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)

Core Insights - INNO HOLDINGS INC. is focused on revolutionizing the construction industry through proprietary cold-formed steel framing technology, AI-driven design, and advanced automation [1][4] - The company is expanding into electronic products trading and enhancing its sales and distribution network across Asia [1][4] - A comprehensive digital transformation in marketing, distribution, and sales is underway to redefine online marketing and sales strategies [2][3] Company Developments - The CEO, Mr. Ding Wei, stated plans to expand into the electronic products industry, including cell phones, computers, and tablets, with a professional team dedicated to creating value for business partners [4] - INNO aims to enhance commercial value for its partners, thereby increasing its own enterprise value and shareholder value [5] - The company has established a professional brand and marketing management system to facilitate the connection and operation of marketing channels globally [5]

[FORM 10-K Filing Information](index=1&type=section&id=FORM%2010-K) [Registrant Information](index=1&type=section&id=Registrant%20Information) This section provides INNO HOLDINGS INC.'s Form 10-K identification details, including fiscal year, commission file number, and filer status - Registrant: **INNO HOLDINGS INC.**[3](index=3&type=chunk) - Fiscal Year End: **September 30, 2024**[2](index=2&type=chunk) - Common stock (INHD) is listed on **The Nasdaq Stock Market**[4](index=4&type=chunk) - Filer Status: **Non-accelerated filer, Smaller reporting company, Emerging growth company**[5](index=5&type=chunk) [Market Value and Shares Outstanding](index=2&type=section&id=Market%20Value%20and%20Shares%20Outstanding) As of March 31, 2024, non-affiliate common stock market value was approximately **$2.8 million**, with **3,057,043 shares outstanding** as of December 3, 2024 Market Value and Shares Outstanding | Metric | Value | | :----------------------------------------- | :------------ | | Market Value (non-affiliates, Mar 31, 2024) | $2,798,633 | | Shares Outstanding (Dec 3, 2024) | 3,057,043 | [Table of Contents](index=3&type=section&id=TABLE%20OF%20CONTENTS) [Special Note Regarding Forward-Looking Statements](index=4&type=section&id=SPECIAL%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) [Forward-Looking Statements Disclaimer](index=4&type=section&id=Forward-Looking%20Statements%20Disclaimer) This section warns that forward-looking statements are subject to risks and uncertainties, including operational effectiveness, competition, and intellectual property protection, which may cause actual results to differ materially - Forward-looking statements are based on current expectations and assumptions, subject to inherent uncertainties, risks, and changes in circumstances[12](index=12&type=chunk) - Key risk factors include the ability to operate business segments, manage expenses, compete in an evolving industry, adapt to technology changes, and protect intellectual property[12](index=12&type=chunk) - The Company does not intend to update forward-looking statements unless required by law[14](index=14&type=chunk) [Use of Certain Defined Terms](index=4&type=section&id=USE%20OF%20CERTAIN%20DEFINED%20TERMS) [Defined Terms](index=4&type=section&id=Defined%20Terms) This section defines key terms used in the report, including 'Company,' 'INNO,' 'fiscal year,' and specific construction terminology like 'cold-formed steel' and 'prefab' - Defines 'Company,' 'INNO,' 'registrant,' 'we,' 'our,' or 'us' as **INNO HOLDINGS INC.** and its subsidiaries[16](index=16&type=chunk) - Specifies 'year' or 'fiscal year' refers to the period ending **September 30**[16](index=16&type=chunk) - Provides definitions for construction terms: framing, stud, truss, joist, cold-formed steel (CFS/LGS), turnkey cost, and prefab[16](index=16&type=chunk) [PART I](index=6&type=section&id=PART%20I) [Business Overview](index=6&type=section&id=ITEM%201.%20BUSINESS) INNO HOLDINGS INC. is a building-technology company transforming construction with proprietary cold-formed steel-framing, manufacturing steel members and prefab homes, and launched new AI tech consulting services in 2024 - **INNO HOLDINGS INC.** aims to transform the construction industry using proprietary cold-formed steel-framing technology[19](index=19&type=chunk) - The company manufactures cold-formed steel members and offers full services, including structural designs, metal stud production, and preassembly of steel wall panels and prefabricated homes[19](index=19&type=chunk)[21](index=21&type=chunk) - In **2024**, INNO launched Inno AI Tech Corp. for research and consulting services, establishing a new revenue stream[23](index=23&type=chunk)[38](index=38&type=chunk) [Our Products](index=6&type=section&id=Our%20Products) INNO offers cold-formed steel framing, modular prefab homes (Castor Cube), and a Mobile Factory for on-site production, leveraging proprietary software for efficient, durable, and sustainable construction solutions - Cold-formed steel framing products (roof trusses, wall panels, joist systems) are a cost-effective, noncombustible alternative to traditional materials, used in various building types[24](index=24&type=chunk) - Castor Cube is a **743-square-foot** modular home designed for high structural stability, earthquake/wind resistance, and pest prevention, capitalizing on the growing prefab home market[29](index=29&type=chunk)[30](index=30&type=chunk) - The Mobile Factory is a portable, IoT-managed production facility capable of producing steel-framing members on-site, reducing transportation costs and enabling urgent deployment in remote or disaster areas[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) [Related Services](index=8&type=section&id=Related%20Services) INNO provides land development and contractor