S-1: iPower Registers $28.18M Convertible Notes for Resale

iPower Inc. filed an S-1 registration statement for the resale of up to 5,221,451 shares of common stock underlying $28,184,024 of Series A Senior Secured Convertible Notes.

Summary

• The filing registers for resale up to 5,221,451 shares of common stock, par value $0.001 per share, issuable upon conversion of $28,184,024 aggregate principal amount of Series A Senior Secured Convertible Notes.
• On December 22, 2025, the company entered into a Securities Purchase Agreement with an institutional investor for a 6% original issue discount (OID) convertible note facility totaling $30,000,000.
• The initial purchase included $5,184,024 in Series A Convertible Notes and $1,815,976 in Series B Convertible Notes.
• An additional $2,000,000 of Series A Convertible Notes will be purchased upon the effectiveness of this registration statement, bringing the total amount of Convertible Notes sold to $9,000,000.
• At closing on December 23, 2025, the company received gross proceeds of $6,580,000, before deducting $394,800 in placement agent fees.
• iPower Inc. operates as an online retailer and supplier of consumer goods, with sales channels including Amazon, Walmart.com, TikTok, Temu, and its own e-commerce websites.
• The company is expanding its operations to include a Digital Treasury Strategy, conducted through its wholly-owned subsidiary, iPower Smart, LLC.
• The company will use $4.7 million of the funds from this offering to invest in Bitcoin (BTC), Ethereum (ETH), and stablecoins.
• The Series A Convertible Notes bear interest at 10% per annum, are senior secured obligations, and mature on the 24-month anniversary of the issuance date.
• The fixed conversion price for the Series A Convertible Notes is $17.70 per share for the first three months, adjusting to $14.16 per share thereafter, with an alternate conversion price based on VWAP and a floor price of $2.27 per share.
• Conversions are subject to a beneficial ownership limitation, initially 4.99% of outstanding common stock, which the investor may elect to increase to 9.99% with 61 days' prior written notice.
• The company has redemption rights, allowing it to redeem all or any portion of the notes at a 10% premium (or 15% during an event of default).
• As of January 12, 2026, the company had 1,146,443 shares of common stock outstanding, which would increase to 6,237,894 shares after giving effect to all shares being registered and issuable upon conversion of the Series A Convertible Notes.

Sentiment

Score: 5

Explanation: The filing details a significant capital raise and a new strategic direction into digital assets, which could be positive for growth and diversification. However, it also outlines extensive and material risks associated with both the convertible notes and the highly volatile and uncertain digital asset market, balancing the sentiment to neutral.

Positives

• Secured a $30,000,000 convertible note facility, providing capital for operations and strategic initiatives.
• Received initial gross proceeds of $6,580,000 from the sale of Series A and Series B Convertible Notes.
• Expanding into a Digital Treasury Strategy with an initial investment of $4.7 million in Bitcoin, Ethereum, and stablecoins, aiming for long-term exposure to digital assets.
• The Digital Treasury Strategy aligns the company's treasury management with its operational focus on digital-asset-related initiatives, potentially offering diversification and new growth avenues.

Negatives

• Experienced a decrease in inventory purchase speed and increased costs due to shipping delays, resulting in reduced profits from global economic disruption.
• Supply chain disruptions may lead to higher costs and difficulty in acquiring necessary materials and services.
• The Digital Treasury Strategy is a newly planned addition, and its success or long-term impact on the business cannot be predicted.
• Bitcoin and other digital assets are highly volatile, exposing the company to significant price fluctuations that could materially and adversely affect financial results.
• Bitcoin does not pay interest or dividends, limiting cash generation from holdings unless specific strategies are implemented.
• The Digital Treasury Strategy has not been tested over an extended period or under different market conditions.
• Subject to counterparty risks, particularly with custodians, and potential loss if custodians enter bankruptcy or insolvency proceedings.
• Changes in accounting treatment (ASU 2023-08) will increase the volatility of financial results and may have adverse tax consequences.
• The availability of spot Bitcoin and Ether ETPs may adversely affect the market price of the company's listed securities, as investors might prefer ETPs for 'pure play' exposure.
• The Digital Treasury Strategy subjects the company to enhanced regulatory oversight and potential scrutiny from the SEC or other federal/state agencies.
• The unregulated nature and lack of transparency surrounding many digital asset trading venues pose risks of fraud, security failures, and market manipulation.
• Concentration of digital asset holdings in BTC and ETH limits risk mitigation compared to a more diversified portfolio.
• Digital asset holdings are less liquid than cash and cash equivalents and may not serve as a reliable source of liquidity during market instability.
• Risks of security breaches, cyberattacks, or loss/destruction of private keys for digital assets could lead to a partial or total loss of holdings.
• Potential reclassification of bitcoin as a security could lead to the company's classification as an investment company under the Investment Company Act of 1940, subjecting it to significant additional regulatory controls.
• The company is not subject to legal and regulatory obligations that apply to investment companies or investment advisers, meaning its board has broad discretion over investment policies without shareholder or regulatory approval.
• Management may invest the proceeds of any offering in ways with which shareholders may not agree or that may not yield a return.

