Revenue from cannabis vaping products was up
100.4% to $40 Million.
Revenue from tobacco vaping products was up 10.9% to
$75.6 Million.
Overall Revenue Increased 31.2% to $115.6
Million
Issues Fiscal Year 2024 Outlook for Cannabis
Vaping Products, Representing a Potential Growth between 100% and
125%, Outlook for Tobacco Vaping Products, Representing a Potential
Growth between 25% and 40%
Fourth Quarter 2023 Non-GAAP Net Profit of
$0.5 Million, as compared to
$1.9 Million Net loss of in Fourth
Quarter 2022
Fourth Quarter 2023
Net Loss of $1.6 million as compared
to $2.2 Million Net Loss for Fourth
Quarter 2022
LOS
ANGELES, Calif., Sept. 18,
2023 /PRNewswire/ -- Ispire Technology Inc.
("Ispire" or "the Company") (NASDAQ: ISPR), a leader in vapor
technology, providing high-quality, innovative products with
first-class performance, announced today
financial results for the fiscal year 2023, which ended on
June 30, 2023, and filed its annual
report on Form 10-K on September 18,
2023.
"The fiscal year 2023 marked a
significant milestone for Ispire, with a 100.4% and 10.9%
surge in cannabis and tobacco vaping products revenues, respectively from Fiscal year 2022. Overall revenue
Increased 31.2%. This growth was predominantly driven by the
doubling of the revenues from our cannabis vaping products in
the United States and a rise in
sales of tobacco vaping products in Europe. Central to this success is our
multi-pronged strategy: expanding our e-cigarette vaporizer
technology sales and innovating our cannabis vaporizer offerings
for both medical and recreational sectors. Our commitment to
delivering industry-leading products has positioned Ispire at the
forefront, cultivating a reputation for innovation and reliability.
The recent introduction of the Ispire ONETM technology
in July 2023 further exemplifies
our commitment to innovation and sets industry standards,
particularly around consumer safety and operational efficiency. As
part of our ongoing improvements, our California operations are set to launch our
first fully automated assembly system by the end of December 2023. Furthermore, we're actively
exploring Southeast Asia as a
potential hub for future manufacturing operations, aiming to
further optimize our production capabilities. Through these
measures, we are not just driving
growth but reinforcing our leadership in the industry," said
Michael Wang, the Co-Chief Executive
Officer of Ispire.
Daniel Machock, the Chief
Financial Officer of Ispire, added, "The fiscal year
2023 showcased a significant 100.4% and 10.9% surge in
cannabis and tobacco vaping products revenues respectively,
representing a record $40.0 million
as compared to $20.0 million of
cannabis vaping products revenue for the same period in 2022, and a
record $75.6 million, as compared to $68.1 million of tobacco vaping products for the
same period in 2022, underscoring the positive impact of our
refined business strategy. Additionally, our gross profit jumped by
58.4% due to the deeper discount offered during fiscal year 2022, a
favorable product mix, and the realization of economies of scale on
higher sales volume in fiscal year
2023. While we navigate a momentary loss amidst our ongoing
expansion, we remain confident that our focus on a multi-prong
strategy will serve as a catalyst for sustained business
development and financial growth. As we forge ahead into the fiscal
year 2024, we remain committed to
technological advancements, agile adaptation to market shifts, and
delivering unwavering shareholder
value. As such, we forecast continued growth in our cannabis
products revenue projecting a potential increase between 100% and
125% and continued growth in our tobacco vaping products revenue
projecting a potential increase between 25% and 40% in the fiscal
year 2024."
Fiscal Year 2023 Highlights
- Revenue increased 31.2% to $115.6 million as compared to $88.1 million in the same period of 2022. Tobacco
vaping products contributed $75.6
million and cannabis vaping products contributed
$40.0 million to revenue during the
fiscal year 2023;
- Gross profit increased 58.4% to $21.1 million as compared to $13.3 million in the same period of 2022;
- Gross margin increased to 18.2% as compared to
15.1% in the same period of 2022.
