Core Insights - INNO Holdings Inc. has entered into a Strategic Cooperation Memorandum of Understanding with STAR LIGHT TELECOM LIMITED to expand into the Middle East, Europe, and Africa markets, which is expected to significantly enhance its business scale and performance growth [2][3][4] Company Overview - INNO is a trade-focused building technology and electronic products trading company, aiming to enhance services and technologies while delivering high-quality products [1][5] - The company has a professional brand and marketing management system to facilitate the connection and operation of marketing channels globally [5] Strategic Cooperation - The partnership with SLTL will leverage its global supply chain system and trade channels to help INNO address supply chain challenges and reduce trade costs [2][3] - SLTL will provide warehouse logistics networks, localized resources, and compliance support to facilitate INNO's market entry into the MEEA region [3] Market Potential - The MEEA markets are identified as new growth drivers due to rising consumer demand, despite high barriers in supply chain establishment and localized channel development [3] - INNO anticipates that within two years, revenue from the MEEA region will significantly boost the company's existing business [4] Financial Outlook - The CEO of INNO highlighted that anticipated Federal Reserve rate cuts may lower capital costs, further accelerating business growth in the MEEA region [4] - Lower financing costs are expected to enhance the profit margin of INNO's trade business by reducing logistics costs [4] Future Plans - A special working group will be established to implement product selection and supply chain adaptation [4] - INNO aims to integrate SLTL's advantages to optimize its products and services for high-quality development in emerging markets [4]

Core Viewpoint - Inno Holdings Inc. has successfully closed a registered direct offering, raising approximately $7.2 million through the sale of common stock and pre-funded warrants, with the transaction aimed at supporting general corporate purposes and working capital [1][3]. Group 1: Offering Details - The offering included the sale of 1,200,000 shares of common stock at a price of $3.60 per share and pre-funded warrants to purchase 800,000 shares, with the pre-funded warrants priced at $3.59999 each [2]. - Upon closing, 285,000 pre-funded warrants were exercised, resulting in the issuance of 285,000 shares of common stock [2]. Group 2: Financial Proceeds and Use - The company received aggregate gross proceeds of approximately $7.2 million from the offering, which closed on September 11, 2025 [3]. - The net proceeds from the offering are expected to be utilized for general corporate purposes, including working capital [3]. Group 3: Company Overview - Inno Holdings Inc. is focused on building technology and electronic products trading, aiming to revolutionize the construction industry with proprietary cold-formed steel framing, AI-driven design, and automation [6]. - The company is expanding its sales and distribution network in electronic product trading, seeking to enhance commercial value for business partners and increase enterprise value for shareholders [6].

Core Viewpoint - Inno Holdings Inc. has announced a registered direct offering with institutional investors, raising approximately $7.2 million through the sale of common stock and pre-funded warrants at a price of $3.60 per share [1][3]. Group 1: Offering Details - The offering includes the sale of 1,200,000 shares of common stock and pre-funded warrants to purchase 800,000 shares of common stock [2]. - The pre-funded warrants are immediately exercisable and can be exercised at any time until fully exercised, with a minimal exercise price of $0.00001 [2]. - The total gross proceeds from the offering are expected to be around $7.2 million, with the transaction anticipated to close on or about September 11, 2025, pending customary closing conditions [3]. Group 2: Use of Proceeds - The company plans to utilize the net proceeds from the offering, along with existing cash, for general corporate purposes and working capital [3]. Group 3: Company Overview - Inno Holdings Inc. is focused on building technology and electronic products trading, aiming to innovate the construction industry through proprietary cold-formed steel framing, AI-driven design, and automation [7]. - The company is expanding its sales and distribution network in electronic product trading, seeking to enhance commercial value for business partners and increase its own enterprise value [7].

Company Performance Highlights - Concorde International Group Ltd (CIGL) saw a stock price increase of 91.16%, reaching $2.81, with a trading volume of 124,077,569, significantly higher than its average [2][7] - Inno Holdings Inc. (INHD) experienced an 80.31% rise in stock price to $8.58, as the company expands into electronic product trading and digital transformation initiatives [3][7] - Brillia Inc (BRIA) reported a 62.51% increase in stock price to $4.16, with a trading volume of 24,795,778 and a declared cash dividend of $0.13 per Class A share, totaling nearly $3 million [4] - Duluth Holdings Inc. (DLTH) had a stock price increase of 52.31%, reaching $3.59, and reported quarterly earnings of $0.03 per share, surpassing the Zacks Consensus Estimate [5][7] Market Dynamics - The recent market movements indicate a dynamic nature of the stock market, with significant price changes across various sectors [6] - Factors contributing to these price movements may include company developments, market trends, or broader economic indicators [6]

Core Insights - Retail investors have significantly contributed to the recent surge in "meme stocks," initially sparked by Opendoor Technologies, Inc. (OPEN), and have now expanded interest to Offerpad Solutions, Inc. (OPAD) and Inno Holdings, Inc. (INHD) [1][2] - The optimism surrounding AI and technology-driven property businesses is driving interest in these stocks, as they are perceived to have the potential to disrupt traditional real estate models [2] Company Performance - Opendoor's stock has increased over 200% this year, with social media playing a crucial role in rallying individual investors [1] - Offerpad's stock (OPAD) rose 183% to $4.36 at the time of publication, reflecting strong trading activity [4] - Inno Holdings' stock (INHD) surged 241% to $4.48, with significant trading volume noted [6] Trading Activity - Inno Holdings has a float of less than 7 million shares, with over 171 million shares traded recently, indicating high investor interest [3] - Offerpad has a float of below 14.5 million shares, with more than 133 million shares changing hands in a single session [3] Market Influences - The rally in housing-related stocks, including Offerpad and Opendoor, is partly attributed to expectations of interest rate cuts following dovish comments from Fed Chair Jerome Powell [4] - Lower interest rates are anticipated to improve housing market conditions, potentially increasing sales activity [4] Business Models - Offerpad provides services similar to Opendoor, focusing on an online real estate platform that offers cash offers within minutes [4] - Inno Holdings is positioned as a dynamic holding company in the building technology sector, with plans for upcoming online platforms that include a supply chain platform and AI testing platform [5][6]

[PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section provides the unaudited financial statements and management's analysis of INNO HOLDINGS INC.'s financial condition and operational results [ITEM 1: Financial Statements](index=3&type=section&id=ITEM%201%3A%20Financial%20Statements) INNO HOLDINGS INC.'s unaudited financial statements show increased cash, a substantial net loss, a going concern issue, and a 1-for-10 reverse stock split in October 2024 - As of June 30, 2025, the Company had an accumulated deficit of $13,509,126 and incurred a net loss of $5,700,965 for the nine months ended June 30, 2025, raising substantial doubt about its ability to continue as a going concern[37](index=37&type=chunk) - On October 9, 2024, the Company completed a 1-for-10 reverse stock split, retroactively adjusting all share and per-share information[11](index=11&type=chunk)[12](index=12&type=chunk)[16](index=16&type=chunk)[102](index=102&type=chunk) [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20-%20June%2030%2C%202025%20(Unaudited)%20and%20September%2030%2C%202024) The balance sheets reflect significant increases in cash, inventories, and total assets, alongside a substantial rise in additional paid-in capital and accumulated deficit Assets (June 30, 2025 vs. September 30, 2024) | Metric | June 30, 2025 | September 30, 2024 | Change | | :-------------------------------- | :-------------- | :----------------- | :----- | | Cash and cash equivalent | $4,385,289 | $1,077,138 | +307.1% | | Inventories | $2,058,800 | $- | N/A | | Prepayments and other current assets | $1,387,476 | $65,797 | +2009.9% | | Current assets from discontinued operations | $- | $1,145,673 | -100% | | Equity investment | $1,000,000 | $- | N/A | | Total assets | $8,831,565 | $4,169,337 | +111.8% | Liabilities & Equity (June 30, 2025 vs. September 30, 2024) | Metric | June 30, 2025 | September 30, 2024 | Change | | :-------------------------------- | :-------------- | :----------------- | :----- | | Other payables and accrued liabilities | $830,702 | $138,700 | +498.9% | | Current liabilities from discontinued operations | $- | $1,124,153 | -100% | | Total liabilities | $880,702 | $1,371,801 | -35.8% | | Additional paid in capital | $21,753,739 | $10,748,534 | +102.4% | | Accumulated deficit | $(13,509,126) | $(7,738,644) | +74.6% | | Total equity | $7,950,863 | $2,797,536 | +184.2% | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20-%20Three%20Months%20and%20Nine%20Months%20Ended%20June%2030%2C%202025%20and%202024%20(Unaudited)) The statements of operations show new revenue generation, increased operating losses, and a higher net loss for both three and nine-month periods ending June 30, 2025 Three Months Ended June 30, 2025 vs. 2024 | Metric | June 30, 2025 | June 30, 2024 | Change | | :-------------------------------- | :-------------- | :-------------- | :----- | | Total revenue | $1,086,250 | $- | N/A | | Total cost of sales | $1,102,300 | $- | N/A | | Gross (Loss)/Profit | $(16,050) | $- | N/A | | Selling, general and administrative expenses | $1,544,590 | $188,667 | +718.7% | | Loss from operations | $(1,560,640) | $(188,667) | +727.2% | | Net loss from discontinued operations | $- | $(881,273) | -100% | | Net loss attributable to INNO HOLDINGS INC. | $(1,546,288) | $(1,064,702) | +45.2% | | Basic and Diluted, Total EPS | $(0.30) | $(0.51) | -41.2% | Nine Months Ended June 30, 2025 vs. 2024 | Metric | June 30, 2025 | June 30, 2024 | Change | | :-------------------------------- | :-------------- | :-------------- | :----- | | Total revenue | $1,760,350 | $- | N/A | | Total cost of sales | $1,718,900 | $- | N/A | | Gross Profit | $41,450 | $- | N/A | | Selling, general and administrative expenses | $3,425,985 | $664,665 | +415.5% | | Loss from operations | $(3,388,049) | $(664,665) | +410.0% | | Net loss from discontinued operations | $(195,796) | $(2,526,698) | -92.2% | | Net loss attributable to INNO HOLDINGS INC. | $(5,770,482) | $(2,926,677) | +97.2% | | Basic and Diluted, Total EPS | $(1.41) | $(1.46) | -3.4% | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity%20-%20Three%20Months%20and%20Nine%20Months%20Ended%20June%2030%2C%202025%20and%202024%20(Unaudited)) Stockholders' equity significantly increased due to capital raises, despite a growing accumulated deficit from net losses Equity Changes (September 30, 2024 to June 30, 2025) | Metric | September 30, 2024 | June 30, 2025 | Change | | :-------------------------- | :----------------- | :-------------- | :----- | | Total equity | $2,797,536 | $7,950,863 | +184.2% | | Additional paid in capital | $10,748,534 | $21,753,739 | +102.4% | | Accumulated deficit | $(7,738,644) | $(13,509,126) | +74.6% | - Key Activities impacting Equity (Nine Months Ended June 30, 