Record Revenue Year with
Revenue Increasing 31.4% Year-Over-Year to
$151.9 Million
Gross Profit Increased 43.3%
Year-Over-Year to $29.8
Million
Submitted PMTA Application in September 2024 Planning to Re-enter US ENDS
Market
LOS
ANGELES, Sept. 26, 2024 /PRNewswire/
-- Ispire Technology
Inc. (NASDAQ: ISPR) ("Ispire," the "Company," "we,"
"us," or "our"), an innovator in vaping technology and precision
dosing, today reported results for the fiscal year 2024, which
ended on June 30, 2024, and will file
its annual report on Form 10-K with the U.S. Securities and
Exchange Commission (the "SEC") on September
26, 2024.
Fiscal Year 2024 Financial Results
- Revenue increased 31.4% to $151.9
million as compared to $115.6
million in the 2023 fiscal year.
- Gross profit increased 43.3% to $29.8 million compared to $20.8 million in the 2023 fiscal year.
- Gross margin increased to 19.6% as compared to 18.0% in
the 2023 fiscal year;
- Total operating expenses increased 73.0% to $43.7 million as compared to $25.3 million in the 2023 fiscal year.
- Net loss of ($14.8)
million as compared to net loss of ($6.0) million in the 2023 fiscal year.
Michael Wang, Co-Chief Executive
Officer of Ispire, commented,
- "Fiscal year 2024 was a foundational year for Ispire, marked by
record revenue and substantial margin expansion while strategically
positioning us for faster growth in our global nicotine business
and intentionally focusing our cannabis vaping hardware on high
quality multi-state operator (MSO) customers.
- We continued to increase our revenue as we forged strategic
long term partnerships with industry leaders such as Acreage
Holdings, Hidden Hills Club, Dank Pack, and BRKFST, a brand
produced and sold under a license arrangement with international
singer and songwriter Burna Boy. These collaborations helped to
expand our market presence, increase distribution channels, and
solidify our global operating infrastructure.
- We enhanced our manufacturing capabilities with the opening of
a state-of-the-art 31,000 sq. ft. facility in Malaysia earlier this year as we aim to
capitalize on the international nicotine market while driving our
costs down and increasing profitability. We expect to continue to
realize incremental margin improvements with this facility as
production throughput increases.
- We successfully closed on a $12.3
million public offering this past spring which helped
strengthen our financial standing and has positioned us to expand
on future international growth opportunities in both the nicotine
and cannabis sectors.
- Additionally, we bolstered our senior leadership team with key
appointments: Jim McCormick as Chief
Financial Officer, John Patterson as
Senior Vice President of International Nicotine, and Dennis Lider as Senior Vice President of
Cannabis Vaping Hardware Sales.
- While we are excited by our results, we are even more
optimistic about our path forward. We continue to work towards an
industry-leading point-of-use age-verification solution for vapor
devices as well as continue to introduce cutting-edge technology
across the U.S. e-cigarette market.
- We recently submitted our first PMTA application in four years
for a disposable ENDS product with four flavors. This is an
important milestone for the Company, as we aim to re-enter the U.S.
ENDS market. While we maintain our focus on innovation to drive
topline growth, we are equally committed to achieving sustainable
margin improvements. At the same time, we are taking steps to limit
underage access to vaping products in line with the Company's
values which focus on responsible marketing to adult consumers.
- We believe these initiatives have collectively positioned us to
capitalize on future market opportunities while delivering
long-term value to our stakeholders."
Jim McCormick, Chief Financial
Officer of Ispire, stated, "Our fiscal year 2024 results reflect
our ability to successfully execute across our business segments,
with a strategic focus on the international nicotine market as our
primary revenue, margin, and future profit driver given its
significant market size.
We recognize we have taken calculated risks with our cannabis
investments in the US over the course of 2024. We have
expanded our customer base as well as sales to existing customers
while improving our gross margins as the year progressed.
While we have made significant gains in market share, we also
experienced challenges with slow-paying customers related to the
systemic cash demands placed on the US cannabis industry.
Much of this can be linked to the cannabis specific 280E
requirements, perpetuated by the lack of cannabis rescheduling from
a Schedule I to a Schedule III controlled substance. In
addition, ongoing industry conditions as well as the current
regulatory and taxation environment are placing pressure on our
customer's cash flow and ability to pay us in a timely manner.
