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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, home goods and other products 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 agrees 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 variable interest entity (“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. On January 13, 2022, the Company entered into a joint venture agreement and formed a Nevada limited liability company, Box Harmony, LLC (“Box Harmony”), for the principal purpose of providing 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. The Company owns 40% of the equity interest in Box Harmony, retaining significant influence, but does not own a majority equity interest or otherwise control of Box Harmony. See details on Note 3 below. On February 10, 2022, the Company entered into another joint venture agreement and formed a Nevada limited liability company, Global Social Media, LLC (“GSM”), for the principal purpose of providing a social media platform, contents and services to assist businesses, including the Company and other businesses, in marketing their products. The Company owns 60% of the equity interest in GSM and controls its operations. See details on Note 3 below. On February 15, 2022, the Company acquired 100% of the ordinary shares of Anivia Limited (“Anivia”), a corporation organized under the laws of the British Virgin Islands (“BVI”), in accordance with the terms of a share transfer framework agreement (the “Transfer Agreement”), dated February 15, 2022, by and between the Company, White Cherry Limited, a BVI company (“White Cherry”), White Cherry’s equity holders, Li Zanyu and Xie Jing (together with White Cherry, the “Sellers”), Anivia, Fly Elephant Limited, a Hong Kong company, Dayourenzai (Shenzhen) Technology Co., Ltd., and Daheshou (Shenzhen) Information Technology Co., Ltd. Anivia owns 100% of the equity of Fly Elephant Limited, which in turn owns 100% of the equity of Dayourenzai (Shenzhen) Technology Co., Ltd., a corporation located in the People’s Republic of China (“PRC”) and which is a wholly foreign-owned enterprise (“WFOE”) of Fly Elephant Limited. The WFOE controls, through contractual arrangements summarized in Note 4 below, the business, revenues and profits of Daheshou (Shenzhen) Information Technology Co., Ltd., a company organized under the Laws of the PRC (“DHS” or “VIE”) and located in Shenzhen, China. See details on Note 4 below.

Note 2 – Basis of Presentation and Summary of significant accounting policies Basis of Presentation The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries and VIE 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, 2023, 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, 2022, which are included in Form 10-K filed on September 28, 2022. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries, E Marketing Solution Inc., Global Product Marketing Inc., Global Social Media, LLC, and Anivia Limited and its subsidiaries and VIE, including Fly Elephant Limited, Dayourenzai (Shenzhen) Technology Co., Ltd., and Daheshou (Shenzhen) Information Technology Co., Ltd. All inter-company balances and transactions have been eliminated. Emerging Growth Company Status The company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of. Use of estimates and assumptions The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities reported and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Foreign currency translation and transactions The reporting and functional currency of iPower and subsidiaries is the U.S. dollar (USD). iPower’s WFOE and VIE in China uses the local currency, Renminbi (“RMB”), as its functional currency. Assets and liabilities of the VIE are translated at the current exchange rate as quoted by the People’s Bank of China (the “PBOC”) at the end of the period. Income and expense accounts are translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income (loss) in the statement of changes in stockholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. The balance sheet amounts of the VIE, with the exception of equity, on September 30, 2022, were translated at 7.116 RMB to $1.00. The equity accounts were stated at their historical rates. The average translation rates applied to statements of operations and comprehensive income (loss) accounts for the three months ended September 30, 2022 was 6.847289 RMB to $1.00. Cash flows were also translated at average translation rates for the period and, therefore, amounts reported on the statement of cash flows would not necessarily agree with changes in the corresponding balances on the unaudited condensed consolidated balance sheet. 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, which is currently the maximum amount 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: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 24px; font-size: 10pt"> </td> <td style="width: 24px; font-size: 10pt">·</td> <td style="font-size: 10pt">the customer fails to comply with its payment schedule;</td></tr> <tr style="vertical-align: top"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt"> </td></tr> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 24px">·</td> <td>the customer is in serious financial difficulty;</td></tr> <tr style="vertical-align: top"> <td> </td> <td> </td> <td> </td></tr> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 24px">·</td> <td>a significant dispute with the customer has occurred regarding job progress or other matters;</td></tr> <tr style="vertical-align: top"> <td> </td> <td> </td> <td> </td></tr> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 24px">·</td> <td>the customer breaches any of its contractual obligations;</td></tr> <tr style="vertical-align: top"> <td> </td> <td> </td> <td> </td></tr> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 24px">·</td> <td>the customer appears to be financially distressed due to economic or legal factors;</td></tr> <tr style="vertical-align: top"> <td> </td> <td> </td> <td> </td></tr> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 24px">·</td> <td>the business between the customer and the Company is not active; and</td></tr> <tr style="vertical-align: top"> <td> </td> <td> </td> <td> </td></tr> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 24px">·</td> <td>other objective evidence indicates non-collectability of the accounts receivable.</td></tr> </table> 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. Equity method investment The Company accounts for its ownership interest in Box Harmony, a <span id="xdx_90F_eus-gaap--EquityMethodInvestmentOwnershipPercentage_iI_dp_c20220930__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--BoxHarmonyMember_zWUrpnl7WGf7" title="Equity Method Investment, Ownership Percentage">40% owned joint venture, following the equity method of accounting, in accordance with ASC 323, Investments —Equity Method and Joint Ventures. Under this method, the carrying cost is initially recorded at cost and then increased or decreased by recording its percentage of gain or loss in Box Harmony’s statement of operations and a corresponding charge or credit to the carrying value of the asset. Business Combination On February 15, 2022, the Company acquired 100% of the ordinary shares of Anivia Limited (“Anivia”) and its subsidiaries, including its variable interest entity (“VIE”), Daheshou (Shenzhen) Information Technology Co., Ltd., a company organized under the laws of the People’s Republic of China (“DHS”). The Company applies the acquisition method of accounting for business combinations. Under the acquisition method, the acquiring entity in a business combination recognizes 100% of the assets acquired and liabilities assumed at their acquisition date fair values. Management utilizes valuation techniques appropriate for the asset or liability being measured in determining these fair values. Any excess of the purchase price paid over amounts allocated to assets acquired, including identifiable intangible assets, and liabilities assumed is recorded as goodwill. Where amounts allocated to assets acquired and liabilities assumed is greater than the purchase price, a bargain purchase gain is recognized. Acquisition-related costs are expensed as incurred. See Note 4 for details on acquisition. Variable interest entities On February 15, 2022, the Company acquired 100% of the ordinary shares of Anivia Limited (“Anivia”) and its subsidiaries, including DHS. Pursuant to the terms of the Agreements for the Company’s acquisition of Anivia and its subsidiaries, including DHS, the Company does not have direct ownership in DHS but is actively involved in DHS’s operations as the sole manager to direct the activities and significantly impact DHS’s economic performance. DHS’s operational funding has been provided by the Company following the February 15, 2022 acquisition. During the term of the Agreements, the Company bears all the risk of loss and has the right to receive all of the benefits from DHS. As such, based on the determination that the Company is the primary beneficiary of DHS, in accordance with ASC 810-10-25-38A through 25-38J, DHS is considered a VIE of the Company and the financial statements of DHS have been consolidated from the date such control existed, February 15, 2022. See Note 4 and Note 5 for details on acquisition. Goodwill Goodwill represents the excess of the purchase price over the fair value of assets acquired and liabilities assumed. The Company accounts for goodwill under ASC Topic 350, Intangibles-Goodwill and Other. Goodwill is not amortized but is reviewed for potential impairment on an annual basis, or if events or circumstances indicate a potential impairment, at the reporting unit level. The Company’s review for impairment includes an assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill. If it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill, a quantitative goodwill impairment test is performed, which compares the fair value of the reporting unit with its carrying amounts, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. However, if the carrying amount of the reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company engaged an independent third-party valuation firm in August 2022 to conduct an evaluation of goodwill impairment for the Company as a whole at the consolidated reporting unit level as of June 30, 2022, which evaluation was conducted prior to the Company’s filing of its Annual Report on Form 10-K. Due to the decrease in the Company’s share price subsequent to the filing of the Form 10-K and the net loss incurred during the quarter ended September 30, 2022, the Company engaged the same valuation firm to review goodwill for impairment. Based on this review , the Company concluded an impairment loss of $3,060,034 as of September 30, 2022 was required. The impairment amount was determined based on the discounted cash flows with the revised projections reflecting the increase in freight and storage costs in the current interim quarter. The Company also considered the Market Capital Method, which is an alternative market approach, suggested the Company’s goodwill is partially impaired. As of September 30, 2022, the remaining goodwill balance amounted to $3,034,110. Intangible Assets, net Finite life intangible assets at September 30, 2022 included a covenant not to compete, supplier relationships, and software recognized as part of the acquisition of Anivia Limited. Intangible assets are recorded at the estimated fair value of these items at the date of acquisition, February 15, 2022. Intangible assets are amortized on a straight-line basis over their estimated useful life as followings: <table cellpadding="0" cellspacing="0" id="xdx_892_ecustom--IntangibleAssetsUsefulLivesTableTextBlock_zqhY7ArqZypa" style="font: 10pt Times New Roman, Times, Serif; width: 50%; border-collapse: collapse" summary="xdx: Disclosure - Basis of Presentation and Summary of significant accounting policies (Details - Useful Lives)"> <tr style="vertical-align: bottom"> <td>Schedule of estimated useful life</td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="border-bottom: black 1pt solid; text-align: center">Useful Life</td></tr> <tr style="vertical-align: bottom; background-color: #EEEEEE"> <td style="width: 66%">Covenant Not to Compete</td> <td style="width: 34%; text-align: center"><span id="xdx_905_eus-gaap--FiniteLivedIntangibleAssetUsefulLife_dtY_c20220701__20220930__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--NoncompeteAgreementsMember_zYnuMX5ITN3f" title="Intangible Asset, Useful Life">10 years</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Supplier relationships</td> <td style="text-align: center"><span id="xdx_908_eus-gaap--FiniteLivedIntangibleAssetUsefulLife_dtY_c20220701__20220930__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--SupplierRelationshipMember_zqh8SaMuJzAj" title="Intangible Asset, Useful Life">6 years</td></tr> <tr style="vertical-align: bottom; background-color: #EEEEEE"> <td>Software</td> <td style="text-align: center"><span id="xdx_90B_eus-gaap--FiniteLivedIntangibleAssetUsefulLife_dtY_c20220701__20220930__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--SoftwareMember_zqU1vWUL7y19" title="Intangible Asset, Useful Life">5 years</td></tr> </table> The Company reviews the recoverability of long-lived assets, including intangible assets, when events or changes in circumstances occur that indicate the carrying value of the asset may not be recoverable. The assessment of possible impairment on assets group level is based on the ability to recover the carrying value of the asset from the expected future pretax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations. As of September 30, 2022, there were no indicators of impairment. Fair values of financial instruments ASC 825, “Disclosures about Fair Value of Financial Instruments,” requires disclosure of fair value information about financial instruments. ASC 820, “Fair Value Measurements” defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and all other current assets and liabilities approximate fair values due to their short-term nature. On February 15, 2022, as part of the consideration for the acquisition of Anivia Limited, the Company issued a two-year unsecured <span id="xdx_90C_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_c20220215__us-gaap--LongtermDebtTypeAxis__custom--AniviaPurchaseNoteMember_zbaRDry66VT9" title="Debt Instrument, Interest Rate, Stated Percentage">6% subordinated promissory note, payable in equal semi-annual installments commencing August 15, 2022 (the “Purchase Note”). The principal amount of the Purchase Note was $3.5 million. On February 15, 2022, the Company evaluated the fair value of the Purchase Note to be $3.6 million using the following inputs: <table cellpadding="0" cellspacing="0" id="xdx_899_ecustom--ScheduleOfAssumptionsUsedFairValuePurchaseNoteTableTextBlock_zX6UtjqYW5Yb" style="font: 10pt Times New Roman, Times, Serif; width: 50%; border-collapse: collapse" summary="xdx: Disclosure - Basis of Presentation and Summary of significant accounting policies (Details - Assumptions)"> <tr style="vertical-align: top"> <td>Schedule of assumptions</td> <td> </td></tr> <tr style="vertical-align: top; background-color: #EEEEEE"> <td style="width: 77%">Corporate bond yield</td> <td style="width: 23%"><span id="xdx_90B_eus-gaap--DerivativesBasisAndUseOfDerivativesBasisDeterminationOfFairValue_dp_c20220214__20220215__us-gaap--MeasurementInputTypeAxis__custom--CorporateBondYieldMember_z07qtfgyVftj" title="Derivatives, Determination of Fair Value">3.1%</td></tr> <tr style="vertical-align: top; background-color: white"> <td>Risk-free rate</td> <td><span id="xdx_90F_eus-gaap--DerivativesBasisAndUseOfDerivativesBasisDeterminationOfFairValue_dp_c20220214__20220215__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember_zxrouQHP7d45" title="Derivatives, Determination of Fair Value">1.6%</td></tr> <tr style="vertical-align: top; background-color: #EEEEEE"> <td>Liquidity premium</td> <td><span id="xdx_900_eus-gaap--DerivativesBasisAndUseOfDerivativesBasisDeterminationOfFairValue_dp_c20220214__20220215__us-gaap--MeasurementInputTypeAxis__custom--LiquidityPremiumMember_zmqBxAgrURS9" title="Derivatives, Determination of Fair Value">0.4%</td></tr> <tr style="vertical-align: top; background-color: white"> <td>Discount rate</td> <td><span id="xdx_906_eus-gaap--DerivativesBasisAndUseOfDerivativesBasisDeterminationOfFairValue_dp_c20220214__20220215__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputDiscountRateMember_zXvkPMZOXfv4" title="Derivatives, Determination of Fair Value">3.5%</td></tr> </table> As of September 30, 2022, the outstanding balance of the Purchase Note was $3,700,588, including a premium of $69,338 and $131,250 of accrued interest. For other financial instruments to be reported at fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines the fair value of its financial instruments based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; Level 2 – Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and Level 3 – Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data. The Company does not have any assets or liabilities measured at fair value on a recurring basis. We measure certain non-financial assets on a non-recurring basis, including goodwill. As a result of those measurements, we recognized an impairment charge of $3.1 million during the three months ended September 30, 2022, as follows: <table cellpadding="0" cellspacing="0" id="xdx_88F_eus-gaap--FairValueAssetsMeasuredOnNonrecurringBasisTextBlock_zTs4HoeiZDj6" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Fair Values of Financial Instruments (Details)"> <tr style="vertical-align: bottom"> <td style="text-align: left">Schedule of fair value on nonrecurring basis</td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Total Fair Value</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Level 1</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Level 2</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Level 3</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Total Impairment Loss</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 1pt; width: 25%">Goodwill</td><td style="padding-bottom: 1pt; width: 2%"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td id="xdx_98B_eus-gaap--AssetsFairValueDisclosure_iI_pp0p0_c20220930__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel12And3Member__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__us-gaap--GoodwillMember_zdaZUFbmnXxk" style="border-bottom: Black 1pt solid; width: 11%; text-align: right" title="Assets">3,034,110</td><td style="padding-bottom: 1pt; width: 1%; text-align: left"> </td><td style="padding-bottom: 1pt; width: 2%"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td id="xdx_98F_eus-gaap--AssetsFairValueDisclosure_iI_pp0p0_d0_c20220930__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel1Member__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__us-gaap--GoodwillMember_zLnANHb0Su8b" style="border-bottom: Black 1pt solid; width: 11%; text-align: right" title="Assets">–</td><td style="padding-bottom: 1pt; width: 1%; text-align: left"> </td><td style="padding-bottom: 1pt; width: 2%"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td id="xdx_983_eus-gaap--AssetsFairValueDisclosure_iI_pp0p0_d0_c20220930__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel2Member__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__us-gaap--GoodwillMember_zWXi0ED0WXR5" style="border-bottom: Black 1pt solid; width: 11%; text-align: right" title="Assets">–</td><td style="padding-bottom: 1pt; width: 1%; text-align: left"> </td><td style="padding-bottom: 1pt; width: 2%"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td id="xdx_98F_eus-gaap--AssetsFairValueDisclosure_iI_pp0p0_c20220930__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__us-gaap--GoodwillMember_z9X8U16WNiwk" style="border-bottom: Black 1pt solid; width: 11%; text-align: right" title="Assets">3,034,110</td><td style="padding-bottom: 1pt; width: 1%; text-align: left"> </td><td style="padding-bottom: 1pt; width: 2%"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td id="xdx_98A_eus-gaap--GoodwillImpairmentLoss_c20220701__20220930_zX8mpSrmbUkb" style="border-bottom: Black 1pt solid; width: 11%; text-align: right">3,060,034</td><td style="padding-bottom: 1pt; width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">3,034,110</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">3,034,110</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">3,060,034</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> Goodwill, with a total carrying value of $6.1 million was written down to its fair value of $3.0 million, resulting in an impairment charge of $3,060,034, which was recorded in earnings for the three months ended September 30, 2022. The fair value of goodwill was determined based on the discounted cash flow method, which is an income approach, which required the use of inputs that were unobservable in the marketplace (Level 3), including a discount rate that would be used by a market participant, projections of revenues and cash flows with the revised projections reflecting the increase in freight and storage costs in the current interim quarter, among others. Revenue recognition The Company has adopted Accounting Standards Codification (“ASC”) 606 since its inception on April 11, 2018 and recognizes revenue from product sales revenues, net of promotional discounts and return allowances, when the following revenue recognition criteria are met: a contract has been identified, separate performance obligations are identified, the transaction price is determined, the transaction price is allocated to separate performance obligations and revenue is recognized upon satisfying each performance obligation. The Company transfers the risk of loss or damage upon shipment, 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 three months ended September 30, 2022 and 2021 were $1,166,349 and $633,416, respectively. Cost of revenue Cost of revenue mainly consists of costs for purchases of products and related inbound freight and delivery fees. Operating expenses Operating expenses, which consist of selling and fulfillment and general and administrative expenses, are expensed as incurred. Inventory 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. Debt Issuance Costs Costs incurred in connection with the issuance of debt are deferred and amortized as interest expense over the term of the related debt using the effective interest method. To the extent that the debt is outstanding, these amounts are reflected in the consolidated balance sheets as direct deductions from the carrying amount of the outstanding borrowings. 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 three months ended September 30, 2022, sales through Amazon to Canada and other foreign countries were approximately <span id="xdx_908_eus-gaap--ConcentrationRiskPercentage1_dp_c20220701__20220930__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--AmazonSalesToCanadaAndOtherForeignCountriesMember_zOYBW07vAX2j">9.8% of the Company’s total sales. Sales of hydroponic products, including ventilation and grow light systems, were approximately <span id="xdx_902_eus-gaap--ConcentrationRiskPercentage1_dp_c20220701__20220930__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--ProductOrServiceAxis__custom--HydroponicProductsMember_zuzc7lr31zVc">53% of the Company’s total sales and the remaining <span id="xdx_906_eus-gaap--ConcentrationRiskPercentage1_dp_c20220701__20220930__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--ProductOrServiceAxis__custom--GeneralGardeningMember_zz4jmcfyEXJb">47% consisted of general gardening, home goods and other products and accessories. As of September 30, 2022, there were approximately $ 1.9 million of inventory stored in China. The Company’s majority of long-lived assets are 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. In addition to requisite service period, the Company also evaluates the performance condition and market condition under ASC 718-10-20. For an award which contains both a performance and a market condition, and where both conditions must be satisfied for the award to vest, the market condition is incorporated into the fair value of the award, and that fair value is recognized over the employee’s requisite service period or nonemployee’s vesting period if it is probable the performance condition will be met. If the performance condition is ultimately not met, compensation cost related to the award should not be recognized (or should be reversed) because the vesting condition in the award has not been satisfied. The Company will recognize forfeitures of such equity-based compensation as they occur. Income taxes The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their perspective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded, when necessary, to reduce deferred tax assets to the amount expected to be realized. 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 on audit and do not anticipate any adjustments that will result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740. The Company’s policy for recording interest and penalties associated with income-based tax audits is to record such items as a component of income taxes. 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 June 2022, FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments in this ASU clarify the guidance in ASC 820 on the fair value measurement of an equity security that is subject to a contractual sale restriction and require specific disclosures related to such an equity security. This standard is effective for fiscal years beginning after December 15, 2024. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606) as if the entity had originated the contracts. The guidance is effective for fiscal years beginning after December 15, 2023, with early application permitted. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements. In March 2020 and January 2021, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope, respectively (collectively, “Topic 848”). Topic 848 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by Topic 848 are effective for all entities as of March 12, 2020 through December 31, 2022. The Company does not expect the adoption of this standard to have a material impact on the Company's consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40).” This ASU reduces the number of accounting models for convertible debt instruments and convertible preferred stock, as well as amend the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. In addition, this ASU improves and amends the related EPS guidance. This standard is effective for the Company on July 1, 2024, including interim periods within those fiscal years. Adoption is either a modified retrospective method or a fully retrospective method of transition. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements. In January 2020, the FASB issued ASU 2020-01, “Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815.” This ASU among other things clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments—Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. The new ASU clarifies that, when determining the accounting for certain forward contracts and purchased options a company should not consider, whether upon settlement or exercise, if the underlying securities would be accounted for under the equity method or fair value option. ASU 2020-01 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021. An entity should apply ASU 2020-01 prospectively at the beginning of the interim period that includes the adoption date. The adoption of ASU 2020-01 did not have material impact on the Company's 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, 2021, and interim periods within fiscal years beginning after December 15, 2022; however, early adoption is permitted. The adoption of this standard did not have material impact on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” which eliminates step two from the goodwill impairment test. Under ASU 2017-04, an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value up to the amount of goodwill allocated to that reporting unit. All other entities, including not-for-profit entities, that are adopting the amendments in this Update should do so for their annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2021. The Company has adopted ASU 2017-04. See disclosures above on Goodwill for further details. The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows. 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.

