Ispire Technology (US:ISPR)2024-02-20 22:21Financial Performance - Revenue for the three months ended December 31, 2023, increased to $41,685,561, representing a 30.6% growth compared to $31,897,399 in the same period of 2022[16] - Gross profit for the six months ended December 31, 2023, was $13,264,498, up from $9,930,681 in the prior year, indicating a 33.5% increase[16] - Total revenue for the three months ended December 31, 2023, was $35,309,000, an increase from $31,897,000 for the same period in 2022, representing a growth of 10.5%[141] - Revenue increased by $9.79 million, or 30.7%, from $31.90 million for the three months ended December 31, 2022, to $41.69 million for the same period in 2023[136] - Revenue for the six months ended December 31, 2023, increased by $25.71 million, or 43.7%, from $58.84 million to $84.55 million[137] - Revenue from tobacco vaping products decreased to $22,134,264 in Q4 2023 from $24,061,401 in Q4 2022, while revenue from cannabis vaping products increased significantly to $19,551,297 from $7,835,998[63] Expenses and Losses - Operating expenses for the three months ended December 31, 2023, rose to $10,326,842, a significant increase from $4,828,735 in the same period of 2022, reflecting a 113.1% rise[16] - The company reported a net loss of $4,022,324 for the three months ended December 31, 2023, compared to a net loss of $130,242 in the same period of 2022[72] - The net loss for the six months ended December 31, 2023, was $5,396,939, compared to a net loss of $2,131,996 for the same period in 2022, representing a 153.1% increase in losses[22] - Net loss for the three months ended December 31, 2023, was $4.02 million, or 9.6% of revenue[133] - Operating expenses increased by $5,498,107, or 113.9%, from $4,828,735 for the three months ended December 31, 2022, to $10,326,842 for the same period in 2023[144] Assets and Liabilities - Cash and cash equivalents decreased to $17,502,989 as of December 31, 2023, down from $84,267,154 at the end of the previous year, marking a decline of 79.2%[22] - Total liabilities increased to $61,592,891 as of December 31, 2023, up from $59,318,416 at the end of June 30, 2023, reflecting a growth of 3.8%[18] - The company’s total stockholders' equity decreased to $28,987,264 as of December 31, 2023, down from $31,374,933 at the end of June 30, 2023, a decline of 7.6%[18] - Current assets decreased by $1,803,000, or 2.1%, from $84,811,000 as of June 30, 2023, to $83,008,000 as of December 31, 2023[155] - Contract liabilities increased from $988,556 as of June 30, 2023, to $1,705,171 as of December 31, 2023, indicating more orders on hand[91] Operational Developments - Ispire Technology Inc. is engaged in the research and development, design, commercialization, sales, marketing, and distribution of branded e-cigarettes and cannabis vaping products[23] - The Company established a wholly-owned subsidiary, Ispire Malaysia, on September 1, 2023, to enhance manufacturing operations in Southeast Asia[27] - The Company has submitted a Premarket Tobacco Product Application (PMTA) for one ENDS product, pending FDA review, which could impact market access[38] - The Company ceased marketing tobacco vaping products in the U.S. due to regulatory burdens, as the sales volume did not justify the associated costs[39] - Supply chain issues previously affected operations, but current conditions have improved, reducing delays in product delivery[33] Risk Factors - Cybersecurity remains a significant risk, with potential impacts on financial condition and operations due to increasing cyber threats[174] - The Company’s operations are subject to uncertainties related to COVID-19, particularly concerning manufacturing in China[32] - The company has not identified any trends or uncertainties that could materially affect its financial performance[167] - Seasonality does not materially affect the company's business operations[168] Shareholder Information - The weighted average basic and diluted shares outstanding increased to 54,270,236 for the three months ended December 31, 2023, from 50,000,000 in the same period of 2022[72] - The company granted 2,910,000 stock options with a weighted average exercise price of $9.63 during the six months ended December 31, 2023[107] - The aggregate intrinsic value of options outstanding as of December 31, 2023, was $7,263,425, with $400,875 for options exercisable[107] Management and Governance - The company has appointed a new chief financial officer and a vice president of finance to address material weaknesses in internal control[177] - The company qualifies as an "emerging growth company" under the JOBS Act, with revenues below $1.235 billion for the last fiscal year, allowing it to take advantage of reduced reporting requirements[173] - The company does not have off-balance sheet arrangements, indicating a straightforward financial structure[169]