UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (date of earliest event reported):
(Exact name of registrant as specified in its charter)
Commission
file number:
| 5200 | ||||
|
(State of Incorporation) |
(Primary Standard Industrial Classification Code Number.) |
(IRS Employer Identification No.) |
iPower Inc.
(Address Of Principal Executive Offices) (Zip Code)
(Registrant’s Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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.
| Item 2.02 | Results of Operations and Financial Condition. |
On September 27, 2021, iPower Inc., a Nevada corporation (the “Company”), issued a press release announcing its financial results for the fourth quarter and fiscal year ended June 30, 2021 (the “Earnings Release”). In addition, as previously disclosed on September 21, 2021, the Company will be hosting a conference call on September 27, 2021, at 4:30 p.m. ET, 1:30 p.m. PT, during which time the Company will discuss its financial results for the fiscal year ended June 30, 2021.
The conference call details are as follows:
| Date: | Monday, September 27, 2021 |
| Time: | 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time |
| Dial-in: | (833) 882-8474 (Domestic) |
| ID: | 3283489 |
| Webcast | https://edge.media-server.com/mmc/p/notg6mtb |
For those unable to participate during the live broadcast, following the earnings call a replay of the webcast will also be available on the Company's website at https://ir.meetipower.com/.
A copy of the Earnings Release is attached hereto and incorporated herein by reference.
In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. Such information may be incorporated by reference in another filing under the Exchange Act or the Securities Act of 1933, as amended, only if and to the extent that such subsequent filing specifically references such information.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits |
| Exhibit No. | Description | |
| 99.1 | Press Release, dated September 27, 2021. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: September 27, 2021 | ||
| iPOWER INC. | ||
| By: | /s/ Chenlong Tan | |
| Name: | Chenlong Tan | |
| Title: | Chief Executive Officer | |
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Exhibit 99.1
iPower Reports Fourth Quarter and Fiscal 2021 Results
Strong Demand for In-House Branded Products Drives Fiscal 2021 Revenue Up 35% to $54.1 Million
iPower Management to Host Conference Call Today at 4:30 p.m. Eastern Time
DUARTE, CA, September 27, 2021 -- iPower Inc. (Nasdaq:IPW) (“iPower” or the “Company”), one of the leading online hydroponic equipment suppliers and retailers in the United States, today announced financial results for its fourth quarter and fiscal year ended June 30, 2021.
Fiscal Q4 2021 Results vs. Year-Ago Quarter
| · | Total revenue increased slightly to $14.7 million. |
| · | Gross profit was $6.5 million compared to $6.6 million. As a percentage of revenue, gross margin was 44.4% compared to 44.7%. |
| · | Net loss was $(1.9) million or $(0.08) per share, compared to net income of $1.2 million or $0.06 per share. |
| · | Non-GAAP net income (a non-GAAP financial measure defined below) was $0.6 million or $0.02 per share, compared to $1.2 million or $0.06 per share. |
Fiscal 2021 Results vs. Fiscal 2020
| · | Total revenue increased 35% to $54.1 million compared to $39.9 million. |
| · | Gross profit increased 51% to $22.8 million compared to $15.1 million. As a percentage of revenue, gross margin increased 430 basis points to 42.2% compared to 37.9%. |
| · | Net loss was $(0.8) million or $(0.04) per share, compared to net income of $2.0 million or $0.10 per share. |
| · | Non-GAAP net income increased 47% to $2.9 million or $0.14 per share, compared to $2.0 million or $0.10 per share. |
Management Commentary
“Fiscal 2021 was a solid year for iPower, highlighted by strong revenue growth of more than 35% with considerable gross margin expansion due to a growing mix of in-house product sales,” said Lawrence Tan, CEO of iPower. “The growing demand for our in-house products, which made up 72% of sales in fiscal 2021, is a testament to our superior product research, design and merchandising expertise. Sales of our proprietary products grew nearly 80% in fiscal 2021. We introduced hundreds of new proprietary SKUs in that same period, with the majority of them introduced in the second half of our fiscal year. We believe we have the right products with the right features to address the needs of our customers.
