warrants to purchase 7.0% of the shares of Common Stock underlying the Convertible Notes
exercisable at the conversion price of the Convertible Note (the "Conversion Price"). The placement agent warrants were exercisable
for a period of five years from the issuance date and are treated as a debt issuance cost.

 Issuer Purchases of Equity Securities

 None.

 Use of Proceeds

 None.

 ITEM 6. [Reserved]

 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

 Historical results may not indicate future
performance. Our forward-looking statements reflect our current views about future events, are based on assumptions and are subject to
known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements.
We undertake no obligation to publicly update or revise any forward-looking statements, including any changes that might result from any
facts, events, or circumstances after the date hereof that may bear upon forward-looking statements. Furthermore, we cannot guarantee
future results, events, levels of activity, performance, or achievements.

 Overview

 Driven by tech and data, iPower
Inc. is an online supplier of consumer goods, including hydroponics equipment, general gardening supplies, and consumer home goods. Through
the operations of our e-commerce platforms and channel partners, our combined 121,000 square foot fulfillment centers in Rancho Cucamonga
and Los Angeles, California, we believe we are one of the leading marketers, distributors and retailers in the consumer gardening and
home goods categories, based on management's estimates. Our core strategy continues to focus on expanding our geographic reach across
the United States and internationally through organic growth, both in terms of expanding customer base as well as brand and product development.
iPower has developed a set of methodologies driven by proprietary data formulas to effectively bring products to market and sales.

 We are actively developing our
in-house branded products and through supply chain partners, which to date include the iPower and Simple Deluxe
brands and more, some of which have been designated as Amazon best seller product leaders and Amazon Choice products, among others.

 Trends and Expectations

 Product and Brand Development

 We plan to increase investments
in product and brand development. We actively evaluate potential acquisition opportunities of companies and product brand names that can
complement our product catalog and improve on existing products and supply chain efficiencies.

 Global Economic Disruption

 While at present the majority
of our products are sourced either in the United States or China, the military conflict between Russia and Ukraine may nonetheless increase
the likelihood of supply chain interruptions and hinder our ability to find the materials we need to make our products. Thus far, as a
result of the general global economic disruption, we have experienced a decrease in the speed with which we are able to purchase new inventory,
as well as an increase in costs due to delays in shipping, resulting increase in time with which products remain in our warehouse facilities,
thus resulting in reduced profits. In addition, supply chain disruptions may make it harder for us to find favorable pricing and reliable
sources for the materials we need, putting upward pressure on our costs and increasing the risk that we may be unable to acquire the materials
and services we need to continue to make certain products.

 Regulatory Environment

 We sell hydroponic gardening
products to end users that may use such products in new and emerging industries or segments, including the growing of cannabis. The demand
for hydroponic gardening products depends on the uncertain growth of these industries or segments due to varying, inconsistent, and rapidly
changing laws, regulations, administrative practices, enforcement approaches, judicial interpretations, and consumer perceptions. For
example, certain countries and a total of 46 U.S. states plus the District of Columbia have adopted frameworks that authorize, regulate
and tax the cultivation, processing, sale and use of cannabis for medicinal and/or non-medicinal use, including legalization of hemp and
CBD, while the U.S. Controlled Substances Act and the laws of U.S. states prohibit growing cannabis. Demand for our products could be
impacted by changes in the regulatory environment with respect to such industries and segments.

 Recent Developments

 On June 18, 2024, we closed
on the Registered Direct offering of 2,083,334 Shares and a concurrent Private Placement of Warrants to purchase 2,083,334 Warrant Shares,
which were sold for gross aggregate proceeds of $5,000,002. The Shares were sold pursuant to a prospectus supplement, filed on June 18,
2024, to the Registration Statement on Form S-3, originally filed on September 25, 2023, with the SEC (File No. 333-274665), and declared
effective by the SEC on September 29, 2023. The Warrants, which were issued pursuant to an exemption from registration under Section 4(a)(2)
or Regulation D of the Securities Act, have a term of five years and are immediately exercisable at $2.40 per share. The Shares and Warrants
were sold to a Purchase Agreement to a securities purchase agreement, dated June 16, 2024, between the Company and the purchaser. Roth
Capital Partners, LLC acted as Placement Agent, pursuant to a Placement Agency Agreement. The Company paid the Placement Agent as compensation
a cash fee equal to 6.5% of the gross proceeds of the Offering plus reimbursement of certain expenses and legal fees.

 On July 9, 2024, as required
by the Purchase Agreement, we filed a resale registration statement on Form S-1 with the SEC (the "Resale Form S-1"). Upon filing
an amendment on July 23, 2024, the Resale Form S-1 was declared effective by the SEC on July 26, 2024.

 RESULTS OF OPERATIONS

 For the fiscal years ended June, 2024 and
2023

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

 Year Ended

 Year Ended

 Variance

 Revenues

 $

 86,071,485

 $

 88,902,048

 (3.18%

)

 Cost of goods sold

 46,818,232

 54,104,587

 (13.47%

)

 Gross profit

 39,253,253

 34,797,461

 12.80%

 Operating expenses

 40,216,145

 48,281,004

 (16.70%

)

 Loss from operations

 (962,892

)

 (13,483,543

)

 (92.86%

)

 Other expenses

 (829,921

)

 (1,184,030

)

 (29.91%

)

 Loss before income taxes

 (1,792,813

)

 (14,667,573

)

 (87.78%

)

 Income tax benefit

 (251,365

)

 (2,690,500

)

 (90.66%

)

 Net loss

 (1,541,448

)

 (11,977,073

)

 (87.13%

)

 Non-controlling interest

 (13,289

)

 (11,683

)

 13.75%

 Net loss attributable to iPower Inc.

 (1,528,159

)

 (11,965,390

)

 (86.61%

)

 Other comprehensive loss

 (148,272

)

 (67,812

)

 118.65%

 Comprehensive loss attributable to iPower Inc.

 $

 (1,676,431

)

 $

 (12,033,202

)

 (86.07%

)

 Gross profit % of revenues

 45.61%

 39.14%

 16.51%

 Operating loss % of revenues

 (1.12%

)

 (15.17%

)

 (92.62%

)

 Net loss attributable to iPower Inc. % of revenues

 (1.78%

)

 (13.46%

)

 (86.81%

)

 Revenues

 Revenues for the year ended
June 30, 2024 decreased 3.18% to $86,071,485 as compared to $88,902,048 for the year ended June 30, 2023. While pricing remained stable,
the decreased revenue mainly resulted from a slight decrease in sales volume.

 Costs of Goods Sold

 Costs of goods sold for the
year ended June 30, 2024 decreased 13.47% to $46,818,232 as compared to $54,104,587 for the year ended June 30, 2023. The decrease was
mainly due to the decrease in sales, freight costs, and lowered product costs resulted from management's efforts on supply chain
management.

 Gross Profit

 Gross profit was $ 39,253,253
for the year ended June 30, 2024 as compared to $34,797,461 for the year ended June 30, 2023. The gross profit ratio increased to 45.61%
for the year ended June 30, 2024 from 39.14% for the year ended June 30, 2023. The increase in gross profit ratio was mainly driven by
the decrease in costs of goods sold during the year ended June 30, 2024, as discussed above.

 Operating Expenses

 Operating expenses for the
year ended June 30, 2024 decreased 16.70% to $40,216,145 as compared to $48,281,004 for the year ended June 30, 2023. The decrease was
mainly due to the combination of a decrease in selling and fulfillment expenses of $4.33 million, including vendor warranty credits for
prior year purchases of $2.48 million recorded during the year ended June 30, 2024 and decreased costs related to advertising, merchant
fees, delivery fees, rental expenses, storage costs and fulfillment workforce, a decrease in general and administrative expenses of $0.67
million, which included payroll expenses, stock-based compensation expense, insurance expenses, legal fees related to the Boustead case,
and other operating expenses including expenses associated with being a publicly traded company, and a decrease of $3.06 million of impairment
loss on goodwill triggered by a decrease in the Company's share price of its common stock and the net loss incurred during the quarter
ended September 30, 2022. We have seen decreased operating expenses during the year ended June 30, 2024; however, we can provide no assurance
that this trend will continue.

 Loss from Operations

 Loss from operations was 962,892
for the year ended June 30, 2024 as compared to $13,483,543 for the year ended June 30, 2023. The decrease was due to combination of the
decrease in operating expenses and the increase in gross profit as discussed above.

 Other Expenses

 Other expenses consist of
interest expense and other non-operating income (expenses). Other expenses for the year ended June 30, 2024 were $829,921 as
compared to $1,184,030 for the year ended June 30, 2023. The decrease in other expenses was mainly due to decrease in other
non-operating loss of $71,761, and in interest, including amortization of debt discount, on the revolving loan of $277,855 during
the year ended June 30, 2024 resulted from the decreasing loan balance.

 Net Loss Attributable to iPower Inc.

 Net loss attributable to iPower
Inc. for the year ended June 30, 2024 was $1,528,159 as compared to $11,965,390 for the year ended June 30, 2023, representing a decrease
of net loss of $10,437,231. The decrease was primarily due to the increase in gross profit and decrease in operating expenses as discussed
above.

 Comprehensive loss Attributable to iPower
Inc.

 Comprehensive loss attributable
to iPower Inc. for the year ended June 30, 2024 was $1,676,431 as compared to $12,033,202 for the year ended June 30, 2023, representing
a decrease of comprehensive loss of $10,356,771. The decrease was due to the reasons discussed above, along with other comprehensive loss
of $148,272 as a result of foreign currency translation adjustments resulting from the translation of RMB, the functional currency of
our VIE in the PRC, to USD, the reporting currency of the Company.

 LIQUIDITY AND CAPITAL RESOURCES

 Sources of Liquidity

 During the fiscal year ended
June 30, 2024 we primarily funded our operations with cash and cash equivalents generated from operations, as well as through borrowing
under our credit facility from JPMorgan Chase Bank ("JPM"). Additionally, on June 18, 2024, we closed on the Registered Direct
offering of 2,083,334 Shares and a concurrent Private Placement of Warrants to purchase 2,083,334 Warrant Shares, which were sold for
gross aggregate proceeds of $5,000,002. We had cash and cash equivalents of $7,377,837 as of June 30, 2024, representing a $3,642,195
increase from $3,735,642 in cash as of June 30, 2023. The cash increase was primarily the result of the cash we received in the Registered
Direct in June 2024.

 Based on our current operating
plan, we believe that our existing cash and cash equivalents and cash flows from operations will be sufficient to finance our operations
during the next 12 months. However, our liquidity and our ability to meet our obligations and fund our capital requirements are dependent
on our future financial performance, which is subject to general economic, financial and other factors that are beyond our control, such
as rising inflation and potential recession, and our anticipated funding requirements could increase. See the "Risk Factors"
section in this Annual Report.

 Our cash requirements consist
primarily of day-to-day operating expenses and obligations with respect to warehouse leases. We lease all our office and warehouse facilities.
We expect to make future payments on existing leases from cash generated from operations. We have credit terms in place with our major
suppliers, however as we bring on new suppliers, we are often required to prepay our inventory purchases from them. This is consistent
with our historical operating model which allowed us to operate using only cash generated by the business. Beyond the next 12 months we
believe that our cash flow from operations should improve as supply chain operations normalize and new suppliers we are bringing online
transition to credit terms more favorable to us. In addition, we plan to increase the size of our in-house product catalog, which will
have a net beneficial impact to our margin profile and ability to generate cash. Currently, we have approximately $18.0 million in unused
credit under the revolving line with JPM, which will be expired and we are in negotiations on a renewal in November 2024.

 Given our current working
capital position and available funding from our revolving credit line and proceeds from our June Registered Direct offering, we believe
we will be able to manage through the current challenges by managing payment terms with customers and vendors.

 Working Capital

 As of June 30, 2024 and 2023,
our working capital was $11.2 million and $17.9 million, respectively. The historical seasonality in our business during the year can
cause cash and cash equivalents, inventory and accounts payable to fluctuate, resulting in changes in our working capital. We anticipate
that past historical trends to remain in place through the balance of the fiscal year with working capital remaining near this level for
the foreseeable future.

 Cash Flows

 Operating Activities

 Our largest source of cash
provided by operations is from sales of products. Our primary uses of cash from operating activities include payments to suppliers for
products, to employees for compensation, and other general expenses. Net cash provided by operating activities for the years ended June
30, 2024 and 2023 was $6,164,076 and $9,211,269, respectively. The decrease in cash provided by operating activities mainly resulted from
a decrease in cash received from customers and an increase in cash paid for cost of revenues and operating expenses.

 Investing Activities

 For the years ended June 30,
2024 and 2023, net cash used in investing activities was $0 and $140,813, respectively. The decrease in cash used in investing activities
was because the Company did not purchase any additional equipment during the year ended June 30, 2024, whereas such equipment had been
purchased in the same period during 2023.

 Financing Activities

 Net cash used in financing activities
was $2,397,801 and $7,153,620, respectively, for the years ended June 30, 2024 and 2023. The decrease in net cash used in financing activities
was primarily due to a combination of increase in proceeds from our registered offering and loans and our payment of approximately $16.8
million for: (1) $3.8 million to pay off the notes payable to White Cherry; (2) $12 million to pay down the outstanding balance of the
asset-based revolving loan facility with JPM; and (3) $1.0 million of offering cost settlement payment to Boustead.

 OFF-BALANCE SHEET ARRANGEMENTS

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

 CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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

 Revenue recognition

 The Company recognizes revenue from service and 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 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.

 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.

 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 period costs and reflected
in selling and fulfillment expenses. The Company regularly review inventory and consider 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 and obsolescence and records allowance for obsolescence.

 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 is provided by the Company after February 15, 2022. During the
term of the agreements, which run for a term of 10 years from February 2022 to February 2032, 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 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. See Note 4 for details on 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 as of September 30, 2022 was required. The impairment amount was
determined based on the discounted cash flows with the revised projections reflecting the increase in freight and storage costs in the
current interim quarter. The Company also considered the Market Capital Method, which is an alternative market approach, suggested the
Company's goodwill is partially impaired.

 Subsequent to the quarter
ended September 30, 2022, during the period ended June 30, 2023, 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 and $3,034,110, respectively.

