Ispire Technology Inc.
For the period ended Sep 30, 2025. Filed Nov 6, 2025.
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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.
Sep 30, 2025 · Filed Nov 6, 2025
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 2025-03-31; filed 2025-05-09.
0001213900-25-041555
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0001213900-25-107205
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 88 previous paragraphs and 71 current paragraphs.
30 unchanged; 32 reworded; 8 added; 25 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 17 previous and 14 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 (8)
Current report
Operating expenses decreased by $5,095,166 or 39.4%, from $12,937,247 for the three months ended September 30, 2024 to $7,842,081 for the three months ended September 30, 2025.
Current report
Sales and marketing expenses decreased by $1,427,403, or 47.7%, from $2,992,247 for the three months ended September 30, 2024 to $1,564,844 for the three months ended September 30, 2025. The decrease in sales and marketing expenses was primarily due to a decrease in (i) stock-based compensation expense related to selling personnels of $0.9 million comparing the three months ended September 30, 2025 and 2024 and (ii) decrease in travelling expense of $0.4 million as a result of less travelling activities during the three months ended September 30, 2025.
Current report
Credit loss expenses decreased by $1,337,829, or 43.1%, from $3,102,081 for the three months ended September 30, 2024, to $1,764,252 for the three months ended September 30, 2025. The decrease is due to more collection of customer payments from repayment plan negotiated and thus less allowance for credit losses were provided as of September 30, 2025.
Current report
Interest income increased by $95,386, from $86 for the three months ended September 30, 2024, to $95,472 for the three months ended September 30, 2025. The increase in interest income is mainly due to charging late fees from customers.
Current report
Interest expense increased by $100,712, from $11,464 for the three months ended September 30, 2024, to $112,176 for the three months ended September 30, 2025. The increase in interest expense is mainly due to borrowing engaged in February 2025.
Current report
Exchange gain, net changes by $107,783, or 91.7%, from net exchange gain $117,585 for three months ended September 30, 2024, to net exchange gain of $9,802 for three months ended September 30, 2025.
Current report
Net cash flow generated from financing activities for the three months ended September 30, 2025, of $0.3 million reflected primarily repayment of borrowing of $0.3 million.
Current report
The Company had no impairment of operating lease right-of-use assets during the three months ended September 30, 2025 and 2024.
Removed paragraphs (25)
Previous report
In many markets e-cigarettes and other nicotine products are subject to an excise tax. The amount of excise tax on our products is a key determining factor in our pricing and the value proposition to our adult consumer target market. The structure (i.e., ad valorem vs. specific) and tax burden can vary significantly from market to market. According to a 2023 study by Dauchy E, Fuss C.Global Taxation of Electronic Nicotine and Non-Nicotine Delivery Systems, the tax burden on nicotine vape products in Norway is 81.2% while the tax burden on the same products in Paraguay is 2.9%. The tax burden and resulting retail sales price is a key factor in determining how competitive our products are compared to illicit vaping products. The greater the price gap between legal and illicit vaping products the greater the incentive for adult consumers to buy illicit products. These illicit vaping products are not subject to the same quality standards as our products and undermine the efforts of legal operators seeking to help adult consumers switch from combustible tobacco products to vaping alternatives.
Previous report
United States E-Cigarette Market
Previous report
In the United States, 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. We have 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 our application and may prevent our ENDS products from being sold in U.S., which will adversely affect our business.
Previous report
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 report
On September 6, 2024, we submitted a PMTA application for a disposable ENDS product with 4 flavors. This is an important milestone for us, as it signals our re-entry into the US ENDS market. It is our intention to amend or resubmit this application in the coming months, once we have finalized the age-gating technology solution with our IKE Tech LLC joint venture. We have further plans to submit additional PMTA applications for pod-based ENDS systems, which will include age-gating technology, in the future as well.
Previous report
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. Further, States may be more willing to permit recreational cannabis use in the future given the DEA’s intention to reschedule cannabis as a Schedule III controlled substance allowing for medicinal use. We 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 report
However, cannabis and its derivatives containing more than 0.3% delta-9 tetrahydrocannabinol on a dry weight basis remain Schedule I controlled substances under U.S. federal law, meaning that federal law generally prohibits their manufacture and distribution. United States federal law also deems it unlawful to sell, offer for sale, transport in interstate commerce, import, or export “drug paraphernalia,” which includes “any equipment, product, or material of any kind which is primarily intended or designed for use in manufacturing, compounding, converting, concealing, producing, processing, preparing, injecting, ingesting, inhaling, or otherwise introducing into the human body a controlled substance” the possession of which federal law prohibits, including Schedule I “marijuana.” Limited exemptions exist, most notably when state or local law authorizes these items’ manufacture, possession, or distribution.