Risks

• Sales of a substantial number of common stock shares in the public market could depress the market price and impair the company's ability to raise additional equity capital.
• The sale or availability for sale of shares issuable upon conversion of the Convertible Notes may depress the price of common stock and encourage short sales by third parties.
• The company has never paid dividends and does not anticipate doing so in the foreseeable future, making capital appreciation the sole source of gain for investors.
• Inability to convert the Series A or Series B Convertible Notes could lead to insufficient cash flow to service debt obligations.
• Investing in the company's securities involves a high degree of risk, and investors may lose all or part of their investment.
• Future equity offerings may result in dilution to existing stockholders.
• An active trading market for the company's common stock may not be maintained, making it difficult for stockholders to sell or purchase shares.
• The Digital Treasury Strategy exposes the company to various risks, including the high volatility of Bitcoin and other digital assets.
• Bitcoin does not pay interest or dividends, and the company can only generate cash from holdings by selling or implementing income-generating strategies, which may not be successful.
• The company's bitcoin holdings could significantly impact its financial results and the market price of its listed securities.
• The ability to achieve the Digital Treasury Strategy objectives depends on obtaining equity and debt financing, which may not be available on favorable terms or at all.
• The Digital Treasury Strategy is new and untested, and its success cannot be guaranteed.
• The company is subject to counterparty risks, particularly with custodians, and applicable insolvency law for digital assets is not fully developed, potentially leading to loss of holdings.
• The broader digital assets industry is subject to counterparty risks, which could adversely impact the adoption rate, price, and use of BTC, ETH, or stablecoins.
• Changes in the accounting treatment of bitcoin holdings (ASU 2023-08) will increase the volatility of financial results and may have adverse tax consequences, including potential corporate alternative minimum tax.
• Digital assets are novel and subject to significant legal, commercial, regulatory, and technical uncertainty, with evolving and unpredictable regulatory environments.
• Fluctuations in the price of digital assets are likely to influence the company's financial results and the market price of its listed securities.
• Negative publicity, media coverage, or sentiment related to digital assets (e.g., use in illicit activities, environmental impact) could adversely affect prices.
• Competition from other digital assets, including stablecoins and central bank digital currencies (CBDCs), could negatively impact the price of bitcoin.
• Technical factors related to the Bitcoin blockchain (e.g., malicious attacks, hard forks, advances in computing) could undercut its integrity and negatively affect price.
• The liquidity of bitcoin may be reduced if financial institutions deny or limit banking services to crypto businesses.
• Historical financial statements do not reflect the potential variability in earnings from future bitcoin holdings due to the adoption of ASU 2023-08.
• The availability of spot exchange-traded products (ETPs) for bitcoin and other digital assets may adversely affect the market price of the company's listed securities.
• The Digital Treasury Strategy subjects the company to enhanced regulatory oversight, including potential scrutiny from the SEC or other agencies.
• Due to the unregulated nature and lack of transparency of many bitcoin and digital asset trading venues, there is a risk of greater fraud, security failures, or operational problems.
• The concentration of bitcoin holdings enhances the risks inherent in the Digital Treasury Strategy, limiting diversification.
• Bitcoin holdings are less liquid than cash and cash equivalents and may not serve as a source of liquidity during market instability.
• Security breaches or cyberattacks on the company or its third-party service providers could result in a partial or total loss of bitcoin holdings.
• Risks relating to the custody of bitcoin, including loss or destruction of private keys and potential treatment as a general unsecured creditor in custodian insolvency.
• Regulatory change reclassifying bitcoin as a security could lead to the company's classification as an investment company under the Investment Company Act of 1940, imposing significant regulatory controls.
• The company is not subject to legal and regulatory obligations that apply to investment companies or investment advisers, allowing broad discretion over investment policies.
• The Digital Treasury Strategy exposes the company to risk of non-performance by counterparties, including execution partners and custodians.
• The market price of the company's common stock may be volatile and fluctuate substantially due to various factors, including the bitcoin treasury strategy, competition, regulatory developments, and general economic conditions.