services for projects using its metal framing, and its Inno AI Tech Corp. generated **$205,000** in 2024 from research and consulting services - INNO participates in land development and contractor services, leveraging its metal framing products for projects like apartment complexes and retirement communities[37](index=37&type=chunk) - Inno AI Tech Corp., formed in **February 2024**, provides research and consulting services, generating **$205,000** in revenue in **2024** by supporting a client in establishing a steel technology company[38](index=38&type=chunk) [Our Customers](index=8&type=section&id=Our%20Customers) INNO serves B2B customers for steel framing and B2B/B2C for prefab homes and consulting, with **three major customers accounting for 90% of total revenues in 2024**, indicating high customer concentration - Sales model for cold-formed steel framing is business-to-business, targeting developers, builders, and contractors[39](index=39&type=chunk) - Sales model for Castor Cube prefab homes and Inno AI Tech Corp. consulting services is expected to be either business-to-business or business-to-customer[39](index=39&type=chunk) Customer Revenue Concentration | Year Ended September 30, | % of Total Revenues from 3 Major Customers | | :----------------------- | :----------------------------------------- | | 2024 | 90% | | 2023 | 53% | [Our Suppliers](index=9&type=section&id=Our%20Suppliers) INNO relies on a limited number of suppliers, with **two suppliers accounting for 58% of total purchases in 2024** and **51% of accounts payable**, generally operating without written agreements Supplier Purchase Concentration | Year Ended September 30, | % of Total Purchases from Top Suppliers | | :----------------------- | :-------------------------------------- | | 2024 | 58% (two suppliers) | | 2023 | 57% (three suppliers) | Accounts Payable Concentration | As of September 30, | % of Total Accounts Payable to Top Two Suppliers | | :------------------ | :----------------------------------------------- | | 2024 | 51% | | 2023 | 55% | - The Company generally does not have written agreements with its suppliers, making purchases through individual orders[43](index=43&type=chunk) [Our Competitive Strengths](index=9&type=section&id=Our%20Competitive%20Strengths) INNO's strengths include continuous innovation, integrated manufacturing from design to prefabrication, and **8-16% cost savings** with cold-formed steel over wood, focusing on patentable products and off-site technology - INNO is committed to continuous technology innovation, focusing on patentable products and commercializing research in cold-formed steel for resilient buildings[44](index=44&type=chunk) - The company offers a fully integrated manufacturing process, from design to metal stud production and prefabrication, utilizing off-site building technology to reduce on-site labor and improve quality control[45](index=45&type=chunk) - INNO's products offer **8-16% cost savings** compared to traditional wood framing, driven by the rising cost of wood and the inherent advantages of steel[47](index=47&type=chunk)[48](index=48&type=chunk) [Market Opportunity](index=10&type=section&id=Market%20Opportunity) INNO targets a **$33.5 billion U.S. market** in 2024, including light-gauge steel framing (projected to reach **$52.73 billion by 2030**), prefabricated homes, and wood framing replacement, driven by sustainability and efficiency Market Size and Growth Projections | Market Segment | 2023/2024 Value (USD) | Projected 2030 Value (USD) | CAGR (2023-2030) | | :----------------------------------- | :-------------------- | :------------------------- | :--------------- | | Global Light-Gauge Steel Framing | $37.27 billion (2023) | $52.73 billion | 5.1% | | U.S. Prefabricated Home Manufacturing | $13.3 billion (2024) | $53 billion | 7% (U.S. modular home market) | | U.S. Wood Framing (Target Market) | $27.5 billion (2024) | N/A | N/A | | INNO's Total Target Market (U.S.) | ~$33.5 billion (2024) | N/A | N/A | - Market growth is fueled by increased construction spending, a shift towards sustainable materials, and regulatory changes (e.g., Los Angeles banning wood-frame building in certain areas) promoting alternatives like steel[50](index=50&type=chunk)[53](index=53&type=chunk)[55](index=55&type=chunk)[57](index=57&type=chunk) - Cold-formed steel framing is positioned as an optimal alternative due to its sustainability, fire/termite resistance, consistent quality, and reduced carbon footprint[58](index=58&type=chunk) [Marketing](index=11&type=section&id=Marketing) INNO's marketing strategy focuses on leadership in intelligent steel-framing, leveraging customer referrals, strategic partnerships, industry education, and digital marketing to expand its customer base - Marketing strategy focuses on establishing INNO as a leader in intelligent steel-framing building systems and expanding its customer base[59](index=59&type=chunk) - Leverages strategic partners (real estate companies, general contractors, builders, developers) and customer referrals for new business[59](index=59&type=chunk)[61](index=61&type=chunk) - Actively educates the construction industry on the benefits of cold-formed steel framing through associations and is increasing online marketing efforts with a professional sales team[62](index=62&type=chunk)[63](index=63&type=chunk) [Research and Product Development/Innovations](index=12&type=section&id=Research%20and%20Product%20Development%2FInnovations) INNO's R&D focuses on cost-effective steel components and optimized production using proprietary CAD/BIM and roller machines, with innovations including a CFS portal frame system, lighter steel trusses, and honeycomb aluminum panels, targeting **100 potential patentable products** - INNO utilizes proprietary modified cold-formed roller machines and CAD/BIM solutions (Vertex) for