What changed in this filing

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Item 1. Business

2025-09-15 compared with 2024-09-27 · 873 added, 867 removed, 79 unchanged (96% of the section changed)

We are engaged

in the research and development, design, commercialization, sales, marketing and distribution of branded e-cigarettes and cannabis vaping

We sell our e-cigarette products worldwide except for the People’s Republic of China (the “PRC”), the United

States, and Russia.

sell our cannabis vaping hardware in the United States, Europe, Canada, and South Africa.

Vaping refers to the practice of inhaling and

exhaling the vapor produced by an electronic vaping device, and includes dabbing, which is the recreational inhalation of extremely concentrated

cannabinoids, typically tetrahydrocannabinol, the main psychotropic cannabinoid derived from the marijuana plant.

The market for cannabis/CBD

vaping continues to grow and is expected to reach $20.5 billion in 2031 according to Transparency Market Research.

Our management anticipates

that the increasing demand of legal cannabis products in the United States will coincide with higher levels of social acceptability for

these products among adult consumers.

As a result, we expect to see increasing demand for our cannabis vaping products in coming years.

products are marketed under the Ispire brand name, primarily on an original design manufacturer (“ODM”) basis to consumer-facing

cannabis vapor companies and third-party co-packers.

ODM generally involves the design and customization of core products to meet each

brand’s unique image and needs, and our products are sold by our customers under their own brand names although they may also include

our brand name on the products.

Some of our products use our

BDC (bottom dual coil) coil technology which uses bottom dual coils to provide much higher temperature and an expanded heating which we

believe achieves much greater flavor and vapor production than other available technologies.

We believe that the use of our dual-coil

technology enhances the flavor performance of e-liquid, and the hidden wick cotton with special designed wick holes can both extend the

tank e-liquid capacity and improve the speed of wicking to increase the coil life.

that our BVC (bottom vertical coil) coil represents a significant technological breakthrough for us in coil technology utilizing a vertical

heating wire surrounded by cotton.

This design can enable the coil heating to provide uniform temperature from the tank, together with

more efficient wicking.

This technology, which was originally introduced by Aspire Global in 2014, enables the coil to last longer while

still giving users what we believe is the purest and cleanest taste from e-liquids.

that our Cleito tank brings new and innovative technological advancement to the vaping industry.

The Cleito uses a revolutionary coil

design that replaces the standard chimney and, we believe, delivers maximized airflow.

This design frees up even more restriction in

the airflow by eliminating the need for a static chimney within the tank itself, which results in an expanded flavor profile and increased

are committed to delivering superior products that challenge industry norms, with the goal of delivering an unmatched customer and adult

consumer experience.

In achieving this, risk reduction is central to our mission, and we aim to improve the lives of our consumers through

cutting-edge research and development.

Our technology platforms look to reduce youth access to vaping products, which in turn will facilitate

our ability to provide adult consumers with the products they desire.

are engaged in the research and development, design, commercialization, sales, marketing and distribution of branded and non-branded

vaping hardware products in both the nicotine and cannabis spaces.

Vaping refers to the practice of inhaling and exhaling the vapor produced

by an electronic vaping device.

These products are sold into the global nicotine markets in the form of e-cigarettes and global cannabis

markets in the form of cartridges filled with oils by our customers.

sell our e-cigarette products globally, in markets where we are legally permitted to do so.

To date, our nicotine products are marketed

under the “Aspire” brand name and are sold primarily through our expansive distribution network.

However, we are currently

preparing to expand our international presence via the launch of nicotine products under the Ispire platform.

These products will be

launched under licensing arrangements with the owners(s) of selected partner brand(s).

One such license arrangement has already launched

and more are anticipated to occur in the future.

currently sell our cannabis vaping hardware in the United States, Canada, and South Africa.

However, we are continuing to develop our

sales network across Europe, South America, and other regions in preparation for legalization in these markets.

Our cannabis products

are marketed under the Ispire brand name, primarily on an original design manufacturer (“ODM”) basis to other cannabis vapor

companies including multi and single-state operators, brand owners and co-packers.

ODM generally involves the design and customization

of core products to meet each brand’s unique image and needs.

Our hardware products are sold by our customers under their own brand

We do not “touch the cannabis plant” in the production and sale of our hardware products and thus are not subject

to the specific cannabis-related regulatory and taxation provisions of the industry (e.g., IRS Code Section 280E).

of our products use our BDC (bottom dual coil) coil technology which uses bottom dual coils to provide much higher temperature and an

expanded heating which we believe achieves much greater flavor and vapor production than other available technologies.

We believe that

the use of our dual-coil technology enhances the flavor performance of e-liquid, and the hidden wick cotton with special designed wick

holes can both extend the tank e-liquid capacity and improve the speed of wicking to increase the coil life.

believe that our BVC (bottom vertical coil) coil represents a significant technological breakthrough for us in coil technology utilizing

a vertical heating wire surrounded by cotton.

This design can enable the coil heating to provide uniform temperature from the tank, together

with more efficient wicking.

This technology, which was originally introduced by Aspire Global in 2014, enables the coil to last longer

while still giving users what we believe is the purest and cleanest taste from e-liquids.

believe that our Cleito tank brings new and innovative technological advancement to the vaping industry.

The Cleito uses a revolutionary

coil design that replaces the standard chimney and, we believe, delivers maximized airflow.

This design frees up even more restriction

in the airflow by eliminating the need for a static chimney within the tank itself, which results in an expanded flavor profile and increased

vapor production.

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The simple top-fill design makes filling the device very easy and more convenient and enjoyable to use.

cannabis vapor products use our patented DuCore™ (Dual Coil) technology for cannabis vaporizers.

This technology enables users to

create massive plumes of vape without burning the cannabis oil.

These products incorporate our patented dual coil technology for what

we believe is best-in-class airflow and taste, and our technology for eliminating the leakage of the oil from the unit, which overcomes

a major disadvantage with many existing products.

2023, we introduced our proprietary Ispire ONE™ technology and products.

Ispire ONE™ is designed to eliminate capping issues

in the manufacturing/co-packing process;

Ispire cannabis vapor products use our patented DuCore™ (Dual Coil) technology for cannabis vaporizers.

This technology enables

users to create massive plumes of vape without burning the cannabis oil.

These products incorporate our patented dual coil technology

for what we believe is best-in-class airflow and taste, and our technology for eliminating the leakage of the oil from the unit, which

overcomes a major disadvantage with many existing products.

June 2023, we introduced our proprietary Ispire ONE™ technology and products.

Ispire ONE™ is designed to eliminate capping

issues in the manufacturing/co-packing process;

increase consistency and quality of the filled devices;

eliminate leaking, spitting, or overheating

for cartridges, disposables, and PODs;

and improve consumer safety, as the devices are sealed in a sterilized factory environment to eliminate

risk of contamination during filling process by Ispire’s customers.

In addition, Ispire ONE™ offers a more streamlined approach

to cartridge filling versus conventional methods improving productivity and lowing production costs per unit.

of our products are manufactured and supplied by Shenzhen Yi Jia, which is 95% owned by our co-chief executive officer and controlling

stockholder, Tuanfang Liu.

eliminate leaking, spitting,

or overheating for cartridges, disposables, and PODs;

and improve consumer safety, as the devices are sealed in a sterilized factory

environment to eliminate risk of contamination during filling process by Ispire’s customers.

In addition, Ispire ONE™ offers

a more streamlined approach to cartridge filling versus conventional methods improving productivity and lowing production costs per unit.

majority of our products are manufactured and supplied by Shenzhen Yi Jia, which is 95% owned by our co-chief executive officer, chairman

and controlling stockholder, Tuanfang Liu.

We have taken steps toward the establishment and operation of our own manufacturing facilities.

5, 2024, we commenced manufacturing on two of the six lines in our approximately 31,000 square foot manufacturing facility in Malaysia.

This facility is operational, with its current manufacturing operations focused on the assembly of components that we purchase from other

Our Malaysian facility has received several ISO certifications, including ISO9001, ISO14001, ISO13485, and a GMP certification.

On February 5, 2024, we commenced manufacturing on two of the six lines in our approximately 31,000 square foot manufacturing facility

This facility is operational, with its current manufacturing operations focused on the assembly of components that we purchase

from other companies.

Our Malaysian facility has received several ISO certifications, including ISO9001, ISO14001, ISO13485, and a GMP

certification, and in May 2025, we received an interim license from the Malaysian Government for the manufacturing of nicotine products.

Because we have only recently commenced Malaysian assembly operations, we may encounter unexpected timing issues or operational and regulatory

5 unchanged sentences

impact the costs of production and thus our gross margins.

the Aspire brand of tobacco vaporizer technology products in more than 30 countries through our global network of more than 150 distributors.

The primary markets for our e-cigarette products are Europe and the Asia Pacific region, which does not include the PRC.

The following table sets out the breakdown of

our revenue and percentage by region for the years ended June 30, 2023 and 2024 based on information provided to us by our distributors

(dollars in thousands) and from the company’s sales.

Year Ended June 30,

sell the Aspire brand of tobacco vaporizer technology products in more than 30 countries through our global network of more than 150

distributors.

The primary markets for our e-cigarette products are Europe and the Asia Pacific region, which does not include the People’s

Republic of China (“PRC”).

following table sets out the breakdown of our revenue and percentage by region for the years ended June 30, 2025 and 2024 based on information

provided to us by our distributors (dollars in thousands) and from the company’s sales.

Ended June 30,

North America (the U.S.

Asia Pacific (excluding PRC)

Acquisition of Our Business from a Related

We were formed on June 13, 2022.

We have two operating

subsidiaries, Aspire North America LLC, a California limited liability company (“Aspire North America”), and Aspire Science

and Technology Limited, a Hong Kong corporation (“Aspire Science”).

On July 29, 2022, we acquired 100% of the equity interest

in Aspire North America from Aspire Global Inc.

(“Aspire Global”), and our wholly-owned subsidiary Ispire International Limited,

a British Virgin Islands corporation (“Ispire International”), acquired 100% of the equity interest in Aspire Science from

a wholly-owned subsidiary of Aspire Global in connection with a restructure by Aspire Global pursuant to which the equity in Aspire North

America and Aspire Science was transferred to us, and, at the time of the transfer, we had the same stockholders as Aspire Global.

Aspire North America commenced marketing cannabis vaping products in

Aspire Science markets nicotine vaping products worldwide, except for the PRC and Russia.

Aspire Global is a related party.

is Aspire Global’s chief executive officer and a director of both us and Aspire Global, and his wife, Jiangyan Zhu, is also a director

of both companies.

Zhu beneficially own 58.7% and 4.4%, respectively, of our outstanding common stock, par value $0.0001

per share (the “Common Stock”) and 66.5% and 5.9% of Aspire Global’s ordinary shares.

Upon our formation we issued 50,000,000

shares of Common Stock to the stockholders of Aspire Global in the same proportion as their stockholdings in Aspire Global.

We presently purchase the majority of our e-cigarette

and cannabis vaping hardware from Shenzhen Yi Jia.

Pursuant to agreements dated January 27, 2023, between Aspire North America and Shenzhen

Yi Jia and between Aspire Science and Shenzhen Yi Jia, we purchase our cannabis and tobacco vaping products form Shenzhen Yi Jia at market

prices, provided that the price, delivery, warranty and other terms are no less favorable to us than the price, delivery, warranty and

other terms that are provided to any other customer of Shenzhen Yi Jia.

Our intellectual property was developed primarily

by our co-chief executive officer, Tuanfang Liu.

Our research and development team is headed by Mr.

Our intellectual property was

owned by Shenzhen Yi Jia, which had patents or patent application in the United States, the PRC, the European Union and elsewhere relating

to various functional and ornamental aspects of our products.

These patents cover both the cannabis and tobacco products.

the Intellectual Property Transfer Agreement, Mr.

Liu, Aspire Global and Shenzhen Yi Jia transferred to Aspire North America all patent

and other intellectual property rights, including trademarks, Know-how and Know-how Documentation, as defined in the agreement, relating

to the cannabis vaping products, and to transfer to us any new intellectual property developed or acquired by Mr.

Liu, Aspire Global and

Shenzhen Yi Jia which relates to cannabis vaping products.

The patents have been transferred to Aspire North America for nil consideration.

Pursuant to the Intellectual Property License

Agreement (the “License Agreement”), Mr.

Liu, Aspire Global and Shenzhen Yi Jia granted Aspire Science a perpetual, royalty-free

sole license to use Licensed Technology worldwide, except for the PRC and Russia.

This license is for exclusive use of the Licensed Technology,

so no other parties may use or practice this intellectual property .

The Licensed Technology includes all patents, know-how, know-how

documentation and trademarks, whether now existing or hereafter developed or acquired by, or for, Mr.

Liu, Aspire Global and/or Shenzhen

Yi Jia that relate, directly or indirectly, to the e-cigarette market.

Pursuant to the License Agreement, neither Mr.

Liu, Aspire Global

nor Shenzhen Yi Jia has any right to market or sell or grant distributors the right to market or sell tobacco vaping products in the world

other than in the PRC and Russia.

Matters Relating to PRC Laws

The majority of our operations are in United States.

of Our Business from a Related Party

were formed on June 13, 2022.

We have two operating subsidiaries, Aspire North America LLC, a California limited liability company (“Aspire

North America”), and Aspire Science and Technology Limited, a Hong Kong corporation (“Aspire Science”).

2022, we acquired 100% of the equity interest in Aspire North America from Aspire Global Inc.

(“Aspire Global”), and our

wholly-owned subsidiary Ispire International Limited, a British Virgin Islands corporation (“Ispire International”), acquired

100% of the equity interest in Aspire Science from a wholly-owned subsidiary of Aspire Global in connection with a restructure by Aspire

Global pursuant to which the equity in Aspire North America and Aspire Science was transferred to us, and, at the time of the transfer,

we had the same stockholders as Aspire Global.

