Core Points - Ispire Technology Inc. has received an interim license from the Malaysian Government for the manufacturing of nicotine products, marking a significant milestone for the company [1][2] - This license is the first and only nicotine manufacturing license in Malaysia, allowing Ispire to begin manufacturing and marketing nicotine products immediately [1][2] - The Malaysian facility is set to expand from six production lines to 80, enhancing production capacity significantly [2] Company Overview - Ispire Technology Inc. specializes in the research, development, design, commercialization, sales, marketing, and distribution of branded e-cigarettes and cannabis vaping products [3] - The company holds over 200 patents globally and markets its tobacco products under the Aspire brand, while cannabis products are marketed under the Ispire brand [3] - Ispire's products are sold worldwide, excluding the U.S., People's Republic of China, and Russia, primarily through a global distribution network [3]

Core Insights - Ispire Technology Inc. has appointed Jie "Jay" Yu as the new Chief Financial Officer, effective immediately, following the departure of the former CFO Jim McCormick [1][3] - The company is implementing significant cost-cutting measures, including a reduction of $3.6 million in annual payroll and an additional $6.6 million in operating expenses, totaling an estimated annualized expense reduction of $10.2 million for fiscal year 2025 [1][3] Company Overview - Ispire is engaged in the research, development, design, commercialization, sales, marketing, and distribution of branded e-cigarettes and cannabis vaping products, owning or licensing over 400 patents globally [4] - The company's tobacco products are marketed under the Aspire brand and sold worldwide, while cannabis products are marketed under the Ispire brand primarily on an ODM basis [4] Leadership and Strategy - Michael Wang, Co-CEO, expressed confidence in Jay Yu's capabilities, highlighting his strong track record and knowledge of the company's financial structure [3] - The company aims to become a global provider of precision dosing vaping technology, focusing on trimming expenses, increasing margins, and achieving profitability [3]

Ispire Technology (ISPR) Q3 2025 Earnings Call May 12, 2025 08:00 AM ET Company Participants Phil Carlson - Managing DirectorMichael Wang - Co-CEOJim McCormick - CFOPablo Zuanic - Managing Partner Conference Call Participants Nick Anderson - Director & Research Analyst Operator and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the iSpire Technology Third Quarter twenty twenty five Earnings Call. All lines have be ...

Ispire Technology (ISPR) Q3 2025 Earnings Call May 12, 2025 08:00 AM ET Company Participants Phil Carlson - Managing DirectorMichael Wang - Co-CEOJim McCormick - CFOPablo Zuanic - Managing Partner Conference Call Participants Nick Anderson - Director & Research Analyst Operator and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the iSpire Technology Third Quarter twenty twenty five Earnings Call. All lines have be ...

Ispire Technology (ISPR) Q3 2025 Earnings Call May 12, 2025 08:00 AM ET Speaker0 and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the iSpire Technology Third Quarter twenty twenty five Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. I would now like to turn the conference over to Philip Carlson from KCSA. ...

[Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) The company reported decreased revenue and increased net loss in Q3 FY2025, alongside strategic operational advancements in cost reduction and product innovation Financial Performance Summary | Financial Metric | Q3 FY2025 | Q3 FY2024 | | :--- | :--- | :--- | | Revenue | $26.2 million | $30.0 million | | Gross Profit | $4.8 million | $6.1 million | | Gross Margin | 18.2% | 20.4% | | Total Operating Expenses | $15.4 million | $11.8 million | | Net Loss | ($10.9) million | ($5.9) million | - Accounts Receivable decreased from **$67.7 million** in the prior year's quarter to **$60.4 million**, marking a first-time reduction and improving the company's financial position by focusing on higher quality customers[1](index=1&type=chunk)[3](index=3&type=chunk)[5](index=5&type=chunk) - The company is transitioning manufacturing to Malaysia, a move expected to reduce annual operating expenses by **$8 million**[3](index=3&type=chunk) - Post-quarter, IKE Tech, a joint venture, filed a component Premarket Tobacco Product Application (PMTA) with the FDA for its blockchain-based, point-of-use age-gating technology[1](index=1&type=chunk)[3](index=3&type=chunk) - Launched 'Sprout,' an advanced all-in-one cannabis vapor device, in collaboration with Raw Garden[1](index=1&type=chunk)[3](index=3&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management emphasized strategic execution, including de-risking production and improving financial stability, to drive long-term growth and shareholder value - Co-CEO Michael Wang stated the company is delivering on its strategic priorities, including transitioning manufacturing to Malaysia to de-risk production and reduce operating expenses by an anticipated **$8 million** annually[3](index=3&type=chunk) - The company received an interim license for manufacturing nicotine products in Malaysia and anticipates receiving the final federal license soon, which would be a first in the country[3](index=3&type=chunk) - CFO Jim McCormick highlighted the successful reduction in accounts receivable to **$60.4 million** from **$67.7 million** year-over-year, achieved by focusing on larger, higher-quality customers[5](index=5&type=chunk) [Detailed Financial Performance](index=2&type=section&id=Detailed%20Financial%20Performance) The company reported a revenue decline for both the quarter and nine-month periods, with increased operating expenses leading to a significant rise in net loss, despite some gross margin improvements [Three-Month Period Ended March 31, 2025 (Q3 FY2025)](index=2&type=section&id=Three-Month%20Period%20Ended%20March%2031%2C%202025) Q3 FY2025 saw a 12.7% revenue decline to $26.2 million, a contracted gross margin of 18.2%, and a nearly doubled net loss of $10.9 million due to increased operating expenses | Metric | Q3 FY2025 | Q3 FY2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $26.2M | $30.0M | -12.7% | | Gross Profit | $4.8M | $6.1M | -21.3% | | Net Loss | ($10.9M) | ($5.9M) | +84.7% | | EPS (Diluted) | ($0.19) | ($0.11) | +72.7% | [Nine-Month Period Ended March 31, 2025](index=2&type=section&id=Nine-Month%20Period%20Ended%20March%2031%2C%202025) For the nine months ended March 31, 2025, revenue decreased by 6.3% to $107.4 million, while gross margin improved to 18.8%, yet a significant rise in operating expenses led to a doubled net loss of $24.5 million | Metric | Nine Months FY2025 | Nine Months FY2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $107.4M | $114.6M | -6.3% | | Gross Profit | $20.2M | $19.2M | +5.2% | | Gross Margin | 18.8% | 16.8% | +2.0 p.p. | | Net Loss | ($24.5M) | ($11.3M) | +116.8% | | EPS (Diluted) | ($0.43) | ($0.21) | +104.8% | [Financial Statements](index=5&type=section&id=Financial%20Statements) The unaudited condensed consolidated financial statements detail the company's financial position as of March 31, 2025, highlighting changes in cash, accounts payable, and accumulated deficit [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, the balance sheet shows a decrease in cash to $23.5 million, a rise in related party accounts payable to $77.1 million, and a working capital deficit of ($2.1) million | Balance Sheet Item | March 31, 2025 (USD) | June 30, 2024 (USD) | | :--- | :--- | :--- | | Cash | $23,518,560 | $35,071,294 | | Accounts receivable, net | $60,425,835 | $59,734,765 | | Total current assets | $94,026,657 | $102,571,605 | | Accounts payable – related party | $77,121,850 | $67,046,472 | | Total liabilities | $100,942,604 | $88,184,626 | | Total stockholders' equity | $14,785,122 | $34,456,340 | - As of March 31, 2025, the company had cash and cash equivalents of **$23.5 million** and working capital of **($2.1) million**[11](index=11&type=chunk) [Unaudited Condensed Consolidated Statements of Operations](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) The statement of operations details the net loss for both the three and nine-month periods, driven by increased general and administrative expenses despite revenue and gross profit figures Income Statement Item (Q3 FY2025) | Income Statement Item (Q3 FY2025) | Amount (USD) | | :--- | :--- | | Revenue | $26,190,725 | | Gross profit | $4,775,905 | | General and administrative expenses | $13,704,819 | | Loss from operations | ($10,585,441) | | Net loss | ($10,856,495) | Income Statement Item (Nine Months FY2025) | Income Statement Item (Nine Months FY2025) | Amount (USD) | | :--- | :--- | | Revenue | $107,356,898 | | Gross profit | $20,172,854 | | General and administrative expenses | $36,670,781 | | Loss from operations | ($23,208,365) | | Net loss | ($24,450,154) | [About Ispire Technology Inc.](index=3&type=section&id=About%20Ispire%20Technology%20Inc.) Ispire Technology develops and distributes branded e-cigarettes and cannabis vaping products globally, leveraging an extensive intellectual property portfolio of over 200 patents - The company develops and distributes branded e-cigarettes and cannabis vaping products[15](index=15&type=chunk) - Tobacco products are marketed under the 'Aspire' brand and sold worldwide, excluding the U.S., China, and Russia[15](index=15&type=chunk) - Cannabis products are marketed under the 'Ispire' brand, primarily as an ODM in the U.S., with recent marketing activities starting in Canada and Europe[15](index=15&type=chunk) [Conference Call Information](index=3&type=section&id=Conference%20Call%20Information) The company will host a conference call and Q&A session on Monday, May 12, 2025, at 8:00 am ET, with details for live access and replay availability - A conference call is scheduled for Monday, May 12, 2025, at 8:00 am ET[13](index=13&type=chunk)[17](index=17&type=chunk) - Dial-in numbers are 888-880-3330 (North America) or +1 646-357-8766 (International)[17](index=17&type=chunk) - A live webcast is available, and a replay can be accessed by dialing 800-770-2030 with passcode 9733287 until May 15, 2025[13](index=13&type=chunk)[14](index=14&type=chunk)

