Document And Entity Information
Document And Entity Information | 12 Months Ended |
Jun. 30, 2023 | |
Document Information Line Items | |
Entity Registrant Name | Ispire Technology Inc. |
Document Type | S-1/A |
Amendment Flag | true |
Amendment Description | Amendment No. 1 |
Entity Central Index Key | 0001948455 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Incorporation, State or Country Code | DE |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 40,300,573 | $ 74,480,651 |
Accounts receivable, net | 24,526,262 | 8,260,574 |
Inventories, net | 7,472,108 | 14,580,557 |
Prepaid expenses and other current assets | 3,378,617 | 192,499 |
Due from related parties | 1,934,855 | |
Held-to-maturity investment | 9,133,707 | |
Total current assets | 84,811,267 | 99,449,136 |
Other assets: | ||
Property, plant and equipment, net | 1,088,131 | 114,025 |
Rental deposit | 732,334 | 876,100 |
Right-of-use assets – operating leases | 4,061,617 | 295,804 |
Total other assets | 5,882,082 | 1,285,929 |
Total assets | 90,693,349 | 100,735,065 |
Current liabilities | ||
Accounts payable | 1,274,391 | 290,541 |
Accounts payable – related party | 51,698,588 | 41,982,373 |
Contract liabilities | 988,556 | 1,672,051 |
Dividends payable | 3,362,639 | |
Accrued liabilities and other payables | 281,361 | 159,296 |
Due to related parties | 710,910 | 40,672,768 |
Income tax payable - current | 63,853 | 481,113 |
Operating lease liabilities – current portion | 944,525 | 347,541 |
Total current liabilities | 55,962,184 | 88,968,322 |
Other liabilities: | ||
Operating lease liabilities – net of current portion | 3,356,232 | |
Total liabilities | 59,318,416 | 88,968,322 |
Stockholders’ equity: | ||
Common stock, par value $0.0001 per share; 140,000,000 shares authorized; 50,000,000 and 54,222,420 shares issued and outstanding as of June 30, 2022 and June 30, 2023 | 5,422 | 5,000 |
Preferred stock, par value $0.0001 per share, 10,000,000 shares authorized, no shares issued at June 30, 2022 and 2023 | ||
Additional paid-in capital | 25,685,475 | |
Accumulated other comprehensive loss | (163,768) | (184,664) |
Retained earnings | 5,847,804 | 11,946,407 |
Total stockholders’ equity | 31,374,933 | 11,766,743 |
Total liabilities and stockholders’ equity | $ 90,693,349 | $ 100,735,065 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Jun. 30, 2023 | Jun. 30, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 140,000,000 | 140,000,000 |
Common stock, shares issued | 54,222,420 | 50,000,000 |
Common stock, shares outstanding | 54,222,420 | 50,000,000 |
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||
Revenue | $ 115,605,536 | $ 88,095,418 |
Cost of revenue | 94,529,769 | 74,789,378 |
Gross profit | 21,075,767 | 13,306,040 |
Operating expenses: | ||
Sales and marketing expenses | 4,714,923 | 5,503,630 |
General and administrative expenses | 20,929,978 | 8,791,081 |
Total operating expenses | 25,644,901 | 14,294,711 |
Loss from operations | (4,569,134) | (988,671) |
Other income (expense): | ||
Interest income | 195,209 | 5,078 |
Exchange gain(loss), net | (324,225) | 58,143 |
Other income(expense), net | (155,150) | 122,394 |
Total other income(expense), net | (284,166) | 185,615 |
Loss before income taxes | (4,853,300) | (803,056) |
Income taxes - current | (1,245,303) | (1,071,097) |
Net loss | (6,098,603) | (1,874,153) |
Other comprehensive (loss) income | ||
Foreign currency translation adjustments | 20,896 | (117,085) |
Comprehensive loss | $ (6,077,707) | $ (1,991,238) |
Net loss per share | ||
Basic (in Dollars per share) | $ (0.12) | $ (0.04) |
Weighted average shares outstanding: | ||
Basic (in Shares) | 50,725,814 | 50,000,000 |
Consolidated Statements of Op_2
Consolidated Statements of Operations and Comprehensive Loss (Parentheticals) - $ / shares | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||
Diluted | $ (0.12) | $ (0.04) |
Diluted | 50,725,814 | 50,000,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders’ Equity - USD ($) | Ordinary shares | Preferred shares | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss)/Income | Total |
Balance at Jun. 30, 2021 | $ 5,000 | $ 13,820,560 | $ (67,579) | $ 13,757,981 | ||
Balance (in Shares) at Jun. 30, 2021 | 50,000,000 | |||||
Net loss | (1,874,153) | (1,874,153) | ||||
Foreign currency translation adjustment | (117,085) | (117,085) | ||||
Balance at Jun. 30, 2022 | $ 5,000 | 11,946,407 | (184,664) | 11,766,743 | ||
Balance (in Shares) at Jun. 30, 2022 | 50,000,000 | |||||
Net loss | (6,098,603) | (6,098,603) | ||||
Issuance of common stock | $ 422 | 25,685,475 | 25,685,897 | |||
Issuance of common stock (in Shares) | 4,222,420 | |||||
Foreign currency translation adjustment | 20,896 | 20,896 | ||||
Balance at Jun. 30, 2023 | $ 5,422 | $ 25,685,475 | $ 5,847,804 | $ (163,768) | $ 31,374,933 | |
Balance (in Shares) at Jun. 30, 2023 | 54,222,420 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss: | $ (6,098,603) | $ (1,874,153) |
Adjustments to reconcile net loss from operations to net cash provided by operating activities: | ||
Depreciation and amortization | 46,662 | 10,402 |
Depreciation of right-of-use assets | 1,061,442 | 135,141 |
Accounts receivable impairment | 3,332,825 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (19,579,339) | (3,950,508) |
Inventories | 7,108,449 | (11,525,561) |
Prepaid expenses and other current assets | (3,088,466) | 29,007 |
Accounts payable | 10,574,989 | 8,875,590 |
Contract liabilities | (690,637) | 543,890 |
Accrued liabilities and other payables | 168,179 | (282,487) |
Income tax payable | (417,260) | 481,113 |
Net cash used in operating activities | (7,581,759) | (7,557,566) |
Cash flows from investing activities: | ||
Purchase of property, plant and equipment | (1,020,768) | (121,516) |
Purchase of short term investment | (9,133,707) | |
Net cash used in investing activities | (10,154,475) | (121,516) |
Cash flows from financing activities: | ||
Net proceeds from initial public offering | 21,735,000 | |
Payment of initial public offering costs | (3,475,171) | |
Proceeds from private placement | 7,969,221 | |
Payment of private placement costs | (543,153) | |
Payment of dividends of subsidiary | (3,362,639) | (469,633) |
Repayment to related parties | (37,893,063) | (2,498,689) |
Principal portion of lease payment | (874,039) | (120,942) |
Net cash used in financing activities | (16,443,844) | (3,089,264) |
Net decrease in cash and cash equivalents | (34,180,078) | (10,768,346) |
Cash and cash equivalents – beginning of year | 74,480,651 | 85,248,997 |
Cash and cash equivalents – end of year | 40,300,573 | 74,480,651 |
Supplemental disclosure of cash flow information: | ||
Cash (refund) paid for income taxes | 1,663,240 | (69,647) |
Cash paid for interest |
Organization and Principal Acti
Organization and Principal Activities | 12 Months Ended |
Jun. 30, 2023 | |
Organization and Principal Activities [Abstract] | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | 1. ORGANIZATION AND PRINCIPAL ACTIVITIES Ispire Technology Inc. (the “Company”) was incorporated under the laws of the State of Delaware on June 13, 2022. Through its subsidiaries, the Company is engaged in the research and development, design, commercialization, sales, marketing and distribution of branded e-cigarettes and cannabis vaping products. Ispire owns a 100% equity interest in Ispire International Limited, a business company incorporated under the laws of the British Virgin Islands (“BVI”) (“Ispire International”) on July 6, 2022. Prior to July 29, 2022, all of the equity of Aspire North America LLC, a California limited liability company (“Aspire North America”), was owned by Aspire Global Inc. (“Aspire Global”), and all of the equity of Aspire Science and Technology Limited, a Hong Kong corporation (“Aspire Science”), was owned by Aspire Global Holdings Limited (“Aspire Holdings”), a wholly-owned subsidiary of Aspire Global. Aspire Global and the Company are related parties since the same individual was the chief executive officer of both companies, the chief executive officer and his wife are directors of both companies and, prior to the transfer of equity described below, owned 66.5% and 5.0%, respectively, of the equity of both Aspire Global and the Company. At the time of the transfer, the Company had the same stockholders as Aspire Global and the Company’s stockholders held the same percentage interest in the Company as they had in Aspire Global. Because the transfer of the equity in Aspire North America and Aspire Science is a transfer between related parties, the historical financial information of the subsidiaries is carried forward as the historical financial information of the Company and the 50,000,000 shares that were issued at or about the time of the Company’s organization are treated as being outstanding on July 1, 2020. On July 29, 2022: ● Aspire Global transferred 100% of the equity interest in Aspire North America to the Company ● Aspire Holdings transferred 100% of the equity of Aspire Science to Ispire International. The following table sets forth information concerning the Company and its subsidiaries as of June 30, 2023: Name of Entity Date of Organization Place of Organization % of Principal Ispire Technology Inc. June 13, 2022 Delaware Parent Company Holding Company Ispire International July 6, 2022 BVI 100% Holding Company Aspire North America February 22, 2020 California 100% Sales and Marketing Aspire Science December 9, 2016 Hong Kong 100% Sales and Marketing Ispire is a holding company and does not engage in any active operations. Its business is conducted by its two operating subsidiaries, Aspire North America, which is engaged in the development, marketing and sales of cannabis vapor products, which were introduced in mid-2020, and Aspire Science, which is engaged in the development, marketing and sales of tobacco vaping products. In October 2022, the directors and stockholders of the Company approved the 2022 Equity Incentive Plan (the “Plan”) pursuant to which up to 15,000,000 shares of common stock may be issued pursuant to options or restricted stock grants. The Plan will be administered by the Compensation Committee. 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 Form S-8. Awards are made at the discretion of the Board of Directors; provided that any options shall be exercisable at the fair market value on the date of grant. As of June 30, 2023, no awards had been granted since the Plan was approved. Impact of COVID-19 In December 2019, coronavirus disease 2019 (COVID-19) was first reported to have surfaced in Wuhan, China. During 2020, the disease spread to many parts of the world. The epidemic has resulted in quarantines, travel restrictions, and the temporary closure of stores and facilities in much of the world, most of which are no longer in effect. The World Health Organization ended the global emergency status for COVID-19 on May 5, 2023, and the United States Department of Health and Human Services declared that the public health emergency from COVID-19 expired at the end of the day on May 11, 2023. The extent to which COVID-19 impacts the Company’s operations on an ongoing basis is highly uncertain. Since the Company’s products are presently manufactured in China by a related party, any changes in the outbreak in China and any changes in the Chinese government’s policy may affect the Company’s supplier’s operations which could affect its ability to manufacture and deliver product in a timely manner. Supply Chain Risks One of effects of the COVID-19 has been delays resulting from supply chain issues, which relate to the difficulty that companies have in having their products manufactured, shipped to the country of destination, and delivered from the port of entry to the customer’s location. As the port delays have significantly decreased, the Company does not believe that the supply chain issues that affected its operations are currently affecting the Company. The Company cannot assure you that delays will not affect its business in the future. In 2021, Shenzhen Yi Jia, the Company’s principal supplier of products, suffered a chip shortage resulting in a slowdown in delivery of its products to the Company from April to August 2021. To secure the supply of chips, Shenzhen Yi Jia has advised the Company that it has obtained a supply of chips to meet its production needs and the chip shortage no longer affects its production. In 2022, a slowdown in the delivery of components to Shenzhen Yi Jia resulting from supply chain slowdowns as a result of the effects of mainland China’s COVID policy resulted in an increase in cost of revenue during the period. The Company cannot assure you that it will not suffer from a chip shortage or that the effects of China’s COVID policy will not affect Shenzhen Yi Jia’s ability or the ability of its suppliers to delivery products in a timely manner. Market and Economic Conditions In recent years, the United States and other markets have experienced cyclical or episodic downturns, and worldwide economic conditions remain uncertain, including, as a result of the COVID-19 pandemic, supply chain disruptions, the Russian invasion of Ukraine, instability in the U.S. and global banking systems, rising fuel prices, increasing interest rates or foreign exchange rates and increased inflation and the possibility of a recession. A significant downturn in economic conditions may affect the market for the Company’s products and its supplier’s