0001683168-22-000984 | 10-Q | XBRL Viewer

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Unaudited Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Dec. 31, 2021	Jun. 30, 2021
Current assets
Cash and cash equivalent	$ 1,091,758	$ 6,651,705
Accounts receivable, net	15,553,516	7,896,347
Inventories, net	19,908,500	13,065,741
Prepayments and other current assets	6,804,371	4,693,000
Total current assets	43,358,145	32,306,793
Non-current assets
Right of use assets – non-current	1,473,397	1,819,421
Property and equipment, net	103,189	55,659
Non-current prepayments	1,141,458	1,357,292
Other non-current assets	329,244	99,645
Total non-current assets	3,047,288	3,332,017
Total assets	46,405,433	35,638,810
Current liabilities
Accounts payable	4,545,928	3,940,963
Credit cards payable	550,310	584,311
Customer deposit	228,161	297,407
Other payables and accrued liabilities	4,899,502	2,487,441
Short-term loans payable	0	162,769
Lease liability - current	766,759	731,944
Long-term loan payable - current portion	29,244	29,244
Income taxes payable	374,513	790,823
Total current liabilities	11,394,417	9,024,902
Non-current liabilities
Long-term loan payable	441,512	458,571
Long-term revolving loan payable, net	6,963,551	0
Lease liability – non-current	777,290	1,169,552
Total non-current liabilities	8,182,353	1,628,123
Total liabilities	19,576,770	10,653,025
Commitments and contingency
Stockholders' Equity
Preferred stock, $0.001 par value; 20,000,000 shares authorized; 0 shares issued and outstanding at December 31, and June 30, 2021	0	0
Common stock, $0.001 par value; 180,000,000 shares authorized; 26,488,682 and 26,448,663 shares issued and outstanding at December 31, and June 30, 2021	26,489	26,449
Additional paid in capital	23,371,712	23,214,263
Retained earnings	3,430,462	1,745,073
Total equity	26,828,663	24,985,785
Total liabilities and equity	$ 46,405,433	$ 35,638,810

Unaudited Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Dec. 31, 2021	Jun. 30, 2021
Statement of Financial Position [Abstract]
preferred stock, par value	$ 0.001	$ 0.001
Preferred stock shares authorized	20,000,000	20,000,000
Preferred stock shares issued	0	0
Preferred stock shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	180,000,000	180,000,000
Common stock, shares issued	26,488,682	26,448,663
Common stock, shares outstanding	26,488,682	26,448,663

Unaudited Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2021	Dec. 31, 2020
Income Statement [Abstract]
REVENUES	$ 17,125,663	$ 11,254,317	$ 34,492,428	$ 26,214,252
TOTAL REVENUES	17,125,663	11,254,317	34,492,428	26,214,252
COST OF REVENUES	9,568,051	6,306,726	19,621,114	15,703,873
GROSS PROFIT	7,557,612	4,947,591	14,871,314	10,510,379
OPERATING EXPENSES:
Selling and fulfillment	3,641,839	2,784,749	7,307,760	5,998,423
General and administrative	2,780,488	1,309,736	5,137,954	2,582,477
Total operating expenses	6,422,327	4,094,485	12,445,714	8,580,900
INCOME FROM OPERATIONS	1,135,285	853,106	2,425,600	1,929,479
OTHER INCOME (EXPENSE)
Interest income (expenses)	(75,112)	(23,708)	(75,112)	(49,538)
Other financing expenses	0	(37,447)	(9,000)	(37,447)
Other non-operating income (expense)	60,403	10,455	9,591	17,852
Total other (expenses), net	(14,709)	(50,700)	(74,521)	(69,133)
INCOME BEFORE INCOME TAXES	1,120,576	802,406	2,351,079	1,860,346
PROVISION FOR INCOME TAXES	322,715	226,930	665,690	522,874
NET INCOME	$ 797,861	$ 575,476	$ 1,685,389	$ 1,337,472
WEIGHTED AVERAGE NUMBER OF COMMON STOCK
Basic	26,491,103	20,204,496	26,487,816	20,204,496
Diluted	26,491,103	20,204,496	26,487,816	20,204,496
EARNINGS PER SHARE
Basic	$ 0.030	$ 0.028	$ 0.064	$ 0.066
Diluted	$ 0.030	$ 0.028	$ 0.064	$ 0.066

Unaudited Condensed Consolidated Statements of Changes in Stockholder's Equity - USD ($)	Common Stock [Member]	Class B Common Stock [Member]	Subscription Receivable [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance, September 30, 2020, unaudited at Jun. 30, 2020	$ 20,204	$ 14,000	$ (14,000)	$ 389,490	$ 2,520,822	$ 2,930,516
Beginning balance, shares at Jun. 30, 2020	20,204,496	14,000,000
Net income					761,996	761,996
Balance, December 31, 2020, unaudited at Sep. 30, 2020	$ 20,204	$ 14,000	(14,000)	389,490	3,282,818	3,692,512
Ending balance, shares at Sep. 30, 2020	20,204,496	14,000,000
Net income					575,476	575,476
Cash for Class B common stock			14,000			14,000
Balance, December 31, 2020, unaudited at Dec. 31, 2020	$ 20,204	$ 14,000		389,490	3,858,294	4,281,988
Ending balance, shares at Dec. 31, 2020	20,204,496	14,000,000
Balance, September 30, 2020, unaudited at Jun. 30, 2021	$ 26,449			23,214,263	1,745,073	24,985,785
Beginning balance, shares at Jun. 30, 2021	26,448,663
Net income					887,528	887,528
Restricted stock units vested				103,054		103,054
Balance, December 31, 2020, unaudited at Sep. 30, 2021	$ 26,449			23,317,317	2,632,601	25,976,367
Ending balance, shares at Sep. 30, 2021	26,448,663
Balance, September 30, 2020, unaudited at Jun. 30, 2021	$ 26,449			23,214,263	1,745,073	24,985,785
Beginning balance, shares at Jun. 30, 2021	26,448,663
Balance, December 31, 2020, unaudited at Dec. 31, 2021	$ 26,489			23,371,712	3,430,462	26,828,663
Ending balance, shares at Dec. 31, 2021	26,488,682
Balance, September 30, 2020, unaudited at Sep. 30, 2021	$ 26,449			23,317,317	2,632,601	25,976,367
Beginning balance, shares at Sep. 30, 2021	26,448,663
Net income					797,861	797,861
Restricted stock units vested				54,435		54,435
Restricted shares issued for vested RSUs	$ 40			(40)
Restricted shares issued for vested RSUs ,shares	40,019
Balance, December 31, 2020, unaudited at Dec. 31, 2021	$ 26,489			$ 23,371,712	$ 3,430,462	$ 26,828,663
Ending balance, shares at Dec. 31, 2021	26,488,682

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

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+ Details

Unaudited Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 1,685,389	$ 1,337,472
Adjustments to reconcile net income to cash used in operating activities:
Depreciation expense	8,894	4,869
Inventory reserve	55,958
Credit loss reserve	70,000	0
Stock-based compensation expense	157,489	0
Amortization of debt issuance costs	44,203	0
Non-cash operating lease expense	(11,425)	27,567
Preferred stock warrant expense	0	8,047
Change in operating assets and liabilities
Accounts receivable	(7,727,169)	(416,040)
Inventories	(6,898,717)	(3,003,928)
Prepayments and other current assets	(2,111,371)	(1,522,806)
Non-current prepayments	215,834	0
Other non-current assets	(229,599)	(96,930)
Accounts payable	604,965	1,463,175
Credit cards payable	(34,001)	(48,702)
Customer deposit	(69,246)	(66,658)
Other payables and accrued liabilities	2,412,063	325,024
Income taxes payable	(416,310)	521,843
Net cash used in operating activities	(12,243,043)	(1,467,067)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment	(56,424)	(55,751)
Net cash used in investing activities	(56,424)	(55,751)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from related parties	0	157,624
Payments to related parties	0	(120,498)
Proceeds from short-term loans	1,604,292	15,100,625
Payments of financing fees	(796,035)
Payments on short-term loans	(1,767,061)	(14,407,495)
Payments on long-term loans	(17,059)	0
Proceeds from long-term loan	7,715,383	0
Shares issued	0	359,000
Net cash provided by financing activities	6,739,520	1,089,256
CHANGES IN CASH	(5,559,947)	(433,562)
CASH AND CASH EQUIVALENT, beginning of year	6,651,705	977,635
CASH AND CASH EQUIVALENT, end of year	1,091,758	544,073
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income tax	1,082,000	0
Cash paid for interest	0	49,538
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS:
Right of use assets acquired under new operating leases	$ 0	$ 2,346,200

Nature of business and organization

6 Months Ended

Dec. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of business and organization

Note 1 - Nature of business and organization

iPower Inc., formerly known as BZRTH Inc., a Nevada corporation (the “Company”), was incorporated on April 11, 2018. The Company is principally engaged in the marketing and sale of advanced indoor and greenhouse lighting, ventilation systems, nutrients, growing media, grow tents, trimming machines, pumps and accessories mainly in the North America.

