Ispire Technology Inc
For the period ended Mar 31, 2024. Filed May 14, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2024 · Filed May 14, 2024
ISPR$1.55+8.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2023-12-31; filed 2024-02-20.
0001213900-24-015395
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-03-31; filed 2024-05-14.
0001213900-24-042990
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 85 previous paragraphs and 80 current paragraphs.
42 unchanged; 35 reworded; 3 added; 8 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 12 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
Three Months and Nine Months Ended March 31, 2023 and 2024
Current report
Operating expenses increased $4,592,248 or 63.7%, from $7,209,628 for the three months ended March 31, 2023 to $11,801,876 for the three months ended March 31, 2024. Operating expenses increased $11,889,575 or 66.5%, from $17,871,956 for the nine months ended March 31, 2023, to $29,761,531 for the nine months ended March 31, 2024.
Current report
As of March 31, 2024, we recorded an unpaid $1 million consideration in accrued liabilities and other payables on the consolidated balance sheet for a committed investment of $1 million into Touch Point Worldwide, Inc. d/b/a/ Berify’s preferred equity for 909,091 shares. We completed the investment on April 5, 2024.
Removed paragraphs (8)
Previous report
Effects of COVID-19 Pandemic
Previous report
In December 2019, coronavirus disease 2019 (COVID-19) was first reported to have surfaced in Wuhan, China. During 2020, the disease spread to many parts of the world. The epidemic has resulted in quarantines, travel restrictions, and the temporary closure of stores and facilities in much of the world, most of which are no longer in effect. The World Health Organization ended the global emergency status for COVID-19 on May 5, 2023, and the United States Department of Health and Human Services declared that the public health emergency from COVID-19 expired at the end of the day on May 11, 2023.
Previous report
The extent to which COVID-19 impacts our operations on an ongoing basis is highly uncertain. Since nearly all of our products are presently manufactured in China by a related party, any changes in the outbreak in China and any changes in the Chinese government’s policy may affect our supplier’s operations which could affect its ability to manufacture and deliver product in a timely manner.
Previous report
Supply Chain Risks
Previous report
One of the effects of the COVID-19 has been delays resulting from supply chain issues, which relate to the difficulty that companies have in having their products manufactured, shipped to the country of destination, and delivered from the port of entry to the customer’s location. As the port delays have significantly decreased, we do not believe that the supply chain issues that affected our operations are currently affecting us. We cannot assure you that delays will not affect our business in the future.
Previous report
In 2022, a slowdown in the delivery of components to Shenzhen Yi Jia resulting from supply chain slowdowns as a result of the effects of the PRC’s COVID policy resulted in an increase in cost of revenue during the period. We cannot assure you that we will not suffer from a chip shortage or that the effects of COVID or the PRC’s COVID policy will not affect Shenzhen Yi Jia’s ability or the ability of its suppliers to delivery products in a timely manner.
Previous report
Three Months and Six Months Ended December 31, 2022 and 2023
Previous report
Operating expenses increased $5,498,107 or 113.9%, from $4,828,735 for the three months ended December 31, 2022 to $10,326,842 for the three months ended December 31, 2023. Operating expenses increased $7,290,701 or 67.3%, from $10,835,706 for the six months ended December 31, 2022, to $18,126,407 for the six months ended December 31, 2023.
Reworded paragraphs (35)
Previous wording
The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited condensed financial statements and the related notes appearing elsewhere in this report. See “Cautionary Forward-Looking Statements.” Actual results could differ materially from those discussed below.
Current wording
The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited condensed consolidated financial statements and the related notes appearing elsewhere in this report. See “Cautionary Forward-Looking Statements.” Actual results could differ materially from those discussed below.
