8-K
iPower Inc. (IPW)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the SecuritiesExchange Act of 1934
Date of report (date of earliest event reported): November 11, 2021
iPower
Inc.
(Exact name of registrant as specified in its charter)
Commission
file number: 001-40391
| Nevada | 5200 | 82-5144171 |
|---|---|---|
| (State of<br><br> <br>Incorporation) | (Primary Standard Industrial<br><br> <br>Classification Code Number.) | (IRS Employer<br><br> <br>Identification No.) |
iPower Inc.
2399 Bateman Avenue
Duarte, CA 91010
(Address Of Principal Executive Offices) (Zip Code)
(626) 863-7344
(Registrant’s Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock $0.001 per share | IPW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
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On November 11, 2021, iPower Inc., a Nevada corporation (the “Company”), issued a press release announcing its financial results for the fiscal first quarter ended September 30, 2021 (the “Earnings Release”). The Earnings Release was issued in conjunction with the Company’s previously disclosed earnings call, which was held November 11, 2021, at 4:30 p.m. ET, 1:30 p.m. PT, during which time the Company discussed its financial results for the fiscal first quarter ended September 30, 2021.
For those who were unable to participate during the live broadcast of the earnings call, a replay of the webcast is available on the Company's website at https://ir.meetipower.com/, where the Company has also posted a copy of the Earnings Release. A copy of the Earnings Release is attached hereto and incorporated herein by reference.
In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. Such information may be incorporated by reference in another filing under the Exchange Act or the Securities Act of 1933, as amended, only if and to the extent that such subsequent filing specifically references such information.
| Item 9.01 | Financial Statements and Exhibits. |
|---|---|
| (d) | Exhibits |
| --- | --- |
| Exhibit No. | Description |
| --- | --- |
| 99.1 | Press Release, dated November 11, 2021. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: November 12, 2021 | |
|---|---|
| iPOWER INC. | |
| By: | /s/ Chenlong Tan |
| Name: | Chenlong Tan |
| Title: | Chief Executive Officer |
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Exhibit 99.1
iPowerReports Fiscal First Quarter 2022 Results
Fiscal Q1 Revenue up16% to $17.4 Million; In-House Branded Product Sales Drive Continued Gross Margin Expansion Despite Supply Chain Headwinds
iPower Management toHost Conference Call Today at 4:30 p.m. Eastern Time
DUARTE, CA, November 11, 2021 -- iPower Inc. (Nasdaq:IPW) (“iPower” or the “Company”), one of the leading online hydroponic equipment suppliers and retailers in the United States, today announced financial results for its fiscal first quarter ended September 30, 2021.
Fiscal Q1 2022 Results vs. Year-Ago Quarter
| • | Total<br>revenue increased 16% to a record $17.4 million. |
|---|---|
| • | Gross<br>profit increased 31% to $7.3 million. As a percentage of revenue, gross margin increased 490 basis points to 42.1%. |
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| • | Net<br>income increased 16% to $0.89 million or $0.03 per share. |
| --- | --- |
Management Commentary
“We continued to execute on our growth initiatives during the quarter, as reflected by another period of double-digit year over year revenue growth and gross margin expansion,” said Lawrence Tan, CEO of iPower. “Given the broader industry weakness in commercial hydroponics and comping a record quarter last year, we were pleased with our top-line performance. We continued to emphasize in-house product sales, which grew by 21% to approximately $13 million and accounted for 75% of revenue in fiscal Q1 compared to 72% in the year-ago quarter. This helped offset the rapid increase in freight costs we experienced over the summer.
“From a product perspective, our in-house ventilation line was our strongest category during the quarter. This was a much smaller category for us prior to the pandemic, and its growth is a reflection of our superior product design and merchandising capability, as well as the work we put in to effectively manage our supply partner network.”
iPower CFO Kevin Vassily added, “We have started to see lower shipping costs in fiscal Q2 as congestion in the California ports has begun to ease, however the supply chain more broadly remains volatile, particularly around input costs and COVID-19 disruptions that continue to impact our partners overseas. Our focus is nevertheless unchanged. We will continue to bring new in-house SKUs to market and plan to continue working with our suppliers to navigate this unique supply chain environment as we deliver on our various growth objectives in fiscal 2022.”
