Press release·09/16/2026 00:10:47

Overview

The company is engaged in the research, development, design, commercialization, sales, marketing, and distribution of branded and non-branded vaping hardware products in both the nicotine and cannabis spaces, as well as the assembly of nicotine pouch products and other next-generation nicotine products. The company sells its e-cigarette (or nicotine) products globally under the “Aspire” brand name, and its cannabis vaping hardware in the United States, Canada, and South Africa under the Ispire brand name.

Since the company’s initial public offering in April 2023, it has completed three fundraising rounds, raising a total of approximately $36.3 million in net proceeds. The company plans to use the proceeds to fund its operations, including the establishment and operation of its manufacturing facility in Malaysia, a joint venture, and general corporate purposes such as research and development.

Regulatory Risks

The sale of nicotine and cannabis products is subject to regulations worldwide. Changes in the regulatory environment can lead to the company’s products becoming non-compliant in certain markets, which may severely disrupt its business. The legal status of e-cigarettes is currently pending in many countries, and the company’s business may be adversely affected by changes in existing laws and regulations or the imposition of new laws or regulations.

Accounts Receivable

The company’s business relies on the timely collection of accounts receivable from its customers. Failure to collect accounts receivable can result from factors such as adverse economic conditions affecting the customer’s cash flow, ineffective collection efforts, and disputes over contract terms, product quality, or delays in delivery. Due to the federal status of cannabis and the uncertainty in the cannabis industry, the company has focused more on its nicotine business in the past year.

Key Factors Affecting Results of Operations

The key factors that may affect the company’s financial condition and results of operations include:

• The effect of legislation and regulations affecting non-combustible nicotine products and cannabis vaping products
• The company’s ability to obtain regulatory approval to market additional nicotine vaping products in the United States and the significant cost of seeking such approval
• The company’s ability to develop and market nicotine and cannabis vaping products to meet the changing tastes of adult consumers
• The effects of competition
• The development of an international market for cannabis vaping products, which is currently primarily limited to certain states in the United States

Results of Operations

The company’s revenue decreased by 24.7% from $127.5 million in the year ended June 30, 2025, to $96.0 million in the year ended June 30, 2026. This was due to decreases in product sales in the United States, Europe, and the Asia Pacific (excluding PRC) regions.

Cost of revenue decreased by 20.2% from $104.8 million in the year ended June 30, 2025, to $83.7 million in the year ended June 30, 2026, primarily driven by lower sales volumes, partially offset by a $2.0 million increase in inventory write-downs.

Gross profit decreased by 45.7% from $22.6 million in the year ended June 30, 2025, to $12.3 million in the year ended June 30, 2026, while gross margin decreased from 17.8% to 12.8%. The decrease in gross margin was due to competitive pricing pressures, an unfavorable shift in revenue mix, and a significant increase in inventory write-downs.

Operating expenses decreased by 25.8% from $60.5 million in the year ended June 30, 2025, to $44.9 million in the year ended June 30, 2026. This was primarily due to decreases in sales and marketing expenses, credit loss expenses, and general and administrative expenses.

Other income (expense), net increased from a net expense of $0.2 million in the year ended June 30, 2025, to a net income of $0.5 million in the year ended June 30, 2026, mainly due to an increase in exchange gain and other income.

Income taxes decreased slightly by 4.7% from $1.2 million in the year ended June 30, 2025, to $1.1 million in the year ended June 30, 2026.

As a result of the above factors, net loss decreased by $6.0 million, from a net loss of $39.2 million, or $0.69 per share, in the year ended June 30, 2025, to a net loss of $33.2 million, or $0.58 per share, in the year ended June 30, 2026.

Liquidity and Capital Resources

The company’s working capital increased from $0.4 million as of June 30, 2025, to $0.8 million as of June 30, 2026. Net cash used in operating activities decreased from $7.4 million in the year ended June 30, 2025, to $0.6 million in the year ended June 30, 2026.

The company believes that its current cash, cash flows from operations, and the net proceeds from its equity offerings and borrowing will be sufficient to meet its working capital needs in the next 12 months. However, if the company experiences an adverse operating environment or incurs unanticipated capital expenditures, additional financing may be required.

Contractual Obligations

As of June 30, 2026, the company had contract liabilities of $1.9 million, which are advance deposits received from customers. The company also had operating lease arrangements for office and factory premises, with right-of-use assets of $3.0 million and lease liabilities of $3.3 million as of June 30, 2026. Additionally, the company had a borrowing balance of $0.8 million outstanding as of June 30, 2026.

Trend Information and Seasonality

The company is not aware of any trends, uncertainties, demands, commitments, or events that are reasonably likely to have a material effect on its net revenues, income from operations, profitability, liquidity, or capital resources. Seasonality does not materially affect the company’s business or results of operations.