Despite these challenges, we remain very confident in our growth
trajectory. Our strategic realignment positions the Company
to drive growth initiatives in both the nicotine and cannabis
sectors, with a renewed focus on quality investments. Furthermore,
we are continuing to drive costs down as we expand our utilization
of our Malaysian production facility. This facility significantly
bolsters our manufacturing capabilities, while providing
operational efficiency and reducing our product costs."
Financial Results for the Fiscal Year Ended June 30, 2024
For the fiscal year ended June 30,
2024, Ispire reported revenue of $151.9 million compared to $115.6 million during the same period last year,
an increase of 31.4%. The increase in revenue was primarily
attributable to the combined effect of increases in product sales
in the United States of
$21.5 million from $41.6 million for the year ended June 30, 2023 to $63.1
million for the year ended June 30,
2024, increases in sales of vaping products in Europe of $6.5
million from $58.8 million for
the year ended June 30, 2023 to
$65.3 million for the year ended
June 30, 2024, and increases in sales
of vaping products in other markets of $5.7
million from $0.3 million for
the year ended June 30, 2023 to
$6.0 million for the year ended
June 30, 2024, mainly contributed by
increase in sales to South Africa
of $5.4 million.
Gross profit for the fiscal year ended June 30, 2024, was $29.8
million compared to $20.8
million for the same period in fiscal year 2023. Over this
same period, our gross margin grew to 19.6%, from 18.0%. The
increase in gross profit and gross margin during the fiscal year
2024 was primarily due to a change in product mix focusing on
higher margin products, higher sales volume leading to improved
economies of scale, and the benefits derived from production in the
Company's Malaysia facility.
Total operating expenses for the fiscal year ended June 30, 2024 were $43.7
million as compared to $25.3
million in the same period in fiscal year 2023. This
increase was primarily due to expenses to support the expanded
business footprint in the areas of payroll and contract wages,
sales and marketing, professional fees as well as increased
stock-based compensation.
For the fiscal year ended June 30,
2024, net loss was ($14.8)
million or ($0.27) per share,
compared to a net loss of ($6.0)
million, or ($0.12) per share
for fiscal year 2023.
As of June 30, 2024, Ispire
had $35.1 million in cash and cash equivalents and working
capital of $16.6 million.
Conference Call
The Company will conduct a conference call at 8:00 am Eastern
Time on Thursday, September 26,
2024, to discuss the results. Ispire management will host
the conference call, followed by a question-and-answer period.
Please call the conference call dial-in 5-10 minutes prior to
the start time and ask for the "Ispire Technology Call." An
operator will register your name and organization.
- Date: Thursday, September 26,
2024
- Time: 8:00 am ET
- Dial-In Numbers: United States
877-451-6152 or International +1 201-389-0879
This conference call will be broadcast live on the Internet and
can be accessed by all interested parties at https://viavid.webcasts.com/starthere.jsp?ei=1683501&tp_key=2e98778e22
Please access the link at least fifteen minutes prior to the
start of the call to register, download, and install any necessary
audio software.
A playback will be available from 11:00
am ET on September 26, 2024
through October 10, 2024. To listen,
please dial 844-512-2921 or +1 412-317-6671. Use the passcode
13748321 to access the replay.
About Ispire Technology Inc.
Ispire is engaged in the research and development, design,
commercialization, sales, marketing, and distribution of branded
e-cigarettes and cannabis vaping products. The Company's operating
subsidiaries own or license more than 200 patents received or filed
globally. Ispire's tobacco products are marketed under the Aspire
brand name and are sold worldwide (except in the U.S., People's Republic of China and Russia) primarily through its global
distribution network. The Company's cannabis products are marketed
under the Ispire brand name primarily on an original design
manufacturer (ODM) basis to other cannabis vapor companies. Ispire
sells its cannabis vaping hardware in the US, Canada, Germany and South
Africa. For more information, visit www.ispiretechnology.com or follow Ispire on
Instagram , LinkedIn, Facebook, TwitterInstagram, LinkedIn,
Facebook, Twitter and YouTube. Any information contained on, or
that can be accessed through, the Company's website, any other
website or any social media, is not a part of this press
release.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended ("Securities Act") as well as Section 21E of the Securities
Exchange Act of 1934, as amended, and the Private Securities
Litigation Reform Act of 1995, as amended, that are intended to be
covered by the safe harbor created by those sections.