Basis of Presentation The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries and VIE 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, 2023, 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, 2022, which are included in Form 10-K filed on September 28, 2022.

Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries, E Marketing Solution Inc., Global Product Marketing Inc., Global Social Media, LLC, and Anivia Limited and its subsidiaries and VIE, including Fly Elephant Limited, Dayourenzai (Shenzhen) Technology Co., Ltd., and Daheshou (Shenzhen) Information Technology Co., Ltd. All inter-company balances and transactions have been eliminated.

Emerging Growth Company Status The company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of.

Use of estimates and assumptions The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities reported and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

Foreign currency translation and transactions The reporting and functional currency of iPower and subsidiaries is the U.S. dollar (USD). iPower’s WFOE and VIE in China uses the local currency, Renminbi (“RMB”), as its functional currency. Assets and liabilities of the VIE are translated at the current exchange rate as quoted by the People’s Bank of China (the “PBOC”) at the end of the period. Income and expense accounts are translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income (loss) in the statement of changes in stockholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. The balance sheet amounts of the VIE, with the exception of equity, on September 30, 2022, were translated at 7.116 RMB to $1.00. The equity accounts were stated at their historical rates. The average translation rates applied to statements of operations and comprehensive income (loss) accounts for the three months ended September 30, 2022 was 6.847289 RMB to $1.00. Cash flows were also translated at average translation rates for the period and, therefore, amounts reported on the statement of cash flows would not necessarily agree with changes in the corresponding balances on the unaudited condensed consolidated balance sheet.

7.116

6.847289

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, which is currently the maximum amount 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.

250000

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: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 24px; font-size: 10pt"> </td> <td style="width: 24px; font-size: 10pt">·</td> <td style="font-size: 10pt">the customer fails to comply with its payment schedule;</td></tr> <tr style="vertical-align: top"> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt"> </td> <td style="font-size: 10pt"> </td></tr> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 24px">·</td> <td>the customer is in serious financial difficulty;</td></tr> <tr style="vertical-align: top"> <td> </td> <td> </td> <td> </td></tr> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 24px">·</td> <td>a significant dispute with the customer has occurred regarding job progress or other matters;</td></tr> <tr style="vertical-align: top"> <td> </td> <td> </td> <td> </td></tr> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 24px">·</td> <td>the customer breaches any of its contractual obligations;</td></tr> <tr style="vertical-align: top"> <td> </td> <td> </td> <td> </td></tr> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 24px">·</td> <td>the customer appears to be financially distressed due to economic or legal factors;</td></tr> <tr style="vertical-align: top"> <td> </td> <td> </td> <td> </td></tr> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 24px">·</td> <td>the business between the customer and the Company is not active; and</td></tr> <tr style="vertical-align: top"> <td> </td> <td> </td> <td> </td></tr> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 24px">·</td> <td>other objective evidence indicates non-collectability of the accounts receivable.</td></tr> </table> 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.

Equity method investment The Company accounts for its ownership interest in Box Harmony, a <span id="xdx_90F_eus-gaap--EquityMethodInvestmentOwnershipPercentage_iI_dp_c20220930__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--BoxHarmonyMember_zWUrpnl7WGf7" title="Equity Method Investment, Ownership Percentage">40% owned joint venture, following the equity method of accounting, in accordance with ASC 323, Investments —Equity Method and Joint Ventures. Under this method, the carrying cost is initially recorded at cost and then increased or decreased by recording its percentage of gain or loss in Box Harmony’s statement of operations and a corresponding charge or credit to the carrying value of the asset.

0.40

Business Combination On February 15, 2022, the Company acquired 100% of the ordinary shares of Anivia Limited (“Anivia”) and its subsidiaries, including its variable interest entity (“VIE”), Daheshou (Shenzhen) Information Technology Co., Ltd., a company organized under the laws of the People’s Republic of China (“DHS”). The Company applies the acquisition method of accounting for business combinations. Under the acquisition method, the acquiring entity in a business combination recognizes 100% of the assets acquired and liabilities assumed at their acquisition date fair values. Management utilizes valuation techniques appropriate for the asset or liability being measured in determining these fair values. Any excess of the purchase price paid over amounts allocated to assets acquired, including identifiable intangible assets, and liabilities assumed is recorded as goodwill. Where amounts allocated to assets acquired and liabilities assumed is greater than the purchase price, a bargain purchase gain is recognized. Acquisition-related costs are expensed as incurred. See Note 4 for details on acquisition.

Variable interest entities On February 15, 2022, the Company acquired 100% of the ordinary shares of Anivia Limited (“Anivia”) and its subsidiaries, including DHS. Pursuant to the terms of the Agreements for the Company’s acquisition of Anivia and its subsidiaries, including DHS, the Company does not have direct ownership in DHS but is actively involved in DHS’s operations as the sole manager to direct the activities and significantly impact DHS’s economic performance. DHS’s operational funding has been provided by the Company following the February 15, 2022 acquisition. During the term of the Agreements, the Company bears all the risk of loss and has the right to receive all of the benefits from DHS. As such, based on the determination that the Company is the primary beneficiary of DHS, in accordance with ASC 810-10-25-38A through 25-38J, DHS is considered a VIE of the Company and the financial statements of DHS have been consolidated from the date such control existed, February 15, 2022. See Note 4 and Note 5 for details on acquisition.

Goodwill Goodwill represents the excess of the purchase price over the fair value of assets acquired and liabilities assumed. The Company accounts for goodwill under ASC Topic 350, Intangibles-Goodwill and Other. Goodwill is not amortized but is reviewed for potential impairment on an annual basis, or if events or circumstances indicate a potential impairment, at the reporting unit level. The Company’s review for impairment includes an assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill. If it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, including goodwill, a quantitative goodwill impairment test is performed, which compares the fair value of the reporting unit with its carrying amounts, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. However, if the carrying amount of the reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company engaged an independent third-party valuation firm in August 2022 to conduct an evaluation of goodwill impairment for the Company as a whole at the consolidated reporting unit level as of June 30, 2022, which evaluation was conducted prior to the Company’s filing of its Annual Report on Form 10-K. Due to the decrease in the Company’s share price subsequent to the filing of the Form 10-K and the net loss incurred during the quarter ended September 30, 2022, the Company engaged the same valuation firm to review goodwill for impairment. Based on this review , the Company concluded an impairment loss of $3,060,034 as of September 30, 2022 was required. The impairment amount was determined based on the discounted cash flows with the revised projections reflecting the increase in freight and storage costs in the current interim quarter. The Company also considered the Market Capital Method, which is an alternative market approach, suggested the Company’s goodwill is partially impaired. As of September 30, 2022, the remaining goodwill balance amounted to $3,034,110.

3060034

3034110

Intangible Assets, net Finite life intangible assets at September 30, 2022 included a covenant not to compete, supplier relationships, and software recognized as part of the acquisition of Anivia Limited. Intangible assets are recorded at the estimated fair value of these items at the date of acquisition, February 15, 2022. Intangible assets are amortized on a straight-line basis over their estimated useful life as followings: <table cellpadding="0" cellspacing="0" id="xdx_892_ecustom--IntangibleAssetsUsefulLivesTableTextBlock_zqhY7ArqZypa" style="font: 10pt Times New Roman, Times, Serif; width: 50%; border-collapse: collapse" summary="xdx: Disclosure - Basis of Presentation and Summary of significant accounting policies (Details - Useful Lives)"> <tr style="vertical-align: bottom"> <td>Schedule of estimated useful life</td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="border-bottom: black 1pt solid; text-align: center">Useful Life</td></tr> <tr style="vertical-align: bottom; background-color: #EEEEEE"> <td style="width: 66%">Covenant Not to Compete</td> <td style="width: 34%; text-align: center"><span id="xdx_905_eus-gaap--FiniteLivedIntangibleAssetUsefulLife_dtY_c20220701__20220930__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--NoncompeteAgreementsMember_zYnuMX5ITN3f" title="Intangible Asset, Useful Life">10 years</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Supplier relationships</td> <td style="text-align: center"><span id="xdx_908_eus-gaap--FiniteLivedIntangibleAssetUsefulLife_dtY_c20220701__20220930__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--SupplierRelationshipMember_zqh8SaMuJzAj" title="Intangible Asset, Useful Life">6 years</td></tr> <tr style="vertical-align: bottom; background-color: #EEEEEE"> <td>Software</td> <td style="text-align: center"><span id="xdx_90B_eus-gaap--FiniteLivedIntangibleAssetUsefulLife_dtY_c20220701__20220930__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--SoftwareMember_zqU1vWUL7y19" title="Intangible Asset, Useful Life">5 years</td></tr> </table> The Company reviews the recoverability of long-lived assets, including intangible assets, when events or changes in circumstances occur that indicate the carrying value of the asset may not be recoverable. The assessment of possible impairment on assets group level is based on the ability to recover the carrying value of the asset from the expected future pretax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations. As of September 30, 2022, there were no indicators of impairment.

<table cellpadding="0" cellspacing="0" id="xdx_892_ecustom--IntangibleAssetsUsefulLivesTableTextBlock_zqhY7ArqZypa" style="font: 10pt Times New Roman, Times, Serif; width: 50%; border-collapse: collapse" summary="xdx: Disclosure - Basis of Presentation and Summary of significant accounting policies (Details - Useful Lives)"> <tr style="vertical-align: bottom"> <td>Schedule of estimated useful life</td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td style="border-bottom: black 1pt solid; text-align: center">Useful Life</td></tr> <tr style="vertical-align: bottom; background-color: #EEEEEE"> <td style="width: 66%">Covenant Not to Compete</td> <td style="width: 34%; text-align: center"><span id="xdx_905_eus-gaap--FiniteLivedIntangibleAssetUsefulLife_dtY_c20220701__20220930__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--NoncompeteAgreementsMember_zYnuMX5ITN3f" title="Intangible Asset, Useful Life">10 years</td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Supplier relationships</td> <td style="text-align: center"><span id="xdx_908_eus-gaap--FiniteLivedIntangibleAssetUsefulLife_dtY_c20220701__20220930__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--SupplierRelationshipMember_zqh8SaMuJzAj" title="Intangible Asset, Useful Life">6 years</td></tr> <tr style="vertical-align: bottom; background-color: #EEEEEE"> <td>Software</td> <td style="text-align: center"><span id="xdx_90B_eus-gaap--FiniteLivedIntangibleAssetUsefulLife_dtY_c20220701__20220930__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--SoftwareMember_zqU1vWUL7y19" title="Intangible Asset, Useful Life">5 years</td></tr> </table>

P10Y

P6Y

P5Y

Fair values of financial instruments ASC 825, “Disclosures about Fair Value of Financial Instruments,” requires disclosure of fair value information about financial instruments. ASC 820, “Fair Value Measurements” defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and all other current assets and liabilities approximate fair values due to their short-term nature. On February 15, 2022, as part of the consideration for the acquisition of Anivia Limited, the Company issued a two-year unsecured <span id="xdx_90C_eus-gaap--DebtInstrumentInterestRateStatedPercentage_iI_dp_c20220215__us-gaap--LongtermDebtTypeAxis__custom--AniviaPurchaseNoteMember_zbaRDry66VT9" title="Debt Instrument, Interest Rate, Stated Percentage">6% subordinated promissory note, payable in equal semi-annual installments commencing August 15, 2022 (the “Purchase Note”). The principal amount of the Purchase Note was $3.5 million. On February 15, 2022, the Company evaluated the fair value of the Purchase Note to be $3.6 million using the following inputs: <table cellpadding="0" cellspacing="0" id="xdx_899_ecustom--ScheduleOfAssumptionsUsedFairValuePurchaseNoteTableTextBlock_zX6UtjqYW5Yb" style="font: 10pt Times New Roman, Times, Serif; width: 50%; border-collapse: collapse" summary="xdx: Disclosure - Basis of Presentation and Summary of significant accounting policies (Details - Assumptions)"> <tr style="vertical-align: top"> <td>Schedule of assumptions</td> <td> </td></tr> <tr style="vertical-align: top; background-color: #EEEEEE"> <td style="width: 77%">Corporate bond yield</td> <td style="width: 23%"><span id="xdx_90B_eus-gaap--DerivativesBasisAndUseOfDerivativesBasisDeterminationOfFairValue_dp_c20220214__20220215__us-gaap--MeasurementInputTypeAxis__custom--CorporateBondYieldMember_z07qtfgyVftj" title="Derivatives, Determination of Fair Value">3.1%</td></tr> <tr style="vertical-align: top; background-color: white"> <td>Risk-free rate</td> <td><span id="xdx_90F_eus-gaap--DerivativesBasisAndUseOfDerivativesBasisDeterminationOfFairValue_dp_c20220214__20220215__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember_zxrouQHP7d45" title="Derivatives, Determination of Fair Value">1.6%</td></tr> <tr style="vertical-align: top; background-color: #EEEEEE"> <td>Liquidity premium</td> <td><span id="xdx_900_eus-gaap--DerivativesBasisAndUseOfDerivativesBasisDeterminationOfFairValue_dp_c20220214__20220215__us-gaap--MeasurementInputTypeAxis__custom--LiquidityPremiumMember_zmqBxAgrURS9" title="Derivatives, Determination of Fair Value">0.4%</td></tr> <tr style="vertical-align: top; background-color: white"> <td>Discount rate</td> <td><span id="xdx_906_eus-gaap--DerivativesBasisAndUseOfDerivativesBasisDeterminationOfFairValue_dp_c20220214__20220215__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputDiscountRateMember_zXvkPMZOXfv4" title="Derivatives, Determination of Fair Value">3.5%</td></tr> </table> As of September 30, 2022, the outstanding balance of the Purchase Note was $3,700,588, including a premium of $69,338 and $131,250 of accrued interest. For other financial instruments to be reported at fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines the fair value of its financial instruments based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; Level 2 – Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and Level 3 – Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data. The Company does not have any assets or liabilities measured at fair value on a recurring basis. We measure certain non-financial assets on a non-recurring basis, including goodwill. As a result of those measurements, we recognized an impairment charge of $3.1 million during the three months ended September 30, 2022, as follows: <table cellpadding="0" cellspacing="0" id="xdx_88F_eus-gaap--FairValueAssetsMeasuredOnNonrecurringBasisTextBlock_zTs4HoeiZDj6" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Fair Values of Financial Instruments (Details)"> <tr style="vertical-align: bottom"> <td style="text-align: left">Schedule of fair value on nonrecurring basis</td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Total Fair Value</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Level 1</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Level 2</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Level 3</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Total Impairment Loss</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 1pt; width: 25%">Goodwill</td><td style="padding-bottom: 1pt; width: 2%"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td id="xdx_98B_eus-gaap--AssetsFairValueDisclosure_iI_pp0p0_c20220930__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel12And3Member__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__us-gaap--GoodwillMember_zdaZUFbmnXxk" style="border-bottom: Black 1pt solid; width: 11%; text-align: right" title="Assets">3,034,110</td><td style="padding-bottom: 1pt; width: 1%; text-align: left"> </td><td style="padding-bottom: 1pt; width: 2%"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td id="xdx_98F_eus-gaap--AssetsFairValueDisclosure_iI_pp0p0_d0_c20220930__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel1Member__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__us-gaap--GoodwillMember_zLnANHb0Su8b" style="border-bottom: Black 1pt solid; width: 11%; text-align: right" title="Assets">–</td><td style="padding-bottom: 1pt; width: 1%; text-align: left"> </td><td style="padding-bottom: 1pt; width: 2%"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td id="xdx_983_eus-gaap--AssetsFairValueDisclosure_iI_pp0p0_d0_c20220930__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel2Member__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__us-gaap--GoodwillMember_zWXi0ED0WXR5" style="border-bottom: Black 1pt solid; width: 11%; text-align: right" title="Assets">–</td><td style="padding-bottom: 1pt; width: 1%; text-align: left"> </td><td style="padding-bottom: 1pt; width: 2%"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td id="xdx_98F_eus-gaap--AssetsFairValueDisclosure_iI_pp0p0_c20220930__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__us-gaap--GoodwillMember_z9X8U16WNiwk" style="border-bottom: Black 1pt solid; width: 11%; text-align: right" title="Assets">3,034,110</td><td style="padding-bottom: 1pt; width: 1%; text-align: left"> </td><td style="padding-bottom: 1pt; width: 2%"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td id="xdx_98A_eus-gaap--GoodwillImpairmentLoss_c20220701__20220930_zX8mpSrmbUkb" style="border-bottom: Black 1pt solid; width: 11%; text-align: right">3,060,034</td><td style="padding-bottom: 1pt; width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">3,034,110</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">3,034,110</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">3,060,034</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> Goodwill, with a total carrying value of $6.1 million was written down to its fair value of $3.0 million, resulting in an impairment charge of $3,060,034, which was recorded in earnings for the three months ended September 30, 2022. The fair value of goodwill was determined based on the discounted cash flow method, which is an income approach, which required the use of inputs that were unobservable in the marketplace (Level 3), including a discount rate that would be used by a market participant, projections of revenues and cash flows with the revised projections reflecting the increase in freight and storage costs in the current interim quarter, among others.

0.06

3500000

3600000

<table cellpadding="0" cellspacing="0" id="xdx_899_ecustom--ScheduleOfAssumptionsUsedFairValuePurchaseNoteTableTextBlock_zX6UtjqYW5Yb" style="font: 10pt Times New Roman, Times, Serif; width: 50%; border-collapse: collapse" summary="xdx: Disclosure - Basis of Presentation and Summary of significant accounting policies (Details - Assumptions)"> <tr style="vertical-align: top"> <td>Schedule of assumptions</td> <td> </td></tr> <tr style="vertical-align: top; background-color: #EEEEEE"> <td style="width: 77%">Corporate bond yield</td> <td style="width: 23%"><span id="xdx_90B_eus-gaap--DerivativesBasisAndUseOfDerivativesBasisDeterminationOfFairValue_dp_c20220214__20220215__us-gaap--MeasurementInputTypeAxis__custom--CorporateBondYieldMember_z07qtfgyVftj" title="Derivatives, Determination of Fair Value">3.1%</td></tr> <tr style="vertical-align: top; background-color: white"> <td>Risk-free rate</td> <td><span id="xdx_90F_eus-gaap--DerivativesBasisAndUseOfDerivativesBasisDeterminationOfFairValue_dp_c20220214__20220215__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember_zxrouQHP7d45" title="Derivatives, Determination of Fair Value">1.6%</td></tr> <tr style="vertical-align: top; background-color: #EEEEEE"> <td>Liquidity premium</td> <td><span id="xdx_900_eus-gaap--DerivativesBasisAndUseOfDerivativesBasisDeterminationOfFairValue_dp_c20220214__20220215__us-gaap--MeasurementInputTypeAxis__custom--LiquidityPremiumMember_zmqBxAgrURS9" title="Derivatives, Determination of Fair Value">0.4%</td></tr> <tr style="vertical-align: top; background-color: white"> <td>Discount rate</td> <td><span id="xdx_906_eus-gaap--DerivativesBasisAndUseOfDerivativesBasisDeterminationOfFairValue_dp_c20220214__20220215__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputDiscountRateMember_zXvkPMZOXfv4" title="Derivatives, Determination of Fair Value">3.5%</td></tr> </table>

3.1

1.6

0.4

3.5

3700588

69338

131250

<table cellpadding="0" cellspacing="0" id="xdx_88F_eus-gaap--FairValueAssetsMeasuredOnNonrecurringBasisTextBlock_zTs4HoeiZDj6" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Fair Values of Financial Instruments (Details)"> <tr style="vertical-align: bottom"> <td style="text-align: left">Schedule of fair value on nonrecurring basis</td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Total Fair Value</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Level 1</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Level 2</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Level 3</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Total Impairment Loss</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 1pt; width: 25%">Goodwill</td><td style="padding-bottom: 1pt; width: 2%"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td id="xdx_98B_eus-gaap--AssetsFairValueDisclosure_iI_pp0p0_c20220930__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel12And3Member__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__us-gaap--GoodwillMember_zdaZUFbmnXxk" style="border-bottom: Black 1pt solid; width: 11%; text-align: right" title="Assets">3,034,110</td><td style="padding-bottom: 1pt; width: 1%; text-align: left"> </td><td style="padding-bottom: 1pt; width: 2%"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td id="xdx_98F_eus-gaap--AssetsFairValueDisclosure_iI_pp0p0_d0_c20220930__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel1Member__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__us-gaap--GoodwillMember_zLnANHb0Su8b" style="border-bottom: Black 1pt solid; width: 11%; text-align: right" title="Assets">–</td><td style="padding-bottom: 1pt; width: 1%; text-align: left"> </td><td style="padding-bottom: 1pt; width: 2%"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td id="xdx_983_eus-gaap--AssetsFairValueDisclosure_iI_pp0p0_d0_c20220930__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel2Member__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__us-gaap--GoodwillMember_zWXi0ED0WXR5" style="border-bottom: Black 1pt solid; width: 11%; text-align: right" title="Assets">–</td><td style="padding-bottom: 1pt; width: 1%; text-align: left"> </td><td style="padding-bottom: 1pt; width: 2%"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td id="xdx_98F_eus-gaap--AssetsFairValueDisclosure_iI_pp0p0_c20220930__us-gaap--FairValueByFairValueHierarchyLevelAxis__us-gaap--FairValueInputsLevel3Member__us-gaap--FairValueByMeasurementFrequencyAxis__us-gaap--FairValueMeasurementsRecurringMember__us-gaap--FinancialInstrumentAxis__us-gaap--GoodwillMember_z9X8U16WNiwk" style="border-bottom: Black 1pt solid; width: 11%; text-align: right" title="Assets">3,034,110</td><td style="padding-bottom: 1pt; width: 1%; text-align: left"> </td><td style="padding-bottom: 1pt; width: 2%"> </td> <td style="border-bottom: Black 1pt solid; width: 1%; text-align: left">$</td><td id="xdx_98A_eus-gaap--GoodwillImpairmentLoss_c20220701__20220930_zX8mpSrmbUkb" style="border-bottom: Black 1pt solid; width: 11%; text-align: right">3,060,034</td><td style="padding-bottom: 1pt; width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">3,034,110</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">3,034,110</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">3,060,034</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

3034110

3060034

Revenue recognition The Company has adopted Accounting Standards Codification (“ASC”) 606 since its inception on April 11, 2018 and recognizes revenue from product sales revenues, net of promotional discounts and return allowances, when the following revenue recognition criteria are met: a contract has been identified, separate performance obligations are identified, the transaction price is determined, the transaction price is allocated to separate performance obligations and revenue is recognized upon satisfying each performance obligation. The Company transfers the risk of loss or damage upon shipment, 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 three months ended September 30, 2022 and 2021 were $1,166,349 and $633,416, respectively.