Previous report
European Market
Previous report
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. We have complied with TPD requirements for all our tobacco products sold in Europe.
Previous report
The sale of cannabis vaping products is illegal in the European Union, save for Germany, and the United Kingdom.
Previous report
Tariffs
Previous report
On April 2, 2025 U.S. President Donald Trump instituted a tariff of 24% on all goods from Malaysia and a 54% tariff on all goods from China through an executive order. On April 9, 2025, President Trump paused the implementation of the April 2 executive order for 90 days, with respect to all countries but China, instead instituting a blanket 10% tariff for all non-China imports to the U.S.
Previous report
As of May 5, 2025 tariffs on most Chinese made products entering the U.S. are 145% and may continue to increase, or decrease, over the near term.
Previous report
We purchase the majority of our nicotine and cannabis vaping products from Shenzhen Yi Jia, located in Shenzhen, China, which constitutes a significant part of our cost of revenue. The increase of tariff rates could affect our operating results and gross profit margins. However, we are currently able to manufacture a wide range of cannabis hardware in Malaysia and import into the U.S. at a substantial discount compared with production in, and importation from, China. We believe that the tariff differential between China and Malaysia serves as a short- and long-term competitive advantage for our U.S. cannabis hardware business. While we cannot be certain that this tariff differential will last, many customers have approached us, seeking to diversify their production supply chains out of China and into Malaysia. To the extent we continue to procure vapor devices from China for sale in the U.S., tariff costs will continue to be passed to our customers.
Previous report
Three and Nine Months Ended March 31, 2025 and 2024
Previous report
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 report
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 report
Operating expenses increased $3,584,098 or 23.3%, from $11,777,248 for the three months ended March 31, 2024 to $15,361,346 for the three months ended March 31, 2025. Operating expenses increased $13,707,756 or 46.2%, from $29,673,463 for the nine months ended March 31, 2024 to $43,381,219 for the nine months ended March 31, 2025.
Previous report
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 report
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 report
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 report
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 report
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 report
Net cash flow provided by financing activities for the nine months ended March 31, 2025 of $2.3 million reflected primarily proceeds from long term debt of $2.3 million, offset by common stock repurchase of $60 thousand.
Previous report
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 cost of the secondary offering of $1.5 million and repayment to related parties of $0.7 million.
Reworded paragraphs (32)
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
We are committed to delivering superior products that challenge industry norms, with the goal of delivering an unmatched customer and adult consumer experience. In achieving this, risk reduction is central to our mission, and we aim to improve the lives of our consumers through cutting-edge research and development. Our technology platforms look to reduce youth access to vaping products, which in turn, will facilitate our ability to provide adult consumers with the products they desire.
Current wording
As stated in our corporate mission, we are committed to delivering superior products that challenge industry norms, with the goal of delivering an unmatched customer and adult consumer experience. In achieving this, risk reduction is central to our mission, and we aim to improve the lives of our consumers through cutting-edge research and development. Our technology platforms look to reduce youth access to vaping products, which in turn, will facilitate our ability to provide adult consumers with the products they desire.
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 markets in the form of e-cigarettes and global cannabis markets in the form of cartridges filled with oils by our customers.
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 and cannabis markets in the form of e-cigarettes or cartridges filled with oils by our customers, respectively.
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). One such license arrangement has already launched, and more are anticipated to occur in the future.
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 expanding our international presence via the launch of nicotine products under the Ispire platform. These products have started to be launched under licensing arrangements with the owners of selected partner brands.
Previous wording
We currently sell our cannabis vaping hardware in the United States, Canada, South Africa, and Germany. However, we are continuing to develop our sales network across Europe, South America, and other regions in preparation for legalization in these markets. Our cannabis products are sold under the Ispire brand name, primarily on an ODM basis to other cannabis vapor companies including multi and single-state operators, brand owners and co-packers. ODM generally involves the design and customization of the core products to meet each brand’s unique image and needs. Our hardware products are sold by our customers under their own brand names. We do not “touch the cannabis plant” in the production and sale of our hardware products and thus are not subject to the specific cannabis-related regulatory and taxation provisions of the industry (e.g., IRS Code Section 280E).