“During our fiscal fourth quarter, we utilized the growth capital raised from our IPO to make significant investments and lay the groundwork for continued growth in the coming years. This included increased advertising on new products launched in the second half of 2021, expansion of our fulfillment infrastructure, and multiple new programs with our co-engineering and supply chain logistics partners.”
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iPower CFO Kevin Vassily added, “As we look toward fiscal 2022, we expect a continued robust demand environment. Historically, our organic revenue growth has ranged between 25-35%, excluding the extraordinary year of fiscal 2020 that benefited from COVID-19 stay-at-home mandates. Hydroponic industry growth at-large appears to be moderating, however, our unique eCommerce model has enabled us to consistently outpace the industry. Given our extensive proprietary SKU introductions over the last six months, we expect to continue outpacing the industry going forward with organic revenue growth of at least 25% in fiscal 2022.
“From a profitability perspective, the cost environment has been more volatile with increased container and product input costs. While we plan to offset some of these costs, we nonetheless believe it is prudent to avoid forecasting exact margin targets until the global supply chain becomes more stable. That said, we are planning a meaningful number of new in-house product introductions, including our own nutrients brand, which we expect will provide margin support during this volatile period. We remain in the early stages of capitalizing on our unique approach to hydroponic eCommerce sales and look forward to another year of strong execution ahead.”
Fiscal Fourth Quarter 2021 Financial Results
Total revenue in the fiscal fourth quarter of 2021 increased slightly to $14.73 million compared to $14.66 million for the same period in fiscal 2020. The Company benefitted from heightened eCommerce demand during the fiscal fourth quarter 2020 as a result of mandatory stay-at-home orders due to COVID-19, and such benefits continued into 2021.
Gross profit in the fiscal fourth quarter of 2021 decreased slightly to $6.5 million compared to $6.6 million. As a percentage of revenue, gross margin was 44.4% compared to 44.7%.
Total operating expenses in the fiscal fourth quarter were $6.3 million compared to $4.8 million for the same period in fiscal 2020. The increase was primarily driven by higher merchant fees related to channel program mix, increases in advertising, and an increase in spending with co-engineering partners.
Net loss in the fiscal fourth quarter of 2021 was $(1.9) million or $(0.08) per share, compared to net income of $1.2 million or $0.06 per share for the same period in fiscal 2020.
Non-GAAP net income in the fiscal fourth quarter was $0.6 million or $0.02 per share, compared to $1.2 million or $0.06 per share. The decrease was driven by the aforementioned higher merchant fees and increased spending.
Cash and cash equivalents were $6.7 million at June 30, 2021, compared to $1.0 million at June 30, 2020. The increase was attributed to proceeds raised from the Company’s initial public offering earlier this fiscal year.
Conference Call
The Company will conduct a conference call today at 4:30 p.m. Eastern Time to discuss the results for its fourth quarter and fiscal year ended June 30, 2021.
iPower management will host the conference call, followed by a question-and-answer period.
Date: September 27, 2021
Time: 4:30 p.m. Eastern time
Toll-free dial-in number: (833) 882-8474
International dial-in number: (409) 981-0009
Conference ID: 3283489
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization.
The conference call will be broadcast live and available for replay here and on the Company’s investor relations website at www.meetipower.com.
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About iPower Inc.
iPower Inc. is one of the leading online retailers and suppliers of hydroponics equipment and accessories in the United States. iPower offers thousands of stock keeping units from its in-house brands as well as hundreds of other brands through its website, www.zenhydro.com, and its online platform partners. All orders are fulfilled from its two fulfillment centers in Southern California. iPower has a diverse customer base that includes both commercial businesses and individuals. For more information, please visit iPower's website at https://ir.meetipower.com/.