accurate, information-rich design models and automated production of steel framing members[65](index=65&type=chunk) - Key innovations include a CFS portal frame system to replace shear walls, offering superior lateral resistance and flexible room layouts for modular homes (Castor Cube) and commercial buildings[67](index=67&type=chunk)[68](index=68&type=chunk) - Developing a cold-formed steel truss system for longer spans and lighter weight, and high-strength, light-weight honeycomb aluminum panels for versatile wall systems, with **100 potential patentable products** in the pipeline[69](index=69&type=chunk)[71](index=71&type=chunk) [Revenue Model](index=13&type=section&id=Revenue%20Model) INNO's revenue model includes wholesale light-gauge studs, prefabricated panels/trusses, on-site framing, engineering/consulting (including **$205,000 from Inno AI Tech Corp. in 2024**), machine sales/leasing, and replicable apartment products like 'Village 101' - Revenue streams include wholesale of customized light-gauge studs and tracks, prefabricated wall panels and trusses (with assembly services), and on-site structure framing work[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk)[77](index=77&type=chunk) - Services revenue includes stamped and sealed structural design, shop drawings, and AI tech research and consulting, which generated **$205,000** in **2024**[78](index=78&type=chunk)[79](index=79&type=chunk) - Developing 'Replicable Apartment products' like Village 101 (**155-unit** senior living) and other apartment options, aiming for scalable, high-quality housing solutions[82](index=82&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk) [Cost of Sales](index=14&type=section&id=Cost%20of%20Sales) INNO's cost of sales primarily comprises materials (rolled steel, managed with fixed-price contracts and **three-month inventory**) and labor, with inbound freight included in cost of goods sold and outbound freight as a selling expense - Materials, primarily rolled steel, represent the largest cost component, managed through fixed-price forward contracts and a **three-month inventory** to mitigate price fluctuations[85](index=85&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk) - Labor costs include hourly factory workers for producing and assembling prefabricated pieces, and non-employee contractors for turnkey projects[86](index=86&type=chunk) - Inbound freight is part of cost of goods sold, while outbound freight to customers is classified as a selling expense[87](index=87&type=chunk) [Other Expenses](index=14&type=section&id=Other%20Expenses) Other expenses primarily include payroll, rent, utilities, insurance, and professional fees, with the company focusing on lean operations in a business-friendly state - Other expenses mainly comprise payroll for salaried and hourly workers, rent, utilities, insurance, and consulting/professional fees[88](index=88&type=chunk) - The company focuses on lean and efficient operations, benefiting from a business-friendly state and available workforce[88](index=88&type=chunk) [Our Growth Strategy](index=15&type=section&id=Our%20Growth%20Strategy) INNO's growth strategy integrates revenue (capacity expansion, R&D for Castor Cube/Village 101, marketing, acquisitions), profit (automation, Mobile Factory, AI design optimization), and technology (thinner/lighter products, stainless steel, module wall applications) - Revenue growth strategy includes expanding factory operations, investing in R&D for products like Castor Cube and Village 101, increasing marketing, and pursuing vertical integration through acquisitions to offer comprehensive building solutions[92](index=92&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk) - Profit growth strategy focuses on improving assembly automation with production robots, reducing transportation costs by utilizing the Mobile Factory, and optimizing AI design capabilities to reduce raw material usage[96](index=96&type=chunk)[97](index=97&type=chunk)[99](index=99&type=chunk) - Technology growth strategy involves developing thinner/lighter EQ products, stainless steel as a high-end building material, and leveraging module wall technology to expand applications[100](index=100&type=chunk)[101](index=101&type=chunk) [Strategic Partnerships](index=16&type=section&id=Strategic%20Partnerships) INNO has strategic partnerships with at least **10 regional and national developers** in Texas and California, who intend to use INNO's steel framing or modular solutions, providing INNO with customized offers and higher bid success rates - INNO maintains strategic partnerships with at least **10 regional and national developers and builders** in Texas and California[102](index=102&type=chunk) - These partners have a strong project pipeline and intend to utilize INNO's steel framing or modular building solutions (Castor Cube, Village 101)[102](index=102&type=chunk) - Strategic partnerships provide INNO with customized offers and increased probability of winning project bids[102](index=102&type=chunk) [Competitive Outlook](index=16&type=section&id=Competitive%20Outlook) INNO competes against lumber and traditional CFS, highlighting steel's superior strength, non-combustibility, and sustainability, while differentiating with proprietary software for customized punchouts and faster structure formation than 3D printing - Steel framing offers superior strength-to-weight ratio, non-combustibility, resistance to pests and mold, dimensional stability, lower builder's risk insurance, and high recyclability compared to lumber[104](index=104&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk) - INNO differentiates from traditional CFS manufacturers (e.g., Clark Dietrich, CEMCO) by using proprietary software for customized punchouts and automated screw hole punching, optimizing load-bearing capacity and reducing on-site