Total Revenue Increased 24% year-over-year to $30.0 Million
Gross Profit Increased 35% year-over-year to $6.1 Million
North American Cannabis Vaping Hardware Revenue Increased 57% year-over-year to $11.9 Million
Closed $12.3 million public offering
LOS ANGELES, May 14, 2024 /PRNewswire/ -- Ispire Technology Inc. (NASDAQ: ISPR) ("Ispire" or the "Company"), an innovator in vaping technology and precision dosing, today reported results for the fiscal third quarter, which ended March 31, 2024 and filed its quarterly report on Form 10-Q on May 14, 2024.
Fiscal Third Quarter 2024 Financial Results
- Revenue increased 24% to $30.0 million as compared to $24.1 million in the same period of 2023. Tobacco vaping products contributed $18.1 million and cannabis vaping products contributed $11.9 million to revenue during the fiscal third quarter 2024;
- Gross profit increased 35% to $6.1 million for the three-month period ended March 31, 2024, compared to $4.5 million in the third quarter of fiscal 2023. Gross profit for the nine-month period ended March 31, 2024, was $19.2 million, compared to $14.3 million for the same period in fiscal 2023.
- Gross margin increased to 20.4% as compared to 18.7% in the same period of 2023;
- Total operating expenses increased 63.7% to $11.8 million as compared to $7.2 million in the same period of 2023; and
- Net loss of $5.9 million as compared to net loss of $2.3 million in the same period of 2023.
Michael Wang, Co-Chief Executive Officer of I spire commented, " the third quarter was important for Ispire as it demonstrated our continued ability to add new strategic partners and expand within existing market sectors as we execute on our mission to be an innovator and a leader in our markets. During the quarter, we entered into a joint venture with Berify and Chemular, and, subsequent to the end of the quarter, announced a partnership with a subsidiary of Acreage Holdings, Inc. (OTCMKTS: ACRGF). These partnerships will allow us to continue to expand our market share as we offer our cutting-edge products and technology globally."
"Also during the quarter, we successfully closed on a $12.3 million public offering. This additional capital will allow us to help fund our joint venture with our partners and also ramp up our operations at our Malaysian manufacturing facility. This facility will play an important part in our operational and financial performance as it further streamlines our supply chain which will lead to improved gross margins and profitability," concluded Wang.
Daniel Machock, Chief Financial Officer of I spire, stat ed, " our third quarter results reflect Ispire's ability to capitalize on areas of strength and to quickly pivot to meet our expectations for our markets. We successfully demonstrated this ability in the third quarter, shifting our focus to increasing profitability due to the anticipated seasonal impact of Chinese New Year on our manufacturing partners. This ability allowed us to continue to invest in research and innovation, while expanding in our existing markets and ensuring that we were well-positioned to enter new markets where we believe there is significant market opportunity."
Financial Results for the Three and Nine-Month Periods Ended March 31, 2024
Revenue increased 24% to $30.0 million for the fiscal third quarter ended March 31, 2024, compared to $24.1 million in the third quarter of fiscal 2023. The increase in the third quarter of fiscal 2024, was primarily attributable to an increase in North American cannabis vaping hardware sales which increased 57% year-over-year from $7.6 million to $11.9 million.
For the nine-month period ended March 31, 2024, Ispire reported revenue of $114.6 million compared to $83.0 million during the same period last year, an increase of 38%. The increase in revenue was primarily attributable to an increase in North American cannabis vaping hardware sales which increased 108% from $23.4 million for the first nine-months of fiscal 2023 to $48.8 million for the first nine-months of fiscal 2024.
Gross profit increased by 35% to $6.1 million for the three-month period ended March 31, 2024, compared to $4.5 million in the third quarter of fiscal 2023. Gross profit for the nine-month period ended March 31, 2024, was $19.2 million compared to $14.3 million for the same period in fiscal 2023.
Gross margin for the three months ended March 31, 2024, was 20.4% compared to 18.7% for the same period in fiscal 2023. For the nine-month period ended March 31, 2024, gross margin was 16.8%, compared to 17.2% during the same period in the prior fiscal year.
Total operating expenses increased by 64% to $11.8 million for the third quarter in fiscal 2024, compared to $7.2 million for the same period of fiscal 2023. This increase was primarily due to marketing expenses and working capital related to maintaining our manufacturing plant in Malaysia and increased professional fees for expenses incurred as a public company. Total operating expenses for the nine-months ended March 31, 2024, were $29.8 million as compared to $17.9 million in the same period in fiscal 2023.
Net loss was $5.9 million or $0.11 per share, for the third quarter of fiscal 2024, compared to a net loss of $2.3 million, or $0.05 per share for the third quarter of fiscal 2023. For the first nine-months of fiscal 2024, net loss was approximately $11.3 million or $0.21 per share, compared to a net loss of approximately $4.5 million, or $0.09 per share for the first nine-months of fiscal 2023.