Non-GAAP Financial Measures
iPower has disclosed non-GAAP net income/(loss) and non-GAAP earnings per share in this press release, which are non-GAAP financial measures as defined by SEC Regulation G. The company defines non-GAAP net income/(loss) as net income/(loss) before stock-based compensation, one-time IPO related costs, D&O insurance, amortization of debt and non-cash financing costs, changes in fair value of warrants and conversion features, and adjustments to tax provisions. A table providing a reconciliation of non-GAAP net income/(loss) and non-GAAP EPS is included at the end of this press release.
The Company’s management believes that presenting non-GAAP net income/(loss) and non-GAAP EPS provide useful information to investors regarding the underlying business trends and performance of the Company’s ongoing operations, as well as providing for more consistent period-over-period comparisons. This non-GAAP measure assists management in its operational and financial decision-making, as well as monitoring the Company’s performance. non-GAAP net income/(loss) and non-GAAP EPS are used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures. Management strongly encourages investors to review the Company’s consolidated financial statements in their entirety and to not rely on any single financial measure
Forward-Looking Statements
All statements other than statements of historical fact in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations and projections about future events and financial trends that iPower believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. iPower undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although iPower believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and iPower cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in iPower's registration statement and in its other filings with the SEC.
Investor Relations Contact
Sherry Zheng
Weitian Group LLC
(718) 213-7386
shunyu.zheng@weitian-ir.com
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iPower Inc. and Subsidiaries
Consolidated Balance Sheets
As of June 30, 2021 and 2020
(Unaudited)
| June 30, | June 30, | |||||||
| 2021 | 2020 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalent | $ | 6,651,705 | $ | 977,635 | ||||
| Accounts receivable | 7,896,347 | 6,067,199 | ||||||
| Inventories, net | 13,065,741 | 5,743,181 | ||||||
| Prepayments and other current assets | 4,693,000 | 616,231 | ||||||
| Total current assets | 32,306,793 | 13,404,246 | ||||||
| Non-current assets | ||||||||
| Right of use - non-current | 1,819,421 | 262,875 | ||||||
| Property and equipment, net | 55,659 | 6,252 | ||||||
| Non-current prepayments | 1,357,292 | |||||||
| Other non-current assets | 99,645 | – | ||||||
| Total non-current assets | 3,332,017 | 269,127 | ||||||
| Total assets | $ | 35,638,810 | $ | 13,673,373 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | 3,940,963 | 4,220,347 | ||||||
| Credit cards payable | 584,311 | 892,792 | ||||||
| Customer deposit | 297,407 | 741,301 | ||||||
| Due to related parties | – | 133,793 | ||||||
| Other payables and accrued liabilities | 2,487,441 | 1,940,858 | ||||||
| Short-term loans payable | 162,769 | 1,329,680 | ||||||
| Lease liability - current | 731,944 | 262,875 | ||||||
| Long-term loan payable - current portion | 29,244 | – | ||||||
| Income taxes payable | 790,823 | 721,211 | ||||||
| Total current liabilities | 9,024,902 | 10,242,857 | ||||||
| Non-current liabilities | ||||||||
| Long-term loan payable | 458,571 | 500,000 | ||||||
| Lease liability - non-current | 1,169,552 | – | ||||||
| Total non-current liabilities | 1,628,123 | 500,000 | ||||||
| Total liabilities | 10,653,025 | 10,742,857 | ||||||
| Commitments and contingency | – | – | ||||||
| Stockholders' Equity | ||||||||
| Common stock, $0.001 par value; 180,000,000 shares authorized; 26,448,663 and 20,204,496 shares issued and outstanding at June 30, 2021 and June 30, 2020 * | 26,449 | 20,204 | ||||||
| Class B common stock, $0.001 par value; 0 and 14,000,000 shares authorized; 0 and 14,000,000 shares issued and outstanding at June 30, 2021 and June 30, 2020 * | – | 14,000 | ||||||
| Subscription receivable | – | (14,000 | ) | |||||
| Additional paid in capital | 23,214,263 | 389,490 | ||||||
| Retained earnings | 1,745,073 | 2,520,822 | ||||||
| Total equity | 24,985,785 | 2,930,516 | ||||||
| Total liabilities and equity | $ | 35,638,810 | $ | 13,673,373 | ||||
*On November 16, 2020, the Company implemented a 2-for-1 forward split of the issued and outstanding shares of Common Stock of the Company. Except shares authorized, all references to number of shares, and to per share information in the consolidated financial statements have been retroactively adjusted.