Forward-looking statements, which are based on certain assumptions
and describe the Company's future plans, strategies and
expectations, can generally be identified by the use of
forward-looking terms such as "believe," "expect," "may," "will,"
"should," "would," "could," "seek," "intend," "plan," "goal,"
"project," "estimate," "anticipate," "strategy," "future," "likely"
or other comparable terms, although not all forward-looking
statements contain these identifying words. All statements other
than statements of historical facts included in this press release
regarding the Company's strategies, prospects, financial condition,
operations, costs, plans and objectives are forward-looking
statements. Important factors that could cause the Company's actual
results and financial condition to differ materially from those
indicated in the forward-looking statements. Such forward-looking
statements include, but are not limited to, risks and uncertainties
including those regarding: whether the Company may be successful in
re-entering the U.S. ENDS market; the approval or rejection of
any PMTA submitted by the Company; whether the Company's joint
venture with Touch Point Worldwide Inc. d/b/a/ Berify and Chemular
Inc. (the "Joint Venture") may be successful in achieving its goals
as currently contemplated, with different terms, or at all, the
Joint Venture's ability to innovate in the e-cigarette technology
space or develop age gating or age verification technologies for
nicotine vaping devices, the Company's ability to collect its
accounts receivable in a timely manner, the Company's business
strategies, the ability of the Company to market to the Ispire
ONE™, Ispire ONE™'s success if meeting its goals, the ability of
its customers to derive the anticipated benefits of the Ispire ONE™
and the success of its products on the markets; the Ispire ONE™
proving to be safe, and the risk and uncertainties described in
"Risk Factors," "Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Cautionary Note on
Forward-Looking Statements" and the additional risk described in
Ispire's Annual Report on Form 10-K for the year ended June
30, 2023 and any subsequent filings which Ispire makes with the
SEC. You should not rely upon forward-looking statements as
predictions of future events. The forward-looking statements made
in this press release relate only to events or information as of
the date on which the statements are made in this press release. We
undertake no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, after the date on which the statements are made or to
reflect the occurrence of unanticipated events except as required
by applicable law. You should read this press release with the
understanding that our actual future results may be materially
different from what we expect.
|
ISPIRE TECHNOLOGY
INC.
|
|
UNAUDITED
CONSOLIDATED BALANCE SHEETS
|
|
(In $USD, except
share and per share data)
|
|
|
|
June 30
|
|
|
|
2023
|
|
|
2024
|
|
|
|
(to be restated
on Form 10-K
for fiscal
year 2024)
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash
|
|
$
|
40,300,573
|
|
|
$
|
35,071,294
|
|
|
Accounts receivable,
net
|
|
|
24,526,262
|
|
|
|
59,734,765
|
|
|
Inventories,
net
|
|
|
7,472,108
|
|
|
|
6,365,394
|
|
|
Prepaid expenses and
other current assets
|
|
|
3,378,617
|
|
|
|
1,400,152
|
|
|
Investment –
other
|
|
|
9,133,707
|
|
|
|
-
|
|
|
Total current
assets
|
|
|
84,811,267
|
|
|
|
102,571,605
|
|
|
Other
assets:
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
1,088,131
|
|
|
|
2,582,457
|
|
|
Intangible assets,
net
|
|
|
-
|
|
|
|