1166349

633416

Cost of revenue Cost of revenue mainly consists of costs for purchases of products and related inbound freight and delivery fees. Operating expenses Operating expenses, which consist of selling and fulfillment and general and administrative expenses, are expensed as incurred.

Inventory 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.

Debt Issuance Costs Costs incurred in connection with the issuance of debt are deferred and amortized as interest expense over the term of the related debt using the effective interest method. To the extent that the debt is outstanding, these amounts are reflected in the consolidated balance sheets as direct deductions from the carrying amount of the outstanding borrowings.

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 three months ended September 30, 2022, sales through Amazon to Canada and other foreign countries were approximately <span id="xdx_908_eus-gaap--ConcentrationRiskPercentage1_dp_c20220701__20220930__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--MajorCustomersAxis__custom--AmazonSalesToCanadaAndOtherForeignCountriesMember_zOYBW07vAX2j">9.8% of the Company’s total sales. Sales of hydroponic products, including ventilation and grow light systems, were approximately <span id="xdx_902_eus-gaap--ConcentrationRiskPercentage1_dp_c20220701__20220930__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--ProductOrServiceAxis__custom--HydroponicProductsMember_zuzc7lr31zVc">53% of the Company’s total sales and the remaining <span id="xdx_906_eus-gaap--ConcentrationRiskPercentage1_dp_c20220701__20220930__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember__srt--ProductOrServiceAxis__custom--GeneralGardeningMember_zz4jmcfyEXJb">47% consisted of general gardening, home goods and other products and accessories. As of September 30, 2022, there were approximately $ 1.9 million of inventory stored in China. The Company’s majority of long-lived assets are 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.

0.098

0.53

0.47

1900000

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. In addition to requisite service period, the Company also evaluates the performance condition and market condition under ASC 718-10-20. For an award which contains both a performance and a market condition, and where both conditions must be satisfied for the award to vest, the market condition is incorporated into the fair value of the award, and that fair value is recognized over the employee’s requisite service period or nonemployee’s vesting period if it is probable the performance condition will be met. If the performance condition is ultimately not met, compensation cost related to the award should not be recognized (or should be reversed) because the vesting condition in the award has not been satisfied. The Company will recognize forfeitures of such equity-based compensation as they occur.

Income taxes The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their perspective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded, when necessary, to reduce deferred tax assets to the amount expected to be realized. 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 on audit and do not anticipate any adjustments that will result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740. The Company’s policy for recording interest and penalties associated with income-based tax audits is to record such items as a component of income taxes.

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 June 2022, FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments in this ASU clarify the guidance in ASC 820 on the fair value measurement of an equity security that is subject to a contractual sale restriction and require specific disclosures related to such an equity security. This standard is effective for fiscal years beginning after December 15, 2024. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606) as if the entity had originated the contracts. The guidance is effective for fiscal years beginning after December 15, 2023, with early application permitted. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements. In March 2020 and January 2021, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope, respectively (collectively, “Topic 848”). Topic 848 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by Topic 848 are effective for all entities as of March 12, 2020 through December 31, 2022. The Company does not expect the adoption of this standard to have a material impact on the Company's consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40).” This ASU reduces the number of accounting models for convertible debt instruments and convertible preferred stock, as well as amend the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. In addition, this ASU improves and amends the related EPS guidance. This standard is effective for the Company on July 1, 2024, including interim periods within those fiscal years. Adoption is either a modified retrospective method or a fully retrospective method of transition. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements. In January 2020, the FASB issued ASU 2020-01, “Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815.” This ASU among other things clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments—Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. The new ASU clarifies that, when determining the accounting for certain forward contracts and purchased options a company should not consider, whether upon settlement or exercise, if the underlying securities would be accounted for under the equity method or fair value option. ASU 2020-01 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021. An entity should apply ASU 2020-01 prospectively at the beginning of the interim period that includes the adoption date. The adoption of ASU 2020-01 did not have material impact on the Company's 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, 2021, and interim periods within fiscal years beginning after December 15, 2022; however, early adoption is permitted. The adoption of this standard did not have material impact on the consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” which eliminates step two from the goodwill impairment test. Under ASU 2017-04, an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value up to the amount of goodwill allocated to that reporting unit. All other entities, including not-for-profit entities, that are adopting the amendments in this Update should do so for their annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2021. The Company has adopted ASU 2017-04. See disclosures above on Goodwill for further details. The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows.

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.

Note 3 - Joint Ventures Box Harmony, LLC On January 13, 2022, the Company entered into a joint venture agreement (the “Joint Venture Agreement”) with Titanium Plus Autoparts, Inc., a California corporation (“TPA”), Tony Chiu (“Chiu”) and Bin Xiao (“Xiao”). Pursuant to the terms of the Joint Venture Agreement, the parties formed a Nevada limited liability company, Box Harmony, LLC (“Box Harmony”), for the principal purpose of providing logistic services primarily for foreign-based manufacturers or distributors who desire to sell their products online in the United States, with such logistic services to include, without limitation, receiving, storing and transporting such products. Following entry into the Joint Venture Agreement, Box Harmony issued a total of 6,000 certificated units of membership interest, designated as Class A voting units (“Equity Units”), as follows: (i) the Company agreed to contribute $50,000 in cash in exchange for 2,400 Equity Units in Box Harmony and agreed to provide Box Harmony with the use and access to certain warehouse facilities leased by the Company (see below), and (ii) TPA received 1,200 Equity Units in exchange for (a) $1,200 and contributing the TPA IP License referred to below, (b) its existing and future customer contracts, and (c) granting Box Harmony the use of shipping accounts (FedEx and UPS) and all other TPA carrier contracts, and (iii) Xiao received 2,400 Equity Units in exchange for $2,400 and his agreement to manage the day to day operations of Box Harmony. Under the terms of the Box Harmony limited liability operating agreement (the “LLC Agreement”), TPA and Xiao each granted to the Company an unconditional and irrevocable right and option to purchase from Xiao and TPA at any time within the first 18 months following January 13, 2022, up to 1,200 Class A voting units, at an exercise price of $550 per Class A voting unit, for a total exercise price of up to $660,000. If such option is fully exercised, the Company would own 3,600 Equity Units or 60% of the total outstanding Equity Units. As of the date of this report, the Company had not exercised the option to purchase additional voting units from Xiao and TPA. The LLC Agreement prohibits the issuance of additional Equity Units and certain other actions unless approved in advance by the Company, that a noncontrolling right that would not be substantive to overcome the majority voting interests held by TPA and Xiao. As a result, the Company owns <span id="xdx_905_eus-gaap--EquityMethodInvestmentOwnershipPercentage_iI_dp_c20220930__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--BoxHarmonyMember_zCHt52QFUBK2" title="Equity Method Investment, Ownership Percentage">40% of the equity interest in Box Harmony with significant influence but does not own a majority equity interest or otherwise control of Box Harmony. The Company accounts for its ownership interest in Box Harmony following the equity method of accounting, in accordance with ASC 323, Investments —Equity Method and Joint Ventures. Under this method, the carrying cost is initially recorded at cost and then increased or decreased by recording its percentage of gain or loss in its statement of operations and a corresponding charge or credit to the carrying value of the asset. Global Social Media, LLC On February 10, 2022, the Company entered into a joint venture agreement with Bro Angel, LLC, Ji Shin and Bing Luo (the “GSM Joint Venture Agreement”). Pursuant to the terms of the GSM Joint Venture Agreement, the parties formed a Nevada limited liability company, Global Social Media, LLC (“GSM”), for the principal purpose of providing a social media platform, contents and services to assist businesses, including the Company and other businesses, in marketing their products. Following entry into the GSM Joint Venture Agreement, GSM issued 10,000 certificated units of membership interest (the “GSM Equity Units”), of which the Company was issued 6,000 GSM Equity Units and Bro Angel was issued 4,000 GSM Equity Units. Messrs. Shin and Luo are the owners of 100% of the equity of Bro Angel. The LLC Agreement prohibits the issuance of additional Equity Units and certain other actions unless approved in advance by Bro Angel, creating a noncontrolling right that would not be substantive to overcome the majority voting interests held by the Company. As of the date of this report, the members had not completed the capital contributions and no receivables were recorded. Pursuant to the terms of the Agreements, the Company owns <span id="xdx_901_eus-gaap--EquityMethodInvestmentOwnershipPercentage_iI_dp_c20220930__srt--ScheduleOfEquityMethodInvestmentEquityMethodInvesteeNameAxis__custom--GPMMember_zTSgz6Prun9i" title="Equity Method Investment, Ownership Percentage">60% of the equity interest in GSM and control of the operations. Based on ASU 2015-02, the Company consolidate GSM due to its majority equity ownership and control over operations. For the three months ended September 30, 2022 and 2021, the impact of GSM’s activities were immaterial to the Company’s unaudited condensed consolidated financial statements.

0.40

0.60

Note 4 - Acquisition of Anivia Limited and Subsidiaries and Variable Interest Entity On February 15, 2022, the Company acquired 100% of the ordinary shares of Anivia Limited (“Anivia”), a corporation organized under the laws of the British Virgin Islands (“BVI”), in accordance with the terms of a share transfer framework agreement (the “Transfer Agreement”), dated February 15, 2022, by and between the Company, White Cherry Limited, a BVI company (“White Cherry”), White Cherry’s equity holders, Li Zanyu and Xie Jing (together with White Cherry, the “Sellers”), Anivia, Fly Elephant Limited, a Hong Kong company, Dayourenzai (Shenzhen) Technology Co., Ltd. and Daheshou (Shenzhen) Information Technology Co., Ltd. Anivia owns 100% of the equity of Fly Elephant Limited, which in turn owns 100% of the equity of Dayourenzai (Shenzhen) Technology Co., Ltd., a corporation located in the People’s Republic of China (“PRC”) and which is a wholly foreign-owned enterprise (“WFOE”) of Fly Elephant Limited. The WFOE controls, through contractual arrangements summarized below, the business, revenues and profits of Daheshou (Shenzhen) Information Technology Co., Ltd., a company organized under the Laws of the PRC (“DHS”) and located in Shenzhen, China. The contractual arrangements between the WFOE and DHS are established through a variable interest operating entity structure, which is reflected in (i) an exclusive business cooperation agreement, dated December 15, 2021, between the WFOE and DHS, (ii) an exclusive equity interest pledge agreement, dated December 15, 2021, between the WFOE and DHS in which the equity of DHS was pledged to the WFOE, (iii) an exclusive option agreement, dated December 15, 2021, between the WFOE, DHS and its equity holders, Li Zanyu and Xie Jing (the “Equity Holders), pursuant to which the Equity Holders give the WFOE the irrevocable and exclusive right to purchase the equity interests in DHS, and (iii) a power of attorney, dated December 15, 2021, pursuant to which Li Zanyu and Xie Jing, the holders of 100% of the equity interest of DHS, granted the WFOE all voting and other rights to their equity interest in DHS. According to the exclusive business cooperation agreement, in consideration for the services provided by the WFOE, DHS shall pay a service fee to the WFOE on annual basis (or at any time agreed by the Parties). The service fees for each year (or for any other period agreed to by the Parties) shall consist of a management fee and a fee for services provided, which shall be reasonably determined by the WFOE based on the nature, complexity, time, and other market and operation factors. The WFOE may provide a separate confirmation letter and/or invoice to DHS to indicate the amount of service fees due for each service period; or the amount of services fees may be as set forth in the relevant contracts separately executed by the Parties. DHS is principally engaged in selling a wide range of products and providing logistic services in the PRC. Pursuant to the terms of the Agreements, the Company does not have direct ownership in DHS but is actively involved in DHS’s operations as the sole manager to direct the activities and significantly impact DHS’s economic performance. As such, based on the determination that the Company is the primary beneficiary of DHS, in accordance with ASC 810-10-25-38A through 25-38J, DHS is considered a variable interest entity (“VIE”) of the Company and the financial statements of DHS have been consolidated from the date such control existed, February 15, 2022. Total fair value of the consideration for the transaction was $10,629,000, which was paid to White Cherry as follows: at closing, the Company (i) paid $3,500,000 in the form of a two-year unsecured 6% subordinated promissory note, payable in equal semi-annual installments commencing August 15, 2022 (the “Purchase Note”), (ii) issued <span id="xdx_907_eus-gaap--StockIssuedDuringPeriodSharesAcquisitions_c20220214__20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember__us-gaap--StatementClassOfStockAxis__us-gaap--RestrictedStockMember_zLMNntaq9UT4" title="Number of shares issued for acquisition">3,083,700 restricted shares of the Company’s common stock (subject to a lock-up period of 180 days and insider trading rules), and (iii) owed an additional $1,500,000 in cash, which was to be paid after closing. JP Morgan Chase Bank, the Company’s senior secured lender (“JPM”), consented to the transaction. In conjunction with obtaining JPM’s consent, the Company delivered an amendment to the pledge and security agreement with JPM, pursuant to which the Company pledged to JPM 65% of the equity interest of Anivia Limited, Fly Elephant Limited and the WFOE. On October 7, 2022, in conjunction with the Company’s entry into the Second Amendment to the Credit Agreement, the Company’s promissory note holder, White Cherry Limited, an exempted company incorporated under the laws of the British Virgin Islands (“White Cherry”), entered into an amendment (the “Amendment”) to the subordination agreement, originally dated March 9, 2022 (the “Subordination Agreement”). The Amendment to the Subordination Agreement was amended solely for purposes of adjusting the definition of payment conditions under Section 2 of the Subordination Agreement such that “payment conditions” shall be deemed satisfied in connection with a permitted payment if (a) no event of default has occurred under the credit agreement and is continuing and (b) the Company shall have Excess Availability in the 30 days prior to the payment (as defined in the Second Amendment to the Credit Agreement) of no less than $7,500,000. In addition, in conjunction with the closing of the transaction, the WFOE entered into an employment agreement with Li Zanyu, dated February 15, 2022 (the “Employment Agreement”), pursuant to which Mr. Li has been appointed to serve as general manager of the WFOE for a term of 10 years (through February 14, 2032), with annual base compensation of up to 500,000 RMB plus bonus as may be determined by the WFOE from time to time, in its sole discretion, based on Mr. Li’s performance. During such employment, Mr. Li may not engage in other employment without the consent of the WFOE. The acquisition of Anivia was accounted for as a business combination under ASC 805. As the acquirer for accounting purposes, the Company has estimated the fair value of Anivia and its subsidiaries’ assets acquired and conformed the accounting policies of Anivia to its own accounting policies. The Company applied the income approach and cost approach in determining the fair value of the intangible assets, which intangible assets consisted of a covenant not to compete, supplier relationships and software. The fair value of the remaining assets acquired and liabilities assumed were not significantly different from their carrying values at the acquisition date. In addition, pursuant to the Transfer Agreement, the Sellers made certain representations and warranties, including that other than the items presented on the balance sheet on February 15, 2022, DHS, the operating VIE, was not subject to any loans, debts, liabilities, guarantees or other contingent liabilities at the Closing date. In the event of any breach of any of the representations and warranties, the sellers shall bear joint and several liability for any direct or indirect losses suffered by the Company as a result thereof. The Company recognized approximately $6.1 million of goodwill in the transaction, which was primarily due to the subsumed assembled workforce intangible assets. Goodwill is not deductible for income tax purposes. The Company expensed with the acquisition certain legal and accounting costs of $54,702 as general and administration expenses and $50,000 paid to JPM as financing fees. The following information summarizes the purchase consideration and allocation of the fair values assigned to the assets at the purchase date, February 15, 2022: <table cellpadding="0" cellspacing="0" id="xdx_89C_eus-gaap--ScheduleOfBusinessAcquisitionsByAcquisitionTextBlock_zxFYyzptAKW4" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Acquisition of Anivia Limited and Subsidiaries and Variable Interest Entities (Details - Acquisition allocation)"> <tr style="vertical-align: bottom"> <td>Schedule of allocation of acquisition price</td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td style="font-weight: bold">Fair Value of Purchase Price:</td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; width: 84%">Cash</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_982_eus-gaap--PaymentsToAcquireBusinessesNetOfCashAcquired_c20220214__20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember_pp0p0" style="width: 13%; text-align: right" title="Cash">1,500,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">Promissory note issued</td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_ecustom--PromissoryNotesIssued1_c20220214__20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember_pp0p0" style="text-align: right" title="Promissory note issued">3,600,627</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt">Common stock issued</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_980_eus-gaap--BusinessCombinationConsiderationTransferredEquityInterestsIssuedAndIssuable_c20220214__20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember_pp0p0" style="border-bottom: Black 1pt solid; text-align: right" title="Common stock issued">5,528,373</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Total purchase consideration</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98C_eus-gaap--BusinessCombinationConsiderationTransferred1_c20220214__20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right" title="Total purchase consideration">10,629,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold">Purchase Price Allocation:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; text-align: left">Covenant not to compete</td><td> </td> <td style="text-align: left">$</td><td id="xdx_986_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedIntangibles_c20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--NoncompeteAgreementsMember_pp0p0" style="text-align: right" title="Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles">3,459,120</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">Supplier relationships</td><td> </td> <td style="text-align: left"> </td><td id="xdx_985_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedIntangibles_c20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--SupplierRelationshipMember_pp0p0" style="text-align: right" title="Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles">1,179,246</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt">Software</td><td> </td> <td style="text-align: left"> </td><td id="xdx_989_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedIntangibles_c20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--SoftwareMember_pp0p0" style="text-align: right" title="Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles">534,591</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">Current assets</td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentAssets_c20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember_pp0p0" style="text-align: right" title="Current assets">1,784,113</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; text-align: left">Property and equipment</td><td> </td> <td style="text-align: left"> </td><td id="xdx_984_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedPropertyPlantAndEquipment_c20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember_pp0p0" style="text-align: right" title="Property and equipment">46,548</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">Rent deposit</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98C_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedRentDeposit_c20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember_pp0p0" style="text-align: right" title="Rent deposit">52,707</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; text-align: left">ROU asset</td><td> </td> <td style="text-align: left"> </td><td id="xdx_989_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedOtherNoncurrentAssets_c20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember_pp0p0" style="text-align: right" title="ROU asset">234,578</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt">Goodwill</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--Goodwill_c20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember_pp0p0" style="text-align: right" title="Goodwill">6,094,144</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; text-align: left">Deferred tax liabilities</td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilities1_iNI_pp0p0_di_c20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember_za3JgQ0zclf" style="text-align: right" title="Deferred tax liabilities">(1,389,113</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">Current liabilities</td><td> </td> <td style="text-align: left"> </td><td id="xdx_986_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilities_iNI_pp0p0_di_c20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember_zWyay8Dh0mgi" style="text-align: right" title="Current liabilities">(1,143,076</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt">Lease liability</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98E_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedNoncurrentLiabilitiesOther_iNI_pp0p0_di_c20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember_zAoO8SVOylc3" style="border-bottom: Black 1pt solid; text-align: right" title="Lease liability">(223,858</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Total purchase consideration</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_981_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredGoodwillAndLiabilitiesAssumedNet_c20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right" title="Total purchase consideration">10,629,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> In October 2022, the $1.5 million cash portion of the consideration, which was presented as investment payable, had been fully paid off. The results of operations of Anivia since February 16, 2022 have been included in the Company's consolidated financial statements.