labor[119](index=119&type=chunk)[120](index=120&type=chunk) - INNO's cold-formed steel technology avoids the cooling time and unique raw material requirements of 3D printing for prefab homes, offering faster structure formation and superior disaster resistance for products like Castor Cube[124](index=124&type=chunk)[125](index=125&type=chunk) [Government Regulations](index=18&type=section&id=Government%20Regulations) INNO's operations comply with building codes (IBC, CBC, FBC), environmental laws (USGBC awards for sustainability), and occupational health and safety regulations, with no material compliance expenditures in **2023 or 2024** - INNO's cold-formed steel-framing members comply with **2018/2015 IBC, 2019 CBC, and 2020 FBC**, and are inherently non-combustible, offering an advantage in fire safety regulations[128](index=128&type=chunk)[129](index=129&type=chunk) - The company adheres to U.S. federal, state, and local environmental laws, with manufacturing processes that minimize waste and prevent pollution, earning awards from the USGBC in **2020**[130](index=130&type=chunk)[132](index=132&type=chunk) - Operations are subject to federal, state, and local occupational health and safety laws, with procedures designed to promote compliance and no material expenditures for compliance in **2024 and 2023**[133](index=133&type=chunk)[135](index=135&type=chunk) [Human Capital Resources](index=19&type=section&id=Human%20Capital%20Resources) INNO's success depends on attracting and retaining skilled employees, with **4 full-time employees and 11 contractors as of September 30, 2024**, a decrease from 2023, and **three marketing consultants engaged in 2024** - The company's success depends on attracting, retaining, and developing a skilled workforce, offering competitive wages and collaborating with workforce development agencies[136](index=136&type=chunk) Human Capital Resources | Metric | September 30, 2024 | September 30, 2023 | | :---------------------- | :----------------- | :----------------- | | Full-time Employees | 4 | 11 | | At-will Contractors | 11 | 18 | | Marketing Consultants | 3 (in 2024) | N/A | [Intellectual Property Matters](index=19&type=section&id=Intellectual%20Property%20Matters) INNO currently has no registered IP or trademarks but has **five pending patent applications** for optimized CNC machine designs, a Z-shaped pendant, and honeycomb aluminum plates, with non-disclosure policies in place - INNO currently has no registered intellectual property rights or trademarks, but applications are pending[137](index=137&type=chunk) - **Five patent applications** are pending, covering optimized CNC machine designs (Cube 200, Cube 300), a Z-shaped pendant for exterior walls, and honeycomb aluminum plates for interior walls[137](index=137&type=chunk) - Despite non-disclosure policies, the company cannot assure complete protection of its intellectual property and manufacturing expertise[138](index=138&type=chunk) [Corporate Structure](index=20&type=section&id=Corporate%20Structure) INNO HOLDINGS INC., incorporated in Texas on **September 8, 2021**, includes subsidiaries like Inno Metal Studs Corp and Castor Building Tech LLC, and in **2024**, established Inno Disrupts Inc. and transferred R&D to Inno AI Tech Corp. - **INNO HOLDINGS INC.** was incorporated in Texas on **September 8, 2021**[139](index=139&type=chunk) - Key subsidiaries include Inno Metal Studs Corp (**100% owned**) and Castor Building Tech LLC (**55% owned** as of Oct 2023)[139](index=139&type=chunk)[265](index=265&type=chunk)[266](index=266&type=chunk) - In **2024**, Inno Disrupts Inc. was established, and Inno Research Institute LLC was dissolved, with its R&D functions transferred to the newly formed Inno AI Tech Corp.[140](index=140&type=chunk)[141](index=141&type=chunk)[267](index=267&type=chunk)[268](index=268&type=chunk) [Risk Factors](index=20&type=section&id=ITEM%201A.%20RISK%20FACTORS) As a 'smaller reporting company,' INNO HOLDINGS INC. is not required to provide specific risk factor information in this item - The Company is a 'smaller reporting company' and is not required to provide risk factor information in this item[143](index=143&type=chunk) [Unresolved Staff Comments](index=20&type=section&id=ITEM%201B.%20UNRESOLVED%20STAFF%20COMMENTS) There are no unresolved staff comments for INNO HOLDINGS INC. as of the filing date - No unresolved staff comments[144](index=144&type=chunk) [Cybersecurity](index=20&type=section&id=ITEM%201C.%20CYBERSECURITY) As a smaller reporting company, INNO lacks formalized cybersecurity measures and a dedicated team, but is evaluating needs, considering external experts, and developing a framework with Board oversight, despite no significant incidents - As a smaller reporting company, INNO currently lacks formalized cybersecurity measures, a dedicated team, or specific protocols[147](index=147&type=chunk) - The company has not experienced significant cybersecurity incidents but recognizes its vulnerability due to the absence of a formalized framework[148](index=148&type=chunk) - INNO is evaluating its cybersecurity needs, considering external experts, conducting vulnerability assessments, and developing an incident response strategy, with Board oversight for risk management[149](index=149&type=chunk)[150](index=150&type=chunk) [Properties](index=21&type=section&id=ITEM%202.