ability to provide products on acceptable terms. The Company cannot predict the timing, strength, or duration of any future economic slowdown or any subsequent recovery generally, or in any industry. If the conditions in the general economy and the markets in which the Company operates worsen from present levels, its business, financial condition, operating results could be adversely affected. E-cigarette regulation Regulation regarding e-cigarette varies across countries, from no regulation to a total ban. The legal status of e-cigarettes is currently pending in many countries. But as e-cigarettes have become more and more popular recently, many countries are considering imposing more stringent law and regulations to regulate this market. Changes in existing law and regulations and the imposition of new laws, regulation in countries and regions that our major customers located in may adversely affect the Company’s business. The Federal Food, Drug, and Cosmetic Act requires all Electronic Nicotine Delivery Systems (“ENDS”) product manufacturers that market products in the United States to submit Premarket Tobacco Product Applications (“PMTAs”) to the FDA. For ENDS products that were on the U.S. market on August 8, 2016, a PMTA was required to be submitted to the FDA by September 9, 2020; for ENDS products that were not on the U.S. market prior on August 8, 2016, and for which a PMTA was not filed by September 9, 2020, a PMTA a premarket authorization issued in response to a PMTA is required before the subject product may enter the U.S. market. The Company has submitted a PMTA filing for one ENDS product, and, under apparent FDA policies, the agency will not enforce the premarket review requirements for that product pending review of its PMTA. However, even with submission of the PMTA application, the FDA may reject the Company’s application and may prevent the Company’s ENDS products from being sold in U.S., which will adversely affect the Company’s business. Amendments to the Prevent All Cigarette Trafficking (“PACT”) Act, which became law in 2021, extend the PACT Act to include e-cigarette and all vaping products, and place significant burdens on sellers of vaping products in the United States which may make it difficult to operate profitably in the United States. Because of tighter government regulations, the Company has stopped marketing tobacco vaping products in the United States, as the volume of sales from the one tobacco vaping product which the Company may sell in the United States does not justify the marketing and regulatory costs involved. In the United States, cannabis vaping products are governed by state laws, which vary from state to state. Most states do not permit the adult recreational use of cannabis, and no states permit the sale of recreational cannabis products to minors. As a result of the reduced revenue to states resulting from the effects of the COVID 19 pandemic, states may seek to raise revenue by permitting and taxing the use of cannabis products. The Company cannot predict what action states will take or the nature and amount of taxes they may impose. However, the extent the PACT Act applies to cannabis products that aerosolize liquids, it may be more difficult to sell our products in states that permit the sale of cannabis. However, cannabis and its derivatives containing more than 0.3% delta-9 tetrahydrocannabinol on a dry weight basis remain Schedule I controlled substances under U.S. federal law, meaning that federal law generally prohibits their manufacture and distribution. United States federal law also deems it unlawful to sell, offer for sale, transport in interstate commerce, import, or export “drug paraphernalia,” which includes “any equipment, product, or material of any kind which is primarily intended or designed for use in manufacturing, compounding, converting, concealing, producing, processing, preparing, injecting, ingesting, inhaling, or otherwise introducing into the human body a controlled substance” the possession of which federal law prohibits, including Schedule I “marijuana.” Limited exemptions exist, most notably when state or local law authorizes these items’ manufacture, possession, or distribution. The European Commission issued the Tobacco Products Directive (the “TPD”), which became effective on May 19, 2014 and became applicable in the European Union member states on May 20, 2016. The TPD regulates e-cigarettes on the packaging, labelling and ingredients of the products on the European Union market, the creation of smoke-free environments, tax measures and activities against illegal trade and anti-smoke campaigns. Member states of the European Union are required to ensure that advertisements for any tobacco related product are prohibited, and no promotion shall be made as to those devices with an intention to promote e-cigarettes. For the e-cigarettes released after May 20, 2016, TPD requires e-cigarette manufacturers to submit product sales applications to the regulatory market six months in advance, and ensure their products can meet the TPD requirements before they can be released. The Company has complied with TPD requirement that for all its tobacco products sold in Europe. The sale of cannabis vaping products is illegal in the European Union and the United Kingdom. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2023 | |
Summary of Significant Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 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”). Certain items for June 30, 2022 have been reclassified to conform to the June 30, 2023 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 private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Basis of consolidation The consolidated financial statements include the financial statements of the Company and its subsidiaries as if the subsidiaries were acquired by the Company as of July 1, 2020. All inter-company transactions and balances have been eliminated upon consolidation. Use of estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates include allowance for doubtful accounts, the useful lives of property and equipment and intangible asset, impairment of long-lived assets, and deferred cost. Actual results could differ from those estimates. Cash and cash equivalents Cash includes currency on hand, deposits held by banks that can be added or withdrawn without limitation and highly liquid investments with maturities of three months or less when purchased. Fair value measurement The Company applies ASC Topic 820, Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for measuring fair value, and expands financial statement disclosure requirements for fair value measurements. ASC Topic 820 defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability (an exit price) on the measurement date in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability. ASC Topic 820 specifies a hierarchy of valuation techniques, which is based on whether the inputs into the valuation technique are observable or unobservable. The hierarchy is as follows: ● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. ● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. Unobservable inputs are valuation technique inputs that reflect the Company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. Accounts receivable Accounts receivable are recognized and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Past due accounts are generally written off against the allowance for bad debts only after all collection attempts have been exhausted and the potential for recovery is considered remote. The Company have different payment terms for different businesses. For tobacco vaping business, the Company requires a deposit of 30% of sales amount upon placing order, and the payment of remaining 70% to be made before shipment. For cannabis vaping business, tailored payment term are designed for each customer, based on business relationship, order size and other considerations. The Company maintains an allowance for potential credit losses on accounts receivable. The Company reviews accounts receivable on a periodic basis. For tobacco vaping business, the Company makes provisions of 80% for accounts receivable aged between 1.5 years to 2 years, and 100% for balances aged over 2 years. For cannabis business, the Company makes provisions of 10% for accounts receivable aged over 3 months. Additionally, specific provisions are made when there is doubt as to collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, the customer’s payment history, the customer’s current credit-worthiness and current economic trends. The Company write-off accounts receivable against the provision when they are deemed uncollectible. Investment The investment represents a certificate of deposit that the Company holds in HSBC bank. The entire balance of the investment presented on the balance sheet as of June 30, 2023 is $9,133,707 and it matures on February 8, 2024. Inventories Inventories mainly consist of finished goods purchased from suppliers. Inventories are stated at the lower of cost or net realizable value. The cost of an inventory item is determined using the weighted average method. When management determines that certain inventories may not be saleable, or when inventory costs exceed expected market value due to obsolescence or damage, the Company will record the difference between the cost and the net realizable value as a write down of inventories. The net realizable value is determined based on the estimated selling price, in the ordinary course of business, less estimated costs necessary to make the sale. These writedowns are recorded based on estimates. The Company did not write down any inventory during the years ended June 30, 2022 and 2023. When there is an indicator, the Company evaluates the ability to realize the value of inventories based on a combination of factors such as forecasted sales, estimated current and future market value. Property, plant and equipment, net Property, plant and equipment are stated at cost less accumulated depreciation and depreciated on a straight-line basis over the estimated useful lives of the assets from the time the assets are placed in service. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income/loss in the year of disposition. Estimated useful lives are as follows: Estimated Useful Life Office and other equipment 3 - 5 years Furniture & fixtures 7 years Leasehold improvements Shorter of the term of the lease or Leases A contract is, or contains, a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration. Control is conveyed where the customer has both the right to obtain substantially all of the economic benefits from use of the identified asset and the right to direct the use of the identified asset. All leases with an initial term of more than 12 months are recognized as assets representing the right-of-use of the underlying asset and liabilities representing the obligation to make lease payments. Both the assets and the liabilities are initially measured as present value of the discounted lease payments over the lease term. As the Company’s leases typically do not provide an implicit rate, the Company uses an estimate of its incremental borrowing rate based on the information available at the lease commencement date to determine the discount rate. Right-of-use assets are measured at cost less any accumulated depreciation and impairment losses and adjusted for any re-measurement of the lease liabilities. Right-of-use assets are depreciated on a straight-line basis over the shorter of the useful lives of the assets or the lease terms. Lease liabilities are initially measured at the present value of the lease payments to be made under the lease terms and subsequently adjusted by the effect of the interest on and the settlement of the lease liabilities, and the re-measurement arising from any reassessment of the lease liabilities or lease modifications. Lease payments on leases with an initial term of twelve months or less and leases of low-value assets are recognized as an expense on a straight-line basis over the lease term and are not treated as right of use assets. Accounts payable Accounts payable represents payables to suppliers. The Company’s major supplier is a related party to the Company. See Note 13. Contract liabilities Contract liabilities represent advanced deposits received from customers after an order has been placed but before a product has been shipped. The Company’s normal policy is to require a customer deposit in the range of 25% to 30% of the purchase price upon placement of a sales order, although the Company exempts certain customers from this requirement. Contract liabilities are realized as revenue when the conditions to revenue recognition are met, primarily when control of goods has transferred to customers. Impairment of long-lived assets In accordance with ASC Topic 360-10, Impairment and Disposal of Long-Lived Assets, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. The Company did not record any impairment charge for the years ended June 30, 2022 and 2023. Revenue recognition The Company sells its products to customers around the world and recognizes revenue in accordance with the guidance of ASC 606, Revenue from Contracts with Customers. Revenue is recognized when control of goods has transferred to customers. For the majority of the Company’s customer arrangements, control transfers to customers at a point-in-time