 Intangible Assets, net

 Finite life intangible assets
at June 30, 2024 include a 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:

 Useful Life

 Covenant Not to Compete

 10 years

 Supplier relationship

 6 years

 Software

 5 years

 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 June 30, 2024, there were no indicators of impairment.

 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 the requisite service period, the Company also evaluates the performance condition and market condition under ASC 718-10-20. For an
award that contains both a performance and a market condition, and where both conditions must be satisfied in order 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 that 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.

 As a result of the implementation
of certain provisions of ASC 740, Income Taxes ("ASC 740"), which clarifies the accounting and disclosure for uncertainty
in tax position, as defined, ASC 740 seeks to reduce the diversity in practice associated with certain aspects of the recognition and
measurement related to accounting for income taxes. The Company has adopted the provisions of ASC 740 since its inception on April 11,
2018, and has subsequently 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. 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.

 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

 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 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

 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 our 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 the 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 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 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.

 Recent Financings

 Asset-based revolving loan

 On November 12, 2021, the
Company entered into a Credit Agreement with JPMorgan Chase Bank, N.A. ("JPM"), 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

 Up to 90% of eligible credit card receivables

 Up to 85% of eligible trade accounts receivable

 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 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 financing fees including 2% of $25.0 million or $500,000
paid to its financial advisor. The financing fees are recorded as debt discount and to be amortized over three years as financing expenses,
the term of the ABL.

 Below is a summary of the
interest expense recorded for the years ended June 30, 2024 and 2023:

 2024

 2023

 Accrued interest

 $
 402,675

 $
 670,924

 Credit utilization fees

 71,332

 43,931

 Amortization of debt discount

 265,219

 265,218

 Total

 $
 739,226

 $
 980,073

 As of June 30, 2024 and 2023,
the outstanding amount of the JPM revolving loan payable, net of debt discount and including interest, was $5,500,739 and $9,791,191,
respectively.

 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 JPM, as administrative agent and lender. 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 JPM 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 JPM accurately reflecting the Excess Availability (together, the "Existing Defaults").
Under the terms of the Waiver Letter, JPM agreed to waive the right to enforce an event of default based on the aforementioned Existing
Defaults. As of June 30, 2024 and 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 with a fair value of $3.6 million as of February 15, 2022, the issuance date. In October 2022, the Company paid the first
installment of $875,000, and in February 2023, the Company paid the second installment of $875,000. In August 2023, the Company paid the
third installment of $875,000. In February 2024, the Company paid the fourth installment of $875,000. For the year ended June 30, 2024,
the Company recorded accrued interest of $39,429 and amortization of note premium of $31,602. For the year ended June 30, 2023, the Company
recorded accrued interest of $157,500 and amortization of note premium of $50,418. As of June 30, 2024, the total outstanding balance
of the Purchase Note was $0. As of June 30, 2023, including $236,250 of accrued interest and $31,602 of unamortized premium, the total
outstanding balance of the Purchase Note was $2,017,852, which is presented on the consolidated balance sheet as a current portion of
$2,017,852 and a non-current portion of $0.

 Short-term loans 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 $2,000,000 from White Cherry, repaid $1 million on July 31, 2023 and $1 million on January 31, 2024. For the
year ended June 30, 2024, the Company recorded interest of $32,911. As of June 30, 2024, the outstanding balance of the On-demand Loan
was fully paid off.

 On April
8, 2024, the Company entered into an agreement with an unrelated accredited investor (the "Investor") for an on-demand, unsecured
and subordinated loan ("On-demand Loan 2"). Pursuant to the agreement, the Investor agreed to loan the Company the amount
requested. The On-demand Loan 2 bears interest at the rate of the Secured Overnight Financing Rate, or SOFR, plus 1.5% per annum. The
On-demand Loan 2 is due in 30 days upon receipt of the Investor's notice of repayment. For the year ended June 30, 2024, the Company
borrowed $483,599 and recorded interest expense of $7,615. As of June 30, 2024, the outstanding balance of the On-demand Loan 2, including
accrued interest of $7,615, was $491,214.

 On April
1, 2024, the Company borrowed $350,000 short-term loan ("RP Loan") from an entity owned by Mr. Allan Huang, one of the majority
shareholders of the Company. The RP Loan bears no interest and is due upon receipt of request of repayment. As of June 30, 2024, the outstanding
balance of the RP Loan was $350,000.

 June 2024 Registered Direct Offering

 On June 18, 2024, the Company,
closed on a Registered Direct Offering of 2,083,334 Shares and a concurrent Private Placement of Warrants to purchase 2,083,334 Warrant
Shares, which were sold for gross aggregate proceeds of $5,000,002. The Shares were sold pursuant to a prospectus supplement, filed on
June 18, 2024, to the Registration Statement on Form S-3, originally filed on September 25, 2023, with the SEC (File No. 333-274665),
and declared effective by the SEC on September 29, 2023. The Warrants, which were issued pursuant to an exemption from registration pursuant
to Section 4(a)(2) or Regulation D on the Securities Act, have a term of five years and are immediately exercisable at $2.40 per share.
The Shares and Warrants were sold to a purchaser pursuant to a securities purchase agreement, dated June 16, 2024, between the Company
and the purchaser (the "Purchase Agreement"). Roth Capital Partners, LLC (the "Placement Agent") acted as placement
agent, pursuant to a placement agency agreement between the Company and the Placement Agent dated June 16, 2024 (the "Placement
Agency Agreement"). The Company paid the Placement Agent as compensation a cash fee equal to 6.5% of the gross proceeds of the offering
plus reimbursement of certain expenses and legal fees. The net proceeds of the offering, after deducting the Placement Agent's fees
and expenses and other offering expenses payable by the Company, is approximately $4,543,089.

 A holder will not have the
right to exercise any portion of the Warrants if the holder (together with its affiliates) would beneficially own in excess of 4.99% (or,
at the election of the holder, 9.99%), respectively, of the number of shares of common stock outstanding immediately after giving effect
to the exercise, as such percentage ownership is determined in accordance with the terms of the Warrants. However, upon notice from the
holder to the Company as described in the Purchase Agreement, the holder may increase the beneficial ownership limitation, which may not
exceed 9.99% of the number of shares of common stock outstanding immediately after giving effect to the exercise of Warrants.

 According to the terms of
the Purchase Agreement, on July 9, 2024, we filed a Form S-1 to register the resale, from time to time, of up to an aggregate of 2,083,334
Warrant Shares, issuable upon the exercise of the Warrants issued in the Private Placement by the selling stockholder named therein. The
resale registration statement was declared effective by the SEC on July 26, 2024. As of June 30, 2024, no Warrants have been exercised.

 Emerging Growth Company

 We are an "emerging
growth company," as defined in the JOBS Act. Accordingly, certain specified reporting and other regulatory requirements for public
companies are reduced for businesses that meet the qualifications for emerging growth companies.

 These provisions include:

 (1)

 an exemption from the auditor attestation requirement in the assessment of our internal controls over financial reporting required by Section 404 of the Sarbanes-Oxley Act of 2002;

 (2)

 an exemption from the adoption of new or revised financial accounting standards until they would apply to private companies;

 (3)

 an exemption from compliance with any new requirements adopted by the Public Company Accounting Oversight Board, or the PCAOB, requiring mandatory audit firm rotation or a supplement to the auditor's report in which the auditor would be required to provide additional information about our audit and our financial statements; and

 (4)

 reduced disclosure about our executive compensation arrangements.

 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK

 As a "smaller reporting
company," this item is not required.

 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 Index to Financial Statements

 Page

 Report of Independent Registered Public Accounting Firm PCAOB ID ( 1195)

 Consolidated Balance Sheets as of June 30, 2024 and 2023

 Consolidated Statements of Operations and Comprehensive Loss for the years ended June 30, 2024 and 2023

 Consolidated Statements of Changes in Stockholders' Equity for the years ended June 30, 2024 and 2023

 Consolidated Statements of Cash Flows for the years ended June 30, 2024 and 2023

 Notes to Consolidated Financial Statements

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 To the Board of Directors and Stockholders of iPower, Inc.

 Opinion on the Consolidated Financial Statements

 We have audited the accompanying
consolidated balance sheets of iPower, Inc. and its subsidiaries (the "Company") as of June 30, 2024 and 2023, and the related
consolidated statements of operations and comprehensive loss, changes in stockholders' equity, and cash flows for each of the years
in the two-year period ended June 30, 2024 and the related notes (collectively referred to as the consolidated financial statements).
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company
as of June 30, 2024 and 2023, and the results of their operations and their cash flows for each of the years in the two-year period ended
June 30, 2024, in conformity with accounting principles generally accepted in the United States of America.

 Basis for Opinion

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

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

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

 /s/ UHY LLP

 We have served as the Company's auditor since 2020.

 Irvine, California

 September
20, 2024

 F- 1

 iPower Inc. and Subsidiaries

 Consolidated
Balance Sheets

 As of June 30, 2024
and 2023

 June 30,

 June 30,

 2024

 2023

 ASSETS

 Current assets

 Cash and cash equivalent

 $
 7,377,837

 $
 3,735,642

 Accounts receivable, net

 14,740,093

 14,071,543

 Inventories, net

 10,546,273

 20,593,889

 Prepayments and other current assets, net

 2,346,534

 2,858,196

 Total current assets

 35,010,737

 41,259,270

 Non-current assets

 Right of use - non-current

 6,124,163

 7,837,345

 Property and equipment, net

 370,887

 536,418

 Deferred tax assets, net

 2,445,605

 2,155,250

 Goodwill

 Intangible assets, net

 3,630,700

 4,280,071

 Other non-current assets

 679,655

 991,823

 Total non-current assets

 16,285,120

 18,835,017

 Total assets

 $
 51,295,857

 $
 60,094,287

 LIABILITIES AND EQUITY

 Current liabilities

 Accounts payable, net

 $
 11,227,116

 $
 13,244,957

 Other payables and accrued liabilities

 3,885,487

 5,548,443

 Advance from shareholders

 –

 85,200

 Lease liability - current

 2,039,301

 2,159,173

 Short-term loan payable

 491,214

 –

 Short-term loan payable - related party

 350,000

 –

 Long-term promissory note payable - current portion

 –

 2,017,852

 Revolving loan payable, net

 5,500,739

 –

 Income taxes payable

 276,158

 276,683

 Total current liabilities

 23,770,015

 23,332,308

 Non-current liabilities

 Long-term revolving loan payable, net

 –

 9,791,191

 Lease liability - non-current

 4,509,809

 6,106,047

 Total non-current liabilities

 4,509,809

 15,897,238

 Total liabilities

 28,279,824

 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
 June 30, 2024 and 2023

 –

 –

 Common stock, $ 0.001 par value; 180,000,000 shares authorized; 31,359,899 and 29,710,939 shares issued and outstanding at June 30, 2024 and 2023

 31,361

 29,712

 Additional paid in capital

 33,463,883

 29,624,520

 Accumulated deficits

 ( 10,230,601
)

 ( 8,702,442
)

 Non-controlling interest

 ( 38,204
)

 ( 24,915
)

 Accumulated other comprehensive loss

 ( 210,406
)

 ( 62,134
)

 Total stockholders' equity

 23,016,033

 20,864,741

 Total liabilities and stockholders' equity

 $
 51,295,857

 $
 60,094,287

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

 F- 2

 iPower Inc. and Subsidiaries

 Consolidated
Statements of Operations and Comprehensive Loss

 For the Years Ended June
30, 2024 and 2023

 For the Years Ended June 30,

 2024

 2023

 REVENUES

 $
 86,071,485

 $
 88,902,048

 TOTAL REVENUES

 86,071,485

 88,902,048

 COST OF REVENUES

 46,818,232

 54,104,587

 GROSS PROFIT

 39,253,253

 34,797,461

 OPERATING EXPENSES:

 Selling and fulfillment

 28,095,176

 32,427,972

 General and administrative

 12,120,969

 12,792,998

 Impairment loss - goodwill

 –

 3,060,034

 Total operating expenses

 40,216,145

 48,281,004

 LOSS FROM OPERATIONS

 ( 962,892
)

 ( 13,483,543
)

 OTHER INCOME (EXPENSE)

 Interest expenses

 ( 788,425
)

 ( 1,066,280
)

 Loss on equity method investment

 ( 5,508
)

 ( 10,001
)

 Other non-operating income (loss)

 ( 35,988
)

 ( 107,749
)

 Total other expenses, net

 ( 829,921
)

 ( 1,184,030
)

 LOSS BEFORE INCOME TAXES

 ( 1,792,813
)

 ( 14,667,573
)

 PROVISION FOR INCOME TAX BENEFIT

 ( 251,365
)

 ( 2,690,500
)

 NET LOSS

 ( 1,541,448
)

 ( 11,977,073
)

 Non-controlling interest

 ( 13,289
)

 ( 11,683
)

 NET LOSS ATTRIBUTABLE TO iPOWER INC.

 $
 ( 1,528,159
)

 $
 ( 11,965,390
)

 OTHER COMPREHENSIVE LOSS

 Foreign currency translation adjustments

 ( 148,272
)

 ( 67,812
)

 COMPREHENSIVE LOSS ATTRIBUTABLE TO iPOWER INC.

