Ispire Technology Inc.

Previous wording

We are engaged in the research and development, design, commercialization, sales, marketing and distribution of branded and non-branded vaping hardware products in both the nicotine and cannabis spaces. Vaping refers to the practice of inhaling and exhaling the vapor produced by an electronic vaping device. These products are sold into the global nicotine and cannabis markets in the form of e-cigarettes or cartridges filled with oils by our customers, respectively.

Current wording

We are engaged in the research and development, design, commercialization, sales, marketing and distribution of branded and non-branded vaping hardware products in both the nicotine and cannabis spaces. Vaping refers to the practice of inhaling and exhaling the vapor produced by an electronic vaping device. These products are sold into the global nicotine markets in the form of e-cigarettes and global cannabis markets in the form of cartridges filled with oils by our customers.

Previous wording

We sell our e-cigarette (or nicotine) products globally, in markets where we are legally permitted to do so. To date, our nicotine products are marketed under the “Aspire” brand name and are sold primarily through our expansive distribution network. However, we are currently preparing to expand our international presence via the launch of nicotine products under the Ispire platform. These products will be launched under licensing arrangements with the owner(s) of selected partner brand(s).

Current wording

We sell our e-cigarette (or nicotine) products globally, in markets where we are legally permitted to do so. To date, our nicotine products are marketed under the “Aspire” brand name and are sold primarily through our expansive distribution network. However, we are currently preparing to expand our international presence via the launch of nicotine products under the Ispire platform. These products will be launched under licensing arrangements with the owner(s) of selected partner brand(s). One such license arrangement has already launched, and more are anticipated to occur in the future.

Previous 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, we have stopped marketing tobacco vaping products in the United States, as the volume of sales from the one tobacco vaping product which we may sell in the United States does not justify the marketing and regulatory costs involved.

Current wording

As a result of ENDS regulation noted above, we can sell only one tobacco vaping product line, the Nautilus Prime, in the U.S.. Our tobacco vaping sales related to this line in the U.S. were approximately $0.2 million and $0.6 million for the twelve months ended June 30, 2024, and 2023, respectively. Additionally, 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 these tighter government regulations, we have stopped marketing tobacco vaping products in the United States, as the volume of sales from the one tobacco vaping product which we may sell in the United States does not justify the marketing and regulatory costs involved.

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 $11.3 million and $5.9 million at December 31, 2024 and June 30, 2024, respectively. Receivables are written off after exhaustive collection efforts occur and the receivable is deemed uncollectible. The increase is due to write offs after collection efforts, and then general rise in receivables balance and estimate losses.

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 $14.6 million and $5.9 million at March 31, 2025 and June 30, 2024, respectively. Receivables are written off after exhaustive collection efforts occur and the receivable is deemed uncollectible. The increase is due to write offs after collection efforts, and then general rise in receivables balance and estimate losses.

Previous wording

The following table sets forth a summary of our consolidated statements of operations and comprehensive income for the three and six months ended December 31, 2024 and 2023 (dollars in thousands except per share amounts).

Current wording

The following table sets forth a summary of our consolidated statements of operations and comprehensive income for the three and nine months ended March 31, 2025 and 2024 (dollars in thousands except per share amounts).

Previous wording

Our revenue increased by $142,299, or 0.3%, from $41,685,561 for the three months ended December 31, 2023, to $41,827,860 for the three months ended December 31, 2024. The increase in revenue is the combined effect of (i) increases in product sales in the Europe of $8.3 million from $15.7 million for the three months ended December 31, 2023, to $24.0 million for the three months ended December 31, 2024, increases in sales in Africa, mainly South Africa, of $2.6 million from $0.1 million for the three months ended December 31, 2023, to $2.7 million for the three months ended December 31, 2024 and increases in sales in South America of $0.6 million from $0 for the three months ended December 31, 2023, to $0.6 million for the three months ended December 31, 2024,offset by (ii) decreases in sales of vaping products in North America of $9.1 million from $20.0 million for the three months ended December 31, 2023 to approximately $10.9 million for the three months ended December 31, 2024, and (iii) decreases in sales to Asia Pacific regions of $2.4 million from $6.0 million for the three months ended December 31, 2023 to approximately $3.6 million for the three months ended December 31, 2024.