As of March 31, 2024, Ispire had approximately $39.5 million in cash and cash equivalents. As of March 31, 2024, and June 30, 2023, we had working capital of $28.9 million and $28.8 million respectively.
Non-GAAP net loss for the nine months ended March 31, 2024 and 2023 | |||||||
Nine months ended March 31, | |||||||
2024 | 2023 | ||||||
Net loss | $ | (11,346,690) | $ | (4,512,513) | |||
add | Stock-based compensation expenses | 4,691,872 | - | ||||
add | Credit loss expenses | 3,318,772 | 2,330,835 | ||||
add | Patent expenses, net off capitalization | 380,768 | 1,534,899 | ||||
Non-GAAP net loss | $ | (2,955,278) | $ | (2,977,614) | |||
Conference Call
The Company will conduct a conference call at 8:00 am Eastern Time on Wednesday May 15, 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: Wednesday, May 15, 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=1669249&tp_key=6a1ed4d261.
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 through 11:00 am ET on May 15, 2024, to May 29, 2024. To listen, please dial 844-512-2921 or +1 412-317-6671. Use the passcode 13746419 to access the replay.
About Ispire Technology Inc.
www.ispiretechnology.com or follow Ispire onInstagram, 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
For more information, kindly contact:
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ISPIRE TECHNOLOGY INC. | ||||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
June 30, | ||||||||
2023 | March 31, | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash | $ | 40,300,573 | $ | 39,453,727 | ||||
Accounts receivable, net | 24,526,262 | 47,732,178 | ||||||
Inventories | 7,472,108 | 9,813,782 | ||||||
Prepaid expenses and other current assets | 3,378,617 | 1,652,850 | ||||||
Investment - other | 9,133,707 | - | ||||||
Total current assets | 84,811,267 | 98,652,537 | ||||||
Other assets: | ||||||||
Property, plant and equipment, net | 1,088,131 | 2,166,563 | ||||||
Intangible assets, net | - | 968,033 | ||||||
Rental deposit | 732,334 | 725,979 | ||||||
Right-of-use assets - operating leases | 4,061,617 | 3,636,104 | ||||||
Long term investment | - | 2,000,000 | ||||||
Total other assets | 5,882,082 | 9,496,679 | ||||||
Total assets | $ | 90,693,349 | $ | 108,149,216 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 1,274,391 | $ | 3,667,581 | ||||
Accounts payable - related party | 51,698,588 | 61,030,319 | ||||||
Contract liabilities | 988,556 | 1,327,371 | ||||||
Accrued liabilities and other payables | 281,361 | 2,441,849 | ||||||
Due to a related party | 710,910 | - | ||||||
Income tax payable | 63,853 | - | ||||||
Operating lease liabilities - current portion | 944,525 | 1,275,923 | ||||||
Total current liabilities | 55,962,184 | 69,743,043 | ||||||
Other liabilities: | ||||||||
Operating lease liabilities - net of current portion | 3,356,232 | 2,730,574 | ||||||
Total liabilities | 59,318,416 | 72,473,617 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity: | ||||||||
Common stock, par value $0.0001 per share; 140,000,000 shares | 5,422 | 5,633 | ||||||
Preferred stock, par value $0.0001 per share, 10,000,000 shares | - | - | ||||||
Additional paid-in capital | 25,685,475 | 41,163,042 | ||||||
Retained earnings (accumulated deficit) | 5,847,804 | (5,498,886) | ||||||
Accumulated other comprehensive (loss) income | (163,768) | 5,810 | ||||||
Total stockholders' equity | 31,374,933 | 35,675,599 | ||||||
Total liabilities and stockholders' equity | $ | 90,693,349 | $ | 108,149,216 | ||||
See notes to unaudited condensed consolidated financial statements.