North America commenced marketing cannabis vaping products in mid-2020.

Aspire Science markets nicotine vaping products worldwide, except

for the PRC and Russia.

Global is a related party.

Tuanfang Liu is Aspire Global’s chief executive officer and a director of both us and Aspire Global,

and his wife, Jiangyan Zhu, is also a director of both companies.

Zhu beneficially own 58.1% and 4.4%, respectively,

of our outstanding common stock, par value $0.0001 per share (the “Common Stock”) and 66.5% and 5.0% of Aspire Global’s

ordinary shares.

Upon our formation we issued 50,000,000 shares of Common Stock to the stockholders of Aspire Global in the same proportion

as their stockholdings in Aspire Global.

presently purchase the majority of our e-cigarette and cannabis vaping hardware from Shenzhen Yi Jia.

Pursuant to agreements dated January

27, 2023, between Aspire North America and Shenzhen Yi Jia and between Aspire Science and Shenzhen Yi Jia, we purchase our cannabis and

tobacco vaping products form Shenzhen Yi Jia at market prices, provided that the price, delivery, warranty and other terms are no less

favorable to us than the price, delivery, warranty and other terms that are provided to any other customer of Shenzhen Yi Jia.

intellectual property was developed primarily by our co-chief executive officer, Tuanfang Liu.

Our research and development team is headed

Our intellectual property was owned by Shenzhen Yi Jia, which had patents or patent application in the United States, the

PRC, the European Union and elsewhere relating to various functional and ornamental aspects of our products.

These patents cover both

the cannabis and tobacco products.

Pursuant to the Intellectual Property Transfer Agreement, Mr.

Liu, Aspire Global and Shenzhen Yi Jia

transferred to Aspire North America all patent and other intellectual property rights, including trademarks, Know-how and Know-how Documentation,

as defined in the agreement, relating to the cannabis vaping products, and to transfer to us any new intellectual property developed

or acquired by Mr.

Liu, Aspire Global and Shenzhen Yi Jia which relates to cannabis vaping products.

The patents have been transferred

to Aspire North America for nil consideration.

to the Intellectual Property License Agreement (the “License Agreement”), Mr.

Liu, Aspire Global and Shenzhen Yi Jia granted

Aspire Science a perpetual, royalty-free sole license to use Licensed Technology worldwide, except for the PRC and Russia.

is for exclusive use of the Licensed Technology, so no other parties may use or practice this intellectual property .

Technology includes all patents, know-how, know-how documentation and trademarks, whether now existing or hereafter developed or acquired

by, or for, Mr.

Liu, Aspire Global and/or Shenzhen Yi Jia that relate, directly or indirectly, to the e-cigarette market.

the License Agreement, neither Mr.

Liu, Aspire Global nor Shenzhen Yi Jia has any right to market or sell or grant distributors the right

to market or sell tobacco vaping products in the world other than in the PRC and Russia.

Relating to PRC Laws

Our operations are located in Hong Kong, the United States and Malaysia.

We do not conduct business and we do not have any employees, assets or funds in mainland China.

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See “ Certain Relationships and Related Party Transactions .”

Our operations are primarily in the United States.

Although Tuanfang Liu, our co-chief executive officer, lives in mainland China, where

Shenzhen Yi Jia is located, the services that he performs for us in his capacity as our co-chief executive officer are performed primarily

in Hong Kong and the United States.

In addition to serving as our co-chief executive officer, Mr.

Liu is chairman of Shenzhen Yi Jia,

and the services he provides in mainland China are performed in his capacity as chairman of Shenzhen Yi Jia.

Our employees are largely

in the United States, with 67 employees based in the United States and where our research and development activities are conducted, 37

in Malaysia, and 10 employees in Hong Kong.

Our facilities are located primarily in the United States, where we lease more than 41,221

square feet of office, manufacturing and storage space and where our research and development activities are conducted, as compared with

1,850 square feet of office space in Hong Kong.

We are also leasing approximately 31,000 square feet for our manufacturing facility in

We do not have any variable interest entities arrangements or any similar agreements in mainland China.

As of the date of this

Annual Report, we do not believe we are subject to PRC Laws applicable to those Chinese companies established in mainland China, based

on advice from Han Kun Law Offices.

We have two operating subsidiaries established in California and Hong

Hong Kong was established as a special administrative region of the PRC in accordance with Article 31 of the Constitution of the

The Basic Law of the Hong Kong Special Administrative Region of the PRC (the “Basic Law”) was adopted and promulgated

on April 4, 1990 and became effective on July 1, 1997, when the PRC resumed the exercise of sovereignty over Hong Kong.

Pursuant to the

Basic Law, Hong Kong is authorized by the National People’s Congress of the PRC to exercise a high degree of autonomy and enjoy

executive, legislative and independent judicial power, and the PRC laws and regulations shall not be applied to Hong Kong, other than

those relating to national defense, foreign affairs, and certain other matters that are not within the scope of autonomy of Hong Kong.

While the National People’s Congress of the PRC has the power to amend the Basic Law, the Basic Law also expressly provides that

no amendment to the Basic Law shall contravene the established basic policies of the PRC regarding Hong Kong.

As a result, as of the date

of this Annual Report, national laws of the PRC that would be applicable to us if we were a Chinese corporation do not apply to our Hong

Kong subsidiary.

However, there is no assurance that certain PRC laws and regulations, including existing laws and regulations and those

enacted or promulgated in the future, will not be applicable to our Hong Kong subsidiary due to change in the current political arrangements

between mainland China and Hong Kong or other unforeseeable reasons.

The application of such laws and regulations may have a material

adverse impact on us, as relevant PRC authorities may impose fines and penalties upon our Hong Kong subsidiary, delay or restrict the

repatriation of the proceeds from this offering into Hong Kong, and any failure of us to fully comply with such new regulatory requirements

may significantly limit or completely hinder our ability to offer or continue to offer our Common Stock, cause significant disruption

to our business operations, and severely damage our reputation, which would materially and adversely affect our financial condition and

results of operations and cause our Common Stock to significantly decline in value or in extreme cases, become worthless.

Our Corporate Organization

We are a Delaware corporation, incorporated on

June 13, 2022.

Aspire North America, LLC, a California limited liability company, was formed on February 22, 2020, and 100% of its ownership

was transferred to Aspire Global on September 23, 2020, and was transferred by Aspire Global to Ispire Technology on July 29, 2022.

Science, a Hong Kong corporation, was formed on December 9, 2016, as a subsidiary of Aspire Global, and 100% of its equity was transferred

to our subsidiary, Ispire International, on July 29, 2022.

Ispire International was organized on July 6, 2022.

Ispire Malaysia Sdn Bhd

was formed by on our behalf by Tuanfang Liu, our Chairman and Co-Chief Executive Officer, under the laws of the Federation of Malaysia

on August 2, 2023, and assigned to us on September 22, 2023.

Aspire North America and Aspire Science are our operating companies.

The following chart shows our corporate structure.

We are implementing a multi-prong growth strategy

directed at increasing the sales of our e-cigarette and cannabis vaporizer technology products.

In addition to increasing sales to our existing

customers, we plan to increase sales of our e-cigarette vaporizer technology products by increasing the number of distributors and regions

where our products are sold.

We plan to increase sales of our cannabis products by increasing sales to existing customers, increasing

our customer base in the United States and seeking to penetrate the Canadian and European markets as they develop.

We closely follow the

legalization of cannabis globally and plan to enter markets when opportunities arise.

Research and development is at the core of our

Although Tuanfang Liu, our co-chief executive officer, lives in mainland China, where Shenzhen Yi Jia is located, the services that he

performs for us in his capacity as our co-chief executive officer are performed primarily in Hong Kong and the United States.

to serving as our co-chief executive officer, Mr.

Liu is chairman of Shenzhen Yi Jia, and the services he provides in mainland China are

performed in his capacity as chairman of Shenzhen Yi Jia.

We have 22 employees based in the United States and where our research and development

activities are conducted, 46 in Malaysia, and 13 employees in Hong Kong.

Our facilities are located primarily in Malaysia and the United

States, where we lease more than 41,221 square feet of office, manufacturing and storage space and where our research and development

activities are conducted, as compared with 1,850 square feet of office space in Hong Kong.

We are also leasing approximately 162,320 square

feet for our manufacturing facility in Malaysia.

We do not have any variable interest entities arrangements or any similar agreements

in mainland China.

As of the date of this Annual Report, we do not believe we are subject to PRC Laws applicable to those Chinese companies

established in mainland China, based on advice from Han Kun Law Offices.

have two operating subsidiaries established in California and Hong Kong.

Hong Kong was established as a special administrative region

of the PRC in accordance with Article 31 of the Constitution of the PRC.

The Basic Law of the Hong Kong Special Administrative Region

of the PRC (the “Basic Law”) was adopted and promulgated on April 4, 1990 and became effective on July 1, 1997, when the

PRC resumed the exercise of sovereignty over Hong Kong.

Pursuant to the Basic Law, Hong Kong is authorized by the National People’s

Congress of the PRC to exercise a high degree of autonomy and enjoy executive, legislative and independent judicial power, and the PRC

laws and regulations shall not be applied to Hong Kong, other than those relating to national defense, foreign affairs, and certain other

matters that are not within the scope of autonomy of Hong Kong.

While the National People’s Congress of the PRC has the power to

amend the Basic Law, the Basic Law also expressly provides that no amendment to the Basic Law shall contravene the established basic

policies of the PRC regarding Hong Kong.

As a result, as of the date of this Annual Report, national laws of the PRC that would be applicable

to us if we were a Chinese corporation do not apply to our Hong Kong subsidiary.

However, there is no assurance that certain PRC laws

and regulations, including existing laws and regulations and those enacted or promulgated in the future, will not be applicable to our

Hong Kong subsidiary due to change in the current political arrangements between mainland China and Hong Kong or other unforeseeable

The application of such laws and regulations may have a material adverse impact on us, as relevant PRC authorities may impose

fines and penalties upon our Hong Kong subsidiary, delay or restrict the repatriation of the proceeds from this offering into Hong Kong,

and any failure of us to fully comply with such new regulatory requirements may significantly limit or completely hinder our ability

to offer or continue to offer our Common Stock, cause significant disruption to our business operations, and severely damage our reputation,

which would materially and adversely affect our financial condition and results of operations and cause our Common Stock to significantly

decline in value or in extreme cases, become worthless.

Corporate Organization

are a Delaware corporation, incorporated on June 13, 2022.

Aspire North America, LLC, a California limited liability company, was formed

on February 22, 2020, and 100% of its ownership was transferred to Aspire Global on September 23, 2020, and was transferred by Aspire

Global to Ispire Technology on July 29, 2022.

Aspire Science, a Hong Kong corporation, was formed on December 9, 2016, as a subsidiary

of Aspire Global, and 100% of its equity was transferred to our subsidiary, Ispire International, on July 29, 2022.

Ispire International

was organized on July 6, 2022.

Ispire Malaysia Sdn Bhd was formed by on our behalf by Tuanfang Liu, our Chairman and Co-Chief Executive

Officer, under the laws of the Federation of Malaysia on August 2, 2023, and assigned to us on September 22, 2023.

Aspire North America

and Aspire Science are our operating companies.

following chart shows our corporate structure.

are implementing a multi-prong growth strategy directed at increasing the sales of our e-cigarette and cannabis vaporizer technology

addition to increasing sales to our existing customers, we plan to increase sales of our e-cigarette vaporizer technology products by

increasing the number of distributors and regions where our products are sold.

We plan to increase sales of our cannabis products by

increasing sales to existing customers, increasing our customer base in the United States and seeking to penetrate the Canadian and European

markets as they develop.

We closely follow the legalization of cannabis globally and plan to enter markets when opportunities arise.

and development is at the core of our business.

We will continue to innovate via our own research and development efforts.

Tuanfang Liu, our co-chief executive officer, developed

the patented DuCore TM technology, which is being assigned to us enabling our cannabis vaporizer products to heat cannabis oil,

which, we believe is the first leak-proof patented design, which enables the consumer to get the full flavor experience of the cannabis.

We will continue to expand our technology leadership and invest in vaporizer and similar technology research and development.

products are designed for adult use.

Our research and development activities will be oriented to focus on both medical and recreational

usages of cannabis products.

Tuanfang Liu,

our co-chief executive officer, developed the patented DuCore TM technology, which is being assigned to us enabling our cannabis

vaporizer products to heat cannabis oil, which, we believe is the first leak-proof patented design, which enables the consumer to get

the full flavor experience of the cannabis.

We will continue to expand our technology leadership and invest in vaporizer and similar

technology research and development.

Our present products are designed for adult use.

Our research and development activities will be

oriented to focus on both medical and recreational usages of cannabis products.

We recognize that industry trends can change rapidly.

We believe that our products must be at the forefront

of technology if we are going to develop our business.

The cannabis vaping business is in its early stages and we will seek to develop

a strong and leading position in this market.

Currently, this market is largely in the United States and we plan to be at the forefront

as other markets develop.

Through our global sales network, we have a strong

understanding of all of the markets in which our products are sold.

We will use online forum and community groups as a means to increase

engagement and collect feedback for future improvements in product research and development.

We will seek to introduce new products to

meet customer needs based on our assessment of the direction of the market.

We will also pursue mergers and acquisitions and

strategic relationships to increase our technological human resources and technology and product portfolio.

We believe that we have a

strong management team adept at integrating such acquisitions and that we are an attractive platform to potential acquirees.

We plan to develop further manufacturing capabilities.

However, currently, and for the foreseeable near term, our manufacturing operations will primarily involve the assembly of products from

components manufactured for us in accordance with our specifications.

We are expanding our cannabis and e-cigarette

Original Equipment Manufacturer (“OEM”) and Original Design Manufacturer (“ODM”) business.

OEM generally means

making and selling the products as we design them and putting customers’ logos on the products.

For OEM products, cost is important

to the customer.