Current wording

Our revenue decreased by $3,824,311, or 12.7%, from $30,015,036 for the three months ended March 31, 2024, to $26,190,725 for the three months ended March 31, 2025. The decrease in revenue is the combined effect of (i) , increases in sales in South America, of $0.9 million from $0.1 million for the three months ended March 31, 2024, to $1.0 million for the three months ended March 31, 2025 offset by (ii) decreases in sales of vaping products in North America of $3.6 million from $12.4 million for the three months ended March 31, 2024 to approximately $8.8 million for the three months ended March 31, 2025, and (iii) decreases in sales to Asia Pacific regions of $0.8 million from $3.8 million for the three months ended March 31, 2024 to approximately $3.0 million for the three months ended March 31, 2025.

Previous wording

Our revenue decreased by $3,384,035, or 4.0%, from $84,550,208 for the six months ended December 31, 2023, to $81,166,173 for the six months ended December 31, 2024. The decrease in revenue is the combined effect of (i) decreases in sales of vaping products in North America of $17.1 million from $37.8 million for the six months ended December 31, 2023 to approximately $20.7 million for the six months ended December 31, 2024, and (ii) decreases in sales to Asia Pacific regions of $3.6 million from $11.1 million for the six months ended December 31, 2023 to approximately $7.5 million for the six months ended December 31, 2024, offset by (iii) increases in product sales in Europe of $10.4 million from $35.5 million for the six months ended December 31, 2023, to $45.9 million for the six months ended December 31, 2024, increases in sales in Africa, mainly South Africa, of $5.6 million from $0.1 million for the six months ended December 31, 2023, to $5.7 million for the six months ended December 31, 2024 and increases in sales in South America of $1.4 million from $0 for the six months ended December 31, 2023, to $1.4 million for the six months ended December 31, 2024.

Current wording

Our revenue decreased by $7,208,346, or 6.3%, from $114,565,244 for the nine months ended March 31, 2024, to $107,356,898 for the nine months ended March 31, 2025. The decrease in revenue is the combined effect of (i) decreases in sales of vaping products in North America of $20.7 million from $50.2 million for the nine months ended March 31, 2024 to approximately $29.5 million for the nine months ended March 31, 2025, and (ii) decreases in sales to Asia Pacific regions of $4.4 million from $14.8 million for the nine months ended March 31, 2024 to approximately $10.4 million for the nine months ended March 31, 2025, offset by (iii) increases in product sales in Europe of $10.0 million from $49.1 million for the nine months ended March 31, 2024, to $59.1 million for the nine months ended March 31, 2025, increases in sales in Africa, mainly South Africa, of $5.5 million from $0.3 million for the nine months ended March 31, 2024, to $5.8 million for the nine months ended March 31, 2025 and increases in sales in South America of $2.3 million from $0.1 for the nine months ended March 31, 2024, to $2.4 million for the nine months ended March 31, 2025.

Previous wording

Cost of revenue mainly consists of cost of purchases of vaping products, of which the majority of the purchase are from Shenzhen Yi Jia. Cost of revenue decreased by $1,327,374, or 3.7%, from $35,432,663 for the three months ended December 31, 2023, to $34,105,289 for the three months ended December 31, 2024. The decrease in cost of revenue is due to changes in product mix with more higher margin products being sold. Cost of revenue decreased by $5,683,238, or 8.0%, from $71,452,462 for the six months ended December 31, 2023, to $65,769,224 for the six months ended December 31, 2024.

Current wording

Cost of revenue mainly consists of cost of purchases of vaping products, of which the majority of the purchase are from Shenzhen Yi Jia. Cost of revenue decreased by $2,478,263, or 10.4%, from $23,893,083 for the three months ended March 31, 2024, to $21,414,820 for the three months ended March 31, 2025. The decrease in cost of revenue is in line with decease in revenue. Cost of revenue decreased by $8,161,501, or 8.6%, from $95,345,545 for the nine months ended March 31, 2024, to $87,184,044 for the nine months ended March 31, 2025.