1,375,666
|
|
|
Right-of-use assets –
operating leases
|
|
|
4,253,732
|
|
|
|
3,579,140
|
|
|
Other
investment
|
|
|
-
|
|
|
|
2,000,000
|
|
|
Equity method
investment
|
|
|
-
|
|
|
|
10,248,048
|
|
|
Other non-current
assets
|
|
|
242,614
|
|
|
|
284,050
|
|
|
Total other
assets
|
|
|
5,584,477
|
|
|
|
20,069,361
|
|
|
Total assets
|
|
$
|
90,395,744
|
|
|
$
|
122,640,966
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
1,274,391
|
|
|
$
|
3,779,723
|
|
|
Accounts payable –
related party
|
|
|
51,698,588
|
|
|
|
67,046,472
|
|
|
Contract
liabilities
|
|
|
988,556
|
|
|
|
2,218,166
|
|
|
Accrued liabilities and
other payables
|
|
|
281,361
|
|
|
|
11,738,339
|
|
|
Due to a related
party
|
|
|
710,910
|
|
|
|
-
|
|
|
Income tax
payable
|
|
|
63,853
|
|
|
|
-
|
|
|
Operating lease
liabilities – current portion
|
|
|
837,100
|
|
|
|
1,207,832
|
|
|
Total current
liabilities
|
|
|
55,854,759
|
|
|
|
85,990,532
|
|
|
|
|
|
|
|
|
|
|
|
Other
liabilities:
|
|
|
|
|
|
|
|
|
|
Operating lease
liabilities – net of current portion
|
|
|
3,071,075
|
|
|
|
2,194,094
|
|
|
Total
liabilities
|
|
|
58,925,834
|
|
|
|
88,184,626
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
|
Common stock, par value
$0.0001 per share; 140,000,000 shares authorized;
54,222,420 and 56,470,636 shares issued and outstanding as of
June 30, 2023 and
June 30, 2024
|
|
|
5,422
|
|
|
|
5,647
|
|
|
Preferred stock, par
value $0.0001 per share, 10,000,000 shares authorized, no
shares issued at June 30, 2023 and June 30,
2024
|
|
|
-
|
|
|
|
-
|
|
|
Additional paid-in
capital
|
|
|
25,685,475
|
|
|
|
43,217,391
|
|
|
Retained earnings
(accumulated deficit)
|
|
|
5,942,781
|
|
|
|
(8,825,041)
|
|
|
Accumulated other
comprehensive (loss) income
|
|
|
(163,768)
|
|
|
|
58,343
|
|
|
Total stockholders'
equity
|
|
|
31,469,910
|
|
|
|
34,456,340
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
90,395,744
|
|
|
$
|
122,640,966
|
|
|
ISPIRE TECHNOLOGY
INC.
|
|
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND
|
|
COMPREHENSIVE
LOSS
|
|
(In $USD, except
share and per share data)
|
|
|
Years ended
June 30,
|
|
|
|
2023
|
|
|
2024
|
|
|
|
(to be restated
on Form 10-K
for fiscal
year 2024)
|
|
|
|
|
|
Revenue
|
|
$
|
115,605,536
|
|
|
$
|
151,908,691
|
|
|
Cost of
revenue
|
|
|
94,828,472
|
|
|
|
122,126,245
|
|
|
Gross profit
|
|
|
20,777,064
|
|
|
|
29,782,446
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Sales and marketing
expenses
|
|
|
4,416,220
|
|
|
|
6,608,724
|
|
|
General and
administrative expenses
|
|
|
20,835,001
|
|
|
|
37,067,861
|
|
|
Total operating
expenses
|
|
|
25,251,221
|
|
|
|
43,676,585
|
|
|
Loss from
operations
|
|
|
(4,474,157)
|
|
|
|
(13,894,139)
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
Interest income,
net
|
|
|
195,209
|
|
|
|
350,022
|
|
|
Exchange loss,
net
|
|
|
(324,225)
|
|
|
|
(70,293)
|
|
|
Other (expense) income,
net
|
|
|
(155,150)
|
|
|
|
128,634
|
|
|
Total other (expense)
income, net
|
|
|
(284,166)
|
|
|
|
408,363
|
|
|
Loss before income
taxes
|
|
|
(4,758,323)
|
|
|
|
(13,485,776)
|
|
|
Income taxes –
current
|
|
|
(1,245,303)
|
|
|
|
(1,282,046)
|
|
|
Net loss
|
|
$
|
(6,003,626)
|
|
|
$
|
(14,767,822)
|
|
|
Other comprehensive
loss
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
|
|
20,896
|
|
|
|
222,111
|
|
|
Comprehensive
loss
|
|
|
(5,982,730)
|
|
|
|
(14,545,711)
|
|
|
Net loss per
share
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
(0.12)
|
|
|
$
|
(0.27)
|
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
|
50,725,814
|
|
|
|
54,812,900
|
|
|
ISPIRE TECHNOLOGY
INC.
