Ispire Technology Inc.

Good morning, everyone. Hello and welcome to participate in today's conference call to discuss I-SPIRE's financial results for its fiscal first quarter 2024 ended September 30th, 2023. At this time, I would like to inform you that this conference is being recorded and that all participants are in listen-only mode. We will be facilitating a question and answer session following the prepared remarks from the company. Joining us today are Mr. Michael Wang, the company's co-CEO, and Mr. Daniel J. Machok, the company's CFO. First, Mr. Wang will brief you on the company's key highlights, and then Mr. Machok will review the company's financial results. Before we begin, I would like to remind you that this conference call contains forward-looking statements within the meanings of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in its announcements are forward-looking statements. Forward-looking statements are based on estimates and assumptions made by the company in terms of its experience and its perception of historical trends, current conditions, and expected future developments, as well as other factors that the company believes are relevant. These forelooking statements involve known and unknown risks and uncertainties, and many factors could cause the company's actual results or performance to differ materially from those expressed or implied by the forelooking statements. Further information regarding this and other risk factors are included in the company's filings with the SEC. The company undertakes no obligation to update forelooking statements to reflect subsequent or current events or circumstances or to changes in its expectations except as may be required by law. I'll now like to turn the conference over to Mr. Wang. Mr. Wang, please go ahead.

Okay. Thank you, operator. And thank you all for joining us this morning. Before we dive into the numbers, I just want to highlight one important new partnership development. Earlier this week, we signed and announced a global e-cigarette design, manufacturing, and distribution partnership with Snoop Dogg's Dogg Pannels brand. We will begin to execute this partnership immediately outside of the U.S. You may ask, why outside the U.S.? This is because in the U.S., we'll need to obtain FDA's PMTA approval before we could distribute any e-cigarette product. I will share more detail on this partnership development later on, but this is not the only global EC-brand partnerships that we will launch in the coming months. In fact, we are in the final phase of negotiations with two other brands, to launch their global eSquare distribution business. That's one key thing I'd like to bring up first. Obviously, it's very encouraging development on that front. Now, back to the fiscal first quarter. For the fiscal first quarter of 2024, iSpire delivered strong financial results to sum it up. the cannabis vaping product revenue increased by 117% over the same period last year. And the tobacco vaping product revenue increased by 35% over the same period last year. So in all, overall revenue for the first quarter increased by 59% compared to the same period last year. The remarkable growth, obviously, particularly doubling in our cannabis product sales underscores the market's robust acceptance for high-quality product offerings and our adept marketing strategies. Since the launch of iSpire One four months ago, our revolutionary vaping technology that we introduced at CHAMPS show in Las Vegas and later on at the Bandinga conference in Chicago. We have been vigorously engaging with the market through major trade shows and conferences as we aim to expand our vaping ecosystem. The ecosystem is truly what separates us from our competitors who are more transaction-based. Our ecosystem obviously is more based on relationships and trust than price. Our customers understand our competitive technology advantage, but also understand that we are well established in the community, in the industry, well connected, and well respected throughout the whole vaping and cannabis communities. Our dynamic market engagement strategy has not only amplified our visibility, but also brought us industry recognition and valuable feedback as we continue to expand our global footprint. As the premier precision dosing technology company, our confidence in iSpire 1 technology is rooted in our innovative mindset and its innovative design and the positive response we have already observed. We believe it has the capacity to make truly meaningful impact on both the waiting experience and the market overall through the impact the technology makes. Our recent Best End-User Technology Award at the 2023 Bandinda Conference in Chicago is further evidence of our momentum and our commitment to continue setting industry benchmarks. Our strategic expansion is advancing very well on several phases of build-out that have been completed at our new Malaysian manufacturing operation. where we are already receiving orders for products. We'll start production in December. As we continue to onboard several key leadership personnel at this facility, we are certainly well positioned to capitalize on the sustainable opportunities in Southeast Asia market while also enhancing our own production capabilities and, most importantly, to improve our growth margin over time. Also, subsequent to the end of the recent fiscal first quarter, I covered briefly early in my update, we signed a manufacturing and distribution agreement with Hanpaco. Hanpaco is a company that focuses on disrupting the $1 trillion tobacco industry by manufacturing and marketing products like herb, spice, and cannabinoids, smoke boards, and rolling papers as alternative to nicotine cigarettes. So our first collaboration with Hanpako will be centered around global icon and rep artist Snoop Dogg and his iconic brand Dogg's Pound. I-SPIRE, as part of the agreement, I-SPIRE will have exclusive worldwide distribution rights to these vaping products as they are sold into I-SPIRE's existing vapor network ecosystem. Also, we'll provide manufacturing and quality control of all hardware for Hanpaco vapes. and we anticipate additional celebrity and influencer brand collaborations to follow in the coming quarters, so please stay tuned. As we head into fiscal 2024, we are certainly fueled by this quarter's robust performance and continue to dedicate ourselves to product innovation, brand enhancement, and market agility. Our strategic product development coupled with a keen understanding of regulatory landscapes globally, positions us well in both the medical and the recreational arenas. Our focus on product excellence, as demonstrated with iSpire 1, has solidified our reputation. And we are confident that iSpire 1 will further strengthen our market presence as a premier precision dosing technology company. So with that, I'll turn the call over to our CFO, Dan, who will review and comment on our financial results. Dan?

Thank you, Michael, and thanks to everyone for being on the call. Let's take a deeper dive into our financials. I will summarize some key financial results for the fiscal first quarter 2024. In my comments on the quarterly results, All comparisons are to the prior year's three-month end of September 30, 2022, unless otherwise stated. As Michael outlined, we've experienced exceptional top-line growth for the fiscal to 17 million in the United States, and 35% year-over-year growth in sales of tobacco vaping products to 26 million in Europe and the Asia Pacific, excluding the PRC. Our gross profit rose to 7 million, representing a 44% increase compared to the same period last year. We experienced a slight dip in gross margin to 16.1% from 17.8% in the same period last year, The gross margin for tobacco vaping products remains constant. We're poised to recover and improve our gross margins as we ramp up sales of the new model product throughout fiscal 2024. seeing additional payroll expenses related to the expansion of our cannabis business and building manufacturing plant in malaysia and increased professional fees for expenses incurred being a public company as a result of the foregoing our net loss was 1.4 million for fiscal first quarter 2024 as compared to 2 million for fiscal first quarter 23. this reduction let's look at the balance sheet and liquidity. As of September 30th, 2023 and June 30th, 2023, we had working capital of $28 million and $29 million respectively. We believe that our current cash and cash flow generated from our operations will be sufficient to meet our working capital needs for at least the next 12 months. That cash used in operating activities was $13 million for the fifth year. That cash used in investing activities was 0.8 million compared to 0.3 million for the same period last year. That cash used in financing activities was 0.9 million compared to 0.3 million for the same period of last year. This concludes our fiscal first quarter 2024 financial results review. I will now turn the call back over to Michael.