Ispire Technology Inc. Reports Financial Results for the Third Quarter 2023
Revenue Increased 26.9% to $24.1 Million; Gross Profit Increased 51.9% to $4.5 Million; Net Loss of $3.3 Million for the Quarter, up from a $1.0 Million Net Loss in the Third Quarter 2022
Issues Fourth Quarter 2023 Outlook for Cannabis Vaping Products, Representing Growth of 58% to 98%
Los Angeles, Calif. – May 16, 2023 – Ispire Technology Inc. (NASDAQ: ISPR) (“Ispire” or the “Company”), a leader in vapor technology, providing high-quality, innovative products with first-class performance, today reported financial results for the third quarter of 2023, which ended on March 31, 2023, and filed its quarterly report on Form 10-Q on May 15, 2023. The Company’s fiscal year is the year ending on June 30, 2023.
“We are very pleased with our financial results during our third quarter. Revenue growth was a robust 26.9% while gross profit grew 51.9% due to a favorable product mix and the realization of economies of scale on higher sales volume. We look forward to a strong finish to the fiscal year with a projected sequential revenue increase for cannabis vaping products of between 58% and 98% during our fourth quarter,” said Michael Wang, CFO of Ispire.
He added, “As we begin our journey as a public company, we are focused on a multi-prong strategy directed at increasing sales of our e-cigarette vaporizer technology products and developing our cannabis vaporizer technology products with a focus on both medical and recreational usages. We firmly believe that Ispire offers the very best products in the marketplace and has rightfully earned an enviable reputation among its customers. We continue to seek to remain at the forefront of technology so that we can adapt to emerging trends and thereby enhance value for all of our shareholders.”
Third Quarter 2023 Highlights
Revenue increased 26.9% to $24.1 million as compared to $19.0 million in the same period of 2022. Tobacco vaping products contributed $16.5 million and cannabis vaping products contributed $7.6 million to revenue during the third quarter 2023;
Gross profit increased 51.9% to $4.5 million as compared to $3.0 million in the same period of 2022;
Gross margin increased to 18.7% as compared to 15.7% in the same period of 2022.
Total operating expenses increased 106.2% to $8.0 million as compared to $3.9 million in the same period of 2022; and
Net loss of $3.1 million as compared to net loss of $1.0 million in the same period of 2022.
Liquidity and Capital Resources
As of March 31, 2023, and prior to the closing of its initial public offering, Ispire had cash and cash equivalents of $24.0 million and working capital of $5.2 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.
Initial Public Offering
In April 2023, Ispire closed on its initial public offering of 3,105,000 shares of common stock, which included the 405,000 shares issued pursuant to the full exercise by the underwriters of their overallotment option, at the initial public offering price of $7.00 per share. The common stock began trading on the NASDAQ Capital Market on April 4, 2023.
Including proceeds from the sale of the additional shares, the aggregate gross proceeds from the offering were approximately $21.7 million, less underwriting discounts and non-accountable expense allowance of approximately $1.7 million, and other expenses of approximately $1.5 million, resulting in net proceeds of $18.5 million.
Net proceeds from the initial public offering are being used for:
Approximately 35% to develop manufacturing operations in Vietnam 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.
Ispire is providing the following outlook for the cannabis vaping products for the fourth quarter 2023, which ends on June 30, 2023. Ispire commenced marketing cannabis vaping products in mid 2020, and revenue from cannabis vaping products was $7.6 million for the third quarter of 2023. Revenue for cannabis vaping products for the fourth quarter is projected at $12 million to $15 million, representing growth of 58% to 98% from the third quarter 2023.
About Ispire Technology Inc.
Ispire is engaged in the R&D, design, commercialization, sales, marketing and distribution of branded e-cigarettes and cannabis vaping products. The Company has or licenses from a related party more than 200 invention/design patents received or filed globally. Ispire’s tobacco vaping products are marketed under the Aspire brand name and are sold worldwide (except in the People’s Republic of China and Russia) primarily through its distribution network. Ispire’s cannabis vaping 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.
This press release contains "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, both as amended by the Private Securities Litigation Reform Act of 1995. The words "expect," "believe," "estimate," "intend," "plan," "anticipate," "may," "should," "strategy," "future," "will," "project," "potential" and similar expressions indicate forward-looking statements. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. These risks and uncertainties include, but are not limited to Ispire’s ability to generate the forecast revenue; Ispire’s ability to develop and market new products; the effects of regulations relating to the marketing and sale of vaping products in the United States and other countries; the expected growth of, and trends in, the markets for our products and services in the markets in which jurisdictions that we sell our products;; Ispire’s ability to establish and operate manufacturing facilities in Vietnam and Los Angeles;; 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 and in Management’s Discussion of Financial Condition and Results of Operations in Ispire’s Form 10-Q quarterly report for the quarter ended March 31, 2023.
You should not rely upon forward-looking statements as predictions of future events. The forward-looking statements made in the prospectus relate only to events or information as of the date on which the statements are made in the prospectus. 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.
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