Previous wording
The sale of tobacco and cannabis products is subject to regulations worldwide. Many countries prohibit the sale of any cannabis products, and many countries have regulations relating to tobacco products, with a particular emphasis on underage sales. As a result of regulations in the United States, we are able to sell only one tobacco vaping product line, the Nautilus Prime, in the United States. Our tobacco vaping sales in the United States were approximately $0.1 million and $47,000 for the three months ended December 31, 2022 and 2023, respectively. Our tobacco vaping sales were approximately $0.5 million and $0.2 million for the six months ended December 31, 2022 and 2023, respectively. Because the volume of sales did not justify the marketing and regulatory costs, we have ceased marketing tobacco vaping products in the United States. If any similar regulations are adopted with respect to cannabis products, our business may be severely impacted since all of our cannabis revenue for the three and six months ended December 31, 2022 and 2023, was generated from sales in the United States
Current wording
The sale of tobacco and cannabis products is subject to regulations worldwide. Many countries prohibit the sale of any cannabis products, and many countries have regulations relating to tobacco products, with a particular emphasis on underage sales. As a result of regulations in the United States, we are able to sell only one tobacco vaping product line, the Nautilus Prime, in the United States. Our tobacco vaping sales in the United States were approximately $0.1 million and $88,000 for the three months ended March 31, 2023 and 2024, respectively. Our tobacco vaping sales in the United States were approximately $0.6 million and $0.2 million for the nine months ended March 31, 2023 and 2024, respectively. Because the volume of sales did not justify the marketing and regulatory costs, we have ceased marketing tobacco vaping products in the United States. If any similar regulations are adopted with respect to cannabis products, our business may be severely impacted since nearly all of our cannabis revenue for the three and nine months ended March 31, 2023 and 2024, was generated from sales in the United States.
Previous wording
Regulation regarding e-cigarette varies across countries, from no regulation to a total ban. The legal status of e-cigarettes is currently pending in many countries. But as e-cigarettes have become more and more popular recently, many countries are considering imposing more stringent law and regulations to regulate this market. Changes in existing law and regulations and the imposition of new laws, regulation in countries and regions that our major customers are located in may adversely affect the Company’s business.
Current wording
Regulation regarding e-cigarettes varies across countries, from no regulation to a total ban. The legal status of e-cigarettes is currently pending in many countries. As e-cigarettes have become more and more popular recently, many countries are considering imposing more stringent law and regulations to regulate this market. Changes in existing law and regulations and the imposition of new laws or regulations in countries and regions that our major customers are located in may adversely affect the Company’s business.
Previous wording
The Federal Food, Drug, and Cosmetic Act requires all Electronic Nicotine Delivery Systems (“ENDS”) product manufacturers that market products in the United States to submit Premarket Tobacco Product Applications (“PMTAs”) to the FDA. For ENDS products that were on the U.S. market on August 8, 2016, a PMTA was required to be submitted to the FDA by September 9, 2020; for ENDS products that were not on the U.S. market prior to August 8, 2016, and for which a PMTA was not filed by September 9, 2020, a PMTA a premarket authorization issued in response to a PMTA is required before the subject product may enter the U.S. market. The Company has submitted a PMTA filing for one ENDS product, and, under apparent FDA policies, the agency will not enforce the premarket review requirements for that product pending review of its PMTA. However, even with submission of the PMTA application, the FDA may reject the Company’s application and may prevent the Company’s ENDS products from being sold in U.S., which will adversely affect the Company’s business.
Current wording
The Federal Food, Drug, and Cosmetic Act requires all Electronic Nicotine Delivery Systems (“ENDS”) product manufacturers that market products in the United States to submit Premarket Tobacco Product Applications (“PMTAs”) to the FDA. For ENDS products that were on the U.S. market on or before August 8, 2016, a PMTA was required to be submitted to the FDA before September 9, 2020; for ENDS products that were not on the U.S. market prior to August 8, 2016, and for which a PMTA was not filed before September 9, 2020, a PMTA premarket authorization issued by FDA is required before the subject product may enter the U.S. market. The Company has submitted a PMTA filing for one ENDS product, and, under apparent FDA policies, the agency will not enforce the premarket review requirements for that product pending review of its PMTA. However, even with submission of the PMTA application, the FDA may reject the Company’s application and may prevent the Company’s ENDS products from being sold in U.S., which will adversely affect the Company’s business.
Previous wording
Amendments to the Prevent All Cigarette Trafficking (“PACT”) Act, which became law in 2021, extend the PACT Act to include e-cigarette and all vaping products, and place significant burdens on sellers of vaping products in the United States which may make it difficult to operate profitably in the United States. Because of tighter government regulations, the Company has stopped marketing tobacco vaping products in the United States, as the volume of sales from the one tobacco vaping product which the Company may sell in the United States does not justify the marketing and regulatory costs involved.
Current wording
Amendments to the Prevent All Cigarette Trafficking (“PACT”) Act, which became law in 2021, extend the PACT Act to include e-cigarettes and all vaping products, and place significant burdens on sellers of vaping products in the United States which may make it difficult to operate profitably in the United States. Because of tighter government regulations, the Company has stopped marketing tobacco vaping products in the United States, as the volume of sales from the one tobacco vaping product which the Company may sell in the United States does not justify the marketing and regulatory costs involved.