%20PROPERTIES) INNO leases its principal executive and production facility in Brookshire, Texas, under a new agreement (Jan 2024-Jan 2027) with prepaid rent for 2027, having ended its California office lease in October 2024 - The principal executive office and production facility in Brookshire, Texas, is leased under a new agreement (**Jan 2024 - Jan 2027**) with prepaid rent for **2027**[152](index=152&type=chunk) - The California office relocated from Corona to Diamond Bar in **August 2023**, and the Diamond Bar lease was ended in **October 2024**[153](index=153&type=chunk) - The current leased property is considered in good condition and suitable for business operations[155](index=155&type=chunk) [Legal Proceedings](index=21&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) INNO is not a party to any material legal proceedings, though an ongoing litigation involves a subcontractor's alleged misappropriation of **over $1.3 million**, which INNO is contesting - The Company is not currently a party to any material legal proceedings, investigations, or claims[156](index=156&type=chunk) - An ongoing litigation involves a plaintiff claiming a subcontractor misappropriated **over $1.3 million**, with funds allegedly transferred to the company; INNO is contesting these claims[369](index=369&type=chunk) - There is no assurance that future legal matters will not arise or materially affect the business[156](index=156&type=chunk) [Mine Safety Disclosures](index=21&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) Mine Safety Disclosures are not applicable to INNO HOLDINGS INC.'s operations - Mine Safety Disclosures are not applicable[157](index=157&type=chunk) [PART II](index=22&type=section&id=PART%20II) [Market for Common Equity, Related Stockholder Matters and Purchases of Equity Securities](index=22&type=section&id=ITEM%205.%20MARKET%20FOR%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20PURCHASES%20OF%20EQUITY%20SECURITIES) INNO HOLDINGS INC.'s common stock (INHD) is listed on Nasdaq, underwent a **1-for-10 reverse stock split in October 2024**, has declared no cash dividends, and completed its IPO in **December 2023**, raising approximately **$7.86 million** - Common stock is listed on **The Nasdaq Capital Market** under the symbol 'INHD'[160](index=160&type=chunk) - The Company completed a **1-for-10 reverse stock split** on **October 9, 2024**, and previously a **1-for-2 reverse stock split** in **July 2023**[162](index=162&type=chunk)[163](index=163&type=chunk) - No cash dividends have been declared since inception; earnings are reinvested for working capital and business growth[166](index=166&type=chunk) - The IPO closed on **December 18, 2023**, generating approximately **$7,859,533** in aggregate net proceeds[179](index=179&type=chunk) [RESERVED](index=24&type=section&id=ITEM%206.%20%5BRESERVED%5D) This item is reserved and contains no information - This item is reserved[184](index=184&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operation](index=24&type=section&id=ITEM%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATION) INNO, a building technology company, saw **total revenue increase by 11% to $885,495 in FY2024** (driven by new consulting/licensing) and net loss decrease by **19% to $3,251,127**, but faces going concern doubt due to insufficient cash for future operations - INNO's business involves manufacturing cold-formed steel products and prefabricated homes, with a new consulting service stream[185](index=185&type=chunk)[189](index=189&type=chunk) - Performance is affected by steel price fluctuations, inflation, interest rates, and geopolitical conditions[191](index=191&type=chunk)[192](index=192&type=chunk)[193](index=193&type=chunk) - The company's cash and cash equivalents of **$1,526,661** as of **September 30, 2024**, are not believed to be sufficient to fund operations for the next twelve months, creating substantial doubt about its ability to continue as a going concern[215](index=215&type=chunk) [Results of Operation](index=26&type=section&id=Results%20of%20Operation) In **FY2024**, total revenue increased by **11% to $885,495** (driven by consulting/licensing), product revenue decreased by **51%**, SG&A rose by **68% to $3,678,866**, and net loss decreased by **19% to $(3,251,127)** Consolidated Statements of Operations Summary (YoY Change) | Metric | FY2024 ($) | FY2023 ($) | YoY Change (%) | | :----------------------------------------- | :------------ | :------------ | :------------- | | Revenue - products | 395,495 | 799,747 | -51% | | Revenue - consulting services | 205,000 | - | 100% | | Revenue – License income | 285,000 | - | 100% | | **Total Revenue** | **885,495** | **799,747** | **11%** | | Costs of materials and labor | 409,169 | 1,255,315 | -67% | | Selling, general and administrative expenses | 3,678,866 | 2,191,043 | 68% | | Impairment loss | 23,911 | - | 100% | | Depreciation | 87,116 | 69,437 | 25% | | Bad debt expense | 59,935 | 1,267,960 | -95% | | **Operating loss** | **(3,373,502)** | **(3,984,008)** | **-15%** | | Other income (expenses) | 123,175 | (39,196) | -414% | | Loss before income taxes | (3,250,327) | (4,023,204) | -19% | | Income tax expense | 800 | - | 100% | | **Net loss** | **(3,251,127)** | **(4,023,204)** | **-19%** | | Net loss attributable to INNO HOLDINGS INC. | (3,213,829) | (3,895,778) | -18% | - Product revenue decreased by **51%** due to varying project statuses, while new consulting and licensing streams significantly contributed to total revenue[200](index=200&type=chunk)[201](index=201&type=chunk) - Backlog as of **September 30, 2024**, was approximately **$14,000,000 to $19,000,000**, including a **$15,875,800** agreement with Vision Opportunity Fund LP (Vision 101)[202](index=202&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) INNO's cash and cash equivalents increased to **$1,526,661 in FY2024** (from **$4,898 in FY2023**) due to **$8 million IPO proceeds**, but insufficient cash for the next twelve months raises going concern doubt, necessitating additional **$5.5 million** capital raises post-year-end Cash and Cash Equivalents | As of September 30, | Cash and Cash Equivalents ($) | | :------------------ | :---------------------------- | | 2024 | 1,526,661 | | 2023 | 4,898 | - The cash increase was primarily driven by **$8 million** in net proceeds from the initial public offering closed in **December 