2025): * Net loss: $(5,700,965) * Shares issued for cash: $7,250,000 * Proceeds from sale of common stock: $1,285,250 * Stock-based compensation: $2,176,205[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20-%20Three%20Months%20and%20Nine%20Months%20Ended%20June%2030%2C%202025%20and%202024%20(Unaudited)) Cash flows reflect significant capital provided by financing activities, offsetting cash used in operating and investing activities, leading to increased cash and cash equivalents Cash Flows (Nine Months Ended June 30, 2025 vs. 2024) | Metric | June 30, 2025 | June 30, 2024 | Change | | :-------------------------------- | :-------------- | :-------------- | :----- | | Net cash used in operating activities | $(3,704,646) | $(4,861,753) | -23.8% | | Net cash used in investing activities | $(1,522,453) | $(412,231) | +269.6% | | Net cash provided by financing activities | $8,535,250 | $7,157,803 | +19.2% | | Cash and cash equivalent, ending of period | $4,385,289 | $1,885,758 | +132.6% | - Key drivers for Operating Cash Flow (Nine Months Ended June 30, 2025): * Net loss from continuing operations: $(5,505,169) * Stock-based compensation expense: $2,185,205 * Loss from investment disposal: $2,152,522 * Increase in inventories: $(2,058,800) * Increase in prepayments and other current assets: $1,026,834[19](index=19&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes detail the company's business shift to electronic product trading, significant subsidiary disposals, a going concern warning, and capital raising activities - Company's primary business: marketing and sale of construction products and full-scope construction services in the US. A new business initiative in electronic product trading started in October 2024. Significant disposals of subsidiaries related to construction and AI tech occurred in March-April 2025[22](index=22&type=chunk)[28](index=28&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk)[135](index=135&type=chunk) - Substantial doubt about the Company's ability to continue as a going concern for the next 12 months due to accumulated deficit and net losses[37](index=37&type=chunk) - Merchandise inventory as of June 30, 2025, was **$2,058,800**, compared to **$0** on September 30, 2024[78](index=78&type=chunk) - Total prepayments and other current assets increased from **$65,797** (Sep 30, 2024) to **$1,387,476** (June 30, 2025), including a **$500,000** loan receivable and **$525,100** receivable from sales of equity investment[79](index=79&type=chunk)[80](index=80&type=chunk) - Goodwill of **$3,514** from acquisitions of Baymax and Lear (Oct-Dec 2024) was fully impaired for the nine months ended June 30, 2025[84](index=84&type=chunk) - Net loss from discontinued operations was **$(195,796)** for the nine months ended June 30, 2025, a significant reduction from **$(2,526,698)** in the prior year[91](index=91&type=chunk) - The Company conducted multiple private placements and registered direct offerings in late 2024 and early 2025, raising significant capital[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) - Customer concentration: Two customers accounted for **100% of revenue** for the three months ended June 30, 2025. Supplier concentration: Two suppliers accounted for **100% of purchases** for the three months ended June 30, 2025[117](index=117&type=chunk)[118](index=118&type=chunk) - Settled a litigation claim for **$75,000** on July 9, 2025, related to alleged fund transfers by a subcontractor. Ongoing litigation from a former shareholder claiming **$2 million** potential loss[121](index=121&type=chunk)[130](index=130&type=chunk) - Stock-based compensation expense significantly increased to **$1,135,200** for three months and **$2,185,205** for nine months ended June 30, 2025, due to grants to employees and executives[128](index=128&type=chunk)[129](index=129&type=chunk) [ITEM 2: Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=ITEM%202%3A%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting a business shift to electronic product trading, revenue growth, increased operating losses from higher SG&A, a going concern warning, and active capital raising through private placements and direct offerings - The company has introduced a new business of electronic products trading since Q4 2024, sourcing from Asia and selling to Southeast Asia, Europe, and other areas, alongside its primary cold-formed-steel manufacturing and construction services[135](index=135&type=chunk) - Management does not believe current cash and cash equivalents are sufficient for the next twelve months and will require additional capital, creating substantial doubt about the company's ability to continue as a going concern[163](index=163&type=chunk) [Overview](index=29&type=section&id=Overview) The company's primary business involves cold-formed-steel manufacturing and construction services, complemented by a new electronic products trading initiative since Q4 2024 - Primary business: manufactures cold-formed-steel members and offers full-scope construction services[134](index=134&type=chunk) - New business: electronic products trading, sourcing pre-owned electronic devices from Asia and selling to wholesale/retail clients in Southeast Asia, Europe, and other areas, introduced since Q4 2024[135](index=135&type=chunk) [Recent Developments](index=30&type=section&id=Recent%20Developments) Recent developments include the disposition of a subsidiary, a strategic equity investment, and significant capital raises through securities purchase agreements and direct offerings - Disposition of Subsidiary: Sold Inno Disrupts Inc. for **$100** on April 8, 2025[137](index=137&type=chunk) - Investment: Entered into an equity investment agreement with Aurora Technology Holding Limited on May 28, 2025, securing a **16.67%** ownership interest for **$1 million**[138](index=138&type=chunk) - June Securities Purchase Agreement: Closed a registered direct offering on June 6, 2025, issuing **1,058,000 shares** for gross proceeds of **$529,000**[139](index=139&type=chunk) - July Standby Equity Purchase Agreement (SEPA): Entered into on July 4, 2025, allowing the company to issue and sell up to **$6 million** worth of common stock to investors over three years[140](index=140&type=chunk)[141](index=141&type=chunk) [Key Performance Indicators (KPIs)](index=31&type=section&id=Key%20Performance%20Indicators%20(%22KPIs%22)) The company focuses on optimizing capital turnover, reducing accounts receivable collection periods, minimizing lead times, and achieving long-term operating income growth - Capital turnover rate of raw-material procurement: Aims for **1-3 months** of raw materials inventory, long-term supplier relationships, and quarterly purchase plans to maximize fund efficiency[143](index=143&type=chunk) - Collection period of accounts receivable: Targets strategic relationships with large-scale homebuilders and professional companies to reduce risk and days outstanding, with an eventual goal of **100% payment** before product shipment[144](index=144&type=chunk) - Lead time: Strives to communicate frequently with customers and optimize production to minimize storage and shorten lead time[145](index=145&type=chunk) - Growth of total operating income: Maintains internal long-term targets for gross profit and operating income, aiming for profitable long-term growth[146](index=146&type=chunk) [Results of Operation](index=31&type=section&id=Results%20of%20Operation) Operational results show significant revenue growth from the new electronic products trading business, alongside substantial increases in selling, general, and administrative expenses, leading to higher operating and net losses Three Months Ended June 30, 2025 vs. 2024 | Metric | June 30, 2025 | June 30, 2024 | Change | | :-------------------------------- | :-------------- | :-------------- | :----- | | Revenues | $1,086,250 | $- | N/A | | Costs of goods sold | $1,102,300 | $- | N/A | | Selling, general and administrative expenses | $1,544,590 | $188,667 | +719% | | Operating loss | $(1,560,640) | $(188,667) | +727% | | Net loss | $(1,546,288) | $(1,050,881) | +47% | Nine Months Ended June 30, 2025 vs. 2024 | Metric | June 30, 2025 | June 30, 2024 | Change | | :-------------------------------- | :-------------- | :-------------- | :----- | | Revenues | $1,760,350 | $- | N/A | | Costs of goods sold | $1,718,900 | $- | N/A | | Selling, general and administrative expenses | $3,425,985 | $664,665 | +415% | | Operating loss | $(3,388,049) | $(664,665) | +410% | | Net loss | $(5,700,965) | $(2,962,072) | +92% | - Revenue increased **100%** for both three and nine months ended June 30, 2025, primarily due to the new electronic products trading business[150](index=150&type=chunk) - Selling, general and administrative expenses increased **719%** (3 months) and **415%** (9 months) primarily due to stock compensation given to employees in May 2025[153](index=153&type=chunk) - Operating loss increased **727%** (3 months) and **410%** (9 months) mainly due to higher SG&A expenses[154](index=154&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) The company's cash position improved significantly due to capital raising activities, yet management expresses substantial doubt about its ability to continue as a going concern without additional capital - Cash increased from **$1,077,138** (Sep 30, 2024) to **$4,385,289** (June 30, 2025), primarily from private-placement offerings, offset by operating and investing cash usage[157](index=157&type=chunk) - Capital Raising Activities (Oct 2024 - June 2025): * October 2024 Private Placement: **$2,000,000** from **500,000 shares** at **$4.00/share** * November 2024 Private Placement: **~$3.5 million** from **729,167 shares** at **$4.80/share** * December 2024 Private Placement: **~$1.75 million** from **700,000 shares** at **$2.50/share** * June 2025 Offering: **$529,000** from **1,058,000 shares** at **$0.50/share** * January SEPA: Issued **1,400,000 shares** at **$0.75/share** on June 20, 2025, with the right to issue up to **$15 million** worth of shares[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk) - Current cash is insufficient for the next twelve months, requiring additional capital and raising substantial doubt about the company's ability to continue as a going concern[163](index=163&type=chunk) - Working capital increased from **$975,755** (Sep 30, 2024) to **$6,950,863** (June 30, 2025)[164](index=164&type=chunk) [Cash Flows](index=35&type=section&id=Cash%20Flows) Cash flows show reduced operating cash usage, increased investing cash usage due to an equity investment, and substantial cash provided by financing activities - Net cash used in operating activities was **$(3,704,646)** for the nine months ended June 30, 2025, compared to **$(4,861,753)** in 2024[165](index=165&type=chunk)[166](index=166&type=chunk) - Net cash used in investing activities was **$(1,522,453)** in 2025, primarily due to a **$1,000,000** investment in Aurora Technology Holding Limited[167](index=167&type=chunk) - Net cash provided by financing activities was **$8,535,250** in 2025, primarily from private-placement offerings[168](index=168&type=chunk)[169](index=169&type=chunk) [Critical Accounting Policies and Estimate](index=35&type=section&id=Critical%20Accounting%20Policies%20and%20Estimate) Key accounting estimates, including revenue recognition, inventory valuation, going concern assessment, and income tax provisions, require significant management judgments and assumptions - Key estimates include revenue recognition, inventory valuation, going concern assessment, and provision for income taxes, which require significant judgments and assumptions[170](index=170&type=chunk) [New Accounting Standards](index=35&type=section&id=New%20Accounting%20Standards) The company anticipates no material impact on its consolidated financial statements from recently issued accounting guidance - The Company does not expect a material impact from recently issued accounting guidance on its consolidated financial statements[171](index=171&type=chunk) [ITEM 3: Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK.) As a smaller reporting company, INNO HOLDINGS INC. is exempt from