10629000

3500000

3083700

1500000

6100000

54702

50000

<table cellpadding="0" cellspacing="0" id="xdx_89C_eus-gaap--ScheduleOfBusinessAcquisitionsByAcquisitionTextBlock_zxFYyzptAKW4" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Acquisition of Anivia Limited and Subsidiaries and Variable Interest Entities (Details - Acquisition allocation)"> <tr style="vertical-align: bottom"> <td>Schedule of allocation of acquisition price</td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td style="font-weight: bold">Fair Value of Purchase Price:</td><td> </td> <td colspan="2"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; width: 84%">Cash</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_982_eus-gaap--PaymentsToAcquireBusinessesNetOfCashAcquired_c20220214__20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember_pp0p0" style="width: 13%; text-align: right" title="Cash">1,500,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">Promissory note issued</td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_ecustom--PromissoryNotesIssued1_c20220214__20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember_pp0p0" style="text-align: right" title="Promissory note issued">3,600,627</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt">Common stock issued</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_980_eus-gaap--BusinessCombinationConsiderationTransferredEquityInterestsIssuedAndIssuable_c20220214__20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember_pp0p0" style="border-bottom: Black 1pt solid; text-align: right" title="Common stock issued">5,528,373</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Total purchase consideration</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98C_eus-gaap--BusinessCombinationConsiderationTransferred1_c20220214__20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right" title="Total purchase consideration">10,629,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold">Purchase Price Allocation:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; text-align: left">Covenant not to compete</td><td> </td> <td style="text-align: left">$</td><td id="xdx_986_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedIntangibles_c20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--NoncompeteAgreementsMember_pp0p0" style="text-align: right" title="Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles">3,459,120</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">Supplier relationships</td><td> </td> <td style="text-align: left"> </td><td id="xdx_985_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedIntangibles_c20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--SupplierRelationshipMember_pp0p0" style="text-align: right" title="Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles">1,179,246</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt">Software</td><td> </td> <td style="text-align: left"> </td><td id="xdx_989_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedIntangibles_c20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--SoftwareMember_pp0p0" style="text-align: right" title="Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles">534,591</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">Current assets</td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentAssets_c20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember_pp0p0" style="text-align: right" title="Current assets">1,784,113</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; text-align: left">Property and equipment</td><td> </td> <td style="text-align: left"> </td><td id="xdx_984_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedPropertyPlantAndEquipment_c20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember_pp0p0" style="text-align: right" title="Property and equipment">46,548</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">Rent deposit</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98C_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedRentDeposit_c20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember_pp0p0" style="text-align: right" title="Rent deposit">52,707</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; text-align: left">ROU asset</td><td> </td> <td style="text-align: left"> </td><td id="xdx_989_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedOtherNoncurrentAssets_c20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember_pp0p0" style="text-align: right" title="ROU asset">234,578</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt">Goodwill</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--Goodwill_c20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember_pp0p0" style="text-align: right" title="Goodwill">6,094,144</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; text-align: left">Deferred tax liabilities</td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_ecustom--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilities1_iNI_pp0p0_di_c20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember_za3JgQ0zclf" style="text-align: right" title="Deferred tax liabilities">(1,389,113</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">Current liabilities</td><td> </td> <td style="text-align: left"> </td><td id="xdx_986_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedCurrentLiabilities_iNI_pp0p0_di_c20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember_zWyay8Dh0mgi" style="text-align: right" title="Current liabilities">(1,143,076</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt">Lease liability</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98E_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredAndLiabilitiesAssumedNoncurrentLiabilitiesOther_iNI_pp0p0_di_c20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember_zAoO8SVOylc3" style="border-bottom: Black 1pt solid; text-align: right" title="Lease liability">(223,858</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Total purchase consideration</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_981_eus-gaap--BusinessCombinationRecognizedIdentifiableAssetsAcquiredGoodwillAndLiabilitiesAssumedNet_c20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right" title="Total purchase consideration">10,629,000</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

1500000

3600627

5528373

10629000

3459120

1179246

534591

1784113

46548

52707

234578

6094144

1389113

1143076

223858

10629000

Note 5 – Variable interest entity Effective February 15, 2022, upon acquisition of Anivia, the Company assumed the contractual arrangements between the WFOE and DHS through a variable interest operating entity structure. See Note 4 for details. The Company did not provide financial or other support to the VIE for the periods presented where the Company was not otherwise contractually required to provide such support. As of September 30, 2022 and 2021, there was no pledge or collateralization of the VIE assets that would be used to settle obligations of the VIE. The carrying amounts of the assets, liabilities and the results of operations of the VIE included in the Company’s consolidated balance sheets and statements of operations and comprehensive income after the elimination of intercompany balances and transactions with the VIE are as follows: The carrying amount of the VIE’s assets and liabilities were as follows for the periods indicated: <table cellpadding="0" cellspacing="0" id="xdx_89B_eus-gaap--ScheduleOfVariableInterestEntitiesTextBlock_zX3V8vyZe5Rd" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Variable interest entity (Details - Assets and Liabilities)"> <tr style="vertical-align: bottom"> <td>Carrying amount of VIE assets and liabilities</td><td> </td> <td colspan="2" id="xdx_499_20220930_srt--ConsolidatedEntitiesAxis_us-gaap--VariableInterestEntityPrimaryBeneficiaryMember" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" id="xdx_494_20210930__srt--ConsolidatedEntitiesAxis__us-gaap--VariableInterestEntityPrimaryBeneficiaryMember_zl7gLzUZR0Jj" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">September 30, 2022</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">September 30, 2021</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr id="xdx_401_eus-gaap--Cash_iI_pp0p0_d0_zHtz9BrEYj8j" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 68%; text-align: left">Cash in bank</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">219,520</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">–</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--PrepaidExpenseAndOtherAssets_iI_pp0p0_d0_zMmKrHahFv0k" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Prepayments and other receivables</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">569,244</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--DepositsAssetsCurrent_iI_pp0p0_d0_zAchiblBTfal" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Rent deposit</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">47,930</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_401_ecustom--OfficeEquipmentNet_iI_pp0p0_d0_zw6b5TrLJDn4" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Office equipment, net</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">50,551</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--OperatingLeaseRightOfUseAsset_iI_pp0p0_d0_zHhv6Dfr3skf" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Right of use - noncurrent</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">108,844</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--DeferredTaxAssetsGross_iI_pp0p0_d0_zBmFy3a2UB7f" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Deferred tax asset</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">178,116</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_401_ecustom--AdvanceFromShareholders_iI_pp0p0_d0_z4Ejnc0RiLG5" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Advance from shareholders</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">86,847</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--AccountsPayableCurrent_iI_pp0p0_d0_zCYodrpEYxba" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Accounts payable</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">153,756</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--OperatingLeaseLiability_iI_pp0p0_d0_zYXZhwchJpG3" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Lease liability</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">103,121</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--TaxesPayableCurrent_iI_pp0p0_d0_z0KJHPCOW8e" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Income tax payable</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">282,029</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--AccountsPayableAndOtherAccruedLiabilities_iI_pp0p0_d0_zDORBVhILNwf" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Other payables and accrued liabilities</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">192,604</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> </table> The operating results of the VIE were as follows for the three months ended September 30, 2022: <table cellpadding="0" cellspacing="0" id="xdx_890_ecustom--ScheduleOfOperatingResultsOfTheVieTableTextBlock_zcXbV8MLVfDj" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Variable interest entity (Details - VIE Operations)"> <tr style="vertical-align: bottom"> <td>Operating results of the VIE</td><td> </td> <td colspan="2" id="xdx_493_20220701__20220930__srt--ConsolidatedEntitiesAxis__us-gaap--VariableInterestEntityPrimaryBeneficiaryMember_zHsclqjaNxA4" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">September 30, 2022</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr id="xdx_405_eus-gaap--Revenues_d0_z0fBJClu1f88" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 84%">Revenue</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">–</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--NetIncomeLoss_iN_pp0p0" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Net loss after elimination of intercompany transactions</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">733,617</td><td style="text-align: left"> </td></tr> </table> For the three months ended September 30, 2022, the VIE contributed approximately $<span id="xdx_908_ecustom--RevenueBeforeConsolidation_pn3n3_dm_c20220701__20220930__srt--ConsolidatedEntitiesAxis__us-gaap--VariableInterestEntityPrimaryBeneficiaryMember_zLd28W6isAM8" title="Revenue before consolidation">3.2 million of revenue and $<span id="xdx_906_ecustom--NetIncomeLossBeforeConsolidation_pn3n3_dm_c20220701__20220930__srt--ConsolidatedEntitiesAxis__us-gaap--VariableInterestEntityPrimaryBeneficiaryMember_zUiSZZvLgfhj" title="Net income">0.6 million of net loss before elimination.

<table cellpadding="0" cellspacing="0" id="xdx_89B_eus-gaap--ScheduleOfVariableInterestEntitiesTextBlock_zX3V8vyZe5Rd" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Variable interest entity (Details - Assets and Liabilities)"> <tr style="vertical-align: bottom"> <td>Carrying amount of VIE assets and liabilities</td><td> </td> <td colspan="2" id="xdx_499_20220930_srt--ConsolidatedEntitiesAxis_us-gaap--VariableInterestEntityPrimaryBeneficiaryMember" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" id="xdx_494_20210930__srt--ConsolidatedEntitiesAxis__us-gaap--VariableInterestEntityPrimaryBeneficiaryMember_zl7gLzUZR0Jj" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">September 30, 2022</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">September 30, 2021</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr id="xdx_401_eus-gaap--Cash_iI_pp0p0_d0_zHtz9BrEYj8j" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 68%; text-align: left">Cash in bank</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">219,520</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">–</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--PrepaidExpenseAndOtherAssets_iI_pp0p0_d0_zMmKrHahFv0k" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Prepayments and other receivables</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">569,244</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--DepositsAssetsCurrent_iI_pp0p0_d0_zAchiblBTfal" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Rent deposit</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">47,930</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_401_ecustom--OfficeEquipmentNet_iI_pp0p0_d0_zw6b5TrLJDn4" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Office equipment, net</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">50,551</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--OperatingLeaseRightOfUseAsset_iI_pp0p0_d0_zHhv6Dfr3skf" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Right of use - noncurrent</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">108,844</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--DeferredTaxAssetsGross_iI_pp0p0_d0_zBmFy3a2UB7f" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Deferred tax asset</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">178,116</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_401_ecustom--AdvanceFromShareholders_iI_pp0p0_d0_z4Ejnc0RiLG5" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Advance from shareholders</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">86,847</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--AccountsPayableCurrent_iI_pp0p0_d0_zCYodrpEYxba" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Accounts payable</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">153,756</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--OperatingLeaseLiability_iI_pp0p0_d0_zYXZhwchJpG3" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Lease liability</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">103,121</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--TaxesPayableCurrent_iI_pp0p0_d0_z0KJHPCOW8e" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Income tax payable</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">282,029</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--AccountsPayableAndOtherAccruedLiabilities_iI_pp0p0_d0_zDORBVhILNwf" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Other payables and accrued liabilities</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">192,604</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> </table>

219520

569244

47930

50551 0

108844

178116

86847 0

153756

103121

282029

192604

<table cellpadding="0" cellspacing="0" id="xdx_890_ecustom--ScheduleOfOperatingResultsOfTheVieTableTextBlock_zcXbV8MLVfDj" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Variable interest entity (Details - VIE Operations)"> <tr style="vertical-align: bottom"> <td>Operating results of the VIE</td><td> </td> <td colspan="2" id="xdx_493_20220701__20220930__srt--ConsolidatedEntitiesAxis__us-gaap--VariableInterestEntityPrimaryBeneficiaryMember_zHsclqjaNxA4" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">September 30, 2022</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr id="xdx_405_eus-gaap--Revenues_d0_z0fBJClu1f88" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 84%">Revenue</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">–</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--NetIncomeLoss_iN_pp0p0" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Net loss after elimination of intercompany transactions</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">733,617</td><td style="text-align: left"> </td></tr> </table>

733617

3200000 600000

Note 6 – Accounts receivable, net Accounts receivable for the Company consisted of the following as of the dates indicated below: <table cellpadding="0" cellspacing="0" id="xdx_88F_eus-gaap--ScheduleOfAccountsNotesLoansAndFinancingReceivableTextBlock_zZuhZEtuejRb" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Accounts receivable (Details)"> <tr style="vertical-align: bottom"> <td>Schedule of accounts receivable</td><td> </td> <td colspan="2" id="xdx_490_20220930_zHDFvXKTZoia" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" id="xdx_498_20220630_zW6NV6SOptSk" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">September 30, 2022</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2022</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_40C_eus-gaap--AccountsReceivableGrossCurrent_iI_pp0p0_maARNCzfvB_zM4A15Kz4bl3" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 68%; text-align: left">Accounts receivable</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">19,059,969</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">17,502,287</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--AllowanceForDoubtfulAccountsReceivableCurrent_iNI_pp0p0_di_msARNCzfvB_zmQwrOcPQ2kl" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Less: allowance for credit losses</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(70,000</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(70,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_407_eus-gaap--AccountsReceivableNetCurrent_iTI_pp0p0_mtARNCzfvB_z40gXvJqVg7d" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 2.5pt">Total accounts receivable</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">18,989,969</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">17,432,287</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

<table cellpadding="0" cellspacing="0" id="xdx_88F_eus-gaap--ScheduleOfAccountsNotesLoansAndFinancingReceivableTextBlock_zZuhZEtuejRb" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Accounts receivable (Details)"> <tr style="vertical-align: bottom"> <td>Schedule of accounts receivable</td><td> </td> <td colspan="2" id="xdx_490_20220930_zHDFvXKTZoia" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" id="xdx_498_20220630_zW6NV6SOptSk" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">September 30, 2022</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2022</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_40C_eus-gaap--AccountsReceivableGrossCurrent_iI_pp0p0_maARNCzfvB_zM4A15Kz4bl3" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 68%; text-align: left">Accounts receivable</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">19,059,969</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">17,502,287</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--AllowanceForDoubtfulAccountsReceivableCurrent_iNI_pp0p0_di_msARNCzfvB_zmQwrOcPQ2kl" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Less: allowance for credit losses</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(70,000</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(70,000</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_407_eus-gaap--AccountsReceivableNetCurrent_iTI_pp0p0_mtARNCzfvB_z40gXvJqVg7d" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 2.5pt">Total accounts receivable</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">18,989,969</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">17,432,287</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

19059969

17502287

70000

18989969

17432287

Note 7 – Inventories, net As of September 30, 2022 and June 30, 2022, inventories consisted of finished goods ready for sale, net of allowance for obsolescence, amounted to $30,313,684 and $30,433,766, respectively. As of September 30, 2022 and June 30, 2022, allowance for obsolescence was $394,998 and $320,000, respectively.

30313684

30433766

394998

320000

Note 8 – Prepayments and other current assets As of September 30, 2022 and June 30, 2022, prepayments and other current assets consisted of the following: <table cellpadding="0" cellspacing="0" id="xdx_885_eus-gaap--DeferredCostsCapitalizedPrepaidAndOtherAssetsDisclosureTextBlock_zQXqFfjo3fzd" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Prepayments and other current assets (Details)"> <tr style="vertical-align: bottom"> <td>Schedule of prepayments and other current assets</td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">September 30, 2022</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2022</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 68%; text-align: left">Advance to suppliers</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_986_eus-gaap--PrepaidExpenseAndOtherAssetsCurrent_c20220930__us-gaap--BalanceSheetLocationAxis__custom--AdvanceToSuppliersMember_pp0p0" style="width: 13%; text-align: right" title="Prepaid Expense and Other Assets, Current">1,922,361</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_985_eus-gaap--PrepaidExpenseAndOtherAssetsCurrent_c20220630__us-gaap--BalanceSheetLocationAxis__custom--AdvanceToSuppliersMember_pp0p0" style="width: 13%; text-align: right" title="Prepaid Expense and Other Assets, Current">3,938,881</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Prepaid income taxes</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98F_eus-gaap--PrepaidExpenseAndOtherAssetsCurrent_c20220930__us-gaap--BalanceSheetLocationAxis__custom--PrepaidIncomeTaxesMember_pp0p0" style="text-align: right" title="Prepaid Expense and Other Assets, Current">214,818</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--PrepaidExpenseAndOtherAssetsCurrent_c20220630__us-gaap--BalanceSheetLocationAxis__custom--PrepaidIncomeTaxesMember_pp0p0" style="text-align: right" title="Prepaid Expense and Other Assets, Current">375,087</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 1pt">Prepaid expenses and other receivables</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98C_eus-gaap--PrepaidExpenseAndOtherAssetsCurrent_c20220930__us-gaap--BalanceSheetLocationAxis__custom--PrepaidAndOtherMember_pp0p0" style="border-bottom: Black 1pt solid; text-align: right" title="Prepaid Expense and Other Assets, Current">1,026,584</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_982_eus-gaap--PrepaidExpenseAndOtherAssetsCurrent_c20220630__us-gaap--BalanceSheetLocationAxis__custom--PrepaidAndOtherMember_pp0p0" style="border-bottom: Black 1pt solid; text-align: right" title="Prepaid Expense and Other Assets, Current">1,130,495</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98D_eus-gaap--PrepaidExpenseAndOtherAssetsCurrent_c20220930_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right" title="Prepaid Expense and Other Assets, Current">3,163,763</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_982_eus-gaap--PrepaidExpenseAndOtherAssetsCurrent_c20220630_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right" title="Prepaid Expense and Other Assets, Current">5,444,463</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> Other receivables consisted of delivery fees of $55,499 and $56,884 and receivables from one and two unrelated parties for their use of the Company’s courier accounts at September 30, 2022 and June 30, 2022. As of the date of this report, the amount had been fully collected.

<table cellpadding="0" cellspacing="0" id="xdx_885_eus-gaap--DeferredCostsCapitalizedPrepaidAndOtherAssetsDisclosureTextBlock_zQXqFfjo3fzd" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Prepayments and other current assets (Details)"> <tr style="vertical-align: bottom"> <td>Schedule of prepayments and other current assets</td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">September 30, 2022</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2022</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 68%; text-align: left">Advance to suppliers</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_986_eus-gaap--PrepaidExpenseAndOtherAssetsCurrent_c20220930__us-gaap--BalanceSheetLocationAxis__custom--AdvanceToSuppliersMember_pp0p0" style="width: 13%; text-align: right" title="Prepaid Expense and Other Assets, Current">1,922,361</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_985_eus-gaap--PrepaidExpenseAndOtherAssetsCurrent_c20220630__us-gaap--BalanceSheetLocationAxis__custom--AdvanceToSuppliersMember_pp0p0" style="width: 13%; text-align: right" title="Prepaid Expense and Other Assets, Current">3,938,881</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Prepaid income taxes</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98F_eus-gaap--PrepaidExpenseAndOtherAssetsCurrent_c20220930__us-gaap--BalanceSheetLocationAxis__custom--PrepaidIncomeTaxesMember_pp0p0" style="text-align: right" title="Prepaid Expense and Other Assets, Current">214,818</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--PrepaidExpenseAndOtherAssetsCurrent_c20220630__us-gaap--BalanceSheetLocationAxis__custom--PrepaidIncomeTaxesMember_pp0p0" style="text-align: right" title="Prepaid Expense and Other Assets, Current">375,087</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 1pt">Prepaid expenses and other receivables</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98C_eus-gaap--PrepaidExpenseAndOtherAssetsCurrent_c20220930__us-gaap--BalanceSheetLocationAxis__custom--PrepaidAndOtherMember_pp0p0" style="border-bottom: Black 1pt solid; text-align: right" title="Prepaid Expense and Other Assets, Current">1,026,584</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_982_eus-gaap--PrepaidExpenseAndOtherAssetsCurrent_c20220630__us-gaap--BalanceSheetLocationAxis__custom--PrepaidAndOtherMember_pp0p0" style="border-bottom: Black 1pt solid; text-align: right" title="Prepaid Expense and Other Assets, Current">1,130,495</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_98D_eus-gaap--PrepaidExpenseAndOtherAssetsCurrent_c20220930_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right" title="Prepaid Expense and Other Assets, Current">3,163,763</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_982_eus-gaap--PrepaidExpenseAndOtherAssetsCurrent_c20220630_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right" title="Prepaid Expense and Other Assets, Current">5,444,463</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

1922361

3938881

214818

375087

1026584

1130495

3163763

5444463

55499 56884 Note 9 – Non-current prepayments Non-current prepayments included $752,082 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 $65,625 down payment on a four-year car lease. As of September 30, 2022 and June 30, 2022, total non-current prepayments were $817,707 and $925,624, respectively. For the three months ended September 30, 2022 and 2021, the Company recorded amortization expenses of $107,917 and $107,917, respectively. 752082 65625 817707 925624

107917

Note 10 – Intangible assets, net As of September 30, 2022, intangible assets, net, consisted of the following: <table cellpadding="0" cellspacing="0" id="xdx_891_eus-gaap--ScheduleOfFiniteLivedIntangibleAssetsTableTextBlock_zA5iZ9fEwB19" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Intangible assets, net (Details)"> <tr style="vertical-align: bottom"> <td>Schedule of intangible assets</td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">September 30, 2022</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 84%; text-align: left">Covenant Not to Compete</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_983_eus-gaap--FiniteLivedIntangibleAssetsGross_iI_pp0p0_c20220930__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--NoncompeteAgreementsMember_z8cIYZimpoGg" style="width: 13%; text-align: right" title="Finite-Lived Intangible Assets, Net">3,459,120</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Supplier relationships</td><td> </td> <td style="text-align: left"> </td><td id="xdx_982_eus-gaap--FiniteLivedIntangibleAssetsGross_iI_pp0p0_c20220930__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--SupplierRelationshipMember_zHHHBv8J1Qtj" style="text-align: right" title="Finite-Lived Intangible Assets, Net">1,179,246</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td>Software</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--FiniteLivedIntangibleAssetsGross_c20220930__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--SoftwareMember_pp0p0" style="text-align: right" title="Finite-Lived Intangible Assets, Net">534,591</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Accumulated amortization</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98D_eus-gaap--FiniteLivedIntangibleAssetsAccumulatedAmortization_iNI_pp0p0_di_c20220930_zTjIDyzmmUmh" style="border-bottom: Black 1pt solid; text-align: right" title="Finite-Lived Intangible Assets, Accumulated Amortization">(405,858</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_980_eus-gaap--IntangibleAssetsNetExcludingGoodwill_c20220930_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right" title="Intangible Assets, Net (Excluding Goodwill)">4,767,099</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> The intangible assets were acquired on February 15, 2022 through the acquisition of Anivia. The weighted average remaining life for finite-lived intangible assets at September 30, 2022 was approximately 8.07 years, and the amortization expense for the three months ended September 30, 2022 was $162,343. At September 30, 2022, finite-lived intangible assets are expected to be amortized over their estimated useful lives, which ranges from a period of five to 10 years, and the estimated remaining amortization expense for each of the five succeeding years thereafter is as follows: <table cellpadding="0" cellspacing="0" id="xdx_891_eus-gaap--ScheduleofFiniteLivedIntangibleAssetsFutureAmortizationExpenseTableTextBlock_z24Szqjc46bh" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Intangible assets, net (Details - Future Amortization)"> <tr style="vertical-align: bottom"> <td>Schedule of future amortization</td><td> </td> <td colspan="2" id="xdx_498_20220930_zn3QHrO2NVoh" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; font-weight: bold">Year Ending June 30,</td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Amount</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr id="xdx_406_eus-gaap--FiniteLivedIntangibleAssetsAmortizationExpenseNextTwelveMonths_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 84%; text-align: left">2023</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">487,028</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--FiniteLivedIntangibleAssetsAmortizationExpenseYearTwo_iI_pp0p0" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">2024</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">649,371</td><td style="text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--FiniteLivedIntangibleAssetsAmortizationExpenseYearThree_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">2025</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">649,371</td><td style="text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--FiniteLivedIntangibleAssetsAmortizationExpenseYearFour_iI_pp0p0" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">2026</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">649,371</td><td style="text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--FiniteLivedIntangibleAssetsAmortizationExpenseYearFive_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">2027</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">649,371</td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--FiniteLivedIntangibleAssetsAmortizationExpenseAfterYearFive_iI_pp0p0" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt">Thereafter</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1,682,587</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--FiniteLivedIntangibleAssetsNet_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="color: rgb(238,238,238); padding-bottom: 2.5pt">Intangible assets, net </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">4,767,099</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