Previous wording
In the United States, cannabis vaping products are governed by state laws, which vary from state to state. Most states do not permit the adult recreational use of cannabis, and no states permit the sale of recreational cannabis products to minors. As a result of the reduced revenue to states resulting from the effects of the COVID 19 pandemic, states may seek to raise revenue by permitting and taxing the use of cannabis products. The Company cannot predict what action states will take or the nature and amount of taxes they may impose. However, to the extent the PACT Act applies to cannabis products that aerosolize liquids, it may be more difficult to sell our products in states that permit the sale of cannabis.
Current wording
In the United States, cannabis vaping products are governed by state laws, which vary from state to state. Most states do not permit the adult recreational use of cannabis, and no states permit the sale of recreational cannabis products to minors. As a result of the reduced revenue to states resulting from the effects of the COVID 19 pandemic and lingering inflationary effects, states may seek to raise revenue by permitting and taxing the use of cannabis products. Further, states may be more willing to permit recreational cannabis use given the DEA’s intention to reschedule cannabis as a Schedule III controlled substance allowing for medicinal use. The Company cannot predict what action states will take or the nature and amount of taxes they may impose. However, to the extent the PACT Act applies to cannabis products that aerosolize liquids, it may be more difficult to sell our products in states that permit the sale of cannabis.
Previous wording
The European Commission issued the Tobacco Products Directive (the “TPD”), which became effective on May 19, 2014 and became applicable in the European Union member states on May 20, 2016. The TPD regulates e-cigarettes on the packaging, labelling and ingredients of the products on the European Union market, the creation of smoke-free environments, tax measures and activities against illegal trade and anti-smoke campaigns. Member states of the European Union are required to ensure that advertisements for any tobacco related product are prohibited, and no promotion shall be made as to those devices with an intention to promote e-cigarettes. For the e-cigarettes released after May 20, 2016, TPD requires e-cigarette manufacturers to submit product sales applications to the regulatory market six months in advance, and ensure their products can meet the TPD requirements before they can be released. The Company has complied with TPD requirement that for all its tobacco products sold in Europe.
Current wording
The European Commission issued the Tobacco Products Directive (the “TPD”), which became effective on May 19, 2014, and became applicable in the European Union member states on May 20, 2016. The TPD regulates e-cigarettes on the packaging, labelling and ingredients of the products on the European Union market, the creation of smoke-free environments, tax measures and activities against illegal trade and anti-smoke campaigns. Member states of the European Union are required to ensure that advertisements for any tobacco related product are prohibited, and no promotion shall be made as to those devices with an intention to promote e-cigarettes. For the e-cigarettes released after May 20, 2016, TPD requires e-cigarette manufacturers to submit product sales applications to the regulatory market six months in advance, and ensure their products can meet the TPD requirements before they can be released. The Company has complied with TPD requirement for all its tobacco products sold in Europe.
Previous wording
Our business relies on the collection of accounts receivable from our customers in a timely manner to maintain liquidity and support our ongoing operations. The balance of the allowance for credit losses was $1.5 million and $2.9 million at June 30, 2023 and December 31, 2023, respectively. Our failure or inability to collect accounts receivable when due results from a number of factors, including (i) our customer’s failure to pay as a result of adverse economic conditions affecting the customers; (ii) our failure to implement effective collection efforts; and (iii) disputes over contract terms, product quality or delays in delivery. Although we may implement strategies to mitigate these risks, there can be no assurance that such measures will be entirely effective, and we may continue to incur write-offs of accounts receivable, which may impair our ability to operate profitably.
Current wording
Our business relies on the collection of accounts receivable from our customers in a timely manner to maintain liquidity and support our ongoing operations. The balance of the allowance for credit losses was $1.5 million and $4.0 million at June 30, 2023 and March 31, 2024, respectively. Our failure or inability to collect accounts receivable when due results from a number of factors, including (i) our customer’s failure to pay as a result of adverse economic conditions affecting the customers; (ii) our failure to implement effective collection efforts; and (iii) disputes over contract terms, product quality or delays in delivery. Although we may implement strategies to mitigate these risks, there can be no assurance that such measures will be entirely effective, and we may continue to incur write-offs of accounts receivable, which may impair our ability to operate profitably.
Previous wording
The following table sets forth a summary of our unaudited condensed consolidated statements of operations and comprehensive income for the three months ended December 31, 2022 and 2023, and six months ended December 31, 2022 and 2023 (dollars in thousands except share amounts).
Current wording
The following table sets forth a summary of our unaudited condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2023 and 2024, and nine months ended March 31, 2023 and 2024 (dollars in thousands except share amounts).