- Total operating expenses increased 79.4% to
$25.6 million as compared to
$14.3 million in the same period of
2022; and
- Net loss of $6.1
million as compared to net loss of $1.9 million in the same period of 2022.
Liquidity and Capital Resources
As of June 30, 2023, Ispire had
cash and cash equivalents of $40.3
million and working capital of $28.8
million.
The Company believes that its current cash and cash flows
provided by operating activities, and the net proceeds from the
initial public offering will be sufficient to meet its working
capital needs in the next 12 months.
Restatement
In September 2023, the Company
identified certain errors related to the recording of intellectual
property rights transferred to the Company by a controlling
party. The Company determined that the intangible assets were
incorrectly recorded in the unaudited financial statements, and
that the unaudited financial statements had to be restated to
record the acquired intangible assets at the transferor's book
value, which was nil, rather than $74,259,915, which represents an independent
third party evaluation of the assets. As a result of the
restatement, the Company's net loss for the nine months ended
March 31, 2023 decreased from
$6,057,776, or $0.12 per share (basic and diluted), to
$4,512,513, or $0.09 per share (basic and diluted), its net loss
for the three months ended March 31,
2023 decreased from $3,106,855, or $0.06 per share, to $2,334,223, or $0.05 per share (basic and diluted), and its
stockholders' equity at March 31,
2023 declined from $79,953,608
to $7,238,957.
Non-GAAP Fourth Quarter Net Income/loss
|
|
|
|
FY2023
|
|
FY2022
|
|
|
|
|
|
|
|
|
|
NET (LOSS)/INCOME for
Q1-Q3
|
|
|
(4,512,513)
|
|
288,124
|
|
|
|
|
|
|
|
|
|
NET LOSS for
Q4
|
|
|
(1,586,090)
|
|
(2,162,277)
|
|
|
|
|
|
|
|
|
|
Add
|
Income tax
|
|
|
175,304
|
|
-
|
|
Add
|
IPO related expenses
that not used to offset proceeds
|
|
47,216
|
|
226,205
|
|
Add
|
Allowance for doubtful
accounts
|
|
|
1,103,058
|
|
-
|
|
Add
|
HK patent legal
expense
|
|
|
498,446
|
|
-
|
|
Add
|
US patent legal
fee
|
|
|
238,152
|
|
-
|
|
|
|
|
|
|
|
|
|
NON-GAAP NET
INCOME/LOSS – Q4
|
|
|
476,086
|
|
(1,936,072)
|
|
|
|
|
|
|
|
|
|
The Company believes that the non-GAAP financial information is
important to an understanding of the Company business because the
add-backs include one-time legal expenses that related to the
Company's acquisition of intellectual property rights from a
control party, expenses relating to the Company's initial public
offering that were expensed and not treated as a cost of the
offering, taxes and the allowance for doubtful accounts. Because
Ispire does not have sufficient experience to establish a policy
for establishing a reserve for doubtful accounts, at June 30, 2023 it established a reserve based on
the age of the outstanding receivables. Although the Company
believes that a significant percentage of these accounts receivable
will be collected, and that this allowance is non-recurring; it is
possible that a significant percentage of the reserved accounts
will be not collected. Accordingly, non-GAAP information
relating to the allowance for doubtful account should be viewed
with the understanding it may become a recurring expense, and thus
part of the Company's normal operations.
Initial Public Offering
In April 2023, Ispire closed on
its initial public offering of 3,105,000 shares of common stock of
the Company at a public offering price of $7.00 per share, which included the 405,000
shares issued pursuant to the full exercise by the underwriters of
their over-allotment option. The common stock of the Company began
trading on the NASDAQ Capital Market on April 4, 2023.
In Ispire initial public offering, Ispire raised net proceeds,
after underwriting expenses and other offering expenses, of
approximately $18.3 million.
