Financial Analysis

NOTE 18. COMMITMENTS AND CONTINGENCIES From time to time, the Company may be subject to legal or regulatory proceedings, investigations and claims incidental to the conduct of its business. The Company is not a party to, nor is the Company aware of, any legal or regulatory proceedings, investigations or claims which, in the opinion of our management, are likely to have a material adverse effect on our business, financial condition or results of operations. Concurrently with the JV Agreement (see Note 8), Ispire entered into an exclusive supply agreement with Berify, whereby Ispire is obligated to purchase all Bluetooth enabled integrated circuits to be used on vape type devices to control the activation of the device that are to be sold to IKE at cost plus a 20% mark-up. In addition, IKE entered into an exclusive supply agreement with Ispire, whereby IKE is obligated to purchase at cost plus a 5% mark-up all products to be sold by IKE in the nicotine field.

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The net sales disaggregated by region for the years ended June 30, 2025 and 2024, were as follows: For the year ended June 30, 2025 2024 Europe $ 74,107,249 $ 65,260,478 North America (the U.S. and Canada) 32,567,795 63,079,961 Asia Pacific (excluding PRC) 12,274,022 17,588,597 Others 8,545,238 5,979,655 Total 127,494,304 151,908,691

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NOTE 15. STOCK-BASED COMPENSATION In October 2022, the board of directors and stockholders of the Company approved the 2022 Equity Incentive Plan (as amended, the Plan) pursuant to which up to 15,000,000 shares of common stock may be issued pursuant to options, restricted stock or RSUs grants. The Plan is administered by the Compensation Committee of the Board of Directors. Awards under the Plan may be granted to officers, directors, employees and those consultants who qualify as a consultant or advisor under the instructions to the Companys Form S-8 (File No. 333-273458) initially filed with U.S. Securities and Exchange Commission on July 26, 2023, and amended on November 15, 2024. The Compensation Committee has broad discretion in making awards, provided that any options shall be exercisable at the fair market value on the date of grant. Restricted stock During the years ended June 30, 2025 and 2024, 206,271 and 148,216 shares of common stock were issued to the Companys board of directors and service providers in settlement of restricted stock granted under the Plan, respectively. Restricted stock granted to directors vests over three months and was fully vested as of June 30, 2025. The Company recognized stock-based compensation expense totaling $1,251,328 and $826,996 during the year ended June 30, 2025 and 2024, which were related to the restricted stock issued to the Companys board of directors and a service provider, based on the grant date fair value of the awards. Th …

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NOTE 13. INCOME TAXES British Virgin Islands (BVI) Under the current laws of the BVI, the Companys BVI subsidiary, Ispire International, is not subject to income or capital gains taxes. In addition, dividend payments are not subject to withholding tax in the BVI. Hong Kong Under the two-tiered profits tax rates regime for Hong Kong, the first 2 million HKD of profits of the qualifying entity will be taxed at 8.25%, and profits above HKD 2 million will be taxed at 16.5%. United States The Company and Aspire North America LLC are each subject to the federal income tax rate of 21% if in a taxable position. Malaysia Ispire Malaysia Sdn Bhd are subject to the standard corporate tax rate of 24% if in a taxable position. However, resident companies that qualify as small and medium-sized enterprises may benefit from a reduced tax rate of 15% on the first RM 150,000 of chargeable income and 17% on the next RM 450,000. For the years ended June 30, 2025 and 2024 income (loss) before income taxes by major taxing jurisdiction consists of: Years ended June 30, 2025 2024 HK $ 7,447,310 $ 8,150,770 U.S. (44,039,142 ) (20,623,262 ) Malaysia (1,444,690 ) (1,013,284 ) Total $ (38,036,522 ) $ (13,485,776 ) The provision for income taxes consisted of the following: Years ended June 30, 2025 2024 Current provision: United States Federal $ - - United States - State - - Foreign 1,203,704 1,282,046 Total current provision 1,203,704 1,282,046 Deferred provision: United States Federal - - United States …

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NOTE 10. LEASES The Company has operating lease arrangements for office premises in Hong Kong, California and Malaysia. These leases typically have terms of two to five years. Leases with an initial term of 12 months or less are not presented as right-of-use assets on the consolidated balance sheet and are expensed over the lease term. All other lease assets and lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. The balances for the right-of-use assets and lease liabilities where the Company is the lessee are presented as follow: As of As of June 30, 2025 June 30, 2024 Operating lease right-of-use assets $ 5,181,521 $ 3,579,140 Impairment (151,516 ) - Total $ 5,030,005 $ 3,579,140 Operating lease liabilities current $ 1,838,815 $ 1,207,832 Operating lease liabilities non-current 3,267,522 2,194,094 Total $ 5,106,337 $ 3,401,926 As of June 30, 2025, the maturities of our lease liabilities (excluding short-term leases) are as follows: As of June 30, 2025 July 1, 2025 to June 30, 2026 $ 2,110,799 July 1, 2026 to June 30, 2027 1,583,109 July 1, 2027 to June 30, 2028 777,402 July 1, 2028 to June 30, 2029 696,727 July 1, 2029 to June 30, 2030 464,484 Total future lease payments 5,632,521 Less: imputed interest (526,184 ) Total lease liabilities $ 5,106,337 The Company incurred lease costs, which include the payment of short-term leases, of $1,757,022 and $1,522,974 on the Companys consolidated statements of operat …

