UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended | |
| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934: |
For the transition period from __________ to __________.
Commission
file number:
(Exact name of registrant as specified in its charter)
| (State or Other Jurisdiction
of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices, including ZIP Code)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller reporting company
| |
| Emerging growth company
|
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of June 30, 2025, there were shares of common stock, no par value, issued and outstanding.
Table of Contents
| i |
INNO HOLDINGS INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
| June 30, 2025 (unaudited) | September 30, 2024 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalent | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Inventories | ||||||||
| Prepayments and other current assets | ||||||||
| Current assets from discontinued operations | ||||||||
| Total current assets | ||||||||
| Non-current assets | ||||||||
| Goodwill, net | ||||||||
| Equity investment | ||||||||
| Non-current assets from discontinued operations | ||||||||
| Total non-current assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities | ||||||||
| Other payables and accrued liabilities | ||||||||
| Short-term loan payable | ||||||||
| Current liabilities from discontinued operations | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities | ||||||||
| Non-current liabilities from discontinued operations | ||||||||
| Total non-current liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingency | ||||||||
INNO
HOLDINGS INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
| June 30, 2025 (unaudited) | September 30, 2024 | |||||||
| Stockholders’ Equity | ||||||||
| Common stock, | ||||||||
| Additional paid in capital | ||||||||
| Subscription receivable | ( | ) | ||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Non-controlling interest | ( | ) | ||||||
| Total equity | ||||||||
| Total liabilities and equity | $ | $ | ||||||
| * |
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
| 1 |
INNO HOLDINGS INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
For the Three Months and Nine Months Ended June 30, 2025 and 2024 (unaudited)
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| REVENUES: | ||||||||||||||||
| Revenue - products | $ | $ | $ | $ | ||||||||||||
| Total revenue | ||||||||||||||||
| COSTS OF REVENUE: | ||||||||||||||||
| Costs of goods sold | ||||||||||||||||
| Total cost of sales | ||||||||||||||||
| GROSS (LOSS)/ PROFIT | ( | ) | ||||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Selling, general and administrative expenses (exclusive of expenses shown separately below) | ||||||||||||||||
| Impairment loss on goodwill | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| LOSS FROM OPERATIONS | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||||||
| Interest income, net | ||||||||||||||||
| Gain/(loss) on investment disposal | ( | |||||||||||||||
| Other non-operating income (expense) | ( | ) | ( | ) | ||||||||||||
| Total other income (expenses), net | ( | ) | ||||||||||||||
| LOSS BEFORE INCOME TAXES | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| PROVISION FOR INCOME TAXES | ||||||||||||||||
| NET LOSS FROM CONTINUING OPERATIONS | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss from discontinued operations | ( | ) | ( | ) | ( | ) | ||||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Non-controlling interest | ( | ) | ||||||||||||||
| NET LOSS ATTRIBUTABLE TO INNO HOLDINGS INC. | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| WEIGHTED AVERAGE NUMBER OF COMMON STOCK* | ||||||||||||||||
| Basic and Diluted | ||||||||||||||||
| LOSSES PER SHARE | ||||||||||||||||
| Basic and Diluted from Continuing Operation | ) | ) | ) | ) | ||||||||||||
| Basic and Diluted from Discontinuing Operation | ) | ) | ) | |||||||||||||
| Basic and Diluted, Total | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| * |
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
| 2 |
INNO HOLDINGS INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Changes in Stockholders’ Equity
For the Nine Months Ended June 30, 2025 and 2024
| Common Stock* | Additional Paid in | Accumulated | Non- controlling | Subscription | ||||||||||||||||||||||||
| Shares | Amount | Capital | Deficit | interest | Receivable | Total | ||||||||||||||||||||||
| Balance, September 30, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||
| Net loss | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Shares issued upon IPO completion | ||||||||||||||||||||||||||||
| Balance, December 31, 2023 (unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Disposal of subsidiary | - | |||||||||||||||||||||||||||
| Warrants assumption | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance, March 31, 2024 (unaudited) | ( | ) | ( | ) | ||||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance, June 30, 2024 (unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||
| Common Stock* | Additional Paid in | Accumulated | Non- controlling | Subscription | ||||||||||||||||||||||||
| Shares | Amount | Capital | Deficit | interest | Receivable | Total | ||||||||||||||||||||||
| Balance, September 30, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Shares issued for cash | ||||||||||||||||||||||||||||
| Balance, December 31, 2024 (unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Disposal of subsidiary | - | |||||||||||||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||||||||||
| Balance, March 31, 2025 (unaudited) | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Proceeds from sale of common stock | ( | ) | ||||||||||||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||||||||||
| Balance, June 30, 2025 (unaudited) | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||
| * |
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
| 3 |
INNO HOLDINGS INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
For the Nine Months Ended (unaudited) | ||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss from continuing operation | $ | ( | ) | $ | ( | ) | ||
| Net loss from discontinuing operation | ( | ) | ( | ) | ||||
| Adjustments to reconcile net income to cash used in operating activities: | ||||||||
| Stock-based compensation expense | ||||||||
| Loss from investment disposal | ||||||||
| Impairment loss | ||||||||
| Accounts receivable | ||||||||
| Inventories | ( | ) | ||||||
| Deferred offering costs | ( | ) | ||||||
| Prepayments and other current assets | ( | ) | ||||||
| Accounts payable | ( | ) | ( | ) | ||||
| Operating lease liabilities | ( | ) | ||||||
| Other payables and accrued liabilities | ( | ) | ||||||
| Other current liabilities | ||||||||
| Operating cash flow used by discontinued operations | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of investment in equity investee | ( | ) | ||||||
| Proceed from investment disposal | ||||||||
| Net cash used in investing activities by discontinued operations | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from related parties | ||||||||
| Payments to related parties | ( | ) | ||||||
| Payments to short-term loans | ( | ) | ||||||
| Warrants assumption | ( | ) | ||||||
| Proceeds from IPO | ||||||||
| Proceeds from issuance of shares | ||||||||
| Net cash used in financing activities by discontinued operations | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| CHANGES IN CASH AND CASH EQUIVALENT | ||||||||
| CASH AND CASH EQUIVALENT, beginning of period | ||||||||
| CASH AND CASH EQUIVALENT, ending of period | $ | $ | ||||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
| Cash paid for income tax | $ | $ | ||||||
| Cash paid for interest | $ | $ | ||||||
| Noncash deferred offering costs offset to APIC upon IPO completion | $ | $ | ||||||
| Right-of-use assets obtained in exchange for operating lease liabilities | $ | $ | ||||||
| Deposit applied to lease liability | $ | $ | ||||||
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
| 4 |
INNO HOLDINGS INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
Note 1 — Nature of business and organization
INNO HOLDINGS, INC., a Texas corporation (the “Company”), was incorporated on September 8, 2021. The Company is principally engaged in the marketing and sale of construction products along with full-scope construction services in the US.
On
January 18, 2022, the Company formed a limited liability company, Castor Building Tech LLC (“CBT”), in California. The Company
owned
Effective
as of January 21, 2022, the Company acquired
Inno
Research Institute LLC (“IRI”), a Texas limited liability company was formed on September 8, 2021, is a
On January 21, 2024, the Company incorporated Inno Disrupts Inc., a wholly owned subsidiary in Texas. The purpose of Inno Disrupts Inc. is to remodel buildings using the Company’s framing steel products, enhance producing and marketing capabilities, manage the designated buildings in US, and other activities.
