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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of report (date of earliest event reported): February 14, 2024

 

iPower Inc.

(Exact name of registrant as specified in its charter)

 

Nevada   001-40391   82-5144171

(State or other jurisdiction

of incorporation)

 

(Commission File Number)

 

(IRS Employer

Identification No.)

 

8798 9th Street

Rancho Cucamonga, CA 91730

(Address Of Principal Executive Offices) (Zip Code)

 

(626) 863-7344

(Registrant’s Telephone Number, Including Area Code)

 

___________________________ 

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock $0.001 per share   IPW   The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company

 

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

 

 

   

 

 

 

Item 2.02 Results of Operations and Financial Condition.

 

On February 14, 2024, iPower Inc., a Nevada corporation (the “Company”), issued a press release announcing its earnings for the second fiscal quarter ended December 31, 2023. The press release also announced that the Company will hold a conference call to discuss its second quarter financial results on Wednesday, February 14, 2024 at 4:30 p.m. Eastern Time.

 

The conference call details are as follows:

 

Date: Wednesday, February 14, 2024
Time: 4:30 p.m. Eastern Time / 1:30 p.m. Pacific Time
Dial-in Registration Link: https://register.vevent.com/register/BIe2be9f347c1e4143a294c9398c9d50d1
Live Webcast Registration Link: https://edge.media-server.com/mmc/p/m8ihqe7j/

 

The conference call will be broadcast live and will also be available for replay in the Events & Presentations section of the Company’s website at www.meetipower.com.

 

A copy of the press release is attached hereto and incorporated herein by reference.

 

In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. Such information may be incorporated by reference in another filing under the Exchange Act or the Securities Act of 1933, as amended, only if and to the extent that such subsequent filing specifically references such information.

 

Item 9.01 Exhibits.

 

(d) Exhibits

 

Exhibit No.   Description
     
99.1   Press Release dated February 14, 2024
104   Cover Page Interactive Data File (formatted in inline XBRL)

 

 

 

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  iPower Inc.
Dated: February 14, 2024    
  By: /s/ Kevin Vassily
  Name:

Kevin Vassily

  Title: Chief Financial Officer

 

 

 

 

 

 

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Exhibit 99.1

 

 

 

iPower Reports Fiscal Second Quarter 2024 Results

 

- iPower Management to Host Conference Call Today at 4:30 p.m. Eastern Time -

 

DUARTE, CA, February 14, 2024 -- iPower Inc. (Nasdaq: IPW) (“iPower” or the “Company”), a tech and data-driven online retailer and supplier of consumer home and garden products, as well as a provider of value-added ecommerce services, today announced its financial results for the fiscal second quarter ended December 31, 2023.

 

Fiscal Q2 2024 Results vs. Fiscal Q2 2023 (unless otherwise noted)

 

·Total revenue was $16.8 million compared to $19.3 million.
·Gross profit was $7.3 million compared to $8.0 million, with gross margin up 220 bps to 43.6% compared to 41.4%.
·Net loss attributable to iPower improved 42% to $1.9 million or $(0.06) per share, compared to net loss attributable to iPower of $3.3 million or $(0.11) per share.
·As of December 31, 2023, net debt (total debt less cash) was reduced by 56% to $3.6 million compared to net debt of $8.1 million as of June 30, 2023.

 

Management Commentary

 

“In our fiscal second quarter, we continued to drive gross margin expansion, operating cost reductions and another period of positive cash flow from operations,” said Lawrence Tan, CEO of iPower. “Due to improvements in the supply chain environment, our largest channel partner has progressively tightened their inventory management as shipping lead times have become more favorable. Although this led to lower order volumes for the quarter, we believe this channel partner’s inventory is now at a preferred level and we are well equipped to meet demand with the high-quality products our customers expect.

 

“We also continued to gain traction in our SuperSuite business as we leverage our superior supply chain, warehousing and merchandising expertise to drive sales growth for partners with innovative product catalogs. We look forward to growing this exciting segment of our business as we further evaluate prospective partners in the months ahead.”

 

iPower CFO, Kevin Vassily, added, “Our gross margin and operating expense improvements were primarily driven by the reduction of high-cost inventory and excess warehousing space. Additionally, we reduced total debt obligations by approximately $2 million during the quarter, demonstrating our commitment to strengthening the balance sheet. We believe these actions, coupled with early signs of normalized order volumes with our largest channel partner, will enable us to deliver on our goals with the aim of returning to profitability in 2024.”