Effective on March 1, 2020, as amended and restated pursuant to an agreement dated October 26, 2020, the Company entered into an agreement with E Marketing Solution Inc. (“E Marketing”), an entity incorporated in California and owned by one of the shareholders of the Company. Pursuant to the terms of the agreement, the Company agreed to provide technical support, management services and other services on an exclusive basis in relation to E Marketing’s business during the term of the agreement. The Company also agreed to fund E Marketing for operational cash flow needs and bear the risk of E Marketing’s losses from operations and E Marketing agreed that iPower has rights to E Marketing’s net profits, if any. Under the terms of the agreement, the Company may at any time, at its option, acquire for nominal consideration 100% of either the equity of E Marketing or its assets subject to assumption of all of its liabilities. E Marketing was considered a variable interest entity (“VIE”). On May 18, 2021, the Company acquired 100% equity ownership of E Marketing. As a result, E Marketing has become the Company’s wholly owned subsidiary.

On September 4, 2020, the Company entered into an agreement with Global Product Marketing Inc. (“GPM”), an entity incorporated in the State of Nevada on September 4, 2020. GPM was then wholly owned by Chenlong Tan, the Chairman, CEO and President and one of the majority shareholders of the Company. Pursuant to the terms of the agreement, the Company was to provide technical support, management services and other services on an exclusive basis in relation to GPM’s business during the term of the Agreement. In addition, the Company agreed to fund GPM for operational cash flow needs and bear the risk of GPM’s losses from operations and GPM agreed that the Company has the right to GPM’s net profits, if any. Under the terms of the agreement, the Company may at any time, at its option, acquire for nominal consideration 100% of either the equity of GPM or its assets subject to assumption of all of its liabilities. GPM was considered a VIE. On May 18, 2021, the Company acquired 100% equity ownership of GPM. As a result, GPM has become the Company’s wholly owned subsidiary.

Basis of Presentation and Summary of significant accounting policies

6 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Basis of Presentation and Summary of significant accounting policies

Note 2 – Basis of Presentation and Summary of significant accounting policies

Basis of presentation

The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the requirements of the U.S. Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These unaudited condensed consolidated financial statements have been prepared on the same basis as its annual consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for the fair statement of the Company’s financial information. These interim results are not necessarily indicative of the results to be expected for the fiscal year ending June 30, 2022, or for any other interim period or for any other future year. All intercompany balances and transactions have been eliminated in consolidation.

These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Annual Report for the year ended June 30, 2021, which are included in Form 10-K filed on September 28, 2021.

Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries, E Marketing Solution Inc. and Global Product Marketing Inc. All inter-company balances and transactions have been eliminated.

Reclassifications

Certain prior period expense accounts have been reclassified in conformity with current period presentation including reclassification of $1.10 million from general administrative expenses to selling and fulfillment expenses for the six months ended December 31, 2020. The reclassification had no effect to the company’s unaudited condensed consolidated statements of operations, statements of cash flow or statements of changes in stockholders’ equity.

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. Actual results could differ from these estimates.

Cash and cash equivalents

Cash and cash equivalents consist of amounts held as cash on hand and bank deposits.

From time to time, the Company may maintain bank balances in interest bearing accounts in excess of the $250,000 currently insured by the Federal Deposit Insurance Corporation 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.

In July 2020, the Company adopted ASU 2016-13, Topics 326 - Credit Loss, Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (CECL) methodology, for its accounting standard for its trade accounts receivable.

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.

The adoption of the credit loss accounting standard has no material impact on the Company’s consolidated financial statements. 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.

Fair values of financial instruments

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.

Revenue recognition

The Company has adopted Accounting Standards Codification (“ASC”) 606 since its inception on April 11, 2018 and recognizes revenue from product sales in the United States, Canada, Europe, and other regions, net of promotional discounts and return allowances, when the following revenue recognition criteria are met: a contract has been identified, separate performance obligations are identified, the transaction price is determined, the transaction price is allocated to separate performance obligations and revenue is recognized upon satisfying each performance obligation. The Company transfers the risk of loss or damage upon shipment, therefore, revenue from product sales is recognized when it is shipped to the customer. Return allowances, which reduce product revenue by the Company’s best estimate of expected product returns, are estimated using historical experience.

The Company evaluates the criteria of ASC 606 - Revenue Recognition Principal Agent Considerations in determining whether it is appropriate to record the gross amount of product sales and related costs or the net amount earned as commissions. Generally, when the Company is primarily responsible for fulfilling the promise to provide a specified good or service, the Company is subject to inventory risk before the good or service has been transferred to a customer and the Company has discretion in establishing the price, revenue is recorded at gross.

Payments received prior to the delivery of goods to customers are recorded as customer deposits.

The Company periodically provides incentive offers to its customers to encourage purchases. Such offers include current discount offers, such as percentage discounts off current purchases and other similar offers. Current discount offers, when accepted by the Company’s customers, are treated as a reduction to the purchase price of the related transaction.

Sales discounts are recorded in the period in which the related sale is recognized. Sales return allowances are estimated based on historical amounts and are recorded upon recognizing the related sales. Shipping and handling costs are recorded as selling expenses.

Advertising costs

Advertising costs are expensed as incurred. Total advertising and promotional costs included in selling and fulfillment expenses for the three and six months were as following:

Schedule of advertising costs
	Three Months Ended December 31,				Six Months Ended December 31,
	2021		2020		2021		2020
Advertising and promotion	$	578,565	$	391,907	$	1,211,981	$	720,956

Cost of revenue

Cost of revenue mainly consists of costs for purchases of products and related inbound freight and delivery fees.

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 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.

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 six months ended December 31, 2021, sales through Amazon to Canada had increased to approximately 14% of the Company’s total sales. The Company’s long-lived assets are all located in California, United States, and majority of the Company’s revenues are derived from within the United States. Therefore, no geographical segments are presented.

Leases

On its inception date, April 11, 2018, the Company adopted ASC 842 – Leases (“ASC 842”), which requires lessees to record right-of-use (“ROU”) assets and related lease obligations on the balance sheet, as well as disclose key information regarding leasing arrangements.

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.

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 inception, April 11, 2018, and 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 upon 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.

Commitments and contingencies

In the ordinary course of business, the Company is subject to certain contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters, such as government investigations and tax matters. The Company recognizes a liability for such contingency if it determines it is probable that a loss has occurred and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments including historical and specific facts and circumstances of each matter.

Earnings per share

Basic earnings per share are computed by dividing net income attributable to holders of common stock by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share reflect the potential dilution that could occur if securities to issue common stock were exercised.

Recently issued accounting pronouncements

In 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 amends the guidance for the derivatives scope exception for contracts in an entity’s own equity for purposes of reducing form-over-substance-based accounting conclusions. In addition, this ASU improves and amends the related EPS guidance. This standard becomes effective for the Company on July 1, 2022, 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 have a material impact on the consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes. The update is intended to simplify the current rules regarding the accounting for income taxes and addresses several technical topics including accounting for franchise taxes, allocating income taxes between a loss in continuing operations and in other categories such as discontinued operations, reporting income taxes for legal entities that are not subject to income taxes, and interim accounting for enacted changes in tax laws. The new standard is effective for fiscal years beginning after December 15, 2020; however, early adoption is permitted. Adoption of this standard did not have a material impact on the consolidated financial statements.

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows.

Subsequent events

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.