<table cellpadding="0" cellspacing="0" id="xdx_891_eus-gaap--ScheduleOfFiniteLivedIntangibleAssetsTableTextBlock_zA5iZ9fEwB19" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Intangible assets, net (Details)"> <tr style="vertical-align: bottom"> <td>Schedule of intangible assets</td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">September 30, 2022</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 84%; text-align: left">Covenant Not to Compete</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td id="xdx_983_eus-gaap--FiniteLivedIntangibleAssetsGross_iI_pp0p0_c20220930__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__us-gaap--NoncompeteAgreementsMember_z8cIYZimpoGg" style="width: 13%; text-align: right" title="Finite-Lived Intangible Assets, Net">3,459,120</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Supplier relationships</td><td> </td> <td style="text-align: left"> </td><td id="xdx_982_eus-gaap--FiniteLivedIntangibleAssetsGross_iI_pp0p0_c20220930__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--SupplierRelationshipMember_zHHHBv8J1Qtj" style="text-align: right" title="Finite-Lived Intangible Assets, Net">1,179,246</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td>Software</td><td> </td> <td style="text-align: left"> </td><td id="xdx_98A_eus-gaap--FiniteLivedIntangibleAssetsGross_c20220930__us-gaap--FiniteLivedIntangibleAssetsByMajorClassAxis__custom--SoftwareMember_pp0p0" style="text-align: right" title="Finite-Lived Intangible Assets, Net">534,591</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Accumulated amortization</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_98D_eus-gaap--FiniteLivedIntangibleAssetsAccumulatedAmortization_iNI_pp0p0_di_c20220930_zTjIDyzmmUmh" style="border-bottom: Black 1pt solid; text-align: right" title="Finite-Lived Intangible Assets, Accumulated Amortization">(405,858</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td id="xdx_980_eus-gaap--IntangibleAssetsNetExcludingGoodwill_c20220930_pp0p0" style="border-bottom: Black 2.5pt double; text-align: right" title="Intangible Assets, Net (Excluding Goodwill)">4,767,099</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

3459120

1179246

534591

405858

4767099

P8Y25D

162343

<table cellpadding="0" cellspacing="0" id="xdx_891_eus-gaap--ScheduleofFiniteLivedIntangibleAssetsFutureAmortizationExpenseTableTextBlock_z24Szqjc46bh" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Intangible assets, net (Details - Future Amortization)"> <tr style="vertical-align: bottom"> <td>Schedule of future amortization</td><td> </td> <td colspan="2" id="xdx_498_20220930_zn3QHrO2NVoh" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; font-weight: bold">Year Ending June 30,</td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Amount</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr id="xdx_406_eus-gaap--FiniteLivedIntangibleAssetsAmortizationExpenseNextTwelveMonths_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 84%; text-align: left">2023</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">487,028</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--FiniteLivedIntangibleAssetsAmortizationExpenseYearTwo_iI_pp0p0" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">2024</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">649,371</td><td style="text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--FiniteLivedIntangibleAssetsAmortizationExpenseYearThree_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">2025</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">649,371</td><td style="text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--FiniteLivedIntangibleAssetsAmortizationExpenseYearFour_iI_pp0p0" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">2026</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">649,371</td><td style="text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--FiniteLivedIntangibleAssetsAmortizationExpenseYearFive_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">2027</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">649,371</td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--FiniteLivedIntangibleAssetsAmortizationExpenseAfterYearFive_iI_pp0p0" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 1pt">Thereafter</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1,682,587</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--FiniteLivedIntangibleAssetsNet_iI_pp0p0" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="color: rgb(238,238,238); padding-bottom: 2.5pt">Intangible assets, net </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">4,767,099</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

487028

649371

1682587

4767099

Note 11 – Other payables and accrued liabilities As of September 30, 2022 and June 30, 2022, other payables and accrued liabilities consisted of the following: <table cellpadding="0" cellspacing="0" id="xdx_885_eus-gaap--ScheduleOfAccountsPayableAndAccruedLiabilitiesTableTextBlock_zJwk7GO8Oxo8" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Other payables and accrued liabilities (Details)"> <tr style="vertical-align: bottom"> <td> Schedule of accounts payable and accrued liabilities</td><td> </td> <td colspan="2" id="xdx_49F_20220930_zd9c8ETiqpPb" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" id="xdx_499_20220630_zRnCW9K33DG3" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">September 30, 2022</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2022</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_407_ecustom--AccruedPayablesForInventoryInTransit_iI_zWgs0ibpvTS" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 68%; text-align: left">Accrued payables for inventory in transit</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">554,991</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">4,217,941</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40E_ecustom--AccruedAmazonFees_iI_z2rh6LeO36Sh" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Accrued Amazon fees</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">512,500</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">640,467</td><td style="text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--SalesAndExciseTaxPayableCurrent_iI_zvtk37OUinXj" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Sales taxes payable</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">535,468</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">307,152</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--AccruedPayrollTaxesCurrent_iI_zIFEQ0fN2Dff" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Payroll liabilities</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">204,871</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">239,248</td><td style="text-align: left"> </td></tr> <tr id="xdx_404_ecustom--OtherAccruedLiabilitiesAndPayables_iI_z6T89olIfyDf" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 1pt">Other accrued liabilities and payables</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">282,765</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">510,412</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--AccountsPayableAndOtherAccruedLiabilitiesCurrent_iI_zIPXt18FTYvk" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">2,090,595</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">5,915,220</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> The Company’s controlled VIE, DHS, facilitates the Company in the process of inventory procurement. Through this process, the Company purchased a total of $31,385 in inventories from a supplier which had a payment term of 90 days with a 2% premium on the purchase price. This supplier purchased the inventory from DHS with payments made upon delivery. As of September 30, 2022, the Company included an outstanding amount of $<span id="xdx_90F_eus-gaap--AccountsPayableCurrent_iI_pp0p0_c20220930__us-gaap--ShareBasedGoodsAndNonemployeeServicesTransactionBySupplierAxis__custom--OneVendorMember_zgVhhqhQ1AWi" title="Accounts Payable, Current">31,385 in other payables and presented as financing cash inflow in proceeds from short term loans on the statement of cash flows. As of the date of this report, the amount had been paid off.

<table cellpadding="0" cellspacing="0" id="xdx_885_eus-gaap--ScheduleOfAccountsPayableAndAccruedLiabilitiesTableTextBlock_zJwk7GO8Oxo8" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Other payables and accrued liabilities (Details)"> <tr style="vertical-align: bottom"> <td> Schedule of accounts payable and accrued liabilities</td><td> </td> <td colspan="2" id="xdx_49F_20220930_zd9c8ETiqpPb" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" id="xdx_499_20220630_zRnCW9K33DG3" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">September 30, 2022</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2022</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_407_ecustom--AccruedPayablesForInventoryInTransit_iI_zWgs0ibpvTS" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 68%; text-align: left">Accrued payables for inventory in transit</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">554,991</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">4,217,941</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_40E_ecustom--AccruedAmazonFees_iI_z2rh6LeO36Sh" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Accrued Amazon fees</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">512,500</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">640,467</td><td style="text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--SalesAndExciseTaxPayableCurrent_iI_zvtk37OUinXj" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Sales taxes payable</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">535,468</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">307,152</td><td style="text-align: left"> </td></tr> <tr id="xdx_40E_eus-gaap--AccruedPayrollTaxesCurrent_iI_zIFEQ0fN2Dff" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Payroll liabilities</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">204,871</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">239,248</td><td style="text-align: left"> </td></tr> <tr id="xdx_404_ecustom--OtherAccruedLiabilitiesAndPayables_iI_z6T89olIfyDf" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 1pt">Other accrued liabilities and payables</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">282,765</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">510,412</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40B_eus-gaap--AccountsPayableAndOtherAccruedLiabilitiesCurrent_iI_zIPXt18FTYvk" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 2.5pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">2,090,595</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">5,915,220</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

554991 4217941 512500 640467

535468

307152

204871

239248

282765 510412

2090595

5915220

31385

Note 12 – 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 bore a discount rate of 3.055555%, subject to a rebate of 0.0277% per day. This revolving credit facility was 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 terms of the agreement, all purchases of accounts receivable were without recourse to the Company, and WFC assumed 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 was obligated to collect the accounts receivables and to repurchase or pay back the amount drawn down if the accounts receivable were 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 September 30, 2022 and June 30, 2022, the outstanding balance due under the RPA was $0 and $0, 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. During the quarter ended June 30, 2022, the Company paid off the SBA Note, including accrued interest expense of $39,237. As of September 30, 2022 and June 30, 2022, the outstanding balance of the SBA Note was $0 and $0, respectively. Asset-based revolving loan On November 12, 2021, the Company entered into 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: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 10%"> </td> <td style="width: 1%">· </td> <td style="width: 89%">Borrowing base equal to the sum of</td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 12%"> </td> <td style="width: 1%">Ø</td> <td style="width: 87%">Up to 90% of eligible credit card receivables</td></tr> <tr style="vertical-align: top"> <td> </td> <td>Ø</td> <td>Up to 85% of eligible trade accounts receivable</td></tr> <tr style="vertical-align: top"> <td> </td> <td>Ø</td> <td>Up to the lesser of (i) 65% of cost of eligible inventory or (ii) 85% of net orderly liquidation value of eligible inventory</td></tr> </table> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 10%"> </td> <td style="width: 1%">· </td> <td style="width: 89%">Interest rates of between LIBOR plus 2% and LIBOR plus 2.25% depending on utilization</td></tr> <tr style="vertical-align: top"> <td> </td> <td>· </td> <td>Undrawn fee of between 0.25% and 0.375% depending on utilization</td></tr> <tr style="vertical-align: top"> <td> </td> <td>· </td> <td>Maturity Date of November 12, 2024</td></tr> </table> In addition, the ABL includes an accordion feature that allows the Company to borrow up to an additional $25.0 million. To secure complete payment and performance of the secured obligations, the Company granted a security interest in all of its right, title and interest in, to and under all of the Company’s assets as collateral to the ABL. Upon closing of the ABL, the Company paid $796,035 in financing fees including 2% of $25.0 million or $500,000 paid to its financial advisor. The financing fees are recorded as debt discount and to be amortized over three years as financing expenses, the term of the ABL. For the three months ended September 30, 2022, the Company recorded the following as interest expense: $<span id="xdx_909_eus-gaap--InterestExpense_pp0p0_c20220701__20220930__us-gaap--CreditFacilityAxis__custom--AssetBasedRevolvingLoanMember__us-gaap--IncomeStatementLocationAxis__custom--AmortizationOfDebtDiscountMember_zpe4Oc83Fpw3">66,305 of amortization of debt discount and $<span id="xdx_905_eus-gaap--InterestExpense_pp0p0_c20220701__20220930__us-gaap--CreditFacilityAxis__custom--AssetBasedRevolvingLoanMember__us-gaap--IncomeStatementLocationAxis__custom--InterestAndCreditUtilizationFeesMember_zuNRxk0Szpsk">163,017 of interest expense and credit utilization fees. Below is a summary of the interest expense recorded for the three months ended September 30, 2022 and 2021: <table cellpadding="0" cellspacing="0" id="xdx_88C_eus-gaap--InterestIncomeAndInterestExpenseDisclosureTableTextBlock_znAkWLSZimFb" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Loans Payable (Details - Interest expense)"> <tr style="vertical-align: bottom"> <td>Schedule of interest on loans payable</td><td> </td> <td colspan="2" id="xdx_499_20220701__20220930_z9BksCKsl6Zk" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" id="xdx_495_20210701__20210930_zVOxyr98pvhg" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">2022</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">2021</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_401_ecustom--AccruedInterestExpense_d0_zDYvbXTxPC9c" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 68%; text-align: left">Accrued interest</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">156,255</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">–</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_400_ecustom--CreditUtilizationFees_d0_z9uOtd9xazgb" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Credit utilization fees</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">6,762</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_40C_ecustom--AmortizationOfDebtDiscount_d0_zvAHXUFdRVkl" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 1pt">Amortization of debt discount</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">66,305</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--InterestExpense_d0_zS5dbZwYsEaa" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt; padding-left: 10pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">229,322</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> As of September 30, 2022, the outstanding amount of the long-term revolving loan payable, net of debt discount, was $15,192,660, including interest payable of $338,798. As of June 30, 2022, the outstanding amount of the long-term revolving loan payable, net of debt discount, was $12,314,627, including interest payable of $182,543. On October 7, 2022, the Company entered into a second amendment to the credit agreement and consent (the “Second Amendment to the Credit Agreement”), originally dated November 12, 2021, as amended, with JPMorgan Chase Bank, N.A., as administrative agent and lender (“JPMorgan”). The Company entered in the Second Amendment to the Credit Agreement primarily for the purpose of changing the interest rate repayment calculations from LIBOR to the Secured Overnight Financing Rate, or SOFR, which adjustment had originally been anticipated under the terms of the original Credit Agreement. In addition, two of the negative covenants set forth in the original credit agreement were amended in order to (i) adjust the definition of “Covenant Testing Trigger Period” to increase the required cash availability from $3,000,000 to $4,000,000, or 10% of the aggregate revolving commitment for the preceding 30 days, and (ii) require that the Company will not and will not permit any of its subsidiaries, after reasonable due diligence and due inquiry, to knowingly sell their products, inventory or services directly to any commercial businesses that grow or cultivate cannabis; it being acknowledged, however, that the Company does not generally conduct due diligence on its individual retail customers. On November 11, 2022, the Company and JPMorgan entered into a default waiver and consent agreement (the “Waiver Letter”) pursuant to which the parties recognized that the Company was in default on its failure to satisfy the minimum Excess Availability requirement of $7,500,000, as defined in the Credit Agreement, and deliver a certificate to JPMorgan accurately reflecting the Excess Availability (together, the “Existing Defaults”). Under the terms of the Waiver Letter, JPMorgan agreed to waive the right to enforce an event of default based on the aforementioned Existing Defaults. Promissory note payable On February 15, 2022, as part of the consideration for acquisition of Anivia Limited, the Company issued a two-year unsecured 6% subordinated promissory note, payable in equal semi-annual installments commencing August 15, 2022 (the “Purchase Note”). The principal amount of the Purchase Note was $3.5 million with a fair value of $3.6 million as of February 15, 2022. For the three months ended September 30, 2022, the Company recorded accrued interest of $52,500 and amortization of note premium of $12,682. As of September 30, 2022, including $131,250 of accrued interest and $69,338 of unamortized premium, the total outstanding balance of the Purchase Note was $3,700,588, which was presented on the consolidated balance sheet as a current portion of $2,806,565 and a non-current portion of $894,023. In October 2022, the Company paid the first installment of $875,000.

3000000

39237

2024-11-12

796035

66305

163017

<table cellpadding="0" cellspacing="0" id="xdx_88C_eus-gaap--InterestIncomeAndInterestExpenseDisclosureTableTextBlock_znAkWLSZimFb" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Loans Payable (Details - Interest expense)"> <tr style="vertical-align: bottom"> <td>Schedule of interest on loans payable</td><td> </td> <td colspan="2" id="xdx_499_20220701__20220930_z9BksCKsl6Zk" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" id="xdx_495_20210701__20210930_zVOxyr98pvhg" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">2022</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">2021</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_401_ecustom--AccruedInterestExpense_d0_zDYvbXTxPC9c" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 68%; text-align: left">Accrued interest</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">156,255</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">–</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_400_ecustom--CreditUtilizationFees_d0_z9uOtd9xazgb" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Credit utilization fees</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">6,762</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_40C_ecustom--AmortizationOfDebtDiscount_d0_zvAHXUFdRVkl" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 1pt">Amortization of debt discount</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">66,305</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--InterestExpense_d0_zS5dbZwYsEaa" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt; padding-left: 10pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">229,322</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

156255 0 6762 0 66305 0

229322

15192660

338798

12314627

182543

3500000

3600000

52500

12682

131250

69338

3700588

2806565

894023

Note 13 - Related party transactions Starting March 1, 2022, the Company subleases 50,000 square feet of its warehouse space to Box Harmony, LLC, which is a 40% owned joint venture of the Company as disclosed on Note 1 and Note 2 above. For the three months ended September 30, 2022, the Company recorded a sublease fee of $247,500 as other non-operating income. As of September 30, 2022 and June 30, 2022, other receivables due from Box Harmony was $134,262 and $51,762, respectively. On February 15, 2022, the Company assumed $92,246 (RMB618,000) of advance from shareholders of DHS through the acquisition of Anivia. This amount was for capital injection pending capital inspection by the local government in accordance with the PRC rules. As of September 30, 2022 and June 30, 2022, the balance of advance from shareholders was $86,847 and $92,246, respectively.