Previous wording
Our revenue increased by $9,788,162, or 30.7%, from $31,897,399 for the three months ended December 31, 2022, to $41,685,561 for the three months ended December 31, 2023. All cannabis vaping products are sold in United States, which were included in sales in North America. Sales in North America also include sales of tobacco vaping products in Canada. Sales to regions other than North America are from tobacco vaping products. The increase in revenue is the combined effect of (i) increases in sales of cannabis vaping products of $11.8 million from $7.8 million for the three months ended December 31, 2022 to approximately $19.6 million for the three months ended December 31, 2023, partially offset by (ii) decreases in sales of tobacco vaping products in Europe of $2.6 million from $18.3 million for the three months ended December 31, 2022 to approximately $15.7 million for the three months ended December 31, 2023.
Current wording
Our revenue increased by $5,878,738, or 24.4%, from $24,136,297 for the three months ended March 31, 2023, to $30,015,035 for the three months ended March 31, 2024. Nearly all cannabis vaping products are sold in United States, which were included in sales in North America. Sales in North America also include sales of tobacco vaping products in Canada. Sales to regions other than North America are mostly tobacco vaping products. The increase in revenue is the combined effect of (i) increases in sales of cannabis vaping products of $4.3 million from $7.6 million for the three months ended March 31, 2023 to approximately $11.9 million for the three months ended March 31, 2024, and (ii) increases in sales of tobacco vaping products in Europe of $1.0 million from $12.6 million for the three months ended March 31, 2023 to approximately $13.6 million for the three months ended March 31, 2024.
Previous wording
Our revenue increased by $25,709,759, or 43.7%, from $58,840,449 for the six months ended December 31, 2022, to $84,550,208 for the six months ended December 31, 2023. All cannabis vaping products are sold in United States, which were included in sales in North America. Sales in North America also include sales of tobacco vaping products in Canada. Sales to regions other than North America are from tobacco vaping products. The increase in revenue is the combined effect of (i) increases in sales of cannabis vaping products of $21.1 million from $15.8 million for the six months ended December 31, 2022 to approximately $36.9 million for the six months ended December 31, 2023, (ii) increases in sales of tobacco vaping products in Asia Pacific (excluding PRC) of $3.0 million from $8.1 million for the six months ended December 31, 2022 to approximately $11.1 million for the six months ended December 31, 2023, (iii) increases in sales of tobacco vaping products in Europe of $2.1 million from $33.4 million for the six months ended December 31, 2022 to approximately $35.5 million for the six months ended December 31, 2023.
Current wording
Our revenue increased by $31,588,498, or 38.1%, from $82,976,746 for the nine months ended March 31, 2023, to $114,565,244 for the nine months ended March 31, 2024. Nearly all cannabis vaping products are sold in United States, which were included in sales in North America. Sales in North America also include sales of tobacco vaping products in Canada. Sales to regions other than North America are mostly tobacco vaping products. The increase in revenue is the combined effect of (i) increases in sales of cannabis vaping products of $25.4 million from $23.4 million for the nine months ended March 31, 2023 to approximately $48.8 million for the nine months ended March 31, 2024, (ii) increases in sales of tobacco vaping products in Asia Pacific (excluding PRC) of $3.3 million from $11.5 million for the nine months ended March 31, 2023 to approximately $14.8 million for the nine months ended March 31, 2024, (iii) increases in sales of tobacco vaping products in Europe of $3.2 million from $46.0 million for the nine months ended March 31, 2023 to approximately $49.1 million for the nine months ended March 31, 2024.
Previous wording
Cost of revenue mainly consists of cost of purchases of vaping products, which we mainly purchased from Shenzhen Yi Jia. Cost of revenue increased by $8,550,534, or 32.0%, from $26,758,821 for the three months ended December 31, 2022, to $35,309,355 for the three months ended December 31, 2023. The increase in cost of revenue reflects the increase in period-to-period unit sales.
Current wording
Cost of revenue mainly consists of cost of purchases of vaping products, which we mainly purchased from Shenzhen Yi Jia. Cost of revenue increased by $4,276,985, or 21.8%, from $19,616,098 for the three months ended March 31, 2023, to $23,893,083 for the three months ended March 31, 2024. The increase in cost of revenue reflects the increase in period-to-period unit sales.
Previous wording
Cost of revenue increased by $22,375,942, or 45.7%, from $48,909,768 for the six months ended December 31, 2022, to $71,285,710 for the six months ended December 31, 2023. The increase in cost of revenue reflects the increase in period-to-period unit sales.