Previous wording

The decrease in cost of revenue is due to changes in product mix with more higher margin products being sold.

Current wording

The decrease in cost of revenue is in line with decrease in revenue and more higher-margin products being sold.

Previous wording

Gross profit increased by $2,299,203, or 17.6%, from $13,097,746 for the six months ended December 31, 2023, to $15,396,949 for the six months ended December 31, 2024, while our gross margin increased from 15.5% to 19.0%. The increase in gross margin was primarily due to changes in product mix with more higher margin products being sold during the six months ended December 31, 2024.

Current wording

Gross profit decreased by $1,346,048, or 22.0%, from $6,121,953 for the three months ended March 31, 2024, to $4,775,905 for the three months ended March 31, 2025, while our gross margin decreased from 20.4% to 18.2%. The decrease in gross margin was primarily due to changes in product mix with less higher-margin products being sold during the three months ended March 31, 2025.

Previous wording

Gross profit increased by $1,469,673, or 23.5%, from $6,252,898 for the three months ended December 31, 2023, to $7,722,571 for the three months ended December 31, 2024, while our gross margin increased from 15.0% to 18.5%. The increase in gross margin was primarily due to changes in product mix with more higher margin products being sold during the three months ended December 31, 2024.

Current wording

Gross profit increased by $953,155, or 5.0%, from $19,219,699 for the nine months ended March 31, 2024, to $20,172,854 for the nine months ended March 31, 2025, while our gross margin increased from 16.8% to 18.8%. The increase in gross margin was primarily due to changes in product mix with more higher-margin products being sold during the nine months ended March 31, 2025.

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 expense, travel expenses and others. Sales and marketing expenses decreased by $98,233, or 5.6%, from $1,754,760 for the three months ended March 31, 2024 to $1,656,527 for the three months ended March 31, 2025. The slight decrease in sales and marketing expenses was primarily due to the net effect of (i) a decrease in our marketing activities, marketing campaign and trade shows of $0.4 million, offset by (ii) increased in headcount and payroll expense for Aspire Science of $0.1 million, and (iii) increase of $0.2 million in other miscellaneous selling expenses.

Previous wording

Sales and marketing expenses increased by $2,634,285, or 108.9%, from $2,419,626 for the six months ended December 31, 2023 to $5,053,911 for the six months ended December 31, 2024. The increase in sales and marketing expenses was primarily due to an increase in (i) our marketing activities, marketing campaign and trade shows of $1.3 million, (ii) stock-based compensation expense related to selling personnels of $1.1 million for the three months ended December 31, 2024 and (iii) headcount and payroll expense for Aspire Science of $0.1 million.

Current wording

Sales and marketing expenses increased by $2,536,052, or 60.8%, from $4,174,386 for the nine months ended March 31, 2024 to $6,710,438 for the nine months ended March 31, 2025. The increase in sales and marketing expenses was primarily due to an increase in (i) our marketing activities, marketing campaign and trade shows of $0.9 million, (ii) stock-based compensation expense related to selling personnel of $1.2 million for the nine months ended March 31, 2025 and (iii) headcount and payroll expense for Aspire Science of $0.2 million.

Previous wording

Our general and administrative expenses mainly consist of employee’s salaries and benefits, rental expense, professional fees, share based payment expenses and other administrative expenses. General and administrative expenses increased by $4,242,247, or 48.3%, from $8,778,715 for the three months ended December 31, 2023 to $13,020,962 for the three months ended December 31, 2024. The increase was primarily due to (i) increase in bad debt expense as an allowance for credit losses of $2.3 million from accounts resulted from management’s assessment on Company’s account receivables balances, (ii) increase of $0.9 million for payroll expenses and (iii) an increase in professional fees of $0.7 million incurred for cannabis business.