ISPIRE TECHNOLOGY INC. | ||||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND | ||||||||||||||||
COMPREHENSIVE LOSS | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
2023 | 2024 | 2023 | 2024 | |||||||||||||
Revenue | $ | 24,136,297 | $ | 30,015,036 | $ | 82,976,746 | $ | 114,565,244 | ||||||||
Cost of revenue | 19,616,098 | 23,893,083 | 68,699,245 | 95,345,545 | ||||||||||||
Gross profit | 4,520,199 | 6,121,953 | 14,277,501 | 19,219,699 | ||||||||||||
Operating expenses: | ||||||||||||||||
Sales and marketing expenses | 948,302 | 1,754,760 | 3,182,451 | 4,174,386 | ||||||||||||
General and administrative expenses | 6,261,326 | 10,047,116 | 14,689,504 | 25,587,145 | ||||||||||||
operating expenses | 7,209,628 | 11,801,876 | 17,871,955 | 29,761,531 | ||||||||||||
Loss from operations | (2,689,429) | (5,679,923) | (3,594,454) | (10,541,832) | ||||||||||||
Other income (expense): | ||||||||||||||||
Interest income, net | 391 | 27,296 | 77,202 | 298,161 | ||||||||||||
Exchange gain (loss), net | 660,760 | (53,904) | 183,178 | (19,387) | ||||||||||||
Other income (expense), net | (67,953) | 12,265 | (108,440) | 20,078 | ||||||||||||
other income (expense), net | 593,198 | (14,343) | 151,940 | 298,852 | ||||||||||||
Loss before income taxes | (2,096,231) | (5,694,266) | (3,442,514) | (10,242,980) | ||||||||||||
Income taxes - current | (237,992) | (255,485) | (1,069,999) | (1,103,710) | ||||||||||||
Net loss | $ | (2,334,223) | $ | (5,949,751) | $ | (4,512,513) | $ | (11,346,690) | ||||||||
Other comprehensive loss | ||||||||||||||||
Foreign currency translation adjustments | (157,704) | 10,788 | (15,274) | 169,578 | ||||||||||||
Comprehensive loss | $ | (2,491,927) | $ | (5,938,963) | $ | (4,527,787) | $ | (11,177,112) | ||||||||
Net loss per share | ||||||||||||||||
Basic and diluted | $ | (0.05) | $ | (0.11) | $ | (0.09) | $ | (0.21) | ||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic and diluted | 50,000,000 | 54,347,729 | 50,000,000 | 54,287,624 | ||||||||||||
See notes to unaudited condensed consolidated financial statements.
ISPIRE TECHNOLOGY INC. | ||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
Nine Months ended | ||||||||
2023 | 2024 | |||||||
(Restated) | ||||||||
Net loss | $ | (4,512,513) | $ | (11,346,690) | ||||
Adjustments to reconcile net loss to net cash provided by (used in) | ||||||||
Depreciation and amortization | 20,878 | 138,546 | ||||||
Credit loss expenses | 2,330,835 | 3,318,772 | ||||||
Stock-based compensation expenses | - | 4,691,872 | ||||||
Inventory impairment | - | 168,585 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (9,428,024) | (26,553,830) | ||||||
Inventories | 343,395 | (2,510,259) | ||||||
Prepaid expenses and other current assets | 143,682 | 1,732,122 | ||||||
Accounts payable and accounts payable - related party | 13,737,398 | 11,904,642 | ||||||
Contract liabilities | (940,014) | 350,227 | ||||||
Accrued liabilities and other payables | 273,565 | 1,160,487 | ||||||
Operating lease liabilities | 128,865 | (63,853) | ||||||
Income tax payable | (481,113) | 131,253 | ||||||
Net cash provided by (used in) operating activities | 1,616,954 | (16,878,126) | ||||||
Cash flows from investing activities: | ||||||||
Purchase of property, plant and equipment | (495,065) | (1,205,716) | ||||||
Acquisition of intangible assets | - | (979,295) | ||||||
Purchase of short term investment | (9,604,418) | - | ||||||
Maturity of short term investment | - | 9,133,707 | ||||||
Acquisition of long term investment | - | (1,000,000) | ||||||
Net cash (used in) provided by investing activities | (10,099,483) | 5,948,696 | ||||||
Cash flows from financing activities: | ||||||||
Payment made for dividends | (3,384,678) | - | ||||||
Advances from related parties | 1,934,855 | - | ||||||
Repayments of advances from a related party | (40,512,691) | (703,322) | ||||||
Proceeds from a secondary offering | - | 12,300,000 | ||||||
Costs of a secondary offering | - | (1,514,094) | ||||||
Net cash (used in) provided by financing activities | (41,962,514) | 10,082,584 | ||||||
Net decrease in cash | (50,445,043) | (846,846) | ||||||
Cash - beginning of period | 74,480,651 | 40,300,573 | ||||||
Cash - end of period | $ | 24,035,608 | $ | 39,453,727 | ||||
Supplemental non-cash investing and financing activities | ||||||||
Leased assets obtained in exchange for operating lease liabilities | $ | 4,882,220 | $ | 495,739 | ||||
Unpaid long term investment in accrued liabilities and other payables | $ | - | $ | 1,000,000 | ||||
Supplemental disclosures | ||||||||
Cash paid for income taxes | $ | 1,666,543 | $ | 1,355,110 | ||||
Cash paid for interest | $ | 587 | $ | 7,399 | ||||
See notes to unaudited condensed consolidated financial statements.
SOURCE Ispire Technology Inc.
