Ispire Technology (US:ISPR)2025-02-07 21:30Financial Performance - Total revenue for Q4 2024 was $41,827,860, a slight increase from $41,685,561 in Q4 2023, representing a growth of 0.34%[21] - Gross profit for Q4 2024 increased to $7,722,571, compared to $6,252,898 in Q4 2023, marking a growth of 23.5%[21] - Net loss for Q4 2024 was $7,998,643, compared to a net loss of $3,991,912 in Q4 2023, reflecting an increase in losses of 100.5%[21] - Revenue for the three months ended December 31, 2024, was $41.83 million, a slight increase of $142,299 or 0.3% compared to $41.69 million for the same period in 2023[124] - Revenue for the six months ended December 31, 2024, decreased by $3.38 million or 4.0% to $81.17 million from $84.55 million for the same period in 2023[125] - Gross profit for the three months ended December 31, 2024, increased by $1.47 million or 23.5% to $7.72 million, with a gross margin improvement from 15.0% to 18.5%[130] - Gross profit for the six months ended December 31, 2024, increased by $2.30 million or 17.6% to $15.40 million, with a gross margin improvement from 15.5% to 19.0%[131] Operating Expenses - Operating expenses rose significantly to $15,082,626 in Q4 2024, up from $10,173,122 in Q4 2023, an increase of 48.5%[21] - Operating expenses for the three months ended December 31, 2024, increased by $4.91 million or 48.3% to $15.08 million compared to $10.17 million for the same period in 2023[132] - Operating expenses for the six months ended December 31, 2024, increased by $10.12 million or 56.6% to $28.02 million from $17.90 million for the same period in 2023[132] - Sales and marketing expenses for the three months ended December 31, 2024, increased by $667,257 or 47.9% to $2.06 million, primarily due to increased marketing activities[134] - Sales and marketing expenses increased by $2,634,285, or 108.9%, from $2,419,626 for the six months ended December 31, 2023 to $5,053,911 for the six months ended December 31, 2024[135] - General and administrative expenses increased by $4,242,247, or 48.3%, from $8,778,715 for the three months ended December 31, 2023 to $13,020,962 for the three months ended December 31, 2024[136] Assets and Liabilities - Total current assets increased to $112,320,204 as of December 31, 2024, up from $102,571,605 as of June 30, 2024, a growth of 9.3%[18] - Total liabilities increased to $107,808,346 as of December 31, 2024, compared to $88,184,626 as of June 30, 2024, an increase of 22.3%[18] - Stockholders' equity decreased to $24,234,088 as of December 31, 2024, down from $34,456,340 as of June 30, 2024, a decline of 29.7%[18] - Current liabilities increased by $20,245,000, or 23.5%, from $85,991,000 as of June 30, 2024 to $106,236,000 as of December 31, 2024[146] Cash Flow - Cash provided by operating activities was $428,110 for the six months ended December 31, 2024, a recovery from $(20,232,049) in the same period of 2023[26] - The total cash, restricted cash, and equivalents at the end of the period was $34,395,386, down from $40,300,573 at the beginning of the period[26] - Net cash provided by operating activities for the six months ended December 31, 2024 was $428,000, a significant increase of $20,660,000 compared to net cash used in operating activities of $20,232,000 for the same period in 2023[147] Credit Losses and Bad Debt - The company recorded credit loss expenses of $7,286,079 for the six months ended December 31, 2024, compared to $2,126,284 in the prior year, reflecting a significant increase of approximately 243%[26] - The allowance for credit losses increased to $11,305,112 as of December 31, 2024, from $5,885,238 as of June 30, 2024, reflecting a significant rise in bad debt expense[60][62] - The Company recorded a bad debt expense of $4,183,998 for the three months ended December 31, 2024, compared to $1,900,797 in the same period of 2023, indicating a substantial increase of 120.2%[61] Investments and Subsidiaries - Ispire Technology Inc. established a wholly-owned subsidiary, Aspire AME Electronic Cigarettes Trading LLC, in July 2024 to enhance sales and marketing efforts in the UAE[29] - The Company entered into a joint venture, IKE Tek LLC, with a total investment of $10 million, aiming to develop age-verification solutions for vapor devices in the U.S. market[64] - The company recorded an unpaid $8.8 million consideration in accrued liabilities for a committed investment of $9 million into a joint venture investment named IKE[157] Regulatory and Market Presence - The company has submitted a PMTA application for a disposable ENDS product with 4 flavors, marking its re-entry into the U.S. ENDS market[110] - The company has ceased marketing tobacco vaping products in the U.S. due to regulatory costs not justifying the sales volume[111] - The company is preparing to expand its international presence by launching nicotine products under the Ispire platform through licensing arrangements[101] Miscellaneous - Management does not expect that disclosure controls and procedures will prevent all errors and fraud, indicating inherent limitations in control systems[166] - The company is not aware of any legal proceedings likely to have a material adverse effect on its business or financial condition[169] - As a smaller reporting company, the company is not required to provide detailed risk factors beyond those in its Annual Report[170]