Future Outlook

The company intends to use proceeds from additional Series A Convertible Note sales to pay off existing loans, invest in additional digital assets, and for general corporate purposes. It is expanding its operations to include a Digital Treasury Strategy, aiming for measured, long-term exposure to digital assets that management believes will become increasingly integrated into commerce. However, the success of this new strategy is unpredictable, and the company will need to continually examine its risks and rewards.

Management Comments

• Management believes digital assets may become increasingly integrated into commerce, aligning the company's treasury strategy with its operational focus on digital-asset-related initiatives.

Industry Context

iPower Inc., an established online retailer of consumer goods, is strategically diversifying its business model by integrating a Digital Treasury Strategy focused on Bitcoin, Ethereum, and stablecoins. This move positions the company at the intersection of traditional e-commerce and the evolving digital asset economy, leveraging its existing infrastructure. This reflects a broader trend of companies exploring digital assets for treasury management and strategic integration, though it also highlights the significant regulatory and market volatility challenges inherent in the crypto industry. The filing acknowledges the recent approval of spot Bitcoin and Ether ETPs, which could impact investor interest in companies like iPower as an alternative exposure to digital assets.

Comparison to Industry Standards

• The company is an operating company and offers a different value proposition than a 'pure play' bitcoin investment vehicle such as a spot bitcoin ETP.
• Unlike spot bitcoin ETPs, the company does not seek for its shares of common stock to track the value of the underlying bitcoin or other digital assets before expenses and liabilities.
• The company does not benefit from various exemptions and relief under the Securities Exchange Act of 1934, including Regulation M, which enable ETPs to continuously align the value of their shares to the price of underlying assets through share creation and redemption.
• The company is a Nevada corporation rather than a statutory trust and does not operate pursuant to a trust agreement requiring stated investment objectives.
• The company is not required to provide daily transparency as to its bitcoin holdings or daily net asset value, unlike spot bitcoin ETPs.

Corporate Governance

Stakeholder Impact

• Shareholders face potential dilution from the conversion of up to 5,221,451 shares of common stock underlying the Series A Convertible Notes.
• Shareholders are exposed to increased volatility in the company's stock price due to the new Digital Treasury Strategy and the highly volatile nature of digital assets.
• The Series A Convertible Notes are senior secured obligations, ranking senior to all of the company's other outstanding and future indebtedness, which could impact the recovery prospects of other creditors in a default scenario.
• The company's ability to obtain future equity and debt financing for its Digital Treasury Strategy will impact its growth and operational capabilities.
• The success or failure of the Digital Treasury Strategy will directly impact the company's financial condition and results of operations, affecting all stakeholders.

Next Steps

• The registration statement must be declared effective by the SEC.
• Upon effectiveness of the registration statement, an additional $2,000,000 of Series A Convertible Notes will be purchased by the investor.
• The Selling Stockholder may offer and sell the registered shares from time to time through public or private transactions.
• The company intends to use proceeds from additional Series A Convertible Note sales to pay off existing loans, invest in additional digital assets, and for general corporate purposes.
• The company will continually examine the risks and rewards of its Digital Treasury Strategy.
• The company monitors its assets and income to conduct business activities in a manner that avoids classification as an investment company under the Investment Company Act of 1940.

Key Dates

Recommendation

The company is undertaking a significant strategic shift into digital assets, which presents both substantial growth opportunities and a high degree of risk due to market volatility and regulatory uncertainty. While the capital raise provides funding, the potential for dilution from the convertible notes and the untested nature of the digital treasury strategy warrant a cautious approach. Investors should monitor the execution of the digital asset strategy and its impact on financial performance before making further investment decisions.

Keywords

iPower Inc., Convertible Notes, Digital Treasury Strategy, Bitcoin, Ethereum, E-commerce, SEC Filing, IPW, Nasdaq Capital Market, Securities Registration, Risk Management, Corporate Finance, Cryptocurrency Investment, Supply Chain, Market Volatility, Regulatory Compliance