Equity Method Investment |
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Dec. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity Method Investment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| EQUITY METHOD INVESTMENT | 6. EQUITY METHOD INVESTMENT
On April 5, 2024, Aspire North America entered into a capital contribution, subscription, and joint venture agreement with several other parties. Pursuant to joint venture agreement, the parties created a legal entity, IKE Tek LLC (“IKE”), whose business will be licensing, owning, operating and developing an industry-standard age-verification solution for vapor (e-cigarette) devices in the U.S. market as the related planned submission of PMTA applications that seek FDA marketing orders for cutting-edge technologies across the U.S. e-cigarette market. Ispire contributed $1 million to IKE in cash for funding its operating activities and entered into a binding commitment to make an additional capital contribution to IKE in the aggregate amount of up to $9 million. In exchange for Ispire’s total investment of $10 million, IKE issued to Ispire membership interests in an aggregate amount initially equal to forty percent (40%) of the membership interests in IKE.
As of December 31, 2024, the investment in joint venture accounted for under the equity method amounted to $10,071,380. As of December 31, 2024, the Company noticed no indicator of impairment regarding the investment.
For the three months ended December 31, 2024, the Company’s share of the joint venture’s net loss was $100,618. For the six months ended December 31, 2024, the Company’s share of the joint venture’s net loss was $176,668. The loss was included in “other (expense) income, net” in the consolidated statements of operations and comprehensive loss.
For the three months ended December 31, 2024 and 2023, the Company recorded $32,479 and $0 in other income from IKE from charging administrative fees. For the six months ended December 31, 2024 and 2023, the Company recorded $72,072 and $0 in other income from IKE from charging administrative fees. As of December 31, 2024 and June 30, 2024, the Company had total accounts receivable of $40,976 and $17,280 due from IKE.
The tables below present the summarized financial information, as provided to the Company by the investee, for the unconsolidated company:
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