INHD Inno Holdings Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-K

 

☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934:

 

For the fiscal year ending September 30, 2024

 

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934:

 

For the transition period from __________ to __________.

 

Commission file number: 001-41882

 

INNO HOLDINGS INC.

(Exact name of registrant as specified in its charter)

 

Texas		87-4294543
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

 

2465 Farm Market 359 South, Brookshire, TX 77423

(Address of principal executive offices, including ZIP Code)

 

 

(800) 909-8800

(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
Common stock, no par value		INHD		The Nasdaq Stock Market

 

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. Yes ☒ No ☐

 

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). Yes ☒ No ☐

 

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 ☐
Non-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 March 31, 2024, the last business day of the Registrant’s most recently completed second fiscal quarter, the aggregate market value of the voting common stock held by non-affiliates of the Registrant (without admitting that any person whose shares are not included in such calculation is an affiliate) was $2,798,633.

 

As of December 3, 2024, there were 3,057,043 shares of common stock, no par value, issued and outstanding.

 

DOCUMENTS INCORPORATED BY REFERENCE

 

None.

 

 

 

Table of Contents

 

		Page
PART I
ITEM 1:	BUSINESS	1
ITEM 1A:	RISK FACTORS	15
ITEM 1B:	UNRESOLVED STAFF COMMENTS	15
ITEM 1C:	CYBERSECURITY	15
ITEM 2:	PROPERTIES	16
ITEM 3:	LEGAL PROCEEDINGS	16
ITEM 4:	MINE SAFETY DISCLOSURES	16
PART II
ITEM 5:	MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND PURCHASES OF EQUITY SECURITIES	17
ITEM 6:	[RESERVED]	19
ITEM 7:	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION	19
ITEM 7A:	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	25
ITEM 8:	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	F-1
ITEM 9:	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	26
ITEM 9A.	CONTROLS AND PROCEDURES	26
ITEM 9B:	OTHER INFORMATION	26
ITEM 9C	DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	26
PART III
ITEM 10:	DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE	27
ITEM 11:	EXECUTIVE COMPENSATION	32
ITEM 12:	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	35
ITEM 13:	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	36
ITEM 14:	PRINCIPAL ACCOUNTING FEES AND SERVICES	38
PART IV
ITEM 15:	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	38
ITEM 16:	FORM 10-K SUMMARY	39
SIGNATURES		40

 

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This annual report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may appear throughout this annual report, including in the following sections: “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties that may cause actual results to differ materially. When used in this annual report, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions, as they relate to us or our management, identify forward-looking statements. Such statements include, but are not limited to, statements contained in this annual report relating to our business strategy, our future operating results, and our liquidity and capital-resources outlook. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. They are neither statements of historical fact nor guarantees of assurance of future performance. We caution you, therefore, against relying on any of these forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation:

 

●

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 compete, 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, our operations, and results of operations.

 

Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.

 

Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

 

USE OF CERTAIN DEFINED TERMS

 

Unless the context otherwise requires, in this annual report on Form 10-K references to:

 

	●	the “Company,” “INNO,” the “registrant,” “we,” “our,” or “us” mean INNO HOLDINGS INC. and its subsidiaries;
	●	“year” or “fiscal year” means the year ending September 30;
	●	all dollar or $ references, when used in this prospectus, refer to United States dollars;
	●	“framing” means the process of connecting building materials together to create a structure;
	●	“stud” means a vertical framing member which forms part of a wall or partition, also known as a wall stud, a fundamental component of frame construction;
	●	“truss” means a web-like roof design that uses tension and compression to create strong, light components that can span a long distance;
	●	“joist” means a horizontal structural member used in framing to span an open space, often between beams that subsequently transfer loads to vertical members;
	●	“cold-formed steel” or “CFS” or “light-gauge steel” or “LGS” means steel products shaped by cold-working processes carried out near room temperature, such as rolling, pressing, stamping, bending, etc.;
	●	“turnkey cost” is the total cost that must be covered before a product or service is ready to be sold and used by consumers;
	●	“prefab” means a building manufactured in sections to enable assembly on site.

 

 

PART I

 

ITEM 1. BUSINESS

 

Overview

 

INNO HOLDINGS INC. (“INNO,” “we,” “us,” or “Company”) is an innovative building-technology company with a mission to transform the construction industry with our proprietary cold-formed steel-framing technology and other building innovations. INNO recognized the inherent inefficiency and waste in traditional lumber-based construction techniques and sought to develop steel-based construction technologies to solve the problems. INNO takes its name from “innovation” and is committed to the research and development of steel studs/tracks/headers, providing higher performance and greater efficiencies in all aspects of construction, making better structural solutions for both commercial and residential buildings, resulting in substantial labor cost savings, in our view. The Company’s products are created using a combination of intelligent machines and cutting-edge techniques to provide an optimal design solution of framing for engineers, builders, and construction companies. We are currently a manufacturer of cold-formed-steel members and we offer a full range of services required to transform raw materials into precise steel framing products and prefabricated homes. We sell these finished products either to businesses or directly to customers. The finished products and cold-formed-steel members are used in a variety of building types, including residential, commercial, industrial, and infrastructure. We hope to transform the building industry by reducing construction times while providing more affordable, environmentally sustainable, and durable solutions compared to traditional construction materials and methods. We believe we are also well positioned to disrupt the construction industry, which now accounts for $10 trillion of the global economy.

 

We work with our customers to manufacture products in accordance with the customers’ drawings and specifications. Our work complies with specific national and international codes and standards applicable to the construction industry. We believe that we have earned our reputation through outstanding technical expertise, attention to detail, and a total commitment to excellence in customer service.

 

Our primary manufacturing operations are located on approximately five acres in Brookshire, Texas. Our facility houses state-of-the-art equipment that gives us the capability to manufacture 15,000 linear feet of product per day. We offer a full range of services such as structural designs, metal stud production, and preassembly of metal studs into steel wall panels, which are required to transform raw materials into finished products that are compliant with local building codes. Our manufacturing capabilities include fabrication operations, such as cutting, punching, forming and assembling, and machine operations, which includes computer numerical controlled (“CNC”) machine operations. We also provide support services for our manufacturing capabilities: manufacturing engineering (planning, fixture and tooling development, and manufacturing), quality control (inspection and testing), materials procurement, production control (scheduling, project management, and expediting), and final assembly.

 

All manufacturing at our facility is done in accordance with our written quality assurance program, which meets specific national codes as well as international codes, standards, and specifications. For example, we have ICC-ES evaluation reports (ESR-4641) that show that our cold-formed steel-framing members are compliant with the 2018 and 2015 International Building Code (“IBC”), 2019 California Building Code (“CBC”), and 2020 Florida Building Code. The standards used for each customer project are specific to each customer’s needs, and we have implemented those standards into our manufacturing operations.

 

In 2024, we successfully launched a new revenue stream through our newly established subsidiary, Inno AI Tech Corp., which specializes in research and consulting services.

 

Our Products

 

Cold-Formed Steel Framing

 

Cold-formed steel is the material of choice to lower building costs and adapt to modular or off-site buildings. It is consistent in quality and form, and it can be shipped preassembled or it can be assembled on-site by workers with little training. Our steel roof trusses, wall panels, and joist systems are a cost-effective noncombustible alternative to traditional building materials. They are now commonly used to build apartments, hotels, temporary housing, nursing homes, commercial buildings, industrial buildings, and single-family detached homes. These types of structures are expected to be the targets of our Company’s sales and marketing team.

 

 

Our proprietary cold-formed roller machines are equipped with proprietary software, which optimizes production efficiency and supports individual part customization to ensure each cold-formed-steel member is produced to the exact specifications of the plans. Our intelligent machines can precisely cut and punch out steel studs, leaving channels for the mechanical, electrical, and plumbing designs. We arrive at an accurate, comprehensive, and information-rich design model with the utilization of light-gauge steel-framing engineering software, which creates a digital model of the project that includes all functional systems, geometric features, and aesthetics, such as electrical wiring, air conditioning, doors, and windows. The light-gauge steel-framing engineering software is a shared multidisciplinary resource that allows collaborators to achieve maximum efficiency and effectiveness by compressing design lead time. We have created a full BIM solution that instructs our advanced cold-formed roller machines to produce each steel-framing piece to certain specifications.

 

After the design phase, our top-quality raw materials are processed on several production lines, each with made-to-order specific dimensions, screw holes, and cross-cut stitching. These customizations reduce the need for on-site manual calculations and simplify the assembling steps, both of which increase construction efficiency and reduce labor costs. All steel-framing products produced by our Company are International Code Council (ICC) certified. The International Code Council is the leading global source of model codes and standards and building safety solutions that include product evaluation, accreditation, technology, training, and certification. The Code Council’s codes, standards, and solutions are used to ensure safe, affordable, and sustainable communities and buildings worldwide.

 

Our modular steel building framing systems avoid construction delays caused by partial or unsynchronized delivery of different building components. By breaking away from the methods of traditional stick-built building, our customers report that their construction timelines have been reduced by at least 20%.

 

Castor Cube

 

Due to high housing prices, some are having difficulties purchasing a home. Housing market trends have shown a gradual preference for modular homes, which is a prefabricated building that consists of repeated sections called modules, and involves constructing sections away from the building site, then delivering them to the intended site where the installation is completed. We believe demand for prefab homes is on an upward growth trend in the United States. According to the Straits Research Institute, North America’s share of the global modular building market was valued at $28 billion in 2021 and is expected to grow to $53 billion by 2030, representing a CAGR of 7%. According to the summary of an IBISWorld report titled, “Prefabricated Home Manufacturing in the US — Market Size 2002-2029,” the prefabricated home manufacturing market size in the U.S. is expected to be $9.1 billion in 2023. We expect to capitalize on this trend by providing high-quality and affordable modular homes.

 

Most consumers are drawn to prefab homes because of their cost-effectiveness, efficiency, and permanent property characteristics. Castor Cube is a low-maintenance, single-story, 743-square-foot manufactured home with 4 color options that can resist earthquakes, withstand winds, and prevent pests. It is a cold-formed-steel building system equipped with honeycomb panels, and it is designed to maximize the strength-to-weight value. As a result, it yields high structural stability. Castor Cube can be built on a foundation or used as a mobile home.

 

The Castor Cube can be built on a foundation steel chassis, which can be single or used as a mobile multi-sectioned. We are expanding and improving our facility in Texas and anticipate that this modular home product will be completely constructed within the next couple years. Once built, it will be transported to permanent locations for installation. The timeline for product delivery is not affected by weather since it will be manufactured in our 100% climate-controlled factory. Furthermore, we expect that streamlined building process will shorten the completion time.

 

Mobile Factory: Off-site Equipment Rental, Sales, Service, and Support

 

We believe innovative technology can increase productivity in the building sector. Research and development of more efficient methods in the manufacturing and building space is at the forefront of our business model.

 

 

Our Mobile Factory is an all-in-one, secured production facility that will produce steel-framing members onsite. It can print wall panels, floor truss, and roof truss components. The size is customized for a trailer, which enables it to be transported anywhere, ranging from metropolitan suburbs to remote areas with little to no infrastructure. It is designed to enable immediate stud production on any site.

 

Our Mobile Factory is complete with metal stud production equipment and a diesel generator. This generator can supply continuous power to our cold-formed roller machine. The production capacity of our Mobile Factory is at least 1,000 linear feet per day. We believe this innovation is the good solution for urgent deployment in disaster areas or remote areas. It is designed to reduce the cost and time of transportation of metal studs, which we believe can drive a lower carbon footprint for larger projects.

 

The Mobile Factory is operated and managed by Internet of Things (“IoT”) technology, a network of physical objects that are embedded with sensors, software and other technologies for the purpose of connecting and exchanging data with other devices and systems over the internet. INNO developed its proprietary IoT production management system independently. The system controls equipment and manages the Mobile Factory via a dashboard, allowing the user to gain a comparative understanding of production parameters, such as operation data, machinery breakdown data, uptime data and production efficiency.

 

Related Services

 

We may from time to time participate in land development and contractor services if an opportunity exists to leverage our products. Specifically, we have evaluated the development of apartment complexes, retirement communities, and remodels for projects that would incorporate our metal framing studs. For example, we have agreed to provide project development services for our contract with Vision Opportunity Fund LP (assigned to Vision 101), partially owned by a minority shareholder of the Company, related to the development of an approximately 110,000 square feet retirement community.

 

In February 2024, we formed Inno AI Tech Corp., which specializes in research and consulting services. Throughout the year, we successfully supported a client in establishing a steel technology company. Our services included incorporation assistance, comprehensive training programs, in-depth market research, and strategic business development guidance. This engagement generated consulting revenue of $205,000.