ODM generally involves the design and customization of the core products to meet each brand’s unique image and

For ODM products, our customers often consider technology, performance and uniqueness more important than cost, which is often

a secondary consideration.

Historically, for our e-cigarette products, we have focused on building and growing our own branded business,

with OEM and ODM sales accounting for a minor portion of our revenue.

OEM and ODM sales accounted for approximately $4.5 million and $22.1

million, or 6.0% and 25.9%, of total revenue of e-cigarette products in the years ended June 30, 2023 and 2024, respectively.

Global continued to innovate in the last decade and the Aspire brand has become recognized as a leading innovator in the vaping industry,

Aspire Science has been sought after by other brands for OEM and ODM work.

We believe that OEM and ODM for our e-cigarette products will

represent a key growth area for us in the future.

In seeking to introduce new products, we will, at least initially, rely upon our chairman,

We believe that our products must be at the forefront of technology if we are going to develop our business.

The cannabis vaping business

is in its early stages and we will seek to develop a strong and leading position in this market.

Currently, this market is largely in

the United States and we plan to be at the forefront as other markets develop.

our global sales network, we have a strong understanding of all of the markets in which our products are sold.

We will use online forum

and community groups as a means to increase engagement and collect feedback for future improvements in product research and development.

We will seek to introduce new products to meet customer needs based on our assessment of the direction of the market.

will also pursue mergers and acquisitions and strategic relationships to increase our technological human resources and technology and

product portfolio.

We believe that we have a strong management team adept at integrating such acquisitions and that we are an attractive

platform to potential acquirees.

plan to develop further manufacturing capabilities.

However, currently, and for the foreseeable near term, our manufacturing operations

will primarily involve the assembly of products from components manufactured for us in accordance with our specifications.

are expanding our cannabis and e-cigarette Original Equipment Manufacturer (“OEM”) and Original Design Manufacturer (“ODM”)

OEM generally means making and selling the products as we design them and putting customers’ logos on the products.

OEM products, cost is important to the customer.

ODM generally involves the design and customization of the core products to meet each

brand’s unique image and needs.

For ODM products, our customers often consider technology, performance and uniqueness more important

than cost, which is often a secondary consideration.

Historically, for our e-cigarette products, we have focused on building and growing

our own branded business, with OEM and ODM sales accounting for a minor portion of our revenue.

OEM and ODM sales accounted for approximately

$36.4 million and $22.1 million, or 40.2% and 25.9%, of total revenue of e-cigarette products in the years ended June 30, 2025 and 2024,

respectively.

As Aspire Global continued to innovate in the last decade and the Aspire brand has become recognized as a leading innovator

in the vaping industry, Aspire Science has been sought after by other brands for OEM and ODM work.

We believe that OEM and ODM for our

e-cigarette products will represent a key growth area for us in the future.

In seeking to introduce new products, we rely upon our chairman,

Tuanfang Liu, who has been largely responsible for the development of the technology underlying our e-cigarette and cannabis vaping products.

Sales of our cannabis products to date are largely

sales to cannabis brands on an ODM basis, and, while some hardware products are sold to end users, we anticipate that our cannabis product

sales will continue to be primarily ODM sales for the near future.

It is the responsibility of our customers, which are cannabis brands,

to manufacture the cannabis oil and load the oil into our vaping hardware product.

None of our products include cannabis oil or hemp oil.

E-Cigarette Products

We develop and sell both branded and, to a significantly

lesser extent, OEM and ODM nicotine vaping systems and components (cartridges and batteries) to meet the needs of adult users worldwide,

excluding the United States, the PRC and Russia.

There are generally two types of vaping systems

– open systems and closed systems.

Initially, all of our products were “open

system” vaping devices.

The term “open system” generally refers to vaping devices consisting of tanks, which include

heating coils, and battery mods, which include the battery packs.

Open system vaping devices allow end consumers to refill the tanks with

their own liquid by themselves.

With open systems, consumers have great flexibility in mixing different coils, mods, and e-liquid to create

a more personalized experience.

Our open system vaping devices are sold under our own brands, including “Nautilus,” and “Zestquest.”

In 2018, we introduced our first “closed

system” vaping device.

The term “closed system” generally refers to vaping devices that consist of cartridges, which

include a heating core (sometimes referred to as atomizers) and is filled with e-liquid, and batteries, which power the cartridges.

closed system vaping devices include rechargeable and disposable vaping devices.

A cartridge for a closed-system vaping device typically

can last from a few days to approximately two weeks, depending upon the frequency of use.

We market a line of closed systems through our

licensed brands under the brand names BRKFST and Hidden Hills Club.

We believe that the market for closed system vaping devices is increasing

rapidly and is becoming the dominant form of tobacco vaping.

Our vaping components include cartridges, lithium

batteries, metal parts such as coils, plastic parts that are molded, circuit boards (printed circuit board assembly) and liquid cartridges

for our products.

The cartridges of closed system vaping devices are consumable products that need to be frequently replaced.

of our cannabis products to date are largely sales to cannabis brands on an ODM basis, and, while some hardware products are sold to

end users, we anticipate that our cannabis product sales will continue to be primarily ODM sales for the near future.

It is the responsibility

of our customers, which are cannabis brands, to manufacture the cannabis oil and load the oil into our vaping hardware product.

of our products include cannabis oil or hemp oil.

We are also actively pursuing

various technological innovations to prevent youth usage of e-cigarettes.

Our IKE Tech LLC joint venture (described more fully within)

(“IKE” or the “Joint Venture”) is a global leader in point-of-use age-gating technology for electronic nicotine

delivery systems.

Ispire is pursuing various product launches using the IKE age-gating technology, including work on age-gated e-cigarettes

with characterizing flavors in the U.S.

using the IKE age-gating technology, as well as pod systems in the UK and European markets which

will have age-gating functionality.

develop and sell both branded and, to a significantly lesser extent, OEM and ODM nicotine vaping systems and components (cartridges and

batteries) to meet the needs of adult users worldwide, excluding the United States, the PRC and Russia.

are generally two types of vaping systems – open systems and closed systems.

all of our products were “open system” vaping devices.

The term “open system” generally refers to vaping devices

consisting of tanks, which include heating coils, and battery mods, which include the battery packs.

Open system vaping devices allow

end consumers to refill the tanks with their own liquid by themselves.

With open systems, consumers have great flexibility in mixing

different coils, mods, and e-liquid to create a more personalized experience.

Our open system vaping devices are sold under our own brands,

including “Nautilus,” and “Zestquest.”

In 2018, we introduced our first “closed system” vaping

The term “closed system” generally refers to vaping devices that consist of cartridges, which include a heating core

(sometimes referred to as atomizers) and is filled with e-liquid, and batteries, which power the cartridges.

The closed system vaping

devices include rechargeable and disposable vaping devices.

A cartridge for a closed-system vaping device typically can last from a few

days to approximately two weeks, depending upon the frequency of use.

We market a line of closed systems through our licensed brands under

the brand name BRKFST.

We believe that the market for closed system vaping devices is increasing rapidly and is becoming the dominant

form of tobacco vaping.

vaping components include cartridges, lithium batteries, metal parts such as coils, plastic parts that are molded, circuit boards (printed

circuit board assembly) and liquid cartridges for our products.

The cartridges of closed system vaping devices are consumable products

that need to be frequently replaced.

of our products use our BDC (bottom dual coil) coil technology which uses bottom dual coils to provide expanded heating area and achieve

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holes can both expand the tank e-liquid capacity and improve the speed of wicking to increase the coil life.

Our BVC (bottom vertical coil) coil represents

a major technological breakthrough for us in coil technology with a vertical heating wire surrounded by cotton.

This design can enable

the coil heating to provide uniform temperature to the tank, together with more efficient wicking.

This technology, which Aspire Global

introduced in 2014, enables the coil to last longer while still giving users what we believe is the purest and cleanest taste from e-liquids.

BVC (bottom vertical coil) coil represents a major technological breakthrough for us in coil technology with a vertical heating wire

surrounded by cotton.

This design can enable the coil heating to provide uniform temperature to the tank, together with more efficient

This technology, which Aspire Global introduced in 2014, enables the coil to last longer while still giving users what we believe

is the purest and cleanest taste from e-liquids.

The BVC coils are still very popular for MTL (mouth to lung) vapors today.

We believe that our Cleito tank brings new and innovative technological

advancement to the vaping industry.

The Cleito uses a revolutionary new coil design that replaces the standard chimney and, we believe,

delivers maximized airflow.

This design frees up even more restriction in the airflow by eliminating the need for a static chimney within

the tank itself, which results in an expanded flavor profile and increased vapor production.

Combined with a Clapton kanthal coil for

maximum flavor, the Cleito tank delivers a rush of intense flavor and huge vapor with a broad flavor profile.

We believe the simple top-fill

design makes filling the device more convenient and more enjoyable when compared to other designs.

Cannabis Products

December 2020, we introduced the Ispire line of cannabis vaping products.

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we have manufactured for our customers.

In June 2023, we introduced our proprietary Ispire

ONE TM technology and associated products.

Ispire ONE TM is designed to eliminate capping issues in the manufacturing/co-packing

process, increase consistency and quality of filled devices, eliminate leaking, spitting, or overheating for cartridges, disposables,

and PODs, and improve consumer safety., The devices are sealed in a sterilized factory environment to eliminate risk of contamination

during the filling process by our customers.

Sales and Distribution

Most of our revenue from our e-cigarette products

comes from sales to our distributors.

We are looking to increase our OEM and ODM sales of e-cigarette products, which accounted for 4.5%

and 25.9% of our e-cigarette revenue for the years ended June 30, 2023 and 2024, respectively.

We have secured a major e-cigarette OEM

contract in May of 2024 and believe that this contract will yield significant revenue increases from the OEM and ODM business in our 2025

Most of our revenue from cannabis products is from ODM sales to other cannabis vaping brands, and we work with the customer

to design the product, which is sold under the customer’s brand name.

June 2023, we introduced our proprietary Ispire ONE TM technology and associated products.

Ispire ONE TM is designed

to eliminate capping issues in the manufacturing/co-packing process, increase consistency and quality of filled devices, eliminate leaking,

spitting, or overheating for cartridges, disposables, and PODs, and improve consumer safety.

The devices are sealed in a sterilized factory

environment to eliminate risk of contamination during the filling process by our customers.

We have recently begun development and early commercialization efforts

of our new patented G-Mesh technology, which will be marketed under a “Silica Series” trademark brand name.

The G-Mesh technology

uses a 1-millimeter-thick sheet of porous glass and draws e-liquid from a reservoir to an interlocking mesh coil on the opposing side

of the glass core.

This innovative new design allows for improved particle size for better nicotine uptake, flavor that is superior to

that generated by ceramic coils, and what we believe could be less hazardous vaping by eliminating the risk of ceramic dust.

and Distribution

Most of our revenue from our e-cigarette products comes from sales

to our distributors.

We are looking to increase our OEM and ODM sales of e-cigarette products, which accounted for 40.2% and 25.9% of

our e-cigarette revenue for the years ended June 30, 2025 and 2024, respectively.

We secured a major e-cigarette OEM contract in May of

Production for the customer began in fiscal year 2025 and given the ramp up in demand in June, July and August of 2025, we believe

that this contract will yield significant revenue increases from the OEM and ODM business in our 2026 fiscal year.

Most of our revenue

from cannabis products is from ODM sales to other cannabis vaping brands, and we work with the customer to design the product, which is

sold under the customer’s brand name.

For some customers, the Ispire brand is also on the product.

to our acquisition, Aspire Global sold e-cigarette vaping products in the United States through its distribution network.

not to market in the United States as a result of changes in regulations in the United States.

Aspire North America would currently only

be able to sell one product line in the United States and that product line does not generate sufficient revenue to justify the marketing

and regulatory expenses at this time.

However, we have submitted a new premarket tobacco product application (“PMTA”) for

a disposable e-cigarette with several flavors, and are hopeful that, with the incorporation of age-gating technology from our IKE Tech

LLC joint venture, we will be able to sell this product into the U.S.

market, if approved.

We also plan to file PMTAs for a pod-based

e-cigarette system with a variety of flavors, which includes point-of-use age-gating technology, in the next 6 to 12 months.

We believe that we have the ability to evaluate

the market need for vaping products and develop products for both the e-cigarette and cannabis markets.

We believe that we have the state-of-the-art

technology, which enables us to market to other cannabis vaping brands.

We believe that we have implemented systems of quality control

that cover the key steps of supply chain management to provide high-quality products to adult smokers in a consistent manner.

uphold our extensive internal standards for various aspects of our products and conduct thorough quality assurance and control practices

throughout the entire production cycle.

Our cannabis vapor products are sold directly

by us, with most of our sales being to other cannabis vaping brands who purchase the product from us on an ODM basis and sell the products

under their brand name, although our Ispire brand may be included on the product.

We work with the customer in the design and appearance

of the product.

Prior to our acquisition, Aspire Global sold e-cigarette vaping products

in the United States through its distribution network.

We decided not to market in the United States as a result of changes in regulations

in the United States.

Aspire North America would currently only be able to sell one product line in the United States and that product

line does not generate sufficient revenue to justify the marketing and regulatory expenses at this time.

We are working on the submission

of several new premarket tobacco product applications (each a “PMTA”) for a pod-based e-cigarette system with a variety of

flavors, which includes the IKE point-of-use age-gating technology, in the next 6 to 12 months.

believe that we have the ability to evaluate the market need for vaping products and develop products for both the e-cigarette and cannabis

We believe that we have the state-of-the-art technology, which enables us to market to other cannabis vaping brands.

that we have implemented systems of quality control that cover the key steps of supply chain management to provide high-quality products

to adult smokers in a consistent manner.

