Ispire Technology Inc.

Good morning, and welcome to iSpire Technologies' earnings conference call for the second fiscal quarter of 2026. I'll now hand the call over to Phil Carlson from KCSA Strategic Communications. Please go ahead, sir.

Hello, everyone, and welcome to iSpire Technologies' earnings conference call for the second fiscal quarter of 2026 and to December 31st, 2025. At this time, I'd like to inform you that this conference call is being recorded and that all participants are in a listen-only mode. Following the company's prepared remarks, we will be holding a question and answer session. With us today are Mr. Michael Wang, the company's Co-Chief Executive Officer, and Mr. Jay Yu, the company's Chief Financial Officer. Mr. Wang will start by discussing iSpira's second fiscal quarter financial results and recent corporate highlights. Mr. Yu will then discuss the company's financial results for the second fiscal quarter of 2026 in more detail. Before we begin, I would like to remind you that this conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in its announcement 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 expectation, except as may be required by law. I will now hand the call over to Mr. Rong. Mr. Rong, please go ahead.

Thank you, Phil, and welcome to all of you joining us today. I'm pleased to share our financial results for the fiscal second quarter of 2026 and the recent corporate highlights. This quarter represented an inflection point for iSpire after a year-long cost-cutting and the customer quality rationalization efforts. And we believe future quarters will see top-line growth, consistent cash flow, and the bottom-line improvement. We are confident we have laid a solid foundation for future success. During the second fiscal quarter of 2026, we continue to fortify our financial position and strengthen our cash flow. Since late fiscal 2025, we have consolidated our customer base to prioritize high-quality clients. This aligned with our strategic focus on the higher-value nicotine sector and the shift away from the cannabis sector and from slower-paying clients. We have seen this translate to promising results across key measures, including improved accounts receivable. While our revenue declined in the second physical quarter, this was an expected outcome due to our deliberate move towards higher quality nicotine sector customers and away from lower value clients. who have difficulties meeting payment timelines. Several key metrics, including accounts receivable operating expenses and the net loss, indicate how our efforts to solidify our financial stability are beginning to deliver improvements in these areas. In addition, there were headwinds for the nicotine sector internationally, with the e-cigarette volume declining, with the pressure from Chinese manufacturers making an impact. It is worth noting that with China's cost base going up, this will benefit Malaysian producers, aligning with iSPIRE's strategic pivot to Malaysia, as e-cigarettes are no longer a preferred industry in China. For the second fiscal quarter of 2016, our net account receivable improved to $37.9 million, down from $47 million at the end of fiscal 2025. Other measures demonstrating this progress include average payment terms and the day sales outstanding, which have all improved. In particular, cash collected versus revenue for calendar year 2025 was 116% versus 67% for calendar year 2024. Also, our average payment terms were shortened, and the average day's sales outstanding improved by eight days, comparing the second fiscal quarter of 2026 to the second fiscal quarter of 2025. We were also able to reduce our net loss to $6.6 million from $8 million in the second quarter of fiscal 2025. And for the sixth month, ending December 31st, 2025, net loss was reduced by $3.7 million compared to the same period year over year. One important item I would also like to highlight is that from April 2025 to the end of the calendar 2025, we burned only $1 million in operating cash as we focused on our cost reduction and customer quality rationalization efforts. This is a significant measure and combined with other financial metrics shows that our stringent cost management and the focus on financial discipline have yielded positive results. And these are trends that we expect to continue through fiscal 2026. The iSPIRE team progressed several significant projects over the second fiscal quarter, mostly related to our high tech joint venture, G-Mesh technology, and building out our Malaysian facility. We continue to see increased traction worldwide for our groundbreaking age-gating technology joint venture with iCAT. In the U.S., in particular, interest from and discussions with several major tobacco players have intensified over the last three months. After the FDA indicated that age-gating technology is the only way to unlock the legal flavored e-cigarette market. As we all know, the U.S. nicotine vaping market is mainly dominated by illicit products. In other words, products that have not been authorized by the FDA. By various estimates, the U.S. e-cigarette retail market is nearly $100 billion in size, and more than 90% of it is illicit in nature. Consumers want flavored e-cigarettes, but the legal market does not have FDA-approved flavored e-cigarettes. As such, consumers can only purchase flavored products from the illicit market, potentially risking their health and life. We strongly support the FDA's initiatives to use age-gating technology to unlock the flavored market with the legally approved products. To not only offer consumers the flavor that they want, but also to protect the consumers from using dangerous products from the illicit market that are currently being sold across U.S. illegally. While there are several technology solutions out there, our technology stands out for its reliability and low friction nature. Our revolutionary technology uses a blockchain-based age verification chip and requires timely authentication at the point of use in order for the user to power it up. This contrasts existing systems that just rely on single verification only at the point of purchase and therefore ensures that only adults can read, not just purchase these products. We have been working with regulators globally across Europe, Southeast Asia, and the Middle East to institute age-gating technology as compulsory standard for the industry. And we have made material progress in getting these measures mandated in several countries across the world. Also, recently we were invited to participate in the SBA's Small Manufacturers Roundtable Session. with Steve Casabella, our chief legal officer and high tech board member representing the company on the panel taking place next week. While we welcome the U.S. federal government's printed enforcement mandate of the illicit trade of dates, we want to emphasize that this can only be effective when combined with technology-based solutions that are able to secure devices before misuse occurs. This is where we are seeing macroeconomic tailwinds in all favor relating to the US FDA's stance on flavored ENDS products and age-gating technology. The FDA's explicit position is that you must have age-gating technology if you want flavored products approved. Our joint venture, iTech, as most of you already know, has the leading and the most low-friction technology in that space. And we look forward to capitalizing on this opportunity in due time. IceBio and IceTech's first ever pre-market tobacco product application, or PMTA, with FDA last year, shows our commitment to advancing safety and compliance for consumers. It's no surprise that our age-gating technology is receiving a lot of attention from the big tobacco players globally. Furthermore, we look forward to announcing a significant development deal around our H-8 gating technology with a leading global nicotine company in the coming weeks. Another area where I aspire is a leading innovation is with our G-Mesh technology. G-Mesh vaping hardware is built with superconductive glass. which, unlike traditional ceramic or cotton core, provides higher purity, which enhances user safety. As we mentioned on our last earnings call, G-Mesh is garnering attention from several medium and large-sized nixing companies who are interested in the opportunity that technology presents for their next-generation vaping devices. We are currently involved in discussions about these opportunities. We'll share an update on this in the coming month for a potential licensing and or partnership agreement. Lastly, an update on the progress of our manufacturing facility in Malaysia. The build-out is on track to ramp up production in fiscal 2026. The marked increase in capacity that the Malaysian facility could hold once finished, which will go to 80 production lines from the current six lines, is a material improvement and aligns with our focus on Malaysia as a production center. We look forward to providing more updates on this in the coming quarters as well. To sum up, we are excited about the innovations that our team is working on, and we are optimistic about upcoming developments over the coming quarters. Our focus on fiscal management and pivoting to quality nicotine sector customers is a delivering result with improved net loss, operating expenses, and account receivable. We expect these trends to continue through fiscal 2016, as well as a pickup in revenue generation as we move closer to profitability. I will now hand the call over to our Chief Financial Officer, Jay Yi, to review our second quarter financial results in more detail. Jay.