Group 1: Earnings Performance - Ispire Technology Inc. reported a quarterly loss of $0.19 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.12, and compared to a loss of $0.11 per share a year ago, indicating an earnings surprise of -58.33% [1] - The company posted revenues of $26.19 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 17.64%, and down from $30.02 million in the same quarter last year [2] - Over the last four quarters, Ispire Technology has surpassed consensus EPS estimates only once [2] Group 2: Stock Performance and Outlook - Ispire Technology shares have declined approximately 42.4% since the beginning of the year, contrasting with the S&P 500's decline of -3.7% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.08 on revenues of $45.2 million, and for the current fiscal year, it is -$0.44 on revenues of $158.2 million [7] - The estimate revisions trend for Ispire Technology is mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6] Group 3: Industry Context - The Technology Services industry, to which Ispire Technology belongs, is currently ranked in the top 26% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

PART I - FINANCIAL INFORMATION [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The company reported increased net losses and a decline in assets and equity, with significant cash used in operations [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased while liabilities increased, resulting in a significant decline in stockholders' equity Condensed Consolidated Balance Sheet Data (in USD) | Balance Sheet Item | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash | $23,518,560 | $35,071,294 | | Accounts receivable, net | $60,425,835 | $59,734,765 | | Total current assets | $94,026,657 | $102,571,605 | | Total assets | $115,727,726 | $122,640,966 | | **Liabilities & Equity** | | | | Accounts payable – related party | $77,121,850 | $67,046,472 | | Total current liabilities | $96,176,082 | $85,990,532 | | Total liabilities | $100,942,604 | $88,184,626 | | Total stockholders' equity | $14,785,122 | $34,456,340 | [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Revenue declined and net loss widened significantly for both periods due to lower gross profit and higher operating expenses Statement of Operations Highlights (in USD) | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | Nine Months Ended Mar 31, 2025 | Nine Months Ended Mar 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $26,190,725 | $30,015,036 | $107,356,898 | $114,565,244 | | Gross Profit | $4,775,905 | $6,121,953 | $20,172,854 | $19,219,699 | | Loss from Operations | $(10,585,441) | $(5,655,295) | $(23,208,365) | $(10,453,764) | | Net Loss | $(10,856,495) | $(5,925,123) | $(24,450,154) | $(11,258,622) | | Net Loss Per Share (Basic & Diluted) | $(0.19) | $(0.11) | $(0.43) | $(0.21) | [Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) Stockholders' equity significantly declined due to net loss, partially offset by stock-based compensation and equity issuance - For the nine months ended March 31, 2025, stockholders' equity decreased from **$34,456,340** to **$14,785,122**[22](index=22&type=chunk)[23](index=23&type=chunk) - The main factors reducing equity were a net loss of **$24,450,154** and a common stock repurchase of **$60,488**[22](index=22&type=chunk) - Positive contributions to equity included stock-based compensation of **$3,642,152** and issuance of common stock for equity incentives worth **$1,281,599**[22](index=22&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations improved, but overall cash decreased by $11.5 million due to shifts in investing and reduced financing activities Consolidated Cash Flow Data (in USD) | Cash Flow Activity | Nine Months Ended Mar 31, 2025 | Nine Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(12,069,519) | $(16,878,126) | | Net cash (used in) provided by investing activities | $(1,689,495) | $5,948,696 | | Net cash provided by financing activities | $2,278,874 | $10,082,584 | | **Net decrease in cash** | **$(11,480,140)** | **$(846,846)** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's vaping business, significant customer/supplier concentration, increased credit loss allowance, and a subsequent preference share issuance - The company is engaged in the R&D, design, commercialization, and distribution of branded e-cigarettes and cannabis vaping products, with recent expansion through new subsidiaries in the UAE, California, and the UK[27](index=27&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) - For the nine months ended March 31, 2025, one customer (Customer A) accounted for **24%** of consolidated revenue, and one supplier (Supplier C, a related party) accounted for **93%** of total purchases[55](index=55&type=chunk)[56](index=56&type=chunk) - The allowance for credit losses on accounts receivable increased to **$14.6 million** as of March 31, 2025, from **$5.9 million** as of June 30, 2024[62](index=62&type=chunk)[64](index=64&type=chunk) - The company has a **40%** membership interest in a joint venture, IKE Tech LLC, focused on developing age-verification solutions for vapor devices[66](index=66&type=chunk) - Subsequent to the quarter end, on April 24, 2025, the company's Malaysian subsidiary issued a preference share to its government affairs firm, entitling the holder to a **5%** annual dividend of the subsidiary's net profit after tax[98](index=98&type=chunk)[99](index=99&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses revenue decline, widened net loss from increased expenses, significant regulatory and tariff risks, and tightened liquidity [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Nine-month revenue decreased, gross margin improved, but operating expenses surged, leading to a significantly increased net loss Revenue by Region (in USD) | Region | Nine Months Ended Mar 31, 2025 | Nine Months Ended Mar 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Europe | $59,174,779 | $49,144,807 | +20.4% | | North America | $29,441,624 | $50,191,212 | -41.3% | | Asia Pacific | $10,453,766 | $14,831,769 | -29.5% | | Africa | $5,840,041 | $261,113 | +2136.4% | | South America | $2,446,688 | $136,343 | +1694.6% | | **Total** | **$107,356,898** | **$114,565,244** | **-6.3%** | - Gross margin for the nine months ended March 31, 2025, increased to **18.8%** from **16.8%** in the prior year, due to a more favorable product mix with higher-margin products[133](index=133&type=chunk) - General and administrative expenses for the nine months increased by **$11.2 million** (**43.8%**), primarily due to a **$10.1 million** increase in credit loss expense[138](index=138&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity significantly deteriorated with negative working capital and decreased cash, though management expects sufficiency for 12 months Working Capital (in thousands USD) | | March 31, 2025 | June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | Current Assets | $94,027 | $102,572 | $(8,545) | | Current Liabilities | $96,176 | $85,991 | $10,185 | | **Working Capital** | **$(2,149)** | **$16,581** | **$(18,730)** | - Net cash used in operating activities for the nine months ended March 31, 2025 was **$12.1 million**, primarily reflecting a net loss of **$24.5 million**, offset by non-cash charges like a **$13.4 million** credit loss expense and a **$4.9 million** stock-based compensation expense[148](index=148&type=chunk) - The company has an outstanding bank loan of **$2.3 million** and a committed but unpaid investment of **$8.2 million** for its IKE Tech LLC joint venture as of March 31, 2025[158](index=158&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is not required to provide this information as it qualifies as a "smaller reporting company" - As a "smaller reporting company" as defined by Item 10 of Regulation S-K, the company is not required to provide information for this item[163](index=163&type=chunk) [Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective due to material weaknesses in asset recording, estimate evaluation, policies, and personnel expertise - Management concluded that disclosure controls and procedures were not effective as of March 31, 2025[164](index=164&type=chunk) - Identified material weaknesses include: - Lack of controls for recording assets acquired from a controlling stockholder - Lack of controls for evaluating significant estimates (inventory reserve, credit loss) - Lack of a comprehensive accounting policies and procedures manual - Lack of sufficient personnel with appropriate technical expertise[164](index=164&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any legal proceedings that are expected to have a material adverse effect on its business, financial condition, or results of operations - The company is not a party to, nor aware of, any legal proceedings, investigations or claims likely to have a material adverse effect on its business[168](index=168&type=chunk) [Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) The company highlights significant risks from global political events and tariffs, especially new U.S. tariffs on Chinese and Malaysian goods - The company highlights the risk of geopolitical events, specifically tariffs; as of May 5, 2025, tariffs on most Chinese-made products entering the U.S. are **145%**[170](index=170&type=chunk) - A U.S. executive order instituted a **24%** tariff on Malaysian goods and **54%** on Chinese goods, which was later paused for 90 days (except for China) and replaced with a blanket **10%** tariff for non-China imports[170](index=170&type=chunk) - Since the company purchases the majority of its products from Shenzhen Yi Jia in China, these tariffs could significantly increase its cost of revenue and adversely affect financial results[170](index=170&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered equity sales but initiated a $10 million share repurchase program, buying back 14,600 shares Issuer Purchases of Equity Securities (March 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Programs | Maximum Dollar Value that May Yet Be Purchased Under the Programs | | :--- | :--- | :--- | :--- | :--- | | March 2025 | 14,600 | $4.14 | 14,600 | $9,939,556 | - On January 20, 2025, the Board of Directors authorized a share repurchase program for up to **$10 million** of the company's common stock over a 24-month period[173](index=173&type=chunk)[175](index=175&type=chunk) [Other Information](index=40&type=section&id=Item%205.%20Other%20Information) During the reported quarter, no director or Section 16 officer adopted or terminated a trading arrangement under Rule 10b5-1(c) or any other non-Rule 10b5-1 trading arrangement - No director or Section 16 officer adopted or terminated a Rule 10b5-1(c) trading arrangement or a non-Rule 10b5-1 trading arrangement during the quarter[177](index=177&type=chunk) [Exhibits](index=41&type=section&id=Item%206.%20Exhibits) The report includes various exhibits filed with the Form 10-Q, such as loan and consulting agreements, officer certifications, and interactive data files - Key exhibits filed include agreements with Avon River Ventures LLC (Master Loan and Security Agreement, Promissory Note, Master Consulting Agreement) and required CEO/CFO certifications (302 and 906)[179](index=179&type=chunk)

