Ispire Technology Inc. Reports Financial Results for the Fiscal Second Quarter 2024

Record Revenue Year with Revenue Increasing 31.4% Year-Over-Year to $151.9 Million

Gross Profit Increased 43.3% Year-Over-Year to $29.8 Million

Submitted PMTA Application in September 2024Planning to Re-enter US ENDS Market

Los Angeles, September 26, 2024 - Ispire Technology Inc.("Ispire" or the "Company") (NASDAQ: ISPR), an innovator in vaping technology and precision dosing, today reported results for the fiscal year 2024, which ended on June 30, 2024, and will file its annual report on Form 10-K with the U.S. Securities and Exchange Commission (the "SEC") on September 26, 2024.

Fiscal Year 2024 Financial Results

• Revenue increased 31.4% to $151.9 millionas compared to $115.6 millionin the 2023 fiscal year.
• Gross profit increased 43.3% to $29.8 millioncompared to $20.8 millionin the 2023 fiscal year.
• Gross margin increased to 19.6% as compared to 18.0% in the 2023 fiscal year;
• Total operating expenses increased 73.0% to $43.7 millionas compared to $25.3 millionin the 2023 fiscal year.
• Net loss of ($14.8) millionas compared to net loss of ($6.0) millionin the 2023 fiscal year.

Michael Wang, Co-Chief Executive Officer of Ispire, commented,

• "Fiscal year 2024 was a foundational year for Ispire, marked by record revenue and substantial margin expansion while strategically positioning us for faster growth in our global nicotine business and intentionally focusing our cannabis vaping hardware on high quality multi-state operator (MSO) customers.
  
  
• We continued to increase our revenue as we forged strategic long term partnerships with industry leaders such as Acreage Holdings, Hidden Hills Club, Dank Pack, and BRKFST, a brand produced and sold under a license arrangement with international singer and songwriter Burna Boy. These collaborations helped to expand our market presence, increase distribution channels, and solidify our global operating infrastructure.
  
  
• We enhanced our manufacturing capabilities with the opening of a state-of-the-art 31,000 sq. ft. facility in Malaysiaearlier this year as we aim to capitalize on the international nicotine market while driving our costs down and increasing profitability. We expect to continue to realize incremental margin improvements with this facility as production throughput increases.
  
  
• We successfully closed on a $12.3 millionpublic offering this past spring which helped strengthen our financial standing and has positioned us to expand on future international growth opportunities in both the nicotine and cannabis sectors.
  
  
• Additionally, we bolstered our senior leadership team with key appointments: Jim McCormickas Chief Financial Officer, John Pattersonas Senior Vice President of International Nicotine, and Dennis Lideras Senior Vice President of Cannabis Vaping Hardware Sales.
  
  
• While we are excited by our results, we are even more optimistic about our path forward. We continue to work towards an industry-leading point-of-use age-verification solution for vapor devices as well as continue to introduce cutting-edge technology across the U.S. e-cigarette market.
  
  
• We recently submitted our first PMTA application in four years for a disposable ENDS product with four flavors. This is an important milestone for the Company, as we aim to re-enter the U.S. ENDS market. While we maintain our focus on innovation to drive topline growth, we are equally committed to achieving sustainable margin improvements. At the same time, we are taking steps to limit underage access to vaping products in line with the Company's values which focus on responsible marketing to adult consumers.
  
  
• We believe these initiatives have collectively positioned us to capitalize on future market opportunities while delivering long-term value to our stakeholders."

Jim McCormick, Chief Financial Officer of Ispire, stated, "Our fiscal year 2024 results reflect our ability to successfully execute across our business segments, with a strategic focus on the international nicotine market as our primary revenue, margin, and future profit driver given its significant market size.

We recognize we have taken calculated risks with our cannabis investments in the US over the course of 2024. We have expanded our customer base as well as sales to existing customers while improving our gross margins as the year progressed. While we have made significant gains in market share, we also experienced challenges with slow-paying customers related to the systemic cash demands placed on the US cannabis industry.

Much of this can be linked to the cannabis specific 280E requirements, perpetuated by the lack of cannabis rescheduling from a Schedule I to a Schedule III controlled substance. In addition, ongoing industry conditions as well as the current regulatory and taxation environment are placing pressure on our customer's cash flow and ability to pay us in a timely manner.

Despite these challenges, we remain very confident in our growth trajectory. Our strategic realignment positions the Company to drive growth initiatives in both the nicotine and cannabis sectors, with a renewed focus on quality investments. Furthermore, we are continuing to drive costs down as we expand our utilization of our Malaysian production facility. This facility significantly bolsters our manufacturing capabilities, while providing operational efficiency and reducing our product costs."

Financial Results for the Fiscal Year Ended June 30, 2024

For the fiscal year ended June 30, 2024, Ispire reported revenue of $151.9 millioncompared to $115.6 millionduring the same period last year, an increase of 31.4%. The increase in revenue was primarily attributable to the combined effect of increases in product sales in the United Statesof $21.5 millionfrom $41.6 millionfor the year ended June 30, 2023to $63.1 millionfor the year ended June 30, 2024, increases in sales of vaping products in Europeof $6.5 millionfrom $58.8 millionfor the year ended June 30, 2023to $65.3 millionfor the year ended June 30, 2024, and increases in sales of vaping products in other markets of $5.7 millionfrom $0.3 millionfor the year ended June 30, 2023to $6.0 millionfor the year ended June 30, 2024, mainly contributed by increase in sales to South Africaof $5.4 million.