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Recent accounting pronouncements As an emerging growth company, the Company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company intends to take advantage of the benefits of this extended transition period for all accounting standards described below, if applicable. In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements. The amendments in this update modify the disclosure or presentation requirements of a variety of topics in the codification. Certain of the amendments represent clarifications to or technical corrections of the current requirements. The adoption of the amendment will occur on a prospective basis. The amendments in this ASU will be effective for public business entities on the effective date of the SECs removal of the related disclosures from Regulation S-X or Regulation S-K. If the SEC has not removed the applicable requirements from Regulation S-X or Regulation S-K by June 30, 2027, the amendments will not become effective for any entity. The Company is currently evaluating the impacts of the provisions of ASU 2023-06. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures. ASU 2023-09 requires disaggregated information about a reporting entitys effective tax rate reconciliation as well as additional information on income taxes paid. The guidance is effective for public business entities for annual periods be …

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NOTE 12. RELATED PARTY TRANSACTIONS a) The table below sets forth the major related parties and their relationships with the Company: Name of related parties and Relationship with the Company - Tuanfang Liu is the Co-Chief Executive Officer and Chairman of the Company. - Jiangyan Zhu is the wife of Tuanfang Liu and a director of the Company. - Eigate (Hong Kong) Technology Co., Limited (Eigate) is a wholly-owned and controlled by the Companys Chairman. - Aspire Global is a company controlled by the Chairman of the Company. - Aspire International Hong Kong Limited is a wholly-owned subsidiary of Aspire Global. - Shenzhen Yi Jia, a Chinese company that is 95% owned by the Companys Chairman and 5% by the Chairmans cousin. - IKE Tech LLC, a joint venture that the Company has 40% membership interests. b) Tuanfang Liu is also Aspire Globals chief executive officer and a director of both the Company and Aspire Global, and his wife, Jiangyan Zhu, is also a director of both companies. As of June 30, 2025, Mr. Liu and Ms. Zhu beneficially own 66.5% and 5.0%, respectively, of the outstanding shares of Aspire Global. As of June 30, 2025, Mr. Liu and Ms. Zhu beneficially own 58.1% and 4.4%, respectively, of the outstanding shares of the Company. c) For both years ended June 30, 2025 and 2024, the majority of the Companys tobacco and cannabis vaping products were purchased from Shenzhen Yi Jia. As of June 30, 2025 and 2024, the accounts payable related party was $52,420,256 and $67,046,472 …

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NOTE 9. CONTRACT LIABILITIES As of June 30, 2025 and 2024, the Company had total contract liabilities of $4,861,250 and $2,218,166, respectively. These liabilities are advance deposits received from customers after an order has been placed. The increase in the balance at June 30, 2025 was due to more orders on hand on that date. The amount of revenue recognized in the year ended June 30, 2025, that was included in the opening contract liability balance was $1,957,808. Changes in the contract liabilities is below: Year ended June 30, 2025 Balance at July 1, 2024 $ 2,218,166 Contract liabilities recognized related to advanced deposits 41,129,592 Revenue recognized in current period (38,486,508 ) Balance at June 30, 2025 $ 4,861,250

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NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and the applicable rules and regulations of the Securities and Exchange Commission (SEC). Credit loss expenses for June 30, 2024 have been broken out from general and administrative expenses in order to conform to the June 30, 2025 presentation. Emerging growth company The Company is an emerging growth company, as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the JOBS Act), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until …

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NOTE 16. STOCKHOLDERS EQUITY The Company has authorized the issuance of 140,000,000 shares of common stock, with a par value of $0.0001 per share. On March 22, 2024, pursuant to a securities purchase agreement with certain purchasers, the Company sold, in a secondary offering, an aggregate of 2,050,000 shares of common stock, with par value $0.0001 per share, at a public offering price of $6.00 per share. This offering generated proceeds of $12,300,000, offset by offering cost of $1,514,094, which contributed an increase of share capital of $205 and additional paid in capital of $10,785,701. The Company has authorized the issuance of 10,000,000 shares of preferred stock, with a par value of $0.0001 per share. As of and for the years ended June 30, 2025 and 2024, there were no shares of preferred stock issued or outstanding. …

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