detailed market risk disclosures, reporting no material changes to risk factors since its 2024 Annual Report on Form 10-K - Exempt from detailed market risk disclosures as a smaller reporting company[172](index=172&type=chunk) [ITEM 4: Controls and Procedures](index=36&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES.) Management concluded that disclosure controls and procedures were ineffective as of June 30, 2025, due to a material weakness in internal control policies, with plans to hire personnel or consultants for remediation - Disclosure Controls and Procedures were not effective as of June 30, 2025[173](index=173&type=chunk) - Material Weakness: Lack of adequate policies and procedures in internal control function to ensure proper control and procedures over key business cycles[173](index=173&type=chunk) - Remediation Plan: Plan to hire additional personnel or consultants with relevant experience and qualifications to design and implement internal control over key business cycles[173](index=173&type=chunk) - No material changes in internal control over financial reporting during the period ended June 30, 2025[175](index=175&type=chunk) [PART II OTHER INFORMATION](index=37&type=section&id=PART%20II%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, and other disclosures for INNO HOLDINGS INC. [ITEM 1: Legal Proceedings](index=37&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS.) The company settled a litigation for $75,000 related to subcontractor fund transfers and faces ongoing litigation from a former shareholder claiming a potential $2 million loss, which it intends to vigorously defend - On July 9, 2025, the Company settled a litigation with a plaintiff for **$75,000**, related to alleged misappropriation of funds by a subcontractor. The payment was made on July 15, 2025[130](index=130&type=chunk)[177](index=177&type=chunk) - Ongoing litigation from a former shareholder filed in December 2024, alleging **$2 million** in potential lost gains from an investment. The Company believes the complaint is without merit and intends to defend it vigorously[121](index=121&type=chunk) [ITEM 1A: Risk Factors](index=37&type=section&id=ITEM%201A.%20RISK%20FACTORS.) As a smaller reporting company, INNO HOLDINGS INC. is exempt from new risk factor disclosures in this quarterly report, with no material changes since its 2024 Annual Report on Form 10-K - No material changes in risk factors since the 2024 Annual Report on Form 10-K[179](index=179&type=chunk) - Exempt from providing detailed risk factor information as a "smaller reporting company"[179](index=179&type=chunk) [ITEM 2: Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS.) The company conducted multiple private placements and a registered direct offering from October 2024 to June 2025, issuing millions of shares and raising substantial capital from both U.S. and non-U.S. investors with registration rights - October 2024 Private Placement: Sold **500,000 shares** for **$2,000,000** (**$4.00/share**) to certain investors, exempt under Section 4(a)(2) of the Securities Act[180](index=180&type=chunk) - November 2024 Private Placement: Sold **729,167 shares** for approximately **$3.5 million** (**$4.80/share**) to nine non-U.S. investors, exempt under Rule 903 of Regulation S[182](index=182&type=chunk) - December 2024 Private Placement: Sold **700,000 shares** for approximately **$1.75 million** (**$2.50/share**) to nine non-U.S. investors, exempt under Rule 903 of Regulation S[184](index=184&type=chunk) - June 2025 Offering: Sold **1,058,000 shares** for **$529,000** (**$0.50/share**) in a registered direct offering[186](index=186&type=chunk) - January SEPA: Issued **1,400,000 shares** for **$0.75/share** on June 20, 2025, as part of an agreement to sell up to **$15 million** worth of shares[187](index=187&type=chunk) - Registration rights agreements were entered into for the private placements, and prospectus supplements were filed for resale[181](index=181&type=chunk)[183](index=183&type=chunk)[185](index=185&type=chunk) [ITEM 3: Defaults Upon Senior Securities](index=38&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES.) The company reported no defaults upon senior securities during the period - No defaults upon senior securities[190](index=190&type=chunk) [ITEM 4: Mine Safety Disclosures](index=38&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES.) The company reported no mine safety disclosures - No mine safety disclosures[191](index=191&type=chunk) [ITEM 5: Other Information](index=38&type=section&id=ITEM%205.%20OTHER%20INFORMATION.) No director or officer adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the quarter ended June 30, 2025 - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements adopted or terminated by directors or officers during the quarter[192](index=192&type=chunk) [ITEM 6: Exhibits](index=39&type=section&id=ITEM%206%3A%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the Standby Equity Purchase Agreement, certifications from the Principal Executive and Financial Officers, and Inline XBRL documents - Includes Standby Equity Purchase Agreement (Exhibit 10.1)[194](index=194&type=chunk) - Includes Certifications of Principal Executive and Financial Officers (Exhibits 31.1, 31.2, 32.1, 32.2)[194](index=194&type=chunk) - Includes Inline XBRL documents (Exhibits 101.INS, SCH, CAL, DEF, LAB, PRE, 104)[194](index=194&type=chunk) [SIGNATURES](index=40&type=section&id=SIGNATURES) The report is duly signed on behalf of INNO HOLDINGS, INC. by Ding Wei, Chief Executive Officer, and Mengshu Shao, Chief Financial Officer, on July 28, 2025 - Signed by Ding Wei, CEO, and Mengshu Shao, CFO, on July 28, 2025[197](index=197&type=chunk)

Core Viewpoint - INNO Holdings Inc. has announced a strategic cooperation with New Life Technology Development Co Ltd to develop a B2B marketplace platform aimed at enhancing electronic products trading and supply chain services [2][4]. Group 1: Company Overview - INNO is a trade-focused building technology and electronic products trading company, dedicated to enhancing services and technologies while delivering high-quality products [1]. - The company is expanding its sales and distribution network in the electronic product trading sector [5]. Group 2: Strategic Cooperation - The collaboration with New Life Tech will leverage cloud computing, big data, and high-frequency matchmaking technology to create a marketplace that connects manufacturers and distributors directly with business buyers [2]. - This partnership is seen as a significant milestone in INNO's commitment to innovative partnerships and is expected to improve its competitive strength in the trillion-dollar electronic products distribution industry [3][4]. Group 3: Market Outlook - The CEO of INNO expressed optimism about the growth of the global electronic products market as the relationship between China and the United States stabilizes [3]. - The strategic cooperation is anticipated to open new avenues for exploration and innovation across various business sectors for INNO [4].

[CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=4&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section warns that forward-looking statements are subject to risks and uncertainties that could materially alter actual results - The report contains forward-looking statements subject to **risks and uncertainties** that could cause actual results to differ materially[7](index=7&type=chunk) - Uncertainty areas include managing operations, expenses, evaluating performance, responding to changes, and protecting **intellectual property**[10](index=10&type=chunk) [PART I FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This part presents unaudited consolidated financial statements and management's discussion and analysis of financial results - The financial statements are unaudited and prepared in accordance with **U.S. GAAP**, with certain disclosures condensed or omitted compared to annual audited statements[38](index=38&type=chunk)[39](index=39&type=chunk) [ITEM 1. FINANCIAL STATEMENTS](index=5&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements for INNO HOLDINGS INC. and its subsidiaries, including the Balance Sheets, Statements of Operations, Statements of Changes in Stockholders' Equity, and Statements of Cash Flows, along with accompanying notes [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity Condensed Consolidated Balance Sheets (March 31, 2025 vs. September 30, 2024) | ASSETS | March 31, 2025 (unaudited) | September 30, 2024 | | :--------------------------------- | :------------------------- | :------------------- | | Cash and cash equivalent | $3,888,816 | $1,077,138 | | Accounts receivable, net | $97,000 | - | | Inventories | $1,658,400 | - | | Prepayments and other current assets | $1,684,634 | $65,797 | | Current assets from discontinued operations | - | $1,145,673 | | Total current assets | $7,328,850 | $2,288,608 | | Non-current assets from discontinued operations | - | $1,880,729 | | Total assets | $7,328,850 | $4,169,337 | | LIABILITIES AND EQUITY | | | | Other payables and accrued liabilities | $192,149 | $138,700 | | Short-term loan payable | $50,000 | $50,000 | | Current liabilities from discontinued operations | - | $1,124,153 | | Total current liabilities | $252,149 | $1,312,853 | | Total liabilities | $252,149 | $1,371,801 | | Additional paid in capital | $19,039,539 | $10,748,534 | | Accumulated deficit | $(11,962,838) | $(7,738,644) | | Total equity | $7,076,701 | $2,797,536 | | Total liabilities and equity | $7,328,850 | $4,169,337 | - The company completed a **1-for-10 reverse stock split** on October 9, 2024, retroactively adjusting all share and per-share information[15](index=15&type=chunk) [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's revenues, costs, expenses, and net loss for the periods ended March 31 Condensed Consolidated Statements of Operations (Three Months Ended March 31, 2025 vs. 2024) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------- | :-------------------------------- | :-------------------------------- | | Revenue - products | $478,100 | $- | | Total revenue | $478,100 | $- | | Costs of goods sold | $436,600 | $- | | Gross Profit / (Loss) | $41,500 | $- | | Selling, general and administrative expenses | $1,410,805 | $276,427 | | Loss from operations | $(1,369,305) | $(276,427) | | Total other (expenses) income, net | $(2,131,836) | $201,832 | | Net loss from continuing operations | $(3,501,141) | $(74,595) | | Net loss from discontinued operations | $(48,127) | $(1,019,332) | | NET LOSS | $(3,549,268) | $(1,093,927) | | Net loss attributable to Inno Holdings Inc. | $(3,620,497) | $(1,060,457) | | Basic and Diluted, Total Losses Per Share | $(0.83) | $(0.51) | Condensed Consolidated Statements of Operations (Six Months Ended March 31, 2025 vs. 2024) | Metric | Six Months Ended March 31, 2025 | Six Months Ended March 31, 2024 | | :------------------------------------- | :------------------------------ | :------------------------------ | | Revenue - products | $674,100 | $- | | Total revenue | $674,100 | $- | | Costs of goods sold | $616,600 | $- | | Gross Profit / (Loss) | $57,500 | $- | | Selling, general and administrative expenses | $1,881,397 | $475,998 | | Impairment loss on goodwill | $3,514 | $- | | Loss from operations | $(1,827,411) | $(475,998) | | Total other (expenses) income, net | $(2,131,470) | $211,032 | | Net loss from continuing operations | $(3,958,881) | $(265,766) | | Net loss from discontinued operations | $(195,796) | $(1,645,425) | | NET LOSS | $(4,154,677) | $(1,911,191) | | Net loss attributable to Inno Holdings Inc. | $(4,224,194) | $(1,861,975) | | Basic and Diluted, Total Losses Per Share | $(1.18) | $(0.95) | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This section outlines changes in the company's equity, including paid-in capital and accumulated deficit, for the six months ended March 31 Condensed Consolidated Statements of Changes in Stockholders' Equity (Six Months Ended March 31, 2025 vs. 2024) | Metric | March 31, 2025 (unaudited) | March 31, 2024 (unaudited) | | :------------------------------------- | :------------------------- | :------------------------- | | Total