On February 11, 2024, the Company incorporated Inno AI Tech Corp., a wholly owned entity to conduct AI tech research and consulting activities.
| 5 |
On
October 18, 2024, the Company completed the acquisition of shares of Lear Group Limited (“Lear”), a Hong Kong company,
from its shareholder for a total consideration of $
On
December 13, 2024, the Company completed the acquisition of shares of Baymax High Technology Co., Limited (“Baymax”),
a Hong Kong company, from its shareholder for a total consideration of $
On
March 4, 2025, the Company entered into a Share Purchase Agreement with Architectix Limited, pursuant to which the Company sold all issued
and outstanding shares it owns in Inno Metal Studs Corp and Inno AI Tech Corp for an aggregate purchase price of $
On
March 28, 2025, the Company entered into a Membership Interest Purchase Agreement with Strucraft Group Limited, pursuant to which the
Company sold all the membership interest it owns in Castor Building Tech LLC, which represents
On
April 8, 2025, the Company entered into a Share Purchase Agreement with Strucraft Group Limited, pursuant to which the Company sold all
issued and outstanding shares it owns in Inno Disrupts Inc. for an aggregate purchase price of $
Note 2 — Basis of Presentation and Summary of significant accounting policies
Basis of presentation
The accompanying financial statements have been prepared in accordance with the generally accepted accounting principles in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). The Company’s fiscal year end date is September 30.
Certain information and footnote disclosures normally included in the Company’s annual audited financial statements and accompanying notes have been condensed or omitted in this accompanying interim consolidated financial statements and footnotes. Accordingly, the accompanying interim condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2024, filed with the Securities and Exchange Commission (“SEC”) on December 19, 2024.
In the opinion of management, these unaudited consolidated financial statements include all adjustments and accruals, consisting only of normal, recurring adjustments that are necessary for a fair statement of the results of all interim periods reported herein. The results of the interim periods are not necessarily indicative of the results expected for the full fiscal year or any other interim period or any future year or period.
Consolidated Principles of consolidation
The Consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company balances and transactions have been eliminated.
Going concern
As
of June 30, 2025, the Company had total cash and cash equivalent of $
| 6 |
The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations, and/or obtaining additional financing from its shareholders or other sources, as may be required.
Use of estimates and assumptions
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities reported and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Actual results could differ from these estimates.
Cash and cash equivalents
Cash and cash equivalents consist of amounts held as cash on hand, bank and money market deposits, and marketable securities with maturities of less than 90 days.
From
time to time, the Company may maintain bank balances in interest bearing accounts in excess of the $
Accounts receivable
During the ordinary course of business, the Company extends unsecured credit to its customers. Accounts receivable are stated at the amount the Company expects to collect from customers. Management reviews its accounts receivable balances each reporting period to determine if an allowance for credit loss is required.
In October 2020, the Company adopted ASU 2016-13, Topics 326 — Credit Loss, Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (CECL) methodology, for its accounting standard for its trade accounts receivable.
The Company continuously monitors the recoverability of accounts receivable. If there are any indicators that a customer may not make payment, the Company may consider making provision for non-collectability for that particular customer. At the same time, the Company may cease further sales or services to such customer. The following are some of the factors that the Company develops allowance for credit losses:
| ● | the customer fails to comply with its payment schedule; | |
| ● | the customer is in serious financial difficulty; | |
| ● | a significant dispute with the customer has occurred regarding job progress or other matters; | |
| ● | the customer breaches any of its contractual obligations; | |
| ● | the customer appears to be financially distressed due to economic or legal factors; | |
| ● | the business between the customer and the Company is not active; and | |
| ● | other objective evidence indicates non-collectability of the accounts receivable. |
The adoption of the credit loss accounting standard has no material impact on the Company’s consolidated financial statements. Accounts receivable are recognized and carried at carrying amount less an allowance for credit losses, if any. The Company maintains an allowance for credit losses resulting from the inability of its customers to make required payments based on contractual terms. The Company reviews the collectability of its receivables on a regular and ongoing basis. The Company has also included in the calculation of allowance for credit losses based on its customers’ businesses and their ability to pay their accounts receivable. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. The Company also considers external factors to the specific customer, including current conditions and forecasts of economic conditions. In the event we recover amounts previously written off, we will reduce the specific allowance for credit losses.
Fair values of financial instruments
ASC 825, “Disclosures about Fair Value of Financial Instruments,” requires disclosure of fair value information about financial instruments. ASC 820, “Fair Value Measurements” defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements.
| 7 |
The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and all other current assets and liabilities are approximate fair values due to their short-term nature.
For other financial instruments to be reported at fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines the fair value of its financial instruments based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:
| Level 1 — | Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; |
| Level 2 — | Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and |
| Level 3 — | Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data. |
As of June 30, 2025 and September 30, 2024, the Company did not have any other financial instruments reported at fair value.
Revenue recognition
The Company has adopted Accounting Standards Codification (“ASC”) 606 since its inception and recognizes revenue from product and service sales revenues, net of promotional discounts and return allowances, if any, when the following revenue recognition criteria are met: a contract has been identified, separate performance obligations are identified, the transaction price is determined, the transaction price is allocated to separate performance obligations and revenue is recognized upon satisfying each performance obligation. The Company transfers the risk of loss or damage upon delivery, therefore, revenue from product sales is recognized when it is delivered to the customer. For services, all sales are recognized upon completion based on terms stated in the sales agreements.
The Company evaluates the criteria of ASC 606 — Revenue Recognition Principal Agent Considerations in determining whether it is appropriate to record the gross amount of product sales and related costs or the net amount earned as commissions. Generally, when the Company is primarily responsible for fulfilling the promise to provide a specified good or service, the Company is subject to inventory risk before the good or service has been transferred to a customer and the Company has discretion in establishing the price, revenue is recorded at gross.
Payments received prior to the delivery of goods to customers are recorded as unearned revenue.
Sales discounts are recorded in the period in which the related sale is recognized. Sales return allowances are estimated based on historical amounts and are recorded upon recognizing the related sales. Shipping and handling costs are recorded as selling expenses.
Revenue from electronic products trading is recognized at the point of delivery when the customer obtains control of the products.
Costs and expenses
Costs and expenses are operating expenses, which consist of costs of material and labor, selling, general and administrative expenses, and depreciation, are expensed as incurred.
| 8 |
Inventory
Inventory consists of material and finished goods ready for sale and is stated at the lower of cost or net realizable value. The Company values its inventory using the FIFO costing method. The Company’s policy is to include as a part of cost of goods sold any freight incurred to ship the product from its vendors to warehouses. Outbound freight costs related to shipping costs to customers are considered periodic costs and are reflected in selling expenses. The Company regularly reviews inventory and considers forecasts of future demand, market conditions and product obsolescence.
If the estimated realizable value of the inventory is less than cost, the Company makes provisions in order to reduce its carrying value to its estimated net realizable value. The Company regularly assesses its inventory for obsolescence and records an allowance only when the inventory is no longer suitable for reproduction. The Company’s inventory generally has a long life cycle and does not become obsolete quickly.
Deferred offering costs
The Company capitalizes certain legal, accounting and other third-party fees that are directly related to an equity financing that is probable of successful completion until such financing is consummated. After consummation of an equity financing, these costs are recorded as a reduction of the proceeds received as a result of the financing. Should a planned equity financing be abandoned, terminated or significantly delayed, the deferred offering costs are immediately written off to operating expenses in the consolidated statements of operations in the period of determination.
Property and equipment
Property and equipment is stated at their historical cost, less accumulated depreciation. Depreciation on property and equipment is provided using the straight-line method over the estimated useful lives of the assets as follows:
| Machinery and equipment | ||
| Office equipment | ||
| Motor vehicles | ||
| Leasehold improvements |
Expenditures for renewals and betterments are capitalized while repairs and maintenance costs are normally charged to the statement of operations in the year in which they are incurred. In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of the asset, the expenditure is capitalized as an additional cost of the asset.
Upon sale or disposal of an asset, the historical cost and related accumulated depreciation or amortization of such asset were removed from their respective accounts and any gain or loss is recorded in the statements of income.
The
Company reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying
value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition.
