Ispire Technology (US:ISPR)2026-02-06 21:30Revenue Performance - Revenue for the three months ended December 31, 2025, decreased by $21.5 million, or 51.5%, to $20.3 million from $41.8 million in the same period in 2024[146]. - Revenue for the six months ended December 31, 2025, decreased by $30.5 million, or 37.6%, to $50.6 million from $81.2 million in the same period in 2024[147]. - Sales of vaping products in North America decreased by $13.6 million, from $20.7 million for the six months ended December 31, 2024, to approximately $7.1 million for the same period in 2025[147]. - Sales of vaping products in Europe decreased by $10.4 million, from $45.9 million for the six months ended December 31, 2024, to $35.5 million for the same period in 2025[147]. Cost and Profitability - Cost of revenue for the three months ended December 31, 2025, decreased by $17.3 million, or 50.7%, to $16.8 million from $34.1 million in the same period in 2024[148]. - Gross profit for the three months ended December 31, 2025, was $3.5 million, representing a gross profit margin of 17.1%, compared to $7.7 million and 18.5% in the same period in 2024[151]. - Gross profit decreased by $4,247,970, or 55.0%, from $7,722,571 for the three months ended December 31, 2024, to $3,474,601 for the three months ended December 31, 2025, with gross margin decreasing from 18.5% to 17.1%[152]. Operating Expenses - Operating expenses decreased by $4,733,158 or 31.4%, from $15,082,626 for the three months ended December 31, 2024, to $10,349,468 for the three months ended December 31, 2025[154]. - Sales and marketing expenses decreased by $585,336, or 28.4%, from $2,061,664 for the three months ended December 31, 2024, to $1,476,328 for the three months ended December 31, 2025[156]. - General and administrative expenses decreased by $4,173,025, or 47.2%, from $8,836,964 for the three months ended December 31, 2024, to $4,663,939 for the three months ended December 31, 2025[160]. Credit Loss and Financial Position - The allowance for credit losses was $20.9 million and $18.0 million at December 31, 2025, and June 30, 2025, respectively[139]. - Credit loss expenses decreased by $1,312,626, or 18.0%, from $7,286,079 for the six months ended December 31, 2024, to $5,973,453 for the six months ended December 31, 2025[159]. - Current assets decreased by $9,256,000, or 12.7%, from $72,908,000 as of June 30, 2025, to $63,652,000 as of December 31, 2025[171]. - Net cash used in operating activities for the six months ended December 31, 2025, was $5,150,000, reflecting a net loss of $9,861,774[172]. Investment and Financing - The company raised approximately $18.3 million from its initial public offering in April 2023, followed by $7.4 million in June 2023, and $10.6 million in March 2024 through public offerings[135][136]. - The company recorded an unpaid consideration of $5.3 million related to a $9 million investment in a joint venture named IKE Tech LLC[182]. - The company has a borrowing balance of $1,378,744, with $1,146,766 due between January 1, 2026, and December 31, 2026[182]. - The total future lease payments are projected to be $4,696,107, after accounting for imputed interest of $394,253[181]. Company Status and Market Conditions - The company qualifies as an "emerging growth company" under the JOBS Act, with less than $1.235 billion in revenue for the last fiscal year[186]. - There are no trends or uncertainties that are expected to materially affect net revenues or profitability[183]. - Seasonality does not materially impact the company's business operations[184]. - The company does not have off-balance sheet arrangements[185]. - The company could lose its Emerging Growth Company status if its public float exceeds $700 million[186]. - As a smaller reporting company, the company is not required to provide certain market risk disclosures[187]. Strategic Focus - The company is expanding its international presence by launching nicotine products under the Ispire platform through licensing arrangements[133]. - The company focuses more on its nicotine business due to the federal status of cannabis and the uncertainty in the cannabis industry[140]. Net Loss - Net loss decreased by $1,395,732, from net loss of $7,998,643 for the three months ended December 31, 2024, to a net loss of $6,602,911 for the three months ended December 31, 2025[169].