Equity | $7,076,701 | $4,065,472 | | Additional Paid in Capital | $19,039,539 | $10,676,534 | | Accumulated Deficit | $(11,962,838) | $(6,386,790) | | Shares Issued and Outstanding | 4,410,482 | 2,075,173 | - The company issued **1,929,167 shares for cash**, contributing **$7,250,000** to additional paid-in capital during the six months ended March 31, 2025[22](index=22&type=chunk) - **Stock-based compensation** of **$1,041,005** was recognized, increasing additional paid-in capital for the six months ended March 31, 2025[22](index=22&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents cash inflows and outflows from operating, investing, and financing activities for the six months ended March 31 Condensed Consolidated Statements of Cash Flows (Six Months Ended March 31, 2025 vs. 2024) | Cash Flow Activity | Six Months Ended March 31, 2025 | Six Months Ended March 31, 2024 | | :------------------------------------- | :------------------------------ | :------------------------------ | | Net cash used in operating activities | $(3,109,869) | $(3,131,454) | | Net cash used in investing activities | $(1,328,453) | $(269,229) | | Net cash provided by financing activities | $7,250,000 | $7,438,223 | | Changes in cash and cash equivalent | $2,811,678 | $4,037,540 | | Cash and cash equivalent, ending of period | $3,888,816 | $4,039,479 | - Cash and cash equivalents **increased** by **$2,811,678** to **$3,888,816** as of March 31, 2025, primarily due to financing activities[26](index=26&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures for the unaudited condensed consolidated financial statements, covering the company's business, accounting policies, specific asset and liability breakdowns, and recent corporate events [Note 1 — Nature of business and organization](index=11&type=section&id=Note%201%20%E2%80%94%20Nature%20of%20business%20and%20organization) This note describes INNO HOLDINGS, INC.'s core construction business and recent expansion into electronic product trading - INNO HOLDINGS, INC. was incorporated on September 8, 2021, and is principally engaged in the marketing and sale of **construction products** along with full-scope construction services in the US[29](index=29&type=chunk) - The company acquired Lear Group Limited and Baymax High Technology Co., Limited in late 2024 to support its entry into a new business initiative focused on **electronic product trading**[34](index=34&type=chunk)[35](index=35&type=chunk) - In March 2025, the company sold all its shares in Inno Metal Studs Corp and Inno AI Tech Corp, and its membership interest in Castor Building Tech LLC[36](index=36&type=chunk)[37](index=37&type=chunk) [Note 2 — Basis of Presentation and Summary of significant accounting policies](index=11&type=section&id=Note%202%20%E2%80%94%20Basis%20of%20Presentation%20and%20Summary%20of%20significant%20accounting%20policies) This note outlines the financial statements' preparation basis, U.S. GAAP adherence, and key accounting policies - The financial statements are prepared in accordance with **U.S. GAAP** and SEC rules, with a fiscal year-end of September 30[38](index=38&type=chunk) - **Substantial doubt** exists about the company's ability to continue as a **going concern** due to an accumulated deficit of **$11,962,838** and a net **loss** of **$4,154,677** for the six months ended March 31, 2025[43](index=43&type=chunk) - Revenue from **electronic product trading** is recognized at the point of delivery when the customer obtains control of the products[59](index=59&type=chunk) [Note 3 — Inventories](index=17&type=section&id=Note%203%20%E2%80%94%20Inventories) This note details the company's inventory valuation methods and composition, primarily merchandise inventory Inventories (March 31, 2025 vs. September 30, 2024) | Inventory Type | March 31, 2025 (unaudited) | September 30, 2024 | | :--------------- | :------------------------- | :------------------- | | Merchandise inventory | $1,658,400 | $- | | Total | $1,658,400 | $- | - Inventory is valued at the **lower of cost or net realizable value** using the FIFO method, with no allowance for obsolescence recorded as of March 31, 2025[62](index=62&type=chunk)[82](index=82&type=chunk) [Note 4 — Prepayments and other current assets](index=18&type=section&id=Note%204%20%E2%80%94%20Prepayments%20and%20other%20current%20assets) This note provides a breakdown of prepayments and other current assets, highlighting a significant increase from new receivables Prepayments and Other Current Assets (March 31, 2025 vs. September 30, 2024) | Asset Type | March 31, 2025 (unaudited) | September 30, 2024 | | :-------------------------------- | :------------------------- | :------------------- | | Prepaid marketing and promotional services | $100,000 | $- | | Prepaid for software development | $125,000 | $- | | Advance to suppliers | $120,000 | $- | | Prepaid for consulting services | $159,028 | $- | | Loan receivable | $500,000 | $- | | Receivable from sales of equity investment | $601,000 | $- | | Other prepayments and current assets | $79,606 | $30,625 | | Total | $1,684,634 | $65,797 | - Total prepayments and other current assets significantly **increased** from **$65,797** to **$1,684,634**, primarily due to new loan receivables, receivables from equity sales, and various prepaid services[83](index=83&type=chunk) [Note 5 — Loan receivable](index=18&type=section&id=Note%205%20%E2%80%94%20Loan%20receivable) This note details a **$500,000** loan agreement with HST Trading Limited, including its interest rate and repayment terms - The company entered into a loan agreement with HST Trading Limited on February 28, 2025, providing a principal amount of **$500,000** at an annual interest rate of **5%**, due for repayment on or before August 30, 2025[84](index=84&type=chunk) [Note 6 — Equity Investments](index=18&type=section&id=Note%206%20%E2%80%94%20Equity%20Investments) This note describes the company's investment in Core Modu LLC and its subsequent sale - On October 14, 2024, the company invested **$1.4 million** for a **15% ownership interest** in Core Modu LLC, measured at cost less impairment[85](index=85&type=chunk) - On March 28, 2025, the company sold its **15% interest** in Core Modu LLC for an aggregate purchase price of **$700,000**, payable in four equal installments[86](index=86&type=chunk) [Note 7 — Goodwill, net](index=18&type=section&id=Note%207%20%E2%80%94%20Goodwill%2C%20net) This note details the company's goodwill, including its acquisition and subsequent full impairment Goodwill, net (March 31, 2025 vs. September 30, 2024) | Item | Amount | | :--------------------- | :------- | | Balance at Sep 30, 2024 | $- | | Acquisition | $3,514 | | Impairment losses | $(3,514) | | Balance at Mar 31, 2025 | $- | - Goodwill of **$3,514**, attributable to the acquisitions of Baymax and Lear, was fully impaired during the six months ended March 31, 2025[87](index=87&type=chunk) [Note 8 — Loans payable](index=18&type=section&id=Note%208%20%E2%80%94%20Loans%20payable) This note confirms that short-term loans payable remained at **$50,000** as of March 31, 2025, with no interest - Short-term loans payable without interest remained at **$50,000** as of March 31, 2025, consistent with September 30, 2024[88](index=88&type=chunk) [Note 9 — Discontinued operations](index=19&type=section&id=Note%209%20%E2%80%94%20Discontinued%20operations) This note outlines the company's sale of several subsidiaries in March 2025, classifying them as discontinued operations - The company sold Inno Metal Studs Corp, Inno AI Tech Corp, and Castor Building Tech LLC in March 2025, classifying them as **discontinued operations**[89](index=89&type=chunk)[90](index=90&type=chunk) Assets and Liabilities from Discontinued Operations (March 31, 2025 vs. September 30, 2024) | Item | March 31, 2025 (unaudited) | September 30, 2024 | | :------------------------------------- | :------------------------- | :------------------- | | Total current assets from discontinued operations | $- | $1,145,673 | | Total non-current assets from discontinued operations | $- | $1,880,729 | | Total current liabilities from discontinued operations | $- | $1,124,153 | | Total non-current liabilities from discontinued operations | $- | $58,948 | Net Loss from Discontinued Operations (Three and Six Months Ended March 31, 2025 vs. 2024) | Period | Net Loss from Discontinued Operations (2025) | Net Loss from Discontinued Operations (2024) | | :------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Three Months Ended March 31 | $(48,127) | $(1,019,332) | | Six Months Ended March 31 | $(195,796) | $(1,645,425) | [Note 10 — Related party transactions](index=22&type=section&id=Note%2010%20%E2%80%94%20Related%20party%20transactions) This note details the reduction of amounts due to former related parties and reclassification of entities - Amounts due to former CEO Mr. Dekui Liu and Zfounder Organization Inc. were reduced to **$Nil** as of March 31, 2025[94](index=94&type=chunk)[95](index=95&type=chunk) - Several entities previously considered related parties (Zfounder, Wise Hill, Vision 101, Core Modu LLC, Baicheng Trading LLC) are no longer classified as such due to changes in ownership or management[95](index=95&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk) [Note 11 — Equity](index=22&type=section&id=Note%2011%20%E2%80%94%20Equity) This note discusses the company's reverse stock split, changes in shares, private placements, and stock compensation - The company completed a **1-for-10 reverse stock split** on October 9, 2024, which did not reduce authorized shares or change the par value[101](index=101&type=chunk) - As of March 31, 2025, **4,410,482 shares** of common stock were issued and outstanding, compared to **2,279,960 shares** on September 30, 2024[15](index=15&type=chunk)[102](index=102&type=chunk) - The company issued **1,929,167 shares for cash** through private placements in late 2024, generating approximately **$7.25 million**[22](index=22&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk) - **Stock-based compensation** expense for the three and six months ended March 31, 2025, was **$1,050,005**, including grants to the CEO and CFO[104](index=104&type=chunk)[110](index=110&type=chunk) [Note 12 — Concentration of risk](index=24&type=section&id=Note%2012%20%E2%80%94%20Concentration%20of%20risk) This note highlights the company's exposure to credit risk, and significant customer and supplier concentration - The company faces **credit risk** from cash deposits (insured up to **$250,000** by FDIC) and unsecured accounts receivable[47](index=47&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) - Customer concentration is high, with **two customers** accounting for **100% of revenues** for the three months ended March 31, 2025, and **one customer** for **100% of accounts receivable**[114](index=114&type=chunk) - Supplier concentration is also high, with **two suppliers** accounting for **100% of total purchases** for the three and six months ended March 31, 2025[115](index=115&type=chunk) [Note 13 — Commitments and contingencies](index=24&type=section&id=Note%2013%20%E2%80%94%20Commitments%20and%20contingencies) This note discloses the company's involvement in litigation regarding alleged fund transfers by a subcontractor, claiming over **$1.3 million** - The company is involved in litigation related to alleged fund transfers by a subcontractor, claiming over **$1.3 million**, which the company is vigorously contesting due to lack of evidence[118](index=118&type=chunk) [Note 14 — Subsequent events](index=24&type=section&id=Note%2014%20%E2%80%94%20Subsequent%20events) This note reports the company's sale of all shares in Inno Disrupts Inc. for **$100** on April 8, 2025 - On April 8, 2025, the company sold all issued and outstanding shares it owns in Inno Disrupts Inc. for an aggregate purchase price of **$100**[121](index=121&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=26&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the company's financial condition and results of operations, highlighting key business activities, recent developments, performance indicators, and