INNO HOLDINGS(INHD) - 2025 Q2 - Quarterly Report

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS 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] - Uncertainty areas include managing operations, expenses, evaluating performance, responding to changes, and protecting intellectual property[10] PART I FINANCIAL INFORMATION 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][39] ITEM 1. FINANCIAL STATEMENTS 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 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] Condensed Consolidated Statements of Operations 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 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] - Stock-based compensation of $1,041,005 was recognized, increasing additional paid-in capital for the six months ended March 31, 2025[22] Condensed Consolidated Statements of Cash Flows 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] Notes to Unaudited Condensed Consolidated Financial Statements 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 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] - 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][35] - 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][37] Note 2 — Basis of Presentation and Summary of significant accounting policies 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] - 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] - Revenue from electronic product trading is recognized at the point of delivery when the customer obtains control of the products[59] Note 3 — Inventories 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][82] Note 4 — Prepayments and other current assets 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] Note 5 — Loan receivable 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] Note 6 — Equity Investments 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] - 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] Note 7 — Goodwill, net 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] Note 8 — Loans payable 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] Note 9 — Discontinued operations 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][90] 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 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][95] - 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][96][97][98] Note 11 — Equity 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] - 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][102] - The company issued 1,929,167 shares for cash through private placements in late 2024, generating approximately $7.25 million[22][107][108][109] - 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][110] Note 12 — Concentration of risk 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][111][112][113] - 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] - 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] Note 13 — Commitments and contingencies 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] Note 14 — Subsequent events 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] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 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][124] - 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][127] - The company adopted the 2025 Omnibus Incentive Plan, reserving 880,000 shares for equity awards, with automatic annual increases[126] 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] - 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] Recent Developments 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] - The 2025 Omnibus Incentive Plan was adopted, reserving 880,000 shares for equity awards, with provisions for annual increases[126] - 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] - 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] - JWF Assurance PAC was appointed as the new independent registered public accounting firm, replacing Simon & Edward, LLP, effective January 13, 2025[129] - Mengshu Shao was appointed Chief Financial Officer on January 3, 2025, following the resignation of Tianwei Li from the CFO position[130] Key Performance Indicators ("KPIs") 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][132][133][134] Results of Operation 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 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] - Revenue for the six months ended March 31, 2025, was $674,100, also entirely from the new electronic product trading business[137] Costs of Goods Sold 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] - COGS for the six months ended March 31, 2025, was $616,600, corresponding to the new electronic product trading business[137] Selling, General and Administrative Expenses 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] - 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] Operating Loss 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][142] - 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] Other Income (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] - 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] Net Loss 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][144] - 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] Liquidity and Capital Resources 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] - The company's working capital increased from $975,755 as of September 30, 2024, to $7,076,701 as of March 31, 2025[152] - 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] Sources of Liquidity 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] - Several private placement offerings in late 2024 generated approximately $7.25 million in gross proceeds[147][148][149] - 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] Working Capital 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] Cash Flows 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] - 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] - Net cash provided by financing activities was $7,250,000 for the six months ended March 31, 2025, entirely from private placement offerings[156] Critical Accounting Policies and Estimate 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] New Accounting Standards 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][79][159] - The adoption of ASU 2022-03 (Fair Value Measurement of Equity Securities) is not expected to have a material impact[80] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 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] ITEM 4. CONTROLS AND PROCEDURES 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] - 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] Disclosure Controls and Procedures 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] - The ineffectiveness is attributed to a material weakness: lack of adequate policies and procedures in internal control function over key business cycles[161] - The company plans to hire additional personnel or consultants to design and implement internal controls to strengthen the system[161] Inherent Limitations Over Internal Controls 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] Changes in Internal Control over Financial Reporting 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] PART II OTHER INFORMATION This part provides additional information beyond financial statements, including legal proceedings, risk factors, and disclosures ITEM 1. LEGAL PROCEEDINGS 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][167] - 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] ITEM 1A. RISK FACTORS 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] - No material changes have occurred in the risk factors previously disclosed in the 2024 Annual Report on Form 10-K[168] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 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][170] ITEM 3. DEFAULTS UPON SENIOR SECURITIES The company reported no defaults upon senior securities - No defaults upon senior securities were reported[171] ITEM 4. MINE SAFETY DISCLOSURES The company reported no mine safety disclosures - No mine safety disclosures were reported[172] ITEM 5. OTHER INFORMATION 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] ITEM 6. EXHIBITS 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] 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]