Current wording

Our general and administrative expenses mainly consist of employees’ salaries and benefits, rental expense, professional fees, stock-based payment expenses, credit loss expense and other administrative expenses. General and administrative expenses increased by $3,682,331, or 26.9%, from $10,022,488 for the three months ended March 31, 2024 to $13,704,819 for the three months ended March 31, 2025. The increase was primarily due to (i) increase in credit loss expense as an allowance for credit losses of $4.9 million from accounts resulted from management’s assessment on Company’s account receivables balances, offset by (ii) an decrease in professional fees of $0.6 million and (iii) decrease of $0.4 million for payroll expenses.

Previous wording

General and administrative expenses increased by $7,489,373, or 48.4%, from $15,476,589 for the six months ended December 31, 2023 to $22,965,962 for the three months ended December 31, 2024. The increase was primarily due to (i) increase in stock-based compensation expense of $0.6 million for the three months ended December 31, 2024, as compensation and incentive for management, employees and service providers, (ii) increase in bad debt expense as an allowance for credit losses of $4.2 million from accounts resulted from management’s assessment on Company’s account receivables balances, (iii) increase of $1.2 million for payroll expenses and (iv) an increase in professional fees of $0.9 million incurred for cannabis business.

Current wording

General and administrative expenses increased by $11,171,704, or 43.8%, from $25,499,077 for the nine months ended March 31, 2024 to $36,670,781 for the nine months ended March 31, 2025. The increase was primarily due to (i) increase in credit loss expense as an allowance for credit losses of $10.1 million from accounts resulted from management’s assessment on Company’s account receivables balances, (ii) increase of $0.8 million for payroll expenses and (iii) an increase in professional fees of $0.3 million incurred for cannabis business.

Previous wording

Interest income decreased by $143,346, or 70.6%, from $203,101 for the three months ended December 31, 2023 to $59,755 for the three months ended December 31, 2024. Interest income decreased by $215,506, or 78.3%, from $275,347 for the six months ended December 31, 2023 to $59,841 for the six months ended December 31, 2024.

Current wording

Interest expense (income) changed by $59,462, or 217.8%, from interest income of $27,296 for the three months ended March 31, 2024 to interest expense of $32,166 for the three months ended March 31, 2025. Interest income decreased by $295,023, or 98.9%, from $298,161 for the nine months ended March 31, 2024 to $3,138 for the nine months ended March 31, 2025. The decrease is largely due to prior year certificate of deposit concluding.

Previous wording

Other expense (income) mainly consists of interest expense, loss on equity method investment, credits from company credit card and other miscellaneous expenses. Other expense (income) decreased by $39,674, or 85.3%, from net income of $46,535 for the three months ended December 31, 2023 to net income of $6,861 for the three months ended December 31, 2024. Other expense (income) increased by $10,465, or 314.17%, from net income of $3,331 for the six months ended December 31, 2023 to net income of $13,796 for the six months ended December 31, 2024.

Current wording

Other expense (income) mainly consists of interest expense, loss on equity method investment, credits from company credit card and other miscellaneous expenses. Other expense (income) decreased by $98,504, or 803.1%, from net income of $12,265 for the three months ended March 31, 2024 to net expense of $86,239 for the three months ended March 31, 2025. Other expense (income) decreased by $67,984, or 338.6%, from net income of $20,078 for the nine months ended March 31, 2024 to net expense of $47,906 for the nine months ended March 31, 2025. The decrease is largely due to the loss on equity method investment.

Previous wording

Exchange loss (gain) changes by $276,029, or 894.6%, from net exchange gain of $30,856 for the three months ended December 31, 2023 to net exchange loss of $245,173 for three months ended December 31, 2024. Exchange loss(gain) changes by $162,105, or 469.6%, from net exchange gain of $34,517 for the six months ended December 31, 2023 to net exchange loss of $127,588 for six months ended December 31, 2024.