when goods have been delivered to the pickup location specified by the customer or a forwarder appointed by the customer, as that is generally when legal title, physical possession and risks and rewards of goods transfer to the customer. Revenue is recognized at the transaction price based on the purchase order as adjusted for the anticipated rebates, discounts and other sales incentives. When determining the transaction price, management estimates variable consideration applying the portfolio approach practical expedient under ASC 606. The main sources of variable consideration for the Company are customer rebates, trade promotion funds, and cash discounts. These sales incentives are recorded as a reduction of revenue at the time of the initial sale using the most-likely amount estimation method. The most-likely amount method is based on the single most likely outcome from a range of possible consideration outcomes. The range of possible consideration outcomes is primarily derived from the following inputs: sales terms, historical experience, trend analysis, and projected market conditions in the various markets served. Because the Company serves numerous markets, the sales incentive programs offered vary across businesses, but the most common incentive relates to amounts paid or credited to customers for achieving defined volume levels or growth objectives. There are no material instances where variable consideration is constrained and not recorded at the initial time of sale. Product returns are recorded as a reduction of revenue based on anticipated sales returns that occur in the normal course of business. The Company has elected to present revenue net of sales taxes and other similar taxes. The Company’s warranties are of an assurance-type and come standard with all Company products to cover repair or replacement should a product not perform as expected by a reasonable customer. The Company offers warranty for all major products, including all types of E-vapor kits, atomizers, replacement coils and mods, but no warranty for accessories such as spare parts or packaging consumables. The Company generally offers a 90 day warranty period from date of purchase for products sold to all regions, but from May 2019, the Company offers a six month warranty period from date of purchase for products sold in the UK and France. The Company offers refund or replacement of products for defects in manufacture, dead on arrival items and items that do not appear the same as listed on the Company’s or distributors’ website, and excludes damaged goods caused by misuse or unauthorized repair. Provisions for estimated expenses related to product warranties are made at the time products are sold. These estimates are established using historical information about the nature, frequency and average cost of warranty claim settlements as well as product manufacturing and recovery from suppliers. Management actively studies trends of warranty claims and takes action to improve product quality and minimize warranty costs. The Company estimates the actual historical warranty claims coupled with an analysis of unfulfilled claims to record a liability for specific warranty purposes. As of June 30, 2022 and 2023, products returned for repair or replacement have been immaterial. Accordingly, a warranty liability has not been deemed necessary. Disaggregated Revenue In accordance with ASC 606-10-50-5, the Company has taken into consideration the nature, amount, timing, and uncertainty of revenue and cash flows, and has determined to disaggregate its net sales of tobacco vaping products and cannabis vaping products. The net sales disaggregated by products for the years ended June 30, 2022 and 2023 were as follows: Years ended June 30, Net sales by products branded 2022 2023 Tobacco vaping products $ 68,116,810 $ 75,562,711 Cannabis vaping products 19,978,608 40,042,825 Total $ 88,095,418 $ 115,605,536 Cost of revenue Cost of revenue for the years ended June 30, 2022 and 2023 consisted primarily of the cost of purchasing vaping products, which were purchased from a related party. See Note 13. Shipping and handling costs Shipping and handling costs for the years ended June 30, 2022 and 2023 are $335,677 and $298,703, respectively. They are included in the sales and marketing expenses. Interest income For the years ended June 30, 2022 and 2023, interest income related to interest on bank deposits. Income taxes The Company accounts for income taxes under ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provisions of ASC 740-10 prescribe a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This interpretation also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures. The Company classifies the interest and penalties, if any, as a component of income tax expense. For the years ended June 30, 2022 and 2023, the Company did not incur any interest or penalties related to an uncertain tax position. The Company does not believe that there was any uncertain tax positions as of June 30, 2022 and 2023. Foreign currency translation The reporting currency of the Company is the U.S. dollar (“USD”). The functional currency of Aspire Science, which is located in Hong Kong, is the Hong Kong Dollar (“HKD”). For the entities whose functional currency is the HKD, results of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into USD are included in determining comprehensive income/loss. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currencies at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency included in the results of operations as incurred. Translations of amounts from HKD into USD were made at the following exchange rates for the respective dates and periods: At June 30, 2022 2023 Consolidated balance sheets: HKD to $1.00 7.8478 7.8373 Consolidated statements of operations and comprehensive loss: HKD to $1.00 7.8045 7.8367 Earnings per share The Company computes earnings per share (“EPS”) in accordance with ASC 260, Earnings per Share. ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net loss divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (for example, convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. The Company has no dilutive securities as of and for the years ended June 30, 2022 and 2023. Comprehensive loss Comprehensive loss consists of two components, net loss and other comprehensive (loss) income. The foreign currency translation gain or loss resulting from translation of the financial statements expressed in USD is reported in other comprehensive (loss) income in the consolidated statements of income and comprehensive loss. Commitments and contingencies In the normal course of business, the Company is subject to contingencies, such as legal proceedings and claims arising out of its business, which cover a wide range of matters. Liabilities for contingencies are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. If the assessment of a contingency indicates that it is probable that a material loss is incurred and the amount of the liability can be estimated, then the estimated liability is accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, is disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. Segment reporting The Company uses the management approach to determine operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker (“CODM”) for making decisions, allocating resources, and assessing performance. The Company’s CODM has been identified as the chief executive officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company. The Company’s CODM reviews the consolidated financial results when making decisions about allocating resources and assessing the performance of the Company as a whole and has determined that the Company has only one reportable segment. Notwithstanding that the Company has customers located around the world and the Company’s Hong Kong subsidiary serves as one of the sales and marketing centers, the Company’s long-lived assets and management are located substantially in the U.S. and management operates its business as a single segment. Related parties Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, immediate family members of principal owners of the Company and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all significant related party transactions in Note 13. 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. Accounting pronouncements adopted during the year ended June 30, 2023 In November 2018, the Financial Accounting Standards Boards (“FASB”) issued ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606, which clarifies that elements of collaborative arrangements could qualify as transactions with customers in the scope of ASC 606. The amendments require the application of existing guidance to determine the units of account in collaborative arrangement for purposes of identifying transactions with customers. For transactions outside the scope of ASC 606, companies can apply elements of ASC 606 or other relevant guidance by analogy, or apply a reasonable accounting policy if there is no appropriate analogy. ASU 2018-18 is effective retrospectively for us for the year ended June 30, 2023. The adoption of this guidance had no material impact on our financial position, results of operations and cash flows. In March 2020, the FASB issued ASU 2020 04, 848 2020 04 2020 04 Accounting pronouncements not yet effective As the Company is an emerging growth company, the effective dates of the pronouncements applicable to us are the same as those applicable to private companies. In June 2016, the FASB amended guidance related to the impairment of financial instruments as part of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The guidance replaces the incurred loss impairment methodology with an expected credit loss model for which a company recognizes an allowance based on the estimate of expected credit loss. For public business entities that meet the definition of a U.S. Securities and Exchange Commission (“SEC”) filer (“SEC filer”), excluding entities eligible to be smaller reporting companies as defined by the SEC, ASU No. 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. For all other entities, including smaller reporting companies, ASU No. 2016-13 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. 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. The Company is in the process of evaluating the impact that this guidance will have on its consolidated financial statements. On September 29, 2022, FASB issued ASU 2022-04: Liabilities-Supplier Finance Programs (Topic 405-50): Disclosure of Supplier Finance Program Obligations. This update requires that a buyer in a supplier finance program disclose additional information about the program to allow financial statement users to better understand the effect of the programs on an entity’s working capital, liquidity, and cash flows. This update will be effective for the Company for fiscal years beginning after December 15, 2022, except for the amendment on roll forward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. The Company does not expect this standard will have a material effect on its consolidated financial statements. Concentration and risks Risks and Uncertainties The Company’s business, financial condition and results of operations may be negatively impacted by risks related to government regulations, natural disasters, extreme weather conditions, health epidemics and other catastrophic incidents, which could significantly disrupt the Company’s operations. Customer and Supplier Concentration (a) Customers For the years ended June 30, 2022 and 2023, the Company’s major customers, who accounted for more than 10% of the Company’s consolidated revenue, were as follow: Year Ended 2022 2023 Major Customers A 39 % 32 % (b) Suppliers For the years ended June 30, 2022 and 2023, the Company’s suppliers, who accounted for more than 10% of the Company’s total purchases, were as follows: Year Ended 2022 2023 Major Suppliers B (1) 99 % 92 % (1) Major supplier B is Shenzhen Yi Jia, a Chinese company that is 95% owned by the Company’s chief executive officer and principal stockholder. See Note 13. Credit Risk The Company is subject to credit risk from cash and cash equivalents, account receivables, financial assets included in prepayments and deposits and amounts due from related parties. All the Company’s cash and cash equivalents are held in major financial institutions located in Hong Kong and the United States, which management believes are of high credit quality. At June 30, 2022 and 2023, the Company had credit risk exposure of uninsured cash in banks of $74,000,991 and $39,792,081, respectively. The Company has policies in place to evaluate credit risk when accepting new business and to limit its credit exposure to individual customers. The management considers the Company does not have a significant concentration of credit risk. The Company does not require collateral to support financial instruments that are subject to credit risk. |
Cash and Cash Equivalents
Cash and Cash Equivalents | 12 Months Ended |
Jun. 30, 2023 | |
Cash and Cash Equivalents [Abstract] | |