247500

134262

51762

92246 86847 92246

Note 14 – Income taxes For the three months ended September 30, 2022, as a result of the Company’s inability to establish a reliable estimate for annual effective tax rate, the Company calculated income tax expense using the actual effective tax rate year to date, as opposed to the estimated annual effective tax rate, as provided in Accounting Standards Codification (ASC) 740-270-30-18. The income tax provision for the three months ended September 30, 2022 and 2021 consisted of the following: <table cellpadding="0" cellspacing="0" id="xdx_89E_eus-gaap--ScheduleOfComponentsOfIncomeTaxExpenseBenefitTableTextBlock_zczEpvJlxGY5" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Income taxes (Details)"> <tr style="vertical-align: bottom"> <td> Schedule of provision for income tax expense</td><td> </td> <td colspan="2" id="xdx_496_20220701__20220930_z6WyItglvX1" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" id="xdx_49A_20210701__20210930_zFfLao41X42d" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">September 30, 2022</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">September 30, 2021</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr id="xdx_403_eus-gaap--CurrentFederalStateAndLocalTaxExpenseBenefitAbstract_iB" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td>Current:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--CurrentFederalTaxExpenseBenefit_d0_maCITEBzvzk_zOMEWjEZIJ15" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; width: 68%">Federal</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">–</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">234,629</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--CurrentStateAndLocalTaxExpenseBenefit_maCITEBzvzk_zBzOi7B0mgUc" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt">State</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">9,921</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">108,346</td><td style="text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--CurrentForeignTaxExpenseBenefit_d0_maCITEBzvzk_z5lPsSjudZU6" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; padding-bottom: 1pt">Foreign</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--CurrentIncomeTaxExpenseBenefit_iT_pp0p0_mtCITEBzvzk_zl4exZKWuCza" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt">Total current income tax provision</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">9,921</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">342,975</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--DeferredFederalStateAndLocalTaxExpenseBenefitAbstract_iB" style="vertical-align: bottom; background-color: White"> <td>Deferred:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--DeferredFederalIncomeTaxExpenseBenefit_iN_pp0p0_di0_maDITEBzlds_zCqkn9AVjwS9" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt">Federal</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(169,467</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--DeferredStateAndLocalIncomeTaxExpenseBenefit_iN_pp0p0_di0_maDITEBzlds_zhJB06JPt7Fd" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt">State</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(103,145</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--DeferredForeignIncomeTaxExpenseBenefit_iN_pp0p0_di0_maDITEBzlds_z67tblJkkuO2" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; padding-bottom: 1pt">Foreign</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(185,105</td><td style="padding-bottom: 1pt; text-align: left">) </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--DeferredIncomeTaxExpenseBenefit_iNT_pp0p0_di0_mtDITEBzlds_zatKuaVfmFMd" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt">Total deferred taxes</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(457,717</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--OtherTaxExpenseBenefit_i_pp0p0" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Total provision for income taxes</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(447,796</td><td style="padding-bottom: 2.5pt; text-align: left">) </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">342,975</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> 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: <table cellpadding="0" cellspacing="0" id="xdx_899_eus-gaap--ScheduleOfEffectiveIncomeTaxRateReconciliationTableTextBlock_zXkrde7AU2wg" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Income taxes (Details - Reconcilation of effective income tax rate)"> <tr style="vertical-align: bottom"> <td> Schedule of reconciliation of effective income tax rate</td><td> </td> <td colspan="2" id="xdx_49B_20220701__20220930_zNtBnA49Zey8" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" id="xdx_493_20210701__20210930_zlR1w90jBTb6" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">September 30, 2022</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">September 30, 2021</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Statutory tax rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate_dp_z5DspgYE94Rg" style="vertical-align: bottom; background-color: White"> <td style="width: 68%">Federal</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 13%; text-align: right">21.00%</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 13%; text-align: right">21.00%</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--EffectiveIncomeTaxRateReconciliationStateAndLocalIncomeTaxes_dp_zu0lnmNZB9w" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">State (net of federal benefit)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">5.85%</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">8.84%</td><td style="text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--EffectiveIncomeTaxRateReconciliationForeignIncomeTaxRateDifferential_dp0_znTEOqqxNOc8" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Foreign tax rate difference</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3.91%</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--EffectiveIncomeTaxRateReconciliationNondeductibleExpenseImpairmentLosses_d0_zgoJyQvzDvhd" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Impairment loss on goodwill – permanent difference</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(17.8%</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--EffectiveIncomeTaxRateReconciliationOtherAdjustments_dp_zegRKZ7zhbGg" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Net effect of state income tax deduction and other permanent differences</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(3.29%</td><td style="padding-bottom: 1pt; text-align: left">)  </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(1.97%</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_40C_eus-gaap--EffectiveIncomeTaxRateContinuingOperations_dp_zmoTyvXWsZVe" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 2.5pt">Effective tax rate</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">9.67%</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">27.87%</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> As of September 30, 2022, prepaid income taxes to US tax authorities and income tax payable to Chinese tax authorities was $214,818 and $282,029, respectively. As of June 30, 2022, prepaid income taxes to US tax authorities and income tax payable to Chinese tax authorities was $375,087 and $299,563, respectively. The tax effects of temporary differences which give rise to significant portions of the deferred taxes are summarized as follows: <table cellpadding="0" cellspacing="0" id="xdx_894_eus-gaap--ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock_zCTNP5fKA182" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Income Taxes (Details - Deferred taxes)"> <tr style="vertical-align: bottom"> <td> Schedule of deferred taxes</td><td> </td> <td colspan="2" id="xdx_49B_20220930_zMrEsfRmguu5" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" id="xdx_490_20220630_zQvuJe3JlMbe" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">September 30, 2022</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2022</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_40C_eus-gaap--DeferredTaxAssetsNetAbstract_iB" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="font-weight: bold; text-align: left">Deferred tax assets</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--DeferredTaxAssetsTaxDeferredExpenseOther_i01I_pp0p0_d0_maDTAGziIo_zsTpUIJT5gpl" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; width: 68%">263A calculation</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">215,434</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">123,884</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--DeferredTaxAssetsInventory_i01I_pp0p0_d0_maDTAGziIo_zaxjQJTxHKo5" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; text-align: left">Inventory reserve</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">106,071</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">71,026</td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--DeferredTaxAssetsStateTaxes_i01I_pp0p0_d0_maDTAGziIo_zMugtQ1F2s53" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">State taxes</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,226</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">45,234</td><td style="text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--DeferredTaxAssetsTaxDeferredExpenseReservesAndAccrualsReserves_i01I_pp0p0_d0_maDTAGziIo_zZLVlmPG79Ag" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; text-align: left">Accrued expenses</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">157,794</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">69,172</td><td style="text-align: left"> </td></tr> <tr id="xdx_407_ecustom--DeferredTaxAssetsLeaseAssetsLiabilities_i01I_pp0p0_d0_maDTAGziIo_zMbicu1YG2yb" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">ROU assets / liabilities</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">110,319</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">83,738</td><td style="text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--DeferredTaxAssetsTaxDeferredExpenseCompensationAndBenefitsShareBasedCompensationCost_i01I_pp0p0_d0_maDTAGziIo_zdXUQqE0AVj7" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; text-align: left">Stock-based compensation</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">99,989</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">70,266</td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--DeferredTaxAssetsOperatingLossCarryforwardsDomestic_i01I_pp0p0_d0_zuzJ8LxPGUD2" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">Net operating loss</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">416,933</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--DeferredTaxAssetsOther_i01I_pp0p0_d0_maDTAGziIo_zFEn3OR0icE8" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; padding-bottom: 1pt">Others</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">18,797</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">7,539</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--DeferredTaxAssetsGross_i01TI_pp0p0_d0_mtDTAGziIo_maDTALNz2Je_zPyuQO2C6bN3" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 20pt; font-weight: bold; text-align: left; padding-bottom: 1pt">Total deferred tax assets</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1,127,663</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">470,859</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--DeferredTaxLiabilitiesAbstract_iB" style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left">Deferred tax liabilities</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--DeferredTaxLiabilitiesPropertyPlantAndEquipment_i01NI_pp0p0_di0_maDITLzthN_zzOTcLbEpeBl" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt">Depreciation</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(118,576</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(86,254</td><td style="text-align: left">) </td></tr> <tr id="xdx_404_eus-gaap--DeferredTaxLiabilitiesOtherFiniteLivedAssets_i01NI_pp0p0_di0_maDITLzthN_zmEGA1lX0m89" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt">Intangible assets acquired</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(1,280,127</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(1,323,720</td><td style="padding-bottom: 1pt; text-align: left">) </td></tr> <tr id="xdx_40D_eus-gaap--DeferredIncomeTaxLiabilities_i01NTI_pp0p0_di0_mtDITLzthN_msDTALNz2Je_zzAxhheCYqz1" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 20pt; font-weight: bold; text-align: left; padding-bottom: 1pt">Total deferred tax liabilities</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(1,398,703</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(1,409,974</td><td style="padding-bottom: 1pt; text-align: left">) </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--DeferredTaxAssetsLiabilitiesNet_iNTI_pp0p0_di0_mtDTALNz2Je_zJ3ZaDXRJLHe" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; font-weight: bold; text-align: left; padding-bottom: 2.5pt">Net deferred tax liabilities</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(271,040</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(939,115</td><td style="padding-bottom: 2.5pt; text-align: left">) </td></tr> </table>

<table cellpadding="0" cellspacing="0" id="xdx_89E_eus-gaap--ScheduleOfComponentsOfIncomeTaxExpenseBenefitTableTextBlock_zczEpvJlxGY5" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Income taxes (Details)"> <tr style="vertical-align: bottom"> <td> Schedule of provision for income tax expense</td><td> </td> <td colspan="2" id="xdx_496_20220701__20220930_z6WyItglvX1" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" id="xdx_49A_20210701__20210930_zFfLao41X42d" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">September 30, 2022</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">September 30, 2021</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr id="xdx_403_eus-gaap--CurrentFederalStateAndLocalTaxExpenseBenefitAbstract_iB" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td>Current:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--CurrentFederalTaxExpenseBenefit_d0_maCITEBzvzk_zOMEWjEZIJ15" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; width: 68%">Federal</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">–</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">234,629</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--CurrentStateAndLocalTaxExpenseBenefit_maCITEBzvzk_zBzOi7B0mgUc" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt">State</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">9,921</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">108,346</td><td style="text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--CurrentForeignTaxExpenseBenefit_d0_maCITEBzvzk_z5lPsSjudZU6" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; padding-bottom: 1pt">Foreign</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--CurrentIncomeTaxExpenseBenefit_iT_pp0p0_mtCITEBzvzk_zl4exZKWuCza" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt">Total current income tax provision</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">9,921</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">342,975</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_40A_eus-gaap--DeferredFederalStateAndLocalTaxExpenseBenefitAbstract_iB" style="vertical-align: bottom; background-color: White"> <td>Deferred:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--DeferredFederalIncomeTaxExpenseBenefit_iN_pp0p0_di0_maDITEBzlds_zCqkn9AVjwS9" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt">Federal</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(169,467</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--DeferredStateAndLocalIncomeTaxExpenseBenefit_iN_pp0p0_di0_maDITEBzlds_zhJB06JPt7Fd" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt">State</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(103,145</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--DeferredForeignIncomeTaxExpenseBenefit_iN_pp0p0_di0_maDITEBzlds_z67tblJkkuO2" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; padding-bottom: 1pt">Foreign</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(185,105</td><td style="padding-bottom: 1pt; text-align: left">) </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_406_eus-gaap--DeferredIncomeTaxExpenseBenefit_iNT_pp0p0_di0_mtDITEBzlds_zatKuaVfmFMd" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt">Total deferred taxes</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(457,717</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--OtherTaxExpenseBenefit_i_pp0p0" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Total provision for income taxes</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(447,796</td><td style="padding-bottom: 2.5pt; text-align: left">) </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">342,975</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

234629

9921

108346

9921

342975

169467

-0

103145

-0

185105

-0

457717

-0

-447796

342975

<table cellpadding="0" cellspacing="0" id="xdx_899_eus-gaap--ScheduleOfEffectiveIncomeTaxRateReconciliationTableTextBlock_zXkrde7AU2wg" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Income taxes (Details - Reconcilation of effective income tax rate)"> <tr style="vertical-align: bottom"> <td> Schedule of reconciliation of effective income tax rate</td><td> </td> <td colspan="2" id="xdx_49B_20220701__20220930_zNtBnA49Zey8" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" id="xdx_493_20210701__20210930_zlR1w90jBTb6" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">September 30, 2022</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">September 30, 2021</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Statutory tax rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--EffectiveIncomeTaxRateReconciliationAtFederalStatutoryIncomeTaxRate_dp_z5DspgYE94Rg" style="vertical-align: bottom; background-color: White"> <td style="width: 68%">Federal</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 13%; text-align: right">21.00%</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 13%; text-align: right">21.00%</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_401_eus-gaap--EffectiveIncomeTaxRateReconciliationStateAndLocalIncomeTaxes_dp_zu0lnmNZB9w" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">State (net of federal benefit)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">5.85%</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">8.84%</td><td style="text-align: left"> </td></tr> <tr id="xdx_405_eus-gaap--EffectiveIncomeTaxRateReconciliationForeignIncomeTaxRateDifferential_dp0_znTEOqqxNOc8" style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Foreign tax rate difference</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">3.91%</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--EffectiveIncomeTaxRateReconciliationNondeductibleExpenseImpairmentLosses_d0_zgoJyQvzDvhd" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Impairment loss on goodwill – permanent difference</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(17.8%</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--EffectiveIncomeTaxRateReconciliationOtherAdjustments_dp_zegRKZ7zhbGg" style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Net effect of state income tax deduction and other permanent differences</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(3.29%</td><td style="padding-bottom: 1pt; text-align: left">)  </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(1.97%</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr id="xdx_40C_eus-gaap--EffectiveIncomeTaxRateContinuingOperations_dp_zmoTyvXWsZVe" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 2.5pt">Effective tax rate</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">9.67%</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">27.87%</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

0.2100

0.0585

0.0884

0.0391

-0.178

-0.0329

-0.0197

0.0967

0.2787

214818

282029

375087

299563

<table cellpadding="0" cellspacing="0" id="xdx_894_eus-gaap--ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock_zCTNP5fKA182" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Income Taxes (Details - Deferred taxes)"> <tr style="vertical-align: bottom"> <td> Schedule of deferred taxes</td><td> </td> <td colspan="2" id="xdx_49B_20220930_zMrEsfRmguu5" style="text-align: center"> </td><td> </td><td> </td> <td colspan="2" id="xdx_490_20220630_zQvuJe3JlMbe" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">September 30, 2022</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">June 30, 2022</td><td style="padding-bottom: 1pt"> </td></tr> <tr id="xdx_40C_eus-gaap--DeferredTaxAssetsNetAbstract_iB" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="font-weight: bold; text-align: left">Deferred tax assets</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--DeferredTaxAssetsTaxDeferredExpenseOther_i01I_pp0p0_d0_maDTAGziIo_zsTpUIJT5gpl" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; width: 68%">263A calculation</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">215,434</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">123,884</td><td style="width: 1%; text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--DeferredTaxAssetsInventory_i01I_pp0p0_d0_maDTAGziIo_zaxjQJTxHKo5" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; text-align: left">Inventory reserve</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">106,071</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">71,026</td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--DeferredTaxAssetsStateTaxes_i01I_pp0p0_d0_maDTAGziIo_zMugtQ1F2s53" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">State taxes</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,226</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">45,234</td><td style="text-align: left"> </td></tr> <tr id="xdx_407_eus-gaap--DeferredTaxAssetsTaxDeferredExpenseReservesAndAccrualsReserves_i01I_pp0p0_d0_maDTAGziIo_zZLVlmPG79Ag" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; text-align: left">Accrued expenses</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">157,794</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">69,172</td><td style="text-align: left"> </td></tr> <tr id="xdx_407_ecustom--DeferredTaxAssetsLeaseAssetsLiabilities_i01I_pp0p0_d0_maDTAGziIo_zMbicu1YG2yb" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">ROU assets / liabilities</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">110,319</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">83,738</td><td style="text-align: left"> </td></tr> <tr id="xdx_404_eus-gaap--DeferredTaxAssetsTaxDeferredExpenseCompensationAndBenefitsShareBasedCompensationCost_i01I_pp0p0_d0_maDTAGziIo_zdXUQqE0AVj7" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; text-align: left">Stock-based compensation</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">99,989</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">70,266</td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--DeferredTaxAssetsOperatingLossCarryforwardsDomestic_i01I_pp0p0_d0_zuzJ8LxPGUD2" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left">Net operating loss</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">416,933</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr id="xdx_40C_eus-gaap--DeferredTaxAssetsOther_i01I_pp0p0_d0_maDTAGziIo_zFEn3OR0icE8" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; padding-bottom: 1pt">Others</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">18,797</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">7,539</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--DeferredTaxAssetsGross_i01TI_pp0p0_d0_mtDTAGziIo_maDTALNz2Je_zPyuQO2C6bN3" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 20pt; font-weight: bold; text-align: left; padding-bottom: 1pt">Total deferred tax assets</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1,127,663</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">470,859</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40F_eus-gaap--DeferredTaxLiabilitiesAbstract_iB" style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold; text-align: left">Deferred tax liabilities</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_400_eus-gaap--DeferredTaxLiabilitiesPropertyPlantAndEquipment_i01NI_pp0p0_di0_maDITLzthN_zzOTcLbEpeBl" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt">Depreciation</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(118,576</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(86,254</td><td style="text-align: left">) </td></tr> <tr id="xdx_404_eus-gaap--DeferredTaxLiabilitiesOtherFiniteLivedAssets_i01NI_pp0p0_di0_maDITLzthN_zmEGA1lX0m89" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; text-align: left; padding-bottom: 1pt">Intangible assets acquired</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(1,280,127</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(1,323,720</td><td style="padding-bottom: 1pt; text-align: left">) </td></tr> <tr id="xdx_40D_eus-gaap--DeferredIncomeTaxLiabilities_i01NTI_pp0p0_di0_mtDITLzthN_msDTALNz2Je_zzAxhheCYqz1" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 20pt; font-weight: bold; text-align: left; padding-bottom: 1pt">Total deferred tax liabilities</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(1,398,703</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(1,409,974</td><td style="padding-bottom: 1pt; text-align: left">) </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_402_eus-gaap--DeferredTaxAssetsLiabilitiesNet_iNTI_pp0p0_di0_mtDTALNz2Je_zJ3ZaDXRJLHe" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; font-weight: bold; text-align: left; padding-bottom: 2.5pt">Net deferred tax liabilities</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(271,040</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(939,115</td><td style="padding-bottom: 2.5pt; text-align: left">) </td></tr> </table>

215434

123884

106071

71026

2226

45234

157794

69172

110319 83738

99989

70266

416933

18797

7539

1127663

470859

118576

86254

1280127

1323720

1398703

1409974

271040

939115

Note 15 – (Loss) Earnings per share The following table sets forth the computation of basic and diluted earnings per share for the periods presented: <table cellpadding="0" cellspacing="0" id="xdx_888_eus-gaap--ScheduleOfEarningsPerShareBasicAndDilutedTableTextBlock_zctlT5b7G2ke" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Earnings per share (Details)"> <tr style="vertical-align: bottom"> <td style="font-weight: bold">Schedule of computation of earnings per share</td><td> </td> <td colspan="2" id="xdx_491_20220701__20220930_zbyLF9uc9zl1" style="text-align: center"> </td><td> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_494_20210701__20210930_zYiNlECj9EZ5" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">For the three months ended September 30,</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="font-weight: bold">Numerator:</td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td></tr> <tr id="xdx_409_eus-gaap--NetIncomeLossAvailableToCommonStockholdersDiluted_i_pp0p0" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 68%; text-align: left; padding-bottom: 2.5pt">Net income</td><td style="width: 1%; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; width: 1%; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; width: 13%; text-align: right">(4,182,376</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left">)</td><td style="width: 1%; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; width: 1%; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; width: 13%; text-align: right">887,528</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold">Denominator:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_ecustom--WeightedaverageSharesUsedInComputingBasicAndDilutedEarningsPerShareAbstract_iB" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Weighted-average shares used in computing basic and diluted earnings per share*</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--WeightedAverageNumberOfSharesOutstandingBasic_i01_pdd" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; padding-bottom: 2.5pt">Basic</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">29,665,716</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">26,484,528</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--WeightedAverageNumberDilutedSharesOutstandingAdjustment_i01_pdd" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; padding-bottom: 2.5pt">Diluted</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">29,665,716</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">26,495,420</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--EarningsPerShareBasic_i01_zvq2E6DEdcu5" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">(Loss) Earnings per share - Basic</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.14</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.03</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--EarningsPerShareDiluted_i01_pdd" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 70pt; padding-bottom: 2.5pt"> - Diluted</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.14</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.03</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> * Due to the ani-dilutive effect, the computation of basic and diluted EPS did not include the shares underlying the exercise of warrants as the Company had a net loss for the three months ended September 30, 2022. * For the three months ended September 30, 2021, the computation of basic and diluted EPS included the vested RSUs. * The computation of diluted EPS included the underlying 10,892 shares of warrants calculated using treasury method for the three months ended September 30, 2021. * For the three months ended September 30, 2022 and 2021, 166,176 and 40,019 vested shares of restricted stock units under the 2020 Equity Incentive Plan (as discussed in Note 16) are considered issued shares and therefore are included in the computation of basic earnings (loss) per share when the shares are fully vested.

<table cellpadding="0" cellspacing="0" id="xdx_888_eus-gaap--ScheduleOfEarningsPerShareBasicAndDilutedTableTextBlock_zctlT5b7G2ke" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Earnings per share (Details)"> <tr style="vertical-align: bottom"> <td style="font-weight: bold">Schedule of computation of earnings per share</td><td> </td> <td colspan="2" id="xdx_491_20220701__20220930_zbyLF9uc9zl1" style="text-align: center"> </td><td> </td><td style="text-align: center"> </td> <td colspan="2" id="xdx_494_20210701__20210930_zYiNlECj9EZ5" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="6" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">For the three months ended September 30,</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2022</td><td style="padding-bottom: 1pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2021</td><td style="padding-bottom: 1pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom"> <td style="font-weight: bold">Numerator:</td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td></tr> <tr id="xdx_409_eus-gaap--NetIncomeLossAvailableToCommonStockholdersDiluted_i_pp0p0" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 68%; text-align: left; padding-bottom: 2.5pt">Net income</td><td style="width: 1%; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; width: 1%; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; width: 13%; text-align: right">(4,182,376</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left">)</td><td style="width: 1%; padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; width: 1%; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; width: 13%; text-align: right">887,528</td><td style="width: 1%; padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="font-weight: bold">Denominator:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_40A_ecustom--WeightedaverageSharesUsedInComputingBasicAndDilutedEarningsPerShareAbstract_iB" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Weighted-average shares used in computing basic and diluted earnings per share*</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr id="xdx_409_eus-gaap--WeightedAverageNumberOfSharesOutstandingBasic_i01_pdd" style="vertical-align: bottom; background-color: White"> <td style="padding-left: 10pt; padding-bottom: 2.5pt">Basic</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">29,665,716</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">26,484,528</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--WeightedAverageNumberDilutedSharesOutstandingAdjustment_i01_pdd" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 10pt; padding-bottom: 2.5pt">Diluted</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">29,665,716</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">26,495,420</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_403_eus-gaap--EarningsPerShareBasic_i01_zvq2E6DEdcu5" style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt">(Loss) Earnings per share - Basic</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.14</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.03</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr id="xdx_40D_eus-gaap--EarningsPerShareDiluted_i01_pdd" style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-left: 70pt; padding-bottom: 2.5pt"> - Diluted</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">(0.14</td><td style="padding-bottom: 2.5pt; text-align: left">)</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">0.03</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