Current wording

Exchange loss (gain) changes by $78,245, or 145.2%, from net exchange loss of $53,904 for the three months ended March 31, 2024 to net exchange gain of $24,341 for three months ended March 31, 2025. Exchange loss (gain) changes by $83,860 or 432.6%, from net exchange loss of $19,387 for the nine months ended March 31, 2024 to net exchange loss of $103,247 for nine months ended March 31, 2025.

Previous wording

As a result of these factors, other expense (income), net decreased by $459,049, from other income, net of $280,492 for the three months ended December 31, 2023 to other expense, net of $178,557 for three months ended December 31, 2024. Other expense (income), net decreased by $367,146, from other income, net of $313,195 for the six months ended December 31, 2023 to other expense, net of $53,951 for six months ended December 31, 2024.

Current wording

As a result of these factors, other expense, net decreased by $79,721, from other expense, net of $14,343 for the three months ended March 31, 2024 to other expense, net of $94,064 for three months ended March 31, 2025. Other expense (income), net decreased by $446,867, from other income, net of $298,852 for the nine months ended March 31, 2024 to other expense, net of $148,015 for nine months ended March 31, 2025. The decrease is largely due to the loss on equity method investment.

Previous wording

Income taxes increased by $107,851, or 30.6%, from $352,180 for the three months ended December 31, 2023 to $460,031 for the three months ended December 31, 2024. Income taxes increased by $68,559, or 8.1%, from $848,225 for the three months ended December 31, 2023 to $916,784 for the three months ended December 31, 2024. We had a consolidated net loss for both three and six month periods ended December 31, 2024 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. 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 decreased by $78,495, or 44.3%, from $255,485 for the three months ended March 31, 2024 to $176,990 for the three months ended March 31, 2025. Income taxes decreased by $9,936, or 0.9%, from $1,103,710 for the nine months ended March 31, 2024 to $1,093,774 for the nine months ended March 31, 2025. We had a consolidated net loss for both three and nine month periods ended March 31, 2025 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. 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 $4,006,731, from net loss of $3,991,912, or $(0.07) per share (basic and diluted) for the three months ended December 31, 2023 to a net loss of $7,998,643, or $(0.14) per share, for the three months ended December 31, 2024. Net loss increased by $8,260,160, from net loss of $5,333,499, or $(0.10) per share (basic and diluted) for the six months ended December 31, 2023 to a net loss of $13,593,659, or $(0.24) per share, for the six months ended December 31, 2024.

Current wording

As a result of the foregoing, net loss increased by $4,931,372, from net loss of $5,925,123, or $(0.11) per share (basic and diluted) for the three months ended March 31, 2024 to a net loss of $10,856,495, or $(0.19) per share, for the three months ended March 31, 2025. Net loss increased by $13,191,532, from net loss of $11,258,622, or $(0.21) per share (basic and diluted) for the nine months ended March 31, 2024 to a net loss of $24,450,154, or $(0.43) per share, for the nine months ended March 31, 2025.

Previous wording

The following table sets forth information as to consolidated cash flow information for the six months ended December 31, 2024 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, 2025 and 2024 (dollars in thousands).

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 $5.3 million, adjusted primarily as follows: an add-back of stock-based compensation expenses of $2.9 million, an add-back of credit loss expenses of $2.1 million, a increase in accounts payable – related party of $1.8 million, an increase in contract liabilities of $0.6 million, offset by an increase in accounts receivable of $22.8 million.

Current wording

Net cash flow used in operating activities for the nine months ended March 31, 2025 of $12.1 million, reflected our net loss of $24.5 million, adjusted primarily as follows: an add-back of credit loss expenses of $13.4 million, an add-back of stock based compensation expense of $4.9 million, increase in accounts payable of $11.0 million, offset by an increase in accounts receivable of $14.1 million, an increase in accrued liabilities and other payables of $1.0 million, and an increase in inventories, net of $1.5 million.