Current wording
Cost of revenue increased by $26,646,300, or 38.8%, from $68,699,245 for the nine months ended March 31, 2023, to $95,345,545 for the nine months ended March 31, 2024. The increase in cost of revenue reflects the increase in period-to-period unit sales.
Previous wording
Gross profit increased by $3,333,817, or 33.6%, from $9,930,681 for the six months ended December 31, 2022 to $13,264,498 for the six months ended December 31, 2023, while our gross profit percentage decreased from 16.9% to 15.7%. The gross profit percentage for tobacco vaping products remained constant. The decrease in gross profit percentage for cannabis vaping products was primarily due to larger customers that negotiated lower prices resulting in lower margins, and a change in product mix with more lower margin products being sold during the six months ended December 31, 2023.
Current wording
Gross profit increased by $1,601,754, or 35.4%, from $4,520,199 for the three months ended March 31, 2023 to $6,121,953 for the three months ended March 31, 2024, and our gross profit percentage slightly increased from 18.7% to 20.4%. The gross profit percentage for tobacco vaping products remained relatively constant. The increase in gross profit percentage for cannabis vaping products was primarily because we have been implementing a more detailed selection process on accepting more sales orders with higher profit margin during the three months ended March 31, 2024.
Previous wording
Gross profit increased by $1,237,628, or 24.1%, from $5,138,578 for the three months ended December 31, 2022 to $6,376,206 for the three months ended December 31, 2023, and our gross profit percentage decreased from 16.1% to 15.3%. The gross profit percentage for tobacco vaping products remained constant. The decrease in gross profit percentage for cannabis vaping products was primarily due to larger customers that negotiated lower prices resulting in lower margins, and a change in product mix with more lower margin products being sold during the three months ended December 31, 2023.
Current wording
Gross profit increased by $4,942,198, or 34.6%, from $14,277,501 for the nine months ended March 31, 2023 to $19,219,699 for the nine months ended March 31, 2024, while our gross profit percentage decreased from 17.2% to 16.6%. The gross profit percentage for tobacco vaping products remained constant. The decrease in gross profit percentage for cannabis vaping products was the combined effect of larger customers that negotiated lower prices resulting in lower margins in the second half year of 2023, and implementing a more detailed selection process on accepting more sales orders with higher profit margin during the three months ended March 31, 2024.
Previous wording
Our sales and marketing expenses mainly consist of employees’ salaries and benefits, marketing expense, travel expenses and others.
Current wording
Our sales and marketing expenses mainly consist of employees’ salaries and benefits, marketing expenses, travel expenses, stock-based compensation expenses and others.
Previous wording
Sales and marketing expenses increased by $611,343, or 67.4%, from $906,372 for the three months ended December 31, 2022, to $1,517,715 for the three months ended December 31, 2023. The increase in sales and marketing expenses was primarily due to an increase in our marketing campaign and trade shows for our cannabis vaping products. Sales and marketing expenses increased by $178,850, or 7.4%, from $2,407,528 for the six months ended December 31, 2022, to $2,586,378 for the six months ended December 31, 2023. The increase in sales and marketing expenses was primarily due to increase in headcount and payroll expense for Aspire Science and an increase in our marketing campaign and trade shows for our cannabis vaping products.
Current wording
Sales and marketing expenses increased by $806,458, or 85.0%, from $948,302 for the three months ended March 31, 2023, to $1,754,760 for the three months ended March 31, 2024. The increase in sales and marketing expenses was primarily due to an increase in our marketing campaign and trade shows for our cannabis vaping products. Sales and marketing expenses increased by $991,935, or 31.2%, from $3,182,451 for the nine months ended March 31, 2023, to $4,174,386 for the nine months ended March 31, 2024. The increase in sales and marketing expenses was primarily due to increase in headcount and payroll expense for Aspire Science and an increase in our marketing campaign and trade shows for our cannabis vaping products.
Previous wording
Our general and administrative expenses mainly consist of compensation and benefits, rental expense, professional fees and other administrative expenses. General and administrative expenses increased by $4,886,764, or 124.6%, from $3,922,363 for the three months ended December 31, 2022, to $8,809,127 for the three months ended December 31, 2023. The increase was primarily due to (i) stock-based compensation expense of $1.9 million incurred in the three months ended December 31, 2023, as compensation for management, employees and service providers, (ii) an increase in credit loss expenses of $1.9 million, (iii) an increase in professional fees of $0.6 million for expenses incurred being a public company for the three months ended December 31, 2023.