Accounts receivable, net

6 Months Ended

Dec. 31, 2021

Receivables [Abstract]

Accounts receivable, net

Note 3 - Accounts receivable, net

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

Schedule of accounts receivable
	December 31, 2021			June 30, 2021
Accounts receivable	$	15,623,516		$	7,896,347
Less: allowance for credit losses		(70,000	)		–
Total accounts receivable, net	$	15,553,516		$	7,896,347

There was $70,000 allowance for credit loss for the three and six months ended December 31, 2021 and $0 recorded for the year ended June 30, 2021, respectively.

Inventories, net

6 Months Ended

Dec. 31, 2021

Inventory Disclosure [Abstract]

Inventories, net

Note 4 – Inventories, net

As of December 31, 2021 and June 30, 2021, inventories consisted of finished goods ready for sale, net of allowance for obsolescence, amounted to $19,908,500 and $13,065,741, respectively.

As of December 31, 2021 and June 30, 2021, allowance for obsolescence was $151,532 and $95,574, respectively. There was $55,958 allowance for credit loss for the three and six months ended December 31, 2021.

Prepayments and other current assets

6 Months Ended

Dec. 31, 2021

Prepayments And Other Current Assets

Prepayments and other current assets

Note 5 – Prepayments and other current assets

As of December 31, 2021 and June 30, 2021, prepayments and other current assets consisted of the following:


	December 31, 2021		June 30, 2021
Advance to suppliers	$	5,697,217	$	3,969,625
Prepaid expenses and other receivables		1,107,154		723,375

Total	$	6,804,371	$	4,693,000

Other receivables consisted of delivery fees of $197,416 and $178,581 and receivables from two unrelated parties for their use of the Company’s courier accounts at December 31, 2021 and June 30, 2021.

Non-current prepayments

6 Months Ended

Dec. 31, 2021

Non-current Prepayments

Non-current prepayments

Note 6 – Non-current prepayments

Non-current prepayments included $1.06 million for product sourcing, marketing research and promotion, and other management advisory and consulting services to companies owned by an employee and minority shareholder and by relatives of a minority shareholder of the Company. The terms of these services are from two years to five years. In addition, there was a $84,425 down payment on a four-year car lease. As of December 31, 2021 and June 30, 2021, total non-current prepayments were $1,141,458 and $1,357,292, respectively. For the three and six months ended December 31, 2021, the Company recorded amortization expenses of $107,917 and $215,834, respectively. For the three and six months ended December 31, 2020, the Company recorded amortization expenses of $0.

Loans payable

6 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Loans payable

Note 7 – Loans payable

Short-term loans

Revolving credit facility

On May 3, 2019, the Company entered into an agreement with WFC Fund LLC (“WFC") for a revolving loan of up to $2,000,000. The revolving loan bore interest equal to the prime rate plus 4.25% per annum on the outstanding amount. On May 26, 2020, the Loan and Security Agreement was amended and restated as a Receivable Purchase Agreement (the “Original RPA”). On November 16, 2020, the Original RPA was further amended and restated (the “Restated RPA”) to increase the credit limit of the revolving credit facility from $2,000,000 to $3,000,000. The Restated RPA bears a discount rate of 3.055555%, subject to a rebate of 0.0277% per day. This revolving credit facility is secured by all of the Company’s assets and guaranteed by Chenlong Tan, the CEO and one of the Company’s major shareholders and founders. Pursuant to the agreement, all purchases of accounts receivable are without recourse to the Company, and WFC assumes the risk of nonpayment of the accounts receivable due to a customer’s financial inability to pay the accounts receivable or the customer’s insolvency but not the risk of non-payment of the accounts receivable for any other reason. The Company is obligated to collect the accounts receivables and to repurchase or pay back the amount drawn down if the accounts receivable are not collected.

During the three months ended September 30, 2021, the Company terminated the Restated RPA and paid off the balance due to WFC.

As of December 31, 2021 and June 30, 2021, the outstanding balance due under the RPA was $0 and $162,769, respectively.

Long-term loan

SBA loan payable

On April 18, 2020, the Company entered into an agreement with the U.S. Small Business Administration (“SBA”) for a loan of $500,000 under Section 7(b) of the Small Business Act pursuant to which we issued a promissory note (the “SBA Note”) to the SBA. The SBA Note bears interest at the rate of 3.75% per annum and matures 30 years from the date of the SBA Note. Monthly installment payments, including principal and interest, will begin twelve months from the date of the SBA Note. As of December 31, 2021 and June 30, 2021, the outstanding balance of the SBA Note was $470,756 and $487,815, which included a current portion of $29,244 and a non-current portion of $441,512 and $458,571, respectively.

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

		Ø	Up to the lesser of (i) 65% of cost of eligible inventory or (ii) 85% of net orderly liquidation value of eligible inventory
·	Interest rates of between LIBOR plus 2% and LIBOR plus 2.25% depending on utilization
·	Undrawn fee of between 0.25% and 0.375% depending on utilization
·	Maturity Date of November 12, 2024

In addition, the ABL includes an accordion feature that allows the Company to borrow up to an additional $25 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, the term of the ABL. For the three and six months ended December 31, 2021, the Company recorded $44,203 of amortization of debt discount and $30,909 of interest expense. As of December 31, 2021, the outstanding amount of the long-term revolving loan payable, net of debt discount, was $6,963,551 and the interest payable was $30,909, which is paid monthly.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

Related party transactions

6 Months Ended

Dec. 31, 2021

Related party transactions

Note 8 – Related party transactions

On December 1, 2018, the Company acquired certain assets and assumed liabilities from BizRight, LLC, an entity owned and managed by the founders and officers of the Company and the purchase price was recorded as payable due to related parties. During the six months ended December 31, 2020, the Company recorded proceeds of $157,624 and payments of $120,498, respectively. The Company had paid off the amount due to related party during the quarter ended June 30, 2021. The amount due to related parties was $0 as of December 31, 2021 and June 30, 2021.

Income taxes

6 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income taxes

Note 9 – Income taxes

On December 22, 2017, the President of the United States signed into law H.R.1, formerly known as the Tax Cuts and Jobs Act (the “Tax Legislation”). The Tax Legislation significantly revised the U.S. tax code by (i) lowering the U.S. federal statutory income tax rate from 35% to 21%, (ii) implementing a territorial tax system, (iii) imposing a one-time transition tax on deemed repatriated earnings of foreign subsidiaries, (iv) requiring a current inclusion of global intangible low taxed income of certain earnings of controlled foreign corporations in U.S. federal taxable income, (v) creating the base erosion anti-abuse tax regime, (vi) implementing bonus depreciation that will allow for full expensing of qualified property, and (vii) limiting deductibility of interest and executive compensation expense, among other changes. The Company has computed its tax expenses using the new statutory rate effective on January 1, 2018 of 21%.

Other provisions of the new legislation include, but are not limited to, limiting deductibility of interest and executive compensation expense. These additional items have been considered in the income tax provision for the six months ended December 31, 2021 and 2020 and the impact was not material to the overall financial statements.

The income tax provision for the three and six months ended December 31, 2021 and 2020 consisted of the following:


	Three Months Ended December 31,				Six Months Ended December 31,
	2021		2020		2021		2020
Current:
Federal	$	222,339	$	155,348	$	456,968	$	357,351
States		100,376		71,582		208,722		165,523
Total current income tax provision		322,715		226,930		665,690		522,874
Deferred:
Federal		–		–		–		–
States		–		–		–		–
Total deferred taxes		–		–		–		–

Total provision for income taxes	$	322,715	$	226,930	$	665,690	$	522,874

The Company is subject to U.S. federal income tax as well as state income tax in certain jurisdictions. The tax years 2018 to 2020 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:


	Three Months Ended December 31,				Six Months Ended December 31,
	2021		2020		2021		2020
Statutory tax rate
Federal		21.00%		21.00%		21.00%		21.00%
State		8.84%		8.84%		8.84%		8.84%
Net effect of state income tax deduction and other permanent differences		(1.04%)		(1.56%)		(1.53%)		(1.74%)

Effective tax rate		28.80%		28.28%		28.31%		28.10%

As of December 31, 2021 and June 30, 2021, the income taxes payable was $374,513 and $790,823, respectively.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

Earnings per share

6 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Earnings per share

Note 10 – Earnings per share

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


	Three Months Ended December 31,				Six Months Ended December 31,
	2021		2020		2021		2020
Numerator:
Net Income	$	797,861	$	575,476	$	1,685,389	$	1,337,472

Denominator:
Weighted-average shares used in computing basic and diluted earnings per share*
Basic		26,491,103		20,204,496		26,487,816		20,204,496
Diluted		26,491,103		20,204,496		26,487,816		20,204,496

Earnings per share:
Basic	$	0.030	$	0.028	$	0.064	$	0.066
Diluted	$	0.030	$	0.028	$	0.064	$	0.066

*	On November 16, 2020, the Company implemented a 2-for-1 forward split of the issued and outstanding shares of Class A Common Stock of the Company. The computation of basic and diluted EPS was retroactively adjusted for all periods presented.