CASH AND CASH EQUIVALENTS | 3. CASH AND CASH EQUIVALENTS Below is a breakdown of the Company’s cash balances in banks for both years, both by geography and by currencies (translated into U.S. dollars): As of June 30, By Geography: 2022 2023 Cash in HK $ 71,221,649 $ 25,841,880 Cash in U.S. 3,259,002 14,458,693 Total $ 74,480,651 $ 40,300,573 By Currency: USD $ 64,187,756 $ 39,835,636 HKD 415,930 363,416 EUR 4,097 59,702 GBP 24,680 22,143 RMB 9,848,188 19,676 Total $ 74,480,651 $ 40,300,573 “HKD” refers to Hong Kong dollars, “GBP” refers to British pounds, and “EUR” refers to Euros. |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Jun. 30, 2023 | |
Fair Value Measurement [Abstract] | |
FAIR VALUE MEASUREMENT | 4. FAIR VALUE MEASUREMENT As of June 30, 2022 and 2023, information about inputs into the fair value measurement of the Company’s assets and liabilities that are measured at fair value on a recurring basis in periods subsequent to their initial recognition is as follows: Cash and cash equivalents, accounts receivable, prepaid expenses, other current assets, due from related parties and held-to-maturity investment are financial assets with carrying values that approximate fair value due to their short-term nature. Accounts payable, account payable – related party, contract liabilities, accrued liabilities and other payables and due to related parties are financial liabilities with carrying values that approximate fair value due to their short-term nature. |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Jun. 30, 2023 | |
Accounts Receivable [Abstract] | |
ACCOUNTS RECEIVABLE, NET | 5. ACCOUNTS RECEIVABLE, NET As of June 30, 2022 and 2023, accounts receivable consisted of the following: As of June 30, 2022 2023 Accounts receivable – gross $ 8,260,574 $ 26,025,068 Allowance for doubtful accounts - (1,498,806 ) Accounts receivable, net $ 8,260,574 $ 24,526,262 The Company recorded bad debt expense of nil |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Jun. 30, 2023 | |
Prepaid Expenses and Other Current Assets [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 6. PREPAID EXPENSES AND OTHER CURRENT ASSETS As of June 30, 2022 and 2023, prepaid expenses and other current assets consisted of the following: As of June 30, 2022 2023 Prepaid inventories $ - $ 3,209,413 Other receivable 127,423 127,595 Prepayment 50,460 26,974 Deposit paid 14,616 14,635 Total $ 192,499 $ 3,378,617 Prepayments primarily consist of prepayment for raw materials and consulting services provided by suppliers. |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 12 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment, Net [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT, NET | 7. PROPERTY, PLANT AND EQUIPMENT, NET As of June 30, 2022 and 2023, property, equipment and leasehold improvement consisted of the following: As of June 30, 2022 2023 Leasehold improvement $ 433 $ 518,854 Office and other equipment 146,798 339,155 Furniture and fixture - 309,990 147,231 1,167,999 Less: accumulated depreciation (33,206 ) (79,868 ) Total $ 114,025 $ 1,088,131 For the years ended June 30, 2022 and 2023, depreciation expense amounted to $11,437 and $46,629, respectively. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Jun. 30, 2023 | |
Intangible Assets [Abstract] | |
INTANGIBLE ASSETS | 8. INTANGIBLE ASSETS On September 30, 2022, an intellectual property transfer agreement and an exclusive license agreement was signed such that all patents, trademarks, Know-how and Know-how Documentation related to cannabis vaping products and tobacco vaping products were transferred from Tuanfang Liu, Aspire Global and Shenzhen Yi Jia to Aspire North America and Aspire Science. As the intangible assets were transferred from Tuanfang Liu, the controlling stockholder, the Company recorded the assets at his cost, which is $0, in accordance with ASC 805-50-30-5 and SEC Staff Accounting Bulletin Topic 5. The Company engaged a third party firm to perform a valuation on the fair values of the intangible assets on the date of transfer and the estimated fair values were $74,259,915, in accordance with ASC 350. |
Contract Liabilities
Contract Liabilities | 12 Months Ended |
Jun. 30, 2023 | |
Contract Liabilities [Abstract] | |
CONTRACT LIABILITIES | 9. CONTRACT LIABILITIES As of June 30, 2022 and 2023, the Company had total contract liabilities of $1,672,051 and $988,556, respectively. These liabilities are advance deposits received from customers after an order has been placed. The balance of $1,672,051 as of June 30, 2022 was recognized as revenue during 2023. As of June 30 2023, the Company expects all of the contract liabilities to be settled in less than one year. The decrease in balance at June 30, 2023 was due to less orders on hand on that date. |
Leases
Leases | 12 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
LEASES | 10. LEASES The Company has operating lease arrangements for office premises for HK and California. 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 where the Company is the lessee are presented as follow: As of June 30, 2022 2023 Right-of-use assets $ 295,804 $ 4,061,617 Lease liabilities - current $ 347,541 $ 944,525 Lease liabilities – non-current - 3,356,232 Total $ 347,541 $ 4,300,757 As of June 30, 2023, the maturities of our lease liabilities (excluding short-term leases) are as follows: As of Year Ended June 30, 2024 1,260,719 2025 1,338,878 2026 1,383,636 2027 968,111 2028 80,676 Total future lease payments 5,032,020 Less: imputed interest (731,263 ) Total lease liabilities 4,300,757 The Company incurred lease costs, which includes the amortization of the right-of-use assets and the payment of short-term leases, of $667,712 and $1,237,868 on the Company’s consolidated statements of operations and comprehensive loss for the years ended June 30, 2022 and 2023, respectively. The Company made payments of $304,291 and $1,141,142 under the lease agreements during the years ended June 30, 2022 and 2023, respectively. The weighted-average remaining lease term related to the Company’s lease liabilities as of June 30, 2022 and 2023 was 1 and 3.8 years, respectively. The discount rate related to the Company’s lease liabilities as of both June 30, 2022 and June 30, 2023 was 5.8% and 8.1%. The discount rates are generally based on estimates of the Company’s incremental borrowing rate, as the discount rates implicit in the Company’s leases cannot be readily determined. As of June 30, 2023, the Company had $0.2 million of future payments under additional leases, primarily for office, which had not yet commenced. This lease, which has a two-year term, will commence in July 2023. |
Accrued Liabilities and Other P
Accrued Liabilities and Other Payables | 12 Months Ended |
Jun. 30, 2023 | |
Accrued Liabilities and Other Payables [Abstract] | |
ACCRUED LIABILITIES AND OTHER PAYABLES | 11. ACCRUED LIABILITIES AND OTHER PAYABLES As of June 30, 2022 and 2023, accrued liabilities and other payables consisted of the following: As of June 30, 2022 2023 Accrued salaries and related benefits $ 43,487 $ 97,314 Other payables 81,226 148,197 Accrued expenses 34,583 35,850 Total $ 159,296 $ 281,361 |
Dividends Payable
Dividends Payable | 12 Months Ended |
Jun. 30, 2023 | |
Dividends Payable [Abstract] | |
DIVIDENDS PAYABLE | 12. DIVIDENDS PAYABLE Dividends payable represent a dividend declared by the Company’s HK subsidiary, Aspire Science, in the year ended June 30, 2020, which was payable to Aspire Science’s then sole stockholder, who was the Company’s chief executive officer and is co-chief executive officer. The dividend was declared prior to the transfer of the equity interest in Aspire Science to Aspire Holdings, which subsequently transferred the equity interest to Ispire International. Set forth below is the information relating to the dividend payable at June 30, 2022 and 2023. As of June 30, 2022 2023 At the beginning of the year $ 3,832,272 $ 3,362,639 Dividends declared - - Dividends paid (469,633 ) (3,362,639 ) At the end of the year $ 3,362,639 $ - |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | 13. 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 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 subsidiary of Aspire Global. -Aspire Global is a company controlled by the Chairman of the Company. -Shenzhen Yi Jia, a Chinese company that is 95% owned by the Company’s chairman and 5% by the chairman’s cousin. b) Tuanfang Liu is also Aspire Global’s 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. At June 30, 2023, Mr. Liu and Ms. Zhu beneficially owned 66.5% and 5.0%, 61.3% and 4.6%, respectively, of the outstanding shares of both Aspire Global and the Company. See Note 15. c) The Company had the following balances due from related parties: As of June 30, 2022 2023 Shenzhen Yi Jia $ 1,872,035 $ - Tuanfang Liu 62,820 - Total $ 1,934,855 $ - The balances represent payment on behalf of these related parties, such as freight and tariff charges and others. These balances as of June 30, 2022 were all non-interest bearing, unsecured, have no due date and are repayable on demand and the balances were fully settled in November 2022. d) The balances in due to related parties at June 30, 2022 and 2023 represent amount due to Eigate of $40,672,768 and amount due to Shenzhen Yi Jia of $710,910, respectively. These balances were all non-interest bearing, unsecured, have no due date and are repayable on demand. e) For the years ended June 30, 2022 and 2023, substantially all of the Company’s tobacco and cannabis vaping products were purchased from Shenzhen Yi Jia. As of June 30, 2022 and 2023, the accounts payable - related party was $41,982,373 and $55,769,526, respectively, which was payable to Shenzhen Yi Jia. For the years ended June 30, 2022 and 2023, the purchases from Shenzhen Yi Jia were $74,787,679 and $83,060,957, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2023 | |
Income Taxes [Abstract] | |
INCOME TAXES | 14. INCOME TAXES British Virgin Islands (“BVI”) Under the current laws of the BVI, the Company’s 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 if in a taxable position. For the years ended June 30, 2022 and 2023, loss before income taxes consists of: Years ended 2022 2023 HK $ 6,679,431 $ 7,444,203 U.S. (7,482,487 ) (12,297,503 ) Total $ (803,056 ) $ (4,853,300 ) The reconciliation of the actual income taxes to the amount of tax computed by applying the aforementioned statutory tax rate to pre-tax income is as follows: Years ended 2022 2023 Expected taxation at HK statutory rate $ (132,504 ) $ (800,795 ) Tax effect of two-tiered profits tax regime (21,142 ) (21,055 ) Effect of income tax rate difference in other jurisdictions (336,712 ) (553,388 ) Non-deductible expenses 116,287 61,208 Non-taxable income (10,764 ) (22,378 ) Change in valuation allowance 1,455,390 2,574,664 Others 542 (7,047 ) Income tax expense $ 1,071,097 $ 1,245,303 For the years ended June 30, 2022 and 2023, there are net operating losses of $8,519,617 and $14,584,702 that arose from Aspire North America LLC, which can be carried forward indefinitely to offset up to 80% of each year’s taxable income, until fully utilized. At June 30, 2022 and 2023, these net operating loss carryforwards may result in future income tax benefits of $1,789,120 and $3,062,787, respectively. Valuation allowances provided against the deferred tax assets are related to the net operating loss carryforwards, as the Company’s management does not believe that sufficient positive evidence exists to conclude that the benefits of such deferred tax assets are more likely than not to be realized in full. The amount of the valuation allowance as of June 30, 2022 and 2023 was $1,925,780 and $4,500,444, respectively. Deferred tax assets and liabilities represent the future effects on income taxes that result from temporary differences and carryforwards that exist at the balance sheet date, and are measured using enacted rates and provisions of the tax law. Deferred tax assets are recognized for deductible temporary differences as well as tax attributes. Significant components of the Company’s deferred tax liabilities and assets as of June 30, 2022 and 2023 are as follows: Years ended Deferred tax assets: 2022 2023 Net operating loss carryforward $ 1,789,120 $ 3,062,787 Foreign payables 160,009 981,956 Accounts receivable impairment - 508,980 Property, plant and equipment (23,349 ) (53,279 ) Total deferred tax assets 1,925,780 4,500,444 Less: Valuation allowance (1,925,780 ) (4,500,444 ) Net deferred tax asset $ - $ - Movement of valuation allowance: Years ended 2022 2023 At the beginning of the year $ 375,307 $ 1,925,780 Current year addition 1,550,473 2,574,664 At the end of the year $ 1,925,780 $ 4,500,444 The Company is subject to income taxes in the U.S. federal, state, and various foreign jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. All of the Company’s tax years will remain open for examination by the US federal and state tax authorities from the date the returns are filed or are due, whichever is later. The Company does not have any tax audits or other issues pending. |
Stockholders_ Equity
Stockholders’ Equity | 12 Months Ended |
Jun. 30, 2023 | |