We strictly uphold our extensive internal standards for various aspects of our products and

conduct thorough quality assurance and control practices throughout the entire production cycle.

cannabis vapor products are sold directly by us, with most of our sales being to other cannabis vaping brands who purchase the product

from us on an ODM basis and sell the products under their brand name, although our Ispire brand may be included on the product.

with the customer in the design and appearance of the product.

We do not sell cannabis or hemp oil, either as part of a product or separately.

our e-cigarette products, we have a network of more than 150 distributors, whose territories cover more than 30 countries or regions.

Our distributors have non-exclusive agreements and generally are not restricted from selling competing vapor products.

Our largest distributor,

whose territory was the United Kingdom and France, is Your-Buyer International Limited, which accounted for revenue of approximately

$37.4 million, or 32.4% of revenue and approximately $45.6 million, or 30.0% of revenue for the years ended June 30, 2023 and 2024, respectively.

No other distributor or customer accounted for 10% or more of our revenues for either the year ended June 30, 2023 or 2024.

Typically, our distributors sell our products

to wholesalers who in turn sell to retail distributors, although distributors may sell products directly to retail outlets.

The vast majority

of sales of all classes of e-cigarettes are sold in stores, primarily grocery stores, convenience stores and tobacco stores, which generally

purchase product from wholesale distributors.

Our products are also available from our distributors on the internet, including both websites

and services such as Amazon.

These internet distribution channels are operated by our distributors.

The distributors are responsible for

complying with the laws of the countries in which they sell our products.

We previously sold tobacco vaping products to a distributor

For our e-cigarette products,

we have a network of more than 150 distributors, whose territories cover more than 30 countries or regions.

Our distributors have non-exclusive

agreements and generally are not restricted from selling competing vapor products.

Our largest distributor, whose territory was the United

Kingdom and France, is Your-Buyer International Limited, which accounted for revenue of approximately $32.7 million, or 25.7% of revenue

and approximately $45.6 million, or 30.0% of revenue for the years ended June 30, 2025 and 2024, respectively.

No other distributor or

customer accounted for 10% or more of our revenues for either the year ended June 30, 2025 or 2024.

our distributors sell our products to wholesalers who in turn sell to retail distributors, although distributors may sell products directly

to retail outlets.

The vast majority of sales of all classes of e-cigarettes are sold in stores, primarily grocery stores, convenience

stores and tobacco stores, which generally purchase the product from wholesale distributors.

Our products are also available from our

distributors on the internet, including both websites and services such as Amazon.

These internet distribution channels are operated

by our distributors.

The distributors are responsible for complying with the laws of the countries in which they sell our products.

previously sold tobacco vaping products to a distributor for Russia;

however, we no longer sell to that distributor.

We assist our distributors in marketing our products

through websites, blogs, search engine optimization (SEO), opt-in and e-mail marketing, social media marketing, influencer, marketing

and digital advertising promotions.

Opt-in and email marketing strategies include newsletter sign-ups to receive new product updates and

promotions, giveaway promotional activities to drive conversion, coupons and discount promotion activities to increase sales to adult

consumers in compliance with local laws and regulations.

We may use social media to promote our products

and we market to adult consumers through our websites and Instagram.

We use social media to educate on current and new products and offers

as well as to provide real-time support to customers.

Our social media strategies aim to convert and nurture leads, to increase brand

awareness among adult consumers.

We also provide distributors with discounts and

other sales incentives.

From time to time, based on our sales or marketing strategy for a specific region or product, we will give distributors

Although our distributors do not have sales quotas, they have sales goals and, from time to time, we may reward distributors

for exceeding their sales targets.

These promotions are not part of a standard plan, but developed by us from time to time based on our

sales and marketing program.

sales of Ispire cannabis products to date, which have been primarily through direct sales of Ispire branded atomizers to other cannabis

brands as semi-finished products on an ODM basis.

Pursuant to our agreements with our ODM customers, we design and sell these atomizers

pursuant to purchase orders by the customers.

assist our distributors in marketing our products through websites, blogs, search engine optimization (SEO), opt-in and e-mail marketing,

social media marketing, influencer, marketing and digital advertising promotions.

Opt-in and email marketing strategies include newsletter

sign-ups to receive new product updates and promotions, giveaway promotional activities to drive conversion, coupons and discount promotion

activities to increase sales to adult consumers in compliance with local laws and regulations.

may use social media to promote our products, and we market to adult consumers through our websites and Instagram.

We use social media

to educate on current and new products and offers as well as to provide real-time support to customers.

Our social media strategies aim

to convert and nurture leads, to increase brand awareness among adult consumers.

also provide distributors with discounts and other sales incentives.

From time to time, based on our sales or marketing strategy for

a specific region or product, we will give distributors discounts.

Although our distributors do not have sales quotas, they have sales

goals and, from time to time, we may reward distributors for exceeding their sales targets.

These promotions are not part of a standard

plan, but developed by us from time to time based on our sales and marketing program.

sales of Ispire cannabis products to date have been primarily through direct sales of Ispire branded atomizers to other cannabis brands

as semi-finished products on an ODM basis.

Pursuant to our agreements with our ODM customers, we design and sell these atomizers pursuant

to purchase orders by the customers.

To a lesser extent we sell heating devices directly to consumers as internet sales.

Source of Supply

We purchase a majority of our current e-cigarette

and cannabis vaping products from Shenzhen Yi Jia.

The products that we sell are the same products that Aspire Science and Aspire North

America sold prior to the transfer of the equity in these subsidiaries to us.

Pursuant to agreements dated January 27, 2023, between Aspire

North America and Shenzhen Yi Jia and between Aspire Science and Shenzhen Yi Jia, we purchase our cannabis and e-cigarette vaping products

form Shenzhen Yi Jia at market prices, provided that the price, delivery, warranty and other terms are no less favorable to us than the

price, delivery, warranty and other terms that are provided to any other customer of Shenzhen Yi Jia.

In addition, the agreement provides

that Shenzhen Yi Jia will be responsible for any warranty expenses.

In February of 2024, we began operations at our

Company-owned manufacturing facility in Malaysia.

We are currently operating with 6 production lines at the Malaysia factory.

to continue expanding our production capabilities in Malaysia as a way to diversify our source of supply.

In connection with the Malaysian operations, we

may purchase components from Shenzhen Yi Jia’s present suppliers as well as other suppliers which we may identify.

Quality control

will be a crucial part of our manufacturing process.

We will need to include quality control checks and balances throughout our supply

chain and manufacturing process.

When selecting suppliers, we will have our quality control and procurement team visit potential suppliers.

We will need to conduct annual inspections of the factories and we will also visit the factory if any quality issues arise.

In connection

with the establishment of any manufacturing facilities we will have to employ qualified manufacturing, supervisory and administrative

We will pass on to our customers the warranties

which Shenzhen Yi Jia provides to us as a customer.

These warranties are of an assurance-type, come standard with all of products we purchase

from Shenzhen Yi Jia, and cover repair or replacement should product not perform as expected.

We offer these warranties 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.

Shenzhen Yi Jia generally offers 90-day warranty period from date of purchase for products sold to all regions,

but Shenzhen Yi Jia offers six months warranty period from date of purchase for products sold in the United Kingdom and France.

offers the refund or replacement of products for manufacturer defective items, dead on arrival items and items that do not appear the

same as listed on our website, and exclude damaged goods caused by misuse or unauthorized repair.

We generally require our customers to

test our hardware with their oils to confirm the hardware performance and approve the hardware designs, in order to minimize any hardware

related discrepancy or performance issues specific to the formulation of their oils.

Since we are passing on the warranties of Shenzhen

Yi Jia, we do not provide for estimated expenses related to product warranties.

Management actively studies trends of warranty claims

and takes action to improve product quality and minimize warranty costs.

We estimate the actual historical warranty claims coupled with

an analysis of unfulfilled claims to record a liability for specific warranty purposes.

As of June 30, 2023 and 2024, products returned

for repair or replacement have been immaterial.

Accordingly, a warranty liability has not been deemed necessary.

Research and Development

We believe that design and attention to detail

are at the heart of our business.

Historically, research and development relating to our existing products were conducted primarily by

Shenzhen Yi Jia.

We have commenced research and development activities independent of Shenzhen Yi Jia, which has related primarily to

cannabis vaping products.

This research and development effort, which is headed by our chairman, Tuanfang Liu, has eleven members, who

are primarily based in Los Angeles.

Prior to the transfer of the equity of Aspire North America and Aspire Science to us, the research

and development activities were conducted by Shenzhen Yi Jia.

As discussed under “Business – Intellectual Property”

we have rights to intellectual property generated by the research and development efforts of Shenzhen Yi Jia and Mr.

the years ended June 30, 2023 and 2024, research and development efforts included the development of the Ispire cannabis vaping system,

patented dual-coil technology, self-sealing technology and a closed system for e-cigarette vaping that is designed to eliminate the problem

of oil leaking out of the unit.

These research and development efforts were conducted by Shenzhen Yi Jia under the leadership of Tuanfang

Liu, our co-chief executive officer and the chief executive officer of Aspire Global.

Since the transfer of Aspire North America and

Aspire Science to us in July 2022, we have established our research and development group independent of Aspire Global and Shenzhen Yi

Jia, and the Shenzhen Yi Jia research and development activities relating to both cannabis and e-cigarette product have transitioned

We are also entitled to the benefits of Shenzhen Yi Jia’s research and development pursuant to the Intellectual Property

Transfer Agreement and the License Agreement.

IKE Tech LLC Joint Venture

reported in our Form 8-K on April 11, 2024, Aspire North America LLC entered into a capital contribution, subscription, and joint venture

agreement with Chemular Inc, Touch Point Worldwide, Inc.

d/b/a/ Berify, and Ike Tech LLC, a Delaware limited liability company (the “Joint

Venture”) pursuant to which the Parties agreed to participate in the Joint Venture.

The business of the Joint Venture is developing,

licensing, owning, and operating an industry-standard age-verification solution for vapor (e-cigarette) devices.

The Joint Venture plans

to submit PMTA applications seeking FDA marketing orders for cutting-edge technologies across the U.S.

e-cigarette market, including,

without limitation, (a) next-generation e-cigarette hardware with a user-friendly point-of-use age-verification and geo fencing capability

that eliminates usability of vapor hardware in certain designated areas such as schools and sensitive areas, (b) e-cigarettes with end-to-end

range of dynamic features such as authentication, direct to consumer engagements and exclusive offerings built on the foundations of

blockchain technology, and (c) a real-time biometric identity platform for user access controls, designed to create added security and

reliability to deter counterfeiting in connection with vapor devices.

As of the date of this Annual Report, Aspire North America LLC

owns 40% of the Joint Venture.

Intellectual Property

Shenzhen Yi Jia has patents or patent applications

in the United States, the PRC, the European Union and elsewhere relating to various functional and ornamental aspects of our products.

Pursuant to the Intellectual Property Transfer Agreement, Aspire Global, Shenzhen Yi Jia and Mr.

Liu have transferred to our subsidiary,

Aspire North America, all their intellectual property, including patents, trademarks, brand names, know-how and know-how documentation

that relate directly or indirectly to cannabis and hemp vaping products, and the patents and trademarks, trademarks and patent and trademark

application, have been transferred to Aspire North America.

Pursuant to the License Agreement, Aspire Science has the right to an exclusive

(to the exclusion of Shenzhen Yi Jia and Mr.

Liu) right and license to any patents, trademarks and other intellectual property that relates

to tobacco vaping products in the territory, which include the world except for China and Russia.

We believe that the utility patents form the core

intellectual property for our cigarette-cigarette and vaporizer products.

The utility patents primarily relate to atomizer, heating coil,

and battery technologies, which we believe provide enhanced functionality and an improved smoking experience to users of our products.

Our atomizer technology is directed toward enhancing the atomization of e-liquid, including by enabling the user to adjust the airflow

through the atomizer to provide a customized smoking experience.

Our heating coil technology is directed towards heating coil designs

and arrangements that deliver heat more efficiently from the heating coil to the e-liquid, thereby producing vapor more effectively.

battery technology is directed towards battery assemblies that are replaceable and that are controllable to help facilitate a customized

smoking experience in combination with the atomizer and heating coil technologies.

We believe the design patents cover the visual

aspects of certain of our products and serve to enhance the protection provide by our utility patents.

We either own, with respect to

cannabis vaping products, or license on an exclusive basis, with respect to tobacco products, designs patents for the ornamental appearance

of the housing of certain of our electronic cigarettes and cannabis vaping products.

Our design patents also extend to the ornamental

appearance of certain e-cigarette components, including certain aspects of our atomizers and heating coils.

The patents are primarily based on inventions developed by our chairman,

Tuanfang Liu, who has received more than 200 patents in China, the United States, the European Union and other countries.

patents have been assigned, licensed, or otherwise transferred to Shenzhen Yi Jia, which, has transferred to Aspire North America, with

respect to intellectual property relating to cannabis products, and licensing on a sole and exclusive basis globally other than the PRC

and Russia, to Aspire Science, with respect to e-cigarette products.

The earliest patents were filed in 2012 and began expiring in 2022,

with the last patents set to expire in 2037, depending on priority filing date, patent type, and jurisdiction.

We intend to work to improve

our technology and products and to seek further patent protection as warranted in connection with any new developments.

We cannot guarantee that our patent rights are

sufficient to protect all aspects of our products or that we will be able to enforce those rights against third parties, as patents can

be challenged, circumvented, or otherwise found to be invalid.

Shenzhen Yi Jia has obtained trademark registrations

for Ispire in the countries which we believe are major markets for our products, including the United States, China, the European Union,

and other countries.

In addition to the Ispire mark, Shenzhen Yi Jia has also been granted trademark registrations in the United States

and China for certain products and components, including the marks CLEITO, PERSEUS, PLATO, PROTEUS, and ZESTQUEST.

Furthermore, Shenzhen

Yi Jia has submitted trademark applications for the mark Ispire in the United States, China, the European Union, and other jurisdictions

we believe are important markets.

