Key Points
Ispire reported fiscal Q1 revenue of $27.5 million, down 9.3% year over year. Net loss widened to $6.4 million from $3.3 million a year earlier, while gross margin recovered sequentially to 16.2%.
The company is expanding Malaysian vape and nicotine pouch manufacturing and estimates a 25% US tariff advantage. A Southeast Asian OEM/ODM agreement remains under negotiation.
Ispire purchased approximately $19.13 million of products from chairman-controlled Shenzhen Yi Jia Technology during the quarter and reported $52 million in non-current related-party payables.
Ispire indirectly owns 49% of JinWu Health Limited through Aspire Science and Technology Limited, partnering with Jincheng-related parties on nicotine pouch development.
Ispire holds 40% of Ike Tech Inc., which plans a US PACHA age-gating pilot. The relevant PMTA remains under FDA review, with no marketing authorization announced.
2Firsts
November 11, 2026
US-listed vaping technology and manufacturing company Ispire Technology Inc. (Nasdaq: ISPR) reported fiscal first-quarter revenue of $27.5 million on November 9, down 9.3% from a year earlier, while its net loss widened to $6.4 million. The company said changes in European vaping regulation had reduced distributor purchases as it expanded Malaysian manufacturing and pursued new business in contract production, nicotine pouches and age-verification technology.
Ispire said its Malaysian manufacturing operations offer an approximately 25% tariff advantage over China-based production for shipments to the United States. It is negotiating an OEM/ODM agreement with a Southeast Asian vaping brand and anticipates announcing the outcome in January 2027.
The company nevertheless remains dependent on a related-party manufacturer in China. Its latest SEC filing shows $52 million in non-current related-party payables and approximately $23.05 million in current trade payables owed to Shenzhen Yi Jia Technology Co., Ltd. at September 30.
Revenue Falls 9.3% as Net Loss Widens to $6.4 Million
Ispire reported $27.5 million in revenue for the quarter ended September 30, compared with $30.4 million a year earlier. Revenue rose 3.2% from $26.7 million in the preceding quarter.
Chief Financial Officer Jie Yu said on the November 9 earnings call that Europe accounted for most of the annual revenue decline.
Disposable vape restrictions and changes to e-cigarette excise taxation in parts of Europe prompted distributors to reduce purchases or delay orders while managing inventories more cautiously, management said.
Competitive pricing also affected gross margins.
The company's principal quarterly results were:
| Metric | Fiscal Q1 2027 | Comparison |
|---|---|---|
| Revenue | $27.5 million | -9.3% YoY; +3.2% QoQ |
| Gross profit | Approximately $4.5 million | Approximately $5.1 million a year earlier |
| Gross margin | 16.2% | 17.0% a year earlier; 6.3% prior quarter |
| GAAP net loss | Approximately $6.4 million | Approximately $3.3 million a year earlier; $13.8 million prior quarter |
| Adjusted EBITDA | Approximately $136,000 positive | Approximately $600,000 a year earlier |
| Cash and equivalents | $15.64 million | $19.33 million at June 30 |
| Operating cash flow | -$1.6 million | Net cash used during the quarter |
Ispire attributed the sequential gross-margin recovery partly to the absence of inventory impairment and product-return charges recorded in the preceding quarter.
Year over year, however, revenue and gross profit declined while the net loss increased.
Quarterly operating expenses rose 35.2% to approximately $10.6 million, largely reflecting higher credit-loss expense. Excluding credit-loss charges, operating expenses declined 3.7% to approximately $5.9 million.
Credit-loss expense totaled approximately $4.8 million, compared with $1.8 million a year earlier.
Net accounts receivable stood at approximately $13.49 million at September 30, down about 80% from the fiscal 2025 peak. The company attributed the reduction to collections, increased credit-loss allowances and changes in customer credit standards and payment terms.
At quarter-end, Ispire reported total assets of approximately $52.82 million and total liabilities of $87.67 million, leaving a stockholders' deficit of $34.85 million.
Current assets were approximately $34.25 million against current liabilities of $33.83 million, representing working capital of about $421,000, down from approximately $803,000 at June 30.
Cash and equivalents fell by approximately $3.69 million during the quarter to $15.64 million.
In its SEC filing, Ispire said it expected existing cash, operating cash flow and available financing arrangements to support its requirements for the next 12 months. It also acknowledged that adverse operating developments or additional investments could increase its funding needs.
Malaysian Manufacturing Expands, but Shenzhen Yi Jia Technology Remains a Major Supplier
Ispire said fiscal 2027 is the first full fiscal year of vape and nicotine pouch production at its company-owned Malaysian facilities.
According to its fiscal 2026 annual report, Ispire operates approximately 31,000 square feet of manufacturing space in Malaysia. Production activities began in phases in 2024.
The company obtained a Malaysian manufacturing licence for nicotine vaping products on March 17, 2026, followed by a nicotine pouch manufacturing licence in May.
President Steven Przybyla said on the November 9 earnings call that Malaysian production offers an estimated 25% tariff advantage on US-bound vaping products compared with manufacturing in China.
He also said China planned to eliminate its 13% VAT export rebate for e-cigarettes in April 2027. The timeline and applicable policy details reflect management's statements and remain subject to confirmation from Chinese government documentation.
Ispire is negotiating an OEM/ODM agreement with a regional Southeast Asian vaping brand. The proposed arrangement would combine its G-Mesh heating technology, Malaysian production and development of vaping devices for Southeast Asian markets.
Management expects to announce the outcome in January 2027 and begin production afterward.
As of November 9, Ispire had not disclosed a signed agreement, the prospective customer's identity, order value, purchase volumes or a confirmed production date.