Current wording
Our general and administrative expenses mainly consist of compensation and benefits, stock-based compensation expenses, rental expenses, professional fees and other administrative expenses. General and administrative expenses increased by $3,785,790, or 60.5%, from $6,261,326 for the three months ended March 31, 2023, to $10,047,116 for the three months ended March 31, 2024. The increase was primarily due to (i) stock-based compensation expense of $1.8 million incurred in the three months ended March 31, 2024, as compensation for management, employees and service providers, (ii) an increase in professional fees of $1.0 million for expenses incurred being a public company for the three months ended March 31, 2024, and (iii) an increase of $0.8 million for payroll expenses as more employees were hired by us for expansion of our cannabis business and building a manufacturing plant in Malaysia.
Previous wording
General and administrative expenses increased by $7,111,851, or 84.4%, from $8,428,178 for the six months ended December 31, 2022, to $15,540,029 for the six months ended December 31, 2023. The increase was primarily due to (i) stock-based compensation expense of $2.8 million incurred in the six months ended December 31, 2023, as compensation for management, employees and service providers, (ii) an increase in credit loss expenses of $2.1 million, (iii) an increase of $1.5 million for payroll expenses as more employees were hired by us for expansion of our cannabis business and building a manufacturing plant in Malaysia.
Current wording
General and administrative expenses increased by $10,897,641, or 74.2%, from $14,689,504 for the nine months ended March 31, 2023, to $25,587,145 for the nine months ended March 31, 2024. The increase was primarily due to (i) stock-based compensation expense of $4.7 million incurred in the nine months ended March 31, 2024, as compensation for management, employees and service providers, (ii) an increase in credit loss expenses of $1.0 million, (iii) an increase of $2.3 million for payroll expenses as more employees were hired by us for expansion of our cannabis business and building a manufacturing plant in Malaysia and (iv) an increase in professional fees of $2.0 million for expenses incurred being a public company for the nine months ended March 31, 2024.
Previous wording
Interest income was $76,301 for the three months ended December 31, 2022, and $203,101 for the three months ended December 31, 2023. Interest income was $76,811 for the six months ended December 31, 2022, and $275,347 for the six months ended December 31, 2023.
Current wording
Interest income was $391 for the three months ended March 31, 2023, and $27,296 for the three months ended March 31, 2024. Interest income was $77,202 for the nine months ended March 31, 2023, and $298,161 for the nine months ended March 31, 2024.
Previous wording
Exchange loss (gain) changes by $7,644, or 32.9%, from net exchange gain of $23,212 for the three months ended December 31, 2022, to net exchange gain of $30,856 for three months ended December 31, 2023. Exchange loss (gain) changes by $512,099, or 107.2%, from net exchange loss of $477,582 for the six months ended December 31, 2022, to net exchange gain of $34,517 for six months ended December 31, 2023.
Current wording
Exchange loss (gain) changes by $714,664, or 108.2%, from net exchange gain of $660,760 for the three months ended March 31, 2023, to net exchange loss of $53,904 for three months ended March 31, 2024. Exchange loss (gain) changes by $202,565, or 110.6%, from net exchange gain of $183,178 for the nine months ended March 31, 2023, to net exchange loss of $19,387 for nine months ended March 31, 2024.
Previous wording
As a result of these factors, other expense (income), net increased by $202,265, from other income, net of $78,227 for the three months ended December 31, 2022, to other income, net of $280,492 for three months ended December 31, 2023. Other expense (income), net increased by $754,453, from other expense, net of $441,258 for the six months ended December 31, 2022, to other income, net of $313,195 for six months ended December 31, 2023.
Current wording
As a result of these factors, other expense (income), net decreased by $607,541, from other income, net of $593,198 for the three months ended March 31, 2023, to other income, net of $14,343 for three months ended March 31, 2024. Other expense (income), net increased by $146,912, from other income, net of $151,940 for the nine months ended March 31, 2023, to other income, net of $298,852 for nine months ended March 31, 2024.
Previous wording
Income taxes decreased by $166,132, or 32.1%, from $518,312 for the three months ended December 31, 2022, to $352,180 for the three months ended December 31, 2023. Income taxes increased by $62,512, or 8.0%, from $785,713 for the six months ended December 31, 2022, to $848,225 for the six months ended December 31, 2023. We had a consolidated net loss for both three and six month periods ended December 31, 2022 and 2023, which was the combined effect of a profit by Aspire Science and a loss by Aspire North America and Ispire Malaysia. The profit from Aspire Science resulted in a current tax expense in Hong Kong. The increase in valuation allowance reflects our view that the taxable income in the future will not be sufficient to utilize the carryforward loss.