*	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.

*	The computation of diluted EPS did not include the underlying shares of warrants calculated using treasury method for the three and six months ended December 31, 2021 as the exercise price was greater than the market price of the shares.

For the three and six months ended December 31, 2021, the 51,232 vested shares of restricted stock units under the Amended and Restated 2020 Equity Incentive Plan (as discussed in Note 11) are considered issued shares and therefore are included in the computation of basic earnings (loss) per share as of grant date when the shares are fully vested. Impact of nonvested RSU is immaterial to the EPS.

Equity

6 Months Ended

Dec. 31, 2021

Equity [Abstract]

Equity

Note 11 – Equity

Common Stock

The Company was incorporated in Nevada on April 11, 2018. As of September 30, 2021, 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.

On November 16, 2020, the Company filed an amended and restated articles of incorporation in Nevada to consummate a 2-for-1 forward split of our outstanding shares of Class A Common Stock. All share numbers of Class A Common Stock are stated at a post-split basis.

The holders of Class A Common Stock shall be entitled to one vote per share in voting or consenting to the election of directors and for all other corporate purposes. The Company issued 20,000,000 shares to its founders at inception.

On January 15, 2020, pursuant to a rescission and mutual release agreement with an unrelated company, the Company issued 204,496 shares of its Class A Common Stock as settlement for a payment of $427,010 received by the Company.

On October 20, 2020, the Company entered into stock purchase agreements with Chenlong Tan and Allan Huang (the “Founders”) pursuant to which each of the Founders received 7,000,000 shares of the Company’s Class B Common Stock, for a purchase price of $0.001 per share in cash. Based on the fact that other than the total consideration of $14,000 (total par value of the Class B Common Stock issued), the Founders did not provide additional services or other means of considerations for the issuance of these shares of Class B Common Stock, the issuance of the Class B Common Stock to the Founders was considered as a nominal issuance, in substance a recapitalization transaction. As such, in accordance with FASB ASC 260-10-55-12 and SAB Topic 4D, the Company recorded and presented the issuance retroactively as outstanding for all reporting periods.

The Class B Common Stock was entitled to ten (10) votes per share in voting or consenting to the election of directors and for all other corporate purposes. In accordance with the Company’s amended and restated articles of incorporation, the Class B Common Stock was eligible to convert into shares of Class A Common Stock, on a ten-for-one basis, at any time following twelve (12) months after the Company’s completion of the initial public offering of its Class A Common Stock. Holders of Class B Common Stock had no dividend or liquidation rights until such time as their shares of Class B Common Stock were converted into shares of Class A Common Stock. As of June 30, 2020, the outstanding shares of Class B Common Stock were retroactively stated as 14,000,000 and 14,000,000, respectively.

Effective April 14, 2021, the Company amended its articles of incorporation to allow conversion of its Class B Common Stock at any time after issuance. On that same date, the Class B Common stockholders, Chenlong Tan and Allan Huang, elected to convert all of their 14,000,000 outstanding shares of the Company’s Class B Common Stock into 1,400,000 shares of Class A Common Stock. On April 23, 2021, the Company further amended and restated its articles of incorporation to eliminate the Class A and Class B Common Stock designations and authorize for issuance a total of 180,000,000 shares which are solely designated as Common Stock.

On May 14, 2020, the Company closed its initial public offering (“IPO”) under a registration statement effective May 11, 2021, in which it issued and sold 3,360,000 shares of its Common Stock at a purchase price of $5.00 per share. On May 21, 2021, the Company closed on the IPO’s overallotment option, selling an additional 504,000 shares of Common Stock to the IPO’s underwriters at the public offering price of $5.00 per share. The Company received net proceeds of approximately $16.6 million from the IPO after deducting underwriting discounts and offering expenses.

On May 14, 2021, upon closing on the Company’s IPO, the Series A convertible preferred stock and Convertible Notes were converted into an aggregate of 955,716 shares of the Company’s Common Stock.

On May 14, 2021, the Company issued 24,451 shares of Common Stock upon cashless exercise of warrants held by Boustead Securities LLC, the placement agent for the Company’s private placement offerings completed in December 2020 and January 2021.

During the quarter ended December 31, 2021, the Company issued to 40,019 shares of common stock for vested RSUs.

As of December 31, 2021 and June 30, 2021, there were 26,488,682 and 26,448,663 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 December 31, 2021 and June 30, 2021, there were no shares of Preferred Stock was issued and outstanding.

Equity Incentive Plan

On May 5, 2021, the Company’s Board adopted, and its stockholders approved and ratified, the iPower Inc. Amended and Restated 2020 Equity Incentive Plan (the “Plan”). The Plan allows for the issuance of up to 5,000,000 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.

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, 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 three months ended September 30, 2021, the Company granted an additional 11,745 shares of RSUs to three employees. These RSUs were valued at market price at grant date. On December 23, 2021, The Company granted $30,000, 13,216 RSUs at market price of $2.27 per share. As of December 31, 2021, the Company had granted a total of 71,507 RSUs, of which 50,905 were fully vested, 4,000 was forfeited and 16,602 remained subject to certain vesting conditions. For the three and six months ended December 31, 2021, the Company recorded $54,435 and $157,489 of stock-based compensation expense. There was 4,000 RSUs forfeited during the three months ended December 31, 2021 as a result of resignation of a director and an employee. As of December 31, 2021, the unvested number of RSUs was 16,602 and the unamortized expense was $46,935.

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)
RSU's granted, but not vested, at June 30, 2021		24,409
RSUs granted		24,961		$	102,370
RSUs forfeited		(4,000	)
RSUs vested		(28,768	)
RSUs granted, but not vested, at December 31, 2021		16,602

_____________________

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

As of December 31, 2021, of the 28,768 vested RSUs, 17,882 shares of common stock were issued and 10,886 shares were to be issued in the next quarter.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Warrants

6 Months Ended

Dec. 31, 2021

Warrants

Warrants

Note 12 – Warrants

On January 27, 2021, the Company completed a private placement offering pursuant to which the Company sold to two accredited investors an aggregate of $3,000,000 in Convertible Notes and warrants to purchase shares of Class A Common Stock equaling 80% of the number of shares of Class A Common Stock issuable upon conversion of the Convertible Notes. The convertible note warrants shall be 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.

In connection with the Convertible Note offering, the Company also 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 had an exercise period of five years from the issuance date.

On May 14, 2021, upon closing of its IPO, the Company remeasured the warrants to fair value using the Modified Black Scholes Option Pricing Model, based on the expected fair value of the underlying stock with the following assumptions:


	As of May 14, 2021
Expected term	1 day to 3 years
Expected volatility	3.3% to 58%
Risk-free interest rate	0.35% to 0.92%
Expected dividend rate	0%
Probability	100%

As of May 14, 2021, the fair value of the warrant liabilities was $1,361,347, which includes $4,610 preferred stock warrants, $1,324,668 warrants issued to the Convertible Note investors and $32,069 warrants issued to the placement agent. The increase in fair value immediately before the IPO was $617,593, which was reported in other non-operating expenses for the year ended June 30, 2021.

Upon closing the IPO on May 14, 2021, the Placement Agent exercised its warrants in full to purchase a total of 24,451 shares of the Company’s Common Stock and, as such, there were no Placement Agent Warrants outstanding as of June 30, 2021. At the same time, 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 December 31, 2021, none of the private placement investors had exercised any of their warrants. As such, as of December 31, 2021 and June 30, 2021, the number of shares issuable under the outstanding warrants was 685,715, with an exercise price of $5.0 per share.