Company Overview - Ispire Technology Inc. is an innovator in the development and commercialization of vaporization technology and precise dosing [1][2] - The company has over 200 patents for inventions/designs, either owned or licensed from affiliates, and sells products under the Aspire brand globally [2] Financial Performance - Ispire Technology Inc. will hold a performance conference call on May 12, 2025, to discuss its financial results for the third quarter of the fiscal year ending March 31, 2025 [1] Market Presence - The company's vaporization products are primarily sold through an ODM model under the Ispire brand to other vaporization companies [2] - Ispire Technology has recently initiated marketing activities in Canada and Europe, expanding its sales efforts beyond the United States [2]

Core Viewpoint - Ispire Technology Inc. will host an earnings conference call on May 12, 2025, to discuss its financial results for the fiscal third quarter ended March 31, 2025 [1]. Company Overview - Ispire Technology Inc. is involved in the research, development, design, commercialization, sales, marketing, and distribution of branded e-cigarettes and cannabis vaping products [3]. - The company holds or licenses over 200 patents globally [3]. - Ispire's tobacco products are marketed under the Aspire brand and are sold worldwide, excluding the U.S., People's Republic of China, and Russia [3]. - The cannabis products are marketed under the Ispire brand primarily on an ODM basis to other cannabis vapor companies, with sales of cannabis vaping hardware limited to the U.S. and recent marketing activities initiated in Canada and Europe [3]. Conference Call Details - The earnings conference call is scheduled for May 12, 2025, at 8:00 AM ET [5]. - Participants can join the call by dialing North America 888-880-3330 or International +1 646-357-8766 [5]. - A playback of the call will be available until May 15, 2025, at midnight ET [2].