To the extent any of these trademarks were held by our chairman, Tuanfang Liu or Shenzhen Yi Jia, the

trademarks related to cannabis products have been assigned to Aspire North America pursuant to the Intellectual Property Transfer Agreement,

and all other trademarks have been licensed on an exclusive license (to the exclusion of Aspire Global, Shenzhen Yi Jia and Mr.

Aspire Science pursuant to the License Agreement.

We cannot assure you that our patent and trademark

rights are sufficient to protect all aspects of our brands or that we will be to enforce those rights to prevent third parties from using

the same or confusingly similar marks, as trademarks can be opposed, cancelled, or otherwise challenged, especially by parties with rights

to similar marks.

Vaping products for both e-cigarette and cannabis

compete with tobacco and marijuana cigarettes and a wide range of other tobacco, nicotine and legal and illegal cannabis products.

each case, vaping products seek to provide the user with pleasure that the user derives from consuming nicotine or cannabis without the

disadvantages of other mediums.

The worldwide market for e-cigarette products

is highly competitive, with more than 50 companies selling products which compete with our products.

In terms of volume of product sold,

by far the largest worldwide producer of tobacco vapor products is Juul Labs, Inc.

British American Tobacco Plc is also a major producer

of tobacco vapor products.

We anticipate that the market for vaping

products will evolve, with technological innovation, changing standards and changes in needs and preferences of adult vapor users.

devices are more than a reduced-risk alternative to traditional cigarettes.

Instead, they represent the user’s taste and offer

them a new and fun experience, as they provide large amounts of vapor, different tastes of e-liquid and fashionable design.

of such trend and to further differentiate their vaping devices, manufacturers are upgrading their products in terms of technology and

Many manufacturers are now providing full-spectrum vaping devices, including closed system vaping devices, open system vaping

devices and other kinds of vaping devices, so as to be more competitive in the market.

In the next few years, with the technology becoming

more mature, we anticipate that more differentiated vaping devices will continuously emerge to draw adult consumers’ attention.

Our recent enhancements to our vaping products, such as the big smoke effect, have increased interest and sales of our products.

that our ability to remain profitable and to increase our market share is dependent upon our ability to anticipate market demand and

develop and market products that address these trends.

The market for cannabis vapor products is a developing

market and at present is mainly limited to the United States, although there is a developing market in Canada, and we believe that a market

is developing in Europe.

Our ability to be successful in these markets is dependent upon our ability to develop vaping systems that attracts

and retains consumer interest and the regulatory environment in the United States.

Our cannabis vaping products compete with other forms

of legal and illegal cannabis, marijuana cigarettes, CBD oil and other CBD products, food products and other vaping products.

Seasonality does not materially affect our business

or the results of our operations.

Human Capital

We believe our people are central to the foundation

and future of our success.

Our culture and commitment to our employees are important factors in attracting, retaining, developing and

progressing qualified employees.

As of September 24, 2024, we had a total of 98 employees, of which 40 are operations personnel, 24 are

general management personnel, 19 are in sales and marketing, and 15, including Tuanfang Liu, our co-chief executive officer, are in research

and development relating to our products.

Culture and Engagement

We value and support our people through, among

other initiatives, our talent management, health and safety, employment practices and total reward programs.

We are committed to fostering

a culture of inclusion where differences are welcomed, appreciated and celebrated to positively impact our people and business, and where

our people are engaged and encouraged to support the communities in where they live and work.

Talent Management

We are committed to providing our people with

opportunities to learn, grow and be recognized for their achievements.

Through our integrated talent management strategy, we strive to

attract, retain, develop and progress a workforce that embraces our culture of inclusion and reflects our diversity efforts.

programs play a critical role in attracting and progressing a diverse pipeline of talent.

We are also committed to investing in our people

by providing learning and networking opportunities and to drive retention, progression and engagement and help them excel in their current

and future roles.

Health and Safety

We are committed to providing safe and healthy

working environments and taking reasonable preventative measures to protect the health and safety of our employees and customers.

environmental, health and safety excellence across the Company and strive for incident-free workplaces – continuously assessing

and developing measures that are in place to help keep our employees, customers and communities safe.

In response to the COVID-19 pandemic,

we have implemented significant changes to our business designed to protect the health and well-being of our employees and to support

appropriate physical distancing and other health and safety protocols.

These efforts continue to include:

enhanced cleaning and sanitation

domestic and international travel restrictions;

return to work and visitor screening protocols;

split shifts at facilities

and the postponement or cancellation of attending large events.

Employment Practices and Total Rewards

We are committed to the fair, consistent and equitable

treatment of our employees in relation to working conditions, wages, benefits, policies and procedures.

To this end, our policies and

programs are designed to respond to the needs of our employees in a manner that provides a safe, professional, efficient and rewarding

Our total rewards programs are designed to offer competitive compensation, comprehensive benefits and other programs to support

employees’ growth, both personally and professionally, and the diverse needs and well-being of our employees worldwide.

we enhanced certain of our benefits to support the health and well-being of our employees during the COVID-19 pandemic, including family

leave and voluntary leave of absence policies and programs.

From time to time, we hire part-time employees

as need in connection with our manufacturing.

purchase a majority of our current e-cigarette and cannabis vaping products from Shenzhen Yi Jia.

The products that we sell are the same

products that Aspire Science and Aspire North America sold prior to the transfer of the equity in these subsidiaries to us.

to agreements dated January 27, 2023, between Aspire North America and Shenzhen Yi Jia and between Aspire Science and Shenzhen Yi Jia,

we purchase our cannabis and e-cigarette vaping products form Shenzhen Yi Jia at market prices, provided that the price, delivery, warranty

and other terms are no less favorable to us than the price, delivery, warranty and other terms that are provided to any other customer

of Shenzhen Yi Jia.

In addition, the agreement provides that Shenzhen Yi Jia will be responsible for any warranty expenses.

In February of 2024, we began

operations at our Company-owned manufacturing facility in Malaysia.

We are currently operating with 6 production lines at the Malaysia

factory and produce a variety of consumer electronics.

We plan to continue expanding our production capabilities in Malaysia as a way

to diversify our source of supply, including by adding up to 70 new lines at a second factory located nearby our first Malaysian operating

This expansion is expected to occur over the next 12 months.

connection with the Malaysian operations, we may purchase components from Shenzhen Yi Jia’s present suppliers as well as other

suppliers which we may identify.

Quality control will be a crucial part of our manufacturing process.

We will need to include quality

control checks and balances throughout our supply chain and manufacturing process.

When selecting suppliers, we will have our quality

control and procurement team visit potential suppliers.

We will need to conduct annual inspections of the factories and we will also

visit the factory if any quality issues arise.

In connection with the establishment of any manufacturing facilities we will have to employ

qualified manufacturing, supervisory and administrative personnel.

will pass on to our customers the warranties which Shenzhen Yi Jia provides to us as a customer.

These warranties are of an assurance-type,

come standard with all of products we purchase from Shenzhen Yi Jia, and cover repair or replacement should product not perform as expected.

We offer these warranties 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.

Shenzhen Yi Jia generally offers 90-day warranty period from date

of purchase for products sold to all regions, but Shenzhen Yi Jia offers six months warranty period from date of purchase for products

sold in the United Kingdom and France.

The warranty offers the refund or replacement of products for manufacturer defective items, dead

on arrival items and items that do not appear the same as listed on our website, and exclude damaged goods caused by misuse or unauthorized

We generally require our customers to test our hardware with their oils to confirm the hardware performance and approve the hardware

designs, in order to minimize any hardware-related discrepancy or performance issues specific to the formulation of their oils.

we are passing on the warranties of Shenzhen Yi Jia, we do not provide for estimated expenses related to product warranties.

actively studies trends of warranty claims and takes action to improve product quality and minimize warranty costs.

We estimate the actual

historical warranty claims coupled with an analysis of unfulfilled claims to record a liability for specific warranty purposes.

June 30, 2025 and 2024, products returned for repair or replacement have been immaterial.

Accordingly, a warranty liability has not been

deemed necessary.

and Development

believe that design and attention to detail are at the heart of our business.

Historically, research and development relating to our

existing products were conducted primarily by Shenzhen Yi Jia.

We have commenced research and development activities independent of Shenzhen

Yi Jia, which has related primarily to cannabis vaping products.

This research and development effort, which is headed by our chairman,

Tuanfang Liu, has eleven members, who are primarily based in Los Angeles.

Prior to the transfer of the equity of Aspire North America

and Aspire Science to us, the research and development activities were conducted by Shenzhen Yi Jia.

As discussed under “ Business

– Intellectual Property ” we have rights to intellectual property generated by the research and development efforts of

Shenzhen Yi Jia and Mr.

During the years ended June 30, 2025 and 2024, research and development

efforts included the development of the Ispire cannabis vaping system, patented dual-coil technology, self-sealing technology and a closed

system for e-cigarette vaping that is designed to eliminate the problem of oil leaking out of the unit.

These research and development

efforts were conducted by Shenzhen Yi Jia under the leadership of Tuanfang Liu, our co-chief executive officer and the chief executive

officer of Aspire Global.

Since the transfer of Aspire North America and Aspire Science to us in July 2022, we have established our research

and development group independent of Aspire Global and Shenzhen Yi Jia, and the Shenzhen Yi Jia research and development activities relating

to both cannabis and e-cigarette product have transitioned to us.

We are also entitled to the benefits of Shenzhen Yi Jia’s research

and development pursuant to the Intellectual Property Transfer Agreement and the License Agreement.

LLC Joint Venture

As reported in our Form 8-K on April 11, 2024, Aspire North America

LLC entered into a capital contribution, subscription, and joint venture agreement with Chemular Inc, Touch Point Worldwide, Inc.

Berify, and Ike Tech LLC, a Delaware limited liability company pursuant to which the Parties agreed to participate in the Joint Venture.

The business of the Joint Venture is developing, licensing, owning, and operating an industry-standard age-verification solution for vapor

(e-cigarette) devices.

The Joint Venture plans to submit PMTA applications seeking FDA marketing orders for cutting-edge technologies

across the U.S.

e-cigarette market, including, without limitation, (a) next-generation e-cigarette hardware with a user-friendly point-of-use

age-verification and geo fencing capability that eliminates usability of vapor hardware in certain designated areas such as schools and

sensitive areas, (b) e-cigarettes with end-to-end range of dynamic features such as authentication, direct to consumer engagements and

exclusive offerings built on the foundations of blockchain technology, and (c) a real-time biometric identity platform for user access

controls, designed to create added security and reliability to deter counterfeiting in connection with vapor devices.

As of the date of

this Annual Report, Aspire North America LLC owns 40% of the Joint Venture.

In November 2024, IKE’s leadership team met with the FDA on site

in Maryland to discuss the viability of its age-gating solution as a product that could allow flavored e-cigarettes on the U.S.

Subsequently, IKE submitted a PMTA application for its age-gating system as a “component” PMTA in April of 2025.

The FDA accepted

IKE’s PMTA in May 2025.

IKE is currently waiting for additional feedback from FDA on its application.

is actively pursuing age-gating mandates for all electronic nicotine products in multiple markets around the world including the United

Kingdom, the United States and various countries in the Middle East.

IKE has also added an agentic

AI suite of services to its SaaS platform, which we believe will further enhance the value proposition to consumers, regulators and tobacco

Yi Jia has patents or patent applications in the United States, the PRC, the European Union and elsewhere relating to various functional

and ornamental aspects of our products.

Pursuant to the Intellectual Property Transfer Agreement, Aspire Global, Shenzhen Yi Jia and

Liu have transferred to our subsidiary, Aspire North America, all their intellectual property, including patents, trademarks, brand

names, know-how and know-how documentation that relate directly or indirectly to cannabis and hemp vaping products, and the patents and

trademarks, trademarks and patent and trademark application, have been transferred to Aspire North America.

Pursuant to the License Agreement,

Aspire Science has the right to an exclusive (to the exclusion of Shenzhen Yi Jia and Mr.

Liu) right and license to any patents, trademarks

and other intellectual property that relates to tobacco vaping products in the territory, which include the world except for China and

believe that the utility patents form the core intellectual property for our e-cigarette and vaporizer products.

The utility patents

primarily relate to atomizer, heating coil, and battery technologies, which we believe provide enhanced functionality and an improved

smoking experience to users of our products.

Our atomizer technology is directed toward enhancing the atomization of e-liquid, including

by enabling the user to adjust the airflow through the atomizer to provide a customized smoking experience.

Our heating coil technology

is directed towards heating coil designs and arrangements that deliver heat more efficiently from the heating coil to the e-liquid, thereby

producing vapor more effectively.

Our battery technology is directed towards battery assemblies that are replaceable and that are controllable

to help facilitate a customized smoking experience in combination with the atomizer and heating coil technologies.

believe the design patents cover the visual aspects of certain of our products and serve to enhance the protection provided by our utility

We either own, with respect to cannabis vaping products, or license on an exclusive basis, with respect to tobacco products,

designs patents for the ornamental appearance of the housing of certain of our electronic cigarettes and cannabis vaping products.

design patents also extend to the ornamental appearance of certain e-cigarette components, including certain aspects of our atomizers

and heating coils.

patents are primarily based on inventions developed by our chairman, Tuanfang Liu, who has received more than 200 patents in China, the

United States, the European Union and other countries.

All of these patents have been assigned, licensed, or otherwise transferred to

Shenzhen Yi Jia, which, has transferred to Aspire North America, with respect to intellectual property relating to cannabis products,

and licensing on a sole and exclusive basis globally other than the PRC and Russia, to Aspire Science, with respect to e-cigarette products.

The earliest patents were filed in 2012 and began expiring in 2022, with the last patents set to expire in 2045, depending on priority

filing date, patent type, and jurisdiction.

We intend to work to improve our technology and products and to seek further patent protection

as warranted in connection with any new developments.

cannot guarantee that our patent rights are sufficient to protect all aspects of our products or that we will be able to enforce those

rights against third parties, as patents can be challenged, circumvented, or otherwise found to be invalid.