In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an
amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment
include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand,
competition and other economic factors. Based on this assessment,
Goodwill
Goodwill represents the excess of the purchase price of an acquired business over the amount assigned to the assets acquired and liabilities assumed. Goodwill is not amortized but are subject to impairment testing on an annually basis or more frequently if events or circumstances indicate a potential impairment. These events or circumstances could include a significant change in the business climate, regulatory environment, established business plans, operating performance indicators or competition. Potential impairment indicators may also include, but are not limited to, (i) significant changes to estimates and assumptions used in the most recent annual or interim impairment testing, (ii) downward revisions to internal forecasts, and the magnitude thereof, (iii) declines in our market capitalization below our book value, and the magnitude and duration of those declines, (iv) a reorganization resulting in a change to our operating segments, and (v) other macroeconomic factors, such as increases in interest rates that may affect the weighted average cost of capital, volatility in the equity and debt markets, or fluctuations in foreign currency exchange rates that may negatively impact our reported results of operations.
| 9 |
Leases
On its inception date, the Company adopted ASC 842 — Leases (“ASC 842”), which requires lessees to record right-of-use (“ROU”) assets and related lease obligations on the balance sheet, as well as disclose key information regarding leasing arrangements.
ROU assets represent our right to use an underlying asset for the lease terms and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company generally uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
The Company applies ASC No. 718, “Compensation-Stock Compensation,” which requires that share-based payment transactions with employees and nonemployees upon adoption of ASU 2018-07, be measured based on the grant date fair value of the equity instrument and recognized as compensation expense over the requisite service period, with a corresponding addition to equity. Under this method, compensation cost related to employee share options or similar equity instruments is measured at the grant date based on the fair value of the award and is recognized over the period during which an employee is required to provide service in exchange for the award, which generally is the vesting period. In addition to the requisite service period, the Company also evaluates the performance condition and market condition under ASC 718-10-20. For an award which contains both a performance and a market condition, and where both conditions must be satisfied for the award to vest, the market condition is incorporated into the fair value of the award, and that fair value is recognized over the employee’s requisite service period or nonemployee’s vesting period if it is probable the performance condition will be met. If the performance condition is ultimately not met, compensation cost related to the award should not be recognized (or should be reversed) because the vesting condition in the award has not been satisfied.
The Company will recognize forfeitures of such equity-based compensation as they occur.
Income taxes
The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their perspective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded, when necessary, to reduce deferred tax assets to the amount expected to be realized.
As a result of the implementation of certain provisions of ASC 740, Income Taxes (“ASC 740”), which clarifies the accounting and disclosure for uncertainty in tax position, as defined, ASC 740 seeks to reduce the diversity in practice associated with certain aspects of the recognition and measurement related to accounting for income taxes. The Company has adopted the provisions of ASC 740 since inception and has analyzed filing positions in each of the federal and state jurisdictions where the Company is required to file income tax returns, as well as open tax years in such jurisdictions. The Company has identified the U.S. federal jurisdiction, and the states of Texas and California, as its “major” tax jurisdictions. However, the Company has certain tax attribute carryforwards which will remain subject to review and adjustment by the relevant tax authorities until the statute of limitations closes with respect to the year in which such attributes are utilized.
| 10 |
The Company believes that its income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740. The Company’s policy for recording interest and penalties associated with income-based tax audits is to record such items as a component of income taxes.
Commitments and contingencies
In the ordinary course of business, the Company is subject to certain contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters, such as government investigations and tax matters. The Company recognizes its liability for such contingency if it determines it is probable that a loss has occurred and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments including historical and specific facts and circumstances of each matter.
Basic earnings per share are computed by dividing net income attributable to holders of common stock by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share reflect the potential dilution that could occur if securities to issue common stock were exercised.
Recently issued but not yet adopted accounting pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures. The new guidance requires enhanced disclosures about income tax expenses. The Company is required to adopt this guidance in the first quarter of the fiscal year 2026. Early adoption is permitted on a prospective basis. We are currently evaluating the impact of this ASU on our annual income tax disclosures.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures. The new guidance requires enhanced disclosures about significant segment expenses. The Company is required to adopt this guidance for fiscal years beginning after December 15, 2023, and for interim period reporting beginning after December 15, 2024 on a retrospective basis. Early adoption is permitted. The Company adopted this guidance in the first quarter of fiscal year 2025. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements.
In June 2022, FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments in this ASU clarify the guidance in ASC 820 on the fair value measurement of an equity security that is subject to a contractual sale restriction and require specific disclosures related to such an equity security. This standard is effective for fiscal years beginning after December 15, 2024. The Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements.
The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows.
Subsequent events
The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the consolidated financial statements are available to be issued. Material subsequent events that required recognition or additional disclosure in the consolidated financial statements are presented.
Note 3 — Inventories
As of June 30, 2025 and September 30, 2024, inventories consisted of the following:
| June 30, 2025 (unaudited) | September 30, 2024 | |||||||
| Merchandise inventory | $ | $ | ||||||
| Total | $ | $ | ||||||
As
of June 30, 2025 and September 30, 2024, there was
| 11 |
Note 4 — Prepayments and other current assets
As of June 30, 2025 and September 30, 2024, prepayments and other current assets consisted of the following:
| June 30, 2025 (unaudited) | September 30, 2024 | |||||||
| Prepaid marketing and promotional services | $ | $ | ||||||
| Prepaid for software development | ||||||||
| Prepaid insurance | ||||||||
| Prepaid for consulting services | ||||||||
| Loan receivable | ||||||||
| Receivable from sales of equity investment | ||||||||
| Prepaid rent | ||||||||
| Deposits | ||||||||
| Other prepayments and current assets | ||||||||
| Total | $ | $ | ||||||
On
March 28, 2025, the Company sold all of the membership interest it owns in Core Modu LLC to Strucraft Group Limited for a total purchase
price of $
On
February 28, 2025, the Company entered into a loan agreement with HST Trading Limited, providing a principal amount of $
Note 5 — Equity Investments
On
October 14, 2024, the Company entered into an equity investment agreement with an individual, securing a
On
March 28,2025, the Company entered into a Membership Interest Purchase Agreement with Strucraft Group Limited, pursuant to which the
Company sold all of the membership interest it owns in Core Modu LLC, which represents
On
May 28, 2025, the Company entered into an equity investment agreement with Aurora Technology Holding Limited (“Aurora”),
securing a
Note 6 — Goodwill, net
As of June 30, 2025 and September 30, 2024, goodwill consisted of the following:
| Balance at September 30,2024 | $ | |||
| Acquisition | ||||
| Impairment losses | ( | ) | ||
| Balance at June 30, 2025 | $ |
Goodwill
of $
| 12 |
Note 7 — Other payables and accrued liabilities
As of June 30, 2025 and September 30, 2024, other payables and accrued liabilities consisted of the following:
| June 30, 2025 (unaudited) | September 30, 2024 | |||||||
| Other payables and accrued liabilities | $ | $ | ||||||
| Share subscription payable | ||||||||
| Total | $ | $ | ||||||
As
of June 30, 2025, the Company has other payables of $
Note 8 — Loans payable
Short-term loans
Short term loan without interest
From
June 2023 to August 2023, the Company borrowed short-term loans due on demand without interest, amounting to $
Note 9 — Discontinued operations