Current wording
We currently sell our cannabis vaping hardware in the United States, Canada, and South Africa. However, we are continuing to develop our sales network across Europe, South America, and other regions in preparation for legalization in these markets. Our cannabis products are sold under the Ispire brand name, primarily on an ODM basis to other cannabis vapor companies including multi and single-state operators, brand owners and co-packers. ODM generally involves the design and customization of the core products to meet each brand’s unique image and needs. Our hardware products are sold by our customers under their own brand names. We do not “touch the cannabis plant” in the production and sale of our hardware products and thus are not subject to the specific cannabis-related regulatory and taxation provisions of the industry (e.g., IRS Code Section 280E).
Previous wording
Regulation regarding e-cigarettes varies across countries, from limited 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 in may adversely affect our business.
Current wording
Regulation regarding e-cigarettes varies across countries, from limited 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 in may adversely affect our business. Please see the sections titled “Item 1. Business – Regulation” and “Item 1A. Risk Factors” above for our robust discussion of this topic.
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 $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.
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 $17.3 million and $18.0 million at September 30, 2025 and June 30, 2025, respectively.
Previous wording
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 customer’s cash flow; (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 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 customer’s cash flow; (ii) our failure to implement effective collection efforts; and (iii) disputes over contract terms, product quality or delays in delivery. Due to federal status of cannabis and the uncertainty of adverse economic conditions in cannabis industry, the Company has focused more on nicotine business in the past year. 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 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).
Current wording
The following table sets forth a summary of our unaudited condensed consolidated statements of operations and comprehensive income for the three months ended September 30, 2025 and 2024 (dollars in thousands except per share amounts).
Previous wording
The following tables set out the breakdown of our revenue percentage by region based on information provided to us by our distributors.
Current wording
The following table sets out the breakdown of our revenue percentage by region based on information provided to us by our distributors.
Previous 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.
Current wording
Our revenue decreased by $8,987,429, or 22.8%, from $39,338,313 for the three months ended September 30, 2024, to $30,350,884 for the three months ended September 30, 2025. The decrease in revenue is the combined effect of (i) decreases in product sales in the United States of $4.2 million from $9.7 million for the three months ended September 30, 2024, to $5.5 million for the three months ended September 30, 2025, (ii) decreases in sales to other regions of $2.0 million from $3.8 million for the three months ended September 30, 2024 to approximately $1.8 million for the three months ended September 30, 2025, mainly contributed by decrease in sales to South Africa of $2.8 million, and (iii) decreases in sales of vaping products in Asia Pacific of $1.5 million from $3.9 million for the three months ended September 30, 2024 to approximately $2.4 million for the three months ended September 30, 2025, and (iv) decreases in sales of vaping products in Europe of $1.3 million from $22.0 million for the three months ended September 30, 2024 to approximately $20.7 million for the three months ended September 30, 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 $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.
Current wording
Cost of revenue mainly consists of cost of purchases of vaping products, that the majority of the purchase are from Shenzhen Yi Jia. Cost of revenue decreased by $6,459,823, or 20.4%, from $31,663,935 for the three months ended September 30, 2024, to $25,204,112 for the three months ended September 30, 2025. The decrease in cost of revenue is in line with decrease in sales.
Previous 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.
Current wording
Gross profit decreased by $2,527,606, or 32.9%, from $7,674,378 for the three months ended September 30, 2024, to $5,146,772 for the three months ended September 30, 2025, while our gross margin decreased from 19.5% to 17.0%. 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 September 30, 2025.
Previous 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.
Current wording
Our sales and marketing expenses mainly consist of employee salaries and benefits, marketing expenses, travel expenses, and other miscellaneous expenses.
Previous 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.
Current wording
Our general and administrative expenses consist of employees’ salaries and benefits, rental expense, professional fees, stock-based compensation expenses and other administrative expenses. General and administrative expenses decreased by $2,329,934, or 34.0%, from $6,842,919 for the three months ended September 30, 2024, to $4,512,985 for the three months ended September 30, 2025. The decrease was primarily due to (i) decrease in payroll of $1.2 million comparing the three months ended September 30, 2025 and 2024 as a result of decrease in headcount of North America, and (ii) decrease of $1.1 million of miscellaneous administrative expenses from North America as a result of drop in headcount and cost reduction for the three months ended September 30, 2025.
Previous wording
Other income, net includes interest income, interest expense, exchange gain (loss), net and other income (expense).
Current wording
Other (expense) income, net includes interest income, interest expense, exchange loss, net and other (expense) income.
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 $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.