 

Our Customers

 

We can serve commercial, residential, and industrial projects. For the cold-formed steel-framing business, the sales model is business-to-business because the main customers are developers, builders, and contractors. For the Castor Cube prefab home products and the consulting services performed by Inno AI Tech Corp., the sales model is expected to be either business-to-business or business-to-customer.

 

On a year-to-year basis we are generally dependent on a small number of major customers that change year to year. Our written agreements with major customers normally terminate upon completion, and our major customers change from year to year. For the year ended September 30, 2024, three customers accounted for 90% of the Company’s total revenues, respectively. For the year ended September 30, 2023, three customers accounted for 53%. As of September 30, 2024, $Nil outstanding of accounts receivable. Accounts receivable from one customer accounted for 100% of the Company’s total accounts receivable as of September 30, 2023.

 

These agreements contain standard construction and supplier agreement terms including payment schedules, performance schedules, the ability to subcontract, insurance obligations and indemnification provisions, and confidentiality provisions. Our written agreements with these customers generally terminate upon completion of the project or early terminate upon mutual agreement of the parties and contain provisions restricting our right to assign the agreement.

 

 

Our Suppliers

 

Historically we rely on a limited number of suppliers. For the year ended September 30, 2024, two suppliers accounted for 58% of the Company’s total purchases. For the year ended September 30, 2023, three suppliers accounted for 57% of the Company’s total purchases. As of September 30, 2024 and 2023, accounts payable to two suppliers accounted for 51% and 55% of the Company’s total accounts payable, respectively. We currently do not have written agreements with these suppliers or, generally, with any of our suppliers. All of our purchases from these suppliers are made by way of individual orders.

 

Our Competitive Strengths

 

Technology Innovations

 

INNO recognizes that no technology or product is completely immune to being copied, and therefore the company is committed to being a pioneer in the industry by constantly researching and developing new technologies, and being ahead in various aspects of the industry such as regulations, equipment autonomy, design technology, production efficiency, new product birth, orderly management, coordinated transportation, remote production, etc. In this way, INNO aims to have the most advanced and comprehensive technology in the industry and be the true technological barrier for competitors to overcome. INNO focuses on patentable innovative products and commercializing research discoveries in the cold-formed steel industry in the U.S. and committed to bringing innovation in the field of thin-walled structures, cold-formed steel building technology, and design methodology for resilient buildings.

 

Fully Integrated Manufacturing Process

 

Compared to other traditional metal stud manufacturers, INNO differentiates itself by integrating services from design to metal stud production to prefabrication, utilizing off-site building technology to reduce the need for on-site framing labor. This approach allows INNO to streamline the production process, increase efficiency, and reduce dependency on labor. By implementing off-site building technologies, INNO is able to prefabricate and assemble many components of the building in a factory setting, which can lead to improved quality control, faster construction times and reduced on-site labor costs. This approach allows INNO to be a leader in the metal studs manufacturing industry in the U.S. and set a new standard for the building industry.

 

Compared to other prefab home companies, INNO sets itself apart by making an innovation in the overall structure system and developing our own patent pending panel material for faster installation. Unlike other prefab home competitors who still use traditional wood-stick building methods or other unique liquid material (required by 3D printing), which are not as efficient and may not be able to guarantee delivery times, INNO’s patent pending panel material and overall structure system allows for faster installation, improved efficiency and guaranteed delivery times. This allows INNO to offer a more efficient and cost-effective solution for prefab home building and maintain a competitive edge in the market. Additionally, INNO’s patent pending material and system can guarantee the quality and safety of the building, which is a significant advantage over the other prefab home companies.

 

Rising Cost of Traditional Wood Construction Favors Transition to Steel

 

Utilizing INNO’s off-site building technology can significantly reduce overall construction costs, even when compared to wood building. The past several years of western wildfires in the United States have had a significant impact on lumber stocks and mills, leading to disruptions in supply and fluctuations in lumber prices. A study by the Steel Framing Industry Association (SFIA) indicates that the cost to build with cold-formed steel is relatively the same as building with wood when the cost comparison includes the construction insurance premiums associated with using the materials. As the price of wood no longer provides a cost advantage, alternative building materials like steel have become increasingly popular in the market. By leveraging its off-site building technology, INNO is able to offer a cost-effective solution that takes advantage of the cost benefits of steel building while also providing faster and more efficient construction.

 

We are keeping our prices at a competitive level with traditional wood framing solutions. In a recent internal case study, we found that INNO’s products delivered real-world cost-savings of 8-16% compared to wood framing. This study compared our solution against wood for a 2,2663 square feet. home built in 2022, for which we supplied materials. Based on fully quoted materials and estimated labor and insurance costs, we estimate the contractor saved 16% by using INNO products compared to wood framing. For the “low” scenario, we recently requested updated wood bids and used the lowest one; in this case, we estimate that INNO products would have provided the contractor with 8% savings.

 

 

Market Opportunity

 

Light-Gauge Steel-Framing Market

 

According to the report released by Grand View Research in 2022, titled “Light Gauge Steel Framing Market Size, Share & Trends Analysis Report By Type (Skeleton Steel Framing, Wall Bearing Steel Framing), By End-use (Commercial, Residential), By Region, And Segment Forecasts, 2023 - 2030”, the global light-gauge steel-framing market was valued at $37.27 billion in 2023 and is expected to reach $52.73 billion by 2030, growing at a CAGR of 5.1% from 2023 to 2030. The substantial rise in construction spending and a shift in trend toward sustainable materials have contributed to higher energy efficiency at a lower cost, in turn driving the market demand for light-gauge steel frames. According to KBV Research’s report released in February 2022, titled “North America Light Gauge Steel Framing Market Size, Share and Industry Trend Analysis Report By Type, By End Use, By Country, Historical Data and Growth Forecast, 2021-2027,” the U. S. market has dominated the North American cold-formed steel-framing market, and it is expected to continue to be a dominant market player until 2027; thereby, achieving a market value of $7.2 billion by 2027.

 

According to the summary of an IBISWorld report titled, “Wood Framing in the US - Market Size, Industry Analysis, Trends and Forecasts (2024-2029),” the wood framing market size in the U.S. is expected to be $27.5 billion in 2024. Since the wood structures could be replaced by cold-formed-steel structures, INNO’s target market size includes the wood-framing market. If we combined the US light gauge steel (which we estimate to be currently at approximately $6 billion based on the projected market value of $7.2 billion by 2027) and wood framing market ($27.5 billion) opportunities in 2024, we estimate it would amount to a $33.5 billion market opportunity in which INNO competes.

 

Prefabricated Building Market

 

According to the summary of an IBISWorld report titled, “Prefabricated Home Manufacturing in the US market size (2024-2029),” the prefabricated home manufacturing market size in the U.S. is expected to be $13.3 billion in 2024. According to the report released by Global Industry Analysts, Inc, titled “Prefabricated Buildings - Global Strategic Business Report”, the global prefabricated building market, estimated at $117.4 billion in the year 2022, is projected to reach a revised size of $202.7 billion by 2030, growing at a CAGR of 7.1% over the analysis period of 2022 through 2030. According to Straits Research Institute, the U.S. modular home market is projected to be valued at $53 billion in 2030.

 

Prefabricated houses are those that are built with the help of prefabricated building materials. These building materials are prefabricated in an off-site facility and then transported to the desired location for assembly. The building materials used to develop prefabricated houses are divided into concrete-based and metal-based materials. The market is being driven by factors such as shorter construction times and cost savings. The market is also benefiting from increased customer interest in reducing CO2 emissions, green building, and waste reduction.

 

Regulatory and Governmental Pressures for Change

 

President Biden’s Executive Order 14057 on the adoption of the federal Sustainable Development Catalyst for America’s Clean Energy Industry and Jobs and the accompanying federal Sustainable Development Plan establish the ambitious goal of achieving zero emissions from building by 2045. The federal government will work on new construction, major renovations, and existing real estate to achieve linked electrification, reduced energy use, lower water consumption and waste reduction. The federal government will develop data-driven targets and annual indicators for energy and water reduction by 2030 based on leading performance benchmarks for building type categories and the composition of institutional building portfolios. As part of this journey, the federal government will use performance contracts to reduce emissions, improve efficiency, and modernize facilities while providing financial savings.

 

In 2021, the Los Angeles City Council Public Safety Committee approved a proposal to expand Fire District I, an anachronistic planning overlay that would effectively ban wood-frame building in much of the city. The motion currently winding its way through City Council would expand Fire District I to neighborhoods with a population density of 5,000 residents per square mile, among other areas. With nearly all of Los Angeles comfortably above 5,000 residents per square mile, this expansion would effectively ban timber and wood-frame building in much of the city, including many rapidly growing neighborhoods near transit.

 

 

Sustainability and Green Building

 

Manufacturing of materials for buildings and construction accounted for approximately 11% of global energy-related CO2 emissions in 2017 according to the Global Status Report 2018, Global Alliance for Buildings and Construction & International Energy Agency. Increased global awareness of green building has driven efforts among all levels of government. For example, local governments are beginning to regulate in favor of using alternatives to wood in building projects. To reduce the city’s vulnerability to wildfires, the Los Angeles City Council voted in early 2021 to explore a proposal that could prohibit the use of wood-frame building for larger developments in some of its most densely populated neighborhoods. Similarly, the Los Angeles City Council Public Safety Committee approval of a proposal in 2021 to expand Fire District 1, an anachronistic planning overlay that would effectively ban wood-frame building in much of the city. In most U.S. cities, fire safety is ensured by the International Building Code (IBC), which sets strict rules on allowable building materials and methods.

 

Cold-formed steel framing (“CFS”) is a highly sustainable, green building solution. Through technological advances and processing changes, steel has drastically reduced its carbon footprint. CFS boasts a high level of recyclability, energy savings and greenhouses gas reduction. Due to its inherent advantages such as fire-resistance, termite resistance, consistent material quality and sustainability, we believe cold-formed steel will be the optimal alternative building material.

 

Marketing

 

We are an innovative building-technology company with a mission to transform the construction industry with our proprietary cold-formed steel-framing technology and other innovations. While we have significant customer concentrations, we endeavor to broaden our customer base as well as the industries we serve. Our marketing strategy is a long-term plan to achieve our Company’s mission by understanding the needs of customers and creating a distinct and sustainable competitive advantage. We position ourselves as the leader in intelligent steel-framing building systems. We intend to leverage our marketing and sales efforts to establish new potential customers. We also intend to leverage customer referrals, which in the past have been a source of new business. A significant portion of our business is the result of competitive bidding processes, and a significant portion of our business is from contract negotiation. We believe that the reputation we have developed with our current customers represents an important part of our marketing effort.

 

Quotation requests from customers are reviewed to determine the specific requirements and our ability to meet such requirements. Quotations are prepared by estimating the material and labor costs and assessing our current production schedule to determine our delivery commitments. Competitive bid quotations are submitted to the customer for review and award of the contract.

 

We have several strategic partners, including real estate companies, general contractors, builders and developers. Our strategic partners connect our Company with potential customers who are either potential homeowners or developers.

 

Through the several architecture, builder and contractor associations that we have joined, we share the advantages of cold-formed steel framing with others, and we educate and encourage construction industry practitioners to move out of their wood-framing comfort zone to embrace steel-framing technology.

 

We have a digital market channel and a social media presence. Also, we are actively conducting market research to determine the viability of our new products and new patents. We have increased our marketing budget and formed a professional sales team to increase our online marketing, which we believe can help us grow our revenue.

 

 

Research and Product Development/Innovations

 

We are a building technology company that is dedicated to research and product development innovation. Our scientists and engineers are committed to developing sturdier steel studs, tracks, headers, and other components, resulting in superior strength while maintaining the lowest costs possible. Our cold-formed roller machine is acquired from an original equipment manufacturer with certain modifications to the standard version of the machine that are unique and proprietary to INNO. When we refer to our “proprietary” cold-formed roller machines, we are referring to the modified machine with the intellectual property and process techniques we have developed. INNO uses CAD (Computer Aided Design) technology to arrive at the most accurate, comprehensive and information-rich design model within its parameters with the utilization of Vertex to ensure each member is produced to the exact specifications of called for in the design. The digital model of the project includes all functional systems and aesthetics, such as electrical wiring, air conditioning, doors, windows etc., as well as geometric features. It is a shared multi-disciplinary resource allowing all those working on a project to share information and working processes in order to achieve maximum efficiency and effectiveness, thus reducing all phases — design, pre-construction and construction — of the construction timeline. The platform gives us open communication, true collaboration, and aligned understanding. Taken all together, INNO has created a full BIM solution that works together to inform our state of the art light-gauge roll forming machines the instructions to automatically produce each steel framing member to exact specification.

 

We have continued making improvements to our cold-formed roller machines to optimally increase the printing speed. We are actively working on a list of 100 potential patentable products. Our goal is to commercialize patents and technologies that we own.