liquidity - The company is a building technology company manufacturing **cold-formed-steel members** and offering construction services, and has introduced a new **electronic product trading business** since Q4 2024[123](index=123&type=chunk)[124](index=124&type=chunk) - The company disposed of its interests in Core Modu LLC, Castor Building Tech LLC, Inno Metal Studs Corp, and Inno AI Tech Corp in March 2025[125](index=125&type=chunk)[127](index=127&type=chunk) - The company adopted the **2025 Omnibus Incentive Plan**, reserving **880,000 shares** for equity awards, with automatic annual **increases**[126](index=126&type=chunk) [Overview](index=26&type=section&id=Overview) This section provides an overview of INNO HOLDINGS INC.'s building technology business and electronic products trading expansion - INNO HOLDINGS INC. is a building technology company specializing in **cold-formed-steel members** and prefabricated homes, utilizing proprietary technologies for steel processing[123](index=123&type=chunk) - The company expanded into **electronic product trading** in Q4 2024, sourcing and selling pre-owned electronic devices in Southeast Asia, Europe, and other markets[124](index=124&type=chunk) [Recent Developments](index=26&type=section&id=Recent%20Developments) This section highlights recent corporate actions, including asset dispositions, incentive plan adoption, and personnel changes - The company sold its **15% membership interest** in Core Modu LLC for **$700,000** and its **53% interest** in Castor Building Tech LLC for **$1,000** to Strucraft Group Limited in March 2025[125](index=125&type=chunk) - The **2025 Omnibus Incentive Plan** was adopted, reserving **880,000 shares** for equity awards, with provisions for annual **increases**[126](index=126&type=chunk) - The company sold its wholly-owned subsidiaries, Inno Metal Studs Corp and Inno AI Tech Corp, for **$1,000** in cash to Architectix Limited on March 4, 2025[127](index=127&type=chunk) - A **Standby Equity Purchase Agreement (SEPA)** was entered into on January 27, 2025, allowing the company to sell up to **$15 million** of common stock to investors, with proceeds for working capital[128](index=128&type=chunk) - JWF Assurance PAC was appointed as the new independent registered public accounting firm, replacing Simon & Edward, LLP, **effective** January 13, 2025[129](index=129&type=chunk) - Mengshu Shao was appointed Chief Financial Officer on January 3, 2025, following the resignation of Tianwei Li from the CFO position[130](index=130&type=chunk) [Key Performance Indicators ("KPIs")](index=27&type=section&id=Key%20Performance%20Indicators%20(%22KPIs%22)) This section outlines the company's key performance indicators, including capital turnover, receivables collection, and operating income **growth** - KPIs include capital turnover rate of raw-material procurement (targeting **1-3 months inventory**), collection period of accounts receivable (aiming for **100% payment** before product leaves shop), lead time, and **growth** of total operating income[131](index=131&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk) [Results of Operation](index=28&type=section&id=Results%20of%20Operation) This section analyzes the company's financial performance, including revenues, costs, and net **loss** for the periods ended March 31 Key Financial Results (Three Months Ended March 31, 2025 vs. 2024) | Metric | 2025 | 2024 | Change (%) | | :------------------------------------- | :--------- | :--------- | :--------- | | Revenues | $478,100 | $- | 100% | | Costs of goods sold | $436,600 | $- | 100% | | Selling, general and administrative expenses | $1,410,805 | $276,427 | 410% | | Operating loss | $(1,369,305) | $(276,427) | 395% | | Other income (expenses) | $(2,131,836) | $201,832 | -1,156% | | Net loss | $(3,549,268) | $(1,093,927) | 224% | | Net loss attributable to Inno Holdings Inc. | $(3,620,497) | $(1,060,457) | 241% | Key Financial Results (Six Months Ended March 31, 2025 vs. 2024) | Metric | 2025 | 2024 | Change (%) | | :------------------------------------- | :----------- | :----------- | :--------- | | Revenues | $674,100 | $- | 100% | | Costs of goods sold | $616,600 | $- | 100% | | Selling, general and administrative expenses | $1,881,397 | $475,998 | 295% | | Impairment loss | $3,514 | $- | 100% | | Operating loss | $(1,827,411) | $(475,998) | 284% | | Other income (expenses) | $(2,131,470) | $211,032 | -1,110% | | Net loss | $(4,154,677) | $(1,911,191) | 117% | | Net loss attributable to Inno Holdings Inc. | $(4,224,194) | $(1,861,975) | 127% | [Revenues](index=29&type=section&id=Revenues) This section reports a **100% increase** in revenue for the three and six months ended March 31, 2025, driven entirely by the new **electronic product trading business** - Revenue for the three months ended March 31, 2025, **increased** **100%** to **$478,100** from **$Nil** in the prior year, solely due to the new **electronic product trading business**[138](index=138&type=chunk) - Revenue for the six months ended March 31, 2025, was **$674,100**, also entirely from the new **electronic product trading business**[137](index=137&type=chunk) [Costs of Goods Sold](index=29&type=section&id=Costs%20of%20Goods%20Sold) This section details costs of goods sold, which **increased** due to the new **electronic product trading business** for the periods ended March 31 - COGS for the three months ended March 31, 2025, **increased** to **$436,600** from **$Nil**, directly attributable to the new **electronic product trading business**[140](index=140&type=chunk) - COGS for the six months ended March 31, 2025, was **$616,600**, corresponding to the new **electronic product trading business**[137](index=137&type=chunk) [Selling, General and Administrative Expenses](index=29&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses) This section reports a significant **increase** in SG&A expenses for the three and six months ended March 31, 2025, primarily due to subsidiary disposals - SG&A expenses for the three months ended March 31, 2025, **increased** **410%** to **$1,410,805**, primarily due to the disposal of multiple subsidiaries that incurred significant expenses in the comparable prior period[141](index=141&type=chunk) - SG&A expenses for the six months ended March 31, 2025, **increased** **295%** to **$1,881,397** compared to **$475,998** in the prior year[137](index=137&type=chunk) [Operating Loss](index=29&type=section&id=Operating%20Loss) This section analyzes the company's operating **loss**, which significantly **increased** for the periods ended March 31, mainly due to higher SG&A expenses - Operating **loss** for the three months ended March 31, 2025, **increased** **395%** to **$1,369,305**, mainly due to the rise in selling, general, and administrative expenses[136](index=136&type=chunk)[142](index=142&type=chunk) - Operating **loss** for the six months ended March 31, 2025, **increased** **284%** to **$1,827,411** compared to **$475,998** in the prior year[137](index=137&type=chunk) [Other Income (Expense)](index=29&type=section&id=Other%20Income%20(Expense)) This section details other income and expenses, noting a significant **increase** in other expenses primarily from investment disposal losses - Other expense for the three months ended March 31, 2025, was **$2,131,836**, primarily driven by a **$2,152,622 loss on investment disposal**[143](index=143&type=chunk) - For the six months ended March 31, 2025, total other expenses, net, were **$(2,131,470)**, a significant **decrease** from **$211,032** in the prior year[137](index=137&type=chunk) [Net Loss](index=29&type=section&id=Net%20Loss) This section reports a substantial **increase** in net **loss** for the periods ended March 31, influenced by revenue, costs, and investment disposal losses - Net **loss** for the three months ended March 31, 2025, **increased** **224%** to **$3,549,268**, primarily due to changes in revenue, costs, and expenses, including the **loss on investment disposal**[136](index=136&type=chunk)[144](index=144&type=chunk) - Net **loss** for the six months ended March 31, 2025, **increased** **117%** to **$4,154,677** compared to **$1,911,191** in the prior year[137](index=137&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, working capital, and cash flow, highlighting funding and **going concern** uncertainties - Cash and cash equivalents **increased** to **$3,888,816** as of March 31, 2025, from **$1,077,138** as of September 30, 2024, primarily from private placement offerings[146](index=146&type=chunk) - The company's working capital **increased** from **$975,755** as of September 30, 2024, to **$7,076,701** as of March 31, 2025[152](index=152&type=chunk) - **Substantial doubt** exists about the company's ability to continue as a **going concern**, as current cash is insufficient for the next twelve months, and securing additional financing (including via SEPA) is uncertain[151](index=151&type=chunk) [Sources of Liquidity](index=30&type=section&id=Sources%20of%20Liquidity) This section identifies the company's funding sources, including cash from operations, share offerings, and borrowings - The company funded operations through cash from operations, private/public share offerings, and borrowings[146](index=146&type=chunk) - Several private placement offerings in late 2024 generated approximately **$7.25 million** in gross proceeds[147](index=147&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk) - A **Standby Equity Purchase Agreement (SEPA)** allows the company to sell up to **$15 million** of common stock, but no shares have been issued under it yet[150](index=150&type=chunk) [Working Capital](index=30&type=section&id=Working%20Capital) This section presents the company's working capital, which significantly **increased** due to capital raising activities Working Capital (March 31, 2025 vs. September 30, 2024) | Metric | March 31, 2025 | September 30, 2024 | | :------------- | :------------- | :----------------- | | Working Capital | $7,076,701 | $975,755 | - Working capital significantly **increased** due to capital raising activities, but can fluctuate with seasonality and capital raising[152](index=152&type=chunk) [Cash Flows](index=31&type=section&id=Cash%20Flows) This section summarizes cash flows from operating, investing, and financing activities for the six months ended March 31, 2025 - Net cash used in operating activities was **$3,109,869** for the six months ended March 31, 2025, primarily due to net losses and **increases** in accounts receivable and inventories[153](index=153&type=chunk) - Net cash used in investing activities was **$1,328,453** for the six months ended March 31, 2025, mainly due to a **$1.4 million investment** in Core Modu LLC[155](index=155&type=chunk) - Net cash provided by financing activities was **$7,250,000** for the six months ended March 31, 2025, entirely from private placement offerings[156](index=156&type=chunk) [Critical Accounting Policies and Estimate](index=31&type=section&id=Critical%20Accounting%20Policies%20and%20Estimate) This section identifies critical accounting estimates, including revenue recognition, inventory, **going concern**, and income taxes - Critical accounting estimates include revenue recognition, inventory valuation, **going concern** assessment, and provision for income taxes, which require significant judgments and assumptions[158](index=158&type=chunk) [New Accounting Standards](index=31&type=section&id=New%20Accounting%20Standards) This section discusses the company's evaluation of new accounting standards, including **ASU 2023-09**, **ASU 2023-07**, and **ASU 2022-03** - The company is evaluating the impact of **ASU 2023-09** (Income Tax Disclosures) and **ASU 2023-07** (Segment Reporting Disclosures), **effective** for fiscal years 2026 and 2025/2026 respectively[78](index=78&type=chunk)[79](index=79&type=chunk)[159](index=159&type=chunk) - The adoption of **ASU 2022-03** (Fair Value Measurement of Equity Securities) is not expected to have a material impact[80](index=80&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=32&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) As a **smaller reporting