Previous wording

Net cash flow provided by operating activities for the six months ended December 31, 2024 of $0.4 million, reflected our net loss of $13.6 million, adjusted primarily as follows: an add-back of credit loss expenses of $7.3 million, an add-back of stock based compensation expense of $3.5 million, an added-back of right-of-use assets amortization of $0.6 million and increase in accounts payable – related party of $20.7 million, offset by an increase in accounts receivable of $15.3 million, an increase in inventories, net of $1.7 million, and an increase in prepaid expenses and other current assets of $0.9 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 add-back of stock-based compensation expenses of $4.7 million, an add-back of credit loss expenses of $3.3 million, an increase in accounts payable of $11.9 million, a decrease in prepaid expenses and other current assets of $1.7 million, an decrease in accrued liabilities and other payables of $1.2 million, offset by an increase in accounts receivable of $26.6 million, and an increase in inventories, net of $2.5 million.

Previous wording

Net cash flow used in investing activities for the six months ended December 31, 2024 of $1.1 million reflected primarily purchase of property, plant and equipment of $0.3 million and acquisition of intangible assets of 0.8 million.

Current wording

Net cash flow used in investing activities for the nine months ended March 31, 2025 of $1.7 million reflected primarily purchase of property, plant and equipment of $0.1 million, acquisition of intangible assets of $0.8 million and payment made for long term investment of $0.8 million.

Previous wording

Net cash flow used in investing activities for the six months ended December 31, 2023 of $1.8 million reflected primarily purchase of property, plant and equipment of $1.1 million and acquisition of intangible assets of $0.7 million.

Current wording

Net cash flow used in investing activities for the nine months ended March 31, 2024 of $5.9 million reflected primarily maturity of short term investment of $9.1 million, offset by acquisition of equity investment of $1.0 million, purchase of property, plant and equipment of $1.2 million and acquisition of intangible assets of $1.0 million.

Previous wording

To date, we have financed our operations primarily through cash flow from operations and working capital accounts payable from our major stockholders, who are our co-chief executive officer and his wife, when necessary. We plan to support our future operations primarily from cash generated from our operations and cash on hand. We believe that our current cash and future cash flows provided by operating activities, and the net proceeds from our initial public offering of $18.3 million will be sufficient to meet our working capital needs in the next 12 months. If we experience an adverse operating environment or incur unanticipated capital expenditure requirements, or if we decide to accelerate our growth, then additional financing may be required. We cannot give any assurance that additional financing will not be required or, if required, would be available on favorable terms if at all. Such financing may include the use of additional debt or the sale of additional equity securities. Any financing which involves the sale of equity securities or instruments that are convertible into equity securities could result in dilution to our stockholders which may be substantial.

Current wording

To date, we have financed our operations primarily through cash flow from operations and working capital accounts payable from our major stockholders, who are our co-chief executive officer and his wife, when necessary. We plan to support our future operations primarily from cash generated from our operations and cash on hand. We believe that our current cash and future cash flows provided by operating activities, the net proceeds from our initial public offering of $18.3 million and bank loan will be sufficient to meet our working capital needs in the next 12 months. If we experience an adverse operating environment or incur unanticipated capital expenditure requirements, or if we decide to accelerate our growth, then additional financing may be required. We cannot give any assurance that additional financing will not be required or, if required, would be available on favorable terms if at all. Such financing may include the use of additional debt or the sale of additional equity securities. Any financing which involves the sale of equity securities or instruments that are convertible into equity securities could result in dilution to our stockholders, which may be substantial.

Previous wording

As of December 31, 2024, and June 30, 2023, we had contract liabilities of $1,882,743 and $2,218,166, 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 March 31, 2025, and June 30, 2024, we had contract liabilities of $1,561,842 and $2,218,166, 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

As of December 31, 2024, we recorded an unpaid $8.8 million consideration in accrued liabilities and other payables on the consolidated balance sheet for a committed investment of $9 million into a joint venture investment named IKE.

Current wording

As of March 31, 2025, we recorded an unpaid $8.2 million consideration in accrued liabilities and other payables on the consolidated balance sheet for a committed investment of $9 million into a joint venture investment named IKE Tech LLC.