 

For example, the CFS portal frame system invented by us could replace current shear wall systems to provide adequate lateral resistance against strong winds and severe earthquakes. The standard lateral force resisting systems in light frame cold-formed steel building are shear walls either sheathed by structural panels such as OSB, Plywood, and steel sheets or braced by steel straps. These systems require a large amount interior walls to be load bearing walls which limits flexibility for room layout and may not support large openings for windows and doors. The steel portal frame system is a novel long span framing system to replace the traditional hot-rolled structural steel frame. The new technologies in the portal frame system include optimized stiffened holes on cold-formed steel frame members to increase structural stability and span capacity and special moment joint technology using adhesive and rivet connections which enable superior energy dissipation capacity and fast fabrication.

 

This new CFS moment frame does not require any interior shear walls for the Castor Cube, our modular home product. It will allow the Cube to have various room layouts. The homeowners will also be able to change the room layout in the future. The new CFS moment frame can also be used for long-span residential and mid-rise commercial buildings. The new technology should improve the structural integrity of building structures, increase the lateral resistance, and lower the overall costs.

 

Another innovation, the cold-formed steel truss system, utilizes a strong axis of cold-formed steel stud members for both chords and webs which allow longer spans and lighter weight than the conventional type trusses. The steel truss system has wide applications in storage and education buildings.

 

We believe the steel truss system and steel portal framing system will also allow INNO to enter the high-rise commercial and large span industrial building markets (Type I and Type II buildings) and deliver more competitive and cost-effective building structures than the traditional structural steel frame and concrete masonry systems.

 

Honeycomb aluminum panel is a metal composite panel product series developed in combination with the composite honeycomb panel technology developed by the aviation industry. The panel is a box-type structure with surrounding edges, which has good airtightness and improves the safety and service life of the panel. The product adopts a “honeycomb sandwich” structure, that is, a composite plate made of high-strength alloy aluminum plate coated with a decorative coating with excellent weather resistance as the surface, bottom plate and aluminum honeycomb core through high temperature and high pressure. This product series has the advantages of excellent material selection, advanced technology, and reasonable structure. It not only has excellent performance in large scale and flatness, but also has many choices in terms of shape, surface treatment, color and installation system. This advanced technology enables the Company to manufacture high-strength and light-weight wall panel products. These siding products have very flat surfaces and tightly controlled seam widths, which allow architects to design very straight and beautiful walls with large panels. Except for certain technical restrictions, there is no standard size for honeycomb aluminum panels, and all wall panels are factory-made according to design drawings. Our production method allows the panels to be highly flexible in size and shape, such as curved panels and folded panels. This flexibility creates a complete and multi-functional highly competitive wall panel system that can be installed on almost any joist and are extremely simple to install.

 

 

Revenue Model

 

Our revenue model currently consists of sales of the following:

 

	●	Light-gauged studs and tracks;
	●	Prefabricated wall panels and trusses;
	●	Structure framing work on site;
	●	Services;
	●	Machine sales; and
	●	Replicable Apartment product.

 

Light-gauged studs and tracks

 

We supply metal studs from 12GA to 24GA depending on the structure engineering requirements and city building codes. The model for selling cold-formed steel studs and tracks is wholesale because it is business-to-business. Given the specific nature of our products, we do not sell retail. Unlike traditional metal stud suppliers, whose products are “made to stock” with no consideration for engineer design, our metal studs are typically made-to-order and customized for each project.

 

Prefabricated wall panels and trusses

 

Prefabricated wall panels and trusses are another option for customers. With these products, the customer can either choose to assemble the panels themselves or include this prefab service in their contract with us. Most customers typically choose prefab service because of our skilled team given that most wood framers are not familiar with steel framing.

 

INNO also has standardized modular wall products which could be used for all residential and commercial buildings. We design modular walls in 20 specifications to cover different building requirements. Modular walls are “made to stock” products and participate in both business-to-business and business-to-customer model channels.

 

Structure framing work on site

 

Steel structure installation on site is also an optional service. Depending on the project size and scope, we will provide on-site installation service if customers requested. With our full turnkey solution, all elements of the project construction are included, not just the cold-formed steel. This may include cabinetry and other items. In cases where the customer simply wants the framing, we bring our expertise in working with steel to that portion of the project. We are in the process of reducing our on-site work offerings.

 

Services

 

Our engineering services provide stamped and sealed structure design services by our in-house engineer team. Because of the specific nature of our services, the rates vary case by case depending on the square footage and project complexity. Our engineer team will collaborate with customer’s architect, civil engineers, and MEP engineers to make sure the final structure design is city approved. To begin the metal stud production, our engineer team also generates the shop drawings which is a digital file and readable by our intelligent CNC machine. We also have another option where the customer may outsource the engineer service and contact INNO for metal stud production, where we do not provide continuous services until the design is city approved.

 

In February 2024, we formed Inno AI Tech Corp., which specializes in research and consulting services. In 2024, we successfully supported a client in establishing a steel technology company. The services included incorporation assistance, comprehensive training programs, in-depth market research, and strategic business development guidance. This engagement generated consulting revenue of $205,000. The revenue from the consulting service is recognized upon the described services be provided to customers.

 

 

Machine sales

 

We may sell or lease our machines. We provide technical and design support at relatively low costs, including industry compliance license and permits, as well as shop drawings and structural design. We also offer administration, operation, and management consulting support, including directing and assisting factory set-up, operation procedures, equipment installation, machine maintenance, repairs, and efficiency improvement. The training for such operations and installations are also provided. We will recommend, select, and advise pricings for material suppliers and other vendors.

 

Replicable Apartment Product

 

Our flagship product within this series is Village 101, a smart senior living apartment comprising 155 units with a floor area of 110,000 square feet. The architectural plan package for Village 101 is complete and ready for implementation. The project is currently pending for permits. Village 101 serves as a prototype building tech community, showcasing our innovative approach to senior living.

 

Our pipeline includes various apartment product options with different unit sizes, ranging from 15 to 150 units. These products are under active research and development, with the aim of creating replicable housing complexes across the United States. By leveraging our expertise in building technology and innovative design, we target to provide scalable and high-quality housing solutions that meet the evolving needs of residents including but not limited to senior citizen, college students and Gen Z etc.

 

Through our revenue model, we anticipate generating sustainable income by catering to the demand for replicable apartment products. By expanding our product line and continually advancing our research and development efforts, we aim to capture a significant market share in the housing industry while delivering superior value to our clients.

 

Cost of Sales

 

Cost of Sales primarily consist below components.

 

	●	Materials — Rolled steel represents the single largest cost. We manage our relationship with suppliers (primarily US Steel) very adroitly by building in purchase orders and their associated costs to the customer to minimize our exposure to changes in steel prices for any specific project. We manage our purchases and deliveries as close to “just in time” as possible.
	●	Labor — Labor is potentially the most variable component of cost of sales. We have a team of hourly workers who largely work onsite at the factory producing parts from raw steel and assembling them into prefabricated pieces to be delivered to job sites. Contractors are non-employee hourly workers who largely work in our turnkey projects. As-needed hourly labor is largely available in our markets.
	●	Freight and Shipping — Our policy is to include any freight incurred to ship the product from our vendors to warehouses as a part of cost of goods sold. Outbound freight costs related to shipping costs to customers are considered periodic costs and are reflected in selling expenses.

 

Other Expenses

 

Other expenses are typically comprised of payroll of salaried and hourly workers. We pride ourselves on running lean and efficiently. We operate in a business-friendly state with a large and available workforce. Rent, utilities, insurance, consulting service and other normal expenses are all competitive in the commercial area where we are based.

 

 

Our Growth Strategy

 

We seek to leverage the trend toward off-site and modular building techniques to increase productivity, reduce errors on-site, and decrease costs. With both Castor Cube and Mobile Factory as our featured products in the coming years, we seek to become leaders in the industry. As the market continues to move toward panelized construction, we seek to have an edge in the industry as a large-scale pioneer of the overall cost-reducing process.

 

INNO’s business growth strategy combines the following three parts: revenue growth strategy, profit growth strategy and technology growth strategy.

 

Revenue Growth Strategy

 

Our revenue growth strategy is composed of the following.

 

Capacity expansion and in-house research and development. We are expanding factory operations and manufacturing capabilities in line with demand. We are also investing in R&D to ensure a pipeline of competitive and innovative building-technology products.

 

Multiple products and services. We are in the process of developing the Castor Cube, a 743-square-foot modular house product with the goal of mass producing. We are also working on developing Village 101, a smart senior living apartment comprising 155 units with a floor area of 110,000 square feet. The architectural plan package for Village 101 is complete and awaits permits approval for implementation. We’ve expanded our business to include consulting services offered by our new entity-AI Tech Corp.

 

Marketing investment. We are in the process of optimizing our online sales and marketing efforts by recruiting marketing talent and engaging consultants for marketing and promotional events.

 

Potential Acquisitions and investments. In accordance with our growth strategy, our company intends to pursue vertical integration by acquiring or investing several companies operating within the construction industry in the United States. The objective of this vertical integration is to strengthen our position as a prominent building-technology developer and expand our capabilities within the market. We will position ourselves to offer a comprehensive range of solutions encompassing the entire building. The expanded scope of our offerings includes prefab structure systems, centralized MEP (mechanical, electrical, plumbing) systems, integrated wall systems, integrated floor systems, roofing systems, and prefab cabinets, sinks, and countertops. This integration allows us to deliver a single-cycle turnkey solution, streamlining the traditional linear process employed by traditional developers. To fortify our supply chain and augment our capabilities, we will consider the strategic acquisition or investment of construction vendors/suppliers. The targeted companies would include the ones that enjoy the popularities in the industry, including but not limited to the companies that can supply the interior finish, exterior wall panels, insulation materials and roof system etc. By incorporating the targeted companies into our operations, we will establish a comprehensive one-stop-shop solution for the multi-family apartments, thereby further solidifying our market position and value proposition. Consistent with our growth strategy, we are firmly committed to implementing a robust product life cycle management approach, encompassing all stages from procurement to delivery. Through our pursuit of vertical integration and strategic acquisitions, we are poised for substantial growth to assume a leadership role within the market. By expanding our product offerings, strengthening our supply chain, and cultivating key partnerships, we are well-positioned to provide comprehensive building solutions that effectively meet the evolving needs of our clients while concurrently driving revenue growth and delivering enhanced shareholder value.

 

Profit Growth Strategy

 

Our profit growth strategy is composed of the following.

 

Improving assembly automation. We plan to source and develop production robots and to expand automation where possible, to further increase our production efficiency.

 

Reducing transportation costs by utilizing Mobile Factory. Our Mobile Factory is equipped with our proprietary machines and can be transported to any jobsite. Mobile Factory utilizes Inno Statlink Data System which is ideal for remote production management. Mobile Factory saves significant transportation costs and as such, our goal is to increase the use of Mobile Factory.

 

 

Optimizing artificial intelligence design capabilities. We intend to optimize the artificial intelligence design capabilities by utilizing machine learning to get the wisest structure supporting data and running several models for all types of walls. The model we tested could reduce the raw materials used in different projects.

 

Technology Growth Strategy

 

Our technology growth strategy is composed of the following.

 

Develop EQ products to replace existing building materials with thinner and lighter products. We are developing technology in an effort to replace existing building materials with thinner materials. Once this technology matures, it is expected to save approximately 10% in raw materials.

 

Develop stainless steel as a building material for the high-end building market. We are developing technology to replace the current galvanized steel sheets with stainless steel. The new patent pending material could be used in extreme climate conditions for high-end customers.

 

Leverage module wall technology to increase the range of applications. We are in the process of developing different types of module wall products to expand our customer reach.

 

Strategic Partnerships

 

We have partnerships with at least 10 regional and national developers and builders. INNO’s customers include national real-estate developers and some local builders in both Texas and California. The regional/national developers and builders have a strong pipeline of projects coming each year. Their project types cover residential, commercial, and industrial. They either intend to use steel framing for structure or to develop land with Castor Cube and Village 101 projects, as their strategic partners, INNO will provide customized offer and have higher probability to bid and win projects. The cold-formed steel framing business is categorized as business-to-business model, and the Castor Cube as well as Village 101 projects will be either to business or to customers.

 

Competitive Outlook

 

Lumber-Based vs. Cold-Formed Steel

 

Our primary competitors (or segment with which we are most often compared) are traditional lumber-based building products solutions in certain categories, particularly buildings below six floors and residential. The accessibility and proficiency in assembling lumber-based structures can make practitioners in the construction industry unwilling to move out of the wood framing comfort zone. Further, lumber prices were generally lower than the price of metal studs. The switch to cold-formed Steel is being driven by materials price and several market-based advantages of steel. Steel is strong, safe, durable, versatile, and cost-effective. Steel has the exceptional environmental advantage of being highly recycled and infinitely recyclable. Steel is tough and does not rot, spawl, split, or absorb moisture, and it is resistant to pests, unlike wood building materials.