Net proceeds from the initial public offering are being used
for:
- Approximately 35% to develop manufacturing operations in
Southeast Asia and the United States;
- Approximately 25% for research and development activities,
which include efforts to develop new products and new vaping
technology;
- Approximately 20% for the marketing and promotion of the
Company's branded products; and
- The balance of approximately 20% for general administration and
working capital.
Outlook
Ispire is providing the following outlook for the cannabis and
tobacco vaping products for the fiscal year 2024, which ends on June 30, 2024. Revenue from cannabis and
tobacco vaping products was $40.0
million and $75.6 Million
respectively for the fiscal year 2023. Revenue for cannabis vaping products
for the fiscal year of 2024 is projected at somewhere between
$80 million and $90 million, representing growth between 100% and
125% from fiscal year 2023. Revenue
for tobacco vaping products for the fiscal year 2024 is projected at somewhere between
$95 million and $105 million, representing growth between 25% and
40% from the fiscal year 2023.
Conference Call
The Company will conduct a conference call at 8:00 a.m. Eastern time on Tuesday, September 19,
2023, to discuss the results.
Ispire management will host the conference call, followed by a
question-and-answer period.
Date: Tuesday, September 19,
2023
Time: 8:00 a.m. Eastern time
Toll-free dial-in number:
United States:
1-888-346-8982
Mainland China: 4001-201203
Hong Kong: 800-905945
International: 1-412-902-4272
Webcast:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=3huXMPJI
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.
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 from a related party 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 United States, People's Republic of China, and Russia) primarily through its distribution
network. Ispire's cannabis products are marketed under the Ispire
brand name primarily on an original design manufacturer (ODM) basis
to other cannabis vapor companies. Ispire currently sells its
cannabis vaping hardware only in the
United States, and it recently commenced marketing
activities in Canada and
Europe, primarily in the European
Union.
Please visit www.ispiretechnology.com and follow us on
Facebook, Twitter, Instagram, Linkedin, Pinterest, 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 and the conference call described in this
press release contains and will contain 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: the Company's ability to collect its
accounts receivables in a timely manner, the Company's business
strategies, the ability of the Company to market to the Ispire
ONETM, Ispire ONETM's success if meeting its
goals, the ability of its customers to derive the anticipated
benefits of the Ispire ONETM and the success of
their products on the markets; the Ispire
ONETM 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,"
"Special Note Regarding Forward-Looking Statements" and the
additional risk described in Ispire's prospectus dated April 3, 2023 filed pursuant to Rule 424(b)(1)
under Securities Act (File Number: 333-269470) and in "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" in the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 2023, and the
Form 8-K filed on September 15, 2023.
You should not rely upon forward-looking statements as predictions
of future events. The forward-looking statements made in the press
release relate only to events or information as of the date on
which the statements are made in the 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 law. You
should read this press release with the understanding that our
actual future results may be materially different from what we
expect.
Investor Relations Contact:
Sherry Zheng/ David Tian
718.213.7386/ 732.208.4091
ir@ispiretechnology.com
ISPIRE TECHNOLOGY
INC.