 $
 ( 1,676,431
)

 $
 ( 12,033,202
)

 WEIGHTED AVERAGE NUMBER OF COMMON STOCK

 Basic

 29,878,196

 29,713,354

 Diluted

 29,878,196

 29,713,354

 LOSSES PER SHARE

 Basic

 $
 ( 0.05
)

 $
 ( 0.40
)

 Diluted

 $
 ( 0.05
)

 $
 ( 0.40
)

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

 F- 3

 iPower Inc. and Subsidiaries

 Consolidated Statements
of Changes in Stockholders' Equity

 For the Years Ended June 30, 2024 and 2023

 Common Stock

 Additional Paid in

 Retained Earnings (Accumulated

 Non-
 controlling

 Accumulated other Comprehensive income

 Shares

 Amount

 Capital

 Deficit)

 interest

 (loss)

 Total

 Balance, June 30, 2023

 29,710,939

 $
 29,712

 $
 29,624,520

 $
 ( 8,702,442
)

 $
 ( 24,915
)

 $
 ( 62,134
)

 $
 20,864,741

 Net loss

 –

 –

 –

 ( 1,528,159
)

 ( 13,289
)

 –

 ( 1,541,448
)

 Stock-based compensation

 –

 –

 512,542

 –

 –

 –

 512,542

 Restricted shares issued for vested
 RSUs

 107,293

 ( 107
)

 –

 –

 –

 –

 Common stock issued for cash, net
 of issuance costs

 2,083,334

 2,084

 4,541,005

 –

 –

 –

 4,543,089

 Capital injection to DHS

 –

 –

 85,381

 –

 –

 –

 85,381

 Settled offering cost
 (See Note 17)

 –

 –

 ( 1,300,000
)

 –

 –

 –

 ( 1,300,000
)

 Returned and cancelled shares

 ( 541,667
)

 ( 542
)

 –

 –

 –

 –

 Foreign currency
 translation adjustments

 –

 –

 –

 –

 –

 ( 148,272
)

 ( 148,272
)

 Balance, June 30, 2024

 31,359,899

 $
 31,361

 $
 33,463,883

 $
 ( 10,230,601
)

 $
 ( 38,204
)

 $
 ( 210,406
)

 $
 23,016,033

 Balance, June 30, 2022

 29,572,382

 29,573

 29,111,863

 3,262,948

 ( 13,232
)

 5,678

 32,396,830

 Net loss

 –

 –

 –

 ( 11,965,390
)

 ( 11,683
)

 –

 ( 11,977,073
)

 Stock-based compensation

 –

 –

 512,796

 –

 –

 –

 512,796

 Restricted shares issued for vested
 RSUs

 138,557

 ( 139
)

 –

 –

 –

 –

 Foreign currency
 translation adjustments

 –

 –

 –

 –

 –

 ( 67,812
)

 ( 67,812
)

 Balance, June 30, 2023

 29,710,939

 $
 29,712

 $
 29,624,520

 $
 ( 8,702,442
)

 $
 ( 24,915
)

 $
 ( 62,134
)

 $
 20,864,741

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

 F- 4

 iPower Inc. and Subsidiaries

 Consolidated Statements
of Cash Flows

 For the Years Ended June
30, 2024 and 2023

 For the Years Ended June 30,

 2024

 2023

 CASH FLOWS FROM OPERATING ACTIVITIES:

 Net loss

 $
 ( 1,541,448
)

 $
 ( 11,977,073
)

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

 Depreciation and amortization expense

 796,225

 796,375

 Inventory reserve

 88,926

 238,899

 Credit loss reserve

 285,386

 249,128

 Loss on equity method investment

 5,508

 10,001

 Impairment loss - goodwill

 –

 3,060,034

 Stock-based compensation expense

 512,542

 512,796

 Amortization of operating lease right of use assets

 1,713,182

 2,615,937

 Amortization of debt premium / discount and non-cash financing costs

 233,617

 214,800

 Change in operating assets and liabilities

 Accounts receivable

 ( 953,936
)

 3,333,936

 Inventories

 9,958,690

 9,600,978

 Deferred tax assets

 ( 290,355
)

 ( 3,094,365
)

 Prepayments and other current assets

 511,663

 2,380,563

 Other non-current assets

 306,660

 373,646

 Accounts payable

 ( 2,017,841
)

 4,121,315

 Other payables and accrued liabilities

 ( 1,728,632
)

 ( 619,497
)

 Operating lease liabilities

 ( 1,716,110
)

 ( 2,583,324
)

 Income taxes payable

 –

 ( 22,880
)

 Net cash provided by operating activities

 6,164,076

 9,211,269

 CASH FLOWS FROM INVESTING ACTIVITIES:

 Purchase of equipment

 –

 ( 140,813
)

 Net cash used in investing activities

 –

 ( 140,813
)

 CASH FLOWS FROM FINANCING ACTIVITIES:

 Capital injection

 85,711

 –

 Advance from shareholders

 ( 85,200
)

 –

 Payments of offering cost settlement (See Note 17)

 ( 975,000
)

 –

 Net proceeds from sale of common stock (See Note 14)

 4,543,089

 –

 Proceeds from related parties

 –

 134,262

 Payments to related parties

 –

 ( 82,500
)

 Proceeds from short-term loans - related party

 2,350,000

 31,385

 Proceeds from short-term loans

 483,599

 –

 Payment on investment payable

 –

 ( 1,500,000
)

 Payments on short-term loans - related party

 ( 2,000,000
)

 –

 Payments on promissory note

 ( 1,750,000
)

 ( 2,159,767
)

 Proceeds from revolving loan

 6,950,000

 5,023,000

 Payments on revolving loan

 ( 12,000,000
)

 ( 8,600,000
)

 Net cash used in financing activities

 ( 2,397,801
)

 ( 7,153,620
)

 EFFECT OF EXCHANGE RATE ON CASH

 ( 124,080
)

 ( 3,141
)

 CHANGES IN CASH

 3,642,195

 1,913,695

 CASH AND CASH EQUIVALENT, beginning of period

 3,735,642

 1,821,947

 CASH AND CASH EQUIVALENT, end of period

 $
 7,377,837

 $
 3,735,642

 SUPPLEMENTAL CASH FLOW INFORMATION:

 Cash paid for income tax

 $
 –

 $
 55,000

 Cash paid for interest

 $
 308,590

 $
 –

 SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING TRANSACTIONS:

 Shares returned and cancelled (See Note 17)

 $
 1,300,000

 $
 –

 Right of use assets acquired under new operating leases

 632,732

 –

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

 F- 5

 iPower Inc.

 Notes to Consolidated Financial Statements

 As of June 30, 2024 and 2023 and for the Years
Ended June 30, 2024 and 2023

 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, 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 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 shareholders of the Company. As a result, E Marketing 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 providing a social media platform, 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.

 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.

 F- 6

 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 RMB to $1.00. The equity accounts were stated at their historical rates.
The average translation rates applied to statements of operations and comprehensive loss accounts for the year ended June 30,
2024 was 7.2103 RMB to $1.00. Cash flows were also translated at average translation rates for the period and, therefore, amounts reported
on the statement of cash flows would not necessarily agree with changes in the corresponding balances on the consolidated balance sheet.

 F- 7

 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 % owned joint venture, following the equity method of accounting, in accordance with ASC 323, Investments —
Equity Method and Joint Ventures. Under this method, the carrying cost is initially recorded at cost and then increased or decreased by
recording its percentage of gain or loss in Box Harmony's statement of operations and a corresponding charge or credit to the carrying
value of the asset.

 F- 8

 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 as of September 30, 2022 was required. The impairment amount was determined
based on the discounted cash flows with the revised projections reflecting the increase in freight and storage costs in the current interim
quarter. The Company also considered the Market Capital Method, which is an alternative market approach, suggested the Company's
goodwill is partially impaired.

 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 and $ 3,034,110, respectively.

 F- 9

 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 years

 Supplier relationship

 6 years

 Software

 5 years

 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.

 F- 10

 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
Value

 Level 1

 Level 2

 Level 3

 Total
Impairment
Loss

 Goodwill

 $

 $
 –

 $
 –

 $

 $
 3,060,034

 Total

 $

 $
 –

 $
 –

 $

 $
 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.

 F- 11

 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
and $ 5,331,152, respectively.

 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 and $ 0, respectively.

 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 and $ 0 were recorded as deferred offering costs and reclassed
to additional paid in capital upon closing of the offering. As of June 30, 2024 and 2023, $ 0 and $ 0 of deferred offering costs were
included in the consolidated balance sheets, respectively.

 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 % and 10 % of the Company's total
sales. During the year ended June 30, 2024, sales of hydroponic products, including ventilation and grow light systems, was approximately
 22 % of the Company's total sales and the remaining 78 % consisted of general gardening, home goods, and other products and accessories.
During the year ended June 30, 2023, sales of hydroponic products, including ventilation and grow light systems, was approximately 23 %
of the Company's total sales and the remaining 77 % consisted of general gardening, home goods, and other products and accessories.
As of June 30, 2024 and 2023, the Company had approximately $ 1.9 and $ 1.6 million of inventory stored in China. The Company's majority
of long-lived assets are located in California, United States, majority of the deferred tax assets are US related, and a majority of the
Company's revenues are derived from within the United States.

 F- 12

 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.

 F- 13

 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.

 F- 14

 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 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

 F- 15

 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.

 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 consolidated financial statements are presented therein.

 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.

 F- 16

 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 % of the equity
interest in Box Harmony with significant influence but does not own a majority equity interest or otherwise control of Box Harmony. The
Company accounts for its ownership interest in Box Harmony following the equity method of accounting, in accordance with ASC 323, Investments
—Equity Method and Joint Ventures. Under this method, the carrying cost is initially recorded at cost and then increased or decreased
by recording its percentage of gain or loss in its statement of operations and a corresponding charge or credit to the carrying value
of the asset.

 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 have
not completed the capital contributions and no receivables were recorded.

 Pursuant to the terms of the Agreements, the Company
owns 60 % of the equity interest in GSM and control of GSM's operations. Based on ASU 2015-02, the Company consolidates GSM into
its financial statements due to its majority equity ownership and control over operations. For the years ended June 30, 2024 and 2023,
the impact of GSM's activities were immaterial to the Company's consolidated financial statements.

 Note 4 – Variable interest entity

 Effective February 15, 2022, upon acquisition
of Anivia, the Company assumed the contractual arrangements between the WFOE and DHS through a variable interest operating entity structure.

 As of June 30, 2024 and 2023, 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 consolidated balance sheets and statements of operations and
comprehensive income after the elimination of intercompany balances and transactions with the VIE are as follows:

 F- 17

 The carrying amount of the VIE's assets
and liabilities were as follows for the years indicated:

 Schedule of carrying amount of the VIE's assets and liabilities

 Cash in bank

 $
 222,648

 $
 341,774

 Prepayments and other receivables

 $
 202,904

 $
 664,886

 Rent deposit

 $
 72,281

 $
 81,624

 Office equipment, net

 $
 12,205

 $
 33,774

 Right of use – noncurrent

 $
 434,034

 $
 6,104

 Deferred tax assets

 $
 –

 $
 64,510

 Advance from shareholders

 $
 –

 $
 85,200

 Accounts payable

 $
 381,013

 $
 6,278

 Lease liability

 $
 443,059

 $
 4,758

 Income tax payable

 $
 276,158

 $
 276,683

 Other payables and accrued liabilities

 $
 514,285

 $
 344,735

 The operating results of the VIE were as follows
for the year ended June 30, 2024:

 Schedule of operating results of the VIE

 Revenue

 $
 –

 Net loss after elimination of intercompany transactions

 $
 4,340,968

 The operating results of the VIE were as follows for the year ended
June 30, 2023:

 Revenue

 $
 –

 Net loss after elimination of intercompany transactions

 $
 2,056,556

 For the year ended June 30, 2024, the VIE contributed approximately
$ 7.1 million of revenue and $ 0.5 million of net loss before elimination. For the year ended June 30, 2023, the VIE contributed approximately
$ 7.0 million of revenue and $ 1.4 million of net loss before elimination.

 Note 5 – Accounts receivable, net

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

 Schedule of accounts receivable

 Accounts receivable

 $
 15,095,479

 $
 14,141,543

 Less: allowance for credit losses

 ( 355,386
)

 ( 70,000
)

 Total accounts receivable

 $
 14,740,093

 $
 14,071,543

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

 Schedule of changes in allowance for credit losses

 Allowance for

Credit Losses

 Balance at June 30, 2022

 $

 70,000

 Allowance recorded during the year ended June 30, 2023

 –

 Balance at June 30, 2023

 $

 70,000

 Allowance recorded during the year ended June 30, 2024

 285,386

 Balance at June 30, 2024

 $

 355,386

 Note 6 – Inventories, net

 As of June 30, 2024 and 2023, inventories consisted
of finished goods ready for sale, net of allowance for obsolescence, amounted to $ 10,546,273 and $ 20,593,889, respectively.

 For the years ended June 30, 2024 and 2023, the
Company recorded inventory reserve expense of $ 88,926 and $ 238,899, respectively. As of June 30, 2024 and 2023, allowance for obsolescence
was $ 647,825 and $ 558,899, respectively.

 F- 18

 Note 7 – Prepayments and other current assets, net

 As of June 30, 2024 and 2023, prepayments and other current assets
consisted of the following:

 Schedule of prepayments and other current assets

 Advance to suppliers

 $
 1,567,528

 $
 1,668,173

 Prepaid income taxes

 31,496

 45,718

 Prepaid expenses and other receivables

 747,510

 1,393,433

 Less: Allowance for credit losses

 –

 ( 249,128
)

 Total

 $
 2,346,534

 $
 2,858,196

 Other receivables consisted of delivery fees of
$ 3,995 and $ 165,962 and receivables from one and two unrelated parties for their use of the Company's courier accounts at June 30,
2024 and 2023.

 The changes in allowance for credit losses on
other receivables are summarized below:

 Schedule of changes in allowance for credit losses on
other receivables

 Allowance for Credit Losses

 Balance at June 30, 2022

 $
 –

 Allowance recorded during the year ended June 30, 2023

 249,128

 Balance at June 30, 2023

 249,128

 Allowance reversed during the year ended June 30, 2024

 ( 249,128
)

 Balance at June 30, 2024

 $
 –

 During the year ended June 30,2024, the Company
collected $ 249,128
of aged other receivables and recorded a reduction of bad debts expense as a reversal of the allowance of credit loss.

