Ispire Technology Invests in New Company to Develop RFID/NFC & Blockchain Vape with up to $87 million revenue in 2023H2

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On January 31, 2024

ISPIRE Technology Inc. (Nasdaq: ISPR), a leading provider of branded e-cigarettes and cannabis vaping products, today announced its preliminary financial results for the three and six months ended December 31, 2023, and provided updates on its business developments.

Preliminary Financial Results
According to its preliminary prospectus filed with the U.S. Securities and Exchange Commission on February 1, 2024, ISPIRE expects to report revenue in the range of $40 million to $44 million and $83 million to $87 million for the three and six months ended December 31, 2023, respectively. The expected increase in revenue was primarily driven by cannabis products, which accounted for $20 million to $22 million and $37 million to $39 million of the total revenue for the same periods, respectively.

The company also expects to report gross profit in the range of $6 million to $7.5 million and $12.5 million to $14.8 million for the three and six months ended December 31, 2023, respectively, representing gross profit margins of 15% to 17% for both periods.

Manufacturing Expansion
ISPIRE also announced that it expects to receive its first fully automated assembly system and related equipment in its approximately 37,000 square foot California facility in the first quarter of 2024 and expects commercial scale operation to begin there in the first half of 2024. The company has established an approximately 31,000 square foot manufacturing facility in Malaysia which it expects will commence commercial scale operation in the first half of 2024. Initially, the company’s primary manufacturing operations in Malaysia will be assembling from components that it purchases from other companies. The company’s Malaysian facility has received several ISO certifications, including ISO9001, ISO14001, ISO13485, and a GMP certification.

Strategic Partnership with Berify
ISPIRE also announced that it has entered into a letter of intent and term sheet with Touch Point Worldwide Inc. d/b/a Berify (“Berify”, together with the company, the “Parties”), to form a new joint venture, a Delaware limited liability company (“NewCo”). Berify is a technology company specializing in linking physical products to the digital world, digital engagement, and brand protection. Berify’s product verification system uses blockchain technologies to authenticate products and prevent counterfeiting, tampering and diversion. ISPIRE contribution to NewCo will be up to $10 million in funding to support research and development, submission by NewCo of premarket tobacco product applications to the U.S. Food and Drug Administration and software development.

The Parties intend to leverage their respective expertise and resources to develop and market innovative products and services that combine ISPIRE’s vaping hardware and software with Berify’s RFID/NFC & Blockchain technology. The Parties expect to execute a definitive agreement and close the transaction in the second quarter of 2024, subject to customary closing conditions and regulatory approvals.