Stockholders’ Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | 15. STOCKHOLDERS’ EQUITY On April 6, 2023, the Company completed the public offering of 2,700,000 shares of common stock at a public offering price of $7.00 per share, par value $0.0001 per share, with option for underwriters to purchase up to an additional 405,000 at the initial public offering price as over-allotment. On April 25, 2023, the underwriters fully exercised their over-allotment option, and 405,000 shares were issued at public offering price of $7.00 per share, par value $0.0001 per share. These two transactions altogether generated proceeds of $21,735,000, offset by offering costs of $3,475,171, which contributed an increase of share capital of $311 and additional paid in capital of $18,259,518. On June 26, 2023, pursuant to purchase agreements dated June 26, 2023, the Company sold to three investors in a private placement an aggregate of 1,117,420 shares of common stock, at a purchase price of $7.1318 per share. This private replacement generated proceeds of $7,969,221, offset by offering cost of $543,153, which contributed an increase of share capital of $111 and additional paid in capital of $7,425,957. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 16. EARNINGS PER SHARE The following table presents a reconciliation of basic net loss per share: Years ended 2022 2023 Net loss $ (1,874,153 ) $ (6,098,603 ) Weighted average basic and diluted ordinary shares outstanding 50,000,000 50,725,814 Net loss per basic and diluted share of common stock $ (0.04 ) $ (0.12 ) |
Legal Proceedings
Legal Proceedings | 12 Months Ended |
Jun. 30, 2023 | |
Legal Proceedings [Abstract] | |
LEGAL PROCEEDINGS | 17. LEGAL PROCEEDINGS From time to time, we may be subject to legal or regulatory proceedings, investigations and claims incidental to the conduct of our business. Other than disclosed below, we are not a party to, nor are we 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. On March 17, 2021, the FDA sent a letter to Aspire North America requesting that Aspire North America submit documents relating to its marketing practices for Aspire products. Specifically, the FDA requested documents related to youth exposure to Aspire North America’s social media marketing of Aspire as well as Aspire North America’s use of influencers in social media marketing. This request applied to all of Aspire electronic nicotine delivery system (ENDS) products and their components or parts. The FDA requested these documents based on the epidemic of youth ENDS use and based on Aspire North America’s marketing of Aspire products on social media platforms (e.g., Facebook, YouTube, and Instagram). The FDA requested that Aspire North America respond within 60 days but granted a 30-day extension. On June 15, 2021, Aspire North America provided the required information to the FDA. To date, the FDA has not substantively responded or taken any further action in the matter. However, we cannot assure you that the FDA will consider the response adequate and will not initiate regulatory or enforcement action based on an alleged failure to comply with the request or that the FDA will not initiate regulatory or enforcement action on other grounds based on the contents of the documents produced in the response. Either result could materially and adversely affect our business, financial condition, and results of operations. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Jun. 30, 2023 | |
Subsequent Event [Abstract] | |
SUBSEQUENT EVENTS | 18. SUBSEQUENT EVENTS In July 2023, the Company registered the grant of up to 15,000,000 shares of common stock, par value $0.0001 per share, to certain employees of and consultants to the Company either as stock grants, stock options or other equity-based incentives, and the subsequent exercise of any stock options pursuant to the 2022 Equity Incentive plan (the “Plan”). On September 4, 2023, the Board, as administrator of the Plan, granted pursuant to the Plan non-qualified stock options to its executive officers, and other employees to purchase an aggregate of 2,605,000 shares of common stock, at exercise price of $9.76 per share, being the fair market value on the date of grant. These options shall vest cumulative as to 25% of the shares subject to the options over four years on the annual anniversary of date of grant. On September 4, 2023, the Board also issued 587,235 restricted stock units to its executive officers, and other employees, pursuant to the Plan. The restricted stock units vest cumulatively as to one-third of the restricted stock units over three years on the annual anniversary of the date of grant. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Jun. 30, 2023 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of presentation | 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”). Certain items for June 30, 2022 have been reclassified to conform to the June 30, 2023 presentation. |
Emerging growth company | 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 private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company that is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. |
Basis of consolidation | Basis of consolidation The consolidated financial statements include the financial statements of the Company and its subsidiaries as if the subsidiaries were acquired by the Company as of July 1, 2020. All inter-company transactions and balances have been eliminated upon consolidation. |
Use of estimates | Use of estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates include allowance for doubtful accounts, the useful lives of property and equipment and intangible asset, impairment of long-lived assets, and deferred cost. Actual results could differ from those estimates. |
Cash and cash equivalents | Cash and cash equivalents Cash includes currency on hand, deposits held by banks that can be added or withdrawn without limitation and highly liquid investments with maturities of three months or less when purchased. |
Fair value measurement | Fair value measurement The Company applies ASC Topic 820, Fair Value Measurements and Disclosures, which defines fair value, establishes a framework for measuring fair value, and expands financial statement disclosure requirements for fair value measurements. ASC Topic 820 defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability (an exit price) on the measurement date in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability. ASC Topic 820 specifies a hierarchy of valuation techniques, which is based on whether the inputs into the valuation technique are observable or unobservable. The hierarchy is as follows: ● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. ● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. Unobservable inputs are valuation technique inputs that reflect the Company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. |
Accounts receivable | Accounts receivable Accounts receivable are recognized and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Past due accounts are generally written off against the allowance for bad debts only after all collection attempts have been exhausted and the potential for recovery is considered remote. The Company have different payment terms for different businesses. For tobacco vaping business, the Company requires a deposit of 30% of sales amount upon placing order, and the payment of remaining 70% to be made before shipment. For cannabis vaping business, tailored payment term are designed for each customer, based on business relationship, order size and other considerations. The Company maintains an allowance for potential credit losses on accounts receivable. The Company reviews accounts receivable on a periodic basis. For tobacco vaping business, the Company makes provisions of 80% for accounts receivable aged between 1.5 years to 2 years, and 100% for balances aged over 2 years. For cannabis business, the Company makes provisions of 10% for accounts receivable aged over 3 months. Additionally, specific provisions are made when there is doubt as to collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, the customer’s payment history, the customer’s current credit-worthiness and current economic trends. The Company write-off accounts receivable against the provision when they are deemed uncollectible. |
Investment | Investment The investment represents a certificate of deposit that the Company holds in HSBC bank. The entire balance of the investment presented on the balance sheet as of June 30, 2023 is $9,133,707 and it matures on February 8, 2024. |
Inventories | Inventories Inventories mainly consist of finished goods purchased from suppliers. Inventories are stated at the lower of cost or net realizable value. The cost of an inventory item is determined using the weighted average method. When management determines that certain inventories may not be saleable, or when inventory costs exceed expected market value due to obsolescence or damage, the Company will record the difference between the cost and the net realizable value as a write down of inventories. The net realizable value is determined based on the estimated selling price, in the ordinary course of business, less estimated costs necessary to make the sale. These writedowns are recorded based on estimates. The Company did not write down any inventory during the years ended June 30, 2022 and 2023. When there is an indicator, the Company evaluates the ability to realize the value of inventories based on a combination of factors such as forecasted sales, estimated current and future market value. |
Property, plant and equipment, net | Property, plant and equipment, net Property, plant and equipment are stated at cost less accumulated depreciation and depreciated on a straight-line basis over the estimated useful lives of the assets from the time the assets are placed in service. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income/loss in the year of disposition. Estimated useful lives are as follows: Estimated Useful Life Office and other equipment 3 - 5 years Furniture & fixtures 7 years Leasehold improvements Shorter of the term of the lease or |
Leases | Leases A contract is, or contains, a lease if the contract conveys a right to control the use of an identified asset for a period of time in exchange for consideration. Control is conveyed where the customer has both the right to obtain substantially all of the economic benefits from use of the identified asset and the right to direct the use of the identified asset. All leases with an initial term of more than 12 months are recognized as assets representing the right-of-use of the underlying asset and liabilities representing the obligation to make lease payments. Both the assets and the liabilities are initially measured as present value of the discounted lease payments over the lease term. As the Company’s leases typically do not provide an implicit rate, the Company uses an estimate of its incremental borrowing rate based on the information available at the lease commencement date to determine the discount rate. Right-of-use assets are measured at cost less any accumulated depreciation and impairment losses and adjusted for any re-measurement of the lease liabilities. Right-of-use assets are depreciated on a straight-line basis over the shorter of the useful lives of the assets or the lease terms. Lease liabilities are initially measured at the present value of the lease payments to be made under the lease terms and subsequently adjusted by the effect of the interest on and the settlement of the lease liabilities, and the re-measurement arising from any reassessment of the lease liabilities or lease modifications. Lease payments on leases with an initial term of twelve months or less and leases of low-value assets are recognized as an expense on a straight-line basis over the lease term and are not treated as right of use assets. |
Accounts payable | Accounts payable Accounts payable represents payables to suppliers. The Company’s major supplier is a related party to the Company. See Note 13. |
Contract liabilities | Contract liabilities Contract liabilities represent advanced deposits received from customers after an order has been placed but before a product has been shipped. The Company’s normal policy is to require a customer deposit in the range of 25% to 30% of the purchase price upon placement of a sales order, although the Company exempts certain customers from this requirement. Contract liabilities are realized as revenue when the conditions to revenue recognition are met, primarily when control of goods has transferred to customers. |
Impairment of long-lived assets | Impairment of long-lived assets In accordance with ASC Topic 360-10, Impairment and Disposal of Long-Lived Assets, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. The Company did not record any impairment charge for the years ended June 30, 2022 and 2023. |