-4182376

887528

29665716

26484528

29665716

26495420

-0.14

0.03

-0.14

0.03

166176

40019

Note 16 – Equity Common Stock During the year ended June 30, 2022, the Company issued <span id="xdx_902_eus-gaap--StockIssuedDuringPeriodSharesRestrictedStockAwardGross_c20220701__20220930__us-gaap--AwardTypeAxis__custom--StockIssuedForVestedRsusMember_zynlaPGbmNzb" title="Stock Issued During Period, Value, Conversion of Convertible Securities">40,019 shares of restricted common stock for RSUs vested in the quarter ended September 30, 2021. On February 15, 2022, as part of the consideration for the acquisition of Anivia and subsidiaries, the Company issued <span id="xdx_90C_eus-gaap--StockIssuedDuringPeriodSharesAcquisitions_c20220214__20220215__us-gaap--BusinessAcquisitionAxis__custom--AniviaMember__us-gaap--StatementClassOfStockAxis__us-gaap--RestrictedStockMember_zewpEAYKrA4h" title="Number of shares issued for acquisition">3,083,700 restricted shares of the Company’s common stock, valued at $2.27 per share, which was the closing price of the Company’s Common Stock as traded on Nasdaq on February 15, 2022. These shares have a lock-up period of 180 days and are subject to insider trading restrictions. The fair value of the shares was $<span id="xdx_905_eus-gaap--BusinessCombinationConsiderationTransferredEquityInterestsIssuedAndIssuable_pp0p0_c20220214__20220215_zZzGTUDVTx3d" title="Business Combination, Consideration Transferred, Equity Interests Issued and Issuable">5,528,373, calculated with a discount of lack of marketability of 21%, which is determined using the Black Scholes Model. As of September 30, 2022 and June 30, 2022, there were 29,572,382 and 29,572,382 shares of Common Stock issued and outstanding, respectively. Preferred Stock The Company’s 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 September 30, 2022 and June 30, 2022, respectively, there were no shares of Preferred Stock issued and outstanding. Equity Incentive Plan On May 5, 2021, the Company’s Board of Directors adopted, and its stockholders approved and ratified, the iPower Inc. Amended and Restated 2020 Equity Incentive Plan (the “Plan”). The Plan allows for the issuance of up to 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. On November 16, 2021, we filed a registration statement on Form S-8 registering all shares issuable under the Plan. Restricted Stock Unit Following completion of the IPO on May 11, 2021, pursuant to their letter agreements, the Company awarded a total of <span id="xdx_90D_eus-gaap--StockIssuedDuringPeriodSharesRestrictedStockAwardGross_c20200701__20210514__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember__us-gaap--RelatedPartyTransactionAxis__custom--LetterAgreementsMember_pdd">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. On November 16, 2021, we filed a registration statement on Form S-8 registering all shares issuable under the Plan. 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. The fair value of RSUs issued subsequent to IPO date was based on the stock price on each grant date. During the three months ended September 30, 2022, the Company granted an additional 29,806 shares of RSUs. For the three months ended September 30, 2022 and 2021, the Company recorded $27,500 and $103,054 of stock-based compensation expense. As of September 30, 2022 and June 30, 2022, the unvested number of RSUs was <span id="xdx_907_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingNumber_c20220930__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_pdd">3,304 and <span id="xdx_904_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingNumber_c20220630__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_pdd">6,608 and the unamortized expense was $7,500 and $15,000, respectively. Information relating to RSU grants is summarized as follows: <table cellpadding="0" cellspacing="0" id="xdx_88A_eus-gaap--ScheduleOfShareBasedCompensationRestrictedStockUnitsAwardActivityTableTextBlock_z77BDAGNWiAi" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Equity (Details)"> <tr style="vertical-align: bottom"> <td> Schedule of RSU activity</td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Total RSUs Issued</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Total Fair Market Value of RSUs Issued as Compensation (1)</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 68%; text-align: left">RSUs granted, but not vested, at June 30, 2022</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_986_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iS_c20220701__20220930__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zCgES3cbvHvc" style="width: 13%; text-align: right" title="RSU's outstanding at beginning">6,608</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 13%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">RSUs granted</td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross_c20220701__20220930__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_pdd" style="text-align: right" title="RSUs granted">29,806</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_98A_eus-gaap--StockIssued1_c20220701__20220930__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_fKDEp_zXhAf7xgM2O1" style="text-align: right" title="Total Fair Market Value of RSUs Issued as Compensation RSUs granted">20,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">RSUs forfeited</td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeituresInPeriod_d0_c20220701__20220930__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zyWY1qyexhi8" style="text-align: right" title="RSUs forfeited">–</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">RSUs vested</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_981_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedNumberOfShares_iN_di_c20220701__20220930__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zzyNlkBJcg7k" style="border-bottom: Black 1pt solid; text-align: right" title="RSUs vested">(33,110</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 2.5pt">RSUs granted, but not vested, at September 30, 2022</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td id="xdx_981_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iE_c20220701__20220930__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zy83ov3lkJV8" style="border-bottom: Black 2.5pt double; text-align: right" title="RSU's outstanding at ending">3,304</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table> _____________________ <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td>(1)</td> <td>The total fair value was based on the current stock price on the grant date.</td></tr> </table> As of September 30, 2022, of the 166,176 vested RSUs, 40,019 shares of Common Stock were issued, and 126,157 shares were to be issued upon setup of the plan administration account. Stock Option On May 12, 2022, the Compensation Committee of the Board of Directors approved an incentive plan for the Company’s executive officers consisting of a cash performance bonus of $60,000 to be awarded to Kevin Vassily, CFO of the Company, and stock option grants (the “Option Grants”) in the amount of (i) <span id="xdx_903_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriod_c20220501__20220512__srt--CounterpartyNameAxis__custom--ChenlongTanMember_pdd" title="Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Net of Forfeitures">3,000,000 shares to Chenlong Tan, CEO and (ii) <span id="xdx_90A_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriod_c20220501__20220512__srt--CounterpartyNameAxis__custom--MrVassilyMember_pdd" title="Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Net of Forfeitures">330,000 shares to Mr. Vassily. The Option Grants, which were issued on May 13, 2022, have an exercise price of $<span id="xdx_906_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice_c20220513_pdd" title="Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price">1.12, a contractual term of 10 years and consist of six vesting tranches with a vesting schedule based entirely on the attainment of both designated operational milestones (performance conditions) and market conditions (together, the “Designated Milestones”), which are set forth in six vesting tranches, assuming continued employment of the recipients through the date on which such Designated Milestones are achieved. Each of the six vesting tranches for the Option Grants will vest when both (i) the market capitalization milestone for such tranche, which begins at $150 million for the first tranche and increases by increments of $50 million through the fourth tranche and $100 million thereafter (based on achieving such market capitalization for five consecutive trading days), has been achieved, and (ii) any one of the following six operational milestones focused on revenue or any one of the six operational milestones focused on operating income have been achieved during a given fiscal year. The achievement status of the operational milestones as of September 30, 2022 was as follows: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; text-align: center"> </td><td colspan="5" style="border-bottom: Black 1pt solid; text-align: center">Revenue in Fiscal Year</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: center"> </td><td colspan="5" style="border-bottom: Black 1pt solid; text-align: center">Operating Income in Fiscal Year</td><td style="padding-bottom: 1pt; text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td style="text-align: center">Milestone</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td style="text-align: center"> </td><td style="text-align: center"> </td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td style="text-align: center"> </td><td style="text-align: center">Milestone</td><td style="text-align: center"> </td><td style="text-align: center"> </td> <td style="text-align: center"> </td><td style="text-align: center"> </td><td style="text-align: center"> </td></tr> <tr style="vertical-align: bottom"> <td style="border-bottom: Black 1pt solid; text-align: center"> </td><td style="border-bottom: Black 1pt solid; text-align: center">(in Millions)</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: center"> </td><td style="border-bottom: Black 1pt solid; text-align: center">Achievement Status</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: center"> </td><td style="border-bottom: Black 1pt solid; text-align: center">(in Millions)</td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="text-align: center; padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: center"> </td><td style="border-bottom: Black 1pt solid; text-align: center">Achievement Status</td><td style="padding-bottom: 1pt; text-align: center"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 1%; text-align: left">$</td><td style="width: 22%; text-align: right">90</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 22%; text-align: center">Probable</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 21%; text-align: right">6</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 21%; text-align: center">Probable</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">$</td><td style="text-align: right">100</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">Probable</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">8</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">Probable</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">$</td><td style="text-align: right">125</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">Probable</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">10</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">Probable</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">$</td><td style="text-align: right">150</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">Probable</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">12</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">–</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">$</td><td style="text-align: right">200</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">Probable</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">16</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">–</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">$</td><td style="text-align: right">250</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">–</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">20</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">–</td><td style="text-align: left"> </td></tr> </table> The Company evaluated the performance condition and market condition under ASC 718-10-20. The Option Grants are considered an award containing a performance and a market condition and both conditions (in this case at least one of the performance conditions) must be satisfied for the award to vest. The market condition is incorporated into the fair value of the award, and that fair value is recognized over the longer of the implied service period or requisite service period if it is probable that one of the performance conditions will be met. In relation to the five awards deemed probable to vest, the recognition period ranges from 2.93 years to 9.64 years. If the performance condition is ultimately not met, compensation cost related to the award should not be recognized (or should be reversed to the extent any expense has been recognized related to such tranche) because the vesting condition in the award would not have been satisfied. On the grant date, a Monte Carlo simulation was used to determine for each tranche (i) a fixed amount of expense for such tranche and (ii) the future time when the market capitalization milestone for such tranche was expected to be achieved. Separately, based on a subjective assessment of our future financial performance, each quarter we determine whether it is probable that we will achieve each operational milestone that has not previously been achieved or deemed probable of achievement and if so, the future time when we expect to achieve that operational milestone. The Monte Carlo simulation utilized the following inputs: <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 24px"> </td> <td style="width: 24px">·</td> <td style="text-align: justify">Stock Price - $1.12 </td></tr> <tr style="vertical-align: top"> <td> </td> <td>·</td> <td style="text-align: justify">Volatility – 95.65% </td></tr> <tr style="vertical-align: top"> <td> </td> <td>·</td> <td style="text-align: justify">Term –10 years</td></tr> <tr style="vertical-align: top"> <td> </td> <td>·</td> <td style="text-align: justify">Risk Free Rate of Return – 2.93% </td></tr> <tr style="vertical-align: top"> <td> </td> <td>·</td> <td style="text-align: justify">Dividend Yield – 0%</td></tr> </table> The total fair value of the Option Grants was $3.2 million of which, at June 30, 2022, $2.3 million is deemed probable of vesting. As of September 30, 2022, none of the options had vested. For the three months ended September 30, 2022 and 2021, the Company recorded $110,382 and $0 of stock-based compensation expense related to the Option Grants. Unrecognized compensation cost related to tranches probable of vesting is approximately $2.1 million and will be recognized over 2.8 years to 9.5 years, depending on the tranche.

40019

3083700

2.27

5528373

29572382

5000000

46546

29806

27500

103054

3304

6608

7500

15000

<table cellpadding="0" cellspacing="0" id="xdx_88A_eus-gaap--ScheduleOfShareBasedCompensationRestrictedStockUnitsAwardActivityTableTextBlock_z77BDAGNWiAi" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%" summary="xdx: Disclosure - Equity (Details)"> <tr style="vertical-align: bottom"> <td> Schedule of RSU activity</td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Total RSUs Issued</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="border-bottom: Black 1pt solid; text-align: center">Total Fair Market Value of RSUs Issued as Compensation (1)</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 68%; text-align: left">RSUs granted, but not vested, at June 30, 2022</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td id="xdx_986_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iS_c20220701__20220930__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zCgES3cbvHvc" style="width: 13%; text-align: right" title="RSU's outstanding at beginning">6,608</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 13%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">RSUs granted</td><td> </td> <td style="text-align: left"> </td><td id="xdx_983_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsGrantsInPeriodGross_c20220701__20220930__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_pdd" style="text-align: right" title="RSUs granted">29,806</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td id="xdx_98A_eus-gaap--StockIssued1_c20220701__20220930__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_fKDEp_zXhAf7xgM2O1" style="text-align: right" title="Total Fair Market Value of RSUs Issued as Compensation RSUs granted">20,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">RSUs forfeited</td><td> </td> <td style="text-align: left"> </td><td id="xdx_987_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsForfeituresInPeriod_d0_c20220701__20220930__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zyWY1qyexhi8" style="text-align: right" title="RSUs forfeited">–</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">RSUs vested</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td id="xdx_981_eus-gaap--SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsVestedNumberOfShares_iN_di_c20220701__20220930__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zzyNlkBJcg7k" style="border-bottom: Black 1pt solid; text-align: right" title="RSUs vested">(33,110</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 2.5pt">RSUs granted, but not vested, at September 30, 2022</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td id="xdx_981_eus-gaap--ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber_iE_c20220701__20220930__us-gaap--AwardTypeAxis__us-gaap--RestrictedStockUnitsRSUMember_zy83ov3lkJV8" style="border-bottom: Black 2.5pt double; text-align: right" title="RSU's outstanding at ending">3,304</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right"> </td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

6608

29806

20000

33110

3304

166176

40019 126157 60000

3000000

330000

1.12

0.9565

P10Y

0.0293

110382

Note 17 – Warrant liabilities The Company’s warrant liabilities contained unobservable inputs that reflected the Company’s own assumptions in which there was little, if any, market activity as of the measurement date. Accordingly, the Company’s warrant liabilities were measured at fair value on a recurring basis using unobservable inputs and were classified as Level 3 measurements. On December 30, 2020, the Company issued warrants to purchase <span id="xdx_902_ecustom--WarrantsIssuedShares_iI_c20201230__srt--CounterpartyNameAxis__custom--PlacementAgentMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAConvertiblePreferredStockMember__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--PrivatePlacementMember_zB9ShVjyweDb" title="Warrants issued">2,415 shares of Series A Convertible Preferred Stock to Boustead Securities, LLC (the “Placement Agent”) as compensation, which was recorded as financing expense. The exercise price of the warrants is $<span id="xdx_909_eus-gaap--ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights1_c20201230__us-gaap--StatementClassOfStockAxis__custom--SeriesAConvertiblePreferredStockMember__srt--CounterpartyNameAxis__custom--PlacementAgentMember_pdd" title="Warrant exercise price">10 per share and expires in five years from the issuance date. This Series A Preferred Stock warrant were valued using Black Scholes Option Pricing Model at issuance date and recorded $<span id="xdx_909_eus-gaap--FinancingInterestExpense_c20201201__20201230__srt--CounterpartyNameAxis__custom--PlacementAgentMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAConvertiblePreferredStockMember__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--PrivatePlacementMember_pp0p0" title="Financing expense"><span id="xdx_90A_ecustom--WarrantLiability_c20201201__20201230__srt--CounterpartyNameAxis__custom--PlacementAgentMember__us-gaap--StatementClassOfStockAxis__custom--SeriesAConvertiblePreferredStockMember__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--PrivatePlacementMember_pp0p0" title="Warrant liability">8,047 as financing expense and warrant liability. On January 27, 2021, the Company completed a private placement offering pursuant to which the Company sold to two accredited investors an aggregate of $<span id="xdx_901_eus-gaap--ProceedsFromIssuanceOrSaleOfEquity_c20210126__20210127__srt--CounterpartyNameAxis__custom--TwoAccreditedInvestorsMember__us-gaap--SubsidiarySaleOfStockAxis__us-gaap--PrivatePlacementMember_pp0p0" title="Proceeds from sale of equity">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: <table cellpadding="0" cellspacing="0" id="xdx_882_eus-gaap--ScheduleOfShareBasedPaymentAwardStockOptionsValuationAssumptionsTableTextBlock_z86P0Tn7aMGa" style="font: 10pt Times New Roman, Times, Serif; width: 50%; border-collapse: collapse" summary="xdx: Disclosure - Warrant liabilities (Details - Assumptions)"> <tr style="vertical-align: top"> <td> Schedule of assumptions for warrant liabilities</td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: top"> <td style="width: 50%"> </td> <td style="border-bottom: black 1pt solid; width: 50%; text-align: center">As of May 14, 2021</td></tr> <tr style="vertical-align: top; background-color: #EEEEEE"> <td>Expected term</td> <td style="text-align: center"><span id="xdx_905_eus-gaap--DerivativesBasisAndUseOfDerivativesBasisDeterminationOfFairValue_c20200701__20210514__us-gaap--DerivativeInstrumentRiskAxis__custom--WarrantLiabilityMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedTermMember" title="Fair value measurement assumptions">1 day to 3 years</td></tr> <tr style="vertical-align: top; background-color: white"> <td>Expected volatility</td> <td style="text-align: center"><span id="xdx_909_eus-gaap--DerivativesBasisAndUseOfDerivativesBasisDeterminationOfFairValue_c20200701__20210514__us-gaap--DerivativeInstrumentRiskAxis__custom--WarrantLiabilityMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputPriceVolatilityMember" title="Fair value measurement assumptions">3.3% to 58%</td></tr> <tr style="vertical-align: top; background-color: #EEEEEE"> <td>Risk-free interest rate</td> <td style="text-align: center"><span id="xdx_905_eus-gaap--DerivativesBasisAndUseOfDerivativesBasisDeterminationOfFairValue_c20200701__20210514__us-gaap--DerivativeInstrumentRiskAxis__custom--WarrantLiabilityMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember" title="Fair value measurement assumptions">0.35% to 0.92% </td></tr> <tr style="vertical-align: top; background-color: white"> <td>Expected dividend rate</td> <td style="text-align: center"><span id="xdx_904_eus-gaap--DerivativesBasisAndUseOfDerivativesBasisDeterminationOfFairValue_c20200701__20210514__us-gaap--DerivativeInstrumentRiskAxis__custom--WarrantLiabilityMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedDividendRateMember" title="Fair value measurement assumptions">0%</td></tr> <tr style="vertical-align: top; background-color: #EEEEEE"> <td>Probability</td> <td style="text-align: center"><span id="xdx_905_eus-gaap--DerivativesBasisAndUseOfDerivativesBasisDeterminationOfFairValue_c20200701__20210514__us-gaap--DerivativeInstrumentRiskAxis__custom--WarrantLiabilityMember__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputProbablityMember" title="Fair value measurement assumptions">100%</td></tr> </table> As of May 14, 2021, the fair value of the warrant liabilities was $1,361,347, which includes $4,610 preferred stock warrant, $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 reclassed to additional paid in capital as the terms became fixed upon closing of the IPO. Through September 30, 2022, none of the private placement investors exercised any of their warrants. As such, as of September 30, 2022 and June 30, 2022, the number of shares issuable under the outstanding warrants was 685,715, with an average exercise price of $5.00 per share. 2415

8047

3000000

<table cellpadding="0" cellspacing="0" id="xdx_882_eus-gaap--ScheduleOfShareBasedPaymentAwardStockOptionsValuationAssumptionsTableTextBlock_z86P0Tn7aMGa" style="font: 10pt Times New Roman, Times, Serif; width: 50%; border-collapse: collapse" summary="xdx: Disclosure - Warrant liabilities (Details - Assumptions)"> <tr style="vertical-align: top"> <td> Schedule of assumptions for warrant liabilities</td> <td style="text-align: center"> </td></tr> <tr style="vertical-align: top"> <td style="width: 50%"> </td> <td style="border-bottom: black 1pt solid; width: 50%; text-align: center">As of May 14, 2021</td></tr> <tr style="vertical-align: top; background-color: #EEEEEE"> <td>Expected term</td> <td style="text-align: center"><span id="xdx_905_eus-gaap--DerivativesBasisAndUseOfDerivativesBasisDeterminationOfFairValue_c20200701__20210514__us-gaap--DerivativeInstrumentRiskAxis__custom--WarrantLiabilityMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedTermMember" title="Fair value measurement assumptions">1 day to 3 years</td></tr> <tr style="vertical-align: top; background-color: white"> <td>Expected volatility</td> <td style="text-align: center"><span id="xdx_909_eus-gaap--DerivativesBasisAndUseOfDerivativesBasisDeterminationOfFairValue_c20200701__20210514__us-gaap--DerivativeInstrumentRiskAxis__custom--WarrantLiabilityMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputPriceVolatilityMember" title="Fair value measurement assumptions">3.3% to 58%</td></tr> <tr style="vertical-align: top; background-color: #EEEEEE"> <td>Risk-free interest rate</td> <td style="text-align: center"><span id="xdx_905_eus-gaap--DerivativesBasisAndUseOfDerivativesBasisDeterminationOfFairValue_c20200701__20210514__us-gaap--DerivativeInstrumentRiskAxis__custom--WarrantLiabilityMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputRiskFreeInterestRateMember" title="Fair value measurement assumptions">0.35% to 0.92% </td></tr> <tr style="vertical-align: top; background-color: white"> <td>Expected dividend rate</td> <td style="text-align: center"><span id="xdx_904_eus-gaap--DerivativesBasisAndUseOfDerivativesBasisDeterminationOfFairValue_c20200701__20210514__us-gaap--DerivativeInstrumentRiskAxis__custom--WarrantLiabilityMember__us-gaap--MeasurementInputTypeAxis__us-gaap--MeasurementInputExpectedDividendRateMember" title="Fair value measurement assumptions">0%</td></tr> <tr style="vertical-align: top; background-color: #EEEEEE"> <td>Probability</td> <td style="text-align: center"><span id="xdx_905_eus-gaap--DerivativesBasisAndUseOfDerivativesBasisDeterminationOfFairValue_c20200701__20210514__us-gaap--DerivativeInstrumentRiskAxis__custom--WarrantLiabilityMember__us-gaap--MeasurementInputTypeAxis__custom--MeasurementInputProbablityMember" title="Fair value measurement assumptions">100%</td></tr> </table>

1 day to 3 years

3.3% to 58%

0.35% to 0.92%

100%

1361347

4610

1324668

32069

617593

24451

685715

5.00

Note 18 - 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 September 30, 2022 and June 30, 2022, $4,842,146 and $1,821,947, respectively, were deposited with various major financial institutions in the United States and PRC. Accounts at each institution in the United States are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000. The Company had approximately $3.9 million and $0.5 million, respectively, in excess of the FDIC insurance limit, as of September 30, 2022 and June 30, 2022. Accounts receivable are typically unsecured and derived from revenue earned from customers, thereby exposing the Company to credit risk. The risk is mitigated by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances. The Company maintains reserves for estimated credit losses, and such losses have generally been within expectations. The business of DHS, the Company’s VIE, may be impacted by Chinese economic conditions, changes in regulations and laws, and other uncertainties. Customer and vendor concentration risk For the three months ended September 30, 2022 and 2021, Amazon Vendor and Amazon Seller customers accounted for <span id="xdx_906_eus-gaap--ConcentrationRiskPercentage1_dp_c20220701__20220930__srt--MajorCustomersAxis__custom--AmazonVendorAndAmazonSellerMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_zW0SznjDrTC" title="Concentration Risk, Percentage">91% and <span id="xdx_906_eus-gaap--ConcentrationRiskPercentage1_dp_c20210701__20210930__srt--MajorCustomersAxis__custom--AmazonVendorAndAmazonSellerMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--SalesRevenueNetMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_zaJb9ZX5dub5" title="Concentration Risk, Percentage">89% of the Company's total revenues, respectively. As of September 30, 2022 and June 30, 2022, accounts receivable from Amazon Vendor and Amazon Seller accounted for <span id="xdx_901_eus-gaap--ConcentrationRiskPercentage1_dp_c20220701__20220930__srt--MajorCustomersAxis__custom--AmazonVendorAndAmazonSellerMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_z0cnZDNbr3C1" title="Concentration Risk, Percentage">94% and <span id="xdx_907_eus-gaap--ConcentrationRiskPercentage1_dp_c20210701__20210930__srt--MajorCustomersAxis__custom--AmazonVendorAndAmazonSellerMember__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsReceivableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--CustomerConcentrationRiskMember_z2KMgNyFHB0j" title="Concentration Risk, Percentage">94% of the Company’s total accounts receivable. For the three months ended September 30, 2022 and 2021, one supplier accounted for 19% and two suppliers accounted for <span id="xdx_909_eus-gaap--ConcentrationRiskPercentage1_dp_c20210701__20210930__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--CostOfSalesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--ProductConcentrationRiskMember__us-gaap--SupplyCommitmentAxis__custom--TwoSuppliersMember_zFw2JIQbpzx7" title="Concentration Risk, Percentage">47% (<span id="xdx_909_eus-gaap--ConcentrationRiskPercentage1_dp_c20210701__20210930__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--CostOfSalesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--ProductConcentrationRiskMember__us-gaap--SupplyCommitmentAxis__custom--OneSupplierMember_z1pwrk6nhRo" title="Concentration Risk, Percentage">36% and <span id="xdx_900_eus-gaap--ConcentrationRiskPercentage1_dp_c20210701__20210930__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--CostOfSalesMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--ProductConcentrationRiskMember__us-gaap--SupplyCommitmentAxis__custom--AnotherSupplierMember_zFFljfYs8E0a" title="Concentration Risk, Percentage">11%) of the Company's total purchases, respectively. As of September 30, 2022, accounts payable to two suppliers accounted for <span id="xdx_902_eus-gaap--ConcentrationRiskPercentage1_dp_c20220701__20220930__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsPayableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--ProductConcentrationRiskMember__us-gaap--SupplyCommitmentAxis__custom--OneSupplierMember_zoJgPcwahE99" title="Concentration Risk, Percentage">48% and <span id="xdx_903_eus-gaap--ConcentrationRiskPercentage1_dp_c20220701__20220930__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsPayableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--ProductConcentrationRiskMember__us-gaap--SupplyCommitmentAxis__custom--AnotherSupplierMember_z3hljzJUZE51" title="Concentration Risk, Percentage">11% of the Company’s total accounts payable. As of June 30, 2022, accounts payable to two suppliers accounted for <span id="xdx_903_eus-gaap--ConcentrationRiskPercentage1_dp_c20210701__20210930__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsPayableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--ProductConcentrationRiskMember__us-gaap--SupplyCommitmentAxis__custom--OneSupplierMember_zieeSr93ezV2" title="Concentration Risk, Percentage">34% and <span id="xdx_901_eus-gaap--ConcentrationRiskPercentage1_dp_c20210701__20210930__us-gaap--ConcentrationRiskByBenchmarkAxis__us-gaap--AccountsPayableMember__us-gaap--ConcentrationRiskByTypeAxis__us-gaap--ProductConcentrationRiskMember__us-gaap--SupplyCommitmentAxis__custom--AnotherSupplierMember_z4uzHjHAJtw" title="Concentration Risk, Percentage">10%, respectively, of the Company’s total accounts payable.

