iPower (US:IPW)2025-11-14 16:13Financial Performance - Revenues for the three months ended September 30, 2025 decreased 36.8% to $12,017,467 compared to $19,008,521 for the same period in 2024, primarily due to decreased orders from Amazon and temporary supply disruptions [182]. - Gross profit was $4,806,524 for the three months ended September 30, 2025, down from $8,487,897 in 2024, with a gross profit margin of 40.0% compared to 44.7% in the prior year [184]. - Operating expenses decreased 42.1% to $6,501,703 for the three months ended September 30, 2025, primarily due to reduced selling, fulfillment, and general administrative expenses [185]. - Net loss attributable to iPower Inc. for the three months ended September 30, 2025 was $533,648, a significant decrease from $2,029,281 in 2024, reflecting a reduction in operating expenses and an increase in other income [188]. - Other income for the three months ended September 30, 2025 was $697,947, a significant increase from $77,805 in 2024, driven by non-operating income and reduced interest expenses [187]. Cash Flow and Working Capital - Cash and cash equivalents as of September 30, 2025 were $903,975, a decrease of $1,103,915 from $2,007,890 as of June 30, 2025, primarily due to operational cash flow and payments on the revolving line of credit [190]. - Working capital as of September 30, 2025 was $4.1 million, down from $4.9 million as of June 30, 2025, with historical seasonality expected to continue affecting cash and inventory levels [194]. - Net cash used in investing activities increased to $1,037,272 in Q3 2025 from $202,140 in Q3 2024, primarily due to deconsolidation of VIE cash and investments in joint ventures [196]. - Net cash used in financing activities decreased to $1,778,026 in Q3 2025 from $3,308,599 in Q3 2024, mainly due to reduced payments on the revolving loan [197]. Goodwill and Intangible Assets - The goodwill balance remained stable at $3,034,110 as of September 30, 2025, with no impairment noted during the quarter [215]. - The Company performed a qualitative goodwill impairment analysis and found no impairment for the three months ended September 30, 2025 [215]. - The Company has not recorded any impairment charges for intangible assets for the three months ended September 30, 2025 [216]. Credit and Revenue Recognition - The Company has approximately $1.0 million in unused credit under the revolving line with JPMorgan Chase, which is expected to support operations amid current challenges [192]. - The Company recognizes revenues from product sales upon shipment and from services upon completion, adhering to ASC 606 revenue recognition standards [200][201]. - The Company maintains an allowance for credit losses based on the creditworthiness of customers and economic conditions, regularly reviewing accounts receivable [206]. - The Company deconsolidated its Variable Interest Entity (VIE) on August 4, 2025, following the termination of all VIE agreements [211]. - The Company does not anticipate any material changes to its financial position from its income tax filing positions and has not recorded reserves for uncertain tax positions [221]. Future Plans - The company plans to increase investments in product and brand development and is actively evaluating potential acquisition opportunities to enhance its product catalog [176].