Revenue recognition | Revenue recognition The Company sells its products to customers around the world and recognizes revenue in accordance with the guidance of ASC 606, Revenue from Contracts with Customers. Revenue is recognized when control of goods has transferred to customers. For the majority of the Company’s customer arrangements, control transfers to customers at a point-in-time when goods have been delivered to the pickup location specified by the customer or a forwarder appointed by the customer, as that is generally when legal title, physical possession and risks and rewards of goods transfer to the customer. Revenue is recognized at the transaction price based on the purchase order as adjusted for the anticipated rebates, discounts and other sales incentives. When determining the transaction price, management estimates variable consideration applying the portfolio approach practical expedient under ASC 606. The main sources of variable consideration for the Company are customer rebates, trade promotion funds, and cash discounts. These sales incentives are recorded as a reduction of revenue at the time of the initial sale using the most-likely amount estimation method. The most-likely amount method is based on the single most likely outcome from a range of possible consideration outcomes. The range of possible consideration outcomes is primarily derived from the following inputs: sales terms, historical experience, trend analysis, and projected market conditions in the various markets served. Because the Company serves numerous markets, the sales incentive programs offered vary across businesses, but the most common incentive relates to amounts paid or credited to customers for achieving defined volume levels or growth objectives. There are no material instances where variable consideration is constrained and not recorded at the initial time of sale. Product returns are recorded as a reduction of revenue based on anticipated sales returns that occur in the normal course of business. The Company has elected to present revenue net of sales taxes and other similar taxes. The Company’s warranties are of an assurance-type and come standard with all Company products to cover repair or replacement should a product not perform as expected by a reasonable customer. The Company offers warranty for all major products, including all types of E-vapor kits, atomizers, replacement coils and mods, but no warranty for accessories such as spare parts or packaging consumables. The Company generally offers a 90 day warranty period from date of purchase for products sold to all regions, but from May 2019, the Company offers a six month warranty period from date of purchase for products sold in the UK and France. The Company offers refund or replacement of products for defects in manufacture, dead on arrival items and items that do not appear the same as listed on the Company’s or distributors’ website, and excludes damaged goods caused by misuse or unauthorized repair. Provisions for estimated expenses related to product warranties are made at the time products are sold. These estimates are established using historical information about the nature, frequency and average cost of warranty claim settlements as well as product manufacturing and recovery from suppliers. Management actively studies trends of warranty claims and takes action to improve product quality and minimize warranty costs. The Company estimates the actual historical warranty claims coupled with an analysis of unfulfilled claims to record a liability for specific warranty purposes. As of June 30, 2022 and 2023, products returned for repair or replacement have been immaterial. Accordingly, a warranty liability has not been deemed necessary. |
Disaggregated Revenue | Disaggregated Revenue In accordance with ASC 606-10-50-5, the Company has taken into consideration the nature, amount, timing, and uncertainty of revenue and cash flows, and has determined to disaggregate its net sales of tobacco vaping products and cannabis vaping products. The net sales disaggregated by products for the years ended June 30, 2022 and 2023 were as follows: Years ended June 30, Net sales by products branded 2022 2023 Tobacco vaping products $ 68,116,810 $ 75,562,711 Cannabis vaping products 19,978,608 40,042,825 Total $ 88,095,418 $ 115,605,536 |
Cost of revenue | Cost of revenue Cost of revenue for the years ended June 30, 2022 and 2023 consisted primarily of the cost of purchasing vaping products, which were purchased from a related party. See Note 13. |
Shipping and handling costs | Shipping and handling costs Shipping and handling costs for the years ended June 30, 2022 and 2023 are $335,677 and $298,703, respectively. They are included in the sales and marketing expenses. |
Interest income | Interest income For the years ended June 30, 2022 and 2023, interest income related to interest on bank deposits. |
Income taxes | Income taxes The Company accounts for income taxes under ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provisions of ASC 740-10 prescribe a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This interpretation also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures. The Company classifies the interest and penalties, if any, as a component of income tax expense. For the years ended June 30, 2022 and 2023, the Company did not incur any interest or penalties related to an uncertain tax position. The Company does not believe that there was any uncertain tax positions as of June 30, 2022 and 2023. |
Foreign currency translation | Foreign currency translation The reporting currency of the Company is the U.S. dollar (“USD”). The functional currency of Aspire Science, which is located in Hong Kong, is the Hong Kong Dollar (“HKD”). For the entities whose functional currency is the HKD, results of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into USD are included in determining comprehensive income/loss. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currencies at the exchange rates prevailing at the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency included in the results of operations as incurred. Translations of amounts from HKD into USD were made at the following exchange rates for the respective dates and periods: At June 30, 2022 2023 Consolidated balance sheets: HKD to $1.00 7.8478 7.8373 Consolidated statements of operations and comprehensive loss: HKD to $1.00 7.8045 7.8367 |
Earnings per share | Earnings per share The Company computes earnings per share (“EPS”) in accordance with ASC 260, Earnings per Share. ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net loss divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (for example, convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. The Company has no dilutive securities as of and for the years ended June 30, 2022 and 2023. |
Comprehensive loss | Comprehensive loss Comprehensive loss consists of two components, net loss and other comprehensive (loss) income. The foreign currency translation gain or loss resulting from translation of the financial statements expressed in USD is reported in other comprehensive (loss) income in the consolidated statements of income and comprehensive loss. |
Commitments and contingencies | Commitments and contingencies In the normal course of business, the Company is subject to contingencies, such as legal proceedings and claims arising out of its business, which cover a wide range of matters. Liabilities for contingencies are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. If the assessment of a contingency indicates that it is probable that a material loss is incurred and the amount of the liability can be estimated, then the estimated liability is accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, is disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. |
Segment reporting | Segment reporting The Company uses the management approach to determine operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker (“CODM”) for making decisions, allocating resources, and assessing performance. The Company’s CODM has been identified as the chief executive officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company. The Company’s CODM reviews the consolidated financial results when making decisions about allocating resources and assessing the performance of the Company as a whole and has determined that the Company has only one reportable segment. Notwithstanding that the Company has customers located around the world and the Company’s Hong Kong subsidiary serves as one of the sales and marketing centers, the Company’s long-lived assets and management are located substantially in the U.S. and management operates its business as a single segment. |
Related parties | Related parties Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, immediate family members of principal owners of the Company and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all significant related party transactions in Note 13. |
Recent accounting pronouncements | 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. Accounting pronouncements adopted during the year ended June 30, 2023 In November 2018, the Financial Accounting Standards Boards (“FASB”) issued ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606, which clarifies that elements of collaborative arrangements could qualify as transactions with customers in the scope of ASC 606. The amendments require the application of existing guidance to determine the units of account in collaborative arrangement for purposes of identifying transactions with customers. For transactions outside the scope of ASC 606, companies can apply elements of ASC 606 or other relevant guidance by analogy, or apply a reasonable accounting policy if there is no appropriate analogy. ASU 2018-18 is effective retrospectively for us for the year ended June 30, 2023. The adoption of this guidance had no material impact on our financial position, results of operations and cash flows. In March 2020, the FASB issued ASU 2020 04, 848 2020 04 2020 04 Accounting pronouncements not yet effective As the Company is an emerging growth company, the effective dates of the pronouncements applicable to us are the same as those applicable to private companies. In June 2016, the FASB amended guidance related to the impairment of financial instruments as part of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The guidance replaces the incurred loss impairment methodology with an expected credit loss model for which a company recognizes an allowance based on the estimate of expected credit loss. For public business entities that meet the definition of a U.S. Securities and Exchange Commission (“SEC”) filer (“SEC filer”), excluding entities eligible to be smaller reporting companies as defined by the SEC, ASU No. 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. For all other entities, including smaller reporting companies, ASU No. 2016-13 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. 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. The Company is in the process of evaluating the impact that this guidance will have on its consolidated financial statements. On September 29, 2022, FASB issued ASU 2022-04: Liabilities-Supplier Finance Programs (Topic 405-50): Disclosure of Supplier Finance Program Obligations. This update requires that a buyer in a supplier finance program disclose additional information about the program to allow financial statement users to better understand the effect of the programs on an entity’s working capital, liquidity, and cash flows. This update will be effective for the Company for fiscal years beginning after December 15, 2022, except for the amendment on roll forward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. The Company does not expect this standard will have a material effect on its consolidated financial statements. |
Concentration and risks | Concentration and risks Risks and Uncertainties The Company’s business, financial condition and results of operations may be negatively impacted by risks related to government regulations, natural disasters, extreme weather conditions, health epidemics and other catastrophic incidents, which could significantly disrupt the Company’s operations. Customer and Supplier Concentration (a) Customers For the years ended June 30, 2022 and 2023, the Company’s major customers, who accounted for more than 10% of the Company’s consolidated revenue, were as follow: Year Ended 2022 2023 Major Customers A 39 % 32 % (b) Suppliers For the years ended June 30, 2022 and 2023, the Company’s suppliers, who accounted for more than 10% of the Company’s total purchases, were as follows: Year Ended 2022 2023 Major Suppliers B (1) 99 % 92 % (1) Major supplier B is Shenzhen Yi Jia, a Chinese company that is 95% owned by the Company’s chief executive officer and principal stockholder. See Note 13. Credit Risk The Company is subject to credit risk from cash and cash equivalents, account receivables, financial assets included in prepayments and deposits and amounts due from related parties. All the Company’s cash and cash equivalents are held in major financial institutions located in Hong Kong and the United States, which management believes are of high credit quality. At June 30, 2022 and 2023, the Company had credit risk exposure of uninsured cash in banks of $74,000,991 and $39,792,081, respectively. The Company has policies in place to evaluate credit risk when accepting new business and to limit its credit exposure to individual customers. The management considers the Company does not have a significant concentration of credit risk. The Company does not require collateral to support financial instruments that are subject to credit risk. |
Organization and Principal Ac_2
Organization and Principal Activities (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Organization and Principal Activities [Abstract] | |
Schedule of Company and Its Subsidiaries | The following table sets forth information concerning the Company and its subsidiaries as of June 30, 2023: Name of Entity Date of Organization Place of Organization % of Principal Ispire Technology Inc. June 13, 2022 Delaware Parent Company Holding Company Ispire International July 6, 2022 BVI 100% Holding Company Aspire North America February 22, 2020 California 100% Sales and Marketing Aspire Science December 9, 2016 Hong Kong 100% Sales and Marketing |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives | Estimated useful lives are as follows: Estimated Useful Life Office and other equipment 3 - 5 years Furniture & fixtures 7 years Leasehold improvements Shorter of the term of the lease or |