 Note 8 – Intangible assets, net

 As of June 30, 2024 and 2023, intangible assets,
net, consisted of the following:

 Schedule of intangible assets,
net

 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

 ( 1,542,257
)

 ( 892,886
)

 Total

 $
 3,630,700

 $
 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 June 30, 2024 was approximately
 6.2 years. The amortization expense for the years ended June 30, 2024 and 2023 was $ 649,371 and $ 649,371, respectively. At June 30, 2024,
finite-lived intangible assets are expected to be amortized over their estimated useful lives, which ranges from a period of five to 10
years, and the estimated remaining amortization expense for each of the five succeeding years thereafter is as follows:

 Schedule of estimated remaining amortization expense

 Year Ending June 30,

 Amount

 2025

 $
 649,371

 2026

 649,371

 2027

 609,277

 2028

 468,750

 2029

 345,912

 Thereafter

 908,019

 Intangible assets, net

 $
 3,630,700

 F- 19

 Note 9 – Other payables and accrued liabilities

 As of June 30, 2024 and 2023, other payables and accrued liabilities
consisted of the following:

 Schedule of other payables and accrued liabilities

 Accrued payables for inventory in transit

 $
 1,405,780

 $
 2,948,551

 Credit cards payable

 231,243

 366,781

 Customer deposit

 313,358

 350,595

 Accrued Amazon fees

 530,456

 915,319

 Sales taxes payable

 442,889

 448,433

 Payroll liabilities

 204,137

 222,962

 Settlement payable

 325,000

 –

 Other payables

 432,624

 295,802

 Total

 $
 3,885,487

 $
 5,548,443

 The Company's controlled VIE, DHS, facilitates
the Company in the process of inventory procurement. During the years ended June 30, 2024 and 2023, the Company purchased a total of $ 0
and $ 31,385, respectively, in inventories from a supplier which had a payment term of 90 days with a 2% premium on the purchase price.
As of June 30, 2024 and 2023, the outstanding balance included in other payables to this supplier was $ 0 and $ 0, which was presented as
financing cash flows from short term loans on the statement of cash flows.

 Note 10 – Loans payable

 Long-term loan

 Asset-based revolving loan

 On November 12, 2021, the Company entered to a
Credit Agreement with JPMorgan Chase Bank, N.A., 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

 Up to 90% of eligible credit card receivables

 Up to 85% of eligible trade accounts receivable

 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 financing fees including 2% of $25.0 million or $500,000 paid
to its financial advisor. The financing fees are recorded as debt discount and to be amortized over three years as interest expenses,
the term of the ABL.

 Below is a summary of the interest expense recorded
for the years ended June 30, 2024 and 2023:

 Schedule of interest expense

 2024

 2023

 Accrued interest

 $
 402,675

 $
 670,924

 Credit utilization fees

 71,332

 43,932

 Amortization of debt discount

 265,219

 265,219

 Total

 $
 739,226

 $
 980,075

 F- 20

 As of June 30, 2024, the outstanding amount of
the revolving loan payable, net of debt discount and including interest payable was $ 5,500,739 and $ 9,791,191, respectively.

 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 Chase Bank, N.A., as administrative agent and lender ("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 June 30, 2024 and 2023, the Company was in compliance with the ABL covenants.

 Promissory note payable

 On February 15, 2022, as part of the
consideration for acquisition of Anivia, the Company issued a two-year unsecured 6% subordinated promissory note, payable in equal
semi-annual installments commencing August 15, 2022 (the "Purchase Note"). The principal amount of the Purchase Note was
$ 3.5 million
with a fair value of $ 3.6
million as of February 15, 2022. In October 2022, the Company paid the first installment of $ 875,000.
And in February 2023, the Company paid the second installment of $ 875,000.
In August 2023, the Company paid the third installment of $ 875,000.
In February 2024, the Company paid the fourth installment of $ 875,000.
For the year ended June 30, 2024, the Company recorded accrued interest of $ 39,429
and amortization of note premium of $ 31,602.
In February 2024, the note premium was fully amortized, and the outstanding balance of the principal and accrued interest of $ 275,679 was
fully paid off. As of June 30, 2024, the total outstanding balance of the Purchase Note was $ 0.
For the year ended June 30, 2023, the Company recorded accrued interest of $ 157,500
and amortization of note premium of $ 50,418.
As of June 30, 2023, including $ 236,250
of accrued interest and $ 31,602
of unamortized premium, the total outstanding balance of the Purchase Note was $ 2,017,852,
which was presented on the consolidated balance sheet as a current portion of $ 2,017,852
and a non-current portion of $ 0.

 Short-term loans 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 $ 2,000,000
 from White Cherry, repaid $ 1
 million on July 31, 2023 and $ 1
 million on January 31, 2024. For the year ended June 30, 2024, the Company recorded interest of $ 32,911.
As of June 30, 2024, the outstanding balance of the On-demand Loan was fully paid off.

 On April 8, 2024, the Company entered into
an agreement with an unrelated accredited investor (the "Investor") for an on-demand, unsecured and subordinated loan
("On-demand Loan 2"). Pursuant to the agreement, the Investor agreed to loan the Company the amount requested. The
On-demand Loan 2 bears interest at the rate of the Secured Overnight Financing Rate, or SOFR, plus 1.5% per annum. The On-demand
Loan 2 is due in 30 days upon receipt of the Investor's notice of repayment. For the year ended June 30, 2024, the Company
borrowed $ 483,599
and recorded interest expense of $ 7,615.
As of June 30, 2024, the outstanding balance of the On-demand Loan 2, including accrued interest of $ 7,615,
was $ 491,214. As of the date of this report, the On-demand Loan 2 had been fully paid off.

 On April 1, 2024, the
Company borrowed $ 350,000
short-term loan ("RP Loan") from an entity owned by Mr. Allan Huang, one of the majority shareholders of the Company.
The RP Loan bears no interest and is due upon receipt of request of repayment. As of June 30, 2024, the outstanding balance of the
RP Loan was $ 350,000.

 F- 21

 Note 11 - 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 year ended June 30, 2024 and 2023, the Company received and recorded sublease fee of $ 0
and $ 359,373 as other non-operating income, respectively. As of June 30, 2024 and 2023, other receivables due from Box Harmony was $ 0
and 0, respectively.

 During the period ended June 30, 2024, the
Company started selling products through MII Strategy Inc. ("MII"), a company owned by the Company's CEO, Mr.
Chenlong Tan. For the year ended June 30, 2024, the amount sold through MII was $ 95,376. As of June 30, 2024, the total amount due
from MII was $ 56,406.

 On February 15, 2022, the Company assumed $ 92,246
of advance from shareholders of DHS through acquisition of Anivia. This amount was for capital injection pending capital inspection by
the local government in accordance with the PRC rules. During the quarter ended June 30, 2024, DHS had completed and fulfilled the capital
injection requirement. As of June 30, 2024 and 2023, the balance of advance from shareholders was $ 0 and $ 85,200, respectively.

 On July 8, 2023, the Company entered into an agreement
with White Cherry for an on-demand loan. See Note 10 above for details.

 On April 1, 2024, the Company borrowed $ 350,000
short-term loan from an entity owned by Mr. Allan Huang, one of the majority shareholders of the Company. See Note 10 above for
details.

 Note 12 – Income taxes

 In addition to corporate income taxes in the
United States, upon completion of the acquisition of Anivia in February 2022, the Company is subject to corporate income taxes in
People's Republic of China ("PRC"). Anivia and its subsidiaries were subject to BVI or Hong Kong income taxes but
did not have any operations for the year ended June 30, 2024 and 2023. 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 GILTI Tax. DHS is subject to 5% tax rate in PRC until December
31, 2027. Since DHS had tested losses during the year ended June 30, 2024 and 2023 and no
GILTI tax was recorded for as of June 30, 2024 and 2023, the Company is not eligible for the GILTI high-tax exclusion. 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 years ended June
30, 2024 and 2023 consisted of the following:

 Schedule of provision for income tax

 Current:

 Federal

 $
 –

 $
 395,053

 State

 40,739

 11,596

 Foreign

 –

 –

 Total current income tax provision

 40,739

 406,649

 Deferred:

 Federal

 ( 317,134
)

 ( 2,462,699
)

 State

 ( 47,305
)

 ( 571,730
)

 Foreign

 72,335

 ( 62,720
)

 Total deferred taxes

 ( 292,104
)

 ( 3,097,149
)

 Total provision for income taxes

 $
 ( 251,365
)

 $
 ( 2,690,500
)

 F- 22

 The Company is subject to U.S. federal income
tax as well as state income tax in certain jurisdictions. The tax years 2019 to 2023 remain open to examination by the major taxing
jurisdictions to which the Company is subject. 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

 Statutory tax rate

 Federal

 21.00
 %

 21.00
 %

 State (net of federal benefit)

 5.54
 %

 5.82
 %

 Foreign tax

 ( 4.94
)%

 0.44
 %

 Impairment loss on goodwill – permanent difference

 –
 %

 ( 5.63
)%

 Prior year adjustment and permanent differences

 ( 2.66
)%

 –
 %

 Others

 ( 4.92
)%

 ( 3.29
)%

 Effective tax rate

 14.02
 %

 18.34
 %

 As of June 30, 2024, prepaid income taxes to US
tax authorities and income tax payable to Chinese tax authorities was $ 31,496 and $ 276,158, respectively. As of June 30, 2023, prepaid
income taxes to US tax authorities and income tax payable to Chinese tax authorities was $ 45,718 and $ 276,683, respectively.

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

 Schedule of deferred tax assets

 June 30,

 2024

 2023

 Deferred tax assets

 263A calculation

 $
 291,354

 $
 239,142

 Inventory reserve

 171,942

 149,907

 State taxes

 4,840

 2,435

 Accrued expenses

 155,860

 273,589

 ROU assets / liabilities

 110,391

 115,125

 Net Operation loss

 2,190,589

 2,173,221

 Disallowed interest expense

 258,352

 163,381

 Stock-based compensation

 341,591

 207,726

 Valuation allowance

 ( 64,897
)

 –

 Others

 40,067

 85,596

 Total deferred tax assets

 3,500,089

 3,410,122

 Deferred tax liabilities

 Depreciation

 ( 77,287
)

 ( 105,323
)

 Intangible assets acquired

 ( 977,197
)

 ( 1,149,549
)

 Total deferred tax liabilities

 ( 1,054,484
)

 ( 1,254,872
)

 Net deferred tax assets

 $
 2,445,605

 $
 2,155,250

 F- 23

 Note 13– Earnings per share

 The following table sets forth the computation of basic and diluted
earnings per share for the years presented:

 Schedule of computation of basic and diluted
earnings per share

 For the year ended
 June 30,

 2024

 2023

 Numerator:

 Net income (loss) attributable to iPower Inc.

 $
 ( 1,528,159
)

 $
 ( 11,965,390
)

 Denominator:

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

 $
 29,878,196

 $
 29,713,354

 Earnings per share of ordinary shares - basic and diluted

 $
 ( 0.05
)

 $
 ( 0.40
)

 *

 Due to the ani-dilutive effect, the computation of basic
 and diluted EPS did not include the shares underlying the exercise of warrants and RSUs as the Company had a net loss for the year
 ended June 30, 2024.

 *

 The computation of diluted EPS did not include the shares
 underlying the exercise of options granted as none of the options were vested and the exercise price of the options was higher than
 the market price as of June 30, 2024 and 2023.

 *

 For the year ended June 30, 2024, 44,285 vested but unissued shares of restricted stock units under the 2020 Equity Incentive Plan (as
discussed in Note 14) are considered issued shares and therefore are included in the computation of basic earnings (losses) per share
when the shares are fully vested.

 *

 For the year ended June 30, 2023, 53,435 vested shares of restricted stock units under the 2020 Equity Incentive Plan (as discussed in
Note 14) are considered issued shares and therefore are included in the computation of basic earnings (loss) per share when the shares
are fully vested.

 Note 14 – Equity

 Common Stock

 As of June 30, 2024, the total authorized shares
of capital stock were 200,000,000 shares consisting of 180,000,000 shares of Common Stock ("Common Stock") and 20,000,000
shares of preferred stock (the "Preferred Stock"), each with a par value of $ 0.001 per share.

 The holders of Common Stock shall be entitled
to one vote per share in voting to the election of directors and all other corporate purposes. 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 shares of restricted common stock for RSUs vested.

 During the year ended June 30, 2024, the Company
issued 107,293 shares of restricted common stock for RSUs vested.

 F- 24

 On June 18, 2024, the Company closed on a
registered direct offering (the "Registered Direct") of 2,083,334 shares
of common stock (the "Shares") and a concurrent private placement ("Private Placement," and together with
the Registered Direct, the "Offering") of warrants (the "Warrants") to purchase 2,083,334 shares
of common stock (the "Warrant Shares"), which were sold for gross aggregate proceeds of $ 5,000,002.
The Shares were sold pursuant to a prospectus supplement, filed on June 18, 2024, to the Registration Statement on Form S-3,
originally filed on September 25, 2023, with the SEC (File No. 333-274665) and declared effective by the SEC on September 29, 2023.
The Warrants, which were issued pursuant to an exemption from registration pursuant to Section 4(a)(2) or Regulation D on the
Securities Act, have a term of five
years and are immediately exercisable at $ 2.40 per
share. The Shares and Warrants were sold to a purchaser pursuant to a securities purchase agreement, dated June 16, 2024, between
the Company and the purchaser (the "Purchase Agreement"). Roth Capital Partners, LLC (the "Placement Agent")
acted as placement agent, pursuant to a placement agency agreement between the Company and the Placement Agent dated June 16, 2024
(the "Placement Agency Agreement"). The Company paid the Placement Agent as compensation a cash fee equal to 6.5 %
of the gross proceeds of the Offering plus reimbursement of certain expenses and legal fees. The net proceeds of the Offering, after
deducting $ 456,913, the Placement Agent's fees and expenses and other direct offering costs paid by the Company, was $ 4,543,089.

 The Company calculated the fair value of the
Warrants at $ 3.1
million, with a relative fair value of $ 1.7 million after allocation of the fair value of the Shares, using the Black-Scholes Model with the following variables:

 Stock Price - $ 2.0

 Exercise Price - $ 2.4

 Volatility – 104 %

 Term – 5 years

 Risk Free Rate of Return – 4.24 %

 Pursuant to the Warrant agreement, except for
some fundamental transactions within the Company's control, in no event shall the Company be required to net cash settle the
Warrants. The Company considered and followed the rules and guidelines under ASC 480-10 and ASC 815 and concluded that the Warrants
should be classified and recorded as equity. Further, as the warrants were issued as part of the Offering, the relative fair value
of the Warrants was included in the gross proceeds and recorded as additional paid-in capital.

 On June 18, 2024, as disclosed in Note 17 below,
in order to recoup the settlement payment made to Boustead Securities, LLC, the Company's Chief Executive Officer and co-founder,
Lawrence Tan, along with co-founder Allan Huang, returned a total of 541,667 shares to the Company for cancellation (the "Share
Cancellation"). The Share Cancellation was completed in June 2024 and the par value of $ 542 was reduced against additional paid-in
capital.

