With an IPO in the pipeline, online horticultural supply company iPower turned to UHY for professional and timely support. Covid-related lockdowns around the world have seen many of us take to our gardens, lavishing time and money we might otherwise have spent on restaurants and holidays – and in the US the gardening boom has fuelled an already buoyant sector. One beneficiary has been iPower, a hydroponics and gardening product supplier based outside Los Angeles, California. iPower supplies a wide range of nutrients, growing mediums, hydroponic equipment, power-efficient lighting and more, selling through its own website and third party e-commerce channels like Amazon, eBay and The business sources products from a range of popular brands and has also established its own in-house branded products, marketed under the iPower and Simple Deluxe labels.

STRONG ROOTS The business was founded in 2018 and has grown every year since. But 2020 was a particularly successful 12 months for iPower and that success has continued in 2021. Around 75% of sales revenue in 2020 was from Amazon, where the business experienced 87% growth. Sales through Walmart grew by 200% year-on-year during the same period. Against this background, co-founder and CEO Lawrence Tan and his team felt the time was right to push iPower to the next level. “The hydroponic and gardening industry is quite fragmented, and retail outlets tend to be smaller family enterprises in a single location,” says Lawrence. “We intend to take advantage of current market conditions by providing consumers with a one-stop shopping experience where they can satisfy all their horticultural needs and have the products shipped directly to their door.” The business decided that the logical next step on the path to fulfilling that ambition was an IPO (Initial Public Offering). iPower turned to US member firm UHY LLP, and specifically its team in Orange County, California, to help prepare the business for public listing. THE IPO AUDIT

Preparing for an IPO can be complex, and the right professional support is crucial. For the registration statement businesses need to show financial audit reporting for the last two or three fiscal years based on the size of the business. Public businesses are subject to Securities and Exchange Commission (SEC) regulations, which means financial reports issued as a private business are usually insufficient for IPO registration. Pre-IPO financial audits need to demonstrate compliance with public-entity accounting principles and meet additional SEC disclosure requirements. Naturally, when iPower was considering an accounting firm to conduct the pre-IPO audit, it looked for one with specific experience of type of specialist work. The company considered a number of accountancy firms but chose UHY LLP because of its wide experience of auditing mid-market clients for the purposes of IPO. “The expertise that was most valuable to us was the firm’s extensive experience of auditing publicly traded companies,” says Lawrence Tan. Another deciding factor was the trust that had built up between UHY audit principal Crystal Li and iPower’s vice president of finance Alice Wu during discussions around earlier projects. iPower officially launched its listing in the second half of 2020, with the IPO set for the following May. This gave the UHY audit team, led by Michael Burke, audit partner, Crystal Li, audit principal, and Yu-Ta Chen,

audit manager, little room for manoeuvre. The team immediately set to work, collaborating with iPower to complete a two-year financial audit in a short space of time. The financial audit report was issued in November 2020. A QUICK TURNAROUND Lawrence Tan was impressed with the results achieved by UHY LLP. “The UHY team completed the initial two-year audit – to be included in the first SEC registration statement filing – within 60 days. They then completed all the filings to help us complete the listing on the NASDAQ stock exchange.” With the help of UHY, iPower became a public company on May 14, 2021, with gross IPO proceeds of USD 16.8 million. The share price rose 15% on the first day of listing. More importantly, Lawrence believes the IPO has created a firm foundation on which to grow the business into the leading hydroponic and gardening equipment supplier in the US. He has no hesitation in recommending UHY to businesses considering their own public listing. “I’m confident in the future and would recommend UHY to other businesses that need a highly professional team,” he says. “We’re happy with everything they did for us – they’ve set a very high standard for others to follow.” WHY HYDROPONICS? Hydroponics is a working form of horticulture which involves growing plants without soil by using mineral nutrient solutions in an aqueous solvent – so achieving a significant decrease in water

usage in farming. The countries currently growing the most produce using hydroponics are Australia, India, Japan, South Africa, the UK and the US. Many others are engaging enthusiastically with this growing process too, with ongoing projects to establish large hydroponic farms in Latin American and African nations. And hydroponics has been used by NASA to grow plants on the International Space Station – leafy vegetables were first grown and eaten in space in 2015, and its Vegetable Production System (also known as Veggie) continues to supplement astronauts’ diets. NASA’s success at growing vegetables in space may not seem immediately relevant to why hydroponics is important in farming. But in fact, it proves a point: using hydroponics enables the production of crops in greenhouses, multi-level buildings, inside or underground. It means food can be grown successfully and effectively in regions that are too hot, too dry, or in densely populated urban areas. Hydroponic farming is thriving in Tokyo, the most populous and overcrowded city in the world, from rooftop community gardens, high-rise spaces filled with growing racks, and even in plots in and around office buildings. A decade ago, the United Nations (UN) reported that farmers would need to increase food production by about 70% by 2050 in order to meet the needs of a global population of 9.8 billion people, 68% of whom are projected to live in city areas.

The global food security challenge continues to be a major concern today, with the World Economic Forum stating that our current agricultural systems simply cannot deliver enough food to achieve this huge task. Why hydroponics? We must find alternatives to our current agricultural system to meet the growing demands for food. While not the whole answer, hydroponic farming provides one solution in the move towards sustainable food and farming. UHY IN THE RETAIL SECTOR As a network, UHY has wide experience in the retail sector, on- and off-line. We work with luxury brands, major international retail chains, e-commerce specialists and single market businesses. Technology is continuing to drive dramatic changes in consumer behaviour and buying patterns. The revolution in online retailing has enabled businesses to access millions of potential new customers faster and with less investment than ever before. Increasing levels of disposable income in many parts of the world are also opening up significant opportunities for retailers and brands to move into new markets which offer huge growth potential. Our specialists around the world understand the needs of retail clients, from stock monitoring to supply chain logistics. In addition to core accountancy services, our experts are also able to provide sector-specific advice in areas such as retail property acquisition, disposal and lease negotiation. And our collaborative international network means that, when clients look to expand, UHY can provide all the specialist local knowledge they need. Formore information about UHY's capabilities in the retail sector, email the UHY executive office,, or visit Zigic

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