Schedule of Net Sales Disaggregated by Products | The net sales disaggregated by products for the years ended June 30, 2022 and 2023 were as follows: Years ended June 30, Net sales by products branded 2022 2023 Tobacco vaping products $ 68,116,810 $ 75,562,711 Cannabis vaping products 19,978,608 40,042,825 Total $ 88,095,418 $ 115,605,536 |
Schedule of Translations of Amounts from HKD into USD Exchange Rates | Translations of amounts from HKD into USD were made at the following exchange rates for the respective dates and periods: At June 30, 2022 2023 Consolidated balance sheets: HKD to $1.00 7.8478 7.8373 Consolidated statements of operations and comprehensive loss: HKD to $1.00 7.8045 7.8367 |
Schedule of Major Customers | For the years ended June 30, 2022 and 2023, the Company’s major customers, who accounted for more than 10% of the Company’s consolidated revenue, were as follow: Year Ended 2022 2023 Major Customers A 39 % 32 % |
Schedule of Major Suppliers | For the years ended June 30, 2022 and 2023, the Company’s suppliers, who accounted for more than 10% of the Company’s total purchases, were as follows: Year Ended 2022 2023 Major Suppliers B (1) 99 % 92 % (1) Major supplier B is Shenzhen Yi Jia, a Chinese company that is 95% owned by the Company’s chief executive officer and principal stockholder. See Note 13. |
Cash and Cash Equivalents (Tabl
Cash and Cash Equivalents (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Both by Geography and by Currencies | Below is a breakdown of the Company’s cash balances in banks for both years, both by geography and by currencies (translated into U.S. dollars): As of June 30, By Geography: 2022 2023 Cash in HK $ 71,221,649 $ 25,841,880 Cash in U.S. 3,259,002 14,458,693 Total $ 74,480,651 $ 40,300,573 By Currency: USD $ 64,187,756 $ 39,835,636 HKD 415,930 363,416 EUR 4,097 59,702 GBP 24,680 22,143 RMB 9,848,188 19,676 Total $ 74,480,651 $ 40,300,573 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Accounts Receivable [Abstract] | |
Schedule of Accounts Receivable | As of June 30, 2022 and 2023, accounts receivable consisted of the following: As of June 30, 2022 2023 Accounts receivable – gross $ 8,260,574 $ 26,025,068 Allowance for doubtful accounts - (1,498,806 ) Accounts receivable, net $ 8,260,574 $ 24,526,262 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Prepaid Expenses and Other Current Assets [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | As of June 30, 2022 and 2023, prepaid expenses and other current assets consisted of the following: As of June 30, 2022 2023 Prepaid inventories $ - $ 3,209,413 Other receivable 127,423 127,595 Prepayment 50,460 26,974 Deposit paid 14,616 14,635 Total $ 192,499 $ 3,378,617 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment, Net [Abstract] | |
Schedule of Property, Equipment and Leasehold Improvement | As of June 30, 2022 and 2023, property, equipment and leasehold improvement consisted of the following: As of June 30, 2022 2023 Leasehold improvement $ 433 $ 518,854 Office and other equipment 146,798 339,155 Furniture and fixture - 309,990 147,231 1,167,999 Less: accumulated depreciation (33,206 ) (79,868 ) Total $ 114,025 $ 1,088,131 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Schedule of Right-of-use Assets | The balances for the right-of-use assets where the Company is the lessee are presented as follow: As of June 30, 2022 2023 Right-of-use assets $ 295,804 $ 4,061,617 Lease liabilities - current $ 347,541 $ 944,525 Lease liabilities – non-current - 3,356,232 Total $ 347,541 $ 4,300,757 |
Schedule of Maturities of Our Lease Liabilities | As of June 30, 2023, the maturities of our lease liabilities (excluding short-term leases) are as follows: As of Year Ended June 30, 2024 1,260,719 2025 1,338,878 2026 1,383,636 2027 968,111 2028 80,676 Total future lease payments 5,032,020 Less: imputed interest (731,263 ) Total lease liabilities 4,300,757 |
Accrued Liabilities and Other_2
Accrued Liabilities and Other Payables (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Accrued Liabilities and Other Payables [Abstract] | |
Schedule of Accrued Liabilities and Other Payables | As of June 30, 2022 and 2023, accrued liabilities and other payables consisted of the following: As of June 30, 2022 2023 Accrued salaries and related benefits $ 43,487 $ 97,314 Other payables 81,226 148,197 Accrued expenses 34,583 35,850 Total $ 159,296 $ 281,361 |
Dividends Payable (Tables)
Dividends Payable (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Dividends Payable [Abstract] | |
Schedule of Dividends Payable Represent | As of June 30, 2022 2023 At the beginning of the year $ 3,832,272 $ 3,362,639 Dividends declared - - Dividends paid (469,633 ) (3,362,639 ) At the end of the year $ 3,362,639 $ - |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of Major Related Parties | 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 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 subsidiary of Aspire Global. -Aspire Global is a company controlled by the Chairman of the Company. -Shenzhen Yi Jia, a Chinese company that is 95% owned by the Company’s chairman and 5% by the chairman’s cousin. |
Schedule of Balances Due from Related Parties | The Company had the following balances due from related parties: As of June 30, 2022 2023 Shenzhen Yi Jia $ 1,872,035 $ - Tuanfang Liu 62,820 - Total $ 1,934,855 $ - |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Income Taxes [Abstract] | |
Schedule of Loss Before Income Taxes | For the years ended June 30, 2022 and 2023, loss before income taxes consists of: Years ended 2022 2023 HK $ 6,679,431 $ 7,444,203 U.S. (7,482,487 ) (12,297,503 ) Total $ (803,056 ) $ (4,853,300 ) |
Schedule of Statutory Tax Rate to Pre-Tax Income | The reconciliation of the actual income taxes to the amount of tax computed by applying the aforementioned statutory tax rate to pre-tax income is as follows: Years ended 2022 2023 Expected taxation at HK statutory rate $ (132,504 ) $ (800,795 ) Tax effect of two-tiered profits tax regime (21,142 ) (21,055 ) Effect of income tax rate difference in other jurisdictions (336,712 ) (553,388 ) Non-deductible expenses 116,287 61,208 Non-taxable income (10,764 ) (22,378 ) Change in valuation allowance 1,455,390 2,574,664 Others 542 (7,047 ) Income tax expense $ 1,071,097 $ 1,245,303 |
Schedule of Company’s Deferred Tax Liabilities and Assets | Significant components of the Company’s deferred tax liabilities and assets as of June 30, 2022 and 2023 are as follows: Years ended Deferred tax assets: 2022 2023 Net operating loss carryforward $ 1,789,120 $ 3,062,787 Foreign payables 160,009 981,956 Accounts receivable impairment - 508,980 Property, plant and equipment (23,349 ) (53,279 ) Total deferred tax assets 1,925,780 4,500,444 Less: Valuation allowance (1,925,780 ) (4,500,444 ) Net deferred tax asset $ - $ - |
Schedule of Valuation Allowance | Movement of valuation allowance: Years ended 2022 2023 At the beginning of the year $ 375,307 $ 1,925,780 Current year addition 1,550,473 2,574,664 At the end of the year $ 1,925,780 $ 4,500,444 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Basic Net Income Per Share | The following table presents a reconciliation of basic net loss per share: Years ended 2022 2023 Net loss $ (1,874,153 ) $ (6,098,603 ) Weighted average basic and diluted ordinary shares outstanding 50,000,000 50,725,814 Net loss per basic and diluted share of common stock $ (0.04 ) $ (0.12 ) |
Organization and Principal Ac_3
Organization and Principal Activities (Details) - shares | Jun. 30, 2023 | Oct. 22, 2022 | Jul. 29, 2022 | Jul. 06, 2022 | Jul. 01, 2020 |
Organization and Principal Activities (Details) [Line Items] | |||||
Shares of common stock (in Shares) | 15,000,000 | 50,000,000 | |||
Percentage of derivatives | 0.30% | ||||
Ispire International Limited [Member] | |||||
Organization and Principal Activities (Details) [Line Items] | |||||
Equity interest percentage | 100% | ||||
Aspire North America [Member] | |||||
Organization and Principal Activities (Details) [Line Items] | |||||
Equity interest percentage | 100% | ||||
Maximum [Member] | |||||
Organization and Principal Activities (Details) [Line Items] | |||||
Own percentage | 66.50% | ||||
Minimum [Member] | |||||
Organization and Principal Activities (Details) [Line Items] | |||||
Own percentage | 5% | ||||
Business Acquisition [Member] | Aspire Science [Member] | |||||
Organization and Principal Activities (Details) [Line Items] | |||||
Equity interest percentage | 100% |
Organization and Principal Ac_4
Organization and Principal Activities (Details) - Schedule of Company and Its Subsidiaries | 12 Months Ended |
Jun. 30, 2023 | |
Ispire Technology Inc.[Member] | |
Organization and Principal Activities (Details) - Schedule of Company and Its Subsidiaries [Line Items] | |
Date of Organization | Jun. 13, 2022 |
Place of Organization | Delaware |
Percentage of Ownership | Parent Company |
Principal Activities | Holding Company |
Ispire International [Member] | |
Organization and Principal Activities (Details) - Schedule of Company and Its Subsidiaries [Line Items] | |
Date of Organization | Jul. 06, 2022 |
Place of Organization | BVI |
Percentage of Ownership | 100% |
Principal Activities | Holding Company |
Aspire North America [Member] | |
Organization and Principal Activities (Details) - Schedule of Company and Its Subsidiaries [Line Items] | |
Date of Organization | Feb. 22, 2020 |
Place of Organization | California |
Percentage of Ownership | 100% |
Principal Activities | Sales and Marketing |
Aspire Science [Member] | |
Organization and Principal Activities (Details) - Schedule of Company and Its Subsidiaries [Line Items] | |
Date of Organization | Dec. 09, 2016 |
Place of Organization | Hong Kong |
Percentage of Ownership | 100% |
Principal Activities | Sales and Marketing |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Percentage of deposit sale amount | 30% | |
Percentage of before shipment | 70% | |
Provision for receivable, percentage | 80% | |
Percentage of account receivable | 10% | |
Held-to-maturity investment (in Dollars) | $ 9,133,707 | |
Investment matures | Feb. 08, 2024 | |
Shipping and handling costs (in Dollars) | $ 298,703 | $ 335,677 |
Percentage of consolidated revenue | 10% | 10% |
Percentage of total purchase | 10% | 10% |
Percentage of principal shareholders | 95% | |
Uninsured cash (in Dollars) | $ 39,792,081 | $ 74,000,991 |
Minimum [Member] | ||
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Account receivable aged period | 1 year 6 months | |
Percentage of purchase price | 25% | |
Maximum [Member] | ||
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Account receivable aged period | 2 years | |
Percentage of purchase price | 30% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | ||
Summary of Significant Accounting Policies (Details) [Line Items] | ||
Concentration risk, percentage | 100% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of Estimated Useful Lives | 12 Months Ended |
Jun. 30, 2023 | |
Office and other equipment [Member] | Minimum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Office and other equipment | 3 years |
Office and other equipment [Member] | Maximum [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Office and other equipment | 5 years |
Furniture & fixtures [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Furniture & fixtures | 7 years |
Leasehold improvements [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Leasehold improvements | Shorter of the term of the lease or the estimated useful life of the assets |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of Net Sales Disaggregated by Products - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Net sales by product | $ 115,605,536 | $ 88,095,418 |
Tobacco vaping products [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales by product | 75,562,711 | 68,116,810 |
Cannabis vaping products [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Net sales by product | $ 40,042,825 | $ 19,978,608 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details) - Schedule of Translations of Amounts from HKD into USD Exchange Rates - Hong Kong, Dollars | Jun. 30, 2023 | Jun. 30, 2022 |
Consolidated balance sheets [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of Translations of Amounts from HKD into USD Exchange Rates [Line Items] | ||
HKD to $1.00 | 7.8373 | 7.8478 |
Consolidated statements of operations and comprehensive loss [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of Translations of Amounts from HKD into USD Exchange Rates [Line Items] | ||
HKD to $1.00 | 7.8367 | 7.8045 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details) - Schedule of Translations of Amounts from HKD into USD Exchange Rates (Parentheticals) - Hong Kong, Dollars - $ / shares | Jun. 30, 2023 | Jun. 30, 2022 |
Consolidated balance sheets [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of Translations of Amounts from HKD into USD Exchange Rates (Parentheticals) [Line Items] | ||
Exchange rate | $ 1 | $ 1 |
Consolidated statements of operations and comprehensive loss [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of Translations of Amounts from HKD into USD Exchange Rates (Parentheticals) [Line Items] | ||
