iPower (IPW) risk factors, 2025 10-K

Risks Related to Our Business and Products

1. 01We sell proprietary brand offerings, as well as third party brands, which could expose us to various risks
2. 02Our competitors and potential competitors may develop products and technologies that are more effective or commercially attractive than our products
3. 03We may not be able to successfully develop new products or improve existing products or maintain our effectiveness in reaching consumers through rapidly evolving communication vehicles
4. 04The availability and cost of transportation for our products is vital to our success, and the loss of availability or increase in the cost of transportation or freight costs could have an unfavorable impact on our business, results of operations, financial condition, and cash flows
5. 05The ongoing conflict between Russia and Ukraine may adversely affect our business, financial condition, or results of operations
6. 06We have a limited operating history on which stockholders and potential investors can evaluate our business or base an investment decision23% rewritten
7. 07Almost all of our sales are carried out through third-party platforms, including Amazon, Temu, Walmart and eBay; any disruption in our selling efforts on such third party platforms could substantially disrupt our business42% rewritten
8. 08Poor economic conditions could adversely affect our business30% rewritten
9. 09Heightened inflation, increased interest rates and other economic conditions including potential recession and credit market disruptions could negatively impact our business
10. 10Government efforts to combat inflation, along with other interest rate pressures arising from an inflationary economic environment, could lead to higher financing costs
11. 11We rely heavily on our access to the China markets for the production of our products; should U.S. and China trade relations further deteriorate, and should the ongoing trade war continue, our supply chain, and thus our operations and revenues, could be subject to deleterious effects25% rewritten
12. 12We face intense competition that could prohibit us from developing or increasing our customer base
13. 13If we need additional capital to fund the expansion of our operations, we may not be able to obtain sufficient capital on terms favorable to us and may be forced to limit the expansion of our operations
14. 14Our business depends substantially on the continuing efforts of our executive officers and our business may be severely disrupted if we lose their services
15. 15If we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy
16. 16In order to increase our sales and marketing infrastructure, we will need to grow the size of our organization, and we may experience difficulties in managing this growth
17. 17Certain of our products may be purchased for use in the cannabis industry and/or be subject to varying, inconsistent, and rapidly changing laws, regulations, administrative practices, enforcement approaches, judicial interpretations, and consumer perceptions
18. 18Continued federal intervention in certain segments of the cannabis industry may have a negative impact on us
19. 19Acquisitions, other strategic alliances, and investments could result in operating difficulties, dilution, and other harmful consequences that may adversely impact our business and results of operations
20. 20Our ongoing investment in and development of our new in-house branded product line is inherently risky and could disrupt our ongoing businesses
21. 21If we are unable to effectively execute our e-commerce business, our reputation and operating results may be harmed
22. 22A substantial proportion of our sales occur on Amazon and, as such, should our Company experience any negative actions by Amazon, our sales could be significantly affected45% rewritten
23. 23Our reliance on third-party manufacturers could harm our business
24. 24Our reliance on a limited base of suppliers for certain products, such as light ballasts, may result in disruptions to our business and adversely affect our financial results
25. 25A significant interruption in the operation of our or our suppliers’ facilities could impact our capacity to produce products and service our customers, which could adversely affect revenues and earnings
26. 26If our suppliers are unable to source raw materials in sufficient quantities, on a timely basis, and at acceptable costs, our ability to sell our products may be harmed
27. 27Disruptions in availability or increases in the prices of raw materials sourced by suppliers could adversely affect our results of operations
28. 28If our suppliers that currently, or in the future, sell directly to the retail market in which we conduct our current or future business, enhance these efforts and cease or decrease their sales through us, our ability to sell certain products could be harmed
29. 29Our operations may be impaired if our information technology systems fail to perform adequately or if we are the subject of a data breach or cyber-attack
30. 30We may not be able to adequately protect our intellectual property and other proprietary rights that are material to our business
31. 31Management has evaluated remediation plans for the deficiency and has implemented changes to address the material weakness identified, including hiring additional accountants and consultants and implementing controls and procedures over financial reporting process
32. 32Changes in U.S. and international trade policies, particularly with respect to China, could materially and adversely impact our business and results of operationsNew
33. 33We have announced that we may adopt a digital treasury strategy which, if adopted and effectuated, would expose us to various risks, including risks associated with holding Bitcoin and other cryptocurrency assetsNew
34. 34Litigation may adversely affect our business, financial condition, and results of operations
35. 35If product liability lawsuits are brought against us, we may incur substantial liabilities
36. 36We may not be able to obtain insurance coverage adequate to cover all significant risk exposures
37. 37Unanticipated changes in our tax provisions, the adoption of new tax legislation or exposure to additional tax liabilities could affect our profitability and cash flows
38. 38Certain of our products sell on a seasonal basis, resulting in fluctuations in our cash flow, inventory, and accounts payable
39. 39Our results of operations could be materially harmed if we are unable to accurately forecast customer demand for our products and manage our inventory
40. 40The failure of third parties to meet their contractual, regulatory, and other obligations could adversely affect our business
41. 41The sizes of the markets for our current and future products have not been established with precision and may be smaller than we estimate
42. 42The conflict between Russia and Ukraine and the war in the Middle East may have the effect of heightening many of the other risks described in this “Risk Factors” section27% rewritten

Risks Related to Doing Business with the Cannabis Industry

1. 43Certain of our products may be purchased for use in new and emerging industries and/or be subject to varying, inconsistent, and rapidly changing laws, regulations, administrative practices, enforcement approaches, judicial interpretations, future scientific research and public perception
2. 44Our indirect involvement in the cannabis industry could affect the public’s perception of us and be detrimental to our reputation
3. 45Businesses involved in the cannabis industry, and investments in such businesses, are subject to a variety of laws and regulations related to money laundering, financial recordkeeping, and proceeds of crimes

Risks Related to Our Common Stock

1. 46If we fail to comply with the continued listing requirements of the Nasdaq Stock Market, it could result in our common stock being delisted, which could adversely affect the market price and liquidity of our securities and could have other adverse effects100% rewritten
2. 47On July 2, 2025, the Company received formal approval from Nasdaq granting it an additional 180 days, or until December 29, 2025 (the “Compliance Date”), to regain compliance with the Bid Price RequirementNew
3. 48Our founders, officers and directors may control, and may continue to control, our company for the foreseeable future, including the outcome of matters requiring stockholder approval
4. 49Sales of substantial amounts of our common stock by the selling stockholder in the Private Placement (as defined below) or the perception that these sales could occur, could adversely affect the price of our common stock
5. 50There are risks, including stock market volatility, inherent in owning our common stock
6. 51We do not intend to pay dividends for the foreseeable future and, as a result, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock
7. 52We may require additional capital to support the growth of our business, and this capital might not be available on acceptable terms, if at all
8. 53As a public company, we are subject to increased costs in relation to maintaining SEC and Nasdaq-related reporting requirements and our management is required to devote substantial time to compliance with our public company reporting responsibilities and corporate governance practices
9. 54As a result of being a public company, we are obligated to develop and maintain proper and effective internal controls over financial reporting, and any failure to maintain the adequacy of these internal controls may adversely affect investor confidence in our Company and, as a result, the value of our common stock
10. 55Our stockholders will experience further dilution if we issue additional equity or equity-linked securities in the future
11. 56If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our common stock, the market price for our common stock and trading volume could decline
12. 57As an actively traded Nasdaq-listed company, the market price of our common stock may be volatile
13. 58In the event of liquidation or dissolution of our company, stockholders may not recoup all or any portion of their investment