On
March 4, 2025, the Company entered into a Share Purchase Agreement with Architectix Limited, pursuant to which the Company sold all issued
and outstanding shares it owns in Inno Metal Studs Corp (“IMSC”) and Inno AI Tech Corp (“AT”) for an aggregate
purchase price of $
On
March 28, 2025, the Company entered into a Membership Interest Purchase Agreement with Strucraft Group Limited, pursuant to which the
Company sold all the membership interest it owns in Castor Building Tech LLC (“CBT”), which represents
In accordance with the provisions of ASC 205-20, Presentation of Financial Statements, we have separately reported the assets and liabilities of the discontinued operations of IMSC, AT and CBT in the consolidated balance sheets. The assets and liabilities have been reflected as discontinued operations in the consolidated balance sheets as of June 30, 2025 and September 30, 2024, and consist of the following:
June 30, 2025 (unaudited) | September 30, 2024 | |||||||
| Current assets from discontinued operations | ||||||||
| Cash and cash equivalent | $ | $ | ||||||
| Inventories | ||||||||
| Prepayments and other current assets | ||||||||
| Total current assets from discontinued operations | $ | $ | ||||||
| Non-current assets from discontinued operations | ||||||||
| Right-of-use assets | $ | $ | ||||||
| Property and equipment, net | ||||||||
| Other non-current assets | ||||||||
| Non-current assets from discontinued operations | $ | $ | ||||||
| Current liabilities from discontinued operations | ||||||||
| Accounts payable | $ | $ | ||||||
| Deferred revenue | ||||||||
| Other payables and accrued liabilities | ||||||||
| Other payables – related party | ||||||||
| Operating lease liability – current | ||||||||
| Long-term notes payable – current portion | ||||||||
| Total current liabilities from discontinued operations | $ | $ | ||||||
| Non-current liabilities from discontinued operations | ||||||||
| Notes payable | $ | $ | ||||||
| Total non-current liabilities from discontinued operations | $ | $ | ||||||
| 13 |
In accordance with the provisions of ASC 205-20, we have not included the results of operations from discontinued operations in the results of continuing operations in the consolidated statements of operations. The results of operations from discontinued operations for the three and nine months ended June 30, 2025 and 2024, have been reflected as discontinued operations in the consolidated statements of operations for the three and nine months ended June 30, 2025 and 2024, and consist of the following:
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of sales | ||||||||||||||||
| GROSS PROFIT / (LOSS) | ( | ) | ||||||||||||||
| Selling, general and administrative expenses (exclusive of expenses shown separately below) | ||||||||||||||||
| Impairment loss on goodwill | ||||||||||||||||
| Bad debt expense | ||||||||||||||||
| Depreciation | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| LOSS FROM OPERATIONS | ( | ) | ( | ) | ( | ) | ||||||||||
| Interest income (expenses), net | ( | ) | ( | ) | ( | ) | ||||||||||
| Other non-operating income (expense) | ( | ) | ( | ) | ||||||||||||
| Total other (expenses) income, net | ( | ) | ( | ) | ||||||||||||
| Net loss from discontinued operations | ( | ) | ( | ) | ( | ) | ||||||||||
| Non-controlling interest | ( | ) | ||||||||||||||
| Net loss from discontinued operations to the Company | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| 14 |
In accordance with the provisions of ASC 205-20, we have included the net cash provided by discontinued operations in the consolidated statements of cash flows. The net cash provided by discontinued operations in the consolidated statements of cash flows for the nine months ended June 30, 2025 and 2024, consists of the following:
For the Nine Months Ended (unaudited) | ||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss from discontinuing operation | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net income to cash used in operating activities: | ||||||||
| Non-controlling interest | ||||||||
| Loss from settlement | ||||||||
| Depreciation expense | ||||||||
| Bad debt expense | ||||||||
| Non-cash operating lease expense | ||||||||
| Fixed assets disposal loss | ||||||||
| Loss from investment disposal | ||||||||
| Impairment loss | ||||||||
| Change in discontinued operating assets and liabilities: | ||||||||
| Accounts receivable | ||||||||
| Inventories | ||||||||
| Prepayments and other current assets | ||||||||
| Accounts payable | ( | ) | ||||||
| Unearned revenue | ( | ) | ||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Other payables and accrued liabilities | ( | ) | ( | ) | ||||
| Note payable | ( | ) | ||||||
| Net cash (used in)/ provided by operating activities by discontinued operations | ( | ) | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Fixed assets additions | ( | ) | ( | ) | ||||
| Purchase of investment in equity investee | ||||||||
| Proceed from fixed assets disposal | ||||||||
| Net cash used in investing activities by discontinued operations | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from related parties | ||||||||
| Payments to short-term loans | ( | ) | ||||||
| Payment to long-term note | ( | ) | ||||||
| Net cash provided by financing activities | ( | ) | ||||||
| CHANGES IN CASH AND CASH EQUIVALENT | $ | ( | ) | $ | ||||
Note 10 — Related party transactions
The
Company borrows short term loans without interest from its Former CEO, Mr. Dekui Liu, for operation and cashflow needs from time to time.
As of June 30, 2025, the amount due to Mr. Liu was $. As of September 30, 2024, the amount due to Mr. Liu was $
Starting
in December 2022, for operation and cashflow needs, the Company advances funds from Zfounder Organization Inc., (“Zfounder”),
one of the Company’s minority shareholders, and Wise Hill Inc., (“Wise Hill”), a company owned by a former shareholder
of the Company who also serves as the CEO and Board member of Zfounder. The advanced amounts are non-interest bearing. As of June 30,
2025, and September 30, 2024, the outstanding balance, due to Zfounder and Wise Hill, were $ and $, respectively. During the three
and nine months ended June 30, 2025, other income of employee lease service from Zfounder was $ and $
In
March 2023, the Company entered into an agreement with Vision Opportunity Fund LP, a Florida limited partnership partially owned by a
minority shareholder of the Company, who also serves as the CEO and Board member of Zfounder. In August 2023, all rights, obligations
and interests under the agreement were subsequently assigned by Vision Opportunity Fund LP to its general partner, New Vision 101 LLC
(“Vision 101”). Pursuant to the agreement, the Company agreed to provide supplies and act as project developer for an amount
equal to $
| 15 |
On
October 14, 2024, the Company entered into an equity investment agreement with an individual, securing a
The
Company purchases prefab home, materials and supplies, including design services from Baicheng Trading LLC (“Baicheng”),
a company with a director related to the former Chairwoman. As of June 30, 2025, and September 30, 2024, the outstanding balance of prepayments
to Baicheng was $ and $
On
May 28, 2025, the Company entered into an equity investment agreement with Aurora Technology Holding Limited (“Aurora”),
securing a
Note 11 — Equity
The Company was incorporated in Texas on September 8, 2021. The total authorized shares of capital stock were shares without par value.
On
November 30, 2022,
On
October 9, 2024,
As of March 31, 2025 and September 30, 2024, after giving effect to the stock splits of the outstanding shares of Common Stock, there were and shares of Common Stock issued and outstanding, respectively. The total authorized number of shares of capital stock was shares without par value.
In
December 2022, The Company issued shares of its common stock at a price of $ per share to an accredited investor for $
In
February 2023, The Company issued shares of its common stock at a price of $ per share to an accredited investor for $
In
March 2023, The Company issued shares of its common stock at a price of $ per share to an accredited investor for $
On
June 20, 2023, the Company issued shares of its common stock for a total value of $
| 16 |
The
registration statement for the Company’s Initial Public Offering (the “Offering”) was declared effective on November
9, 2023. The Common Stock commenced trading on the Nasdaq Capital Market (the “Nasdaq”) on December 14, 2023, under the symbol
“INHD.” The closing of the Offering took place on December 18, 2023. On December 18, 2023, in connection with the closing
of the initial public offering of shares (“the Shares”) of its common stock,
The
total gross proceeds from the Offering were $
On
October 31, 2024, the Company entered into a securities purchase agreement with certain investors, providing for the sale and issuance
of shares of the Company’s common stock,
On
November 13, 2024, the Company entered into a securities purchase agreement with nine non-U.S. investors, pursuant to which the Company
agreed to issue and sell in a private placement offering (the “November 2024 Private Placement”) an aggregate of
shares of common stock,
On
December 11, 2024, the Company entered into a securities purchase agreement with nine non-U.S. investors, pursuant to which the Company
agreed to issue and sell in a private placement offering (the “December 2024 Private Placement”) an aggregate of
shares of common stock, no par value, at a purchase price per share of $, for gross proceeds of approximately $
On January 16, 2025, pursuant to the Omnibus Incentive Plan, the Company granted shares of our common stock to our Chief Executive Officer Ding Wei, and shares of our common stock to our Chief Financial Officer Mengshu Shao.