4842146

1821947

3900000

500000

0.91

0.89

0.94

0.47

0.36

0.11

0.48

0.11

0.34

0.10

Note 19 - Commitments and contingencies Lease commitments The Company has adopted ASC842 since its inception date, April 11, 2018. The Company has entered into a lease agreement to rent office and warehouse space with a lease period from December 1, 2018 until December 31, 2020. On August 24, 2020, the Company negotiated for new terms to extend the lease through December 21, 2023 at the rate of approximately $42,000 per month. On 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 ranges from $27,921 to $29,910 per month through October 31, 2023. On February 15, 2022, upon completion of the acquisition of Anivia Limited, the Company assumed an operating lease for offices located in the People’s Republic of China. On July 28, 2021, the Company entered into a Lease agreement (the “Lease Agreement”) with 9th & Vineyard, LLC, a Delaware limited liability company (the “Landlord”), to lease from the Landlord approximately 99,347 square feet of space located at 8798 9th Street, Rancho Cucamonga, California (the “Premises”). The term of the Lease Agreement was for 62 months, commencing on the date on which the Landlord completes certain prescribed improvements on the property (the “Rent Commencement Date”). The Lease Agreement does not provide for an option to renew. 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 were to be abated. The lease was not started under the original Lease Agreement as completion of the construction was not timely completed. On February 23, 2022, as a result of the delay in completion of the construction, the Company entered into an amended agreement to extend the lease term to 74 months. The lease commencement date is February 10, 2022, with rent payments commencing May 11, 2022 and the lease expiring on May 31, 2028. The base rental fee ranges from $114,249 to $140,079 per month through the expiration date of May 31, 2028. On May 1, 2022, the Company leased another fulfillment center in Duarte, California. The base rental fee ranges from $56,000 to $59,410 per month through April 30, 2025. Total commitment for the full term of these leases is $12,440,869. The financial statements reflected $9,805,484 and $10,453,282, respectively, of operating lease right-of-use assets, and $10,210,581 and $10,848,544, respectively, of operating lease liabilities as of September 30, 2022 and June 30, 2022. Three Months Ended September 30, 2022 and 2021: <table cellpadding="0" cellspacing="0" id="xdx_898_eus-gaap--LeaseCostTableTextBlock_zyPetp67ISLd" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse" summary="xdx: Disclosure - Commitments and contingencies (Details - Lease cost)"> <tr style="vertical-align: bottom"> <td> Schedule of lease cost and other information</td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Lease cost</td> <td> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">9/30/2022</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">9/30/2021</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #EEEEEE"> <td style="width: 68%">Operating lease cost (included in selling and fulfillment in the Company's statement of operations)</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td id="xdx_988_eus-gaap--OperatingLeaseCost_c20220701__20220930_pp0p0" style="width: 13%; text-align: right" title="Operating lease cost">779,233</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td id="xdx_986_eus-gaap--OperatingLeaseCost_c20210701__20210930_pp0p0" style="width: 13%; text-align: right" title="Operating lease cost">205,517</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #EEEEEE"> <td>Other information</td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Cash paid for amounts included in the measurement of lease liabilities</td> <td> </td> <td>$</td> <td id="xdx_986_eus-gaap--OperatingLeasePayments_c20220701__20220930_pp0p0" style="text-align: right" title="Cash paid for amounts included in the measurement of lease liabilities">769,061</td> <td> </td> <td> </td> <td>$</td> <td id="xdx_984_eus-gaap--OperatingLeasePayments_c20210701__20210930_pp0p0" style="text-align: right" title="Cash paid for amounts included in the measurement of lease liabilities">209,763</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #EEEEEE"> <td>Remaining term in years</td> <td> </td> <td> </td> <td style="text-align: right">0.83 – 5.67</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">2.25</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Average discount rate - operating leases</td> <td> </td> <td> </td> <td style="text-align: right">5 - 8%</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">8%</td> <td> </td></tr> </table> The supplemental balance sheet information related to leases for the period is as follows: <table cellpadding="0" cellspacing="0" id="xdx_89D_eus-gaap--ScheduleOfCashFlowSupplementalDisclosuresTableTextBlock_z1R2DuqD3Do" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse" summary="xdx: Disclosure - Commitments and contingencies (Details - Balance Sheet)"> <tr style="vertical-align: bottom"> <td> Supplemental balance sheet information related to leases</td> <td> </td> <td> </td> <td id="xdx_49F_20220930_zhG9cn53YEr2" style="text-align: center"> </td> <td> </td> <td> </td> <td> </td> <td id="xdx_49E_20220630_zPGkXG8MHa2d" style="text-align: center"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Operating leases</td> <td> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">9/30/2022</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">6/30/2022</td> <td> </td></tr> <tr id="xdx_40A_eus-gaap--OperatingLeaseRightOfUseAsset_iI_pp0p0_msOLLzdlC_zDmTCGWQwuDl" style="vertical-align: bottom; background-color: #EEEEEE"> <td style="width: 68%">Right of use asset - non-current</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 13%; text-align: right">9,805,484</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 13%; text-align: right">10,453,282</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr id="xdx_404_ecustom--OperatingLeaseLiabilityCurrents_iI_maOLLzdlC_zXztPYFBZSca" style="vertical-align: bottom; background-color: #EEEEEE"> <td>Lease Liability - current</td> <td> </td> <td> </td> <td style="text-align: right">2,593,995</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">2,583,933</td> <td> </td></tr> <tr id="xdx_406_ecustom--OperatingLeaseLiabilityNoncurrents_iI_maOLLzdlC_zvpPNRahbFw2" style="vertical-align: bottom; background-color: white"> <td>Lease Liability - non-current</td> <td> </td> <td style="border-bottom: black 1pt solid"> </td> <td style="border-bottom: black 1pt solid; text-align: right">7,616,586</td> <td> </td> <td> </td> <td style="border-bottom: black 1pt solid"> </td> <td style="border-bottom: black 1pt solid; text-align: right">8,265,611</td> <td> </td></tr> <tr id="xdx_40C_eus-gaap--OperatingLeaseLiability_iTI_pp0p0_mtOLLzdlC_zyfpDsmxY8d4" style="vertical-align: bottom; background-color: #EEEEEE"> <td>Total operating lease liabilities</td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">10,210,581</td> <td> </td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">10,848,544</td> <td> </td></tr> </table> Maturities of the Company’s lease liabilities are as follows: <table cellpadding="0" cellspacing="0" id="xdx_89D_eus-gaap--LesseeOperatingLeaseLiabilityMaturityTableTextBlock_ze3VBcFqIFub" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse" summary="xdx: Disclosure - Commitments and contingencies (Details - Lease maturity)"> <tr style="vertical-align: bottom"> <td> Schedule of maturities of lease liabilities</td> <td> </td> <td colspan="2" id="xdx_49A_20220930_z6rKgsqygPRc" style="text-align: center"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Operating</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Lease</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #EEEEEE"> <td>For Year ending June 30:</td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr id="xdx_405_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueNextTwelveMonths_iI_pp0p0" style="vertical-align: bottom; background-color: white"> <td style="width: 84%">2023</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 13%; text-align: right">2,303,662</td> <td style="width: 1%"> </td></tr> <tr id="xdx_40A_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueYearTwo_iI_pp0p0" style="vertical-align: bottom; background-color: #EEEEEE"> <td>2024</td> <td> </td> <td> </td> <td style="text-align: right">2,510,662</td> <td> </td></tr> <tr id="xdx_40D_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueYearThree_iI_pp0p0" style="vertical-align: bottom; background-color: white"> <td>2025</td> <td> </td> <td> </td> <td style="text-align: right">2,080,331</td> <td> </td></tr> <tr id="xdx_402_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueYearFour_iI_pp0p0" style="vertical-align: bottom; background-color: #EEEEEE"> <td>2026</td> <td> </td> <td> </td> <td style="text-align: right">1,533,918</td> <td> </td></tr> <tr id="xdx_405_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueYearFive_iI_pp0p0" style="vertical-align: bottom; background-color: white"> <td>2027</td> <td> </td> <td> </td> <td style="text-align: right">1,586,572</td> <td> </td></tr> <tr id="xdx_402_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueAfterYearFive_iI_pp0p0" style="vertical-align: bottom; background-color: #EEEEEE"> <td>2028 and after</td> <td> </td> <td> </td> <td style="text-align: right">1,459,407</td> <td> </td></tr> <tr id="xdx_40B_eus-gaap--LesseeOperatingLeaseLiabilityUndiscountedExcessAmount_iNI_pp0p0_di_zMXZyI13IfYd" style="vertical-align: bottom; background-color: white"> <td>Less: Imputed interest/present value discount</td> <td> </td> <td style="border-bottom: black 1pt solid"> </td> <td style="border-bottom: black 1pt solid; text-align: right">(1,263,971</td> <td>)</td></tr> <tr id="xdx_40F_eus-gaap--OperatingLeaseLiability_iI_pp0p0" style="vertical-align: bottom; background-color: #EEEEEE"> <td>Present value of lease liabilities</td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">10,210,581</td> <td> </td></tr> </table> Contingencies Except as disclosed below, the Company is not currently a party to any material legal proceedings, investigation or claims. As the Company may, from time to time, be involved in legal matters arising in the ordinary course of its business, there can be no assurance that such matters will not arise in the future or that any such matters in which the Company is involved, or which may arise in the ordinary course of the Company’s business, will not at some point proceed to litigation or that such litigation will not have a material adverse effect on the business, financial condition or results of operations of the Company. 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). Presently, the matter is scheduled to be heard before a FINRA arbitration appeal over six non-consecutive days during the months of April and May 2023. 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. The Company cannot reasonably estimate the amount of potential exposure as of the date of this report. 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 may have on the Company’s business in the future. In February 2022, the Russian Federation began conducting military operations against Ukraine, resulting in global economic uncertainty and increased cost of various commodities. In response to these types of events, should they directly impact our supply chain or other operations, we may experience or be exposed to supply chain disruption which could cause us to seek alternate sources for product supply, or suffer consequences that are unexpected and difficult to mitigate. Any of these risks might have a materially adverse impact on our business operations and our financial position or results of operations. Although, it is difficult to predict the impact that these factors may have on our business in the future, they did not have a material effect on our results of operations, financial condition, or liquidity for the three months ended September 30, 2022.

The base rental fee ranges from $56,000 to $59,410 per month through April 30, 2025.

12440869

9805484

10453282

10210581

10848544

<table cellpadding="0" cellspacing="0" id="xdx_898_eus-gaap--LeaseCostTableTextBlock_zyPetp67ISLd" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse" summary="xdx: Disclosure - Commitments and contingencies (Details - Lease cost)"> <tr style="vertical-align: bottom"> <td> Schedule of lease cost and other information</td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td> <td> </td> <td colspan="2" style="text-align: center"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Lease cost</td> <td> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">9/30/2022</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">9/30/2021</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #EEEEEE"> <td style="width: 68%">Operating lease cost (included in selling and fulfillment in the Company's statement of operations)</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td id="xdx_988_eus-gaap--OperatingLeaseCost_c20220701__20220930_pp0p0" style="width: 13%; text-align: right" title="Operating lease cost">779,233</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td id="xdx_986_eus-gaap--OperatingLeaseCost_c20210701__20210930_pp0p0" style="width: 13%; text-align: right" title="Operating lease cost">205,517</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #EEEEEE"> <td>Other information</td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Cash paid for amounts included in the measurement of lease liabilities</td> <td> </td> <td>$</td> <td id="xdx_986_eus-gaap--OperatingLeasePayments_c20220701__20220930_pp0p0" style="text-align: right" title="Cash paid for amounts included in the measurement of lease liabilities">769,061</td> <td> </td> <td> </td> <td>$</td> <td id="xdx_984_eus-gaap--OperatingLeasePayments_c20210701__20210930_pp0p0" style="text-align: right" title="Cash paid for amounts included in the measurement of lease liabilities">209,763</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #EEEEEE"> <td>Remaining term in years</td> <td> </td> <td> </td> <td style="text-align: right">0.83 – 5.67</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">2.25</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td>Average discount rate - operating leases</td> <td> </td> <td> </td> <td style="text-align: right">5 - 8%</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">8%</td> <td> </td></tr> </table>

779233

205517

769061

209763

0.83 – 5.67

P2Y3M

5 - 8%

0.08

<table cellpadding="0" cellspacing="0" id="xdx_89D_eus-gaap--ScheduleOfCashFlowSupplementalDisclosuresTableTextBlock_z1R2DuqD3Do" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse" summary="xdx: Disclosure - Commitments and contingencies (Details - Balance Sheet)"> <tr style="vertical-align: bottom"> <td> Supplemental balance sheet information related to leases</td> <td> </td> <td> </td> <td id="xdx_49F_20220930_zhG9cn53YEr2" style="text-align: center"> </td> <td> </td> <td> </td> <td> </td> <td id="xdx_49E_20220630_zPGkXG8MHa2d" style="text-align: center"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td>Operating leases</td> <td> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">9/30/2022</td> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">6/30/2022</td> <td> </td></tr> <tr id="xdx_40A_eus-gaap--OperatingLeaseRightOfUseAsset_iI_pp0p0_msOLLzdlC_zDmTCGWQwuDl" style="vertical-align: bottom; background-color: #EEEEEE"> <td style="width: 68%">Right of use asset - non-current</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 13%; text-align: right">9,805,484</td> <td style="width: 1%"> </td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 13%; text-align: right">10,453,282</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: white"> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr id="xdx_404_ecustom--OperatingLeaseLiabilityCurrents_iI_maOLLzdlC_zXztPYFBZSca" style="vertical-align: bottom; background-color: #EEEEEE"> <td>Lease Liability - current</td> <td> </td> <td> </td> <td style="text-align: right">2,593,995</td> <td> </td> <td> </td> <td> </td> <td style="text-align: right">2,583,933</td> <td> </td></tr> <tr id="xdx_406_ecustom--OperatingLeaseLiabilityNoncurrents_iI_maOLLzdlC_zvpPNRahbFw2" style="vertical-align: bottom; background-color: white"> <td>Lease Liability - non-current</td> <td> </td> <td style="border-bottom: black 1pt solid"> </td> <td style="border-bottom: black 1pt solid; text-align: right">7,616,586</td> <td> </td> <td> </td> <td style="border-bottom: black 1pt solid"> </td> <td style="border-bottom: black 1pt solid; text-align: right">8,265,611</td> <td> </td></tr> <tr id="xdx_40C_eus-gaap--OperatingLeaseLiability_iTI_pp0p0_mtOLLzdlC_zyfpDsmxY8d4" style="vertical-align: bottom; background-color: #EEEEEE"> <td>Total operating lease liabilities</td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">10,210,581</td> <td> </td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">10,848,544</td> <td> </td></tr> </table>

9805484

10453282

2593995 2583933 7616586 8265611

10210581

10848544

<table cellpadding="0" cellspacing="0" id="xdx_89D_eus-gaap--LesseeOperatingLeaseLiabilityMaturityTableTextBlock_ze3VBcFqIFub" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse" summary="xdx: Disclosure - Commitments and contingencies (Details - Lease maturity)"> <tr style="vertical-align: bottom"> <td> Schedule of maturities of lease liabilities</td> <td> </td> <td colspan="2" id="xdx_49A_20220930_z6rKgsqygPRc" style="text-align: center"> </td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="text-align: center">Operating</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td> <td> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Lease</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: #EEEEEE"> <td>For Year ending June 30:</td> <td> </td> <td> </td> <td style="text-align: right"> </td> <td> </td></tr> <tr id="xdx_405_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueNextTwelveMonths_iI_pp0p0" style="vertical-align: bottom; background-color: white"> <td style="width: 84%">2023</td> <td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="width: 13%; text-align: right">2,303,662</td> <td style="width: 1%"> </td></tr> <tr id="xdx_40A_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueYearTwo_iI_pp0p0" style="vertical-align: bottom; background-color: #EEEEEE"> <td>2024</td> <td> </td> <td> </td> <td style="text-align: right">2,510,662</td> <td> </td></tr> <tr id="xdx_40D_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueYearThree_iI_pp0p0" style="vertical-align: bottom; background-color: white"> <td>2025</td> <td> </td> <td> </td> <td style="text-align: right">2,080,331</td> <td> </td></tr> <tr id="xdx_402_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueYearFour_iI_pp0p0" style="vertical-align: bottom; background-color: #EEEEEE"> <td>2026</td> <td> </td> <td> </td> <td style="text-align: right">1,533,918</td> <td> </td></tr> <tr id="xdx_405_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueYearFive_iI_pp0p0" style="vertical-align: bottom; background-color: white"> <td>2027</td> <td> </td> <td> </td> <td style="text-align: right">1,586,572</td> <td> </td></tr> <tr id="xdx_402_eus-gaap--LesseeOperatingLeaseLiabilityPaymentsDueAfterYearFive_iI_pp0p0" style="vertical-align: bottom; background-color: #EEEEEE"> <td>2028 and after</td> <td> </td> <td> </td> <td style="text-align: right">1,459,407</td> <td> </td></tr> <tr id="xdx_40B_eus-gaap--LesseeOperatingLeaseLiabilityUndiscountedExcessAmount_iNI_pp0p0_di_zMXZyI13IfYd" style="vertical-align: bottom; background-color: white"> <td>Less: Imputed interest/present value discount</td> <td> </td> <td style="border-bottom: black 1pt solid"> </td> <td style="border-bottom: black 1pt solid; text-align: right">(1,263,971</td> <td>)</td></tr> <tr id="xdx_40F_eus-gaap--OperatingLeaseLiability_iI_pp0p0" style="vertical-align: bottom; background-color: #EEEEEE"> <td>Present value of lease liabilities</td> <td> </td> <td style="border-bottom: black 2.25pt double">$</td> <td style="border-bottom: black 2.25pt double; text-align: right">10,210,581</td> <td> </td></tr> </table>

2303662

2510662

2080331

1533918

1586572

1459407

1263971

10210581

Note 20 - Subsequent events The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the consolidated financial statements are available to be issued. Other than as set forth below and as disclosed in Note 4 and Note 12 above, no material subsequent events that required recognition or additional disclosure in the consolidated financial statements are presented. On November 9, 2022, the Company received a deficiency letter from the Listing Qualifications Department of the Nasdaq Stock Market (“Nasdaq”) notifying the Company that, for the preceding 30 consecutive business days, the closing bid price for the Company’s common stock was trading below the minimum $1.00 per share requirement for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5405(a)(1) (the “Bid Price Requirement”). In order to regain compliance with the Bid Price Requirement, the Company’s stock must trade at $1.00 or above for a period of 10 consecutive trading days. Following receipt of Nasdaq’s deficiency notification, the Company has 180 days, or until May 8, 2023, to regain compliance with the Bid Price Requirement and may seek an additional 180-day extension thereafter. During that time, the Company will evaluate what actions it needs to take should the Company determine that it is unlikely that it will regain compliance within the requisite time period. While the Company needs to remain mindful of the timing in which it needs to regain compliance, the deficiency notification has no immediate effect on the Company’s Nasdaq listing and the Company’s common stock will continue to trade on Nasdaq under the ticker symbol “IPW.”

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