Fiscal First Quarter 2022 Financial Results
Total revenue in the fiscal first quarter of 2022 increased 16% to $17.4 million compared to $15.0 million for the same period in fiscal 2021. The increase was primarily driven by greater in-house product sales, as well as increased sales of ventilation and nutrient products.
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Gross profit in the fiscal first quarter of 2022 increased 31% to $7.3 million compared to $5.6 million. As a percentage of revenue, gross margin increased 490 basis points to 42.1% compared to 37.2%. The increase was driven by a greater mix of in-house product sales, partially offset by increased freight and product input costs.
Total operating expenses in the fiscal first quarter were $6.0 million compared to $4.5 million for the same period in fiscal 2021. The increase was primarily driven by increased sales volumes, increases in advertising, and an increase in expenses associated with being a publicly traded company.
Net income in the fiscal first quarter of 2022 increased 17% to $0.89 million or $0.03 per diluted share, compared to net income of $0.76 million or $0.04 per diluted share for the same period in fiscal 2021.
Cash and cash equivalents were $1.2 million as of September 30, 2021, compared to $6.7 million as June 30, 2021. The decrease was attributed to the timing of receivables with the Company’s largest channel partner and is not an indication of any other business or operating trend. Total debt as of September 30, 2021 was $0.5 million compared to $0.7 million as of June 30, 2021.
Conference Call
The Company will conduct a conference call today at 4:30 p.m. Eastern time to discuss the results for its fiscal first quarter ended September 30, 2021.
iPower management will host the conference call, followed by a question-and-answer period.
Date: Thursday, November 11, 2021
Time: 4:30 p.m. Eastern time
Toll-free dial-in number: (888) 705-0179
International dial-in number: (409) 981-0009
Conference ID: 5848879
Webcast: iPower FQ1 2022 Conference Call
Please call the conference call dial-in 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Elevate IR at (949) 200-4603.
The conference call will also be broadcast live and available for replay in the Events & Presentations section of the Company’s website at www.meetipower.com.
About iPower Inc.
iPower Inc. is one of the leading online retailers and suppliers of hydroponics equipment and accessories in the United States. iPower offers thousands of stock keeping units from its in-house brands as well as hundreds of other brands through its website, www.zenhydro.com, and its online platform partners. All orders are fulfilled from its two fulfillment centers in Southern California. iPower has a diverse customer base that includes both commercial businesses and individuals. For more information, please visit iPower's website at https://ir.meetipower.com/.
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Forward-Looking Statements
All statements other than statements of historical fact in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations and projections about future events and financial trends that iPower believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. iPower undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although iPower believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and iPower cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in iPower's registration statement and in its other filings with the SEC.
US & Canada InvestorRelations Contact:
Sean Mansouri, CFA
Elevate IR
(949) 200-4603
IPW@elevate-ir.com
Asia Investor RelationsContact:
Sherry Zheng
Weitian Group LLC
(718) 213-7386
shunyu.zheng@weitian-ir.com
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iPower Inc.