Exchange rate | $ 1 | $ 1 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details) - Schedule of Major Customers | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Customer A [Member] | Consolidated Revenue Rate [Member] | ||
Revenue, Major Customer [Line Items] | ||
Consolidated revenue rate | 32% | 39% |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies (Details) - Schedule of Major Suppliers | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | ||
Suppliers B [Member] | |||
Concentration Risk [Line Items] | |||
Total purchases rate | [1] | 92% | 99% |
[1] Major supplier B is Shenzhen Yi Jia, a Chinese company that is 95% owned by the Company’s chief executive officer and principal stockholder. See Note 13. |
Cash and Cash Equivalents (Deta
Cash and Cash Equivalents (Details) - Schedule of Both by Geography and by Currencies - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Cash and Cash Equivalents [Line Items] | ||
Cash | $ 40,300,573 | $ 74,480,651 |
USD [Member] | ||
Cash and Cash Equivalents [Line Items] | ||
Cash | 39,835,636 | 64,187,756 |
HKD [Member] | ||
Cash and Cash Equivalents [Line Items] | ||
Cash | 363,416 | 415,930 |
EUR [Member] | ||
Cash and Cash Equivalents [Line Items] | ||
Cash | 59,702 | 4,097 |
GBP [Member] | ||
Cash and Cash Equivalents [Line Items] | ||
Cash | 22,143 | 24,680 |
RMB [Member] | ||
Cash and Cash Equivalents [Line Items] | ||
Cash | 19,676 | 9,848,188 |
HK [Member] | ||
Cash and Cash Equivalents [Line Items] | ||
Cash | 25,841,880 | 71,221,649 |
US [Member] | ||
Cash and Cash Equivalents [Line Items] | ||
Cash | $ 14,458,693 | $ 3,259,002 |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Accounts Receivable [Abstract] | ||
Bad debt expense | $ 3,332,825 |
Accounts Receivable, Net (Det_2
Accounts Receivable, Net (Details) - Schedule of Accounts Receivable - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Schedule of Accounts Receivable [Abstract] | ||
Accounts receivable – gross | $ 26,025,068 | $ 8,260,574 |
Allowance for doubtful accounts | (1,498,806) | |
Accounts receivables | $ 24,526,262 | $ 8,260,574 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - Schedule of Prepaid Expenses and Other Current Assets - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Schedule Of Prepaid Expenses And Other Current Assets [Abstract] | ||
Prepaid inventories | $ 3,209,413 | |
Other receivable | 127,595 | 127,423 |
Prepayment | 26,974 | 50,460 |
Deposit paid | 14,635 | 14,616 |
Total | $ 3,378,617 | $ 192,499 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Property, Plant and Equipment, Net [Abstract] | ||
Depreciation expense | $ 46,629 | $ 11,437 |
Property, Plant and Equipment_4
Property, Plant and Equipment, Net (Details) - Schedule of Property, Equipment and Leasehold Improvement - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Schedule of Property Equipment and Leasehold Improvement [Abstract] | ||
Leasehold improvement | $ 518,854 | $ 433 |
Office and other equipment | 339,155 | 146,798 |
Furniture and fixture | 309,990 | |
Total | 1,167,999 | 147,231 |
Less: accumulated depreciation | (79,868) | (33,206) |
Total | $ 1,088,131 | $ 114,025 |
Intangible Assets (Details)
Intangible Assets (Details) | Sep. 30, 2022 USD ($) |
Intangible Assets [Abstract] | |
Assets cost | $ 0 |
Estimated fair values | $ 74,259,915 |
Contract Liabilities (Details)
Contract Liabilities (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2023 | |
Contract Liabilities [Abstract] | ||
Total contract liabilities | $ 1,672,051 | $ 988,556 |
Recognized revenue amount | $ 1,672,051 |
Leases (Details)
Leases (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Leases (Details) [Line Items] | ||
Lease costs | $ 1,237,868 | $ 667,712 |
Lease agreements payments | $ 1,141,142 | $ 304,291 |
Discount rate | 8.10% | 5.80% |
Additional lease amount | $ 200,000 | |
Minimum [Member] | ||
Leases (Details) [Line Items] | ||
Operating lease term | 2 years | |
Weighted-average remaining lease term | 1 year | |
Maximum [Member] | ||
Leases (Details) [Line Items] | ||
Operating lease term | 5 years | |
Weighted-average remaining lease term | 3 years 9 months 18 days |
Leases (Details) - Schedule of
Leases (Details) - Schedule of Right-of-use Assets - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Schedule Of Right-Of-Use Assets [Abstract] | ||
Right-of-use assets | $ 4,061,617 | $ 295,804 |
Lease liabilities - current | 944,525 | 347,541 |
Lease liabilities – non-current | 3,356,232 | |
Total | $ 4,300,757 | $ 347,541 |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of Maturities of Our Lease Liabilities - Lease Liabilities [Member] | Jun. 30, 2023 USD ($) |
Leases (Details) - Schedule of Maturities of Our Lease Liabilities [Line Items] | |
2024 | $ 1,260,719 |
2025 | 1,338,878 |
2026 | 1,383,636 |
2027 | 968,111 |
2028 | 80,676 |
Total future lease payments | 5,032,020 |
Less: imputed interest | (731,263) |
Total lease liabilities | $ 4,300,757 |
Accrued Liabilities and Other_3
Accrued Liabilities and Other Payables (Details) - Schedule of Accrued Liabilities and Other Payables - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Schedule of Accrued Liabilities and Other Payables [Abstract] | ||
Accrued salaries and related benefits | $ 97,314 | $ 43,487 |
Other payables | 148,197 | 81,226 |
Accrued expenses | 35,850 | 34,583 |
Total | $ 281,361 | $ 159,296 |
Dividends Payable (Details) - S
Dividends Payable (Details) - Schedule of Dividends Payable Represent - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Schedle of Dividends Payable Represent [Abstract] | ||
At the beginning of the year | $ 3,362,639 | $ 3,832,272 |
Dividends declared | ||
Dividends paid | (3,362,639) | (469,633) |
At the end of the year | $ 3,362,639 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Related Party Transactions (Details) [Line Items] | ||
Accounts payable related party | $ 55,769,526 | $ 41,982,373 |
Purchases from related party | $ 83,060,957 | 74,787,679 |
Mr. Liu [Member] | ||
Related Party Transactions (Details) [Line Items] | ||
Percentage of related parties outstanding shares | 66.50% | |
Ms. Zhu [Member] | ||
Related Party Transactions (Details) [Line Items] | ||
Percentage of related parties outstanding shares | 5% | |
Aspire Global [Member] | ||
Related Party Transactions (Details) [Line Items] | ||
Percentage of related parties outstanding shares | 61.30% | |
Ispire Technology Inc.[Member] | ||
Related Party Transactions (Details) [Line Items] | ||
Percentage of related parties outstanding shares | 4.60% | |
Eigate [Member] | ||
Related Party Transactions (Details) [Line Items] | ||
Due to related parties | $ 710,910 | $ 40,672,768 |
Related Party Transactions (D_2
Related Party Transactions (Details) - Schedule of Major Related Parties | 12 Months Ended |
Jun. 30, 2023 | |
Tuanfang Liu [Member] | |
Related Party Transaction [Line Items] | |
Name of related parties | -Tuanfang Liu is the Chairman of the Company. |
Jiangyan Zhu [Member] | |
Related Party Transaction [Line Items] | |
Name of related parties | -Jiangyan Zhu is the wife of Tuanfang Liu and a director of the Company. |
Eigate [Member] | |
Related Party Transaction [Line Items] | |
Name of related parties | -Eigate (Hong Kong) Technology Co., Limited (“Eigate”) is a wholly-owned subsidiary of Aspire Global. |
Aspire Global [Member] | |
Related Party Transaction [Line Items] | |
Name of related parties | -Aspire Global is a company controlled by the Chairman of the Company. |
Shenzhen Yi Jia [Member] | |
Related Party Transaction [Line Items] | |
Name of related parties | -Shenzhen Yi Jia, a Chinese company that is 95% owned by the Company’s chairman and 5% by the chairman’s cousin. |
Related Party Transactions (D_3
Related Party Transactions (Details) - Schedule of Balances Due from Related Parties - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Related Party Transactions (Details) - Schedule of Balances Due from Related Parties [Line Items] | ||
Due from related parties | $ 1,934,855 | |
Shenzhen Yi Jia [Member] | ||
Related Party Transactions (Details) - Schedule of Balances Due from Related Parties [Line Items] | ||
Due from related parties | 1,872,035 | |
Tuanfang Liu [Member] | ||
Related Party Transactions (Details) - Schedule of Balances Due from Related Parties [Line Items] | ||
Due from related parties | $ 62,820 |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | 12 Months Ended | ||
Jun. 30, 2023 USD ($) | Jun. 30, 2023 HKD ($) | Jun. 30, 2022 USD ($) | |
Income Taxes (Details) [Line Items] | |||
Profits tax (in Dollars) | $ 2 | ||
Net operating losses | $ 14,584,702 | $ 8,519,617 | |
Taxable income rate, percentage | 80% | 80% | |
Net operating loss carryforwards | $ 3,062,787 | 1,789,120 | |
Valuation allowance | $ 4,500,444 | $ 1,925,780 | |
Hong Kong [Member] | |||
Income Taxes (Details) [Line Items] | |||
Profits tax (in Dollars) | $ 2 | ||
Minimum [Member] | |||
Income Taxes (Details) [Line Items] | |||
Percentage of tax rate | 8.25% | 8.25% | |
Maximum [Member] | |||
Income Taxes (Details) [Line Items] | |||
Percentage of tax rate | 16.50% | 16.50% |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of Loss Before Income Taxes - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Income Taxes (Details) - Schedule of Loss Before Income Taxes [Line Items] | ||
loss before income taxes total | $ (4,853,300) | $ (803,056) |
HK [Member] | ||
Income Taxes (Details) - Schedule of Loss Before Income Taxes [Line Items] | ||
loss before income taxes total | 7,444,203 | 6,679,431 |
U.S. [Member] | ||
Income Taxes (Details) - Schedule of Loss Before Income Taxes [Line Items] | ||
loss before income taxes total | $ (12,297,503) | $ (7,482,487) |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of Statutory Tax Rate to Pre-Tax Income - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Schedule of Statutory Tax Rate To Pre Tax Income [Abstract] | ||
Expected taxation at HK statutory rate | $ (800,795) | $ (132,504) |
Tax effect of two-tiered profits tax regime | (21,055) | (21,142) |
Effect of income tax rate difference in other jurisdictions | (553,388) | (336,712) |
Non-deductible expenses | 61,208 | 116,287 |
Non-taxable income | (22,378) | (10,764) |
Change in valuation allowance | 2,574,664 | 1,455,390 |
Others | (7,047) | 542 |
Income tax expense | $ 1,245,303 | $ 1,071,097 |
Income Taxes (Details) - Sche_3
Income Taxes (Details) - Schedule of Company’s Deferred Tax Liabilities and Assets - USD ($) | Jun. 30, 2023 | Jun. 30, 2022 |
Schedule of Company’s Deferred Tax Liabilities and Assets [Abstract] | ||
Net operating loss carryforward | $ 3,062,787 | $ 1,789,120 |
Foreign payables | 981,956 | 160,009 |
Accounts receivable impairment | 508,980 | |
Property, plant and equipment | (53,279) | (23,349) |
Total deferred tax assets | 4,500,444 | 1,925,780 |
Less: Valuation allowance | (4,500,444) | (1,925,780) |
Net deferred tax asset |
Income Taxes (Details) - Sche_4
Income Taxes (Details) - Schedule of Valuation Allowance - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Schedule of Valuation Allowance [Abstract] | ||
At the beginning of the year | $ 1,925,780 | $ 375,307 |
Current year addition | 2,574,664 | 1,550,473 |
At the end of the year | $ 4,500,444 | $ 1,925,780 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - USD ($) | 12 Months Ended | ||||
Jun. 26, 2023 | Apr. 25, 2023 | Apr. 06, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | |
Stockholders’ Equity [Line Items] | |||||
Common stock, shares authorized (in Shares) | 2,700,000 | 140,000,000 | 140,000,000 | ||
Public offering price of per share (in Dollars per share) | $ 7 | $ 7 | |||
Common stock par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Public offering price (in Shares) | 405,000 | 405,000 | |||
Generated proceeds | $ 7,969,221 | $ 21,735,000 | |||
Offering costs | 543,153 | 3,475,171 | |||
Share Capital | 111 | 311 | |||
Additional paid in capital | $ 7,425,957 | $ 18,259,518 | |||
Aggregate of common stock (in Shares) | 1,117,420 | ||||
Purchase price, Per share (in Dollars per share) | $ 7.1318 |
Earnings Per Share (Details) -
Earnings Per Share (Details) - Schedule of Reconciliation of Basic Net Income Per Share - USD ($) | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Schedule of Reconciliation of Basic Net Income Per Share [Abstract] | ||
Net income(loss) | $ (6,098,603) | $ (1,874,153) |
Weighted average basic share of common stock outstanding | 50,725,814 | 50,000,000 |
Net income(loss) per basic share of common stock | $ (0.12) | $ (0.04) |
Earnings Per Share (Details) _2
Earnings Per Share (Details) - Schedule of Reconciliation of Basic Net Income Per Share (Parentheticals) - $ / shares | 12 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Schedule of Reconciliation of Basic Net Income Per Share [Abstract] | ||
Weighted average diluted share of common stock outstanding | 50,725,814 | 50,000,000 |
Net income(loss) per diluted share of common stock | $ (0.12) | $ (0.04) |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - $ / shares | Sep. 04, 2023 | Jul. 31, 2023 |
Subsequent Events (Details) [Line Items] | ||
Common stock shares | 15,000,000 | |
Price per share (in Dollars per share) | $ 0.0001 | |
Aggregate of common stock | 2,605,000 | |
Exercise price of per share (in Dollars per share) | $ 9.76 | |
Percentage of cumulative shares | 25% | |
Restricted stock, term | 4 years | |
Restricted stock | 587,235 | |
Restricted stock, term | 3 years |