On May 28, 2025, pursuant to 2025 Omnibus Incentive Plan, the Company granted shares of its common stock to the Company’s employees.
On
June 2, 2025, the Company entered into a securities purchase agreement with certain investors, pursuant to which the Company agreed to
issue and sell, in a registered direct offering by the Company directly to the investors (the “June 2025 Offering”), an aggregate
of shares (the “June 2025 Shares”) of its common stock, par value, at a purchase price per share of $. The
June 2025 Offering closed on June 6, 2025 and the Company received gross proceeds of $
On
January 27, 2025, the Company entered into a Standby Equity Purchase Agreement (the “January SEPA”) with certain investors
effective as of January 28, 2025. Pursuant to January SEPA, the Company has the right to issue and sell to the investors, from time to
time, up to $
Note 12 — Concentration of risk
Credit risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.
As
of June 30, 2025 and September 30, 2024, $
Accounts receivable are typically unsecured and derived from revenue earned from customers, thereby exposing the Company to credit risk. The risk is mitigated by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances.
Customer and vendor concentration risk
For
the three and nine months ended June 30, 2025, two customers accounted for
| 17 |
For the three and nine months ended June 30, 2025, two suppliers accounted for % of the Company’s total purchases. For the three and nine months ended June 30, 2024, two suppliers accounted for % and % of the Company’s total purchases, respectively. As of June 30, 2025, $ outstanding of accounts payable. As of September 30, 2024, accounts payable to two suppliers accounted for % of the Company’s total accounts payable.
Note 13 — Commitments and contingencies
From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business.
On
July 23, 2024, the Company reached a settlement with a subcontractor’s customer for $
In
December 2024, a former shareholder of the Company (the “Shareholder”) filed a complaint against the Company and other
entities and individuals affiliated with the Company in the Orange County Superior Court of California, alleging financial losses
related to his investment in entities affiliated with the Company.
Except as set forth above, we are not currently a party to any legal proceeding that we believe would adversely affect our financial position, results of operations, or cash flows and are not aware of any material legal proceedings contemplated by governmental authorities.
Note 14 — Segment Information
Reportable Segments
The Company operates as a single reportable segment, which is consistent with how the Chief Operating Decision Maker (“CODM”), the Chief Executive Officer, allocates resources and assesses performance. The Company’s operations are centralized and integrated, with financial results reviewed and managed on a consolidated basis. Accordingly, management has determined that the Company has one reportable segment under ASC Topic 280, Segment Reporting.
Measure of Segment Profit or Loss
The CODM reviews financial information on a consolidated basis, using Net Income as the primary measure of segment performance to monitor budget versus actual results and decide where to allocate and invest additional resources to achieve continued growth. Net Income is defined as revenue less cost of goods sold and operating expenses, and other segment items (including interest income, interest expense, other income and other expenses), and income taxes.
Significant Segment Expense Categories Provided to the CODM
The CODM regularly receives and reviews the following expense categories, which are included in the segment’s measure of profit or loss.
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | 1,102,300 | - | 1,718,900 | - | ||||||||||||
| Sales and marketing expenses | ||||||||||||||||
| – Marketing service expenses | ||||||||||||||||
| General and administrative expenses | ||||||||||||||||
| – Payroll and stock-based compensation expenses | ||||||||||||||||
| – Professional service expenses | ||||||||||||||||
| – Office related expenses | ||||||||||||||||
| – Lease expenses | ||||||||||||||||
| – Travel expenses | ||||||||||||||||
| Other segment expenses (income), net | ( | ) | ( | ) | ( | ) | ||||||||||
| Income tax expense | ||||||||||||||||
| Net loss from continuing operations | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss from discontinued operations | ( | ) | ( | ) | ( | ) | ||||||||||
The following table presents revenues by geographic area based on the sales location of our products:
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Hong Kong | $ | $ | $ | $ | ||||||||||||
| Total revenue | ||||||||||||||||
For the Three Months Ended June 30, | For the Nine Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Restricted stock: | ||||||||||||||||
| – Stock awards | ||||||||||||||||
| Total | ||||||||||||||||
On January 16, 2025, pursuant to the Omnibus Incentive Plan, the Company granted shares of our common stock to our Chief Executive Officer Ding Wei, and shares of our common stock to our Chief Financial Officer Mengshu Shao. The stock grant does not have vesting period. The price of the granted stocks is based on the closing price of the Company’s stock on grant date, which is $ per share.
On May 28, 2025, pursuant to 2025 Omnibus Incentive Plan, the Company granted shares of its common stock to the Company’s employees. The stock grant does not have vesting period. The price of the granted stocks is based on the closing price of the Company’s stock on grant date, which is $ per share.
Note 16 — Subsequent events
As
of June 30, 2025, the Company is involved in a litigation related to alleged fund transfers. A plaintiff claims that one of the Company’s
subcontractors misappropriated over $
On July 21, 2025, the Company has fully paid the investment amount to Aurora Technology Holding Limited pursuant to the equity investment agreement dated May 28, 2025. The share subscription payable of $ as of June 30, 2025 has been cleared and the balance is zero as of the date of this report.
| 18 |
ITEM 2. - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes that appear elsewhere in this Quarterly Report on Form 10-Q. All share and per-share information presented in this report has been retroactively adjusted to reflect the 1-for-10 reverse stock split of our common stock, which was effective on October 9, 2024. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements as a result of various factors, including those set forth under the heading “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q.
Cautionary Note Regarding Forward-Looking Statements
Some of the information in this document contains, or has incorporated by reference, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements typically are identified by the use of terms such as “may,” “believe,” “anticipate,” “expect,” “plan,” “predict,” “estimate,” “will be,” or other similar words and phrases, although some forward-looking statements are expressed differently. You should be aware that our actual results could differ materially from results anticipated in the forward-looking statements due to a number of factors, including, but not limited to, our ability to effectively operate our business segments, our ability to manage our research, development, expansion, growth, and operating expenses, our ability to evaluate and measure our business, prospects, and performance metrics, our ability to complete, directly and indirectly, and succeed in a highly competitive and evolving industry, our ability to respond and adapt to changes in technology and customer behavior, our ability to protect our intellectual property and to develop, maintain, and enhance a strong brand, and other factors relating to our industry, operations, and results of operations. You should also consider carefully the statements under “Risk Factors,” as disclosed in our Form 10-K, which address additional factors that could cause our actual results to differ from those set forth in the forward-looking statements. Given these uncertainties, current or prospective investors are cautioned not to place undue reliance on any such forward-looking statements. We undertake no obligation to update any such factors or forward-looking statements to reflect future events or developments.
Overview
We are a building technology company that primarily manufactures cold-formed-steel members and offers a full range of services required to transform raw materials into precise steel framing products and prefabricated homes. We transform raw material (coils of rolled steel of various gauges and other materials) through our proprietary technologies to cut, punch and bend the steel into members or other components. These work-in-process components are further processed into finished products which are used in a variety of building types, including residential, commercial, industrial, and infrastructure.
Since the quarter ended December 31, 2024, we have introduced a new business of electronic products trading. We source and purchase electronic devices, including pre-owned smartphones, tablets, and laptops, from suppliers in Asia, and sell these products to wholesale clients and retail customers in Southeast Asia, Europe and other areas.
| 19 |
Recent Developments
Disposition of Subsidiary
On April 8, 2025, the Company entered into a Share Purchase Agreement with Strucraft Group Limited, pursuant to which the Company sold all issued and outstanding shares it owns in Inno Disrupts Inc. for an aggregate purchase price of $100.
Investment in Aurora Technology Holding Limited
On May 28, 2025, the Company entered into an equity investment agreement with Aurora Technology Holding Limited (“Aurora”), securing a 16.67% ownership interest in Aurora, and for which the Company does not have the ability to exercise significant influence. The investment totaled $1 million.