 

Inherent Benefits of Steel Framing

 

	●	Steel has the highest strength-to-weight ratio of any framing material.
	●	Non-combustible. Steel will not contribute fuel to the spread of fire.
	●	Steel is termite and rodent resistant.
	●	Steel ensures dimensional stability. Will not rot, warp, crack or shrink.
	●	Lower builder’s risk insurance.
	●	Permanently straight walls. No call backs for nail pops.

 

 

	●	No toxicity contribution. Free of resins, adhesives, and chemicals normally present in other framing material.
	●	Consistent material quality. No regional variation.
	●	Grounded against electrical storms.
	●	Steel is inorganic. Unlike traditional framing products, steel is not vulnerable to mold.
	●	Steel is the most recycled product in the world. Optimum sustainability.

 

The SFIA has conducted studies of construction costs in two different locations using two identical buildings — one designed with wood and the other with cold-formed steel (CFS) framing. The mixed-use, 49,900 square foot building used in the studies is representative of many residential buildings constructed in the mid-rise market today and includes:

 

	●	A first floor non-combustible (concrete) podium with parking and retail space
	●	Residential dwellings on levels 2-5
	●	Roof-top/penthouse space atop level 5 housing building services.

 

The first location for the study was a building constructed in Chicago in late 2017. Results include hard construction costs only. In this case, cold-formed steel cost 2.6% more than traditional wood construction.

 

The second location was in Morristown, New Jersey. It takes a deeper look at costs by including the impact of lower insurance premiums available for CFS construction compared to combustible framing (wood). The insurance costs from major insurers operating in New Jersey were converted to a cost per square foot and evaluated in terms of their impact on the overall building costs. In this case, cold-formed steel cost 0.9% more than traditional wood construction.

 

The two case studies mentioned above are taken from the official SFIA website. We believe INNO’s product cost is less than that of the preceding case studies, with the overall cost less than that of traditional wood.

 

Others Participating in Cold-formed Steel

 

The second category of competitors are divided into two groups: traditional manufacturers of metal studs and suppliers of cold-roller machines. Traditional manufacturers, such as Clark Dietrich and CEMCO, pre-punch their metal studs with punchouts at regular intervals for pipe installation, but the number of punchouts is fixed and not customized for each project. INNO employs proprietary software to calculate the minimum punchouts for MEP pipe installation that are consistent with the architectural plan set to ensure the structure’s load-bearing capability to the greatest extent possible. The load-bearing capability gradually decreases as the number of punchouts increases. Traditional steel framing manufacturers are unable to automatically make punchouts for screw holes, so manual drilling holes at the jobsite for metal stud connections are still required. The screw holes are precisely located and punched by the INNO CNC machines.

 

Screw hole punchouts are left for panel assembly, and the stud spacing should be building code compliant. The number of screw holes for each panel is calculated systematically, and the screws are included in the product package. We prefabricate the wall panels, joists, and trusses in the factory, eliminating the need for on-site manual labor to measure stud intervals and drill holes for metal stud connection. These two traditional metal studs profile manufacturers have a nationwide retail network that we cannot compete with. We are using the Internet to increase the marginal effect of sales, and our future strategy is to use Internet sales to undermine traditional store-based sales.

 

In the cold-formed roller machine market, FRAMECAD is a traditional LGS/CFS machine manufacturer. When compared to their LGS equipment, INNO CNC machines manufacturing cost is approximately 50% less, based on our estimates. INNO CNC machines currently have three pending patents, the CUBE 200 (Application number: 63437142), CUBE 300 (Application number: 63427583) and NEW OPTIMIZED DESIGN FOR ROLL FORMER CNC MACHINE (Application number: 63427583). CUBE 200 is able to form C& U type studs and tracks in the thickness of 16 gauge and 6 inches width studs. CUBE 300 is able to form C&U type studs in the thickness of 12 gauge and 12 inches width studs.

 

 

In addition, mobile factories are an important countermeasure to traditional equipment. We have developed a mobile factory for offsite production of steel pieces and structures that compete in the traditional prefab and modular building markets. INNO differentiates itself from other steel framing companies and cold-formed roller machine suppliers by integrating services ranging from metal stud manufacturing to prefabrication. In this context, we distinguish ourselves through the technologies and innovations we bring to our process and methods for producing structural components from rolled steel into useful pieces that assemble without error.

 

3D “Printing” Technology

 

Currently, 3D printing technology is widely used for prefab homes; however, cooling time is required for formation because the technical principle is to melt the material and then wait for it to cool before settling. In contrast to other prefab home companies, which use 3D printing technology, INNO uses our own cold-formed steel technology to ensure that there is no waiting time for structure formation. 3D printing necessitates the use of unique liquid raw materials such as LAVACRETE and Light Stone Material (LSM), neither of which are easily accessible. This could lead to supply chain disruptions and affect delivery time. Furthermore, steel is still commonly used to support the structure of prefab homes, regardless of the manufacturing technology used.

 

Safety is an important factor to consider when choosing a prefab home. Since INNO’s CASTOR CUBE uses steel structure entirely, which has a high strength to weight ratio and good performance to resist disasters such as hurricanes and earthquakes. The foldable prefab home product manufactured by other company may not have the same level of disaster resistance as CASTOR CUBE.

 

Castor Cube plans to apply a patent for its utility hook-up system, which enables consumers to connect utility within one day. This is a unique feature that can make the process of setting up a prefab home more convenient for consumers. It is also worth noting that according to other prefab companies’ product introduction videos and their social media platforms, they all take around 48 hours to construct a 350 square feet prefab home.

 

With the usage of INNO’s patent pending honeycomb aluminum panels and Z-shaped pendant designed for replacing manual sheetrock installation, we can significantly reduce the number of manufacturing steps and minimize manual labor. INNO is planning to set up an automatic streamline to produce CASTOR CUBE. This will bring a significant increase in production capacity and it can help INNO to meet the growing demand for prefab homes more efficiently.

 

Government Regulations

 

Building Codes

 

Building codes are laws that set minimum requirements for how structural systems, plumbing, heating, ventilation and air conditioning, natural gas systems and other aspects of residential and commercial buildings should be designed and constructed. In the U.S., building codes mostly fall under the purview of state and local governments. All metal studs used for building structures are required to pass inspections in the jurisdiction they are located. We have ICC-ES evaluation reports (ESR-4641) that show that our cold-formed steel-framing members are compliant with the 2018 and 2015 International Building Code (“IBC”), 2019 California Building Code (“CBC”), and 2020 Florida Building Code (“FBC”). Because of the nature and use of our products, we need to be compliant with quality assurance programs.

 

Fire safety is one critical area of the building codes. As fire codes become stricter in some geographical areas or specific types of structures, our cold-formed steel materials are inherently non-combustible and therefore are advantaged over combustible alternatives.

 

Environmental Compliance

 

We are subject to U.S federal, state, and local environmental laws and regulations that involve the use, disposal and cleanup of substances regulated by those laws and subject to periodic inspections to monitor our compliance. We believe that we are currently in compliance with applicable environmental regulations. Expenditures for environmental compliance purposes during 2024 and 2023 were not material.

 

 

We were given awards by the U.S. Green Building Council (“USGBC”) in 2020. Our manufacturing processes minimizes waste, prevents pollution, and recycles wherever possible. Our manufacturing process manufactures special length products for all types of projects, has self-contained building system solutions that do not rely on third-party suppliers, and designs products to fulfill the BCA Energy Efficiency program. This compliance proves that we are a green company that meets basic environmental milestones and legal requirements.

 

Occupational Health and Safety Laws

 

Our business and operations are subject to numerous federal, state, and local laws and regulations intended to protect our employees. Due to the nature of manufacturing, we are subject to substantial regulations related to safety in the workplace. In addition to the requirements of local and state governments in Texas, we must comply with federal health and safety regulations, the most significant of which are enforced by the Occupational Safety and Health Administration.

 

Further, our operations and facilities are subject to additional federal, state, or local laws or regulations, such as the COVID-19 safety and prevention regulations. Our operations are also subject to federal, state, and local labor laws relating to employee privacy, wage and hour matters, overtime pay, discrimination and harassment, equal opportunity and employee leave and benefits.

 

It is our policy and practice to comply with all legal and regulatory requirements and our procedures and internal controls are designed to promote such compliance. Expenditures for compliance with occupational health and safety laws and regulations during 2024 and 2023 were not material.

 

Human Capital Resources

 

The success of our business depends in large part on our ability to attract, retain, and develop a workforce of skilled employees at all levels of our organization. We provide employees with base wages and salaries that we believe are competitive and consistent with each employee’s position. We also work with local, regional, and state-wide agencies to facilitate workforce hiring and development initiatives. We had four and 11 full-time employees as of September 30, 2024 and 2023, respectively. We also utilize at-will contractors in our business. As of September 30, 2024 and 2023, we had 11 and 18 at-will contractors employed, respectively. For the year ended September 30, 2024, the Company also engaged three consultants conducting marketing activities and promotional events.

 

Intellectual Property Matters

 

Presently, we have no registered intellectual property rights and trademarks. The trademarks application status of our name and other marketing materials is pending. There are currently five pending patent applications and descriptions of each pending patent are as follows:

 

	●	New optimized design for Roll Former CNC machine that efficiently produces C&U type studs and tracks to be used in building high quality, quick erection structures. (Application number: 63427583)
	●	Cube 200, which is a new optimized design for a Roll Former CNC machine that efficiently produces C&U type studs and tracks to be used in building high quality, quick erection structures. (Application number: 63437142)
	●	Z-shaped pendant for castor exterior wall to replace the Z-shaped pendant for sheetrock with honeycomb aluminum plate. (Application number: 63434155)
	●	Cube 300, which is a new optimized design for a Roll Former CNC machine that efficiently produces C&U type studs and tracks to be used in building high quality, quick erection structures. (Application number: 63437143)
	●	Aluminum honeycomb plate for interior wall construction. (Application number: 63367663)

 

 

In the course of our business, we develop expertise in the manufacturing process. Although we have non-disclosure policies in place with respect to our personnel and in our contractual relationships, we cannot assure you that we will be able to protect our intellectual property rights with respect to this expertise.

 

Corporate Structure

 

Our Company, INNO HOLDINGS INC., was incorporated in Texas on September 8, 2021. It originally had three subsidiaries, Inno Metal Studs Corp (“IMSC”), Castor Building Tech LLC (“CBT”), and Inno Research Institute LLC (“IRI”).

 

On January 21, 2024, the Company established 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 January 27, 2024, the Company and the minority shareholder of IRI agreed to dissolve IRI, a subsidiary of IMSC with 65% ownership. The R&D activities previously carried out by IRI will be transferred to the new subsidiary, Inno AI Tech Corp.

 

On February 11, 2024, the Company formed Inno AI Tech Corp., a wholly owned entity in Texas to conduct AI tech research and consulting activities.

 

Below is the corporate structure of the Company as of December 6, 2024:

 

 

Corporate Information

 

Our principal executive office is located at 2465 Farm Market 359 South, Brookshire, TX 77423. Our corporate website address is https://www.innoholdings.com. Our telephone number is (800) 909-8800.

 

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.

 

ITEM 1B. UNRESOLVED STAFF COMMENTS

 

None.

 

ITEM 1C. CYBERSECURITY

 

We acknowledge the increasing importance of cybersecurity in today’s digital and interconnected world. Cybersecurity threats pose significant risks to the integrity of our systems and data, potentially impacting our business operations, financial condition and reputation.

 

 

As a smaller reporting company, we currently do not have formalized cybersecurity measures, a dedicated cybersecurity team or specific protocols in place to manage cybersecurity risks. Our approach to cybersecurity is in the developmental stage, and we have not yet conducted comprehensive risk assessments, established an incident response plan or engaged with external cybersecurity consultants for assessments or services.

 

Given our current stage of cybersecurity development, we have not experienced any significant cybersecurity incidents to date. However, we recognize that the absence of a formalized cybersecurity framework may leave us vulnerable to cyberattacks, data breaches and other cybersecurity incidents. Such events could potentially lead to unauthorized access to, or disclosure of, sensitive information, disrupt our business operations, result in regulatory fines or litigation costs and negatively impact our reputation among customers and partners.

 

We are in the process of evaluating our cybersecurity needs and developing appropriate measures to enhance our cybersecurity posture. This includes considering the engagement of external cybersecurity experts to advise on best practices, conducting vulnerability assessments and developing an incident response strategy. Our goal is to establish a cybersecurity framework that is commensurate with our size, complexity and the nature of our operations, thereby reducing our exposure to cybersecurity risks.

 

In addition, the Board will oversee any cybersecurity risk management framework and a dedicated committee of the Board or an officer appointed by the Board will review and approve any cybersecurity policies, strategies and risk management practices.

