Core Insights - Ispire Technology Inc. reported a significant reduction in net accounts receivable by 19.5%, amounting to $37.9 million as of December 31, 2025, down from $47.0 million at the end of fiscal year 2025, indicating a focus on high-quality revenue and customer quality rationalization [3][4]. Financial Performance - Revenue for the second quarter of fiscal 2026 was $20.3 million, a decrease from $41.8 million in the same period of the previous year, attributed to a strategic shift away from lower-quality cannabis customers [5][6]. - Gross profit was reported at $3.5 million, down from $7.7 million year-over-year, with a gross margin of 17.1%, compared to 18.5% in the prior year, primarily due to a change in product mix [6][7]. - Total operating expenses decreased to $10.3 million from $15.1 million year-over-year, reflecting the impact of efficiency initiatives [4][6]. - The net loss for the quarter was $6.6 million, or $0.12 per share, an improvement from a net loss of $8.0 million, or $0.14 per share, in the same quarter of the previous year [8][6]. Strategic Initiatives - The company is ramping up manufacturing capabilities in Malaysia to increase production throughout fiscal 2026 and is engaged in discussions with several nicotine manufacturers regarding its proprietary G-Mesh technology for next-generation vaping devices [3]. - Ispire's joint venture, IKE Tech, is collaborating with regulators in Europe, Southeast Asia, and the Middle East to promote age-gating technology as a safer industry standard, aligning with the U.S. FDA's enforcement on flavored e-cigarettes [3][4]. - The company aims to create a robust legal market for FDA-authorized flavored e-cigarette products, leveraging its technologies to prevent youth access and ensure product authenticity [3].