Yi Jia has obtained trademark registrations for Ispire in the countries which we believe are major markets for our products, including

the United States, China, the European Union, and other countries.

In addition to the Ispire mark, Shenzhen Yi Jia has also been granted

trademark registrations in the United States and China for certain products and components, including the marks CLEITO, PERSEUS, PLATO,

PROTEUS, and ZESTQUEST.

Furthermore, Shenzhen Yi Jia has submitted trademark applications for the mark Ispire in the United States, China,

the European Union, and other jurisdictions we believe are important markets.

To the extent any of these trademarks were held by our

chairman, Tuanfang Liu or Shenzhen Yi Jia, the trademarks related to cannabis products have been assigned to Aspire North America pursuant

to the Intellectual Property Transfer Agreement, and all other trademarks have been licensed on an exclusive license (to the exclusion

of Aspire Global, Shenzhen Yi Jia and Mr.

Liu) to Aspire Science pursuant to the License Agreement.

cannot assure you that our patent and trademark rights are sufficient to protect all aspects of our brands or that we will be to enforce

those rights to prevent third parties from using the same or confusingly similar marks, as trademarks can be opposed, cancelled, or otherwise

challenged, especially by parties with rights to similar marks.

products for both e-cigarette and cannabis compete with tobacco and marijuana cigarettes and a wide range of other tobacco, nicotine

and legal and illegal cannabis products.

In each case, vaping products seek to provide the user with pleasure that the user derives from

consuming nicotine or cannabis without the disadvantages of other mediums.

The worldwide market for e-cigarette products is highly competitive,

with more than 50 companies selling products which compete with our products.

In terms of volume of legal products sold, by far the largest

worldwide producer of tobacco vapor products is Smoore International Holdings Limited.

anticipate that the market for vaping products will evolve, with technological innovation, changing standards and changes in needs and

preferences of adult vapor users.

Vaping devices are more than a reduced-risk alternative to traditional cigarettes.

Instead, they represent

the user’s taste and offer them a new and fun experience, as they provide large amounts of vapor, different tastes of e-liquid

and fashionable design.

In light of such trend and to further differentiate their vaping devices, manufacturers are upgrading their products

in terms of technology and design.

Many manufacturers are now providing full-spectrum vaping devices, including closed system vaping

devices, open system vaping devices and other kinds of vaping devices, so as to be more competitive in the market.

In the next few years,

with the technology becoming more mature, we anticipate that more differentiated vaping devices will continuously emerge to draw adult

consumers’ attention.

Our recent enhancements to our vaping products, such as the big smoke effect, have increased interest and

sales of our products.

We believe that our ability to remain profitable and to increase our market share is dependent upon our ability

to anticipate market demand and develop and market products that address these trends.

market for cannabis vapor products is a developing market and at present is mainly limited to the United States, although there is a

developing market in Canada, and we believe that a market is developing in Europe.

Our ability to be successful in these markets is dependent

upon our ability to develop vaping systems that attracts and retains consumer interest and the regulatory environment in the United States.

Our cannabis vaping products compete with other forms of legal and illegal cannabis, marijuana cigarettes, CBD oil and other CBD products,

food products and other vaping products.

does not materially affect our business or the results of our operations.

We believe our people are

central to the foundation and future of our success.

Our culture and commitment to our employees are important factors in attracting,

retaining, developing and progressing qualified employees.

As of September 4, 2025, we had a total of 81 employees, of which 21 are operations

personnel, 46 are general management personnel, 9 are in sales and marketing, and 5, including Tuanfang Liu, our co-chief executive officer,

are in research and development relating to our products.

and Engagement

value and support our people through, among other initiatives, our talent management, health and safety, employment practices and total

reward programs.

We are committed to fostering a culture of inclusion where differences are welcomed, appreciated and celebrated to positively

impact our people and business, and where our people are engaged and encouraged to support the communities in which they live and work.

are committed to providing our people with opportunities to learn, grow and be recognized for their achievements.

Through our integrated

talent management strategy, we strive to attract, retain, develop and progress a workforce that embraces our culture of inclusion and

reflects our diversity efforts.

Our talent programs play a critical role in attracting and progressing a diverse pipeline of talent.

We are also committed to investing in our people by providing learning and networking opportunities and to drive retention, progression

and engagement and help them excel in their current and future roles.

are committed to providing safe and healthy working environments and taking reasonable preventative measures to protect the health and

safety of our employees and customers.

We drive environmental, health and safety excellence across the Company and strive for incident-free

workplaces – continuously assessing and developing measures that are in place to help keep our employees, customers and communities

Practices and Total Rewards

are committed to the fair, consistent and equitable treatment of our employees in relation to working conditions, wages, benefits, policies

and procedures.

To this end, our policies and programs are designed to respond to the needs of our employees in a manner that provides

a safe, professional, efficient and rewarding workplace.

Our total rewards programs are designed to offer competitive compensation, comprehensive

benefits and other programs to support employees’ growth, both personally and professionally, and the diverse needs and well-being

of our employees worldwide.

time to time, we hire part-time employees as needed in connection with our manufacturing.

We consider our employee relations to be good.

We enter into labor contracts and standard confidentiality

and intellectual property agreements with our key employees.

We believe that maintaining good working relationships with our employees

is essential, and we have not experienced any labor disputes except for the matter set forth below.

None of our employees are represented

by labor unions.

We consider our insurance coverage to be consistent

with customary industry standards adopted by other companies in the same industry and of similar size although Aspire Science does not

have product liability insurance.

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.

enter into labor contracts and standard confidentiality and intellectual property agreements with our key employees.

We believe that

maintaining good working relationships with our employees is essential, and we have not experienced any labor disputes except for the

matter set forth below.

None of our employees are represented by labor unions.

consider our insurance coverage to be consistent with customary industry standards adopted by other companies in the same industry and

of similar size although Aspire Science does not have product liability insurance.

time to time, we may be subject to legal or regulatory proceedings, investigations and claims incidental to the conduct of our business.

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.

United States

Premarket Tobacco Product Application (“PMTA”)

filings are required for electronic nicotine delivery systems (“ENDS”) products, including devices, components, and/or parts

that deliver aerosolized e-liquid when inhaled.

For existing 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.

We timely filed our PMTA for our Nautilus Prime open system vaping products,

which are the only products we can presently sell in the United States.

For new ENDS products that were not on the U.S.

market on August

8, 2016, and not the subject of a pending PMTA filed by September 9, 2020, a premarket authorization is required before introducing the

product to the U.S.

Selling ENDS products without authorization can result in civil penalties, seizures, injunctions, and even

criminal prosecutions.

The PMTA pathway remains open for us to add further

products, but now neither we, nor anyone else, can bring new tobacco products to the U.S.

Tobacco Product Application (“PMTA”) filings are required for electronic nicotine delivery systems (“ENDS”) products,

including devices, components, and/or parts that deliver aerosolized e-liquid when inhaled.

For existing ENDS products that were on the

market on August 8, 2016, a PMTA was required to be submitted to the FDA by September 9, 2020.

We timely filed our PMTA for our

Nautilus Prime open system vaping products, which are the only products we can presently sell in the United States.

For new ENDS products

that were not on the U.S.

market on August 8, 2016, and not the subject of a pending PMTA filed by September 9, 2020, a premarket authorization

is required before introducing the product to the U.S.

Selling ENDS products without authorization can result in civil penalties,

seizures, injunctions, and even criminal prosecutions.

PMTA pathway remains open for us to add further products, but now neither we, nor anyone else, can bring new tobacco products to the

market without actual premarket authorizations.

The PMTA process is expensive, time-consuming, and uncertain.

Under the Family Smoking Prevention and Tobacco

Control Act of 2009 (the “TCA”), a PMTA’s components include:

Full reports of all information published or known to, or which should reasonably be known to, the applicant concerning investigations which have been made to show the health risks of such tobacco product and whether such tobacco product presents less risk than other tobacco products.

Full statement of the components, ingredients, additives, and properties, and of the principle or principles of operation.

Full description of the methods used in, and the facilities and controls used for, the manufacture, processing, and when relevant, packing and installation.

An identifying reference to any tobacco product standard, if applicable.

Samples of the tobacco product as required.

Specimens of proposed labeling.

In adopting the Consolidated Appropriations Act,

2021, the COVID-19 relief bill that was signed on December 27, 2020, Congress amended the PACT Act to apply to e-cigarettes and all vaping

products, which includes cannabis vaping products.

The legislation amends the PACT Act’s definition of “cigarette” to

include ENDS, which is defined to include “any electronic device that, through an aerosolized solution, delivers nicotine, flavor,

or any other substance to the user inhaling from the device.

The term “any other substance” has been interpreted in regulations

to include liquids containing cannabis derivatives as well as nicotine.

This amendment prohibits mailing covered products through the

United States Postal Service to consumers (with exceptions for certain business-to-business mailings) and requires reporting to federal

and state agencies.

These restrictions make it more difficult for a seller of vaping products to sell the products in the United States.

Briefly, the PACT Act requires any person who

sells, transfers, or ships “cigarettes,” which is defined to include ENDS, which, as noted above, is very broadly defined,

in interstate commerce for profit to, or who advertises or offers cigarettes or smokeless tobacco for such sale, transfer, or shipment

File a statement setting forth the name, address, phone number, email address, website address, with the U.S.

Attorney General and the tobacco tax administrator of the State where shipment is being made or in which an advertisement or offer is disseminated;

On the 10th day of every month, file a memorandum or a copy of the invoice covering each and every shipment of “cigarettes” during the previous calendar month with the state tobacco tax administrator and, where there are also local taxes on cigarettes, with local/tribal official

Comply with (i) certain shipping requirements if using common carriers other than the Postal Service, such as FedEx or UPS (e.g., label requirements, weight restrictions, 21+ age verification on delivery, etc.), and (ii) recordkeeping requirements (e.g., detailed invoices covering every delivery sale, organized by the state, the city or town, and zip code into which the delivery sale is made);

(iii) all state, local, tribal, and other laws generally applicable to sales of cigarettes, including:

the Family Smoking Prevention and Tobacco Control Act of 2009 (the “TCA”), a PMTA’s components include:

reports of all information published or known to, or which should reasonably be known to,

the applicant concerning investigations which have been made to show the health risks of

such tobacco product and whether such tobacco product presents less risk than other tobacco

statement of the components, ingredients, additives, and properties, and of the principle

or principles of operation.

description of the methods used in, and the facilities and controls used for, the manufacture,

processing, and when relevant, packing and installation.

identifying reference to any tobacco product standard, if applicable.

of the tobacco product as required.

of proposed labeling.

adopting the Consolidated Appropriations Act, 2021, the COVID-19 relief bill that was signed on December 27, 2020, Congress amended the

PACT Act to apply to e-cigarettes and all vaping products, which includes cannabis vaping products.

The legislation amends the PACT Act’s

definition of “cigarette” to include ENDS, which is defined to include “any electronic device that, through an aerosolized

solution, delivers nicotine, flavor, or any other substance to the user inhaling from the device.

The term “any other substance”

has been interpreted in regulations to include liquids containing cannabis derivatives as well as nicotine.

This amendment prohibits

mailing covered products through the United States Postal Service to consumers (with exceptions for certain business-to-business mailings)

and requires reporting to federal and state agencies.

These restrictions make it more difficult for a seller of vaping products to sell

the products in the United States.

the PACT Act requires any person who sells, transfers, or ships “cigarettes,” which is defined to include ENDS, which, as

noted above, is very broadly defined, in interstate commerce for profit to, or who advertises or offers cigarettes or smokeless tobacco

for such sale, transfer, or shipment to:

a statement setting forth the name, address, phone number, email address, website address,

with the U.S.

Attorney General and the tobacco tax administrator of the State where shipment

is being made or in which an advertisement or offer is disseminated;

the 10th day of every month, file a memorandum or a copy of the invoice covering each and

every shipment of “cigarettes” during the previous calendar month with the state

tobacco tax administrator and, where there are also local taxes on cigarettes, with local/tribal

with (i) certain shipping requirements if using common carriers other than the Postal Service,

such as FedEx or UPS (e.g., label requirements, weight restrictions, 21+ age verification

on delivery, etc.), and (ii) recordkeeping requirements (e.g., detailed invoices covering

every delivery sale, organized by the state, the city or town, and zip code into which the

delivery sale is made);

(iii) all state, local, tribal, and other laws generally applicable

to sales of cigarettes, including:

excise taxes, licensing and tax-stamping requirements;

restrictions on sales to minors;

and other payment obligations or legal requirements relating to the sale, distribution, or delivery of cigarettes or smokeless tobacco.

Importantly, neither the mail ban nor the other

PACT Act’s “delivery sale” provisions apply to business-to-business deliveries.

Under an exception to the mail ban provision

of the PACT Act, covered products may be mailed for business purposes between legally operating businesses that have all applicable State

and Federal Government licenses or permits and are engaged in product manufacturing, distribution, wholesale, export, import, testing,

investigation, or research or for regulatory purposes between any business described above and an agency of the federal government or

a state government.

A business must apply for and obtain Postal Service approval of an exception to avail itself of this exception.

Except for the mail ban, the amendment

to the PACT Act took effect on March 28, 2021.

The mail ban took effect on October 21, 2021, pursuant to final regulations issued by

the Postal Service.

and other payment obligations or legal requirements relating

to the sale, distribution, or delivery of cigarettes or smokeless tobacco.

neither the mail ban nor the other PACT Act’s “delivery sale” provisions apply to business-to-business deliveries.

Under an exception to the mail ban provision of the PACT Act, covered products may be mailed for business purposes between legally operating

businesses that have all applicable State and Federal Government licenses or permits and are engaged in product manufacturing, distribution,

wholesale, export, import, testing, investigation, or research or for regulatory purposes between any business described above and an

agency of the federal government or a state government.