Current wording
Income taxes increased by $17,493, or 7.4%, from $237,992 for the three months ended March 31, 2023, to $255,485 for the three months ended March 31, 2024. Income taxes increased by $33,711, or 3.2%, from $1,069,999 for the nine months ended March 31, 2023, to $1,103,710 for the nine months ended March 31, 2024. We had a consolidated net loss for both three- and nine-month periods ended March 31, 2023 and 2024, which was the combined effect of a profit by Aspire Science and a loss by Aspire North America and Ispire Malaysia. The profit from Aspire Science resulted in a current tax expense in Hong Kong. The increase in valuation allowance reflects our view that the taxable income in the future will not be sufficient to utilize the carryforward loss.
Previous wording
As a result of the foregoing, net loss increased by $3,892,082, from net loss of $130,242, or $(0.01) per share (basic and diluted) for the three months ended December 31, 2022, to a net loss of $4,022,324, or $(0.07) per share, for the three months ended December 31, 2023. Net loss increased by $3,264,943, from net loss of $2,131,996, or $(0.04) per share (basic and diluted) for the six months ended December 31, 2022, to a net loss of $5,396,939, or $(0.10) per share, for the six months ended December 31, 2023.
Current wording
As a result of the foregoing, net loss increased by $3,615,528, from net loss of $2,334,223, or $(0.05) per share (basic and diluted) for the three months ended March 31, 2023, to a net loss of $5,949,751, or $(0.11) per share, for the three months ended March 31, 2024. Net loss increased by $6,834,177, from net loss of $4,512,513, or $(0.09) per share (basic and diluted) for the nine months ended March 31, 2023, to a net loss of $11,346,690, or $(0.21) per share, for the nine months ended March 31, 2024.
Previous wording
The following table sets forth information as to consolidated cash flow information for the six months ended December 31, 2022 and 2023 (dollars in thousands).
Current wording
The following table sets forth information as to consolidated cash flow information for the nine months ended March 31, 2023 and 2024 (dollars in thousands).
Previous wording
Net cash flow provided by operating activities for the six months ended December 31, 2022 of $8.4 million, reflected our net loss of $2.1 million, adjusted primarily as follows: an add back of credit loss expenses of $1.0 million, an increase in accounts payable of $25.5 million and increase in income tax payable of $0.8 million, offset by an increase in accounts receivable of $10.8 million, and an increase in inventories of $5.7 million.
Current wording
Net cash flow provided by operating activities for the nine months ended March 31, 2023 of $1.6 million, reflected our net loss of $4.5 million, adjusted primarily as follows: an add back of credit loss expenses of $2.2 million, an increase in accounts payable of $13.7 million, offset by an increase in accounts receivable of $9.3 million, and an decrease in income tax payable of $0.5 million.
Previous wording
Net cash flow used in operating activities for the six months ended December 31, 2023, of $20.2 million, reflected our net loss of $5.4 million, adjusted primarily as follows: an increase in accounts receivable of $22.8 million, offset by an add-back of stock-based compensation expenses of $2.9 million, an add-back of credit loss expenses of $2.1 million, a decrease in prepaid expenses and other current assets of $0.2 million, an increase in accounts payable of $1.8 million, an increase in contract liabilities of $0.6 million and an increase in accrued liabilities and other payables of $0.3 million.
Current wording
Net cash flow used in operating activities for the nine months ended March 31, 2024, of $16.9 million, reflected our net loss of $11.3 million, adjusted primarily as follows: an increase in accounts payable of $11.9 million, add-back of stock-based compensation expenses of $4.7 million, an add-back of credit loss expenses of $3.3 million, a decrease in prepaid expenses and other current assets of $1.7 million, an increase in accrued liabilities and other payables of $1.2 million, offset by an increase in accounts receivable of $26.6 million and increase in inventories of $2.5 million.
Previous wording
Net cash flow used in investing activities for the six months ended December 31, 2022, of $0.5 million reflected primarily the purchase of property, plant and equipment of $0.5 million.
Current wording
Net cash flow used in investing activities for the nine months ended March 31, 2023, of $10.1 million reflected primarily the purchase of short-term investment of $9.6 million, and purchase of property, plant and equipment of $0.5 million.
Previous wording
Net cash flow used in investing activities for the six months ended December 31, 2023, of $1.9 million reflected primarily the purchase of property, plant and equipment of $1.2 million and acquisition of intangible assets of $0.7 million.