*On October 20, 2020, the Company issued to its Founders 14,000,000 shares of the Company’s Class B Common Stock. The issuance was considered as a nominal issuance, in substance a recapitalization transaction, which was recorded and presented retroactively as outstanding for all reporting periods.
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iPower Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
| For the Three Months Ended June 30, | For the Years Ended June 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| REVENUES | $ | 14,727,768 | $ | 14,660,133 | $ | 54,075,922 | $ | 39,938,472 | ||||||||
| TOTAL REVENUES | 14,727,768 | 14,660,133 | 54,075,922 | 39,938,472 | ||||||||||||
| COST OF REVENUES | 8,184,358 | 8,099,954 | 31,257,358 | 24,810,907 | ||||||||||||
| GROSS PROFIT | 6,543,410 | 6,560,179 | 22,818,564 | 15,127,565 | ||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Selling and fulfillment | 4,403,285 | 3,847,275 | 13,473,602 | 8,961,627 | ||||||||||||
| General and administrative | 1,897,774 | 949,345 | 6,384,398 | 3,257,989 | ||||||||||||
| Total operating expenses | 6,301,059 | 4,796,620 | 19,858,000 | 12,219,616 | ||||||||||||
| INCOME FROM OPERATIONS | 242,351 | 1,763,559 | 2,960,564 | 2,907,949 | ||||||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||||||
| Interest income (expenses) | (44,129 | ) | (124,764 | ) | (153,785 | ) | (168,283 | ) | ||||||||
| Other financing expenses | (50,000 | ) | – | (148,139 | ) | – | ||||||||||
| PPP loan forgiveness | – | – | 175,500 | – | ||||||||||||
| Other non-operating income (expense) | (2,048,545 | ) | 12,621 | (2,843,127 | ) | 20,734 | ||||||||||
| Total other income (expense), net | (2,142,674 | ) | (112,143 | ) | (2,969,551 | ) | (147,549 | ) | ||||||||
| (LOSS) INCOME BEFORE INCOME TAXES | (1,900,323 | ) | 1,651,416 | (8,987 | ) | 2,760,400 | ||||||||||
| PROVISION FOR INCOME TAXES | 6,075 | 462,400 | 766,762 | 773,438 | ||||||||||||
| NET (LOSS) INCOME | $ | (1,906,398 | ) | $ | 1,189,016 | $ | (775,749 | ) | $ | 1,986,962 | ||||||
| WEIGHTED AVERAGE NUMBER OF COMMON STOCK* | ||||||||||||||||
| Basic and diluted | 23,863,538 | 20,170,788 | 21,113,942 | 20,093,004 | ||||||||||||
| EARNINGS PER SHARE * | ||||||||||||||||
| Basic and diluted | $ | (0.080 | ) | $ | 0.059 | $ | (0.04 | ) | $ | 0.10 | ||||||
*On November 16, 2020, the Company implemented a 2-for-1 forward split of the issued and outstanding shares of Common Stock of the Company. The computation of basic and diluted EPS was retroactively adjusted for all periods presented.
*On October 20, 2020, the Company issued to its Founders 14,000,000 shares of the Company’s Class B Common Stock. The issuance was considered as a nominal issuance, in substance a recapitalization transaction, which was recorded and presented retroactively as outstanding for all reporting periods. The computation of basic and diluted EPS did not include the Class B Common Stock as the holders of Class B Common Stock have no dividend or liquidation right until such time as their shares of Class B Common Stock have been converted into Class A Common Stock.