 As of June 30, 2024 and 2023, there were 31,359,899
and 29,710,939 shares of Common Stock issued and outstanding, respectively.

 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 June 30, 2024 and 2023, respectively, there were no shares of Preferred
Stock issued and outstanding.

 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 10,000,000 shares of Common Stock, whether in the form of options, restricted stock, restricted
stock units, stock appreciation rights, performance units, performance shares and other stock or cash awards. The general purpose of the
Plan is to provide an incentive to the Company's directors, officers, employees, consultants and advisors by enabling them to share
in the future growth of the Company's business. On November 16, 2021 and December 6, 2022, the Company filed a registration statement
on Form S-8 registering all shares issuable under the Plan, which Form S-8 was subsequently amended on December 6, 2022, September 15,
2023 and November 22, 2023.

 Restricted Stock Unit

 Following completion of the IPO on May 11, 2021,
pursuant to their letter agreements, the Company awarded 46,546 restricted stock units ("RSUs") under the Plan to its independent
directors, its Chief Financial Officer, and certain other employees and consultants, all of which are subject to certain vesting conditions
in the next 12 months and restrictions until filing of a Form S-8 for registration of the shares. The fair value of the RSUs was determined
to be based on $5.00 per share, the initial listing price of the Company's common stock on the grant date. During the year ended
June 30, 2024, the Company granted additional 62,600 shares of RSUs. For the year ended June 30, 2024 and 2023, the Company recorded $ 71,014
and $ 71,268 of stock-based compensation expense. There was no forfeiture of RSUs occurred during the year ended June 30, 2024 and 2023.
As of June 30, 2024 and 2023, the unvested number of RSUs was 3,250 and 38,793 and the unamortized expense was $ 1,788 and $ 22,500, respectively.

 F- 25

 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, 2022

 6,608

 RSUs granted

 131,130

 $
 78,768

 RSUs forfeited

 –

 RSUs vested

 ( 98,945
)

 RSUs granted, but not vested, at June 30, 2023

 38,793

 RSUs granted

 62,600

 $
 50,302

 RSUs forfeited

 –

 RSUs vested

 ( 98,143
)

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

 3,250

 _____________________

 (1)

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

 As of June 30, 2024, of the 330,154 vested RSUs,
 285,869 shares, including 107,293 shares issued during the current year, of Common Stock were issued, and 44,285 shares were to be issued
in the next fiscal year.

 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
(i) a $ 60,000
 to be awarded to Kevin Vassily, CFO of the Company, and (ii) grants of stock options (the "Option Grants") in the amount
of (a) 3,000,000
 shares to Chenlong Tan, CEO and (b) 330,000
 shares to Mr. Vassily. The Option Grants, which were issued on May 13, 2022, have an exercise price of $ 1.12,
a contractual term of 10 years and consist of six vesting tranches with a vesting schedule based entirely on the attainment of both operational
milestones (performance conditions) and market conditions, assuming continued employment of the recipients through each vesting date.
Each of the six vesting tranches of the Option Grants will vest when both (i) the market capitalization milestone for such tranche, which
begins at $150 million for the first tranche and increases by increments of $50 million through the fourth tranche and $100 million
thereafter (based on achieving such market capitalization for five consecutive trading days), has been achieved, and (ii) any one of
the following six operational milestones focused on revenue or any one of the six operational milestones focused on operating income
have been achieved during a given fiscal year.

 The achievement status of the operational
milestones as of June 30, 2024 was as follows:

 Revenue in Fiscal Year

 Operating Income in Fiscal Year

 Milestone
(in Millions)

 Achievement
Status

 Milestone
(in Millions)

 Achievement
Status

 $

 $

 $

 $

 $

 $

 $

 $

 $

 $

 –

 $

 –

 $

 –

 F- 26

 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 we will achieve each operational milestone that has not previously been achieved
or deemed probable of achievement and if so, the future time when we expect to achieve that operational milestone. The Monte Carlo simulation
utilized the following inputs:

 Stock Price - $ 1.12

 Volatility – 95.65 %

 Term – 10 years

 Risk Free Rate of Return – 2.93 %

 Dividend Yield – 0 %

 The total fair value of the Option Grants was
$3.2 million of which, at June 30, 2024 and 2023, $2.3 million is deemed probable of vesting. As of June 30, 2024 and 2023, none of the
options had vested. For the year ended June 30, 2024 and 2023, the Company recorded $ 441,528 and $ 441,528 of stock-based compensation
expense related to the Option Grants. Unrecognized compensation cost related to tranches probable of vesting is approximately $1.3 million
and will be recognized over two years to nine years, depending on the tranche.

 Note 15 – Warrant liabilities

 On January 27, 2021, the Company completed a
private placement offering pursuant to which the Company sold to two accredited investors an aggregate of $3,000,000 in Convertible
Notes and warrants to purchase shares of Class A Common Stock equaling 80% of the number of shares of Class A Common Stock issuable
upon conversion of the Convertible Notes. The convertible note warrants are exercisable for a period of three years from
the IPO completion date at a per share exercise price equal to the IPO. In accordance with the terms of the warrants, in the event
the Convertible Notes are repaid in cash by the Company, the warrants issued in conjunction with the Convertible Notes will expire
and have no further value.

 The outstanding warrants held by the
Convertible Note investors were reclassified to additional paid in capital as the terms became fixed upon closing of the IPO.
Through June 30, 2024, none of the private placement investors exercised any of their warrants and the warrants were expired in May
2024. As such, as of June 30, 2024 and 2023, the number of shares issuable under the outstanding convertible note warrants was 0
and 685,715,
with an average exercise price of $ 5.00
per share.

 Note 16 - 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 June 30, 2024 and 2023, $ 7,377,837
and $ 3,735,642,
respectively, were deposited with various major financial institutions and financial services companies in the United States and
PRC. Accounts at each institution in the United States are insured by the Federal Deposit Insurance Corporation (FDIC) for up to
$250,000. The Company had approximately $ 5.8
million and $ 2.7
million, respectively, in excess of the FDIC insurance limit, as of June 30, 2024 and 2023.

 F- 27

 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 years ended June 30, 2024 and 2023, Amazon
Vendor and Amazon Seller customers accounted for 90 % and 91 % of the Company's total revenues, respectively. As of June 30, 2024 and 2023,
accounts receivable from Amazon Vendor and Amazon Seller accounted for 91 % and 95 % of the Company's total accounts receivable.

 For the years ended June 30, 2024 and 2023,
one supplier accounted for 10 %
and 27 %
of the Company's total purchases, respectively. As of June 30, 2024 and 2023, accounts payable to one supplier accounted for 36 %
and 49 %
of the Company's total accounts payable, net of credits of $1.7 million, respectively.

 Note 17 - Commitments and contingencies

 Lease commitments

 The Company has entered into a lease agreement
for office and warehouse space with a lease period from December 1, 2018 until December 31, 2020. On August 24, 2020, the Company negotiated
for new terms to extend the lease through December 21, 2023 at the rate of approximately $42,000 per month. On December 21, 2023, the
lease expired without renewal.

 On September 1, 2020, in addition to the primary
fulfillment center, the Company leased a second fulfillment center in City of Industry, California. The base rental fee is $27,921 to
$29,910 per month through October 31, 2023. On October 31, 2023, the lease expired without renewal.

 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. Under the Lease
Agreement, the Company is responsible for its pro rata share of certain costs, including utility costs, insurance and common area costs,
as further detailed in the Lease Agreement. In addition, following the Rent Commencement Date, the first two months of the Base Rent were
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. The lease commencement date is 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.

 F- 28

 Total commitment for the full term of these leases
is $ 12,651,376. The financial statements reflected $ 6,124,163 and $ 7,837,345, respectively, of operating lease right-of-use assets, and
$ 6,549,110 and $ 8,265,220, respectively, of operating lease liabilities as of June 30, 2024 and 2023.

 Years Ended June 30, 2024 and 2023:

 Schedule of lease cost and other information

 Lease cost

 6/30/2024

 6/30/2023

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

 $
 2,716,705

 $
 3,107,513

 Other information

 Cash paid for amounts included in the measurement of lease liabilities

 $
 2,644,838

 $
 3,074,909

 Remaining term in years

 0.08 – 3.92

 0.08 – 4.92

 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

 6/30/2024

 6/30/2023

 Right of use asset - non-current

 $
 6,124,163

 $
 7,837,345

 Lease Liability – current

 2,039,301

 2,159,173

 Lease Liability - non-current

 4,509,809

 6,106,047

 Total operating lease liabilities

 $
 6,549,110

 $
 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:

 2025

 $
 2,314,092

 2026

 1,767,679

 2027

 1,596,313

 2028

 1,459,409

 Less: Imputed interest/present value discount

 ( 588,383
)

 Present value of lease liabilities

 $
 6,549,110

 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.

 F- 29

 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 seeking, among other things, monetary damages against the Company and D.A. Davidson &
Co. (who acted as underwriter in the Company's IPO). As part of the IPO closing, the Company 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, 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. As of June 30, 2023, the Company was not able to reasonably
estimate the amount of potential exposure.

 On April 3, 2024, the
Company and D.A. Davidson & Co entered into a settlement agreement and mutual release (the "Settlement Agreement")
with Boustead Securities, LLC ("Boustead") and its current and former employees, officers, directors, partners, agents
and affiliates, pursuant to which all parties agreed to release all claims in exchange for the Company's payment of $ 1.3
million (the "Settlement Amount") to Boustead. The Settlement Agreement was entered into for purposes of settling in
full the FINRA Arbitration (FINRA Case No. 22-01133) which had been brought by Boustead against the Company and D.A. Davidson after
the Company opted not to complete its initial public offering with Boustead but instead engaged and completed its initial public
offering with D.A. Davidson. Pursuant to the terms of the Settlement Agreement, the Company is required to pay the
Settlement Amount in four equal installments of $325,000 on each of April 3, 2024, May 3, 2024, June 3, 2024 and July 3, 2024.
Within five days of its receipt of the final payment, or by July 8, 2024, Boustead will be obligated to dismiss the FINRA
Arbitration against the Company, with prejudice, after which time the Company will be required to dismiss, with prejudice, all
counterclaims brought by the Company against Boustead. For the year ended June 30, 2024, the Company considered and concluded that
the Settlement Amount of $ 1.3
million was incremental costs directly associated with the IPO under ASC 340-10-S99-1 and so recorded as offering costs against
additional paid-in capital. As of June 30, 2024, the outstanding balance of the Settlement Amount
was $ 325,000. As of the date of this report, the Settlement Amount had been paid off and the parties have formally withdrawn all of the
complaints that were before FINRA, with prejudice, and the matter is settled in full.

 In conjunction with entry into the Settlement
Agreement, the Company's CEO and co-founder, Chenlong Tan, and Allan Huang, also a co-founder of the Company, entered into a pledge
agreement (the "Pledge Agreement") with the Company pursuant to which they each pledged 1,300,000 shares of their iPower common
stock, for a total of 2,600,000 shares (the "Pledged Shares"), in order that the Company may, from time to time, sell such
Pledged Shares into the market on behalf of Messrs. Tan and Huang in order to recoup the Settlement Amount.

 On June 18, 2024, calculating the shares at $ 2.40,
 Messrs. Tan and Huang returned
a total of 541,667 shares as indemnification payment to the Company for cancellation (the "Share Cancellation"). The Share
Cancellation was completed in June 2024.

 In addition, in February 2022, the Russian Federation
began conducting military operations against Ukraine, and in October 2023, an armed conflict between Hamas-led Palestinian militant groups
and Israeli military forces began, both of which have since escalated into prolonged wars. While we do not do business in those regions,
the military conflicts in Ukraine and in Israel have resulted in global economic uncertainty and increased the cost of various commodities.
In response to these types of events, should they directly impact our supply chain or other operations, we may experience or be exposed
to supply chain disruptions which could cause us to seek alternate sources for product supply or suffer consequences that are unexpected
and difficult to mitigate. Any of these risks might have a materially adverse impact on our business operations and our financial position
or results of operations. Although, it is difficult to predict the impact that these factors may have on our business in the future, we
have experienced a delay in, as well as an increase in costs in shipping, and the resulting inventory level increase in our warehouse
facilities, thus resulting in reduced profits. In addition, supply chain disruptions may put upward pressure on our costs and increase
the risk that we may be unable to acquire the materials and services we need to continue to make certain products.

 F- 30

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

 The Company is required to retain PPP loan documentation 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 the consolidated financial statements.

 Note 18 - 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. Other
than the material subsequent events disclosed above in the notes to financial statements, no other material subsequent events that required
recognition or additional disclosure in the consolidated financial statements are presented.

 On August 29, 2024, the board of directors (the
"Board") of the Company, based on the recommendation of the compensation committee of the Board, approved a grant of 1,200,000
stock options (the "Stock Options") issuable to Chenlong Tan, the Company's Chief Executive Officer, pursuant to the
terms of the iPower Inc. Amended and Restated 2020 Equity Incentive Plan (the "Plan"). Following the Board's approval,
Mr. Tan and the Company entered into a stock option award agreement (the "Stock Option Award Agreement").

 According to the Stock Option Award Agreement,
and subject to the terms and conditions of the Stock Option Award Agreement and the Plan, upon vesting of the Stock Options, Mr. Tan will
have the option to purchase common stock, par value $0.001 per share of the Company, at an exercise price of $1.43 per share (which is
110% of the Fair Market Value of the stock on the grant date). The Stock Options have a term of five years and will vest as follows: 30,000
Stock Options vested on the grant date (August 29, 2024), and 32,500 Stock Options will vest on the first day of each month from September
1, 2024, to August 1, 2027.

 F- 31

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

 None.