2023**[212](index=212&type=chunk)[214](index=214&type=chunk) - Management believes current cash is insufficient for the next twelve months, creating substantial doubt about the company's ability to continue as a going concern, necessitating additional capital raises[215](index=215&type=chunk) - Subsequent to year-end, the company secured **$2,000,000** and approximately **$3.5 million** through private placements in **October and November 2024**, respectively[216](index=216&type=chunk)[217](index=217&type=chunk)[387](index=387&type=chunk)[389](index=389&type=chunk) [Cash Flows](index=29&type=section&id=Cash%20Flows) Net cash used in operating activities increased to **$5,075,412 in FY2024** (from **$1,225,941 in FY2023**), investing activities used **$547,060**, and financing activities provided **$7,144,235** (largely from IPO proceeds) Summary of Cash Flows | Cash Flow Activity | FY2024 ($) | FY2023 ($) | | :----------------- | :------------ | :------------ | | Operating | (5,075,412) | (1,225,941) | | Investing | (547,060) | (244,899) | | Financing | 7,144,235 | 1,425,110 | - The increase in net cash usage in operating activities was mainly due to a **$3,720,738** increase of working capital outflow[219](index=219&type=chunk) - Net cash provided by financing activities in **FY2024** was primarily due to **$8,450,000** net cash from the initial public offering[224](index=224&type=chunk) [Quantitative and Qualitative Disclosure About Market Risk](index=30&type=section&id=ITEM%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURE%20ABOUT%20MARKET%20RISK) As a 'smaller reporting company,' INNO HOLDINGS INC. is not required to provide 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[229](index=229&type=chunk) [PART III](index=31&type=section&id=PART%20III) [Financial Statements and Supplementary Data](index=31&type=section&id=ITEM%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This section presents INNO HOLDINGS INC.'s audited consolidated financial statements for **FY2024 and FY2023**, including balance sheets, statements of operations, equity, and cash flows, with unqualified auditor opinions (one highlighting going concern) and detailed notes on accounting policies and subsequent events - Consolidated financial statements for **FY2024 and FY2023** include Balance Sheets, Statements of Operations, Changes in Stockholders' Equity, and Cash Flows[231](index=231&type=chunk) - Independent auditors (Simon & Edward, LLP for **2024**; TAAD LLP for **2023**) issued unqualified opinions, with TAAD LLP's report highlighting a going concern matter due to recurring losses[232](index=232&type=chunk)[240](index=240&type=chunk)[241](index=241&type=chunk) - Notes to financial statements provide details on accounting policies, financial instrument fair values, revenue recognition, inventory, property and equipment, loans, related party transactions, equity, concentration of risk, commitments, contingencies, income taxes, and subsequent events[263](index=263&type=chunk)[269](index=269&type=chunk)[323](index=323&type=chunk) [Consolidated Balance Sheets](index=34&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased from **$2,545,762 in 2023 to $4,169,337 in 2024**, total liabilities decreased to **$1,371,801**, and total equity improved from a **$(1,943,586) deficit to $2,797,536** in 2024 Consolidated Balance Sheet Highlights | Metric | September 30, 2024 ($) | September 30, 2023 ($) | | :---------------------- | :--------------------- | :--------------------- | | Total Assets | 4,169,337 | 2,545,762 | | Total Liabilities | 1,371,801 | 4,489,348 | | Total Equity (Deficit) | 2,797,536 | (1,943,586) | - Cash and cash equivalents increased from **$4,898 in 2023 to $1,526,661 in 2024**[247](index=247&type=chunk) - Working capital improved from a deficit of **$(2,913,827) in 2023 to a positive $975,755 in 2024**[218](index=218&type=chunk) [Consolidated Statements of Operations](index=36&type=section&id=Consolidated%20Statements%20of%20Operations) Total revenue increased by **11% to $885,495 in 2024**, while net loss decreased by **19% to $(3,251,127)**, and losses per share improved from **$(2.15) to $(1.59)** Consolidated Statements of Operations Summary | Metric | FY2024 ($) | FY2023 ($) | | :----------------------------------------- | :------------ | :------------ | | Total Revenue | 885,495 | 799,747 | | Loss from Operations | (3,373,502) | (3,984,008) | | Net Loss | (3,251,127) | (4,023,204) | | Net Loss Attributable to INNO HOLDINGS INC. | (3,213,829) | (3,895,778) | | Losses Per Share (Basic and Diluted) | (1.59) | (2.15) | - Total revenue increased by **11%** year-over-year, primarily due to the introduction of consulting services and licensing income[198](index=198&type=chunk)[200](index=200&type=chunk) - Net loss decreased by **19%** year-over-year, reflecting changes in revenue, costs, expenses, and other income/expenses[211](index=211&type=chunk) [Consolidated Statements of Changes in Stockholders' Equity](index=37&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) Total equity shifted from a **$(1,943,586) deficit in 2023 to a positive $2,797,536 in 2024**, driven by **$7,859,534** in additional paid-in capital from the IPO and **$72,000** from shares issued for services Changes in Stockholders' Equity | Metric | September 30, 2024 ($) | September 30, 2023 ($) | | :----------------------------------- | :--------------------- | :--------------------- | | Additional Paid in Capital | 10,748,534 | 2,830,000 | | Accumulated Deficit | (7,738,644) | (4,524,815) | | Total Equity (Deficit) | 2,797,536 | (1,943,586) | - The IPO completion resulted in **$7,859,534** in additional paid-in capital[256](index=256&type=chunk) - Shares issued for services contributed **$72,000** to additional paid-in capital in **2024**[256](index=256&type=chunk) [Consolidated Statements of Cash