A business must apply for and obtain Postal Service approval of an exception

to avail itself of this exception.

for the mail ban, the amendment to the PACT Act took effect on March 28, 2021.

The mail ban took effect on October 21, 2021, pursuant

to final regulations issued by the Postal Service.

It applies to cannabis and hemp vaping products that aerosolize liquids only.

Further, the most commonly used carriers,

Federal Express and UPS, have recently announced that they would cease all deliveries of vapor products in the United States.

The other requirements of the PACT Act applicable

to “delivery sellers” and “delivery sales” do not apply to business-to-business sales, as those terms involve

delivery to “consumers.” The PACT Act defines “consumer” as “any person that purchases cigarettes or smokeless

tobacco” and specifically excludes “any person lawfully operating as a manufacturer, distributor, wholesaler, or retailer

of cigarettes or smokeless tobacco.

Starting on February 6, 2020, the FDA prioritized

enforcement against:

(i) flavored, cartridge-based ENDS products (other than tobacco- or menthol-flavored ENDS products), and (ii) any

flavored ENDS products (including tobacco and menthol flavors) that are targeted at minors.

Several states in the United States have imposed

temporary emergency flavor bans on ENDS products, and a few of these bans have been enjoined by courts while several have become permanent.

Several states and the District of Columbia have also enacted permanent prohibitions on the sale of flavored ENDS products.

are not the same as a total ban on e-cigarettes, and none of the states in the U.S.

have imposed a total ban on e-cigarettes.

Our self-branded vaping systems are not affected

by the flavor bans.

The flavor bans are mainly aimed at ENDS products that are sold with pre-filled non-tobacco flavored or non-menthol-flavored

cartridges, and our self-branded products do not contain any pre-filled cartridges.

we believe that the technology being developed by our IKE Tech LLC Joint Venture may allow for the approval of ENDS products with characterizing

flavors other than tobacco or menthol.

This is because the point-of-use age-gating technology could prevent youth usage of vapor devices

by biometrically preventing youth from powering-on the device itself.

Accordingly, we have submitted a disposable ENDS device PMTA in

September of 2024 with several characterizing flavors.

Our plan is to amend or resubmit this PMTA when we receive approval of the IKE

Tech LLC age-gating technology from the FDA.

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.

We cannot predict what action states will take or the nature and amount of taxes they may

impose upon cannabis products.

However, the shipping restrictions of the USPS under the PACT Act applied to certain cannabis products,

and cannabis products cannot, with certain exceptions, be sent through the USPS.

Major overnight courier services, such as Federal Express,

do not ship vaping products that may not be sent using the USPS.

We use a combination of advanced accounting software and PACT Act compliant

carriers to remain compliant with the tax and delivery restrictions of the PACT Act.

Under federal law and the laws of certain states

that continue to broadly restrict production and sale of cannabis, vaping devices intended for use in consuming cannabis products may

qualify as prohibited drug paraphernalia.

However, the federal Controlled Substances Act includes an exemption for “any person authorized

by local, State, or Federal law to manufacture, possess, or distribute such items.” Several states with legal cannabis programs,

including California, have enacted legislation invoking this exemption to shield state-legal businesses from federal enforcement on paraphernalia

the most commonly used carriers, Federal Express and UPS, have recently announced that they would cease all deliveries of vapor products

in the United States.

other requirements of the PACT Act applicable to “delivery sellers” and “delivery sales” do not apply to business-to-business

sales, as those terms involve delivery to “consumers.” The PACT Act defines “consumer” as “any person that

purchases cigarettes or smokeless tobacco” and specifically excludes “any person lawfully operating as a manufacturer, distributor,

wholesaler, or retailer of cigarettes or smokeless tobacco.

on February 6, 2020, the FDA prioritized enforcement against:

(i) flavored, cartridge-based ENDS products (other than tobacco- or menthol-flavored

ENDS products), and (ii) any flavored ENDS products (including tobacco and menthol flavors) that are targeted at minors.

Several states

in the United States have imposed temporary emergency flavor bans on ENDS products, and a few of these bans have been enjoined by courts

while several have become permanent.

Several states and the District of Columbia have also enacted permanent prohibitions on the sale

of flavored ENDS products.

Flavor bans are not the same as a total ban on e-cigarettes, and none of the states in the U.S.

a total ban on e-cigarettes.

self-branded vaping systems are not affected by the flavor bans.

The flavor bans are mainly aimed at ENDS products that are sold with

pre-filled non-tobacco flavored or non-menthol-flavored cartridges, and our self-branded products do not contain any pre-filled cartridges.

Moreover, we believe that the technology being developed by IKE may

allow for the approval of ENDS products with characterizing flavors other than tobacco or menthol.

This is because the point-of-use age-gating

technology could prevent youth usage of vapor devices by biometrically preventing youth from powering-on the device itself.

we plan to submit several PMTA applications for ENDS devices with characterizing flavors when we receive positive news from, or approval

of, the IKE age-gating technology from the FDA.

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.

We cannot predict what action states will take or the nature

and amount of taxes they may impose upon cannabis products.

However, the shipping restrictions of the USPS under the PACT Act applied

to certain cannabis products, and cannabis products cannot, with certain exceptions, be sent through the USPS.

Major overnight courier

services, such as Federal Express, do not ship vaping products that may not be sent using the USPS.

We use a combination of advanced

accounting software and PACT Act compliant carriers to remain compliant with the tax and delivery restrictions of the PACT Act.

federal law and the laws of certain states that continue to broadly restrict production and sale of cannabis, vaping devices intended

for use in consuming cannabis products may qualify as prohibited drug paraphernalia.

However, the federal Controlled Substances Act includes

an exemption for “any person authorized by local, State, or Federal law to manufacture, possess, or distribute such items.”

Several states with legal cannabis programs, including California, have enacted legislation invoking this exemption to shield state-legal

businesses from federal enforcement on paraphernalia grounds.

In addition, a recent court decision from the U.S.

Court of International Trade applied this exemption in prohibiting U.S.

and Border Protection from refusing import entry of cannabis paraphernalia components that the importer could legally possess in the state

of importation.

In distributing cannabis vaping devices in the

United States, we rely on this exemption by (i) not selling our own branded cannabis vaping products directly into states that have maintained

complete or near-complete cannabis prohibition, (ii) requiring distributors to whom we sell cannabis vaping products to covenant that

they will not sell our products into these states, and (iii) limiting the sale of our custom made and white label cannabis vaping products

to state-licensed dispensaries and entities, such as licensed cultivators or manufacturers.

To the extent that we conduct manufacturing operations

in California we will be subject to federal and California state laws and regulations applicable to manufacturing operations generally,

including employee health and safety and environmental laws and regulations.

The European Commission issued the Tobacco Products

Directive (the “TPD’’), which entered into force on May 19, 2014, and became applicable in the EU Member States on May

Under the TPD, an e-cigarette is widely defined as a product that can be used for, including all types of vaping devices, HNB

devices and their respective components, the consumption of nicotine-containing vapor via a mouthpiece, or any component of that product.

Court of International

Trade applied this exemption in prohibiting U.S.

Customs and Border Protection from refusing import entry of cannabis paraphernalia components

that the importer could legally possess in the state of importation.

distributing cannabis vaping devices in the United States, we rely on this exemption by (i) not selling our own branded cannabis vaping

products directly into states that have maintained complete or near-complete cannabis prohibition, (ii) requiring distributors to whom

we sell cannabis vaping products to covenant that they will not sell our products into these states, and (iii) limiting the sale of our

custom made and white label cannabis vaping products to state-licensed dispensaries and entities, such as licensed cultivators or manufacturers.

the extent that we conduct manufacturing operations in California we will be subject to federal and California state laws and regulations

applicable to manufacturing operations generally, including employee health and safety and environmental laws and regulations.

European Commission issued the Tobacco Products Directive (the “TPD’’), which entered into force on May 19, 2014, and

became applicable in the EU Member States on May 20, 2016.

Under the TPD, an e-cigarette is widely defined as a product that can be used

for, including all types of vaping devices, HNB devices and their respective components, the consumption of nicotine-containing vapor

via a mouthpiece, or any component of that product.

The TPD regulates e-cigarettes on five main aspects:

(i) the information to be provided by the manufacturer and/or distributor, (ii) the

advertising and promotion, (iii) safety issues and warnings, (iv) product presentation, and (v) provisional measures in case of suspected

Member states of the European Union are required to ensure that advertisements for any tobacco related product are prohibited, unless

the advertisement is specifically targeted at professionals specializing in the electronic cigarettes trading.

Moreover, no promotion

whatsoever shall be made as to those devices with an intention (direct or indirect) to promote electronic cigarettes.

The sale of cannabis vaping products for recreational

(as contrasted with medical) use is illegal in most of the European Union, although we believe that a market is developing, particularly

in Germany, where the new coalition government stated clearly that it is introducing the controlled supply of recreational cannabis to

adults in licensed shops.

United Kingdom

The Medicines and Healthcare Products Regulatory

Agency (“MHRA”) is the authority for a regulatory scheme for e-cigarettes and refill containers in Great Britain and Northern

Ireland and is responsible for implementing the majority of provisions under Part 6 of the Tobacco and related Products Regulations (“TRPR”)

and the Tobacco Products and Nicotine Inhaling Products (Amendment) (EU Exit) Regulations 2020.

The TRPR introduced rules which ensure:

minimum standards for the safety and quality of all e-cigarettes and refill containers (otherwise known as e-liquids)

that information is provided to consumers so that they can make informed choices

an environment that protects children from starting to use these products.

The requirements:

restrict e-cigarette tanks to a capacity of no more than 2ml

restrict the maximum volume of nicotine-containing e-liquid for sale in one refill container to 10ml

restrict e-liquids to a nicotine strength of no more than 20mg/ml

require nicotine-containing products or their packaging to be child-resistant and tamper evident

ban certain ingredients including colorant, stimulants and any carcinogenic, mutanegenic or reprotoxic elements

include new labelling requirements and warnings in line with the Classification, Labelling & Packaging regulations of the European Union

require all e-cigarettes and e-liquids be notified to the MHRA before they can be sold.

The Tobacco Products and Nicotine Inhaling Products

(Amendment) (EU Exit) Regulations 2020 (the “2020 Regulations”) explains the changes from a policy perspective:

The 2020 Regulations set out the requirements

for new products to be notified from January 1, 2021.

(i) the information to be provided

by the manufacturer and/or distributor, (ii) the advertising and promotion, (iii) safety issues and warnings, (iv) product presentation,

and (v) provisional measures in case of suspected risk.

Member states of the European Union are required to ensure that advertisements

for any tobacco related product are prohibited, unless the advertisement is specifically targeted at professionals specializing in the

electronic cigarettes trading.

Moreover, no promotion whatsoever shall be made as to those devices with an intention (direct or indirect)

to promote electronic cigarettes.

sale of cannabis vaping products for recreational (as contrasted with medical) use is illegal in most of the European Union, although

we believe that a market is developing, particularly in Germany, where the new coalition government stated clearly that it is introducing

the controlled supply of recreational cannabis to adults in licensed shops.

Medicines and Healthcare Products Regulatory Agency (“MHRA”) is the authority for a regulatory scheme for e-cigarettes and

refill containers in Great Britain and Northern Ireland and is responsible for implementing the majority of provisions under Part 6 of

the Tobacco and related Products Regulations (“TRPR”) and the Tobacco Products and Nicotine Inhaling Products (Amendment)

(EU Exit) Regulations 2020.

TRPR introduced rules which ensure:

standards for the safety and quality of all e-cigarettes and refill containers (otherwise

known as e-liquids)

information is provided to consumers so that they can make informed choices

environment that protects children from starting to use these products.

requirements:

e-cigarette tanks to a capacity of no more than 2ml

the maximum volume of nicotine-containing e-liquid for sale in one refill container to 10ml

e-liquids to a nicotine strength of no more than 20mg/ml

nicotine-containing products or their packaging to be child-resistant and tamper evident

certain ingredients including colorant, stimulants and any carcinogenic, mutanegenic or reprotoxic

new labelling requirements and warnings in line with the Classification, Labelling &

Packaging regulations of the European Union

all e-cigarettes and e-liquids be notified to the MHRA before they can be sold.

Tobacco Products and Nicotine Inhaling Products (Amendment) (EU Exit) Regulations 2020 (the “2020 Regulations”) explains

the changes from a policy perspective:

2020 Regulations set out the requirements for new products to be notified from January 1, 2021.

This will mean that:

Producers placing products on the Northern Ireland market will be required to notify using the EU Common Entry Gate (EU-CEG) system for the notification of tobacco and e-cigarette products.

Producers placing products on the Great Britain market will be required to notify on the Great Britain domestic system.

Notifiers will be required to pay one fee if they notify in relation to placing products on one of the Great Britain or Northern Ireland markets and the same one fee if they notify in relation to placing products on the two markets.

A producer is anyone who manufactures or imports

these products or who re-brands any product as their own.

Part 6 of the Tobacco and Related Products

Regulations 2016 sets out the requirements for e-cigarettes and refill containers.

Producers must submit information about their

products to the MHRA through the MHRA Submission Portal and European Common Entry Gate (EU-CEG) notification portal for UK wide supply.

Under the TRPR, it is the responsibility of the

producer to ensure that their products comply with the TRPR requirements.

We check notifications submitted for completeness and verify

TRPR compliance with producers.

Where this review has been completed, the compliance status of products is recorded as ‘declared’

to indicate that the notification is complete, and the product has been declared compliant by the producer.

Producers of new e-cigarette and refill container

products must submit a notification to the MHRA six months before they intend to put their product on the market in Great Britain and/or

Northern Ireland.

Once the notification has been published on the MHRA website, producers can launch the product in the notified region.

A product which has been substantially modified will count as a new product and must also follow this process.

Further information regarding

what qualifies as a substantial modification can be found in the guidance on submission type below.