 

Despite our efforts to improve our cybersecurity measures, there can be no assurance that our initiatives will fully mitigate the risks posed by cyber threats. The landscape of cybersecurity risks is constantly evolving, and we will continue to assess and update our cybersecurity measures in response to emerging threats.

 

For a discussion of potential cybersecurity risks affecting us, please refer to the “Risk Factors” section of our Registration Statement on Form S-1 filed with the Securities and Exchange Commission on October 20, 2023 titled “Our systems and information technology infrastructure may be subject to security breaches and other cybersecurity incidents.”

 

ITEM 2. PROPERTIES

 

We lease our principal executive offices which are located at 2465 Farm Market 359 South, Brookshire, TX 77423. The lease for this principal Executive Office had a 60-month term beginning on December 1, 2019 and ending on December 31, 2024. On January 1, 2024, this facility lease was terminated without penalty and a new lease agreement was entered with the landlord. The new lease term is from January 1, 2024 to January 1, 2027, with a monthly rent of $18,000. The facility consists of 15,000 square feet of indoor space and 2.5 acres of concrete slab in the yard. On February 1, 2024, a mutual amendment to the lease agreement was executed. Under the terms of the amendment, we opted to prepay the lease payments covering the period up to December 31, 2026, with the due date set for April 1, 2024. This prepayment arrangement secures a rent-free period for the final year of the lease, spanning the entirety of 2027.

 

We had also entered into a lease agreement for office and production space in Corona, California with a term from May 1, 2022 until April 30, 2027 at a rate of $6,617 to $7,740 per month. In August 2023, we relocated our California office from Corona to Diamond Bar. We were obligated to pay the monthly rent for the office in Corona until February 1, 2024 when the landlord found a new lessee to occupy the facility. The lease in Diamond Bar, California has a term of 24 months from August 18, 2023 to August 17, 2025 at a rate of $4,730 to $4,926 per month. Subsequently on October 28, 2024, the lease in Diamond Bar was ended and assigned to a nonprofit organization.

 

These lease agreements contain standard commercial lease terms including but not limited to provisions regarding utilities, alterations, maintenance and repair, insurance and indemnification.

 

We believe that our current leased property is in good condition and suitable for the conduct of our business.

 

ITEM 3. LEGAL PROCEEDINGS

 

We are not currently a party to any material legal proceedings, investigations or claims. From time to time, we involve in legal matters arising in the ordinary course of our business. There can be no assurance that such matters will not arise in the future or that any such matters in which we are involved, or which may arise in the ordinary course of our business, will not at some point proceed to litigation or that such litigation will not have a material adverse effect on our business, financial condition or results of operations.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

 

PART II

 

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 

Market Information

 

We have our common stock listed on The Nasdaq Capital Market under the symbol “INHD”.

 

Holders

 

As of December 6, 2024, there were approximately 25 stockholders of record of our common stock. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees. This number of holders of record also does not include stockholders whose shares may be held in trust by other entities.

 

Reverse Stock Split

 

On November 30, 2022, the Company effected a forward stock split (the “Stock Split”) of the Company’s issued and outstanding shares of the common stock at a split ratio of 2-for-1. Further on July 24, 2023, the Company effected a reverse stock split (the “Reverse Stock Split”) of the Company’s issued and outstanding shares of the common stock at a split ratio of 1-for-2 such that every holder of common stock of the Company shall receive one share of common stock for every two shares of common stock held and to reduce the number of authorized shares of common stock from 200,000,000 to 100,000,000. Shortly after the Reverse Stock Split, the Board of Directors of the Company approved issuance of additional shares to preserve the original purchase price per share of the shares sold in the period from February 1 to June 30, 2023.

 

On October 9, 2024, the Company completed a 1-for-10 reverse stock split of its issued and outstanding common stock, no par value, (the “Reverse Stock Split”). As a result of the Reverse Stock Split, each share of common stock issued and outstanding immediately prior to October 9, 2024 were automatically converted into one-tenth (1/10) of a share of common stock. The Common Stock began trading on a Reverse Stock Split-adjusted basis on the Nasdaq Capital Market on October 10, 2024. The trading symbols for the Common Stock remains “INHD”. The Reverse Stock Split did not reduce the number of authorized shares of Common Stock and did not change the par value of the Common Stock. The Reverse Stock Split affected all stockholders uniformly. Except to the extent that the Reverse Stock Split resulted in the stockholders’ fractional shares being rounded up, no other effects affect stockholder’s ownership percentage of the Company’s shares of Common Stock. 199,787 fractional shares were issued in connection with the Reverse Stock Split.

 

All common share and per-share amounts in this Form 10-K have been retroactively restated to reflect the effect of the Reverse Stock Split.

 

 

Dividend Policy

 

We have not declared any cash dividends since inception, and we do not anticipate paying any dividends in the foreseeable future. Instead, we anticipate that all of our earnings will be used to provide working capital, to support our operations, and to finance the growth and development of our business. The payment of dividends is within the discretion of the Board and will depend on our earnings; capital requirements; financial condition; prospects; applicable Texas law, which provides that dividends are only payable out of surplus or current net profits; and other factors our Board might deem relevant. There are no restrictions that currently limit our ability to pay dividends on our common stock other than those generally imposed by applicable state law.

 

Transfer Agent

 

VStock Transfer, LLC., 18 Lafayette Place, Woodmere, New York 11598.

 

Recent Sales of Unregistered Securities

 

During the period from October 1, 2022 to September 30, 2024, we have granted or issued the following securities that were not registered under the Securities Act:

 

(a)

Issuance of common stock.

 

●

On December 3, 2022, the Company issued 14,286 shares of its common stock to an accredited investor at $35 per share for $500,000 in cash.

 

●

On March 13, 2023, the Company issued 2,703 shares of its common stock to an accredited investor at $37 per share for $100,000 in cash.

 

●

On April 25, 2023, The Company issued 7,895 shares of its common stock to an accredited investor at $38 per share for $300,000 in cash.

 

●

On June 20, 2023, the Company issued 1,316 shares of its common stock for a total value of $50,000 for services to be rendered during next twelve months by the immediate relative of the Company’s Chief Financial Officer.

 

●

On June 20, 2023, the Company issued 1,974 shares of its common stock for a total value of $75,000 for services to be rendered during next twelve months by one nonemployee contractor. These shares were valued at $38 per share.

 

●

On July 24, 2023, the Company issued 1,352 shares of its common stock to an accredited investor for no additional consideration following the Company’s previously disclosed reverse stock split in July 2023.

 

●

On July 24, 2023, the Company issued 3,947 shares of its common stock to an accredited investor for no additional consideration following the Company’s previously disclosed reverse stock split in July 2023.

 

●

On July 24, 2023, the Company issued 658 shares of its common stock to an accredited investor for no additional consideration following the Company’s previously disclosed reverse stock split in July 2023.

 

●

On July 24, 2023, the Company issued 987 shares of its common stock to an accredited investor for no additional consideration following the Company’s previously disclosed reverse stock split in July 2023.

 

	●	On July 24, 2023, the Company issued 7,143 shares of its common stock to an accredited investor for no additional consideration following the Company’s previously disclosed reverse stock split in July 2023.
	●	On January 1, 2024, the Company granted 5,000 shares to one advisory firm for a total value of $72,000 for advisory services to be rendered during next twelve months. The advisory firm helps and supports the Company in the capital market, including developing capital market strategies, sourcing different providers including investment banks and underwriters, etc. These shares were issued by the transfer agent on July 15,2024 and valued at $14 per share.

 

 

The issuance of the common stock in private placements was deemed exempt from registration under Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder in that the issuance of securities were made to an accredited investor and did not involve a public offering. The recipient of such securities represented its intention to acquire the securities for investment purposes only and not with a view to or for sale in connection with any distribution thereof.

 

(b)

Warrants.

 

●

On December 18, 2023, the Company issued warrants to AC Sunshine Securities LLC, the underwriter of its IPO (as defined below), to purchase up to 20,125 shares of common stock at an exercise price of $48 per share.

 

Use of Proceeds from our Initial Public Offering of Common Stock

 

On December 18, 2023, we closed our initial public offering (the “IPO”), in which we sold and issued 250,000 shares of our common stock at a price to the public of $40 per share. We received approximately $7,859,533 in aggregate net proceeds from our IPO after deducting underwriting discounts and commissions and other offering expenses. AC Sunshine Securities LLC was the underwriter of our IPO.

 

The offer and sale of all of the shares of our common stock in our IPO were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-273429), which was declared effective by the SEC on November 9, 2023.

 

As of January 11, 2023, we have used approximately $0.9 million of the net proceeds from our IPO for working capital and general corporate purposes. There has been no material change in our planned use of the net proceeds from our IPO as described in our final prospectus filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC on December 4, 2023.

 

Purchases of Equity Securities

 

Neither we nor any “affiliated purchaser,” as defined in Rule 10b-18(a)(3) of the Exchange Act, purchased any of our equity securities during the period covered by this annual report.

 

Securities Authorized for Issuance Under Equity Compensation Plans.

 

The information required by this Item regarding equity compensation plans is incorporated by reference to the information set forth in Item 12 of this Annual Report on Form 10-K.

 

ITEM 6. [RESERVED]

 

ITEM 7. 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 consolidated financial statements and related notes that appear elsewhere in this Annual Report. 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.

 

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. At each stage of the process, we are adding value to the original rolled steel (and other materials) to its final assembled use by businesses or directly to customers.

 

 

Our largest commodity expense is our primary raw material — rolled steel in various gauges and widths. Like any commodity, steel is subject to supply/demand-based price fluctuations which can have an impact on the profitability of our business if prices change between the time we enter into a contract with a customer to deliver finished goods and the time the steel is purchased from the mill. We seek to mitigate our exposure to steel price fluctuations in two ways:

 

	●	Entering fixed price forward contracts with steel mills/suppliers for delivery in the future so that our bids for customer contracts have known pricing for the steel. This is particularly useful in larger projects that involve delivery of product over many months.
	●	Maintaining an approximately three-month inventory of our most actively used rolled steel coils (defined by width and gauge). This inventory requires an active forward-looking assessment of steel needs to meet expected demand. Maintaining inventory is a real financial exposure especially during periods of pricing volatility.

 

Beyond our manufacturing operations, we offer consulting services to support clients in developing their own building technology companies. Our subsidiary- Inno AI Tech Corp., formed in February 2024, specializes in providing research, consulting, incorporation assistance, training, market research, and business development guidance. In 2024, we successfully assisted a client in establishing a new steel technology company.

 

Key Factors Affecting our Performance

 

As a result of a number of factors, our historical results of operations may not be comparable to our results of operations in future periods, and our results of operations may not be directly comparable from period to period. Set forth below is a brief discussion of the key factors impacting our results of operations.

 

Inflation

 

Prices of certain commodity products, including raw materials, are historically volatile and are subject to fluctuations arising from changes in domestic and international supply and demand, labor costs, competition, market speculation, government regulations, trade restrictions and tariffs. Increasing prices of the component materials for parts of our goods may impact the availability, quality and price of our products as suppliers search for alternatives to existing materials and increase the prices they charge. Our suppliers may also fail to provide consistent quality of product as they may substitute lower cost materials to maintain pricing levels. Rapid and significant changes in commodity prices may negatively affect our profit margins, and it may be difficult to mitigate worsened margins through customer pricing actions and cost reduction initiatives.

 

Interest Rates

 

Rising interest rates have also resulted in a shift in institutional holdings away from micro-cap equities, which has negatively influenced our stock’s trading volume. We continue to forge relationships with institutional investors and analysts in order to maintain a healthy trading volume.

 

Geopolitical Conditions

 

In February 2022, Russia initiated significant military action against Ukraine. In response, the U.S. and certain other countries imposed significant sanctions and export controls against Russia, Belarus and certain individuals and entities connected to Russian or Belarusian political, business, and financial organizations, and the U.S. and certain other countries could impose further sanctions, trade restrictions, and other retaliatory actions should the conflict continue or worsen. It is not possible to predict the broader consequences of these conflicts, including related geopolitical tensions, and the measures and retaliatory actions taken by the U.S. and other countries in respect thereof as well as whether any counter measures or retaliatory actions in response, including, for example, potential cyberattacks or the disruption of energy exports, are likely to cause regional instability and geopolitical shifts, which could materially adversely affect global trade, currency exchange rates, regional economies and the global economy. These situations remain uncertain, and while it is difficult to predict the impact of any of the foregoing, the conflicts and actions taken in response to these conflicts could increase our costs, reduce our sales and earnings, impair our ability to raise additional capital when needed on acceptable terms, if at all, or otherwise adversely affect our business, financial condition, and results of operations.