 

Fiscal Second Quarter 2024 Financial Results

 

Total revenue in the fiscal second quarter of 2024 was $16.8 million compared to $19.3 million for the same period in fiscal 2023. The decrease was driven primarily by lower promotional activity given iPower’s normalized inventory level, as well as lower order volumes from the Company’s largest channel partner who is more tightly managing inventory levels due to the improved supply chain environment. This was partially offset by growth in the Company’s SuperSuite supply chain offerings.

 

 

 

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Gross profit in the fiscal second quarter of 2024 was $7.3 million compared to $8.0 million in the same quarter in fiscal 2023. As a percentage of revenue, gross margin increased 220 basis points to 43.6% compared to 41.4% in the year-ago period. The increase in gross margin was primarily driven by favorable product mix.

 

Total operating expenses in the fiscal second quarter of 2024 improved 18% to $9.9 million compared to $12.1 million for the same period in fiscal 2023. The decrease was driven primarily by lower selling, fulfillment and marketing expenses.

 

Net loss attributable to iPower in the fiscal second quarter of 2024 improved 42% to $1.9 million or $(0.06) per share, compared to net loss attributable to iPower of $3.3 million or $(0.11) per share for the same period in fiscal 2023. The improvement was driven primarily by the higher gross margin and lower operating expenses.

 

Cash and cash equivalents were $1.5 million at December 31, 2023, compared to $3.7 million at June 30, 2023. Total debt as of December 31, 2023 was $5.0 million compared to $11.8 million as of June 30, 2023. As a result of the Company’s debt paydown, net debt (total debt less cash) was reduced by 56% to $3.6 million compared to $8.1 million as of June 30, 2023.

 

Conference Call

 

The Company will hold a conference call today, February 14, 2024, at 4:30 p.m. Eastern Time to discuss its results for the fiscal second quarter ended December 31, 2023.

 

iPower’s management will host the conference call, which will be followed by a question-and-answer session.

 

The conference call details are as follows:

 

Date: Wednesday, February 14, 2024
Time: 4:30 p.m. Eastern Time
Dial-in registration link: here

Live webcast registration link: here

 

Please dial into the conference call 5-10 minutes prior to the start time. If you have any difficulty connecting with the conference call, please contact the Company’s investor relations team at IPW@elevate-ir.com.

 

The conference call will also be broadcast live and available for replay in the Events & Presentations section of the Company’s website at www.meetipower.com.

 

About iPower Inc.

 

iPower Inc. is a tech and data-driven online retailer and supplier of consumer home and garden products, as well as a provider of value-added ecommerce services for third-party products and brands. iPower offers thousands of stock keeping units from its in-house brands as well as hundreds of other brands through its ecommerce channel partners and its websites, www.zenhydro.com and www.simpledeluxe.com. iPower has a diverse customer base that includes both commercial businesses and individuals. For more information, please visit iPower's website at www.meetipower.com.

 

 

 

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Forward-Looking Statements

 

All statements other than statements of historical fact in this press release are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations and projections about future events and financial trends that iPower believes may affect its financial condition, results of operations, business strategy, and financial needs. Investors can identify these forward-looking statements by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. iPower undertakes no obligation to update forward-looking statements to reflect subsequent events or circumstances, or changes in its expectations, except as may be required by law. Although iPower believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and iPower cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results and performance in iPower's Annual Report on Form 10-K, as filed with the SEC on September 15, 2023, its Quarterly Reports on Form 10-Q, as filed with the SEC on November 15, 2023 and February 14, 2024, and in its other SEC filings.

 

Investor Relations Contact:

Sean Mansouri, CFA

Elevate IR

(720) 330-2829

IPW@elevate-ir.com

 

 

 

 

 

 

 

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iPower Inc. and Subsidiaries

Unaudited Condensed Consolidated Balance Sheets

As of December 31, 2023 and June 30, 2023

 

   December 31,   June 30, 
   2023   2023 
    (Unaudited)      
ASSETS          
Current assets          
Cash and cash equivalents  $1,488,027   $3,735,642 
Accounts receivable, net   11,765,833    14,071,543 
Inventories, net   15,782,322    20,593,889 
Prepayments and other current assets   1,483,209    2,858,196 
Total current assets   30,519,391    41,259,270 
           
Non-current assets          
Right of use - non-current   7,141,633    7,837,345 
Property and equipment, net   456,006    536,418 
Deferred tax assets   3,122,363    2,155,250 
Non-current prepayments   390,612    531,456 
Goodwill   3,034,110    3,034,110 
Investment in joint venture   31,287    33,113 
Intangible assets, net   3,955,385    4,280,071 
Other non-current assets   419,289    427,254 
Total non-current assets   18,550,685    18,835,017 
           