Gross profit for the fiscal year ended June 30, 2024, was $29.8 millioncompared to $20.8 millionfor the same period in fiscal year 2023. Over this same period, our gross margin grew to 19.6%, from 18.0%. The increase in gross profit and gross margin during the fiscal year 2024 was primarily due to a change in product mix focusing on higher margin products, higher sales volume leading to improved economies of scale, and the benefits derived from production in the Company's Malaysiafacility.

Total operating expenses for the fiscal year ended June 30, 2024were $43.7 millionas compared to $25.3 millionin the same period in fiscal year 2023. This increase was primarily due to expenses to support the expanded business footprint in the areas of payroll and contract wages, sales and marketing, professional fees as well as increased stock-based compensation.

For the fiscal year ended June 30, 2024, net loss was ($14.8) millionor ($0.27)per share, compared to a net loss of ($6.0) million, or ($0.12)per share for fiscal year 2023.

As of June 30, 2024, Ispire had $35.1 million in cash and cash equivalents and working capital of $16.6 million.

Conference Call

The Company will conduct a conference call at 8:00 am Eastern Time on Thursday, September 26, 2024, to discuss the results. Ispire management will host the conference call, followed by a question-and-answer period.

Please call the conference call dial-in 5-10 minutes prior to the start time and ask for the "Ispire Technology Call." An operator will register your name and organization.

• Date: Thursday, September 26, 2024
• Time: 8:00 am ET
• Dial-In Numbers: United States877-451-6152 or International +1 201-389-0879

This conference call will be broadcast live on the Internet and can be accessed by all interested parties at https://viavid.webcasts.com/starthere.jsp?ei=1683501&tp_key=2e98778e22

Please access the link at least fifteen minutes prior to the start of the call to register, download, and install any necessary audio software.

A playback will be available from 11:00 am ETon September 26, 2024through October 10, 2024. To listen, please dial 844-512-2921 or +1 412-317-6671. Use the passcode 13748321 to access the replay.

About Ispire Technology Inc.

Ispire is engaged in the research and development, design, commercialization, sales, marketing, and distribution of branded e-cigarettes and cannabis vaping products. The Company's operating subsidiaries own or license more than 200 patents received or filed globally. Ispire's tobacco products are marketed under the Aspire brand name and are sold worldwide (except in the U.S., People's Republic of Chinaand Russia) primarily through its global distribution network. The Company's cannabis products are marketed under the Ispire brand name primarily on an original design manufacturer (ODM) basis to other cannabis vapor companies. Ispire sells its cannabis vaping hardware in the US, Canada, Germanyand South Africa. For more information, visit www.ispiretechnology.com or follow Ispire on Instagram , LinkedIn, Facebook, TwitterInstagram,LinkedIn,Facebook,Twitter and YouTube. Any information contained on, or that can be accessed through, the Company's website, any other website or any social media, is not a part of this press release.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended ("Securities Act") as well as Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended, that are intended to be covered by the safe harbor created by those sections. Forward-looking statements, which are based on certain assumptions and describe the Company's future plans, strategies and expectations, can generally be identified by the use of forward-looking terms such as "believe," "expect," "may," "will," "should," "would," "could," "seek," "intend," "plan," "goal," "project," "estimate," "anticipate," "strategy," "future," "likely" or other comparable terms, although not all forward-looking statements contain these identifying words. All statements other than statements of historical facts included in this press release regarding the Company's strategies, prospects, financial condition, operations, costs, plans and objectives are forward-looking statements. Important factors that could cause the Company's actual results and financial condition to differ materially from those indicated in the forward-looking statements. Such forward-looking statements include, but are not limited to, risks and uncertainties including those regarding: whether the Company may be successful in re-entering the U.S. ENDS market; the approval or rejection of any PMTA submitted by the Company; whether the Company's joint venture with Touch Point Worldwide Inc. d/b/a/ Berify and Chemular Inc. (the "Joint Venture") may be successful in achieving its goals as currently contemplated, with different terms, or at all, the Joint Venture's ability to innovate in the e-cigarette technology space or develop age gating or age verification technologies for nicotine vaping devices, the Company's ability to collect its accounts receivable in a timely manner, the Company's business strategies, the ability of the Company to market to the Ispire ONE™, Ispire ONE™'s success if meeting its goals, the ability of its customers to derive the anticipated benefits of the Ispire ONE™ and the success of its products on the markets; the Ispire ONE™ proving to be safe, and the risk and uncertainties described in "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Cautionary Note on Forward-Looking Statements" and the additional risk described in Ispire's Annual Report on Form 10-K for the year ended June 30, 2023 and any subsequent filings which Ispire makes with the SEC. You should not rely upon forward-looking statements as predictions of future events. The forward-looking statements made in this press release relate only to events or information as of the date on which the statements are made in this press release. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events except as required by applicable law. You should read this press release with the understanding that our actual future results may be materially different from what we expect.

For more information, kindly contact:

IR Contacts:
Investor Relations
Sherry Zheng
718-213-7386
[email protected]

KCSA Strategic Communications

Phil Carlson
212-896-1233
[email protected]

PR Contact:
Ellen Mellody
570-209-2947
[email protected]

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