 

 

In addition, while we do not have any direct operations or significant sales in the Middle East nor Africa, geopolitical tensions and ongoing conflicts in these regions, particularly in Gaza, northern Israel and southern Lebanon, the Red Sea, Sudan, and Ethiopia, may lead to further global economic instability and fluctuating energy prices that could materially affect our business. It is not possible to predict the broader consequences of these conflicts, including related geopolitical tensions, and the measures and actions taken by other countries in respect thereof, which could materially and adversely affect global trade, currency exchange rates, regional economies and the global economy. While it is difficult to predict the impact of any of the foregoing, these conflicts may increase our costs, disrupt our supply chain, reduce our sales and earnings, impair our ability to raise additional capital when needed on acceptable terms, if at all, or otherwise adversely affect our business, financial condition and results of operations.

 

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 Years Ended September 30, 2024, and 2023

 

		Years Ended September 30,
		2024				2023
Revenue - products		$	395,495			$	799,747				-51	%
Revenue - consulting services			205,000				-				100	%
Revenue – License income			285,000				-				100	%
Total Revenue			885,495				799,747				11	%
Costs of materials and labor			409,169				1,255,315				-67	%
Selling, general and administrative expenses (exclusive of items shown separately below)			3,678,866				2,191,043				68	%
Impairment loss			23,911				-				100	%
Depreciation			87,116				69,437				25	%
Bad debt expense			59,935				1,267,960				-95	%
Operating loss			(3,373,502	)			(3,984,008	)			-15	%
Other income (expenses)			123,175				(39,196	)			-414	%
Loss before income taxes			(3,250,327	)			(4,023,204	)			-19	%
Income tax expense			800				-				100	%
Net loss			(3,251,127	)			(4,023,204	)			-19	%
Non-controlling interest			(37,298	)			(127,426	)			-71	%
Net loss attributable to INNO HOLDINGS INC.		$	(3,213,829	)		$	(3,895,778	)			-18	%

 

Revenues

 

Total revenue for the year ended September 30, 2024 increased 11% to $885,495 in comparison to the year ended September 30, 2023.

 

 

In February 2024, we started our second revenue stream by offering consulting service through our newly formed subsidiary, Inno AI Tech Corp. Throughout the year, we successfully supported a client in establishing a steel technology company. Our services included incorporation assistance, comprehensive training programs, in-depth market research, and strategic business development guidance. This engagement generated consulting revenue of $205,000. During the fourth quarter of 2024, we entered into a one-time licensing agreement with an individual and his startup company. This agreement provided them with a license to utilize our logo, technology, trademarks and other intellectual property for the purpose of startup operations and marketing development. The agreement generated $285,000 in licensing income.

 

Our product revenue decreased 51% to $395,495 in comparison to $799,747 for the year ended September 30, 2023. The decrease was primarily due to the various statuses and stages of projects. To mitigate collection issues, the Company has focused on developing relationships with larger customers. During the year ended September 30, 2024, the Company has been working on obtaining permits for large projects and exploring new business opportunities with larger customers.

 

Our backlog as of September 30, 2024 was approximately $14,000,000 to $19,000,000. The range of backlog amount is comprised of all remaining payments related to our signed customer contracts and estimation of order adjustments. The timing of revenue recognition from these contracts is subject to variation based on each project’s permit status and construction progress. These signed contracts included an agreement, amount of $15,875,800, with Vision Opportunity Fund LP (assigned to Vision 101) partially owned by one of our shareholders. None of the contract amount has been delivered to Vision 101 or recognized as revenue as of September 30, 2024.

 

Our revenues are significantly impacted by demand for residential and commercial buildings, economic conditions including interest rates and 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 negative overall economic conditions currently being experienced.

 

Costs of Materials and Labor

 

Costs of materials and labor include raw materials (primarily rolled steel) and direct labor in the processing of raw materials through the manufacturing process. Costs of materials and labor for the year ended September 30, 2024 was $409,169 compared to $1,255,315 for the year ended September 30, 2023. The decrease in the Cost of Goods Sold (COGS), pertaining to materials and labor, is predominantly due to the decrease in product sales volume.

 

The primary cost of consulting service revenue in fiscal year 2024 was the payroll expense for office employees, which is included in selling, general, and administrative expenses.

 

Selling, General and Administrative Expenses

 

Selling, general and administrative expenses for the year ended September 30, 2024, increased 68% to $3,678,866 in comparison to $2,191,043 for the comparable period in 2023. This increase was primarily driven by higher overhead costs, including rent, payroll, insurance, consulting and professional fees, marketing, and promotional expenses. These additional expenses were incurred to support our growth in the consulting business and comply with the regulatory requirements of a public company.

 

Bad debt expense

 

Bad debt expense decreased by $1,208,025 for the year ended September 30, 2024 compared to the same period in 2023. We estimated the credit losses based on each customer’s financial situation, project status and the outstanding days of the accounts receivable balance. Starting prior year, we strengthened our risk control of accounts receivable and reduced the days outstanding for accounts receivable by discontinuing business with smaller customers with high credit risk. Most of our current customers adhere to a 30-day payment term. For the current year’s transactions, we have maintained a high collection rate.

 

Operating Loss

 

Operating loss was $3,373,502 for the year ended September 30,2024, in comparison to an operating loss of $3,984,008 for the comparable period in 2023. The increase in operating loss was primarily attributed to the lower revenue and increased expenses offset by the decrease in bad debt expense, as discussed above.

 

 

Other Income (Expense)

 

Other income for the year ended September 30, 2024, was $123,175, in comparison to other expenses of $39,196 for the comparable period in 2023. The increase in other income was primarily due to interest earned on bank deposits of $76,047, supporting services provided to a customer of $104,674, and offset by settlements with former lessor, customers and subcontractor. Other expenses for the year ended September 30, 2023, were primarily attributable to loan interest.

 

Net Loss

 

Net loss for the year ended September 30, 2024 was $3,251,127, in comparison to a net loss of $4,023,204 for the year ended September 30, 2023. The decrease in net loss was primarily due to changes in revenue, costs, expenses and other income (expense) as outlined above.

 

Liquidity and Capital Resources

 

Sources of Liquidity

 

During the year ended September 30, 2024 and 2023, we primarily funded our operations with cash generated from operations, private and public 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 $1,526,661 as of September 30, 2024 compared to $4,898 of cash as of September 30, 2023. The cash increase was primarily due to the proceeds from the initial public offering closed in December 2023 and offset by the cash usage in operating and investing activities during the periods ended September 30, 2024.

 

The Company has participated in several private-placement offerings. On December 3, 2022, we closed on a private-placement offering pursuant to which we sold to an accredited investor an aggregate of $500,000 in common stock, at a purchase price of $35 per share. On March 13, 2023, we closed on a private-placement offering pursuant to which we sold to an accredited investor an aggregate of $100,000 in common stock, at a purchase price of $37 per share. On March 29, 2023, we closed on a private-placement offering pursuant to which we sold to an accredited investor an aggregate of $300,000 in common stock, at a purchase price of $38 per share. The offerings were completed pursuant to an exemption from registration under Rule 506(b) of the Securities Act of 1933, as amended.

 

On December 18, 2023, the Company successfully closed the initial public offering with net proceeds of $8 million.

 

We do not believe the cash and cash equivalents on hand as of September 30, 2024 of $1,526,661 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.

 

On October 31, 2024, the Company entered into a Securities Purchase Agreement with certain investors to issue and sell 500,000 shares of its common stock at a price of $4.00 per share, for an aggregate purchase price of $2,000,000.

 

On November 13, 2024, the Company entered into a Securities Purchase Agreement with nine non-U.S. investors to issue and sell an aggregate of 729,167 shares of common stock in a private placement offering at a price per share of $4.80, for total proceeds of approximately $3.5 million.

 

 

Working Capital

 

As of September 30, 2024 and September 30, 2023, our working capital (deficit) was $975,755 and $(2,913,827), respectively. The historical seasonality in our business during the year can cause cash and cash equivalents, inventory, and accounts payable to fluctuate, resulting in changes in our working capital.

 

Cash Flows

 

Operating Activities

 

Net cash used in operating activities for the year ended September 30, 2024 was $5,075,412 compared to $1,225,941 of net cash used in operating activities for the year ended September 30, 2023. The increase of net cash usage in operating activities was mainly due to a $128,733 increase of loss with non-cash reconciling items adjustment and a $3,720,738 increase of working capital outflow.

 

For the year ended September 30, 2024, net cash used in operating activities was $5,075,412, primarily driven by the net loss of $3,251,127, partially offset by non-cash items of $599,057 and working capital used cash of $2,423,342, which was primarily driven by a $322,739 increase of prepayments and other current assets, including prepaid insurance and prepayments to service suppliers, a $547,568 decrease in unearned revenue, a $729,359 decrease in operating lease liabilities and a $843,694 decrease in accounts payable, accounts payable - related party, and other current liabilities.

 

For the year ended September 30, 2023, net cash used in operating activities was $1,225,941, primarily driven by the net loss of $4,023,204, partially offset by non-cash items of $1,499,867, which mainly included bad debt expense of $1,267,960. Working capital provided cash of $1,297,396, which was primarily driven by a $936,098 increase in unearned revenue, a $325,951 increase in accounts payable, accounts payable - related party, operating lease liabilities and other current liabilities, a $468,895 decrease in account receivable, a $79,457 decrease of prepayments and other current assets, and partially offset by a $64,389 increase in inventories and a $538,765 increase in deferred offering costs.

 

Investing Activities

 

For the year ended September 30, 2024 and 2023, net cash used in investing activities was primarily the result of additions to property and equipment of $559,629 and $244,899, respectively, which are mainly related to the additions of machinery, tools, motor vehicles, and leasehold improvements.

 

Financing Activities

 

Net cash provided by financing activities was $7,144,235 and $1,425,110, respectively, for the year ended September 30, 2024 and 2023.

 

For the year ended September 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 $740,000 payment of short-term loans, $503,372 repayment to related parties, $49,393 payments of notes payable, and an aggregate amount payment of $13,000 for the assumption of the Warrants.

 

For the year ended September 30, 2023, net cash provided by financing activities was primarily due to the $900,000 proceeds from stock issuance, $627,000 proceeds from related parties, $230,000 proceeds from short-term loans and offset by $150,000 payment of short-term loans, $134,861 repayment to related parties, and $47,029 payments of notes payable.

 

 

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 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 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 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 Consolidated Financial Statements upon adoption.

 

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not required under Regulation S-K for “smaller reporting companies.”

 

 

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

INDEX TO FINANCIAL STATEMENTS

 

		Page
Financial Statements as of and for the Fiscal Years Ended September 30, 2024 and 2023
Report of Independent Registered Public Accounting Firm PCAOB ID# (2485)		F-2
Report of Independent Registered Public Accounting Firm PCAOB ID# (05854)		F-3
Consolidated Balance Sheets as of September 30, 2024 and 2023		F-4
Consolidated Statements of Operations for the years ended September 30, 2024 and 2023		F-6
Consolidated Statements of Changes in Stockholders’ Equity for the years ended September 30, 2024 and 2023		F-7
Consolidated Statements of Cash Flows for the years ended September 30, 2024 and 2023		F-8
Notes to Consolidated Financial Statements		F-9

 

 

 

Report of Independent Registered Public Accounting Firm

 

Shareholders and Board of Directors

Inno Holdings Inc.

Brookshire, TX

 

Opinion on the Consolidated Financial Statements

 

We have audited the accompanying consolidated balance sheet of Inno Holdings Inc. and its subsidiaries (the “Company”) as of September 30, 2024, the related consolidated statements of operations, changes in stockholders' equity, and cash flows for the year then ended, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at September 30, 2024, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

 

Basis for Opinion

 

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

 

Critical Audit Matter

 

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

 

/s/ Simon & Edward, LLP (PCAOB ID: 2485)

 

We have served as the Company’s auditor since 2024.

Rowland Heights, California

December 9, 2024

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the shareholders and the board of directors of INNO HOLDINGS INC.

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheet of INNO HOLDINGS INC. and its subsidiaries (the Company) as of September 30, 2023 and the related consolidated statements of operations, stockholders’ deficit, and cash flows for the year ended September 30, 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2023, and the results of its operations and its cash flows for the year ended September 30, 2023, in conformity with accounting principles generally accepted in the United States of America.

 

Going Concern Matter

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has suffered recurring losses from operations that raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 2 to the consolidated financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

/s/ TAAD LLP

 

We served as the Company’s auditor from 2022 to 2024.