Concentration of risk

6 Months Ended

Dec. 31, 2021

Risks and Uncertainties [Abstract]

Concentration of risk

Note 13 - 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 December 31, 2021 and June 30, 2021, $1,091,758 and $6,651,705, respectively, were deposited with various major financial institutions in the United States. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000. The Company had approximately $0.48 million and $5.4 million, respectively, in excess of the FDIC insurance limit, as of December 31, 2021 and June 30, 2021.

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.

Customer and vendor concentration risk

For the six months ended December 31, 2021 and 2020, Amazon Vendor and Amazon Seller customers accounted for 89% and 77% of the Company's total revenues, respectively. As of December 31, 2021 and June 30, 2021, accounts receivable from Amazon Vendor and Amazon Seller accounted for 98% and 98% of the Company’s total accounts receivable.

For the six months ended December 31, 2021 and 2020, two suppliers accounted for 29% (22% and 7%) and 33% (22% and 11%) of the Company's total purchases, respectively. As of December 31, 2021, accounts payable to one supplier accounted for 17% of the Company’s total accounts payable. As of June 30, 2021, accounts payable to two suppliers accounted for 11% and 10% of the Company’s total accounts payable.

Commitments and contingencies

6 Months Ended

Dec. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and contingencies

Note 14 - Commitments and contingencies

Lease commitment

The Company has adopted ASC842 since its inception date, April 11, 2018. 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. As a result, the lease term was amended and extended through December 31, 2023.

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.

Total commitment for the full term of these leases is $2,346,200. $1,473,397 and $1,819,421 of operating lease right-of-use assets and $1,544,049 and $1,901,496 of operating lease liabilities were reflected on the December 31, 2021 and June 30, 2021 financial statements, respectively.

Three Months Ended December 31, 2021 and 2020:


Lease cost	12/31/2021		12/31/2020
Operating lease cost (included in selling and fulfillment expenses in the Company's statement of operations)	$	205,517	$	213,423
Other information
Cash paid for amounts included in the measurement of lease liabilities	$	212,694	$	179,785
Remaining term in years		1.75		2.75
Average discount rate - operating leases		8%		8%

Six Months Ended December 31, 2021 and 2020:

Lease cost	12/31/2021		12/31/2020
Operating lease cost (included in selling and fulfillment expenses in the Company's statement of operations)	$	411,034	$	369,959
Other information
Cash paid for amounts included in the measurement of lease liabilities	$	422,457	$	342,392
Remaining term in years		1.75		2.75
Average discount rate - operating leases		8%		8%

The supplemental balance sheet information related to leases for the period is as follows:


Operating leases	12/31/2021		6/30/2021
Right of use asset - non-current	$	1,473,397	$	1,819,421

Lease Liability - current		766,759		731,944
Lease Liability - non-current		777,290		1,169,552
Total operating lease liabilities	$	1,544,049	$	1,901,496

Maturities of the Company’s lease liabilities are as follows:


	Operating
	Lease
For years ending June 30:
2022	$	425,388
2023		859,881
2024		371,640
Less: Imputed interest/present value discount		(112,860	)
Present value of lease liabilities	$	1,544,049

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 Company expects to use the Premises 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 Lease Agreement is for 62 months, commencing on the date on which the Landlord completes certain proscribed improvements on the property (the “Rent Commencement Date”). The Lease Agreement does not provide for an option to renew.

Under the terms of the Lease Agreement, the Company paid an initial security deposit of $228,498.10, which was included in other non-current assets, and, upon the Rent Commencement Date (which shall be the date on which the Premises is delivered to the Company following completion of certain improvements to be made by the Landlord, with such delivery to be on or before February 28, 2022), the Company’s initial monthly base rent (the “Base Rent”) will be approximately $114,249.05 and will increase on each anniversary of the Rent Commencement Date as follows:

Schedule of rent commencement
Months	Price Per Square Foot of the Premises Per Month	Monthly Base Rent
1-12	$1.15 per square foot per month	$114,249.05
13-24	$1.19 per square foot per month	$118,222.93
25-36	$1.23 per square foot per month	$122,196.81
37-48	$1.27 per square foot per month	$126,170.69
49-60	$1.31 per square foot per month	$130,144.57
61-62	$1.36 per square foot per month	$135,111.92

In addition, the Company will be responsible for its pro rata share of certain costs, including utility costs, insurance and common area costs, as further detailed in the Lease Agreement. Following the Rent Commencement Date, the first two months of the Base Rent will be abated.

During the six months ended December 31, 2021, the Company had not paid any rental fees as the Premises has not been delivered.

Contingencies

Except as disclosed below, the Company is not currently a party to any material legal proceedings, investigation or claims. However, the Company may, from time to time, be involved in legal matters arising in the ordinary course of its business. While the Company is not presently subject to any material legal proceedings, other than the proceeding detailed below, there can be no assurance that such matters will not arise in the future or that any such matters in which the Company is involved, or which may arise in the ordinary course of the Company’s business, will not at some point proceed to litigation or that such litigation will not have a material adverse effect on the business, financial condition or results of operations of the Company.

Pursuant to an engagement agreement, dated and effective August 31, 2020 (the “Engagement Agreement”), with Boustead Securities LLC (“Boustead”), the Company engaged Boustead to act as its exclusive placement agent for private placements of its securities and as a potential underwriter for its initial public offering. On February 28, 2021, the Company informed Boustead that it was terminating the Engagement Agreement and any continuing obligations the Company may have had under its terms. On April 15, 2021, the Company provided formal written notice to Boustead of its termination of the Engagement Agreement and all obligations thereunder, effective immediately. On April 30, 2021, Boustead filed a statement of claim with the Financial Institute Regulatory Authority, or FINRA, demanding to arbitrate the dispute, and is seeking, among other things, monetary damages against the Company and D.A. Davidson & Co. (who acted as underwriter in the Company’s IPO). The FINRA arbitration has been scheduled for June 20, 2022. The Company has agreed to indemnify D.A. Davidson & Co. and the other underwriters against any liability or expense they may incur or be subject to arising out of the Boustead dispute. Additionally, Chenlong Tan, the Company’s Chairman, President and Chief Executive Officer and a beneficial owner more than 5% of the Company’s Common Stock, has agreed to reimburse the Company for any judgments, fines and amounts paid or actually incurred by the Company or an indemnitee in connection with such legal action or in connection with any settlement agreement entered into by the Company or an indemnitee up to a maximum of $3.5 million in the aggregate, with the sole source of funding of such reimbursement to come from sales of shares then owned by Mr. Tan.

In an effort to contain or slow the COVID-19 outbreak, authorities across the world have implemented various measures, some of which have been subsequently rescinded or modified, including travel bans, stay-at-home orders and shutdowns of certain businesses. The Company anticipates that these actions and the global health crisis caused by the COVID-19 outbreak, including any resurgences, will continue to negatively impact global economic activity. While the COVID-19 outbreak has not had a material adverse impact on the Company’s operations to date, it is difficult to predict all of the positive or negative impacts the COVID-19 outbreak will have on the Company’s business.

Subsequent events

6 Months Ended

Dec. 31, 2021

Subsequent Events [Abstract]

Subsequent events

Note 15 - Subsequent events

On January 14, 2022, the board of directors (the “Board”) of iPower, Inc., a Nevada corporation (the “Company”), approved the Company’s entry into a joint venture agreement, dated January 13, 2022 (the “Box Harmony 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 Box Harmony 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 Box Harmony 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 and agreed to provide Box Harmony with the use and access to certain warehouse facilities leased by the Company (see below) in exchange for 2,400 Equity Units in Box Harmony, 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) Bin received 2,400 Equity Units in exchange for $2,400 and his agreement to manage the day to day operations of Box Harmony.

Under the terms of the Box Harmony limited liability operating agreement (the “LLC Agreement”), TPA and Xiao each granted to the Company an unconditional and irrevocable right and option to purchase from Xiao and TPA at any time within the first 18 months following January 13, 2022, up to 1,200 Class A voting units, at an exercise price of $550 per Class A voting unit, for a total exercise price of up to $660,000. If such option is fully exercised, the Company would own 3,600 Equity Units or 60% of the total outstanding Equity Units. The LLC Agreement prohibits the issuance of additional Equity Units and certain other actions unless approved in advance by the Company.