|
|
UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(In $USD, except
share and per share data)
|
|
|
|
Years ended
June 30,
|
|
|
|
2023
|
|
|
2024
|
|
|
|
(to be restated
on Form 10-K
for fiscal
year 2024)
|
|
|
|
|
|
Net loss
|
|
$
|
(6,003,626)
|
|
|
$
|
(14,767,822)
|
|
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
46,662
|
|
|
|
505,653
|
|
|
Credit loss
expenses
|
|
|
3,332,825
|
|
|
|
6,015,752
|
|
|
Right-of-use assets
amortization
|
|
|
1,030,104
|
|
|
|
1,211,899
|
|
|
Stock-based
compensation expenses
|
|
|
—
|
|
|
|
6,380,282
|
|
|
Inventory
impairment
|
|
|
—
|
|
|
|
205,594
|
|
|
Loss from equity method
investment
|
|
|
—
|
|
|
|
117,905
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(19,579,339)
|
|
|
|
(41,299,642)
|
|
|
Inventories
|
|
|
7,108,449
|
|
|
|
901,120
|
|
|
Prepaid expenses and
other current assets
|
|
|
(2,598,746)
|
|
|
|
1,937,029
|
|
|
Accounts payable and
accounts payable – related party
|
|
|
10,574,989
|
|
|
|
17,891,667
|
|
|
Contract
liabilities
|
|
|
(690,637)
|
|
|
|
1,248,687
|
|
|
Accrued liabilities and
other payables
|
|
|
168,179
|
|
|
|
2,456,979
|
|
|
Operating lease
liabilities
|
|
|
(1,427,398)
|
|
|
|
(1,043,556)
|
|
|
Income tax
payable
|
|
|
(417,260)
|
|
|
|
(63,853)
|
|
|
Net cash used in
operating activities
|
|
|
(8,455,798)
|
|
|
|
(18,302,306)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
Purchase of property,
plant and equipment
|
|
|
(1,020,768)
|
|
|
|
(1,969,961)
|
|
|
Acquisition of
intangible assets
|
|
|
—
|
|
|
|
(1,173,302)
|
|
|
Purchase of short term
investment
|
|
|
(9,133,707)
|
|
|
|
—
|
|
|
Maturity of short term
investment
|
|
|
—
|
|
|
|
9,133,707
|
|
|
Acquisition of other
investment
|
|
|
|
|
|
|
(2,000,000)
|
|
|
Acquisition of equity
method investment
|
|
|
—
|
|
|
|
(1,000,000)
|
|
|
Net cash (used in)
provided by investing activities
|
|
|
(10,154,475)
|
|
|
|
2,990,444
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
Net proceeds from
initial public offering
|
|
|
21,735,000
|
|
|
|
—
|
|
|
Payment of initial
public offering costs
|
|
|
(3,475,172)
|
|
|
|
—
|
|
|
Proceeds from equity
offerings
|
|
|
7,969,221
|
|
|
|
12,300,000
|
|
|
Issuance costs of
equity offerings
|
|
|
(543,153)
|
|
|
|
(1,514,094)
|
|
|
Payment made for
dividends
|
|
|
(3,362,639)
|
|
|
|
—
|
|
|
Repayments of advances
from a related party
|
|
|
(37,893,062)
|
|
|
|
(703,323)
|
|
|
Net cash (used in)
provided by financing activities
|
|
|
(15,569,805)
|
|
|
|
10,082,583
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in
cash
|
|
|
(34,180,078)
|
|
|
|
(5,229,279)
|
|
|
Cash – beginning of
period
|
|
|
74,480,651
|
|
|
|
40,300,573
|
|
|
Cash – end of
period
|
|
$
|
40,300,573
|
|
|
$
|
35,071,294
|
|
|
Supplemental
non-cash investing and financing activities
|
|
|
|
|
|
|
|
|
|
Leased assets obtained
in exchange for operating lease liabilities
|
|
$
|
4,988,032
|
|
|
$
|
537,307
|
|
|
Unpaid equity method
investment in accrued liabilities and other payables
|
|
$
|
—
|
|
|
$
|
9,000,000
|
|
|
Warrants issued in
connection with equity method investment
|
|
$
|
—
|
|
|
$
|
365,954
|
|
|
Unpaid intangible
assets in accrued liabilities and other payables
|
|
$
|
—
|
|
|
$
|
232,382
|
|
|
Supplemental
disclosures
|
|
|
|
|
|
|
|
|
|
Cash paid for income
taxes
|
|
$
|
1,663,240
|
|
|
$
|
1,355,110
|
|
|
Cash paid for
interest
|
|
$
|
587
|
|
|
$
|
15,229
|
|
For more information, kindly contact:
IR Contacts:
Investor Relations
Sherry Zheng
718-213-7386
ir@ispiretechnology.com
KCSA Strategic Communications
Phil Carlson
212-896-1233
ispire@kcsa.com
PR Contact:
Ellen
Mellody
570-209-2947
EMellody@kcsa.com
View original
content:https://www.prnewswire.com/news-releases/ispire-technology-inc-reports-financial-results-for-the-fiscal-year-2024-302259490.html
SOURCE Ispire Technology Inc.