Current wording
Net cash flow provided by investing activities for the nine months ended March 31, 2024, of $5.9 million reflected primarily the maturity of short-term investment of $9.1 million, offset by purchase of property, plant and equipment of $1.2 million, purchase of non-marketable securities of $1.0 million and acquisition of intangible assets of $1.0 million.
Previous wording
Net cash flow used in financing activities for the six months ended December 31, 2023, of $0.7 million reflected primarily repayments of advances from related parties of $0.7 million.
Current wording
Net cash flow used in financing activities for the nine months ended March 31, 2023, of $42.0 million reflected primarily repayment of advances from related parties of $40.5 million, payment made for dividend of $3.4 million, offset by advances from related parties of $1.9 million.
Previous wording
Net cash flow provided by financing activities for the six months ended December 31, 2022, of $1.9 million reflected primarily advances from related parties of $1.9 million.
Current wording
Net cash flow provided by financing activities for the nine months ended March 31, 2024, of $10.1 million reflected primarily proceeds from a secondary offering of $12.3 million, offset by payments from a secondary offering of $1.5 million and repayments of advances from related parties of $0.7 million.
Previous wording
As of June 30, 2023, and December 31 2023, we had contract liabilities of $988,556 and $1,705,171, respectively. These liabilities are advance deposits received from customers after an order has been placed. We expect all of the contract liabilities to be settled in less than one year.
Current wording
As of June 30, 2023, and March 31,2024, we had contract liabilities of $988,556 and $1,327,371, respectively. These liabilities are advance deposits received from customers after an order has been placed. We expect all of the contract liabilities to be settled in less than one year.
Previous wording
Based on the current expected credit loss model, we considers many factors, including age of balance, past events, any historical default, current information available about the customers, current economic conditions and certain forward-looking information, including reasonable and supportable forecasts.
Current wording
Based on the current expected credit loss model, we consider many factors, including age of balance, past events, any historical default, current information available about the customers, current economic conditions, and certain forward-looking information, including reasonable and supportable forecasts.
Previous wording
We record an allowance for slow moving and potentially obsolete inventory based upon recent sales history, the quantity of inventory on-hand, and an estimate of expected sellable life of the inventory. We periodically reviews inventory to identify slow moving inventories and compares the forecast sales with the quantities and expected sellable life of inventory. Any inventory s identified during this process are reserved for at rates based upon our management’s judgment, historical rates, and industry practices. The quantity thresholds and reserve rates are subjective and are based on management’s judgment and knowledge of current and projected industry demand. The reserve estimates may, therefore, be revised if there are changes in the overall market for our products or market changes that in our management’s judgment, impact its ability to sell potentially obsolete inventory. For the three months ended December 31, 2022 and 2023, we recorded inventory reserve of $0 and $130,452, respectively. For the six months ended December 31, 2022 and 2023, we recorded inventory reserve of $0 and $130,452, respectively.
Current wording
We record an allowance for slow moving and potentially obsolete inventory based upon recent sales history, the quantity of inventory on-hand, and an estimate of expected sellable life of the inventory. We periodically review inventory to identify slow moving inventories and compare the forecast sales with the quantities and expected sellable life of inventory. Any inventory identified during this process is reserved for at rates based upon our management’s judgment, historical rates, and industry practices. The quantity thresholds and reserve rates are subjective and are based on management’s judgment and knowledge of current and projected industry demand. The reserve estimates may, therefore, be revised if there are changes in the overall market for our products or market changes that, in our management’s judgment, impact its ability to sell potentially obsolete inventory. For the three months ended March 31, 2023 and 2024, we recorded inventory reserve of $0 and $38,133, respectively. For the nine months ended March 31, 2023 and 2024, we recorded inventory reserve of $0 and $168,585, respectively.
Previous wording
As a company with less than $1.235 billion in revenue for our last fiscal year, we qualify as an “emerging growth company” pursuant to the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth company’s internal control over financial reporting. The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards. We have elected to take advantage of such exemptions. We could lose Emerging Growth Company status if we becomes a “Large Accelerated Filer”. This would occur if we have a public float of $700 million or more, as of the last business day of our most recently completed second fiscal quarter.
Current wording
As a company with less than $1.235 billion in revenue for our last fiscal year, we qualify as an “emerging growth company” pursuant to the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth company’s internal control over financial reporting. The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards. We have elected to take advantage of such exemptions. We could lose Emerging Growth Company status if we become a “Large Accelerated Filer.” This would occur if we had a public float of $700 million or more, as of the last business day of our most recently completed second fiscal quarter.