company**, INNO HOLDINGS INC. is electing scaled disclosure reporting obligations and is not required to provide detailed quantitative and qualitative disclosures about market risk - The company is a **smaller reporting company** and is not required to provide quantitative and qualitative disclosures about market risk[160](index=160&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=32&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section addresses the **effectiveness** of the company's disclosure controls and procedures and internal control over financial reporting. Management concluded that disclosure controls were **not effective** as of March 31, 2025, due to **material weaknesses**, and plans to remediate them - Management concluded that disclosure controls and procedures were **not effective** as of March 31, 2025, due to **material weaknesses** in internal controls[161](index=161&type=chunk) - The company plans to hire additional personnel or consultants to design and implement internal control over key business cycles to strengthen the internal control system[161](index=161&type=chunk) [Disclosure Controls and Procedures](index=32&type=section&id=Disclosure%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were **not effective** as of March 31, 2025, due to a **material weakness** in internal control function - Management concluded that disclosure controls and procedures were **not effective** as of March 31, 2025[161](index=161&type=chunk) - The ineffectiveness is attributed to a **material weakness**: lack of adequate policies and procedures in internal control function over key business cycles[161](index=161&type=chunk) - The company plans to hire additional personnel or consultants to design and implement internal controls to strengthen the system[161](index=161&type=chunk) [Inherent Limitations Over Internal Controls](index=32&type=section&id=Inherent%20Limitations%20Over%20Internal%20Controls) Management acknowledges that control systems provide only reasonable assurance against errors and fraud due to inherent limitations - Management acknowledges that control systems provide only reasonable, not absolute, assurance against errors and fraud due to inherent limitations like faulty judgments, simple errors, collusion, or management override[162](index=162&type=chunk) [Changes in Internal Control over Financial Reporting](index=32&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section confirms that **no material changes** occurred in internal controls over financial reporting during the period ended March 31, 2025 - There have been **no material changes** in internal controls over financial reporting during the period ended March 31, 2025[163](index=163&type=chunk) [PART II OTHER INFORMATION](index=32&type=section&id=PART%20II%20OTHER%20INFORMATION) This part provides additional information beyond financial statements, including legal proceedings, risk factors, and disclosures [ITEM 1. LEGAL PROCEEDINGS](index=32&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is involved in a litigation where a former shareholder claims **$2 million** in lost potential gains related to an IPO, which the company believes is without merit and is vigorously defending. Additionally, the company is contesting claims of misappropriated funds by a subcontractor - A former shareholder filed a complaint in December 2024, alleging **$2 million** in lost potential gains from an IPO, which the company is vigorously defending and seeking arbitration for[166](index=166&type=chunk)[167](index=167&type=chunk) - The company is involved in litigation concerning alleged misappropriation of over **$1.3 million** by a subcontractor, with initial investigations suggesting the company did not receive the funds[118](index=118&type=chunk) [ITEM 1A. RISK FACTORS](index=34&type=section&id=ITEM%201A.%20RISK%20FACTORS) As a **smaller reporting company**, INNO HOLDINGS INC. is not required to provide detailed risk factor disclosures in this item. There have been **no material changes** to the risk factors previously disclosed in the 2024 Annual Report on Form 10-K - As a "**smaller reporting company**," the company is not required to provide risk factor information in this item[168](index=168&type=chunk) - **No material changes** have occurred in the risk factors previously disclosed in the 2024 Annual Report on Form 10-K[168](index=168&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=34&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section states that there were **no unregistered sales of equity securities**, no use of proceeds, and no issuer purchases of equity securities during the reporting period - There were **no unregistered sales of equity securities**, use of proceeds, or issuer purchases of equity securities during the period[169](index=169&type=chunk)[170](index=170&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=34&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) The company reported no defaults upon senior securities - No defaults upon senior securities were reported[171](index=171&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=34&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) The company reported no mine safety disclosures - No mine safety disclosures were reported[172](index=172&type=chunk) [ITEM 5. OTHER INFORMATION](index=34&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No director or officer adopted or terminated a "**Rule 10b5-1 trading arrangement**" or "**non-Rule 10b5-1 trading arrangement**" during the quarter ended March 31, 2025 - No director or officer adopted or terminated a **Rule 10b5-1** or **non-Rule 10b5-1 trading arrangement** during the quarter ended March 31, 2025[173](index=173&type=chunk) [ITEM 6. EXHIBITS](index=35&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the Form 10-Q, including various agreements, certifications, and XBRL documents, with details on their incorporation by reference - The exhibit index includes the Standby Equity Purchase Agreement, Share Purchase Agreement, Membership Interest Purchase Agreements, and certifications from principal executive and financial officers[175](index=175&type=chunk) [SIGNATURES](index=36&type=section&id=SIGNATURES) This section confirms the report's official signing by the Chief Executive Officer and Chief Financial Officer on May 2, 2025 - The report is signed by Ding Wei, Chief Executive Officer, and Mengshu Shao, Chief Financial Officer, on May 2, 2025[178](index=178&type=chunk)

[Company Information](index=1&type=section&id=Company%20Information) This section provides essential details about INNO HOLDINGS INC., including its registration, stock listing, and classification [Registrant Details](index=1&type=section&id=Registrant%20Details) INNO HOLDINGS INC. is a Texas corporation listed on Nasdaq (INHD), classified as a non-accelerated filer, smaller reporting company, and emerging growth company, with 4,410,482 common shares outstanding as of February 14, 2025 - INNO HOLDINGS INC.'s common stock is listed on the Nasdaq Stock Market under the ticker symbol **INHD**[2](index=2&type=chunk) - The company is classified as a non-accelerated filer, a smaller reporting company, and an emerging growth company[3](index=3&type=chunk) Common Stock Issued and Outstanding | Metric | Quantity | | :--- | :--- | | Common Stock Issued and Outstanding as of February 14, 2025 | 4,410,482 shares | [PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section presents INNO HOLDINGS INC.'s unaudited condensed consolidated financial statements and related notes for the periods ended December 31, 2024, and 2023 [ITEM 1: Financial Statements](index=4&type=section&id=ITEM%201%3A%20Financial%20Statements) This section contains INNO HOLDINGS INC.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, changes in stockholders' equity, cash flows, and related notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's condensed consolidated balance sheets as of December 31, 2024, and September 30, 2024 Condensed Consolidated Balance Sheet Key Data | Metric | December 31, 2024 (Unaudited) ($) | September 30, 2024 ($) | | :--- | :--- | :--- | | Cash and Cash Equivalents | $4,804,138 | $1,526,661 | | Inventories | $2,226,074 | $333,074 | | Equity Investments | $1,400,000 | $- | | Total Assets | $10,699,743 | $4,169,337 | | Total Liabilities | $1,257,616 | $1,371,801 | | Total Stockholders' Equity | $9,442,127 | $2,797,536 | | Common Stock Issued | 4,209,127 | 2,279,960 | - The company completed a **1-for-10 reverse stock split** on October 9, 2024, with all share numbers and per-share information retroactively adjusted[12](index=12&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section presents the company's condensed consolidated statements of operations for the three months ended December 31, 2024, and 2023 Condensed Consolidated Statements of Operations Key Data (Three Months Ended December 31) | Metric | 2024 ($) | 2023 ($) | Change Rate (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $198,000 | $166,617 | 19% | | Cost of Sales | $180,000 | $169,617 | 6% | | Gross Profit/(Loss) | $18,000 | $(3,000) | - | | Selling, General and Administrative Expenses | $578,578 | $785,536 | -26% | | Operating Loss | $(584,301) | $(809,596) | -28% | | Net Loss | $(605,409) | $(817,264) | -26% | | Net Loss Attributable to INNO HOLDINGS INC. | $(603,697) | $(801,518) | -25% | | Basic and Diluted Loss Per Share | $(0.22) | $(0.43) | - | | Weighted Average Common Shares Outstanding | 2,782,406 | 1,860,499 | - | - The company completed a **1-for-10 reverse stock split** on October 9, 2024, with per-share loss calculations retroactively adjusted[16](index=16&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This section presents the company's condensed consolidated statements of changes in stockholders' equity for the three months ended December 31, 2024, and 2023 Condensed Consolidated Statements of Changes in Stockholders' Equity Key Data (Three Months Ended December 31) | Metric | December 31, 2024 ($) | December 31, 2023 ($) | | :--- | :--- | :--- | | Share Capital (Shares) | 4,209,127 | 2,075,173 | | Additional Paid-in Capital | $17,998,534 | $10,689,534 | | Accumulated Deficit | $(8,342,341) | $(5,326,333) | | Total Stockholders' Equity | $9,442,127 | $5,098,684 | - As of December 31, 2024, total stockholders' equity significantly increased to **$9,442,127**, primarily due to additional paid-in capital from new share issuances[19](index=19&type=chunk) - The company completed a **1-for-10 reverse stock split** on October 9, 2024, with all share numbers retroactively adjusted[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the company's condensed consolidated statements of cash flows for the three months ended December 31, 2024, and 2023 Condensed Consolidated Statements of Cash Flows Key Data (Three Months Ended December 31) | Cash Flow Activity | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Net Cash from Operating Activities | $(2,531,650) | $(195,197) | | Net Cash from Investing Activities | $(1,428,154) | $(52,883) | | Net Cash from Financing Activities | $7,237,281 | $7,920,452 | | Change in Cash and Cash Equivalents | $3,277,477 | $7,672,372 | | Cash and Cash Equivalents, End of Period | $4,804,138 | $7,677,270 | - Operating cash outflow significantly increased in 2024, primarily due to increases in **inventory and prepayments**[23](index=23&type=chunk) - Investment cash outflow substantially increased in 2024, mainly due to an **equity investment in Core Modu LLC**[23](index=23&type=chunk) - Financing cash inflow in 2024 primarily stemmed from **multiple private placements**, while 2023's inflow was mainly from an initial public offering[23](index=23&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the unaudited condensed consolidated financial statements, explaining accounting policies, estimates, and specific financial items [Note 1 — Nature of business and organization](index=9&type=section&id=Note%201%20%E2%80%94%20Nature%20of%20business%20and%20organization) This note describes the company's primary business activities, including construction products and services, and recent expansions into electronic product trading and AI technology - The company primarily engages in the marketing and sale of construction products and provides comprehensive construction services in the United States[25](index=25&type=chunk) - The company entered a new electronic product trading business through the acquisitions of **Lear Group Limited and Baymax High Technology Co., Limited**[30](index=30&type=chunk)[31](index=31&type=chunk) - The company established **Inno AI Tech Corp.