Flows](index=38&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash increased by **$1,521,763 in 2024**, resulting in **$1,526,661** cash at year-end, driven by **$7,144,235** from financing (IPO proceeds) offsetting **$5,075,412** used in operations and **$547,060** in investing Consolidated Statements of Cash Flows Summary | Cash Flow Activity | FY2024 ($) | FY2023 ($) | | :----------------- | :------------ | :------------ | | Operating | (5,075,412) | (1,225,941) | | Investing | (547,060) | (244,899) | | Financing | 7,144,235 | 1,425,110 | | Net Change in Cash | 1,521,763 | (45,730) | | Cash, End of Period| 1,526,661 | 4,898 | - Net cash provided by financing activities was primarily due to **$8,450,000** net cash from the initial public offering in **2024**[224](index=224&type=chunk)[261](index=261&type=chunk) - Net cash used in operating activities increased significantly due to a **$3,720,738** increase in working capital outflow[219](index=219&type=chunk)[261](index=261&type=chunk) [Notes to Consolidated Financial Statements](index=39&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies (U.S. GAAP, reverse stock splits), key estimates, changes in accounts receivable (allowance for credit losses decreased to **$0 in 2024**), inventory, property, loans, related party transactions, equity changes, risk concentrations, commitments, contingencies, income taxes, and subsequent events including **$5.5 million** in private placements and a **$1.4 million** equity investment - The Company's financial statements are prepared in accordance with **U.S. GAAP**, with all inter-company balances and transactions eliminated[269](index=269&type=chunk)[270](index=270&type=chunk) - Allowance for credit losses decreased significantly to **$0 in 2024** from **$1,267,960 in 2023**, reflecting improved collection rates and discontinuing business with high-risk customers[207](index=207&type=chunk)[324](index=324&type=chunk) - Subsequent events include two private placements in **October and November 2024**, raising **$2 million** and approximately **$3.5 million** respectively, and a **$1.4 million** equity investment in CoreModu LLC[386](index=386&type=chunk)[387](index=387&type=chunk)[389](index=389&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=58&type=section&id=ITEM%209.%20CHANGES%20IN%20AND%20DISAGREEMENTS%20WITH%20ACCOUNTANTS%20ON%20ACCOUNTING%20AND%20FINANCIAL%20DISCLOSURE) INNO HOLDINGS INC. reports no changes in or disagreements with its accountants on accounting and financial disclosure matters - No changes in or disagreements with accountants on accounting and financial disclosure[392](index=392&type=chunk) [Controls and Procedures](index=58&type=section&id=ITEM%209A.%20CONTROLS%20AND%20PROCEDURES) As of **September 30, 2024**, INNO's disclosure controls and procedures were ineffective due to inadequate internal control policies, with plans to remediate by hiring personnel or consultants, acknowledging inherent control limitations - Disclosure controls and procedures were not effective as of **September 30, 2024**, due to a lack of adequate policies and procedures in internal control functions over key business cycles[394](index=394&type=chunk)[395](index=395&type=chunk) - The company plans to hire additional personnel or consultants to design and implement internal controls to strengthen the system[395](index=395&type=chunk) - Management recognizes that internal control systems have inherent limitations and cannot prevent all errors or fraud[396](index=396&type=chunk) [Other Information](index=58&type=section&id=ITEM%209B.%20OTHER%20INFORMATION) This item contains no other information - No other information is reported in this item[398](index=398&type=chunk) [Disclosure Regarding Foreign Jurisdictions That Prevent Inspections](index=58&type=section&id=ITEM%209C.%20DISCLOSURE%20REGARDING%20FOREIGN%20JURISDICTIONS%20THAT%20PREVENT%20INSPECTIONS) This disclosure is not applicable to INNO HOLDINGS INC. - This disclosure is not applicable[400](index=400&type=chunk) [PART III (Continued)](index=59&type=section&id=PART%20III) [Directors, Executive Officers and Corporate Governance](index=59&type=section&id=ITEM%2010.%20DIRECTORS%2C%20EXECUTIVE%20OFFICERS%20AND%20CORPORATE%20GOVERNANCE) INNO's Board has **5 directors (3 independent)**, with Ding Wei as CEO and Tianwei Li as CFO, overseeing risk management; post-IPO, Audit and Compensation Committees were established, chaired by Yufang Qu (audit committee financial expert) - The Board of Directors comprises **5 directors**, with **3 independent directors** (Yufang Qu, Tao Tu, Yongbo Mo) as per Nasdaq standards[417](index=417&type=chunk)[419](index=419&type=chunk) - Key executive officers are Ding Wei (CEO, Director, Chairman) and Tianwei (Solomon) Li (CFO)[403](index=403&type=chunk)[405](index=405&type=chunk)[406](index=406&type=chunk) - The Board oversees risk management, including operational, financial, legal, regulatory, cybersecurity, strategic, and reputational risks, and monitors geopolitical developments[416](index=416&type=chunk) - Audit and Compensation Committees were established post-IPO, composed of independent directors. Yufang Qu chairs both and is an audit committee financial expert[420](index=420&type=chunk)[421](index=421&type=chunk)[425](index=425&type=chunk) [Executive Compensation](index=64&type=section&id=ITEM%2011.