 ITEM 9A. CONTROLS AND PROCEDURES

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

 Evaluation of Disclosure Controls and Procedures

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

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

 Limitations on the Effectiveness of Controls

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

 Management's Report on Internal Control
Over Financial Reporting

 Our principal executive officer
and our principal accounting and financial officer are responsible for establishing and maintaining adequate internal control over financial
reporting, as such term is defined in Exchange Act Rules 13a-15(f). Management conducted an assessment of the effectiveness of our internal
control over financial reporting as of June 30, 2024. In making this assessment, management used the criteria described in Internal Control-Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based upon such assessment and
due to the existence of the material weaknesses in our internal control over financial reporting described below, our principal executive
officer and our principal accounting and financial officer have concluded that, as of June 30, 2024, our internal control over financial
reporting was not effective because, among other things, our controls related to the financial statements closing process were not adequately designed or appropriately
implemented to identify material misstatements in our financial reporting on a timely basis. Management has evaluated remediation plans
to address these deficiencies and is implementing changes to address the material weakness identified, including hiring additional accountants
and consultants and implementing controls and procedures over the financial reporting process.

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

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

 Changes in Internal Control over Financial
Reporting

 There have been no changes
in our internal controls over financial reporting that occurred during the fiscal year ended June 30, 2024 that have materially affected,
or are reasonably likely to materially affect, our internal controls over financial reporting.

 UHY LLP, our independent registered
public accounting firm, is not required to and has not provided an assessment of the design or effectiveness of our internal controls
over financial reporting.

 ITEM 9B. OTHER INFORMATION

 During the quarter ended
June 30, 2024, no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading
arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation
S-K.

 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT
INSPECTIONS

 Not applicable.

 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND
CORPORATE GOVERNANCE

 MANAGEMENT

 Executive Officers and Directors

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

 Name

 Age

 Position

 Chairman, Chief Executive Officer, President, and Director

 Kevin Vassily

 Chief Financial Officer and Director

 Bennet Tchaikovsky

 Independent Director

 Hanxi Li

 Independent Director

 Kevin Liles

 Independent Director

 Chenlong Tan.
Mr. Tan cofounded our Company in 2018 and is the Chairman, Chief Executive Officer and President. He has held the position of Chief Executive
Officer since April 2018 and assumed the positions of Chairman, President and Interim Chief Financial Officer in January 2020. Mr. Tan
held the position of Interim Chief Financial Officer until January 2021. From 2010 until 2018, Mr. Tan was the cofounder, Chief Executive
Officer and Chief Information Officer at our predecessor, BizRight LLC, where he built the business from the ground up to achieve $20
million in sales through data driven development. From 2002 until 2010, Mr. Tan served as a Solution Architect and Senior Software Engineer
at various companies, where he took a lead role, managing consultants, business architects and project managers, in working with healthcare
companies in completing scoping requirements, solution gathering and project management, among other things. Mr. Tan received his B. Sc.
at the University of Auckland in New Zealand, where he graduated with honors.

 Kevin Vassily. Mr.
Vassily was appointed as our Chief Financial Officer in January 2021. Mr. Vassily was also appointed as a member of our board of directors
in March 2021. Mr. Vassily also serves as a director at Aimfinity Investment Corp. commencing March 15, 2023, a director at Tungray Technologies
commencing April 2024, and a director at Thunder Power Holdings commencing June 2024. Prior to joining iPower, from 2019 to January 2021,
Mr. Vassily served as Vice President of Market Development for Facteus, a financial analytics company focused on the Asset Management
industry. From October 2018 through its acquisition in 2020, Mr. Vassily served as an advisor at Go Capture, where he was responsible
for providing strategic, business development, and product development advisory services for the company's emerging "Data
as a Service" platform. Since February 2020, Mr. Vassily has served as a director of Zhongchao Inc., a provider of healthcare information,
education and training services to healthcare professionals and the public in China. From 2015 through 2018, Mr. Vassily served as an
associate director of research at Keybanc Capital Markets, and helped to co-manage the Technology Research vertical. From 2010 to 2014,
he served as the director of research at Pacific Epoch (a wholly-owned subsidiary of Pacific Crest Securities), where he was responsible
for a complete overhaul of product and a complete business model restart post-acquisition, re focusing the firm around a "data-first"
research offering. From 2007 to 2010, he served as the Asia Technology business development representative and as a senior analyst at
Pacific Crest Securities, responsible for establishing the firm's presence and relevance covering Asia Technology. From 2003 to
2006, he served as senior research analyst in the semiconductor technology group at Susquehanna International Group, responsible for research
in semiconductor and related technologies. From 2001 to 2003, Mr. Vassily served as the vice president and senior research analyst for
semiconductor capital equipment at Thomas Weisel Partners, responsible for publishing research and maintaining financial models on each
of the companies under coverage. Mr. Vassily began his career on Wall Street in 1998, as a research associate covering the semiconductor
industry at Lehman Brothers. He holds a B.A. in liberal arts from Denison University and an M.B.A. from the Tuck School of Business at
Dartmouth College.

 Bennet Tchaikovsky.
 Mr. Tchaikovsky serves as a member of our board of directors, a position he has held since May 2021, following completion of our
initial public offering, and serves as chair of the audit committee. Since August 2014, Mr. Tchaikovsky has been a full-time professor
at Irvine Valley College. From January 2022 to June 2024, Mr. Tchaikovsky served as a part-time accounting instructor at California State
University, Fullerton. From January 2020 through December 2021, Mr. Tchaikovsky served as a member of the board of directors for Oriental
Culture Holding Group, Ltd. (NASDAQ: OCG). From February 2021 through July 2022, Mr. Tchaikovsky served as a member of the board of directors
for Industrial Human Capital, Inc. (NYSE: AXH). From September 2020 through December 2021, Mr. Tchaikovsky served as a part-time accounting
instructor at Long Beach City College. From August 2018 to May 2019, Mr. Tchaikovsky was a part-time instructor at Chapman University.
From November 2013 to August 2019, Mr. Tchaikovsky served as a board member and chairman of the audit committee of Ener-Core, Inc. (OTCMKTS:
ENCR). From August 2013 to May 2014, Mr. Tchaikovsky was a part-time faculty member of Irvine Valley College and a part-time faculty member
of Pasadena City College. Mr. Tchaikovsky has served as a director on the board of directors of China Jo-Jo Drugstores, Inc. (NASDAQ:
CJJD) from August 2011 to January 2013 and as its chief financial officer from September 2009 to July 2011. From April 2010 to August
2013, Mr. Tchaikovsky has served as chief financial officer of VLOV, Inc. From May 2008 to April 2010, Mr. Tchaikovsky has served as chief
financial officer of Skystar Bio-Pharmaceutical Company. From March 2008 to November 2009, Mr. Tchaikovsky served as a director on the
board of directors of Ever-Glory International Group (NASDAQ: EVK), where he served as chairman of the audit committee and was a member
of the compensation committee. From December 2008 through November 2009, Mr. Tchaikovsky served as a director of Sino Clean Energy, Inc.
Mr. Tchaikovsky received his Juris Doctorate degree from Southwestern Law School in December 1996 and his Bachelor of Arts degree in Business
Economics from the University of California at Santa Barbara in August 1991. Mr. Tchaikovsky is an actively licensed Certified Public
Accountant in California and is an actively licensed member of the California State Bar. We believe that Mr. Tchaikovsky's extensive
experience in accounting and business will benefit the Company's business and operations and make him a valuable member of the board
of directors and its committees.

 Hanxi Li. Ms.
Li was appointed to serve as a director on our board of directors on December 23, 2021 and serves as chair of our compensation committee.
Ms. Li has more than a decade of marketing experience working with Fortune 50 companies and international conferences. Since 2019, Ms.
Li has served as Vice President of Marketing for Elegantz Productions LLC. In this role, she executed branding and marketing campaigns
targeting the United States region for Sequoia Capital and Xiaomi. She also formed a long-term partnership with ByteDance Ltd. and Ciwen
Media. From 2017 to 2018, she was the marketing director of the Company's predecessor, Bizright LLC, where she was in charge of
the company's branding and marketing strategies, including the expansion of the company's social media marketing. From 2013
to 2016, Ms. Li was a partner at a private video studio where she worked with top companies across industries, including Bluefocus, and
executed a performance project in China National Olympic Park. From 2011 to 2014, as publicity supervisor for the China National Convention
Center, Ms. Li led efforts for branding and media channels for national and international meetings. Her long track record as a successful
marketing leader makes her ideally suited to serving as a member of our board of directors.

 Kevin Liles.
Mr. Liles was appointed to serve as a member of our board of directors commencing May 2021, upon completion of our initial public offering,
and serves as chair of the nominating and corporate governance committee. Mr. Liles is the Chairman and CEO of 300 Elektra Entertainment,
a collection of labels under the umbrella of Warner Music Group. Mr. Liles's ability to create, build and lead some of the biggest
and culturally relevant brands over the past 30 years cements his place in cultural history. Prior to its sale to Warner Music Group in
2021, Mr. Liles was co-founder and CEO of 300 Entertainment, and Head of 300 Studios, the company's Emmy-winning content and film
division. Earlier in his career, Mr. Liles architected Def Jam's expansion into video games and television in the late 1990s and
early 2000s as President of Def Jam Recordings, and later introduced Artist Services as an Executive Vice President at Warner Music Group
during the 2000s. In recognition of his personal, professional, and philanthropic achievements, in the past year Mr. Liles has been honored
with the United Negro College Fund's Leadership Award, the Black Music Action Coalition's Social Impact Award, and the Reginald
Lewis Museum of Maryland African-American History and Culture's Titan Award. Mr. Liles sits on the Board of Gibson Brands, the Recording
Industry Association of America, Free Our Art, and Rolling Sea Action Fund, among others. Mr. Liles holds an honorary Doctor of Law degree
from Morgan State University, where he studied engineering and electrical engineering as an undergraduate. We believe Mr. Liles'
extensive entrepreneurial and business experience, as well as his extensive knowledge in the area of social media, will assist us in our
growth plans going forward.

 Family Relationships

 There are no family relationships
among any of our officers or directors.

 Involvement in Certain Legal Proceedings

 To our knowledge, during the
past ten years, none of our directors, executive officers, promoters, control persons, or nominees has:

 had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;

 been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

 been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;

 been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

 been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

 been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

 Board Committees

 Our board of directors has
established an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Each of these committees
operates under a charter that has been approved by our board of directors, as set forth below.

 Audit Committee.
Our Audit Committee consists of three independent directors. The members of the Audit Committee are Mr. Tchaikovsky, Ms. Li and Mr. Liles.
The Audit Committee consists exclusively of directors who are financially literate and Mr. Tchaikovsky serves as chair of the Audit Committee.
As a licensed certified public accountant, Mr. Tchaikovsky is considered an "audit committee financial expert" as defined
by the SEC's rules and regulations.

 The audit committee responsibilities include:

 overseeing the compensation and work of and performance by our independent auditor and any other registered public accounting firm performing audit, review or attestation services for us;

 engaging, retaining and terminating our independent auditor and determining the terms thereof;

 assessing the qualifications, performance and independence of the independent auditor;

 evaluating whether the provision of permitted non-audit services is compatible with maintaining the auditor's independence;

 reviewing and discussing the audit results, including any comments and recommendations of the independent auditor and the responses of management to such recommendations;

 reviewing and discussing the annual and quarterly financial statements with management and the independent auditor;

 producing a committee report for inclusion in applicable SEC filings;

 reviewing the adequacy and effectiveness of internal controls and procedures;

 establishing procedures regarding the receipt, retention and treatment of complaints received regarding the accounting, internal accounting controls, or auditing matters and conducting or authorizing investigations into any matters within the scope of the responsibility of the audit committee; and

 reviewing transactions with related persons for potential conflict of interest situations.

 Compensation Committee.
Our Compensation Committee consists of three independent directors. The members of the Compensation Committee are Ms. Li, Mr. Tchaikovsky
and Mr. Liles. Ms. Li serves as the chair of the Compensation Committee. The committee has primary responsibility for:

 reviewing and recommending all elements and amounts of compensation for each executive officer, including any performance goals applicable to those executive officers;

 reviewing and recommending for approval the adoption, any amendment and termination of all cash and equity-based incentive compensation plans;

 once required by applicable law, causing to be prepared a committee report for inclusion in applicable SEC filings;

 approving any employment agreements, severance agreements or change of control agreements that are entered into with the Chief Executive Officer and certain executive officers; and

 reviewing and recommending the level and form of non-employee director compensation and benefits.

 Nominating and Governance
Committee. The Nominating and Governance Committee consists of three independent directors. The members of the Nominating and
Governance Committee are Mr. Liles, Ms. Li and Mr. Tchaikovsky. Mr. Liles serves as chair of the Nominating and Corporate Governance Committee.
The Nominating and Corporate Governance Committee's responsibilities include:

 recommending persons for election as directors by the stockholders;

 recommending persons for appointment as directors to the extent necessary to fill any vacancies or newly created directorships;

 reviewing annually the skills and characteristics required of directors and each incumbent director's continued service on the board of directors;

 reviewing any stockholder proposals and nominations for directors;

 advising the board of directors on the appropriate structure and operations of the board of directors and its committees;

 reviewing and recommending standing board committee assignments;

 developing and recommending to the board of directors the Corporate Governance Guidelines, a Code of Business Conduct and Ethics and other corporate governance policies and programs and reviewing such guidelines, code and any other policies and programs at least annually;

 making recommendations to the board of directors as to determinations of director independence; and

 making recommendations to the board of directors regarding corporate governance based upon developments, trends, and best practices.

 The Nominating and Governance
Committee will consider stockholder recommendations for candidates for the board of directors.

 Code of Business Conduct and Ethics

 The Company maintains a formal
Code of Business Conduct and Ethics (the "Code") that is applicable to every officer, director, employee and consultant (the
"Employees") of the Company and its affiliates. The Code reaffirms the high standards of business conduct required of all
of the Company's Employees.

 Insider Trading Policy

 The Company maintains an insider
trading policy to help the Company's Employees comply with federal and state securities laws, prevent insider trading and govern
the terms and conditions at which the Employees can trade in the Company's securities.

 Incentive-Based Compensation Recovery (Clawback)
Policy

 The Company maintains an incentive-based
compensation recovery (clawback) policy to enable the Company to recover erroneously awarded compensation in the event that the Company
is required to prepare an accounting restatement.

 Limitation of Directors Liability and Indemnification

 The Nevada Revised Statutes
("NRS") authorizes corporations to limit or eliminate, subject to certain conditions, the personal liability of directors
to corporations and their stockholders for monetary damages for breach of their fiduciary duties.

 iPower maintains stand-alone
director and officer liability insurance to cover liabilities our directors and officers may incur in connection with their services to
us, including matters arising under the Securities Act. In addition, Nevada law and our bylaws provide that we will indemnify our directors
and officers who, by reason of the fact that he or she is an officer or director, is involved in a legal proceeding of any nature.