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
June 30,
|
|
|
|
2022
|
|
|
2023
|
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
74,480,651
|
|
|
$
|
40,300,573
|
|
Accounts receivable,
net
|
|
|
8,260,574
|
|
|
|
24,526,262
|
|
Inventories,
net
|
|
|
14,580,557
|
|
|
|
7,472,108
|
|
Prepaid expenses and
other current assets
|
|
|
192,499
|
|
|
|
3,378,617
|
|
Due from related
parties
|
|
|
1,934,855
|
|
|
|
-
|
|
Held-to-maturity
investment
|
|
|
-
|
|
|
|
9,133,707
|
|
Total current
assets
|
|
|
99,449,136
|
|
|
|
84,811,267
|
|
Other
assets:
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
114,025
|
|
|
|
1,088,131
|
|
Rental
deposit
|
|
|
876,100
|
|
|
|
732,334
|
|
Right-of-use assets –
operating leases
|
|
|
295,804
|
|
|
|
4,061,617
|
|
Total other
assets
|
|
|
1,285,929
|
|
|
|
5,882,082
|
|
Total assets
|
|
$
|
100,735,065
|
|
|
$
|
90,693,349
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
290,541
|
|
|
$
|
1,274,391
|
|
Accounts payable –
related party
|
|
|
41,982,373
|
|
|
|
51,698,588
|
|
Contract
liabilities
|
|
|
1,672,051
|
|
|
|
988,556
|
|
Dividends
payable
|
|
|
3,362,639
|
|
|
|
-
|
|
Accrued liabilities and
other payables
|
|
|
159,296
|
|
|
|
281,361
|
|
Due to related
parties
|
|
|
40,672,768
|
|
|
|
710,910
|
|
Income tax payable -
current
|
|
|
481,113
|
|
|
|
63,853
|
|
Operating lease
liabilities – current portion
|
|
|
347,541
|
|
|
|
944,525
|
|
Total current
liabilities
|
|
|
88,968,322
|
|
|
|
55,962,184
|
|
|
|
|
|
|
|
|
|
|
Other
liabilities:
|
|
|
|
|
|
|
|
|
Operating lease
liabilities – net of current portion
|
|
|
-
|
|
|
|
3,356,232
|
|
Total
liabilities
|
|
$
|
88,968,322
|
|
|
$
|
59,318,416
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
Common stock, par value
$0.0001 per share; 140,000,000 shares authorized; 50,000,000
and 54,222,420 shares issued and outstanding as of June 30,
2022 and June 30, 2023
|
|
|
5,000
|
|
|
|
5,422
|
|
Preferred stock, par
value $0.0001 per share, 10,000,000 shares authorized, no
shares
issued at June 30, 2022 and 2023
|
|
|
-
|
|
|
|
-
|
|
Additional paid-in
capital
|
|
|
-
|
|
|
|
25,685,475
|
|
Accumulated other
comprehensive loss
|
|
|
(184,664)
|
|
|
|
(163,768)
|
|
Retained
earnings
|
|
|
11,946,407
|
|
|
|
5,847,804
|
|
Total stockholders'
equity
|
|
|
11,766,743
|
|
|
|
31,374,933
|
|
Total liabilities and
stockholders' equity
|
|
$
|
100,735,065
|
|
|
$
|
90,693,349
|
|
ISPIRE TECHNOLOGY
INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
|
|
|
|
Years ended
June 30,
|
|
|
|
2022
|
|
|
2023
|
|
Revenue
|
|
$
|
88,095,418
|
|
|
$
|
115,605,536
|
|
Cost of
revenue
|
|
|
74,789,378
|
|
|
|
94,529,769
|
|
Gross profit
|
|
|
13,306,040
|
|
|
|
21,075,767
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Sales and marketing
expenses
|
|
|
5,503,630
|
|
|
|
4,714,923
|
|
General and
administrative expenses
|
|
|
8,791,081
|
|
|
|
20,929,978
|
|
Total operating
expenses
|
|
|
14,294,711
|
|
|
|
25,644,901
|
|
Loss from
operations
|
|
|
(988,671)
|
|
|
|
(4,569,134)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
5,078
|
|
|
|
195,209
|
|
Exchange gain(loss),
net
|
|
|
58,143
|
|
|
|
(324,225)
|
|
Other income(expense),
net
|
|
|
122,394
|
|
|
|
(155,150)
|
|
Total other
income(expense), net