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iPower Inc. and Subsidiaries
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
| For the Three Months Ended June 30, | For the Years Ended June 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| GAAP OPERATING EXPENSES | $ | 6,301,059 | $ | 4,796,620 | $ | 19,858,000 | $ | 12,219,616 | ||||||||
| Stock-based compensation | (111,683 | ) | – | (111,683 | ) | – | ||||||||||
| IPO related costs expensed | (196,240 | ) | – | (795,445 | ) | – | ||||||||||
| D&O Insurance | (100,655 | ) | – | (100,655 | ) | – | ||||||||||
| NON-GAAP OPERATING EXPENSES | $ | 5,892,481 | $ | 4,796,620 | $ | 18,850,217 | $ | 12,219,616 | ||||||||
| GAAP INCOME FROM OPERATIONS | $ | 242,351 | $ | 1,763,559 | $ | 2,960,564 | $ | 2,907,949 | ||||||||
| Stock-based compensation | 111,683 | – | 111,683 | – | ||||||||||||
| IPO related costs expensed | 196,240 | – | 795,445 | – | ||||||||||||
| D&O Insurance | 100,655 | – | 100,655 | – | ||||||||||||
| NON-GAAP INCOME FROM OPERATIONS | $ | 650,929 | $ | 1,763,559 | $ | 3,968,347 | $ | 2,907,949 | ||||||||
| GAAP OTHER INCOME (EXPENSE) | $ | (2,142,674 | ) | $ | (112,143 | ) | $ | (2,969,551 | ) | $ | (147,549 | ) | ||||
| Amortization of debt discount and non-cash financing costs | 1,148,494 | – | 1,611,874 | – | ||||||||||||
| Change in fair value of warrants and conversion features | 1,023,991 | – | 1,358,555 | – | ||||||||||||
| NON-GAAP OTHER INCOME (EXPENSE) | $ | 29,811 | $ | (112,143 | ) | $ | 878 | $ | (147,549 | ) | ||||||
| GAAP NET (LOSS) INCOME | $ | (1,906,398 | ) | $ | 1,189,016 | $ | (775,749 | ) | $ | 1,986,962 | ||||||
| Stock-based compensation | 111,683 | – | 111,683 | – | ||||||||||||
| IPO related costs expensed | 196,240 | – | 795,445 | – | ||||||||||||
| D&O Insurance | 100,655 | – | 100,655 | – | ||||||||||||
| Amortization of debt discount and non-cash financing costs | 1,148,494 | – | 1,611,874 | – | ||||||||||||
| Change in fair value of warrants and conversion features | 1,023,991 | – | 1,358,555 | – | ||||||||||||
| Adjustments to tax provision | (114,335 | ) | (282,014 | ) | ||||||||||||
| NON-GAAP NET (LOSS) INCOME | $ | 560,330 | $ | 1,189,016 | $ | 2,920,449 | $ | 1,986,962 | ||||||||
| GAAP (LOSS) EARNINGS PER SHARE * | ||||||||||||||||
| Basic and diluted | $ | (0.080 | ) | $ | 0.059 | $ | (0.04 | ) | $ | 0.10 | ||||||
| Impact of Non-GAAP adjustments | 0.103 | – | 0.175 | – | ||||||||||||
| NON-GAAP (LOSS) EARNINGS PER SHARE * | $ | 0.022 | $ | 0.059 | $ | 0.138 | $ | 0.099 | ||||||||
| WEIGHTED AVERAGE NUMBER OF COMMON STOCK* | ||||||||||||||||
| Basic and diluted - GAAP and NON-GAAP | 23,863,538 | 20,170,788 | 21,116,750 | 20,093,004 | ||||||||||||
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