Despite its expansion in Malaysia, Ispire continues to conduct substantial business with Shenzhen Yi Jia Technology Co., Ltd. (Shenzhen Yi Jia), a related-party manufacturer in China.
According to its latest Form 10-Q and previously filed bilingual corporate agreements, 95% of Shenzhen Yi Jia is owned by Ispire Chairman and Chief Executive Officer Tuanfang Liu, with the remaining 5% held by Yuli Liu, his cousin.
Ispire purchased approximately $19.13 million of products from Shenzhen Yi Jia during the quarter ended September 30, compared with approximately $22.90 million a year earlier.
At September 30, Ispire owed Shenzhen Yi Jia approximately $23.05 million in current trade payables, together with $52 million in non-current related-party payables.
According to the SEC filing, the $52 million obligation is unsecured and non-interest-bearing. Shenzhen Yi Jia agreed not to demand repayment for 12 months beginning November 8, 2026.
The arrangement defers payment and does not extinguish the obligation.
Ispire used approximately $1.6 million in operating cash during the quarter, including a $3 million payment of aged payables to a related-party manufacturer.
The balance sheet also included approximately $519,000 in current borrowings. The substantially larger related-party payables are separately classified liabilities.
Further expansion of Malaysian production will depend on customer contracts, manufacturing utilization and development of local operations.
JinWu Health Venture With Jincheng Pharma Records Minimal Earnings Contribution
Ispire is also developing modern oral nicotine products.
In May 2026, the company announced a nicotine pouch partnership with Shandong Jincheng Pharmaceutical Group Co., Ltd. (Jincheng Pharma), a Chinese pharmaceutical company listed on the Shenzhen Stock Exchange under stock code 300233.
According to Ispire's latest SEC filing, Aspire Science and Technology Limited (Aspire Science), its Hong Kong subsidiary, entered a definitive cooperation agreement in August 2026 with Shandong Jincheng Pharmaceutical and Chemical Co., Ltd. and related parties.
The legal name used in Ispire's SEC disclosure differs from the listed group's current English corporate name. The precise contracting entity should be read in conjunction with the underlying agreement.
The business is conducted through JinWu Health Limited, a company incorporated in Hong Kong on March 25, 2026, under the registered Chinese name 金霧健康有限公司.
JinWu develops, produces and sells nicotine pouch products.
Aspire Science holds 49% of JinWu, while Jincheng-related parties hold the remaining 51%.
Ispire intends to combine the venture's nicotine pouch development and production activities with its licensed manufacturing operations in Malaysia.
As of September 30, JinWu's contribution to Ispire's consolidated financial statements remained immaterial.
The SEC filing shows that Ispire recognized approximately $290 in equity-method earnings from JinWu during the quarter.
The company has not disclosed the venture's major commercial customers, complete product portfolio or mass-production volumes.
The partnership was initially announced in May, followed by the definitive agreement in August. The November 9 earnings disclosure did not establish a material new nicotine pouch revenue stream.
Ike Tech Inc. Plans US PACHA Age-Gating Pilot as FDA Review Continues
Ispire is also developing device-level age-verification technology through Ike Tech Inc., a US venture in which it owns 40%.
The venture was established as IKE Tech LLC with participants including Ispire's Aspire North America LLC, Chemular Inc. and Touch Point Worldwide, Inc., doing business as Berify.
According to Ispire's latest SEC filing, IKE converted from a Delaware limited liability company into a corporation in October 2026, changing its legal name to Ike Tech Inc.
Following the conversion, Ispire's 40% interest was exchanged for Class B common stock, with no change in its ownership percentage.
IKE develops device access restrictions, user age verification and related authentication technology.
Ispire's fiscal 2026 annual report states that IKE submitted a device-component premarket tobacco product application (PMTA) to the US Food and Drug Administration in April 2025. The FDA accepted the application in May 2025.
Acceptance is a procedural step in FDA review, not a marketing authorization.
In September 2026, IKE introduced its IKE 2.0 platform, incorporating user onboarding, device-access management, brand customization and related software features.
During the November 9 earnings call, Ispire said IKE planned a US market pilot with Charlie's Holdings, Inc.
The proposed pilot would integrate device-level age verification into selected PACHA-branded disposable vaping products, initially through the Smoker Friendly tobacco retail network.
The companies expect to begin the pilot before the end of 2026 and use the resulting data to support updates to certain Charlie's Holdings PMTA submissions.
According to Ispire management, Charlie's Holdings has more than 800 PMTA submissions in various regulatory statuses, including pending review or administrative stay.
That figure refers to applications, not products granted FDA marketing authorization.
IKE's own device-component PMTA also remains under review. As of November 10, Ispire had not announced FDA marketing authorization for the relevant application.
The FDA's May 2026 enforcement-priority guidance for certain unauthorized electronic nicotine delivery systems and nicotine pouch products does not replace statutory premarket authorization requirements. Neither a pending PMTA nor an enforcement-priority policy itself grants marketing authorization.
Ispire also reported that IKE generated approximately $100,000 in quarterly revenue and posted a net loss of about $658,000.
Ispire recognized approximately $263,000 as its share of IKE's loss. After including a small equity-method profit from JinWu, the company's net investment loss from the ventures was approximately $262,900.
Ispire anticipates the PACHA pilot before the end of 2026 and a potential announcement on the Southeast Asian OEM arrangement in January 2027.
At September 30, Ispire's quarterly revenue remained below its year-earlier level, while the company continued to report a net loss and negative operating cash flow. It did not provide specific full-year fiscal 2027 revenue or profit guidance during the November 9 earnings call.
Follow 2Firsts for developments in global vaping manufacturing, nicotine pouch supply chains, corporate earnings and the commercialization of regulatory technology.
Cover Image Source: Ispire Technology
