Business Overview: iPower Inc (NASDAQ: IPW)

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Executive Summary

iPower Inc was originally an online retailer of hydroponics, grow-light, ventilation, and home/garden/pet products, built around its in-house iPower and Simple Deluxe brands and sold overwhelmingly through Amazon (historically over 82% of sales). The company, headquartered in Rancho Cucamonga, California and originally incorporated in 2018 as BZRTH, Inc., went public in 2021 as a straightforward e-commerce consumer-products business.

That business no longer describes what iPower is today. In February 2026, iPower sold its core commerce subsidiary, Global Product Marketing, Inc. (GPM), to ETTS AI Investment LLC for a $2.3 million promissory note, retaining only a supply role, and redirected the company toward "AI infrastructure acquisition, financing, equipment leasing," and a digital-asset treasury strategy — including holding Bitcoin and tokens tied to the USD.AI protocol — funded by a $32 million convertible note facility. This is a fundamentally different company than the one implied by its legacy ticker and brand history: as of its fiscal year 2026 10-K, iPower is a micro-cap shell-like entity with four employees, a 68% year-over-year revenue decline, and two reverse stock splits completed in 2026 to maintain Nasdaq listing compliance.

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1. Core Business Model & How They Work (Legacy vs. Current)

LEGACY MODEL (through FY2025):
[ Design/Source Hydroponics & Home Products (China) ] ➡️ [ iPower / Simple Deluxe Brands ] ➡️ [ Amazon / Walmart / Temu / eBay / Own Sites ] ➡️ [ End Consumer ]

CURRENT MODEL (FY2026 onward):
[ Sale of GPM (Core Commerce Unit) to ETTS AI Investment LLC ] ➡️ [ $32M Convertible Note Facility ] ➡️ [ Digital Asset Treasury (BTC, USD.AI tokens) + AI Infrastructure Leasing ]
                                                              ➡️ [ Residual Supply Agreement: iPower Supplies GPM's SKUs in US/Canada/Mexico, Exclusive, 5-Year Term ]

Key Operational Drivers

1. Legacy Consumer-Products Engine (largely divested): iPower built its brands around hydroponics supplies (grow lights, HVAC/ventilation, pumps, nutrients), fans, shelving, pet supplies, and home goods, almost entirely distributed through Amazon's Vendor and third-party marketplace programs.
2. The GPM Divestiture: iPower sold its equity in GPM — the subsidiary that had functioned as its sales, marketing, and cash-management arm — to ETTS AI Investment LLC in exchange for a seven-year, prepayable $2.3 million promissory note, while remaining GPM's exclusive supplier for existing SKUs under a five-year agreement (with up to a 15% margin).
3. Pivot to AI Infrastructure and Digital Assets: iPower now describes its strategic focus as acquiring and financing AI infrastructure and equipment leasing, funded through a convertible note facility (originally $30 million, amended to $32 million) provided by ATW Digital Asset Opportunities XIV. As of October 2026, the company's pledged collateral account held roughly $4.82 million in cash and about 15.1 BTC (~$1.28 million).
4. Heavy Dilution Mechanics: Noteholders had already converted over $9.3 million of notes into stock by October 2026, and the company executed a 1-for-8 reverse split (May 2026) followed by a 1-for-9 reverse split (August 2026) to stay compliant with Nasdaq listing requirements.

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2. Product Portfolio (Legacy Business)

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3. Competitive Landscape

• Legacy E-Commerce Competition: As a hydroponics/home-goods brand sold primarily on Amazon, iPower historically competed against other marketplace sellers and national home-and-garden retailers; its own filings name no specific competitors, describing the field only generically as local and online hydroponic/home-goods resellers.
• New Strategy, No Established Competitive Position: In its new AI-infrastructure-leasing and digital-asset-treasury strategy, iPower is not described in its own filings as having named competitors, reflecting how early-stage and unproven this pivot is; it is competing for capital and attention against a wide, loosely defined field of other small-cap "digital asset treasury" and crypto-adjacent companies rather than operating in an established product category.

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4. Strategic Strengths & Risks

Remaining Strengths

• Contracted Supply Relationship: The five-year exclusive supply agreement with GPM gives iPower a residual, contracted revenue stream tied to its legacy brands even after divesting the consumer-facing sales operation.
• Capital Access via Convertible Notes: The $32 million note facility, while dilutive, has given iPower access to capital it could not likely raise through its shrinking legacy e-commerce business alone.

Strategic Risks & Vulnerabilities

Revenue and Structural Decline, FY2025 → FY2026
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FY2025: ~$62M revenue (implied by 68% decline) ──➡️ FY2026: ~$20.0M revenue
Net loss widens to $11.6M (incl. $3.0M goodwill impairment)

1. Company Is No Longer the Business Its History Suggests: iPower divested the core commerce subsidiary (GPM) that generated most of its historical revenue and now pursues an unrelated, unproven AI-infrastructure and digital-asset strategy — a complete change in business identity, not an extension of its hydroponics/consumer-products franchise.
2. Severe Revenue Decline and Widening Losses: FY2026 revenue fell approximately 68% year-over-year to about $20.0 million, with net loss widening to $11.6 million, including a $3.0 million goodwill impairment.
3. Unproven, High-Risk New Strategy: iPower's own filings describe the digital-asset-treasury approach as untested, with no operating history, exposure to volatile crypto prices, custodian counterparty risk, and collateral pledged to noteholders that is not freely available to the company.
4. Severe Dilution and Listing Risk: Note conversions, a $32 million convertible facility, and two reverse stock splits within months of each other (1-for-8, then 1-for-9) point to significant shareholder dilution and ongoing Nasdaq listing-compliance pressure.
5. Minimal Operating Capacity: As of June 30, 2026, iPower had only two full-time and two part-time employees/consultants, and its own disclosures cite identified material weaknesses in internal controls.
6. Thin Unrestricted Liquidity: Of roughly $3.73 million in total cash and restricted cash at fiscal year-end, only about $0.48 million was unrestricted, with the remainder pledged as collateral to the convertible note investor.

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5. Financial Overview

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6. Summary Conclusion

iPower Inc's history as a hydroponics and home-goods e-commerce brand is no longer an accurate description of the company's current business. Having sold the commerce subsidiary that generated most of its revenue and pivoted toward AI-infrastructure leasing and a digital-asset treasury funded by a large convertible note facility, iPower in its current form carries almost none of the operating characteristics — brand recognition, marketplace distribution scale, or product moat — that defined it as a public company through fiscal 2025.

What remains is a thinly staffed, heavily diluted, early-stage strategic pivot whose success depends entirely on an unproven AI-infrastructure and crypto-treasury strategy rather than on any competitive position in the consumer products market investors may still associate with its ticker and brand names.