Pursuant to the Box Harmony Joint Venture Agreement, on January 13, 2022, the Company and Box Harmony entered into a facility and use access sublease agreement (the “Facility and Use Access Agreement”), pursuant to which the Company will sublease to Box Harmony a portion of its leased warehouses located in California. Under such Facility and Use Access Agreement, Box Harmony would pay the Company a pro-rata portion of all rent and other charges based on the amount of square feet of rentable space sublet to and used by Box Harmony. Further pursuant to the terms of the Box Harmony Joint Venture Agreement, on January 13, 2022, Box Harmony, TPA and Xiao entered into a consulting agreement (“Consulting Agreement”), pursuant to which Xiao and TPA will provide management consulting services to assist Box Harmony in conducting its business. Additionally, on January 13, 2022, TPA, Xiao and Chiu entered into a license agreement (“License Agreement”) pursuant to which TPA licensed certain intellectual property rights to Box Harmony.

As of the date of this filing, there was no activities conducted by Box Harmony yet.

On February 4, 2022, the board of directors (the “Board”) of the Company approved the Company’s entry into a joint venture agreement with Bro Angel, LLC, Jie Shan and Bing Luo (the “GSM Joint Venture Agreement”). Pursuant to the terms of the GSM Joint Venture Agreement, dated February 10, 2022, 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 the marketing of 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.

Under the terms of the GSM limited liability operating agreement (the “GSM LLC Agreement”), the Company contributed $100,000 to the capital of GSM and Bro Angel granted GSM an exclusive worldwide paid up right and license to use all intellectual property of Bro Angel and its members for the purpose of furthering the proposed business of GSM. The LLC Agreement prohibits the issuance of additional GSM Equity Units and certain other actions unless approved in advance by the Company.

Pursuant to the GSM Joint Venture Agreement, the Company and GSM also intend to enter into an occupancy management agreement pursuant to which the Company shall agree to grant to GSM the right to have access to and use up to approximately 4,000 square feet of office space along with internet access at the Company’s facility located at 2399 Bateman Avenue, Irwindale, CA 91010. It is contemplated that only approximately 300-400 square feet will be initially used by GSM.

As of the date of this filing, there was no activities conducted by GSM yet.

Basis of Presentation and Summary of significant accounting policies (Policies)

6 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Basis of presentation

Principles of Consolidation

Reclassifications

Use of estimates and assumptions

Cash and cash equivalents

Cash and cash equivalents consist of amounts held as cash on hand and bank deposits.

Accounts receivable, net

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.

Fair values of financial instruments

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.

Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

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.

Revenue recognition

Payments received prior to the delivery of goods to customers are recorded as customer deposits.

Advertising costs

Advertising costs are expensed as incurred. Total advertising and promotional costs included in selling and fulfillment expenses for the three and six months were as following:

Schedule of advertising costs
	Three Months Ended December 31,				Six Months Ended December 31,
	2021		2020		2021		2020
Advertising and promotion	$	578,565	$	391,907	$	1,211,981	$	720,956

Cost of revenue

Cost of revenue mainly consists of costs for purchases of products and related inbound freight and delivery fees.

Inventory, net

Segment reporting

Leases

Stock-based Compensation

The Company will recognize forfeitures of such equity-based compensation as they occur.

Income taxes

Commitments and contingencies

Earnings per share

Recently issued accounting pronouncements

Subsequent events

Basis of Presentation and Summary of significant accounting policies (Tables)

6 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Schedule of advertising costs

Schedule of advertising costs
	Three Months Ended December 31,				Six Months Ended December 31,
	2021		2020		2021		2020
Advertising and promotion	$	578,565	$	391,907	$	1,211,981	$	720,956

Accounts receivable, net (Tables)

6 Months Ended

Dec. 31, 2021

Receivables [Abstract]

Schedule of accounts receivable

Schedule of accounts receivable
	December 31, 2021			June 30, 2021
Accounts receivable	$	15,623,516		$	7,896,347
Less: allowance for credit losses		(70,000	)		–
Total accounts receivable, net	$	15,553,516		$	7,896,347

Prepayments and other current assets (Tables)

6 Months Ended

Dec. 31, 2021

Prepayments And Other Current Assets

Schedule of prepayments and other current assets


	December 31, 2021		June 30, 2021
Advance to suppliers	$	5,697,217	$	3,969,625
Prepaid expenses and other receivables		1,107,154		723,375

Total	$	6,804,371	$	4,693,000

Income taxes (Tables)

6 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Schedule of provision for income tax expense


	Three Months Ended December 31,				Six Months Ended December 31,
	2021		2020		2021		2020
Current:
Federal	$	222,339	$	155,348	$	456,968	$	357,351
States		100,376		71,582		208,722		165,523
Total current income tax provision		322,715		226,930		665,690		522,874
Deferred:
Federal		–		–		–		–
States		–		–		–		–
Total deferred taxes		–		–		–		–

Total provision for income taxes	$	322,715	$	226,930	$	665,690	$	522,874

Schedule of reconciliation of effective income tax rate


	Three Months Ended December 31,				Six Months Ended December 31,
	2021		2020		2021		2020
Statutory tax rate
Federal		21.00%		21.00%		21.00%		21.00%
State		8.84%		8.84%		8.84%		8.84%
Net effect of state income tax deduction and other permanent differences		(1.04%)		(1.56%)		(1.53%)		(1.74%)

Effective tax rate		28.80%		28.28%		28.31%		28.10%

Earnings per share (Tables)

6 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Schedule of computation of earnings per share


	Three Months Ended December 31,				Six Months Ended December 31,
	2021		2020		2021		2020
Numerator:
Net Income	$	797,861	$	575,476	$	1,685,389	$	1,337,472

Denominator:
Weighted-average shares used in computing basic and diluted earnings per share*
Basic		26,491,103		20,204,496		26,487,816		20,204,496
Diluted		26,491,103		20,204,496		26,487,816		20,204,496

Earnings per share:
Basic	$	0.030	$	0.028	$	0.064	$	0.066
Diluted	$	0.030	$	0.028	$	0.064	$	0.066

*	On November 16, 2020, the Company implemented a 2-for-1 forward split of the issued and outstanding shares of Class A Common Stock of the Company. The computation of basic and diluted EPS was retroactively adjusted for all periods presented.

*	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.

*	The computation of diluted EPS did not include the underlying shares of warrants calculated using treasury method for the three and six months ended December 31, 2021 as the exercise price was greater than the market price of the shares.

Equity (Tables)

6 Months Ended

Dec. 31, 2021

Equity [Abstract]

Schedule of RSU activity

Schedule of RSU activity
	Total RSUs Issued			Total Fair Market Value of RSUs Issued as Compensation (1)
RSU's granted, but not vested, at June 30, 2021		24,409
RSUs granted		24,961		$	102,370
RSUs forfeited		(4,000	)
RSUs vested		(28,768	)
RSUs granted, but not vested, at December 31, 2021		16,602

Warrants (Tables)

6 Months Ended

Dec. 31, 2021

Warrants

Schedule of assumptions for warrant liabilities


	As of May 14, 2021
Expected term	1 day to 3 years
Expected volatility	3.3% to 58%
Risk-free interest rate	0.35% to 0.92%
Expected dividend rate	0%
Probability	100%

Commitments and contingencies (Tables)

6 Months Ended

Dec. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Schedule of lease cost and other information


Lease cost	12/31/2021		12/31/2020
Operating lease cost (included in selling and fulfillment expenses in the Company's statement of operations)	$	205,517	$	213,423
Other information
Cash paid for amounts included in the measurement of lease liabilities	$	212,694	$	179,785
Remaining term in years		1.75		2.75
Average discount rate - operating leases		8%		8%

Six Months Ended December 31, 2021 and 2020:

Lease cost	12/31/2021		12/31/2020
Operating lease cost (included in selling and fulfillment expenses in the Company's statement of operations)	$	411,034	$	369,959
Other information
Cash paid for amounts included in the measurement of lease liabilities	$	422,457	$	342,392
Remaining term in years		1.75		2.75
Average discount rate - operating leases		8%		8%

Supplemental balance sheet information related to leases


Operating leases	12/31/2021		6/30/2021
Right of use asset - non-current	$	1,473,397	$	1,819,421

Lease Liability - current		766,759		731,944
Lease Liability - non-current		777,290		1,169,552
Total operating lease liabilities	$	1,544,049	$	1,901,496