June Securities Purchase Agreement
On June 2, 2025, the Company entered into a securities purchase agreement with certain investors, pursuant to which the Company agreed to issue and sell, in a registered direct offering by the Company directly to the investors (the “June 2025 Offering”), an aggregate of 1,058,000 shares (the “June 2025 Shares”) of its common stock, no par value, at a purchase price per share of $0.50. The June 2025 Offering closed on June 6, 2025 and the Company received gross proceeds of $529,000.
July Standby Equity Purchase Agreement
On July 4, 2025, the Company entered into a standby equity purchase agreement (“July SEPA”) with certain investors (each, an “Investor” and collectively, the “Investors”), a copy of which is filed as Exhibit 10.1 to the Company’s Form 8-K filed July 8, 2025. Pursuant to the July SEPA, the Company has the right, but the not the obligation, to issue and sell to those certain investors, from time to time, up to $6 million worth of shares (the “Shares”) of the Company’s common stock, no par value per share. Under the July SEPA, the Company may, at its discretion, issue and sell Shares (“Advance”) to the Investors in accordance with their allocated commitment (“Investor Allocation”) by delivering written notice (“Advance Notice”). Each Advance will be for at least $500,000. An advance to any Investor may not exceed the greater of 9.99% of the outstanding shares of Common Stock held by such Investor, unless otherwise agreed in writing. Any portion of an Advance that would exceed this limitation for any Investor will automatically be withdrawn with no further action required by the Company, and such Advance Notice will be deemed automatically modified to reduce the aggregate amount of the requested Advance by an amount equal to such withdrawn portion for that Investor. In such cases, the Investor will promptly notify the Company of the adjustment.
The July SEPA will automatically terminate on the earlier of (i) three years from the Effective Date (as defined therein) and (ii) the date on which the Investors have made payment of Advances equal to their respective portion of the Commitment Amount (as defined therein). The Company has the right to terminate the July SEPA without liability or penalty by providing five trading days’ prior written notice to the Investors, provided that there are no outstanding Advance Notices requiring the issuance of Shares.
| 20 |
Key Performance Indicators (“KPIs”)
In addition to the measures presented in our consolidated financial statements, our management regularly monitors certain KPIs for our business. The KPIs used by the Company include:
The capital turnover rate of raw-material procurement
Our business is reliant on timely delivery of raw materials. At the same time, our primary raw material (steel) is expensive to warehouse. We strive to achieve roughly 1-3 months of raw materials inventory to balance our cost of inventory against the risk of not having raw materials when needed. We do this by setting up long-term cooperative relationship with multiple local and national suppliers, including steel mills, in order to obtain a better payment cycle to secure the raw materials and to maximize the use of funds. At the same time, to match the raw-material usage of the sales order each quarter, we make quarterly purchase plans, to ensure the efficiency of capital turnover is higher.
The collection period of accounts receivable
Timely payments from customers are essential to a successful business. Based on our historical collectability experience, we will target strategic relationships with large-scale homebuilders and professional companies to reduce the risk associated with accounts receivable and reduce the days outstanding for accounts receivable. Eventually, we expect to achieve the goal of receiving 100% of the payment before products leave the shop.
Lead time
Construction requires the coordination of many contractors, subcontractors, permitting, etc. that must be done on very exacting schedules where any delays will have a ripple effect down the chain. While there are many things we cannot control, we strive to communicate with the customers at a high frequency and make the best production arrangement to minimize storage period and shorten the lead time, which is one of the most important operating indicators of INNO.
The growth of total operating income
We maintain internal long-term targets for both gross profit and operating income, based partly on long-term revenue growth targets and partly on execution and internal controls. Ultimately, we strive to deliver profitable long-term growth.
Results of Operation
The following table presents certain Consolidated statement-of-operations information and presentation of that data as a percentage of change from year to year.
For the Three Months Ended June 30, 2025, and 2024
| Three Months Ended June 30, | ||||||||||||
| 2025 | 2024 | |||||||||||
| Revenues | $ | 1,086,250 | - | 100 | % | |||||||
| Costs of goods sold | 1,102,300 | - | 100 | % | ||||||||
| Selling, general and administrative expenses (exclusive of items shown separately below) | 1,544,590 | 188,667 | 719 | % | ||||||||
| Operating loss | (1,560,640 | ) | (188,667 | ) | 727 | % | ||||||
| Other income (expenses) | 14,352 | 19,059 | -25 | % | ||||||||
| Loss before income taxes | (1,546,288 | ) | (169,608 | ) | 812 | % | ||||||
| Income tax expense | - | - | - | % | ||||||||
| Net profit/(loss) from discontinued operations | - | (881,273 | ) | -100 | % | |||||||
| Net loss | (1,546,288 | ) | (1,050,881 | ) | 47 | % | ||||||
| Non-controlling interest | - | 13,821 | -100 | % | ||||||||
| Net loss attributable to Inno Holdings Inc. | $ | (1,546,288 | ) | (1,064,702 | ) | 45 | % | |||||
For the Nine Months Ended June 30, 2025, and 2024
| Nine Months Ended June 30, | ||||||||||||
| 2025 | 2024 | |||||||||||
| Revenues | $ | 1,760,350 | - | 100 | % | |||||||
| Costs of goods sold | 1,718,900 | - | 100 | % | ||||||||
| Selling, general and administrative expenses (exclusive of items shown separately below) | 3,425,985 | 664,665 | 415 | % | ||||||||
| Impairment loss | 3,514 | - | 100 | % | ||||||||
| Operating loss | (3,388,049 | ) | (664,665 | ) | 410 | % | ||||||
| Other income (expenses) | (2,117,120 | ) | 230,091 | -1020 | % | |||||||
| Loss before income taxes | (5,505,169 | ) | (434,574 | ) | 1167 | % | ||||||
| Income tax expense | 800 | -100 | % | |||||||||
| Net profit/(loss) from discontinued operations | (195,796 | ) | (2,526,698 | ) | -92 | % | ||||||
| Net loss | (5,700,965 | ) | (2,962,072 | ) | 92 | % | ||||||
| Non-controlling interest | 69,517 | (35,395 | ) | -296 | % | |||||||
| Net loss attributable to Inno Holdings Inc. | $ | (5,770,482 | ) | (2,926,677 | ) | 97 | % | |||||
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Revenues
Revenue for the three months ended June 30, 2025 increased 100% to $1,086,250 in comparison to $Nil for the three months ended June 30, 2024. Revenue for the three months ended June 30, 2025 consists solely of the Company’s new business of electronic products trading that started during this period. The new business of electronic products trading contributes to the increase in revenue for the three months ended June 30, 2025 against the comparable period in 2024.
Our revenues are significantly impacted by demand for economic conditions including costs of labor, materials and other variables that impact the cost of our finished goods. We cannot ensure that growth will continue, and our business may be adversely affected by the negative overall economic conditions currently being experienced.
Costs of Goods Sold
Cost of Goods Sold (COGS) includes electronic products purchased from our suppliers. COGS for the three months ended June 30, 2025, increased to $1,102,300 in comparison to $Nil for the three months ended June 30, 2024. COGS for the three months ended June 30, 2025 consists solely of electronic products purchased from our suppliers in the Company’s new business of electronic products trading that started during this period. The new business of electronic products trading contributes to the increase in COGS for the three months ended June 30, 2025 against the comparable period in 2024.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the three months ended June 30, 2025, increased 719% to $1,544,590 in comparison to $188,667 for the comparable period in 2024. The main reason for the increase was due to a stock compensation given to the Company’s employees on May 2025.
Operating Loss
Operating loss was $1,560,640 for the three months ended June 30, 2025, in comparison to an operating loss of $188,667 for the comparable period in 2024. The increase in operating loss was primarily attributed to the increase in selling, general and administrative expenses, as discussed above.