** to conduct AI technology research and consulting activities[29](index=29&type=chunk) [Note 2 — Basis of Presentation and Summary of significant accounting policies](index=10&type=section&id=Note%202%20%E2%80%94%20Basis%20of%20Presentation%20and%20Summary%20of%20significant%20accounting%20policies) This note details the basis of financial statement presentation, adherence to U.S. GAAP, and a summary of significant accounting policies, including revenue recognition and goodwill impairment - Financial statements are prepared in accordance with **U.S. Generally Accepted Accounting Principles (U.S. GAAP)** and SEC rules[33](index=33&type=chunk) - As of December 31, 2024, the company has an accumulated deficit and operating cash outflows, raising **substantial doubt about its ability to continue as a going concern**, requiring reliance on additional financing[37](index=37&type=chunk)[38](index=38&type=chunk) - Revenue recognition: product sales are recognized upon delivery, services upon completion, and electronic product trading revenue when customers obtain control of the products[51](index=51&type=chunk)[54](index=54&type=chunk) - The company recorded a goodwill impairment loss of **$3,514** stemming from the acquisitions of Baymax and Lear[82](index=82&type=chunk) [Note 3 — Inventories](index=15&type=section&id=Note%203%20%E2%80%94%20Inventories) This note provides a breakdown of inventory components and explains the significant increase in merchandise inventory Inventory Composition | Inventory Category | December 31, 2024 ($) | September 30, 2024 ($) | | :--- | :--- | :--- | | Raw Materials | $73,109 | $73,109 | | Work-in-Process Inventory | $259,965 | $259,965 | | Merchandise Inventory | $1,893,000 | $- | | Total | $2,226,074 | $333,074 | - Merchandise inventory increased from zero on September 30, 2024, to **$1,893,000** on December 31, 2024, leading to a significant increase in total inventory[77](index=77&type=chunk) [Note 4 — Prepayments and other current assets](index=16&type=section&id=Note%204%20%E2%80%94%20Prepayments%20and%20other%20current%20assets) This note details the composition of prepayments and other current assets, highlighting the increase in prepaid consulting service fees Prepayments and Other Current Assets Composition | Category | December 31, 2024 ($) | September 30, 2024 ($) | | :--- | :--- | :--- | | Prepaid Marketing and Promotion Services | $29,500 | $73,750 | | Prepaid Consulting Services | $221,529 | $- | | Other Prepayments and Current Assets | $46,403 | $10,052 | | Total | $548,479 | $428,873 | - Prepaid consulting service fees increased from zero on September 30, 2024, to **$221,529** on December 31, 2024, primarily contributing to the increase in total prepayments[78](index=78&type=chunk) [Note 5 — Equity Investments](index=16&type=section&id=Note%205%20%E2%80%94%20Equity%20Investments) This note describes the company's $1.4 million equity investment in Core Modu LLC, acquiring a 15% stake without significant influence - On October 14, 2024, the company invested **$1.4 million** in Core Modu LLC, acquiring a **15% equity stake** without significant influence[79](index=79&type=chunk) [Note 6 — Property and equipment, net](index=16&type=section&id=Note%206%20%E2%80%94%20Property%20and%20equipment%2C%20net) This note provides the composition of property and equipment, net, including machinery, equipment, and assets under construction related to factory expansion Property and Equipment, Net Composition | Category | December 31, 2024 ($) | September 30, 2024 ($) | | :--- | :--- | :--- | | Machinery and Equipment | $346,900 | $346,900 | | Assets Under Construction | $1,007,737 | $980,883 | | Property and Equipment, Net | $1,244,193 | $1,300,583 | - Assets under construction are related to the company's operational and manufacturing capacity expansion project at its Texas facility, expected to be completed by the end of February 2025[80](index=80&type=chunk) [Note 7 — Goodwill, net](index=16&type=section&id=Note%207%20%E2%80%94%20Goodwill%2C%20net) This note details the changes in goodwill, including the impairment loss recorded from the Baymax and Lear acquisitions Goodwill Changes | Change | Amount ($) | | :--- | :--- | | Balance as of September 30, 2024 | $- | | Acquisitions | $3,514 | | Impairment Loss | $(3,514) | | Balance as of December 31, 2024 | $- | - As of December 31, 2024, the company recorded a goodwill impairment charge of **$3,514**, originating from the acquisitions of Baymax and Lear[82](index=82&type=chunk) [Note 8 — Loans payable](index=17&type=section&id=Note%208%20%E2%80%94%20Loans%20payable) This note outlines the status of loans payable, including the repayment of the Origin Bank credit line and the balances of short-term and long-term notes - As of December 31, 2024, the company fully repaid and closed its revolving credit facility with Origin Bank[83](index=83&type=chunk) Loans Payable Balances | Loan Type | December 31, 2024 ($) | September 30, 2024 ($) | | :--- | :--- | :--- | | Non-interest Bearing Short-term Loan | $50,000 | $50,000 | | Total Long-term Notes | $98,127 | $110,846 | | Long-term Notes (Current Portion) | $52,515 | $51,898 | | Long-term Notes (Non-current Portion) | $45,612 | $58,948 | [Note 9 — Lease](index=17&type=section&id=Note%209%20%E2%80%94%20Lease) This note explains the company's adoption of ASC 842 for lease accounting, recognizing right-of-use assets and lease liabilities, and details operating lease costs and maturities - The company has adopted **ASC 842 lease accounting standards**, recognizing right-of-use assets and lease liabilities on its balance sheet[87](index=87&type=chunk) - The company's operating lease costs for the three months ended December 31, 2024, and 2023, were **$47,192** and **$51,705**, respectively[93](index=93&type=chunk) Lease Liability Maturities (As of December 31, 2024) | Period | Operating Lease Liability ($) | | :--- | :--- | | Remaining Three Months Ending September 30, 2025 | $4,333 | | 2026 | $- | | Less: Estimated Interest/Discount to Present Value | $(50) | | Present Value of Lease Liabilities | $4,283 | [Note 10 — Related party transactions](index=19&type=section&id=Note%2010%20%E2%80%94%20Related%20party%20transactions) This note discloses amounts owed to former executives and shareholders, and identifies entities no longer considered related parties after share sales or resignations - As of December 31, 2024, the company owed **$1,108** to former CEO De Kui Liu and **$10,000** to shareholder Qi Wang[94](index=94&type=chunk) - **Zfounder Organization Inc. and Wise Hill Inc.** are no longer considered related parties after selling most of their shares in October 2024[95](index=95&type=chunk) - **Baicheng Trading LLC** is no longer considered a related party after the company's former chairman resigned in October 2024[98](index=98&type=chunk) [Note 11 — Equity](index=19&type=section&id=Note%2011%20%E2%80%94%20Equity) This note details equity changes, including a reverse stock split, private placements for capital raising, and stock awards to the CEO and CFO - The company completed a **1-for-10 reverse stock split** on October 9, 2024, to meet Nasdaq's minimum bid price requirement[101](index=101&type=chunk) - In October, November, and December 2024, the company issued a total of **2,000,000 common shares** through three private placements, raising approximately **$7.25 million** in gross proceeds[107](index=107&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk) - On January 16, 2025, the company granted **150,000 common shares** to CEO Wei Ding and **51,355 common shares** to CFO Mengshu Shao under the Omnibus Incentive Plan[110](index=110&type=chunk) [Note 12 — Concentration of risk](index=21&type=section&id=Note%2012%20%E2%80%94%20Concentration%20of%20risk) This note highlights concentrations of risk related to cash deposits exceeding FDIC limits, reliance on a few key customers for revenue, and dependence on a few suppliers - As of December 31, 2024, the company had **$318,049** in deposits at a U.S. financial institution exceeding the Federal Deposit Insurance Corporation (FDIC) insurance limit[112](index=112&type=chunk) - For the three months ended December 31, 2024, **two customers** accounted for **100% of the company's total revenue**[114](index=114&type=chunk) - For the three months ended December 31, 2024, **two suppliers** accounted for **100% of the company's total purchases** and **77% of total accounts payable**[115](index=115&type=chunk) [Note 13 — Commitments and contingencies](index=21&type=section&id=Note%2013%20%E2%80%94%20Commitments%20and%20contingencies) This note describes a pending lawsuit concerning alleged misappropriation of construction project funds exceeding $1.3 million, which the company is actively defending - The company is involved in a lawsuit related to alleged fund transfers, where the plaintiff claims a subcontractor misappropriated over **$1.3 million** in construction project funds[119](index=119&type=chunk) - The company is actively defending against the plaintiff's allegations and seeking dismissal of claims against it due to lack of evidence[119](index=119&type=chunk) [Note 14 — Subsequent events](index=22&type=section&id=Note%2014%20%E2%80%94%20Subsequent%20events) This note discloses a subsequent event where the company entered into a standby equity purchase agreement to issue and sell up to $15 million in common stock - On January 27, 2024, the company entered into a standby equity purchase agreement, effective January 28, 2025, granting it the right to issue and sell up to **$15 million** of common stock to investors from time to time[121](index=121&type=chunk) [ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=23&type=section&id=ITEM%202.%20-%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section discusses INNO HOLDINGS INC.'s financial condition and operating results for the three months ended December 31, 2024, covering business overview, recent developments, KPIs, operating results, liquidity, capital resources, and accounting policies [Cautionary Note Regarding Forward-Looking Statements](index=23&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section warns that the document contains forward-looking statements, and actual results may differ materially due to various factors - This document contains forward-looking statements, and actual results may differ materially from expectations due to various factors, including business operations, R&D, expansion, competition, technological changes, and intellectual property protection[124](index=124&type=chunk) [Overview](index=23&type=section&id=Overview) This section provides an overview of the company's business as a construction technology firm, its raw material management, and its new electronic product trading business - The company is a construction technology firm primarily manufacturing cold-formed steel components and providing full construction services, processing raw materials into precision steel framing products and prefabricated homes[125](index=125&type=chunk) - The company's largest cost of goods is raw materials—coiled steel of various gauges and widths, mitigating steel price fluctuation risks through fixed-price forward contracts and maintaining approximately **three months of inventory**[126](index=126&type=chunk) - Since the quarter ended December 31, 2024, the company introduced a new electronic product trading business, sourcing electronic devices from Asian suppliers and selling to wholesale and retail customers in Southeast Asia, Europe, and other regions[127](index=127&type=chunk) [Recent Developments](index=24&type=section&id=Recent%20Developments) This section highlights recent corporate developments, including the