Current wording
Other (expense) income, net mainly consists of loss on equity method investment, credits from company credit card and other miscellaneous expenses. Other (expense) income changed by $88,982, or 483.6%, from net income of $18,399 for the three months ended September 30, 2024 to net expense of $70,583 for the three months ended September 30, 2025.
Previous 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.
Current wording
As a result of these factors, total other (expense) income, net decreased by $202,091, from other income, net of $124,606 for three months ended September 30, 2024, to other expense, net of $77,485 for three months ended September 30, 2025.
Previous 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.
Current wording
Income taxes increased by $29,316 or 6.4%, from $456,753 for three months ended September 30, 2024, to $486,069 for three months ended September 30, 2025. We had a consolidated net loss for both three months ended September 30, 2025 and 2024, which was the combined effect of a profit by Aspire Science, 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 $4,931,372, 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.
Current wording
As a result of the foregoing, net loss decreased by $2,336,153, from net loss of $5,595,016, or $(0.10) per share, for the three months ended September 30, 2024, to a net loss of $3,258,863, or $(0.06) per share, for the three months ended September 30, 2025.
Previous 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).
Current wording
The following table sets forth information as to consolidated cash flow information for the three months ended September 30, 2025 and 2024 (dollars in thousands).
Previous 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.
Current wording
Net cash flow used in operating activities for the three months ended September 30, 2025, of $1.2 million, reflected our net loss of $3.3 million, adjusted primarily as follows: add back of impairment of account receivable of $1.8 million, add back of share-based compensation expense of $0.9 million, a decrease in accounts receivable of $0.7 million, a decrease in prepaid expenses and other current assets of $0.5 million, offset by decrease in contract liabilities of $1.9 million.
Previous 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.
Current wording
Net cash flow provided by operating activities for the three months ended September 30, 2024 of $3.6 million, reflected our net loss of $5.6 million, adjusted primarily as follows: an add-back of credit loss expenses of $3.1 million, an add-back of stock based compensation expense of $2.0 million, increase in accounts payable of $9.5 million, offset by an increase in accounts receivable of $5.7 million.
Previous 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.
Current wording
Net cash flow used in investing activities for the three months ended September 30, 2024 of $0.9 million reflected primarily purchase of property, plant and equipment of $0.3 million and capitalized costs of patents of 0.6 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, 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.
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. As of the date of this Quarterly Report, we believe that our current cash and cash flows provided by operating activities, and the net proceeds from our equity offerings and borrowing 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
The cash at bank held by our Hong Kong operating subsidiary can be freely transferred within our corporate structure without restriction. If our Hong Kong operating subsidiary were to incur additional debt on its own behalf in the future, the instruments governing the debt may restrict the ability of our operating subsidiaries to transfer cash to our U.S. investors.
Current wording
The cash held at a bank by our Hong Kong operating subsidiary can be freely transferred within our corporate structure without restriction. If our Hong Kong operating subsidiary were to incur additional debt on its own behalf in the future, the instruments governing the debt may restrict the ability of our operating subsidiaries to transfer cash to our U.S. investors.
Previous 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.
Current wording
As of September 30, 2025 and June 30, 2025, we had contract liabilities of $2,962,299 and $4,861,250, 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
The balances for the right-of-use assets and lease liabilities where we are the lessee are presented as follow:
Current wording
The balances for the right-of-use assets and lease liabilities where we are the lessee are presented as follows:
Previous wording
As of March 31, 2025, we have a bank loan balance of $2,339,362 outstanding. The maturities of our bank loan are as follows:
Current wording
As of September 30, 2025, we have a borrowing balance of $1,665,435 outstanding. The maturities of our borrowing are as follows:
Previous 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.
Current wording
As of September 30, 2025, we recorded an unpaid $5.8 million consideration in accrued liabilities and other payables on the unaudited condensed consolidated balance sheet for a committed investment of $9 million into a joint venture investment named IKE Tech LLC.
Previous wording
Other than as disclosed elsewhere in this this Form 10-Q, we are not aware of any trends, uncertainties, demands, commitments, or events that are reasonably likely to have a material effect on our net revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.
Current wording
Other than as disclosed elsewhere in this Form 10-K, we are not aware of any trends, uncertainties, demands, commitments, or events that are reasonably likely to have a material effect on our net revenues, income from operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.
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.
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.** **
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Net cash flow used in investing activities for the three months ended September 30, 2025 of $0.1 million reflected primarily acquisition of intangible assets of $0.1 million.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The decrease in cost of revenue is in line with decrease in revenue and more higher-margin products being sold.