Other Income (Expense)
Other income for the three months ended June 30, 2025, was $14,352, in comparison to other income of $19,059 for the comparable period in 2024. Other income for the three months ended June 30, 2025, primarily consisted of a $14,549 interest income. In contrast, other expenses for the three months ended June 30, 2024, were primarily consisted of a loss from a settlement with a subcontractor’s customer, partially offset by a gain from a liability settlement with the landlord and interest income from bank deposits.
Net Loss
Net loss for the three months ended June 30, 2025 was $1,546,288, in comparison to net loss of $1,050,881 for the three months ended June 30, 2024. The increase in net loss was primarily due to changes in revenue, costs and expenses as outlined above.
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Liquidity and Capital Resources
Sources of Liquidity
During the three months ended June 30, 2025 and 2024, we primarily funded our operations with cash generated from operations, private shares offering, as well as through borrowing under our revolving line of credit, a long term promissory note, and related parties. We had cash of $4,385,289 as of June 30, 2025 compared to $1,077,138 of cash as of September 30, 2024. The cash increase was primarily due to the proceeds from the several private-placement offerings during the quarter ended December 31, 2024 and the quarter ended June 30, 2025, and offset by the cash usage in operating and investing activities during the periods ended June 30, 2025.
The Company has participated in several private-placement offerings during the quarter ended December 31, 2024. On October 31, 2024, the Company entered into a securities purchase agreement with certain investors, providing for the sale and issuance of 500,000 shares of the Company’s common stock, no par value, for an aggregate purchase price of $2,000,000 at $4.00 per share (the “October 2024 Private Placement”). The offering closed on November 6, 2024.
On November 13, 2024, the Company entered into a securities purchase agreement with nine non-U.S. investors, pursuant to which the Company agreed to issue and sell in a private placement offering (the “November 2024 Private Placement”) an aggregate of 729,167 shares of common stock, no par value, at a purchase price per share of $4.80, for gross proceeds of approximately $3.5 million, of which proceeds will be used for working capital and other general corporate purposes. The offering closed on December 13, 2024.
On December 11, 2024, the Company entered into a securities purchase agreement with nine non-U.S. investors, pursuant to which the Company agreed to issue and sell in a private placement offering (the “December 2024 Private Placement”) an aggregate of 700,000 shares of common stock, no par value, at a purchase price per share of $2.50, for gross proceeds of approximately $1.75 million, of which proceeds will be used for working capital and other general corporate purposes. The offering closed on December 23, 2024.
On June 2, 2025, the Company entered into a securities purchase agreement with certain investors, pursuant to which the Company agreed to issue and sell, in a registered direct offering by the Company directly to the investors (the “June 2025 Offering”), an aggregate of 1,058,000 shares (the “June 2025 Shares”) of its common stock, no par value, at a purchase price per share of $0.50. The June 2025 Offering closed on June 6, 2025 and the Company received gross proceeds of $529,000.
On January 27, 2025, the Company entered into a Standby Equity Purchase Agreement (the “January SEPA”) with certain investors effective as of January 28, 2025. Pursuant to January SEPA, the Company has the right to issue and sell to the investors, from time to time, up to $15 million worth of shares of the Company’s common stock, no par value per share, subject to the terms and conditions specified in the January SEPA. On June 20,2025, the Company issued and sold an aggregate of 1,400,000 shares (the “January 2025 SEPA Shares”) of its common stock at a purchase price per share of $0.75, pursuant to January SEPA.
We do not believe the cash and cash equivalents on hand as of June 30, 2025 of $4,385,289 will be sufficient to fund our operations and capital expenditure requirements for the next twelve months from the date the consolidated financial statements are issued. We will be required to raise additional capital to continue to fund operations and capital expenditure. The uncertainties surrounding our ability to access capital when needed creates substantial doubt about our ability to continue as a going concern. Based on our need to raise additional funds to implement our business plans for the next twelve months, we have included a discussion concerning the presentation of our financial statements on a going concern basis in the notes to our consolidated financial statements. We will be required in the near future to issue debt or sell our Company’s equity securities in order to raise additional cash, although there are no firm arrangements in place for any such financing at this time. We cannot provide any assurances as to whether we will be able to secure the necessary financing, or the terms of any such financing transaction if one were to occur. The failure to secure such financing could severely curtail our plans for future growth or in more severe scenarios, the continued operations of our Company.
Working Capital
As of June 30, 2025 and September 30, 2024, our working capital (deficit) was $6,950,863 and $975,755, respectively. The historical seasonality in our business and our capital raising activities during the year can cause cash and cash equivalents, inventory, and accounts payable to fluctuate, resulting in changes in our working capital.
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Cash Flows
Operating Activities
For the nine months ended June 30, 2025, net cash used in operating activities was $3,704,646, primarily driven by the net loss from continuing operation of $5,505,169 and net loss from discontinuing operation of $265,313, partially offset by non-cash items of stock-based compensation expense of $2,185,205 and loss from investment disposal of $2,152,522, and working capital used cash of $1,872,943, which was primarily driven by a $1,026,834 increase in prepayments and other current assets, a $2,058,800 increase in inventories and a $805,579 increase in accounts payable, and operating cash flow used by discontinued operations of $398,948.
For the nine months ended June 30, 2024, net cash used in operating activities was $4,861,753, primarily driven by the net loss from continuing operation of $435,374 and net loss from discontinuing operation of $2,491,303, partially offset by non-cash items of $83,333 and working capital used cash of $2,905,023, which was primarily driven by a $2,775,684 increase of prepayments and other current assets, and a $77,638 decrease in accounts payable, accounts payable - related party, unearned revenue, operating lease liabilities and other current liabilities, and operating cash flow used by discontinued operations of $886,614.
Investing Activities
For the nine months ended June 30, 2025, net cash used in investing activities was $1,522,453 and was primarily the result of investment in equity investee of $1,000,000, which is related to the investment in Aurora Technology Holding Limited.
For the nine months ended June 30, 2024, net cash used in investing activities was $412,231 and was mainly related to the purchase of machinery, tools, motor vehicles, and leasehold improvements by discontinued operations.
Financing Activities
Net cash provided by financing activities was $8,535,250 and $7,157,803, respectively, for the nine months ended June 30, 2025 and 2024.
For the nine months ended June 30, 2025, net cash provided by financing activities was due to the $8,535,250 net cash from the several private-placement offerings.
For the nine months ended June 30, 2024, net cash provided by financing activities was primarily due to the $8,450,000 net cash from the initial public offering, offset by $627,000 repayment to related parties and $180,000 payment of short-term loans and $472,197 used in financing activities by discontinued operations.
Critical Accounting Policies and Estimate
The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires us to make judgments, assumptions, and estimates that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Note 2 — Basis of Presentation and Summary of significant accounting policies in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of our most recently filed Form 10-K, describes the significant accounting policies and methods used in the preparation of the Consolidated Financial Statements. Our critical accounting estimates, identified in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our most recently filed Form 10-K, include the discussion of estimates used for revenue recognition, inventory valuation, going concern assessment, and our provision for income taxes. Such accounting estimates require significant judgments and assumptions to be used in the preparation of the Condensed Consolidated Financial Statements included in this Form 10-Q, and actual results could differ materially from the amounts reported.
New Accounting Standards
From time to time, the FASB or other standards-setting bodies issue new accounting pronouncements. Updates to the FASB Accounting Standards Codification are communicated through issuance of an Accounting Standards Update. To understand the impact of recently issued guidance, whether adopted or to be adopted, please review the information provided in Note 2 — Basis of Presentation and Summary of significant accounting policies, “Recently issued but not yet adopted accounting pronouncements”, in the Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q. Unless otherwise discussed, we believe that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on our Condensed Consolidated Financial Statements upon adoption.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this item.
ITEM 4. CONTROLS AND PROCEDURES.