Diamond Bar, California

January 16, 2024

 

 

INNO HOLDINGS INC. AND SUBSIDIARIES

Consolidated Balance Sheets

As of September 30, 2024 and September 30, 2023

 

		September 30, 2024				September 30, 2023
ASSETS
Current assets
Cash and cash equivalent		$	1,526,661			$	4,898
Accounts receivable, net			-				70,435
Inventories			333,074				394,293
Deferred offering costs			-				538,765
Prepayments and other current assets			428,873				180,467
Total current assets			2,288,608				1,188,858
Non-current assets
ROU assets			570,295				437,770
Property and equipment, net			1,300,583				869,584
Other non-current assets			9,851				49,550
Total non-current assets			1,880,729				1,356,904
Total assets		$	4,169,337			$	2,545,762
LIABILITIES AND EQUITY
Current liabilities
Accounts payable			271,507				781,056
Accounts payable – related party			-				535,595
Accounts payable			-				535,595
Unearned revenue			590,260				1,137,828
Other payables and accrued liabilities			287,952				92,164
Other payables – related party			1,000				504,372
Other payables			1,000				504,372
Short-term loan payable			50,000				790,000
Lease liability – current			60,236				212,277
Long-term notes payable – current portion			51,898				49,393
Total current liabilities			1,312,853				4,102,685
Non-current liabilities
Notes payable			58,948				110,846
Lease liability – non-current			-				275,817
Total non-current liabilities			58,948				386,663
Total liabilities			1,371,801				4,489,348
Commitments and contingency			—				—

 

 

INNO HOLDINGS INC. AND SUBSIDIARIES

Consolidated Balance Sheets

As of September 30, 2024, and September 30, 2023

 

		September 30, 2024				September 30, 2023
Stockholders’ Equity (Deficit)
Common stock, no par value; 100,000,000 shares authorized; 2,279,960 and 1,825,173 shares issued and outstanding on September 30, 2024 and September 30, 2023 *			—				—
Additional paid in capital			10,748,534				2,830,000
Accumulated deficit			(7,738,644	)			(4,524,815	)
Non-controlling interest			(212,354	)			(248,771	)
Total equity (deficit)			2,797,536				(1,943,586	)
Total liabilities and equity (deficit)		$	4,169,337			$	2,545,762

 

*	Adjusted retroactively for reverse stock split that occurred on October 9, 2024, see Note 2

 

The accompanying notes are an integral part of these Consolidated Financial Statements.

 

 

INNO HOLDINGS INC. AND SUBSIDIARIES

Consolidated Statements of Operations

For the Years Ended September 30, 2024 and 2023

 

		2024				2023
		For the Years Ended September 30,
		2024				2023
Revenue - products		$	395,495			$	799,747
Revenue - consulting services			205,000				-
Revenue – licensing income			285,000				-
Total Revenue			885,495				799,747
COSTS AND EXPENSES:
Costs of materials and labor			409,169				1,255,315
Selling, general and administrative expenses (exclusive of expenses shown separately below)			3,678,866				2,191,043
Impairment loss			23,911				-
Depreciation			87,116				69,437
Bad debt expense			59,935				1,267,960
Total costs and expenses			4,258,997				4,783,755
LOSS FROM OPERATIONS			(3,373,502	)			(3,984,008	)
OTHER INCOME (EXPENSE)
Interest income (expenses), net			76,047				(72,118	)
Other non-operating income (expense)			47,128				32,922
Total other income (expenses), net			123,175				(39,196	)
LOSS BEFORE INCOME TAXES			(3,250,327	)			(4,023,204	)
PROVISION FOR INCOME TAXES			800				-
NET LOSS			(3,251,127	)			(4,023,204	)
Non-controlling interest			(37,298	)			(127,426	)
NET LOSS ATTRIBUTABLE TO INNO HOLDINGS INC.		$	(3,213,829	)		$	(3,895,778	)
WEIGHTED AVERAGE NUMBER OF COMMON STOCK
Basic and Diluted			2,022,263				1,815,510
LOSSES PER SHARE
Basic and Diluted		$	(1.59	)		$	(2.15	)

 

*	Adjusted retroactively for reverse stock split that occurred on October 9, 2024, see Note 2. The computation of basic and diluted Losses Per Share were retroactively adjusted for all periods presented.

 

The accompanying notes are an integral part of these Consolidated Financial Statements.

 

 

INNO HOLDINGS INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders’ Equity

For the Years Ended September 30, 2024 and 2023

 

		Shares				Amount				Capital				Deficit				interest				Total
		Common Stock*								Additional Paid in				Accumulated				Non- controlling
		Shares				Amount				Capital				Deficit				interest				Total
Balance, September 30, 2022			1,797,000			$	—			$	1,805,000			$	(629,037	)		$	(121,345	)		$	1,054,618
Net loss			—				—				—				(3,895,778	)			(127,426	)			(4,023,204	)
Shares issued for cash			24,883				—				900,000				—				—				900,000
Shares issued for service			3,289				—				125,000				—				—				125,000
Balance, September 30, 2023			1,825,173			$	—			$	2,830,000			$	(4,524,815	)		$	(248,771	)		$	(1,943,586	)
Balance			1,825,173			$	—			$	2,830,000			$	(4,524,815	)		$	(248,771	)		$	(1,943,586	)
Net loss															(3,213,829	)			(37,298	)			(3,251,127	)
Shares issued upon IPO completion			250,000				—				7,859,534				—				—				7,859,534
Disposal of subsidiary			—				—				—				—				73,715				73,715
Warrants assumption			—				—				(13,000	)			—				—				(13,000	)
Shares issued for service			5,000				—				72,000				—				—				72,000
Fractional shares round up due to reverse stock split			199,787				—				—				—				—				—
Balance, September 30, 2024			2,279,960			$	—			$	10,748,534			$	(7,738,644	)		$	(212,354	)		$	2,797,536
Balance			2,279,960			$	—			$	10,748,534			$	(7,738,644	)		$	(212,354	)		$	2,797,536

 

*	Adjusted retroactively for reverse stock split that occurred on October 9, 2024, see Note 2. All references to number of shares, and to per share information in the consolidated financial statements have been retroactively adjusted.

 

The accompanying notes are an integral part of these Consolidated Financial Statements.

 

 

INNO HOLDINGS INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

 

		2024				2023
		For the Years Ended September 30,
		2024				2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(3,251,127	)		$	(4,023,204	)
Adjustments to reconcile net income to cash used in operating activities:
Depreciation expense			87,116				69,437
Stock-based compensation expense			146,333				41,667
Non-cash operating lease expense			224,216				120,803
Bad debt expense			59,935				1,267,960
Loss from settlement			28,796				—
Fixed assets disposal loss			5,035				—
Subsidiary disposal loss			23,715				—
Impairment loss			23,911				—
Change in operating assets and liabilities
Accounts receivable			10,500				468,895
Accounts receivable – related party			—				100,000
Inventories			61,219				(64,389	)
Deferred offering costs			(51,701	)			(538,765	)
Prepayments and other current assets			(322,739	)			79,457
Other non-current assets			—				(9,851	)
Accounts payable			(480,886	)			309,278
Accounts payable – related party			(485,595	)			50,000
Unearned revenue			(547,568	)			936,098
Operating lease liabilities			(729,359	)			(76,991	)
Other current liabilities			122,787				46,121
Other non-current liabilities			—				(2,457	)
Net cash used in operating activities			(5,075,412	)			(1,225,941	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Fixed assets additions			(559,629	)			(244,899	)
Proceed from fixed assets disposal			12,569				—
Net cash used in investing activities			(547,060	)			(244,899	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from related parties			—				627,000
Payments to related parties			(503,372	)			(134,861	)
Proceeds from short-term loans			—				230,000
Payments to short-term loans			(740,000	)			(150,000	)
Payment to long-term note			(49,393	)			(47,029	)
Warrants assumption			(13,000	)			—
Shares issued for cash			8,450,000				900,000
Net cash provided by financing activities			7,144,235				1,425,110
CHANGES IN CASH			1,521,763				(45,730	)
CASH AND CASH EQUIVALENT, beginning of period			4,898				50,628
CASH AND CASH EQUIVALENT, ending of period		$	1,526,661			$	4,898
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income tax		$	800			$	3,500
Cash paid for interest		$	23,697			$	43,909
Noncash deferred offering costs offset to APIC upon IPO completion		$	590,466			$	—
Right-of-use assets obtained in exchange for operating lease liabilities		$	356,741			$	104,690
Deposit applied to lease liability		$	39,699			$	—

 

The accompanying notes are an integral part of these Consolidated Financial Statements.

 

 

INNO HOLDINGS INC. AND SUBSIDIARIES

Notes to 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 53% of the equity interest in CBT. On October 16, 2023, the Company and the noncontrolling interest parties reached a new ownership agreement that the Company’s ownership increased to 55%. According to the new ownership agreement, the ownership percentage change is retroactively effective from January 18, 2022. The impact of historical noncontrolling interest allocation from this ownership percentage change is immaterial.

 

Effective as of January 21, 2022, the Company acquired 100% of the ordinary shares of Inno Metal Studs Corp. (“IMSC”), a Texas corporation incorporated on October 31, 2019. Pursuant to the terms of the Share Purchase Agreement with IMSC’s former sole owner and CEO of the Company, Mr. Dekui Liu, the Company issued 15,170,000 shares of its common stock to Mr. Dekui Liu in exchange for his 100% ownership in IMSC. Upon completion of the transaction, IMSC became a 100% owned subsidiary of the Company.

 

Inno Research Institute LLC (“IRI”), a Texas limited liability company incorporated on September 8, 2021, is a 65% owned subsidiary of IMSC. On January 27, 2024, IRI was voluntarily terminated and resulted in a disposal loss of $ 23,715. The R&D activities carried out by IRI will be transferred to Inno AI Tech Corp, a new subsidiary of the Company.

 

On January 21, 2024, the Company established 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 formed Inno AI Tech Corp., a wholly owned entity to conduct AI tech research and consulting activities.

 

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.

 

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.

 

Reclassifications

 

Certain amounts on the prior year’s consolidated balance sheets, consolidated statements of operations and cash flows were reclassified to conform to the current year presentation, with no effect on ending stockholders’ equity.

 

Reverse Stock Split

 

On November 30, 2022, the Company effected a forward stock split (the “Stock Split”) of the Company’s issued and outstanding shares of the common stock at a split ratio of 2-for-1. Further on July 24, 2023, the Company effected a reverse stock split (the “Reverse Stock Split”) of the Company’s issued and outstanding shares of the common stock at a split ratio of 1-for-2 such that every holder of common stock of the Company shall receive one share of common stock for every two shares of common stock held and to reduce the number of authorized shares of common stock from 200,000,000 to 100,000,000. Shortly after the Reverse Stock Split, the Board of Directors of the Company approved issuance of additional shares to preserve the original purchase price per share of the shares sold in the period from February 1 to September 30, 2023.

 

On October 9, 2024, the Company completed a 1-for-10 reverse stock split of its issued and outstanding common stock, no par value, (the “Reverse Stock Split”). As a result of the Reverse Stock Split, each share of common stock issued and outstanding immediately prior to October 9, 2024 were automatically converted into one-tenth (1/10) of a share of common stock. The Common Stock began trading on a Reverse Stock Split-adjusted basis on the Nasdaq Capital Market on October 10, 2024. The trading symbols for the Common Stock remains “INHD”. The Reverse Stock Split did not reduce the number of authorized shares of Common Stock and did not change the par value of the Common Stock. The Reverse Stock Split affected all stockholders uniformly. Except to the extent that the Reverse Stock Split resulted in the stockholders’ fractional shares being rounded up, no other effects affect stockholder’s ownership percentage of the Company’s shares of Common Stock. 199,787 fractional shares were issued in connection with the Reverse Stock Split.

 

All common share and per-share amounts in this Form 10-K have been retroactively restated to reflect the effect of the Reverse Stock Split.

 

F-9

 

 

INNO HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

 

Note 2 — Basis of Presentation and Summary of significant accounting policies (cont.)

 

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 $250,000, which is currently the maximum amount insured by the Federal Deposit Insurance Corporation for interest bearing accounts (there is currently no insurance limit for deposits in noninterest bearing accounts). The Company has not experienced any losses with respect to cash. Management believes the Company is not exposed to any significant credit risk with respect to its cash.

 

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 using expected credit loss (CECL) methodology each reporting period to determine if an allowance for credit loss is required.

 

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.

 

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.

 

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

 

F-10

 

 

INNO HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

 

Note 2 — Basis of Presentation and Summary of significant accounting policies (cont.)

 

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.

 

Revenue recognition

 

The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, accounting for product, service and licensing revenue, 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 or services 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.

 

License income originates from licensing our logo, technology and intellectual property where we receive fixed license fees over licensing periods. Our 2024 license revenue was derived from one-time licensing agreement with an individual and his startup company for the purpose of startup operations and marketing development. Revenue from the licensing has minimal associated direct costs, and thus is highly profitable.

 

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.

 

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.

 

F-11

 

 

INNO HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

 

Note 2 — Basis of Presentation and Summary of significant accounting policies (cont.)

 

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:

 

Schedule of depreciation on property and equipment

Machinery and equipment		7 years
Office equipment		5 years
Motor vehicles		5 years
Leasehold improvements		the shorter of the lease term or the estimated useful life of the 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, the Company recorded $23,911 impairment loss during the year ended September 30, 2024 to write down the leasehold improvement balance as a result of the early termination of the lease in Corona CA. No impairment expenses for property and equipment were recorded during the year ended September 30, 2023.