Schedule of maturities of lease liabilities


	Operating
	Lease
For years ending June 30:
2022	$	425,388
2023		859,881
2024		371,640
Less: Imputed interest/present value discount		(112,860	)
Present value of lease liabilities	$	1,544,049

Schedule of rent commencement

Schedule of rent commencement
Months	Price Per Square Foot of the Premises Per Month	Monthly Base Rent
1-12	$1.15 per square foot per month	$114,249.05
13-24	$1.19 per square foot per month	$118,222.93
25-36	$1.23 per square foot per month	$122,196.81
37-48	$1.27 per square foot per month	$126,170.69
49-60	$1.31 per square foot per month	$130,144.57
61-62	$1.36 per square foot per month	$135,111.92

Nature of business and organization (Details Narrative)	May 18, 2021
G P M [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Ownership Percentage	100.00%

Basis of Presentation and Summary of significant accounting policies (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2021	Dec. 31, 2020
Accounting Policies [Abstract]
Advertising and promotion	$ 578,565	$ 391,907	$ 1,211,981	$ 720,956

Basis of Presentation and Summary of significant accounting policies (Details Narrative) - USD ($)	Dec. 31, 2021	Jun. 30, 2021
Accounting Policies [Abstract]
Excess FDIC amount	$ 250,000	$ 250,000

Accounts receivable (Details) - USD ($)	Dec. 31, 2021	Jun. 30, 2021
Receivables [Abstract]
Accounts receivable	$ 15,623,516	$ 7,896,347
Less: allowance for credit losses	(70,000)
Total accounts receivable, net	$ 15,553,516	$ 7,896,347

Accounts receivable, net (Details Narrative) - USD ($)	3 Months Ended	6 Months Ended		12 Months Ended
Accounts receivable, net (Details Narrative) - USD ($)	Dec. 31, 2021	Dec. 31, 2021	Dec. 31, 2020	Jun. 30, 2021
Receivables [Abstract]
Accounts Receivable, Credit Loss Expense (Reversal)	$ 70,000	$ 70,000	$ 0	$ 0

Inventories, net (Details Narrative) - USD ($)	6 Months Ended
Inventories, net (Details Narrative) - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Jun. 30, 2021
Inventory Disclosure [Abstract]
Inventory, net	$ 19,908,500		$ 13,065,741
Inventory, LIFO Reserve	151,532		$ 95,574
Inventory, LIFO Reserve, Period Charge	$ 55,958

Prepayments and other current assets (Details) - USD ($)	Dec. 31, 2021	Jun. 30, 2021
Total prepayments and other current assets	$ 6,804,371	$ 4,693,000
Advance To Suppliers [Member]
Total prepayments and other current assets	5,697,217	3,969,625
Prepaid And Other [Member]
Total prepayments and other current assets	$ 1,107,154	$ 723,375

Prepayments and other current assets (Details Narrative) - USD ($)	Dec. 31, 2021	Jun. 30, 2021
Prepayments And Other Current Assets
Delivery fees receivable	$ 197,416	$ 178,581

Non-current prepayments (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
Non-current prepayments (Details Narrative) - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Jun. 30, 2021
Offsetting Assets [Line Items]
Non-current prepayments	$ 1,141,458		$ 1,141,458		$ 1,357,292
Amortization expenses	107,917	$ 0	215,834	$ 0
Product Sourcing [Member]
Offsetting Assets [Line Items]
Non-current prepayments	1,060.00		1,060.00
Car Prepayment [Member]
Offsetting Assets [Line Items]
Non-current prepayments	$ 84,425		$ 84,425

Loans payable (Details Narrative) - USD ($)		3 Months Ended	5 Months Ended
Loans payable (Details Narrative) - USD ($)	Nov. 12, 2021	Dec. 31, 2021	Nov. 16, 2021	Nov. 16, 2020	Jun. 30, 2021
Line of Credit Facility [Line Items]
Loan payable - current		$ 29,244			$ 29,244
Loan payable - noncurrent		441,512			458,571
Proceeds from loan			$ 25,000,000
Maturity date	Nov. 12, 2024
[custom:LoanPayableDescription]			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.
Amortization of Debt Discount (Premium)		44,203
Interest Expense, Other		30,909
Asset-based Revolving Loan [Member]
Line of Credit Facility [Line Items]
Long-term Debt, Gross		6,963,551
Interest Payable		30,909
SBA Loan [Member]
Line of Credit Facility [Line Items]
Loan payable		470,756			487,815
Loan payable - noncurrent		441,512			458,571
Two Unrelated Parties [Member]
Line of Credit Facility [Line Items]
Loans Payable		$ 0			$ 162,769
Revolving Credit Facility [Member] \| WFC Fund [Member]
Line of Credit Facility [Line Items]
Line of credit interest rate				discount rate of 3.055555%, subject to a rebate of 0.0277% per day.

Related party transactions (Details Narrative) - USD ($)	3 Months Ended	6 Months Ended
	Sep. 30, 2020	Dec. 31, 2021	Dec. 31, 2020	Jun. 30, 2021
Related Party Transaction [Line Items]
Proceeds from Related Party Debt		$ 0	$ 157,624
Repayments of Related Party Debt		(0)	120,498
Biz Right [Member]
Related Party Transaction [Line Items]
Proceeds from Related Party Debt	$ 157,624
Repayments of Related Party Debt			$ 120,498
Due to Related Parties		$ 0		$ 0

- Definition

Carrying amount as of the balance sheet date of obligations due all related parties.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(k)(1))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
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-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(4)(iii)(C))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442552-122756

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
-Topic 944
-SubTopic 210
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-03.17)
-URI http://asc.fasb.org/extlink&oid=120400017&loc=d3e572229-122910

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(iv))
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-Subparagraph (SX 210.13-01(a)(4)(iii)(B))
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Subparagraph (SX 210.13-01(a)(5))
-URI http://asc.fasb.org/extlink&oid=124359900&loc=SL124442526-122756

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Subparagraph (SX 210.13-02(a)(4)(iv))
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-Name Accounting Standards Codification
-Topic 942
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-Section S99
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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-SubTopic 10
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-Paragraph 1
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39549-107864

+ Details

Schedule of provision for income tax expense (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2021	Dec. 31, 2020
Current:
Federal	$ 222,339	$ 155,348	$ 456,968	$ 357,351
States	100,376	71,582	208,722	165,523
Total current income tax provision	322,715	226,930	665,690	522,874
Deferred:
Federal
States
Total deferred taxes
Total provision for income taxes	$ 322,715	$ 226,930	$ 665,690	$ 522,874

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Income taxes (Details - Reconcilation of effective income tax rate)	3 Months Ended		6 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2021	Dec. 31, 2020
Federal	21.00%	21.00%	21.00%	21.00%
Net effect of state income tax deduction and other permanent differences	1.04%	1.56%	1.53%	1.74%
Effective tax rate	28.80%	28.28%	28.31%	28.10%
CANADA
State Of California	8.84%	8.84%	8.84%	8.84%

Income taxes (Details Narrative) - USD ($)	Dec. 31, 2021	Jun. 30, 2021
Income Tax Disclosure [Abstract]
Income taxes payable	$ 374,513	$ 790,823

Earnings per share (Details) - USD ($)	3 Months Ended		6 Months Ended
Earnings per share (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2021	Dec. 31, 2020
Earnings Per Share [Abstract]
Net income	$ 797,861	$ 575,476	$ 1,685,389	$ 1,337,472
Weighted-average shares, Basic	26,491,103	20,204,496	26,487,816	20,204,496
Weighted-average shares, Diluted	26,491,103	20,204,496	26,487,816	20,204,496
Earnings per share - Basic	$ 0.030	$ 0.028	$ 0.064	$ 0.066
Earnings per share - Diluted	$ 0.030	$ 0.028	$ 0.064	$ 0.066
Restricted Stock Units Shares			51,232

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 65
-Paragraph 1
-Subparagraph (e)(4)
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 250
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The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

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Equity (Details)

6 Months Ended

Dec. 31, 2021

USD ($)

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

RSUs vested

(51,232)

Restricted Stock Units (RSUs) [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

RSU's outstanding at beginning

24,409

RSUs granted

24,961

Total Fair Market Value of RSUs Issued as Compensation | $

$ 102,370

^[1]

RSUs forfeited

(4,000)