Disclosure Controls and Procedures
An evaluation was performed under the supervision of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report. Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that, as of June 30, 2025, our disclosure controls and procedures were not effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms due to material weaknesses in our internal controls described below.
| ● | Lack of adequate policies and procedures in internal control function to ensure that proper control and procedures have been designed and implemented over key business cycles. |
We plan to hire additional personnel or consultant with relevant experience and qualifications to design and implement internal control over key business cycles to strengthen the internal control system. However, we cannot assure you that we will remediate our material weaknesses in a timely manner.
Inherent Limitations Over Internal Controls
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Our control systems are designed to provide such reasonable assurance of achieving their objectives. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Changes in Internal Control over Financial Reporting
There have not been any changes in our internal controls over financial reporting during the period ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
As of June 30, 2025, the Company is involved in a litigation related to alleged fund transfers. A plaintiff claims that one of the Company’s subcontractors misappropriated over $1.3 million from a construction project in 2020-2021, transferring the funds to the company instead of fulfilling a judgment. On July 9, 2025, the Company entered into the Settlement and Release Agreement with the plaintiff that for the Settlement Payment, the plaintiff permanently releases, acquits, and discharges Inno Holdings Inc. and its affiliates from all claims, liabilities, and obligations of any kind. This includes all known and unknown claims up to the Settlement and Release Agreement’s effective date, specifically those related to the Lawsuit or any federal, state, or local laws. The Settlement Payment has been paid to the plaintiff on July 15, 2025.
From time to time, we become involved in legal proceedings arising in the ordinary course of our business. We believe that we do not have any threatened litigation which, individually or in the aggregate, would have a material adverse effect on our business, results of operations, financial condition and/or cash flows.
ITEM 1A. RISK FACTORS.
As a “smaller reporting company,” as defined by Rule 12b-2 of the Exchange Act, we are not required to provide the information in this Item. In any event, there have been no material changes in our risk factors as previously disclosed in our 2024 Annual Report on Form 10-K filed with the SEC on December 9, 2024.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
(A) Unregistered Sales of Equity Securities
On October 31, 2024, the Company entered into a securities purchase agreement with certain investors (the “October 2024 Investors”) providing for the sale and issuance of 500,000 shares of the Company’s common stock (the “October 2024 Shares”) for an aggregate purchase price of $2,000,000 at $4.00 per share. The offering closed on November 6, 2024. The issuance of the shares was made pursuant to the exemption from registration provided under Section 4(a)(2) of the Securities Act.
In connection with the October 2024 Private Placement, the Company entered into a registration rights agreement with the October 2024 Investors, pursuant to which, among other things, the Company was required to prepare and file with the SEC one or more registration statements to register for the resale of the shares issued in the October 2024 Private Placement. On December 27, 2024, the Company filed a prospectus supplement to the Registration Statement on Form S-3 (File No. 333-284054) (the “Form S-3”), filed with the SEC on December 27, 2024, registering the October 2024 Shares. The Form S-3 was declared effective by the SEC on January 10, 2025.
On November 13, 2024, the Company entered into a securities purchase agreement with nine non-U.S. investors (the “November 2024 Investors”) pursuant to which the Company agreed to issue and sell in a private placement offering an aggregate of 729,167 shares of common stock (the “November 2024 Shares”) at a purchase price per share of $4.80, for gross proceeds of approximately $3.5 million, of which proceeds will be used for working capital and other general corporate purposes. The November 2024 Private Placement closed in two tranches, with the initial issuance of 277,083 shares on November 20, 2024 and the subsequent issuance of 452,084 shares on December 13, 2024. The issuance and sale of the shares were exempt from registration under the Securities Act, pursuant to Rule 903 of Regulation S under the Securities Act because all of the investors were non-U.S. Persons (as defined under Rule 902 Section (k)(2)(i) of Regulation S).
In connection with the November 2024 Private Placement, the Company entered into a registration rights agreement with the November 2024 Investors, pursuant to which, among other things, the Company was required to prepare and file with the SEC one or more registration statements to register for the resale of the shares issued in the November 2024 Private Placement. On December 27, 2024, the Company filed a prospectus supplement to the Form S-3, filed with the SEC on December 27, 2024, registering the November 2024 Shares. The Form S-3 was declared effective by the SEC on January 10, 2025.
On December 11, 2024, the Company entered into a securities purchase agreement with nine non-U.S. investors (the “December 2024 Investors”) pursuant to which the Company agreed to issue and sell in a private placement offering an aggregate of 700,000 shares of common stock (the “December 2024 Shares”) at a purchase price per share of $2.50, for gross proceeds of approximately $1.75 million, of which proceeds will be used for working capital and other general corporate purposes. The offering closed on December 23, 2024. The issuance and sale of the shares were exempt from registration under the Securities Act, pursuant to Rule 903 of Regulation S under the Securities Act because all of the investors were non-U.S. Persons (as defined under Rule 902 Section (k)(2)(i) of Regulation S).
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In connection with the December 2024 Private Placement, the Company entered into a registration rights agreement with the December 2024 Investors, pursuant to which, among other things, the Company was required to prepare and file with the SEC one or more registration statements to register for the resale of the shares issued in the December 2024 Private Placement. On December 27, 2024, the Company filed a prospectus supplement to the Form S-3 filed with the SEC on December 27, 2024, registering the December 2024 Shares. The Form S-3 was declared effective by the SEC on January 10, 2025.
On June 2, 2025, the Company entered into a securities purchase agreement with certain investors, pursuant to which the Company agreed to issue and sell, in a registered direct offering by the Company directly to the investors (the “June 2025 Offering”), an aggregate of 1,058,000 shares (the “June 2025 Shares”) of its common stock, no par value, at a purchase price per share of $0.50. The June 2025 Offering closed on June 6, 2025 and the Company received gross proceeds of $529,000. The June 2025 Shares were offered pursuant to a prospectus supplement dated June 4, 2025, filed with the SEC pursuant to Rule 424(b)(5) promulgated under the Securities Act, and the accompanying base prospectus dated December 26, 2024, which together form part of the “shelf” registration statement on Form S-3, which was declared effective by the SEC on January 10, 2025.
On January 27, 2025, the Company entered into a Standby Equity Purchase Agreement (the “January SEPA”) with certain investors effective as of January 28, 2025. Pursuant to January SEPA, the Company has the right to issue and sell to the investors, from time to time, up to $15 million worth of shares of the Company’s common stock, no par value per share, subject to the terms and conditions specified in the January SEPA. On June 20,2025, the Company issued and sold an aggregate of 1,400,000 shares (the “January 2025 SEPA Shares”) of its common stock at a purchase price per share of $0.75, pursuant to January SEPA. The January 2025 SEPA Shares were offered pursuant to a prospectus supplement dated June 17, 2025, filed with the SEC pursuant to Rule 424(b)(5) promulgated under the Securities Act, and the accompanying base prospectus dated December 26, 2024, which together form part of the “shelf” registration statement on Form S-3, which was declared effective by the SEC on January 10, 2025.
(B) Use of Proceeds
Not applicable.
(C) Issuer Purchases of Equity Securities
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
None.
ITEM 5. OTHER INFORMATION.
During
the quarter ended June 30, 2025, no director or officer of the Company
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ITEM 6. EXHIBITS
EXHIBIT INDEX
| 101.INS* | Inline XBRL Instance Document | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibits 101). |
| * | Filed or furnished herewith. |
| ++ | Exhibits and Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish a supplemental copy of any such omitted Exhibit or Schedules to the Securities and Exchange Commission upon request. |
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| INNO HOLDINGS, INC. | ||
| Date: July 28, 2025 | By: | /s/ Ding Wei |
| Ding Wei | ||
Chief Executive Officer (Principal Executive Officer) | ||
| Date: July 28, 2025 | By: | /s/ Mengshu Shao |
| Mengshu Shao | ||
Chief Financial Officer (Principal Financial and Accounting Officer) | ||
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