Total assets  $49,070,076   $60,094,287 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities          
Accounts payable  $13,931,800   $13,244,957 
Credit cards payable   340,912    366,781 
Customer deposit   340,876    350,595 
Other payables and accrued liabilities   3,715,996    4,831,067 
Advance from shareholders   87,305    85,200 
Lease liability - current   2,065,177    2,159,173 
Short-term loan payable - related party   1,032,189     
Long-term promissory note payable - current portion   1,150,508    2,017,852 
Revolving loan payable, net   2,862,857     
Income taxes payable   283,519    276,683 
Total current liabilities   25,811,139    23,332,308 
           
Non-current liabilities          
Long-term revolving loan payable, net       9,791,191 
Lease liability - non-current   5,503,365    6,106,047 
Total non-current liabilities   5,503,365    15,897,238 
           
Total liabilities   31,314,504    39,229,546 
           
Commitments and contingency        
           
Stockholders' Equity          
Preferred stock, $0.001 par value; 20,000,000 shares authorized; 0 shares issued and outstanding at December 31, 2023 and June 30, 2023        
Common stock, $0.001 par value; 180,000,000 shares authorized; 29,710,939 and 29,710,939 shares issued and outstanding at December 31, 2023 and June 30, 2023   29,712    29,712 
Additional paid in capital   29,883,647    29,624,520 
Accumulated deficits   (11,903,785)   (8,702,442)
Non-controlling interest   (30,906)   (24,915)
Accumulated other comprehensive loss   (223,096)   (62,134)
Total stockholders’ equity   17,755,572    20,864,741 
           
Total liabilities and stockholders’ equity  $49,070,076   $60,094,287 

 

 

 

 

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iPower Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations

For the Three and Six Months Ended December 31, 2023 and 2022

 

  

For the Three Months Ended

December 31,

  

For the Six Months Ended

December 31,

 
   2023   2022   2023   2022 
   (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited) 
                 
REVENUES  $16,800,122   $19,254,590   $43,308,496   $45,277,263 
                     
TOTAL REVENUES   16,800,122    19,254,590    43,308,496    45,277,263 
                     
COST OF REVENUES   9,481,882    11,285,064    24,231,411    27,322,021 
                     
GROSS PROFIT   7,318,240    7,969,526    19,077,085    17,955,242 
                     
OPERATING EXPENSES:                    
Selling and fulfillment   6,936,980    9,338,737    17,000,451    17,757,549 
General and administrative   2,933,607    2,713,355    5,897,658    5,813,531 
Impairment loss - goodwill               3,060,034 
Total operating expenses   9,870,587    12,052,092    22,898,109    26,631,114 
                     
LOSS FROM OPERATIONS   (2,552,347)   (4,082,566)   (3,821,024)   (8,675,872)
                     
OTHER INCOME (EXPENSE)                    
Interest expenses   (182,612)   (314,119)   (410,977)   (562,160)
Loss on equity method investment   (801)   (3,938)   (1,826)   (7,328)
Other non-operating income   128,838    59,600    61,672    271,360 
Total other expenses, net   (54,575)   (258,457)   (351,131)   (298,128)
                     
LOSS BEFORE INCOME TAXES   (2,606,922)   (4,341,023)   (4,172,155)   (8,974,000)
                     
PROVISION FOR INCOME TAX BENEFIT   (688,939)   (1,047,749)   (964,821)   (1,495,545)
NET LOSS   (1,917,983)   (3,293,274)   (3,207,334)   (7,478,455)
                     
Non-controlling interest   (3,155)   (2,835)   (5,991)   (5,640)
                     
NET LOSS ATTRIBUTABLE TO IPOWER INC.  $(1,914,828)  $(3,290,439)  $(3,201,343)  $(7,472,815)
                     
OTHER COMPREHENSIVE LOSS                    
Foreign currency translation adjustments   (160,255)   47,149    (160,962)   (64,326)
                     
COMPREHENSIVE LOSS ATTRIBUTABLE TO IPOWER INC.  $(2,075,083)  $(3,243,290)  $(3,362,305)  $(7,537,141)
                     
WEIGHTED AVERAGE NUMBER OF COMMON STOCK                    
Basic   29,790,242    29,742,620    29,777,378    29,687,878 
                     
Diluted   29,790,242    29,742,620    29,777,378    29,687,878 
                     
LOSSES PER SHARE                    
Basic  $(0.06)  $(0.11)  $(0.11)  $(0.25)
                     
Diluted  $(0.06)  $(0.11)  $(0.11)  $(0.25)

 

 

 

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