expansion into electronic product trading, a reverse stock split, and private placements - The company announced its expansion into a new electronic product trading business on December 13, 2024, and initiated digital transformation of marketing, distribution, and sales starting December 2024[128](index=128&type=chunk) - The company implemented a **1-for-10 reverse stock split** on October 9, 2024, to meet Nasdaq's minimum bid price requirement[129](index=129&type=chunk) - The company completed **three private placements** in October, November, and December 2024, raising approximately **$7.25 million** in gross proceeds for working capital and general corporate purposes[130](index=130&type=chunk)[132](index=132&type=chunk)[134](index=134&type=chunk) [Key Performance Indicators ("KPIs")](index=25&type=section&id=Key%20Performance%20Indicators%20%28%22KPIs%22%29) This section outlines the company's key performance indicators related to raw material inventory management, accounts receivable risk mitigation, and production capacity expansion - The company aims to achieve **1-3 months of raw material inventory** through long-term relationships with multiple suppliers and quarterly procurement plans to improve capital turnover efficiency[136](index=136&type=chunk) - The company plans to establish strategic partnerships with large residential builders and professional firms to mitigate accounts receivable risk, aiming for **100% collection before product shipment**[137](index=137&type=chunk) - The company is committed to investing in improved production capacity and efficiency to support larger order volumes and achieve its goal of **total operating revenue growth**[140](index=140&type=chunk) [Results of Operation](index=26&type=section&id=Results%20of%20Operation) This section analyzes the company's operating results for the three months ended December 31, 2024, compared to the prior year, focusing on revenue, costs, and net loss Results of Operation Summary (Three Months Ended December 31) | Metric | 2024 ($) | 2023 ($) | Change Rate (%) | | :--- | :--- | :--- | :--- | | Revenue | $198,000 | $166,617 | 19% | | Cost of Sales | $180,000 | $169,617 | 6% | | Gross Profit/(Loss) | $18,000 | $(3,000) | - | | Selling, General and Administrative Expenses | $578,578 | $785,536 | -26% | | Operating Loss | $(584,301) | $(809,596) | -28% | | Other Income (Expense) | $(21,108) | $(6,868) | 207% | | Net Loss | $(605,409) | $(817,264) | -26% | - Revenue increased by **19% in 2024**, primarily driven by the newly launched electronic product trading business[143](index=143&type=chunk) - Selling, general, and administrative expenses decreased by **26%**, mainly due to reduced salaries, bonuses, and rent expenses[146](index=146&type=chunk) - Operating loss decreased by **28%**, and net loss decreased by **26%**, primarily benefiting from reduced selling, general, and administrative expenses[147](index=147&type=chunk)[149](index=149&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, working capital, and cash flow activities, highlighting the need for additional capital to support ongoing operations - As of December 31, 2024, the company's cash and cash equivalents were **$4,804,138**, an increase from **$1,526,661** on September 30, 2024, primarily due to proceeds from private placements[150](index=150&type=chunk) - The company believes existing cash is insufficient to meet operating and capital expenditure needs for the next twelve months, requiring additional capital, which raises **substantial doubt about its ability to continue as a going concern**[154](index=154&type=chunk) Working Capital and Cash Flow Summary | Metric | December 31, 2024 ($) | September 30, 2024 ($) | | :--- | :--- | :--- | | Working Capital (Deficit) | $6,366,687 | $975,755 | | Net Cash from Operating Activities (Three Months Ended December 31) | $(2,531,650) | $(195,197) | | Net Cash from Investing Activities (Three Months Ended December 31) | $(1,428,154) | $(52,883) | | Net Cash from Financing Activities (Three Months Ended December 31) | $7,237,281 | $7,920,452 | [Critical Accounting Policies and Estimate](index=29&type=section&id=Critical%20Accounting%20Policies%20and%20Estimate) This section describes the critical accounting policies and estimates that require significant management judgment and assumptions, such as revenue recognition and inventory valuation - Critical accounting estimates include revenue recognition, inventory valuation, going concern assessment, and income tax provisions, all requiring **significant management judgment and assumptions**[161](index=161&type=chunk) [New Accounting Standards](index=29&type=section&id=New%20Accounting%20Standards) This section outlines the company's ongoing evaluation of new accounting standards, including those related to income tax disclosures, segment reporting, and equity securities fair value - The company is evaluating the impact of **ASU 2023-09 (Income Tax Disclosures), ASU 2023-07 (Segment Reporting Disclosures), and ASU 2022-03 (Fair Value Measurement of Equity Securities)** on its financial statements[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk) [ITEM 3: Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=ITEM%203%3A%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, INNO HOLDINGS INC. is exempt from providing quantitative and qualitative disclosures about market risk - As a smaller reporting company, the company is not required to provide quantitative and qualitative disclosures about market risk[163](index=163&type=chunk) [ITEM 4: Controls and Procedures](index=29&type=section&id=ITEM%204%3A%20Controls%20and%20Procedures) This section assesses the effectiveness of the company's disclosure controls and procedures as of December 31, 2024, and discusses internal control limitations and changes [Disclosure Controls and Procedures](index=29&type=section&id=Disclosure%20Controls%20and%20Procedures) This section assesses the effectiveness of the company's disclosure controls and procedures as of December 31, 2024, and outlines plans to strengthen internal controls - As of December 31, 2024, the company's disclosure controls and procedures were deemed **ineffective**, primarily due to a lack of adequate internal control policies and procedures for key business cycles[164](index=164&type=chunk) - The company plans to hire additional personnel or consultants to design and implement internal controls for key business cycles to strengthen its internal control system[165](index=165&type=chunk) [Inherent Limitations Over Internal Controls](index=30&type=section&id=Inherent%20Limitations%20Over%20Internal%20Controls) This section explains that internal control systems provide reasonable, not absolute, assurance and may not prevent all errors or fraud - Management does not expect disclosure controls and procedures or internal controls to prevent all errors and fraud, as control systems can only provide **reasonable, not absolute, assurance**[166](index=166&type=chunk) [Changes in Internal Control over Financial Reporting](index=30&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section confirms no material changes in internal control over financial reporting occurred during the period ended December 31, 2024 - No changes in internal control over financial reporting occurred during the period ended December 31, 2024, that materially affected or are reasonably likely to materially affect internal control[167](index=167&type=chunk) [PART II OTHER INFORMATION](index=30&type=section&id=PART%20II%20OTHER%20INFORMATION) This section provides disclosures on legal proceedings, risk factors, unregistered equity sales, senior securities defaults, and other relevant information [ITEM 1. LEGAL PROCEEDINGS.](index=30&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS.) The company is not currently subject to material litigation but is actively defending a pending lawsuit related to alleged fund misappropriation - The company is not currently subject to threatened litigation that would materially adversely affect its business, results of operations, financial condition, and/or cash flows[169](index=169&type=chunk) - The company is involved in a lawsuit related to alleged fund transfers, where the plaintiff claims a subcontractor misappropriated over **$1.3 million** in construction project funds[119](index=119&type=chunk) [ITEM 1A. RISK FACTORS.](index=30&type=section&id=ITEM%201A.%20RISK%20FACTORS.) As a smaller reporting company, INNO HOLDINGS INC. is not required to provide risk factor information, and no material changes occurred since the 2024 10-K - As a smaller reporting company, the company is not required to provide risk factor information[170](index=170&type=chunk) - No material changes occurred to the risk factors disclosed in the company's 2024 Form 10-K annual report[170](index=170&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.](index=30&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS.) This section details the company's three private placements in October, November, and December 2024, including shares issued, purchase prices, total proceeds, and related registration rights agreements - The company completed a private placement on October 31, 2024, issuing **500,000 common shares** at **$4.00 per share** for total proceeds of **$2,000,000**[171](index=171&type=chunk) - The company completed a private placement on November 13, 2024, issuing **729,167 common shares** at **$4.80 per share** for total proceeds of approximately **$3.5 million**[173](index=173&type=chunk) - The company completed a private placement on December 11, 2024, issuing **700,000 common shares** at **$2.50 per share** for total proceeds of approximately **$1.75 million**[175](index=175&type=chunk) - All private placements included registration rights agreements, requiring the company to file a registration statement with the SEC to register the resale of shares[172](index=172&type=chunk)[174](index=174&type=chunk)[176](index=176&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES.](index=31&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES.) The company reported no defaults upon senior securities during the reporting period - The company reported no defaults upon senior securities[179](index=179&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES.](index=31&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES.) The company did not provide mine safety disclosures during the reporting period - The company did not provide mine safety disclosures[180](index=180&type=chunk) [ITEM 5. OTHER INFORMATION.](index=31&type=section&id=ITEM%205.%20OTHER%20INFORMATION.) No directors or executive officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended December 31, 2024 - No directors or executive officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended December 31, 2024[181](index=181&type=chunk) [ITEM 6. Exhibits](index=32&type=section&id=ITEM%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q report, including articles of incorporation, securities purchase agreements, registration rights agreements, and certifications - Exhibits include amended articles of incorporation, securities purchase agreements, registration rights agreements, and CEO and CFO certifications[183](index=183&type=chunk) [SIGNATURES](index=33&type=section&id=SIGNATURES) This section contains the official signatures for the report [Report Signatures](index=33&type=section&id=Report%20Signatures) This report was officially signed by INNO HOLDINGS, INC.'s CEO, Wei Ding, and CFO, Mengshu Shao, on February 14, 2025 - The report was signed by CEO Wei Ding and CFO Mengshu Shao on February 14, 2025[186](index=186&type=chunk)

Brookshire, Texas, Dec. 13, 2024 (GLOBE NEWSWIRE) -- INNO HOLDINGS INC. (“INNO” or the “Company”) (NASDAQ : INHD) is a trade-focused building technology company dedicated to revolutionizing the construction industry with its proprietary cold-formed steel framing technology, artificial intelligence (“AI”)-driven design, and advanced automation to deliver innovative and efficient building solutions. In addition to its existing business, the Company is now developing a new venture in electronic products tradin ...