NASDAQ: ISPR

We
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
names. 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).

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.

We
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.

We
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. Combined with a Clapton kanthal coil for maximum flavor, the Cleito tank delivers a rush of intense flavor and huge
vapor with a broad profile. The simple top-fill design makes filling the device very easy and more convenient and enjoyable to use.

Our
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.

In
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.

1

A
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.
On February 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 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
challenges which could impact our ability to be fully operational on our expected time schedule. Accordingly, we cannot assure you that
we will be able to effectively and efficiently operate our facilities, or profitably or efficiently manage variations in manufacturing
costs, capacity and demand planning issues, workforce and labor pricing, and local labor laws. Any one of these items could negatively
impact the costs of production and thus our gross margins.

We
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”).

The
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.

Year
Ended June 30,

2025
2024

Revenue
%
Revenue
%

Europe
$ 74,107
58.1 %
$ 65,260
43.0 %

North America (the U.S. and Canada)
32,568
25.5 %
63,080
41.5 %

Asia Pacific (excluding PRC)
12,274
9.6 %
17,589
11.6 %

Others
8,545
6.7 %
5,980
3.9 %

Total
127,494
100 %
151,909
100 %

Acquisition
of Our Business from a Related Party

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 mid-2020. Aspire Science markets nicotine vaping products worldwide, except
for the PRC and Russia.

Aspire
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. Mr. Liu and Ms. 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.

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.

2

Our
intellectual property was developed primarily by our co-chief executive officer, Tuanfang Liu. Our research and development team is headed
by Mr. Liu. 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.

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

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. Although most of our cash is in Hong Kong
banks, a significant portion of these funds is to be paid to related parties. See “Certain Relationships and Related Party Transactions.”
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. 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.

We
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
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. 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.

3

The
following chart shows our corporate structure.

4

Our
Strategy

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 business. We will continue to innovate via our own research and development efforts. Tuanfang Liu,
our co-chief executive officer, developed the patented DuCoreTM 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 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.

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.

5

Our
Products

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. 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.

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.

Some
of our products use our BDC (bottom dual coil) coil technology which uses bottom dual coils to provide expanded heating area and achieve
double flavor and vapor production. This technology allows for two separate oil tanks/cartridges to be integrated into one product/design.
Each of the cartridges has its own heating coil that can be regulated separately to generate the desired heating temperatures independently
of the other. This is beneficial to the consumers because one cartridge could be designed for terpenes (which has a very low evaporation
temperature, typically 100-120 degrees Fahrenheit), and the other can be for cannabis oil (which has an evaporating temperature in the
range of 400-430 degrees Fahrenheit). Conventional cartridge design would have the terpenes and cannabis oil mixed together in one cartridge
and be heated to a single temperature that would typically burn the terpenes and yet under-heat the cannabis oil. With the double flavor
design, we can optimize the heating temperature to evaporate both terpenes and cannabis oil without burning them. We believe that the
use of our dual-coil technology enhances the flavor performance of e-liquid, and the hidden wick cotton with specially designed wick
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. The BVC coils are still very popular for MTL (mouth to lung) vapors today.

6

Cannabis
Products

In
December 2020, we introduced the Ispire line of cannabis vaping products. Our Ispire products use our patented Ducore™ (Dual Coil)
technology for cannabis vaporizers. Similar to the Nautilus series, this technology enables users to create extremely large 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, as well as our technology for eliminating the leakage of the oil from the unit, which overcomes a major disadvantage
with many existing products. In addition to the base unit, we offer a range of cartridge, mouthpiece and color options. In our ODM services,
we work with the customer to design a product that has the desired appearance. All the products are made of stainless steel and the fluid
housing is Pyrex glass. We are not involved in cannabis or hemp plant or oil business, and we do not provide or procure cannabis or hemp
oil. Our product, which is hardware only, is designed for our customers to fill the cartridge with their own cannabis or hemp oil. Cannabis
oil, unlike nicotine oil or liquids which are generally of a uniform consistency, is not of a uniform consistency. If the oil is too
viscous, the user will not have good experience with the product and our customer may reject or return the product. We do not package
the oil with our product. Our ODM customers purchase the oil separately from the product they purchase from us or the end user of our
product purchases the oil independently. We have no way to ensure that any consumer will use a cannabis oil that will work in a product
we have manufactured for our customers.

In
June 2023, we introduced our proprietary Ispire ONETM technology and associated products. Ispire ONETM 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.

7

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 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
2024. 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.

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.

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. 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.

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

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.

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 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. We
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.

8

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 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.

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

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 personnel.

Warranties

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. 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
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, 2025 and 2024, products returned for repair or replacement have been immaterial. Accordingly, a warranty liability has not been
deemed necessary.

9

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. Liu.

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.

IKE Tech
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. d/b/a/
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. market.
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.

IKE
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
companies.

10

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 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.

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

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. Liu) to 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.

11

Competition

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. 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.

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. 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.

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

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 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.

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 which 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. 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.

12

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. 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
safe.

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 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.

From
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.

Insurance

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.

We
are not a party to, nor are we aware of, any legal or regulatory proceedings, investigations or claims which, in the opinion of our management,
are likely to have a material adverse effect on our business, financial condition or results of operations.

REGULATION

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. market. 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. market without actual premarket authorizations. The PMTA process is expensive, time-consuming, and uncertain.

13

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 to:

● 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: 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. 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.

14

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. Flavor bans 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.

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. Accordingly,
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.

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 grounds. In addition, a recent court decision from the U.S. 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.

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.

15

Europe

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 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 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.

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. 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.

16

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 conditions.

Disposable
(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. The Bill
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.

The
sale of cannabis products is currently illegal in the United Kingdom.

Malaysia

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. We are 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. In
May 2025, we received a temporary license to produce products containing nicotine for export from the Malaysian federal government. We
are actively working to secure a permanent version of this license.

17

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”) 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.

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 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.

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. 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
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. 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
incur.

18

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.
As part of our current manufacturing Malaysia, we will be required to comply with applicable environmental laws and regulations. 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. You can find our SEC filings at the SEC’s website at www.sec.gov.

Our
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.