Unaudited Condensed Consolidated Balance Sheets
As of September 30, 2021 and June 30, 2021
| June 30, | |||
|---|---|---|---|
| 2021 | |||
| ASSETS | |||
| Current assets | |||
| Cash and cash equivalent | 1,219,580 | $ | 6,651,705 |
| Accounts receivable | 13,083,946 | 7,896,347 | |
| Inventories, net | 14,594,078 | 13,065,741 | |
| Prepayments<br> and other current assets | 6,243,929 | 4,693,000 | |
| Total current assets | 35,141,533 | 32,306,793 | |
| Non-current assets | |||
| Right of use - non-current | 1,648,133 | 1,819,421 | |
| Property and equipment, net | 102,026 | 55,659 | |
| Non-current prepayments | 1,249,375 | 1,357,292 | |
| Other non-current<br> assets | 328,643 | 99,645 | |
| Total non-current assets | 3,328,177 | 3,332,017 | |
| Total assets | 38,469,710 | $ | 35,638,810 |
| LIABILITIES AND EQUITY | |||
| Current liabilities | |||
| Accounts payable | 6,186,446 | 3,940,963 | |
| Credit cards payable | 787,176 | 584,311 | |
| Customer deposit | 248,384 | 297,407 | |
| Other payables and accrued liabilities | 2,690,163 | 2,487,441 | |
| Short-term loans payable | – | 162,769 | |
| Lease liability - current | 749,132 | 731,944 | |
| Long-term loan payable - current<br> portion | 29,244 | 29,244 | |
| Income taxes<br> payable | 377,145 | 790,823 | |
| Total current liabilities | 11,067,690 | 9,024,902 | |
| Non-current liabilities | |||
| Long-term loan payable | 448,823 | 458,571 | |
| Lease liability - non-current | 976,830 | 1,169,552 | |
| Total non-current liabilities | 1,425,653 | 1,628,123 | |
| Total liabilities | 12,493,343 | 10,653,025 | |
| Commitments and contingency | – | – | |
| Stockholders' Equity | |||
| Preferred stock, 0.001 par value; 20,000,000 shares<br> authorized; 0 shares issued and outstanding at September 30, 2021 and June 30, 2021 | – | – | |
| Common stock, 0.001 par value; 180,000,000 shares<br> authorized; 26,448,663 and 26,448,663 shares issued and outstanding at September 30, 2021 and<br> June 30, 2021 | 26,449 | 26,449 | |
| Additional paid in capital | 23,317,317 | 23,214,263 | |
| Retained earnings | 2,632,601 | 1,745,073 | |
| Total equity | 25,976,367 | 24,985,785 | |
| Total liabilities and equity | 38,469,710 | $ | 35,638,810 |
All values are in US Dollars.
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iPower Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations
For the Three Months Ended September 30, 2021 and 2020
| For the Three Months Ended September 30, | ||||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||
| (Unaudited) | (Unaudited) | |||||
| REVENUES | $ | 17,366,765 | $ | 14,959,935 | ||
| TOTAL REVENUES | 17,366,765 | 14,959,935 | ||||
| COST OF REVENUES | 10,053,063 | 9,397,147 | ||||
| GROSS PROFIT | 7,313,702 | 5,562,788 | ||||
| OPERATING EXPENSES: | ||||||
| Selling and fulfillment | 3,665,921 | 3,213,674 | ||||
| General and<br> administrative | 2,357,466 | 1,272,741 | ||||
| Total operating<br> expenses | 6,023,387 | 4,486,415 | ||||
| INCOME FROM OPERATIONS | 1,290,315 | 1,076,373 | ||||
| OTHER INCOME (EXPENSE) | ||||||
| Interest income (expenses) | – | (25,830 | ) | |||
| Other financing expenses | (59,000 | ) | – | |||
| Other non-operating<br> income (expense) | (812 | ) | 7,397 | |||
| Total other<br> (expenses), net | (59,812 | ) | (18,433 | ) | ||
| INCOME BEFORE INCOME TAXES | 1,230,503 | 1,057,940 | ||||
| PROVISION FOR INCOME TAXES | 342,975 | 295,944 | ||||
| NET INCOME | $ | 887,528 | $ | 761,996 | ||
| WEIGHTED AVERAGE NUMBER OF COMMON STOCK* | ||||||
| Basic | 26,484,528 | 20,204,496 | ||||
| Diluted | 26,495,420 | 20,204,496 | ||||
| EARNINGS PER SHARE * | ||||||
| Basic | $ | 0.03 | $ | 0.04 | ||
| Diluted | $ | 0.03 | $ | 0.04 |
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