%20EXECUTIVE%20COMPENSATION) INNO, as an emerging growth company, discloses executive compensation for NEOs, aiming to attract and retain talent through base salaries and short-term incentives (e.g., **$50,000 IPO award to Tianwei Li**), with no equity incentives granted in **FY2023/2024** - The compensation program aims to attract, motivate, and retain executives, aligning their interests with shareholders through base salaries, short-term cash incentives, and long-term equity incentives[432](index=432&type=chunk) Summary Compensation Table for NEOs | Name and Principal Position | Year | Salary ($) | Bonus ($) | Total ($) | | :-------------------------- | :--- | :--------- | :-------- | :-------- | | Ding Wei (CEO) | 2024 | - | - | - | | | 2023 | - | - | - | | Dekui Liu (Former CEO) | 2024 | 70,833 | - | 70,833 | | | 2023 | 11,000 | - | 11,000 | | Tianwei (Solomon) Li (CFO) | 2024 | 180,000 | 50,000 | 230,000 | | | 2023 | 45,000 | - | 45,000 | | Dr. Li (Alice) Gong (Former COO) | 2024 | 152,587 | - | 152,587 | | | 2023 | 100,347 | - | 100,347 | | Weston Twigg (Former CFO) | 2024 | - | - | - | | | 2023 | 104,527 | - | 104,527 | - Mr. Li received a one-time IPO award of **$50,000** in **2024**. No incentive equity awards were granted in **FY2023 or FY2024**[433](index=433&type=chunk)[434](index=434&type=chunk)[445](index=445&type=chunk)[448](index=448&type=chunk) - The company adopted the **2023 Omnibus Incentive Plan** and an **Incentive Based Compensation Recoupment Policy**[446](index=446&type=chunk)[452](index=452&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=67&type=section&id=ITEM%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) As of **December 6, 2024**, INNO had **3,057,043 shares outstanding**, with no beneficial ownership by directors/executive officers, and significant stockholders including West Lake Club Inc. (**20.94%**) and Changzheng Ye (**5.14%**) - As of **December 6, 2024**, there were **3,057,043 shares** of common stock issued and outstanding[457](index=457&type=chunk) Beneficial Ownership (as of Dec 6, 2024) | Name and Address of Beneficial Owner | Beneficially Owned Shares | Percent | | :----------------------------------- | :------------------------ | :------ | | Officers and Directors as a Group | — | — | | Changzheng Ye | 157,079 | 5.14% | | West Lake Club Inc. | 640,000 | 20.94% | - No awards were issued under the Company's equity compensation plan as of **September 30, 2024**[461](index=461&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=68&type=section&id=ITEM%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS%2C%20AND%20DIRECTOR%20INDEPENDENCE) INNO engaged in related party transactions, including **$2,000** in loans from former CEO Mr. Dekui Liu, consulting from Yunited Assets LLC, purchases from Baicheng Trading LLC, and a **$15.88 million** project agreement with Vision Opportunity Fund LP, with a related person transaction policy and a majority independent Board - Short-term, interest-free loans from former CEO Mr. Dekui Liu, with **$2,000** outstanding as of **September 30, 2024**[463](index=463&type=chunk) - Consultation services from Yunited Assets LLC (minority owner of a subsidiary) and renovation design services/materials from Baicheng Trading LLC (related to Chairwoman)[464](index=464&type=chunk)[466](index=466&type=chunk) - A **$15,875,800** project development agreement with Vision Opportunity Fund LP (assigned to Vision 101), partially owned by a former shareholder, with **$244,185** received as deferred revenue as of **September 30, 2024**[468](index=468&type=chunk) - The company has a written related person transaction policy for review and approval, and a majority of its Board members are independent[469](index=469&type=chunk)[471](index=471&type=chunk) [Principal Accounting Fees and Services](index=70&type=section&id=ITEM%2014.%20PRINCIPAL%20ACCOUNTING%20FEES%20AND%20SERVICES) INNO paid **$92,500** in audit fees to Simon & Edward, LLP for **FY2024** and **$178,383** to TAAD LLP for **FY2023**, with no other fees incurred, and the audit committee pre-approves all services Fees Paid to Principal Independent Registered Public Accounting Firm | Fee Type | FY2024 ($) | FY2023 ($) | | :--------------- | :--------- | :--------- | | Audit Fees | 92,500 | 178,383 | | Audit Related Fees | - | - | | Tax Fees | - | - | | All Other Fees | - | - | | **Total Fees** | **92,500** | **178,383**| - Simon & Edward, LLP served as the independent auditor for **FY2024**, and TAAD LLP for **FY2023**[472](index=472&type=chunk) - The audit committee's charter requires pre-approval of all audit and permitted non-audit services[475](index=475&type=chunk) [PART IV](index=70&type=section&id=PART%20IV) [Exhibits and Financial Statement Schedules](index=70&type=section&id=ITEM%2015.%20EXHIBITS%20AND%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists financial statements and exhibits for the Form 10-K, with all financial statements included under Item 8 and schedules omitted, detailing corporate governance documents, agreements, and certifications - All financial statements are included under **Item 8** of this Annual Report[477](index=477&type=chunk) - Financial statement schedules are omitted as the required information is included in the financial statements or notes, or not required[478](index=478&type=chunk) - The exhibit index includes corporate formation documents, bylaws, underwriter warrants, indemnification agreements, development and supply agreements, incentive plans, offer letters, and various certifications[482](index=482&type=chunk)[485](index=485&type=chunk) [Form 10-K Summary](index=72&type=section&id=ITEM%2016.%20FORM%2010-K%20SUMMARY) This item indicates that no Form 10-K summary is provided - No Form 10-K summary is provided[483](index=483&type=chunk) [Signatures](index=73&type=section&id=SIGNATURES) The Form 10-K report is signed by CEO Ding Wei and CFO Tianwei Li, along with other directors, on **December 9, 2024** - The report is signed by Ding Wei (Chief Executive Officer, Director and Chairman) and Tianwei Li (Chief Financial Officer) as principal executive and financial/accounting officers, respectively[488](index=488&type=chunk) - Additional signatures include directors Yufang Qu, Mengshu Shao, Tao Tu, and Yongbo Mo[488](index=488&type=chunk) - All signatures are dated **December 9, 2024**[488](index=488&type=chunk)[490](index=490&type=chunk)