|
|
|
185,615
|
|
|
|
(284,166)
|
|
Loss before income
taxes
|
|
|
(803,056)
|
|
|
|
(4,853,300)
|
|
Income taxes -
current
|
|
|
(1,071,097)
|
|
|
|
(1,245,303)
|
|
Net loss
|
|
$
|
(1,874,153)
|
|
|
$
|
(6,098,603)
|
|
Other comprehensive
loss
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
|
|
(117,085)
|
|
|
|
20,896
|
|
Comprehensive
loss
|
|
|
(1,991,238)
|
|
|
|
(6,077,707)
|
|
Net loss per
share
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
(0.04)
|
|
|
$
|
(0.12)
|
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
|
50,000,000
|
|
|
|
50,725,814
|
|
ISPIRE TECHNOLOGY
INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
Years ended
June 30,
|
|
|
|
2022
|
|
|
2023
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
Net loss:
|
|
$
|
(1,874,153)
|
|
|
$
|
(6,098,603)
|
|
Adjustments to
reconcile net loss from operations to net cash provided by
operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
10,402
|
|
|
|
46,662
|
|
Depreciation of
right-of-use assets
|
|
|
135,141
|
|
|
|
1,061,442
|
|
Accounts receivable
impairment
|
|
|
-
|
|
|
|
3,332,825
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(3,950,508)
|
|
|
|
(19,579,339)
|
|
Inventories
|
|
|
(11,525,561)
|
|
|
|
7,108,449
|
|
Prepaid expenses and
other current assets
|
|
|
29,007
|
|
|
|
(3,088,466)
|
|
Accounts
payable
|
|
|
8,875,590
|
|
|
|
10,574,989
|
|
Contract
liabilities
|
|
|
543,890
|
|
|
|
(690,637)
|
|
Accrued liabilities and
other payables
|
|
|
(282,487)
|
|
|
|
168,179
|
|
Income tax
payable
|
|
|
481,113
|
|
|
|
(417,260)
|
|
Net cash used in
operating activities
|
|
$
|
(7,557,566)
|
|
|
$
|
(7,581,759)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Purchase of property,
plant and equipment
|
|
|
(121,516)
|
|
|
|
(1,020,768)
|
|
Purchase of short term
investment
|
|
|
-
|
|
|
|
(9,133,707)
|
|
Net cash used in
investing activities
|
|
$
|
(121,516)
|
|
|
$
|
(10,154,475)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Net proceeds from
initial public offering
|
|
|
-
|
|
|
|
21,735,000
|
|
Payment of initial
public offering costs
|
|
|
-
|
|
|
|
(3,475,171)
|
|
Proceeds from private
placement
|
|
|
-
|
|
|
|
7,969,221
|
|
Payment of private
placement costs
|
|
|
-
|
|
|
|
(543,153)
|
|
Payment of dividends of
subsidiary
|
|
|
(469,633)
|
|
|
|
(3,362,639)
|
|
Repayment to related
parties
|
|
|
(2,498,689)
|
|
|
|
(37,893,063)
|
|
Principal portion of
lease payment
|
|
|
(120,942)
|
|
|
|
(874,039)
|
|
Net cash used in
financing activities
|
|
$
|
(3,089,264)
|
|
|
$
|
(16,443,844)
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash
and cash equivalents
|
|
|
(10,768,346)
|
|
|
|
(34,180,078)
|
|
Cash and cash
equivalents – beginning of year
|
|
|
85,248,997
|
|
|
|
74,480,651
|
|
Cash and cash
equivalents – end of year
|
|
$
|
74,480,651
|
|
|
$
|
40,300,573
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure
of cash flow information:
|
|
|
|
|
|
|
|
|
Cash (refund) paid for
income taxes
|
|
$
|
(69,647)
|
|
|
$
|
1,663,240
|
|
Cash paid for
interest
|
|
$
|
-
|
|
|
$
|
-
|
|
View original
content:https://www.prnewswire.com/news-releases/ispire-technology-inc-reports-financial-results-for-the-fiscal-full-year-2023-301931297.html
SOURCE Ispire Technology Inc.