 There is no pending litigation
or proceeding against any of our directors, officers, employees or agents in which indemnification will be required or permitted. We are
not aware of any threatened litigation or proceeding which may result in a claim for such indemnification.

 Indemnification Agreements

 To date, we have no specific
indemnification agreements with our directors or executive officers. However, our officers and directors are entitled to indemnification
through our bylaws and to the extent allowed pursuant to the NRS, federal securities law and our directors and officers liability insurance.

 SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE

 Section 16(a) of the Exchange
Act requires our executive officers and directors, and persons who own more than 10% of our common stock, to file reports regarding ownership
of, and transactions in, our securities with the SEC and to provide us with copies of those filings. Based solely on our review of the
copies of such forms furnished to us and written representations by our officers and directors regarding their compliance with applicable
reporting requirements under Section 16(a) of the Exchange Act, we believe that all Section 16(a) filing requirements for our executive
officers, directors and 10% stockholders were met during the year ended June 30, 2024, except for the following:

 Name

 Late Reports

 Transactions Covered

 Number of Shares

 Kevin Liles

 Form 4

 COMMON STOCK

 24,800

 Bennet Tchaikovsky

 Form 4

 COMMON STOCK

 24,800

 ITEM 11. EXECUTIVE COMPENSATION

 Summary Compensation Table

 The following table presents
information regarding the total compensation earned by our executive officers who were serving as executive officers as of June 30, 2024,
for services rendered in all capacities to us for the fiscal years ended June 30, 2024 and 2023.

 Name and Principal Position

 Year

 Salary

 Bonus

 Stock Based Awards

 Others

 Total

 2024

 264,000

 –

 –

 62,647
 (1)

 326,647

 Chairman, Chief Executive Officer, President

 2023

 264,000

 –

 –

 62,647
 (1)

 326,647

 Kevin Vassily

 2024

 240,000

 –

 –

 –

 240,000

 Chief Financial Officer

 2023

 240,000

 –

 –

 –

 240,000

 _________________________

 (1) Consists of the costs of leasing a car.

 Employment Agreement with Chenlong Tan

 On July 1, 2020, we entered
into an employment agreement with our Chief Executive Officer, Chenlong Tan. Under Mr. Tan's employment agreement, Mr. Tan receives
base compensation of $20,000 per month, is entitled to performance cash bonus compensation based on achievement of certain pre-determined
goals, and from time to time may be granted restricted common shares and/or options to purchase shares of the Company's common stock,
subject to the board of directors or Compensation Committee approval. In addition, during the term of Mr. Tan's employment agreement,
we are also leasing a motor vehicle for Mr. Tan's daily use. Mr. Tan is not entitled to any severance rights under his employment
agreement. Mr. Tan's employment agreement has a term of five years, is thereafter renewable on an annual basis, and may be terminated
upon 30 days' notice upon the mutual agreement of Mr. Tan and the Company.

 Employment Agreement with Kevin Vassily

 On January 29, 2021, we entered
into an employment agreement with our Chief Financial Officer, Kevin Vassily. Under Mr. Vassily's employment agreement, Mr. Vassily
receives base compensation of $240,000, is entitled to an annual guaranteed bonus of $60,000 upon achievement of certain milestones and
up to an additional $60,000 annually in the sole discretion of the Company's board of directors. Mr. Vassily is also entitled to
12,000 restricted stock units upon completion of our IPO. Thereafter, stock grants will be adjusted based on the awards from each prior
year. Mr. Vassily is not entitled to any severance rights under his employment agreement and may be terminated upon 30 days' written
notice by either party.

 Outstanding Equity Awards

 Outstanding Equity Awards at June 30, 2024

 The following table provides
information regarding outstanding equity awards held by our named executive officers as of June 30, 2024.

 Options

 Restricted Stock Unit Awards

 Name

 Grant Date

 Number of securities Underlying Options (#)
 Vested

 Number of Securities Underlying Options (#)
 Unvested

 Option
 Exercise
 Price
 ($)

 Option
 Expiration
 date

 Number of Securities Underlying RSUs (#) Vested

 Number of Securities Underlying RSUs(#) Unvested

 5/13/2022

 3,000,000

 $
 1.12

 5/12/2032

 –

 –

 Kevin Vassily (1)

 5/11/2021

 –

 –

 –

 –

 12,000

 –

 5/13/2022

 330,000

 $
 1.12

 5/12/2032

 –

 –

 (1) Total number of RSUs granted was 12,000, all of which had vested
as of June 30, 2024.

 Director Compensation

 We reimburse all members of
our board of directors for their direct out of pocket expenses incurred in attending meetings of our board of directors. This table summarizes
the compensation paid to each of our independent directors who served in such capacity during the fiscal year ended June 30, 2024.

 Name

 Fees Earned or Paid in Cash

 Stock Based Awards

 Others

 Total

 Bennet Tchaikovsky

 $
 30,000

 $
 30,000

 $
 –

 $
 60,000

 Kevin Liles

 $
 25,000

 $
 30,000

 $
 –

 $
 55,000

 Hanxi Li

 $
 25,000

 $
 30,000

 $
 –

 $
 55,000

 Our independent directors
each receive (i) $25,000 annual cash compensation, payable in equal quarterly installments, and (ii) $30,000 in restricted stock units
("RSUs"), which were issued pursuant to our 2020 Amended Equity Incentive Plan. The RSUs vest monthly in 12 substantially
equal installments. In addition, the chairman of our audit committee is entitled to receive an additional $5,000 annual retainer for his
additional responsibilities, which retainer will be payable in equal quarterly installments. Directors will also be reimbursed for reasonable
expenses incurred in connection with the performance of their duties. No compensation has been awarded to any directors who were not executive
officers for the fiscal years ended June 30, 2024 and 2023.

 Equity Incentive Plan

 On October 15, 2020, the Company's
board of directors adopted, and its stockholders approved and ratified, the iPower Inc. 2020 Equity Incentive Plan. Further on May 5,
2021, the Company's board of directors adopted, and its stockholders approved and ratified, the 2020 Amended Equity Incentive Plan.
The 2020 Amended Equity Incentive Plan allows for the issuance of up to 10,000,000 shares of common stock, whether in the form of options,
restricted stock, restricted stock units, stock appreciation rights, performance units, performance shares and other stock or cash awards.
The general purpose of the 2020 Amended Equity Incentive Plan is to provide an incentive to the Company's directors, officers, employees,
consultants and advisors by enabling them to share in the future growth of the Company's business. The board of directors believes
that granting equity-based compensation serves to promote continuity of management and provide for a shared interest in the welfare, growth
and development of the Company. The Company believes that the 2020 Amended Equity Incentive Plan will serve to advance the Company's
interests by enhancing its ability to (i) attract and retain employees, consultants, directors and advisors who are able to contribute
to the Company's ongoing success and development, (ii) reward those employees, consultants, directors and advisors for their contributions
to the Company, and (iii) encourage employees, consultants, directors and advisors to participate in the Company's long-term growth
and success.

 In addition to the RSU grants
referenced above, on May 13, 2022, the Company granted stock options (the "Option Grants") in the amount of (i) 3,000,000
shares to Chenlong Tan, our Chief Executive Officer and (ii) 330,000 shares to Kevin Vassily, our Chief Financial Officer. The Option
Grants have an exercise price of $1.12 per share (the closing price on the grant date) and have a term of 10 years, will vest in stages
upon the Company's achievement of certain pre-determined market capitalization and revenue or operating income targets set forth
in the grant agreements. During the fiscal year ended June 30, 2024, the Company granted an additional 62,600 RSUs to our directors and
employees.

 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 The following table sets forth
the number of shares of common stock beneficially owned as of September 17, 2024 by:

 each of our stockholders who is known by us to beneficially own 5% or more of our common stock;

 each of our executive officers;

 each of our directors; and

 all of our directors and current executives as a group.

 Beneficial ownership is determined
based on the rules and regulations of the SEC. A person has beneficial ownership of shares if such individual has the power to vote and/or
dispose of shares. This power may be sole or shared and direct or indirect. Applicable percentage ownership in the following table is
based on the total of 31,425,290 shares of common stock outstanding as of September 20, 2024. In computing the number of shares beneficially
owned by a person and the percentage ownership of that person, shares of common stock that are subject to options or warrants held by
that person and exercisable as of, or within sixty (60) days of, the date of this prospectus. These shares, however, are not counted as
outstanding for the purposes of computing the percentage ownership of any other person(s). Except as may be indicated in the footnotes
to this table and pursuant to applicable community property laws, each person named in the table has sole voting and dispositive power
with respect to the shares of common stock set forth opposite that person's name. Unless indicated below, the address of each individual
listed below is c/o iPower Inc., 8798 9th Street, Rancho Cucamonga, CA 91730.

 Name of Beneficial Owner

 No. of Shares Common Stock Beneficially Owned

 Total Percentage of Common Stock Owned

 Chenlong Tan (1)

 7,752,501

 24.67%

 Kevin Vassily (2)

 22,000

 *%

 Bennet Tchaikovsky (3)

 55,600

 *%

 Kevin Liles (4)

 55,600

 *%

 Hanxi Li (5)

 64,941

 *%

 All Officers and Directors (5 Persons)

 7,950,642

 25.30%

 Beneficial Owners of more than 5%

 Allan Huang (6)

 7,752,500

 24.67%

 White Cherry Limited (7)

 2,629,515

 8.37%

 __________________________

 *

 Less than 0.1%

 (1)

 Chenlong Tan is our co-Founder, Chairman, Chief Executive Officer and President. Mr. Tan's holding consists of (i) 3,752,501 shares directly held by Mr. Tan and (ii) 4,000,000 shares held by a trust for the benefit of Mr. Tan and certain of his family members. The aforementioned holdings do not include options to purchase 3,000,000 shares of common stock which remain subject to certain vesting conditions.

 (2)

 Kevin Vassily is our Chief Financial Officer. The aforementioned holdings do not include options to purchase 330,000 shares of common stock which remain subject to certain vesting conditions.

 (3)

 Mr. Tchaikovsky is a member of our board of directors. His holdings consist of (i) 30,800 shares of common stock and (ii) 24,800 restricted stock units ("RSUs") which remain subject to vesting.

 (4)

 Mr. Liles is a member of our board of directors. His holdings consist of (i) 30,800 shares of common stock and (ii) 24,800 RSUs which remain subject to vesting.

 (5)

 Ms. Li is a member of our board of directors. Her reported holdings consist of (i) 26,147 shares of common stock and (ii) 38,794 RSUs which remain subject to vesting.

 (6)

 Allan Huang is our co-Founder and a consultant and was previously our Chief Executive Officer, President and a director.

 (7)

 White Cherry Limited was the former owner of our subsidiary in Hong Kong.

 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS AND DIRECTOR INDEPENDENCE

 Unless described below, during
the last two fiscal years, there are no transactions or series of similar transactions to which we were a party or will be a party, in
which:

 the amounts involved exceed or will exceed $120,000; and

 any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family of any of the foregoing had, or will have, a direct or indirect material interest.

 On April 27, 2021, Mr. Chenlong
Tan, our Chairman, President and Chief Executive Officer and a beneficial owner more than 5% of our common stock, agreed to reimburse
us for any judgments, fines and amounts paid or actually incurred by us or an indemnitee in connection with such legal action or in connection
with any settlement agreement entered into by us 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, against any damages that the Company may owe Boustead
or the underwriters, should Boustead be successful in any action against the Company related to this initial public offering. On June
18, 2024, Mr. Tan, along with co-founder and shareholder Allan Huang, satisfied this obligation by returning a total of 541,667 shares
to the Company's treasury, to reimburse the company for a $1.3 million settlement with Boustead. See Note 17 above.

 Starting March 1, 2022, the
Company subleases 50,000 square feet of its warehouse space to Box Harmony, LLC ("Box Harmony"), which is a 40% owned joint
venture of the Company as disclosed in Note 1 and Note 2 to our audited consolidated financial statements. For the year ended June 30,
2023 and 2022, the Company received and recorded sublease fee of $359,373 and $330,000 as other non-operating income, respectively. As
of June 30, 2023 and 2022, other receivables due from Box Harmony was $0 and 51,762, respectively. The Company discontinued the sublease
to Box Harmony on January 1, 2023.

 On February 15, 2022, the
Company assumed $92,246 of advance payments from shareholders of DHS as a result of the Company's acquisition of Anivia. These advance
payments were for capital injections pending capital inspection by the local government in accordance with the PRC rules. As of June 30,
2023, the balance of advance from shareholders was $85,200. As of June 30, 2024, the balance of advance from shareholders was $0.

 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 $2,000,000 from White Cherry, repaid $1 million on July 31, 2023 and $1 million on January 31, 2024. For the
year ended June 30, 2024, the Company recorded interest of $32,911. As of June 30, 2024, the outstanding balance of the On-demand Loan
was $0.

 During the
period ended June 30, 2024, the Company started selling products through MII Strategy Inc. ("MII"), a company owned by the
Company's CEO, Mr. Chenlong Tan. For the year ended June 30, 2024, the amount sold through MII was $95,376. As of June 30, 2024,
the total amount due from MII was $56,406.

 On April 1, 2024, the Company
borrowed $350,000 short-term loan ("RP Loan") from an entity owned by Mr. Allan Huang, one of the majority shareholders of
the Company. The RP Loan bears no interest and is due upon receipt of request of repayment. As of June 30, 2024, the outstanding balance
of the RP Loan was $350,000.

 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

 The following table represents
fees for professional audit services for the audit of the Company's annual financial statements for the fiscal years ended June
30, 2024 and 2023, rendered by UHY LLP.

 Fiscal year ended June 30,

 2024

 2023

 Audit fees 1

 $
 316,066

 $
 405,276

 Audit-related fees 2

 –

 –

 Total fees

 $
 316,066

 $
 405,276

 _________________________

 1.

 Audit fees consist of fees for professional services rendered by the principal accountant for the audit of the Company's annual financial statements and review of the financial statements included in the Company's Form 10-K and Form 10-Q and for services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements.