RSUs vested

(28,768)

RSU's outstanding at ending

16,602

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

Equity (Details Narrative) - USD ($)					3 Months Ended		4 Months Ended	6 Months Ended		10 Months Ended
Equity (Details Narrative) - USD ($)	Dec. 23, 2021	May 14, 2021	Nov. 16, 2020	Jan. 15, 2020	Dec. 31, 2021	Sep. 30, 2021	Oct. 20, 2020	Dec. 31, 2021	Dec. 31, 2020	May 11, 2021	May 14, 2020	Jun. 30, 2021
Class of Stock [Line Items]
Proceeds from Issuance or Sale of Equity								$ 0	$ 359,000
Stock Issued During Period, Value, Conversion of Convertible Securities					$ 40,019
Common stock, shares issued					26,488,682			26,488,682				26,448,663
Common stock, shares outstanding					26,488,682			26,488,682				26,448,663
Share-based Payment Arrangement, Noncash Expense								$ 157,489	$ 0
Share-based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount					$ 46,935			$ 46,935
Stock issued for RSU's vested					17,882			17,882
Stock to be issued for RSU's vested					10,886			10,886
Restricted Stock Units (RSUs) [Member]
Class of Stock [Line Items]
Option granted	13,216							71,507
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period								50,905
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period								4,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number					16,602			16,602
Share-based Payment Arrangement, Noncash Expense					$ 54,435			$ 157,489
Restricted Stock Units (RSUs) [Member] \| Three Employees [Member]
Class of Stock [Line Items]
Option granted						11,745
Restricted Stock Units (RSUs) [Member] \| Letter Agreements [Member]
Class of Stock [Line Items]
Option granted										46,546
Equity Incentive Plan [Member]
Class of Stock [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized					5,000,000			5,000,000
Boustead Securities L L C [Member]
Class of Stock [Line Items]
Warrnat exercise		24,451
IPO [Member]
Class of Stock [Line Items]
Stock issued new, shares											3,360,000
Proceeds from Issuance or Sale of Equity											$ 16,600
IPO [Member] \| Underwriters [Member]
Class of Stock [Line Items]
Stock issued new, shares											504,000
Common Class A [Member]
Class of Stock [Line Items]
Stock split			2-for-1 forward split
Stock issued for settlemtn payment, shares				204,496
Stock issued for settlemtn payment, value				$ 427,010
Common Class B [Member]
Class of Stock [Line Items]
Stock issued new, shares							7,000,000
Share price							$ 0.001
Stock issued new, value							$ 14,000
Series A Convertible Preferred Stock [Member] \| Convertible Notes [Member]
Class of Stock [Line Items]
Number of shares converted		955,716

Warrant liabilities (Details - Assumptions) - Warrant Liability [Member]	10 Months Ended
	May 14, 2021
Measurement Input, Expected Term [Member]
Offsetting Assets [Line Items]
Fair value measurement assumptions	1 day to 3 years
Measurement Input, Price Volatility [Member]
Offsetting Assets [Line Items]
Fair value measurement assumptions	3.3% to 58%
Measurement Input, Risk Free Interest Rate [Member]
Offsetting Assets [Line Items]
Fair value measurement assumptions	0.35% to 0.92%
Measurement Input, Expected Dividend Rate [Member]
Offsetting Assets [Line Items]
Fair value measurement assumptions	0
Measurement Input Probablity [Member]
Offsetting Assets [Line Items]
Fair value measurement assumptions	100

Warrants (Details Narrative) - USD ($)		6 Months Ended		12 Months Ended
Warrants (Details Narrative) - USD ($)	Jan. 27, 2021	Dec. 31, 2021	Dec. 31, 2020	Jun. 30, 2021	May 14, 2021
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Proceeds from sale of equity		$ 0	$ 359,000
Fair value of warrant liabilities					$ 1,361,347
Fair Value Adjustment of Warrants				$ 617,593
Outstanding warrants		685,715		685,715
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 5.0
Placement Agent [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Warrants Exercised					24,451
Preferred Stock Warrants [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Fair value of warrant liabilities					$ 4,610
Convertible Note Investors [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Fair value of warrant liabilities					1,324,668
Placement Agent Warrants [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Fair value of warrant liabilities					$ 32,069
Two Accredited Investors [Member] \| Private Placement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Proceeds from sale of equity	$ 3,000,000
Boustead Securities L L C [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Warrants Exercised					24,451

Concentration of risk (Details Narrative) - USD ($)	6 Months Ended		12 Months Ended
Concentration of risk (Details Narrative) - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Jun. 30, 2021	Jun. 30, 2020
Concentration Risk [Line Items]
Cash and cash equivalents	$ 1,091,758	$ 544,073	$ 6,651,705	$ 977,635
Federal Deposit Insurance Corporation	250,000		250,000
FDIC insurance limit	$ 480,000		$ 5,400,000
Cost of Sales [Member] \| Product Concentration Risk [Member] \| Two Suppliers [Member]
Concentration Risk [Line Items]
Concentration risk percent	29.00%	33.00%
Cost of Sales [Member] \| Product Concentration Risk [Member] \| One Suppliers [Member]
Concentration Risk [Line Items]
Concentration risk percent	22.00%	22.00%
Cost of Sales [Member] \| Product Concentration Risk [Member] \| Another Suppliers [Member]
Concentration Risk [Line Items]
Concentration risk percent	7.00%	11.00%
Accounts Payable [Member] \| Product Concentration Risk [Member] \| One Supplier [Member]
Concentration Risk [Line Items]
Concentration risk percent	17.00%		11.00%
Accounts Payable [Member] \| Product Concentration Risk [Member] \| Another Supplier [Member]
Concentration Risk [Line Items]
Concentration risk percent			10.00%
Amazon Vendor And Amazon Seller [Member] \| Revenue Benchmark [Member] \| Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk percent	89.00%	77.00%
Amazon Vendor And Amazon Seller [Member] \| Accounts Receivable [Member] \| Customer Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk percent	98.00%	98.00%

Commitments and contingencies (Details - Lease cost) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2021	Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Operating lease cost	$ 205,517	$ 213,423	$ 411,034	$ 369,959
Cash paid for amounts included in the measurement of lease liabilities	$ 212,694	$ 179,785	$ 422,457	$ 342,392
Lease remaining term	1 year 9 months	2 years 9 months	1 year 9 months	2 years 9 months
Average discount rate - operating leases	8.00%	8.00%	8.00%	8.00%

Commitments and contingencies (Details - Balance Sheet) - USD ($)	Dec. 31, 2021	Jun. 30, 2021
Commitments and Contingencies Disclosure [Abstract]
Right of use asset - non-current	$ 1,473,397	$ 1,819,421
Lease Liability - current	766,759	731,944
Lease Liability - non-current	777,290	1,169,552
Total operating lease liabilities	$ 1,544,049	$ 1,901,496

Commitments and contingencies (Details - Lease maturity)	Dec. 31, 2021 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2022	$ 425,388
2023	859,881
2024	371,640
Less: Imputed interest/present value discount	(112,860)
Present value of lease liabilities	$ 1,544,049

Commitments and contingencies (Details - Rent commencement)	6 Months Ended
	Dec. 31, 2021 USD ($)
1-12 Months [Member]
Description of price per square foot per month	1.15 per square foot per month
Monthly base rent	$ 114,249
13-24 Months [Member]
Description of price per square foot per month	1.19 per square foot per month
Monthly base rent	$ 118,222
25-36 Months [Member]
Description of price per square foot per month	1.23 per square foot per month
Monthly base rent	$ 122,196
37-48 Months [Member]
Description of price per square foot per month	1.27 per square foot per month
Monthly base rent	$ 126,170
49-60 Months [Member]
Description of price per square foot per month	1.31 per square foot per month
Monthly base rent	$ 130,144
61-62 Months [Member]
Description of price per square foot per month	1.36 per square foot per month
Monthly base rent	$ 135,111

Commitments and contingencies (Details Narrative) - USD ($)	6 Months Ended
	Dec. 31, 2021	Jun. 30, 2021
Commitments and Contingencies Disclosure [Abstract]
Lease commitment	$ 2,346,200
Operating lease, right of use asset	1,473,397	$ 1,819,421
Operating lease liability	1,544,049	$ 1,901,496
Deposits	228,498
Rental fees	$ 0