The TRPR does not include any requirements as

to where testing of e-cigarettes and refill containers has to take place nor has any international testing standards been established.

The notifier will need to be satisfied as to the standards of any testing carried out as they have to submit a declaration that they bear

full responsibility for the quality and safety of the product when placed on the market and used under normal or reasonably foreseeable

Disposable (closed-system) e-cigarette products

will be banned in the United Kingdom on April 1, 2025.

Our primary sales in the UK are currently open-system, non-disposable products.

The sale of cannabis products is currently illegal

in the United Kingdom.

We are operating a manufacturing facility in Malaysia.

As such, we must comply with laws and regulations relating to manufacturing operations, including regulatory approval, as applicable,

including satisfying the applicable government authority that we have sufficient capital to cover all of our planned activities.

also subject to wage and hour laws and laws relating to employee health and safety and environmental laws and regulations.

We have structured

our operations to comply with applicable laws and regulations in Malaysia.

Other requirements for e-cigarettes

Replacement e-cigarette parts that could contain

nicotine only require notification if they have not already been notified as part of a device or e-cigarette kit in the United Kingdom

or European Union (EU).

Identical replacement parts that have already been notified as part of another notified e-cigarette product do

not need to be separately re-notified if it is clear on the labelling what notified product the part is for.

Any non-identical replacement

part, particularly one that alters the consumer safety profile of a product (for example by changing its refill capacity), would require

a separate notification.

The Conformitè Europëenne (“CE”)

Mark is defined as the EU’s mandatory conformity marking for regulating the goods sold within the European Economic Area (“EEA”)

The CE marking represents a manufacturer’s declaration that products comply with the EU’s New Approach Directives.

These directives not only apply to products within the EU but also for products that are manufactured in or designed to be sold in the

This makes the CE marking recognizable worldwide even to those unfamiliar with the EEA.

Regulations Relating to Privacy and Security

We are or may become subject to a variety of laws

and regulations in the United States and abroad regarding privacy, data security, cybersecurity and data protection.

These laws and regulations

are continuously evolving and developing.

The scope and interpretation of the laws that are or may be applicable to us are often uncertain

and may be conflicting, particularly with respect to foreign laws.

In particular, there are numerous United States federal, state, and

local laws and regulations and foreign laws and regulations regarding privacy and the collection, sharing, use, processing, disclosure,

and protection of personal information and other user data.

Such laws and regulations often vary in scope, may be subject to differing

interpretations, and may be inconsistent among different jurisdictions.

To the extent that we deal with the public and obtain private

information on our computer system, we would be subject to these laws.

To the extent that we conduct internet sales, we may be subject

to these laws.

In June 2018, California adopted the California

Consumer Privacy Act (“CCPA”), which became effective in 2020.

Under the law, any California consumer has a right to demand

to see all the information a company has saved on the consumer, as well as a full list of all the third parties that data is shared with.

The consumer also has the right to request that we delete the information it has on the consumer.

The CCPA broadly defines “protected

data.” The CCPA also has specific requirements for companies subject to the law.

The CCPA provides for a private right of action

for unauthorized access, theft or disclosure of personal information in certain situations, with possible damage awards of $100 to $750

per consumer per incident, or actual damages, whichever is greater.

The CCPA also permits class action lawsuits.

To the extent that we

sell products to adult consumers through our website or otherwise on the Internet, we may be subject to the CCPA as well as other consumer

protection laws.

The European Union Parliament approved a new data

protection regulation, known as the General Data Protection Regulation (“GDPR”), which came into effect in May 2018.

includes operational requirements for companies that receive or process personal data of residents of the European Economic Area.

GDPR imposes significant penalties for non-compliance.

Although we do not conduct any business in the European Economic Area, in the event

that residents of the European Economic Area access our website and input protected information, including information provided in ordering

through our website, we may become subject to provisions of the GDPR.

We are also subject to laws restricting disclosure

of information relating to our employees.

We strive to comply with all applicable laws, policies, legal obligations, and industry codes

of conduct relating to privacy, data security, cybersecurity and data protection.

However, given that the scope, interpretation, and application

of these laws and regulations are often uncertain and may be conflicting, it is possible that these obligations may be interpreted and

applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our practices.

or perceived failure by us or our third-party service-providers to comply with our privacy or security policies or privacy-related legal

obligations, or any compromise of security that results in the unauthorized release or transfer of personally identifiable information

or other user data, may result in governmental enforcement actions, litigation, or negative publicity, and could have an adverse effect

on our business and operating results.

Although we maintain cybersecurity insurance, we cannot assure you that this insurance will cover

or satisfy any claim made against us or adequately cover any defense costs we may incur.

placing products on the Northern Ireland market will be required to notify using the EU Common

Entry Gate (EU-CEG) system for the notification of tobacco and e-cigarette products.

placing products on the Great Britain market will be required to notify on the Great Britain

domestic system.

will be required to pay one fee if they notify in relation to placing products on one of

the Great Britain or Northern Ireland markets and the same one fee if they notify in relation

to placing products on the two markets.

producer is anyone who manufactures or imports these products or who re-brands any product as their own.

6 of the Tobacco and Related Products Regulations 2016 sets out the requirements for e-cigarettes and refill containers.

must submit information about their products to the MHRA through the MHRA Submission Portal and European Common Entry Gate (EU-CEG) notification

portal for UK wide supply.

the TRPR, it is the responsibility of the producer to ensure that their products comply with the TRPR requirements.

We check notifications

submitted for completeness and verify TRPR compliance with producers.

Where this review has been completed, the compliance status of

products is recorded as ‘declared’ to indicate that the notification is complete, and the product has been declared compliant

by the producer.

of new e-cigarette and refill container products must submit a notification to the MHRA six months before they intend to put their product

on the market in Great Britain and/or Northern Ireland.

Once the notification has been published on the MHRA website, producers can launch

the product in the notified region.

A product which has been substantially modified will count as a new product and must also follow

this process.

Further information regarding what qualifies as a substantial modification can be found in the guidance on submission type

TRPR does not include any requirements as to where testing of e-cigarettes and refill containers has to take place nor has any international

testing standards been established.

The notifier will need to be satisfied as to the standards of any testing carried out as they have

to submit a declaration that they bear full responsibility for the quality and safety of the product when placed on the market and used

under normal or reasonably foreseeable conditions.

(closed-system) e-cigarette products were banned in the United Kingdom on April 1, 2025.

Our primary sales in the UK are currently open-system,

non-disposable products.

In late 2024, the Tobacco and Vapes Bill (the “Bill”) was

introduced to the House of Commons, reviving wide-ranging restrictions on vaping and tobacco products which had fallen under the previous

Conservative Government.

Much of the legislation mirrors the Conservative Government’s prior legislation, most notably in introducing

a ban on the sale of tobacco to those born after 1 January 2009, the ban of non-nicotine vape sales to under-18s, and the introduction

of powers to regulate the flavoring, packaging and product requirements of vapes.

However, the Labour Government’s Bill goes further, introducing

powers to create a register of vaping products for sale in the United Kingdom, along with new requirements for producers to share information

on their products and carry out studies and testing on any health impacts.

The Bill also gives the Secretary of State the ability to designate

public spaces as vape and smoke-free, subject to consultation.

The Bill additionally introduces a ban on the advertisement of vapes in

the United Kingdom, as well as any “brandsharing” where vapes may be advertised by their logo on other products.

has passed through the House of Commons and is currently awaiting scrutiny in the House of Lords.

We expect the next stage in October,

2025, with the Bill to be completed in early 2026.

sale of cannabis products is currently illegal in the United Kingdom.

are operating a manufacturing facility in Malaysia.

As such, we must comply with laws and regulations relating to manufacturing operations,

including regulatory approval, as applicable, including satisfying the applicable government authority that we have sufficient capital

to cover all of our planned activities.

We are also subject to wage and hour laws and laws relating to employee health and safety and

environmental laws and regulations.

As our supplier, Shenzhen Yi Jia is responsible

for compliance with Chinese environmental laws and regulations.

To the extent that such compliance results in increased manufacturing

costs, we anticipate that our prices will be increased, although we may not know the details of the expense of such compliance.

As a distributor of products made by third parties,

we do not have any material costs in complying with environmental laws and regulations.

If we are able to establish manufacturing operations

in California, and as part of our current manufacturing Malaysia, we will be required to comply with applicable environmental laws and

We cannot estimate the ongoing costs of such compliance.

As we establish manufacturing facilities, we expect that the cost

of such compliance will be included in our capital budget for any facilities we establish.

Available Information

As a public company, we are required to file our

annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements on Schedule 14A and other information

(including any amendments) with the Securities and Exchange Commission (the “SEC”).

The SEC maintains an Internet site that

contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

can find our SEC filings at the SEC’s website at www.sec.gov.

Our Internet address is www.ispiretechnology.com.

We have structured our operations to comply with applicable laws and regulations in Malaysia.

May 2025, we received a temporary license to produce products containing nicotine for export from the Malaysian federal government.

are actively working to secure a permanent version of this license.

requirements for e-cigarettes

e-cigarette parts that could contain nicotine only require notification if they have not already been notified as part of a device or

e-cigarette kit in the United Kingdom or European Union (EU).

Identical replacement parts that have already been notified as part of

another notified e-cigarette product do not need to be separately re-notified if it is clear on the labelling what notified product the

Any non-identical replacement part, particularly one that alters the consumer safety profile of a product (for example by

changing its refill capacity), would require a separate notification.

Conformitè Europëenne (“CE”) Mark is defined as the EU’s mandatory conformity marking for regulating the

goods sold within the European Economic Area (“EEA”) since 1985.

The CE marking represents a manufacturer’s declaration

that products comply with the EU’s New Approach Directives.

These directives not only apply to products within the EU but also

to products that are manufactured in or designed to be sold in the EEA.

This makes the CE marking recognizable worldwide even to those

unfamiliar with the EEA.

Relating to Privacy and Security

are or may become subject to a variety of laws and regulations in the United States and abroad regarding privacy, data security, cybersecurity

and data protection.

These laws and regulations are continuously evolving and developing.

The scope and interpretation of the laws that

are or may be applicable to us are often uncertain and may be conflicting, particularly with respect to foreign laws.

In particular,

there are numerous U.S.

federal, state, and local laws and regulations and foreign laws and regulations regarding privacy and the collection,

sharing, use, processing, disclosure, and protection of personal information and other user data.

Such laws and regulations often vary

in scope, may be subject to differing interpretations, and may be inconsistent among different jurisdictions.

To the extent that we deal

with the public and obtain private information on our computer system, we would be subject to these laws.

To the extent that we conduct

internet sales, we may be subject to these laws.

June 2018, California adopted the California Consumer Privacy Act (“CCPA”), which became effective in 2020.

Under the law,

any California consumer has a right to demand to see all the information a company has saved on the consumer, as well as a full list

of all the third parties that data is shared with.

The consumer also has the right to request that we delete the information it has on

the consumer.

The CCPA broadly defines “protected data.” The CCPA also has specific requirements for companies subject to

The CCPA provides for a private right of action for unauthorized access, theft or disclosure of personal information in certain

situations, with possible damage awards of $100 to $750 per consumer per incident, or actual damages, whichever is greater.

also permits class action lawsuits.

To the extent that we sell products to adult consumers through our website or otherwise on the Internet,

we may be subject to the CCPA as well as other consumer protection laws.

European Union Parliament approved a new data protection regulation, known as the General Data Protection Regulation (“GDPR”),

which came into effect in May 2018.

The GDPR includes operational requirements for companies that receive or process personal data of

residents of the European Economic Area.

The GDPR imposes significant penalties for non-compliance.

Although we do not currently conduct

any business in the European Economic Area, in the event that residents of the European Economic Area access our website

and input protected information, including information provided in ordering through our website, we may become subject to provisions

are also subject to laws restricting disclosure of information relating to our employees.

We strive to comply with all applicable laws,

policies, legal obligations, and industry codes of conduct relating to privacy, data security, cybersecurity and data protection.

given that the scope, interpretation, and application of these laws and regulations are often uncertain and may be conflicting, it is

possible that these obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and

may conflict with other rules or our practices.

Any failure or perceived failure by us or our third-party service-providers to comply

with our privacy or security policies or privacy-related legal obligations, or any compromise of security that results in the unauthorized

release or transfer of personally identifiable information or other user data, may result in governmental enforcement actions, litigation,

or negative publicity, and could have an adverse effect on our business and operating results.

Although we maintain cybersecurity insurance,

we cannot assure you that this insurance will cover or satisfy any claim made against us or adequately cover any defense costs we may

Environmental

Laws and Regulations

our supplier, Shenzhen Yi Jia is responsible for compliance with Chinese environmental laws and regulations.

To the extent that such

compliance results in increased manufacturing costs, we anticipate that our prices will be increased, although we may not know the details

of the expense of such compliance.

a distributor of products made by third parties, we do not have any material costs in complying with environmental laws and regulations.

As part of our current manufacturing Malaysia, we will be required to comply with applicable environmental laws and regulations.

estimate the ongoing costs of such compliance.

As we establish manufacturing facilities, we expect that the cost of such compliance will

be included in our capital budget for any facilities we establish.

a public company, we are required to file our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K,

proxy statements on Schedule 14A and other information (including any amendments) with the Securities and Exchange Commission (the “SEC”).

The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that

file electronically with the SEC.

You can find our SEC filings at the SEC’s website at www.sec.gov.

Internet address is www.ispiretechnology.com.

Information contained on our website is not part of this Annual Report.

Our SEC filings (including any amendments) will be made available

free of charge on www.ispiretechnology.com, as soon as reasonably practicable after we electronically file such material with, or furnish

it to, the SEC.

Our SEC filings

(including any amendments) will be made available free of charge on www.ispiretechnology.com, as soon as reasonably practicable after

we electronically file such material with, or furnish it to, the SEC.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business