 2.

 Audit-related fees consist primarily of fees for assurance and related services by the accountant that are reasonably related to the performance of the audit or review of the Company's financial statements.

 Audit Committee Pre-Approval Policies

 The Audit Committee is tasked
with pre-approving any non-audit services proposed to be provided to the Company by the independent auditors.

 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

 Exhibit No.

 Description

 3.1

 Sixth Amended and Restated Articles of Incorporation of iPower Inc. (incorporated by reference to Exhibit 3.3 to Amendment No. 3 to the Registration Statement on Form S-1 filed May 5, 2021).

 3.2

 Second Amended and Restated Bylaws of iPower Inc. (incorporated by reference to Exhibit 3.3 to Amendment No. 2 the Registration Statement on Form S-1 filed April 27, 2021).

 4.1

 Certificate of Designation of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-1 filed February 2, 2021).

 4.2

 Form of Warrant (incorporated by Reference to Exhibit 4.1 to the Current Report on Form 8-K filed June 18, 2024).

 10.1

 2020 Amended and Restated Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to Amendment No. 3 to the Registration Statement on Form S-1 filed May 5, 2021).

 10.2

 Form of Sublease Agreement, dated as of December 1, 2018, between BZRTH, Inc. and BizRight, LLC (incorporated by reference to Exhibit 10.2 to the Registration Statement on Form S-1 filed February 2, 2021).

 10.3

 Asset Purchase Agreement, dated December 1, 2018, between BZRTH, Inc. and BizRight, LLC (incorporated by Reference to Exhibit 10.3 to the Registration Statement on Form S-1 filed February 2, 2021).

 10.4

 Loan and Security Agreement, dated May 3, 2019, between BZRTH, Inc. and WFC Fund, LLC (incorporated by reference to Exhibit 10.4 to the Registration Statement on Form S-1 filed February 2, 2021).

 10.5

 Consulting Agreement, dated February 1, 2020, between BZRTH, Inc. and Allan Huang (incorporated by reference to Exhibit 10.5 to Amendment No. 1 to the Registration Statement on Form S-1 filed April 15, 2021).

 10.6

 Note for PPP Loan, dated April 13, 2020, issued to Royal Business Bank (incorporated by reference to Exhibit 10.5 to the Registration Statement on Form S-1 filed February 1, 2021).

 10.7

 Loan Authorization and Agreement, dated April 18, 2020, between BZRTH, Inc. and U.S. Small Business Administration (incorporated by reference to Exhibit 10.6 to the Registration Statement on Form S-1 filed February 1, 2021).

 10.8

 Employment Agreement, dated July 1, 2020, between iPower Inc. and Chenlong Tan (incorporated by reference to Exhibit 10.7 to the Registration Statement on Form S-1 filed February 2, 2021).

 10.9

 Standard Industrial Multi-Tenant Lease, dated as of September 1, 2020, between BZRTH, Inc. and Nelson, LLC (incorporated by reference to Exhibit 10.8 to the Registration Statement on Form S-1 filed February 2, 2021).

 10.10

 Exclusive Business Cooperation Agreement, dated September 4, 2020, between iPower Inc. and Global Product Marketing Inc. (incorporated by reference to Exhibit 10.9 to the Registration Statement on Form S-1 filed February 2, 2021).

 10.11

 Restricted Stock Purchase Agreement, dated October 20, 2020, between iPower Inc. and Allan Huang (incorporated by reference to Exhibit 10.10 to the Registration Statement on Form S-1 filed February 2, 2021).

 10.12

 Restricted Stock Purchase Agreement, dated October 20, 2020, between iPower Inc. and Chenlong Tan (incorporated by reference to Exhibit 10.11 to the Registration Statement on Form S-1 filed February 2, 2021).

 10.13

 Amended and Restated Exclusive Business Cooperation Agreement, dated October 26, 2020, between iPower Inc. and E Marketing Solution Inc. (incorporated by reference to Exhibit 10.12 to the Registration Statement on Form S-1 filed February 2, 2021).

 10.14

 Receivables Purchase Agreement, dated November 16, 2020, between BZRTH, Inc. and WFC Fund, LLC (incorporated by reference to Exhibit 10.13 to the Registration Statement on Form S-1 filed February 2, 2021).

 10.15

 Form of Subscription Agreement for Series A Preferred Stock Offering (incorporated by reference to Exhibit 10.14 to the Registration Statement on Form S-1 filed February 2, 2021).

 10.16

 Board Letter Agreement, dated January 26, 2021, between iPower Inc. and Danilo Cacciamatta (incorporated by reference to Exhibit 10.15 to the Registration Statement on Form S-1 filed February 2, 2021).

 10.17

 Board Letter Agreement, dated January 26, 2021, between iPower Inc. and Bennet Tchaikovsky (incorporated by reference to Exhibit 10.16 to the Registration Statement on Form S-1 filed February 2, 2021).

 10.18

 Form of Subscription Agreement for 6% Convertible Note and Warrants (incorporated by reference to exhibit 10.17 to the Registration Statement on Form S-1 filed February 2, 2021).

 10.19

 Convertible Note, dated January 27, 2021, issued to Wiseman Capital Management LLC (incorporated by reference to Exhibit 10.18 to the Registration Statement on Form S-1 filed February 2, 2021).

 10.20

 Convertible Note, dated January 27, 2021, issued to Bright Century Investment LLC (incorporated by reference to Exhibit 10.19 to the Registration Statement on Form S-1 filed February 2, 2021).

 10.21

 Board Letter Agreement, dated January 28, 2021, between iPower Inc. and Kevin Liles (incorporated by reference to Exhibit 10.20 to the Registration Statement on Form S-1 filed February 2, 2021).

 10.22

 Employment Agreement, dated January 29, 2021, between iPower Inc. and Kevin Vassily (incorporated by reference to Exhibit 10.21 to the Registration Statement on Form S-1 filed February 2, 2021).

 10.23

 Indemnification Agreement, dated as of April 27, 2021, by and among iPower Inc. and D.A. Davidson & Co., Roth Capital Partners, LLC and US Tiger Securities, Inc. (incorporated by reference to Exhibit 10.23 to Amendment No. 3 to the Registration Statement on Form S-1 filed May 5, 2021).

 10.24

 Indemnification and Lock-Up Agreement, dated as of April 27, 2021, entered into by Chenlong Tan (incorporated by reference to Exhibit 10.24 to Amendment No. 3 to the Registration Statement on Form S-1 filed May 5, 2021).

 10.25

 E Marketing Solutions Inc. Equity Purchase Agreement, dated May 18, 2021, between iPower Inc. and Shanshan Huang (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed May 21, 2021).

 10.26

 Global Products Marketing Inc. Equity Purchase Agreement, dated May 18, 2021, between iPower Inc. and Chenlong Tan (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed May 21, 2021).

 10.27

 Lease Agreement, dated July 28, 2021, between iPower Inc. and 9 th and Vineyard LLC (incorporated by reference to Exhibit 10.1 to the Current Report filed August 2, 2021).

 10.28

 Form of Credit Agreement, dated as of November 12, 2021, between iPower Inc., its subsidiaries and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed November 15, 2021).

 10.29

 Form of Trademark Security Agreement, dated as of November 12, 2021, between iPower Inc., its subsidiaries and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q filed November 15, 2021).

 10.30

 Form of Pledge and Security Agreement, dated as of November 12, 2021, between iPower Inc., its subsidiaries and JPMorgan Chase Bank, N.A. (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q filed November 15, 2021).

 10.31

 Joint Venture Agreement (incorporated by Reference to Exhibit 10.1 to the Current Report on Form 8-K filed January 20, 2022).

 10.32

 Box Harmony LLC Agreement (incorporated by Reference to Exhibit 10.2 to the Current Report on Form 8-K filed January 20, 2022).

 10.33

 Facility and Use Access Agreement (incorporated by Reference to Exhibit 10.3 to the Current Report on Form 8-K filed January 20, 2022).

 10.34

 Consulting Agreement (incorporated by Reference to Exhibit 10.4 to the Current Report on Form 8-K filed January 20, 2022).

 10.35

 License Agreement (incorporated by Reference to Exhibit 10.5 to the Current Report on Form 8-K filed January 20, 2022).

 10.36

 Director Offer Letter (incorporated by Reference to Exhibit 10.6 to the Current Report on Form 8-K filed January 20, 2022).

 10.37

 Joint Venture Agreement, dated February 10, 2022, between iPower Inc., Bro Angel LLC, Jie Shan and Bing Luo (incorporated by Reference to Exhibit 10.1 to the Current Report on Form 8-K filed February 14, 2022).

 10.38

 Amended & Restated Limited Liability Company Operating Agreement of Global Social Media LLC, dated February 10, 2022, between Global Social Media LLC, iPower Inc., and Bro Angel LLC (incorporated by Reference to Exhibit 10.2 to the Current Report on Form 8-K filed February 14, 2022).

 10.39

 Intellectual Property License Agreement, dated February 10, 2022, between Bro Angel LLC and Global Social Media LLC (incorporated by Reference to Exhibit 10.3 to the Current Report on Form 8-K filed February 14, 2022).

 10.40

 Share Transfer Agreement, dated February 15, 2022, between iPower Inc., White Cherry Limited, Li Zanyu, Xie Jing, Anivia Limited, Fly Elephant Limited, Dayou Renzai (Shenzhen) Technology Co., Ltd. and Daheshou (Shenzhen) Information Technology Co., Ltd. (incorporated by Reference to Exhibit 10.1 to the Current Report on Form 8-K filed February 22, 2022).

 10.41

 $3,500,000 Promissory Note, dated February 15, 2022, from iPower, Inc. to White Cherry Limited (incorporated by Reference to Exhibit 10.2 to the Current Report on Form 8-K filed February 22, 2022).

 10.42

 Exclusive Business Cooperation Agreement, dated December 15, 2021, between Dayaorenzai (Shenzhen) Technology Co., Ltd. and Daheshou (Shenzhen) Information Technology Co., Ltd. (incorporated by Reference to Exhibit 10.3 to the Current Report on Form 8-K filed February 22, 2022).

 10.43

 Exclusive Equity Interest Pledge Agreement, dated December 15, 2021, between Dayao Renzai (Shenzhen) Technology Co., Ltd., Daheshou (Shenzhen) Information Technology Co., Ltd. and its equity holders (incorporated by Reference to Exhibit 10.4 to the Current Report on Form 8-K filed February 22, 2022).

 10.44

 Exclusive Option Agreement, dated December 15, 2021, between Dayao Renzai (Shenzhen) Technology Co., Ltd., Daheshou (Shenzhen) Information Technology Co., Ltd. and its equity holders (incorporated by Reference to Exhibit 10.5 to the Current Report on Form 8-K filed February 22, 2022).

 10.45

 Power of Attorney of Li Zanyu, dated December 15, 2021 (incorporated by Reference to Exhibit 10.6 to the Current Report on Form 8-K filed February 22, 2022).

 10.46

 JP Morgan Chase Consent Agreement, dated February 16, 2022 (incorporated by Reference to Exhibit 10.7 to the Current Report on Form 8-K filed February 22, 2022).

 10.47

 Amendment to Pledge and Security Agreement, dated February 16, 2022 (incorporated by Reference to Exhibit 10.8 to the Current Report on Form 8-K filed February 22, 2022).

 10.48

 Employment Contract, dated February 15, 2022, between Dayao Renzai (Shenzhen) Technology Co., Ltd. and Li Zanyu (incorporated by Reference to Exhibit 10.9 to the Current Report on Form 8-K filed February 22, 2022).

 10.49

 Second Amendment to the Credit Agreement, dated October 7, 2022, between iPower Inc., its subsidiaries and JPMorgan Chase Bank, N.A. (incorporated by Reference to Exhibit 10.1 to the Current Report on Form 8-K filed October 13, 2022).

 10.50

 Amendment to Subordination Agreement, dated October 7, 2022, between White Cherry Limited and JPMorgan Chase Bank, N.A. (incorporated by Reference to Exhibit 10.2 to the Current Report on Form 8-K filed October 13, 2022).

 10.51

 Form of Pledge Agreement between iPower Inc., Chenlong Tan and Allan Huang (incorporated by Reference to Exhibit 10.1 to the Current Report on Form 8-K filed April 9, 2024).

 10.52

 Form of Placement Agency Agreemen t (incorporated by Reference to Exhibit 10.1 to the Current Report on Form 8-K filed June 18, 2024).

 10.53

 Form of Purchase Agreement (incorporated by Reference to Exhibit 10.2 to the Current Report on Form 8-K filed June 18, 2024).

 14.1

 Code of Business Conduct and Ethics (incorporated by reference to Exhibit 14.1 to Amendment No. 1 to the Registration Statement on Form S-1 filed April 15, 2021).

 21.1

 Subsidiaries (Incorporated by reference to Exhibit 21 to the Annual Report on Form 10-K filed on September 28, 2022)

 23.1*

 Consent of Independent Registered Public Accounting Firm

 31.1*

 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 31.2*

 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

 32.1**

 Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 32.2**

 Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 Incentive-Based Compensation Recovery (Clawback) Policy (incorporated by Reference to Exhibit 10.1 to the Current Report on Form 8-K filed December 1, 2023)

 101.INS

 101.SCH

 101.CAL

 101.DEF

 101.LAB

 101.PRE

 * Filed herewith.

 ** Furnished herewith.

 Item 16. Form 10-K Summary

 None.

 SIGNATURES

 Pursuant to the requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this amendment to be signed on its behalf by the undersigned,
thereunto duly authorized.

 iPOWER INC.

 By:

 /s/ Chenlong Tan

 Chairman of the Board of Directors,

 Chief Executive Officer and President

 Date: September 20, 2024

 Principal Executive Officer

 Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 Signature

 Title

 Date

 /s/ Chenlong Tan

 Chairman of the Board of Directors,

 Chief Executive Officer and President

 (principal executive officer)

 /s/ Kevin Vassily

 Chief Financial Officer

 Kevin Vassily

 (principal financial and accounting officer)

 /s/ Bennet Tchaikovsky

 Director

 Bennet Tchaikovsky

 /s/ Kevin Lies

 Director

 Kevin Liles

 /s/ Hanxi Li

 Director

 Hanxi Li