 

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.

 

F-12

 

 

INNO HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

 

Note 2 — Basis of Presentation and Summary of significant accounting policies (cont.)

 

Stock-based Compensation

 

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.

 

Segment Reporting

 

The Company uses the management approach in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions, allocating resources and assessing performance as the source for determining the Company’s reportable segments. During the years ended September 30, 2024 and 2023, the Chief Executive Officer has been identified as the chief operating decision maker. The Company’s chief operating decision maker regularly reviews consolidated assets and consolidated operating results prepared under U.S. GAAP for the enterprise as a whole when making decisions about allocating resources and assessing performance of the Company. Consequently, management has determined that the Company only has one operating segment as defined under ASC 280-10-50.

 

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.

 

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.

 

F-13

 

 

INNO HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

 

Note 2 — Basis of Presentation and Summary of significant accounting policies (cont.)

 

Loss per share

 

Basic loss 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 its annual reporting in fiscal year 2025 and for interim period reporting beginning the first quarter of fiscal year 2026 on a retrospective basis. Early adoption is permitted. We are currently evaluating the impact of this ASU on our segment disclosures.

 

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.

 

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606) as if the entity had originated the contracts. The guidance is effective for fiscal years beginning after December 15, 2023, with early application permitted. 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.

 

F-14

 

 

INNO HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

 

Note 2 — Basis of Presentation and Summary of significant accounting policies (cont.)

 

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 — Accounts Receivable, Net

 

Accounts receivable for the Company consisted of the following as of the dates indicated below:

 

Schedule of accounts receivable

		September 30, 2024				September 30, 2023
Accounts receivable		$	-			$	1,338,395
Less: allowance for credit losses			-				(1,267,960	)
Accounts receivable, net		$	-			$	70,435

 

The Company wrote off the allowance for credit losses subsequent to exhaustive efforts to recover the receivable, which typically occurs within a 12-month period following the initial reservation for the allowance. A summary of the activities in the allowance for expected credit losses for the years ended September 30, 2024 and 2023 is as follows:

 

Schedule of activities in the allowance for expected credit losses

		September 30, 2024				September 30, 2023
Allowance for credit losses, beginning		$	1,267,960			$	-
Add/ (Deduct):
Provision for credit loss			59,935				1,267,960
Write-offs			(1,327,895	)			-
Allowance for credit losses, end		$	-			$	1,267,960

 

The Company recorded credit losses of $59,935 and $1,267,960 for the years ended September 30, 2004 and 2023, respectively.

 

Note 4 — Inventories

 

As of September 30, 2024 and September 30, 2023, inventories consisted of the following:

 

Schedule of inventories

		September 30, 2024				September 30, 2023
Raw material		$	73,109			$	134,299
Production inventory			259,965				259,994
Total		$	333,074			$	394,293

 

As of September 30, 2024 and 2023, there was no allowance for obsolescence recorded.

 

Note 5 — Deferred offering costs

 

Deferred offering costs consisted of fees and expenses incurred in connection with the sale of the Company’s common stock in the IPO, including the legal, accounting, printing and other offering related costs. Upon completion of the IPO, these deferred offering costs are to be reclassified from current assets to stockholders’ equity and recorded against the net proceeds from the offering. As of September 30, 2024 and September 30, 2023, deferred offering costs amounted to $Nil and $538,765, respectively. On December 18, 2023, the whole amount of deferred offering costs was charged to additional paid in capital upon the completion of the initial public offering.

 

Note 6 — Prepayments and other current assets

 

As of September 30, 2024 and 2023, prepayments and other current assets consisted of the following:

 

Schedule of prepayments and other current assets

		September 30, 2024				September 30, 2023
Prepaid marketing and promotional services		$	73,750			$	-
Advance to other service providers			57,624				-
Advance to suppliers			250,638				87,217
Prepaid insurance			36,809				3,663
Prepaid for services by stock grants			-				83,333
Other prepayments and current assets			10,052				6,254
Total		$	428,873			$	180,467

 

F-15

 

 

INNO HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

 

Note 7 — Property and equipment, net

 

As of September 30, 2024 and 2023, property and equipment consisted of the following:

 

Schedule of property and equipment

		September 30, 2024				September 30, 2023
Machinery and equipment		$	346,900			$	346,900
Office equipment			3,064				5,488
Motor vehicles			109,276				64,082
Construction-in-progress			980,883				497,000
Leasehold improvements			18,000				54,049
Total			1,458,123				967,519
Property and equipment, gross			1,458,123				967,519
Less: accumulated depreciation			(157,540	)			(97,935	)
Property and equipment, net		$	1,300,583			$	869,584

 

The Construction-in-progress is related to the project to expand the Company’s operation and manufacturing capabilities in a factory in Texas. This project is expected to be completed by the end of February 2025.

 

In connection with the termination of the lease in Corona, CA as disclosed in Note 13, the Company recorded $23,911 impairment loss during the year ended September 30, 2024 to write down the leasehold improvement balance.

 

For the years ended September 30, 2024 and 2023, depreciation expenses amounted to $87,116 and $69,437, respectively.

 

Note 8 — Loans payable

 

Short-term loans

 

Revolving line of credit

 

On September 16, 2022, the Company entered into an agreement with Origin Bank for a revolving line of credit (the “Line of Credit”) of up to $1,000,000 with interest at the floating Prime Rate plus one percent (1.0%) per annum, which is to be adjusted daily to the rate in effect. Interest shall be due and payable monthly as it accrues. The Line of Credit is secured by a Security Agreement and Financing Statement that covers certain properties of the Company and guaranteed by Mr. Dekui Liu, the former CEO of the Company. As of September 30, 2024, the line of credit was fully paid off and closed. For the years ended September 30, 2024 and 2023, the Company recorded interest expense related to the Line of Credit of $ 15,881 and $60,957, respectively. As of September 30, 2024 and 2023, the total outstanding balance of the Note was $Nil and $560,000, respectively. The balance was presented on the consolidated balance sheet as a short-term loan.

 

Short term loan without interest

 

From June 2023 to August 2023, the Company borrowed short-term loans due on demand without interest, amounting to $230,000 from three individuals for operating purposes. As of September 30, 2024 and 2023, the outstanding balance due to these individuals were $50,000 and $230,000, respectively. The balance was presented on the consolidated balance sheet as a short-term loan.

 

Long-term loan

 

Promissory note payable

 

On October 28, 2021, the Company issued to BancorpSouth Bank a five-year unsecured 4.75% promissory note, payable in equal monthly installments of $4,661 commencing November 28, 2021 (the “Note”). The principal amount of the Note was $248,500. The Note is secured by a Security Agreement and Financing Statement that covers certain properties of the Company and guaranteed by Mr. Dekui Liu, the former CEO of the Company. For the years ended September 30, 2024 and 2023, the Company recorded interest expense related to the note of $6,773 and $8,903, respectively.

 

As of September 30, 2024 and 2023, the total outstanding balance of the Note was $110,846 and $160,239, respectively, which was presented on the consolidated balance sheet as a current portion of $51,898 and $49,393, and a non-current portion of $58,948 and $110,846, respectively.

 

Note 9 — 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 September 30, 2024, the amount due to Mr. Liu was $1,000. As of September 30, 2023, the amount due to Mr. Liu was $327,372.

 

F-16

 

 

INNO HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

 

Note 9 — Related party transactions (cont.)

 

The Company engaged Yunited Assets LLC (“Yunited”), a limited liability company owned by Mr. Cheng Yu, the minority owner of the Company’s subsidiary, Inno Research Institute, for consultation services on a project-by-project basis. During the year ended September 30, 2023, the Company recorded $4,375 of project-based consulting service fees and $110,000 consulting fee to Yunited for Mr. Yu’s daily operating services included in the general and administrative expenses. No such services have been provided for the year ended September 30, 2024. As of September 30, 2024 and 2023, the outstanding balance of accounts payable – related party due to Yunited was $Nil and $50,000, respectively.

 

The Company purchases prefab home, materials and supplies, including design services from Baicheng Trading LLC (“Baicheng”), a company with a director related to the Chairwoman. During the year ended September 30, 2024, Baicheng provided the renovation design services with a fee of $52,000. Additionally, the Company prepaid $225,511 to Baicheng for roof materials for the factory improvement project. As of September 30, 2024, the outstanding balance of prepayments to Baicehng was $225,511. As of September 30, 2023, the outstanding accounts payable-related party due to Baicheng was $485,595.

 

Starting in December 2022, for operation and cashflow needs, the Company advances funds from Zfounder Organization Inc., (“Zfounder”), one of the Company’s 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 September 30, 2024, the outstanding balance, due to Zfounder and Wise Hill, has been fully paid off. As of September 30, 2023, the outstanding balance due to Zfounder and Wise Hill, were $55,000 and $122,000, respectively.

 

In March 2023, the Company entered into an agreement with Vision Opportunity Fund LP, a Florida limited partnership partially owned by a former 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 $15,875,800 plus applicable taxes. As of September 30, 2024, amount of $244,185 has been received and recorded as deferred revenue, and $Nil amount of revenue has been recognized during the year ended September 30, 2024.

 

Note 10 — Other payables and accrued liabilities

 

As of September 30, 2024 and 2023, Other payables and accrued liabilities consisted of the following:

 Schedule of other payables and accrued liabilities

		September 30, 2024				September 30, 2023
Payable to service providers			185,793				-
Accrued compensation			74,915				-
Other payable			27,244				92,164
Other payables and accrued liabilities		$	287,952			$	92,164

 

F-17

 

 

INNO HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

 

Note 11 — Equity

 

The Company was incorporated in Texas on September 8, 2021. The total authorized shares of capital stock were 200,000,000 shares without par value.

 

As of September 30, 2024 and September 30, 2023, after giving effect to the stock splits of the outstanding shares of Common Stock, there were 2,279,960 and 1,825,173 shares of Common Stock issued and outstanding, respectively. The total authorized number of shares of capital stock was 100,000,000 shares without par value.

 

In December 2022, The Company issued 14,286 shares of its common stock at a price of $35.0 per share to an accredited investor for $500,000 in cash.

 

In February 2023, The Company issued 2,703 shares of its common stock at a price of $37.0 per share to an accredited investor for $100,000 in cash.

 

In March 2023, The Company issued 7,895 shares of its common stock at a price of $38.0 per share to an accredited investor for $300,000 in cash.

 

On June 20, 2023, the Company issued 1,316 shares of its common stock for a total value of $50,000 for services to be rendered during next twelve months by the immediate relative of the Company’s Chief Financial Officer. On June 20, 2023, the Company issued 1,973 shares of its common stock for a total value of $75,000 for services to be rendered during next twelve months by one nonemployee contractor. These shares were valued at $38.0 per share, which was the per share price for the most recent sale of the Company’s capital stock to accredited investors. On January 1, 2024, the Company issued 5,000 shares of its common stock for a total value of $72,000 for services to be rendered during next twelve months by one advisor firm. For the years ended September 30, 2024 and 2023, the Company recorded $146,333 and $41,667 as stock compensation expense under Selling, general and administrative expenses. As of September 30, 2024 and September 30, 2023, the remaining balance of $9,000 and $83,333 was recorded as Prepayments and other current assets, respectively.

 

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 250,000 shares (“the Shares”) of its common stock, no par value, the Company adopted its Amended and Restated Bylaws, effective the same day. In connection with the Offering of the Shares at an offering price of $40.0 per share, the Company also granted the underwriters an option exercisable for 45-days to purchase up to 37,500 shares of Common Stock as the Public Offering Price, less the underwriting discount to cover-over allotment. Additionally, the Company also issued warrants to the underwriters to purchase up to 20,125 shares of Common Stock at an exercise price of $48.0 per share, subject to adjustment as set forth in the warrants, exercisable from June 18, 2024 and valid until December 18, 2028. On March 1, 2024, the Company entered into a warrant assumption agreement with the underwriter to assume those certain underwriter’s warrants for the purchase an aggregate amount of 20,125 shares of the Company’s common stock in connection with the Company’s initial public offering. Pursuant to the warrant assumption agreement, the Company paid an aggregate amount of $13,000 for the assumption of the Warrants. The paid amount of $13,000 was recorded to reduce Additional Paid-in Capital. As of September 30, 2024, the Warrants are no longer outstanding.

 

The total gross proceeds from the Offering were $10,000,000, before deducting underwriting discounts and other offering expenses associated with the Offering payable by the Company or paid by the Company. Transaction costs related to the offering amounted to $2,140,466, consisting of $700,000 of underwriting fees, $345,876 of underwriting related expenses, $595,000 of legal fees and $499,590 of other costs. Of the total transaction cost of $2,140,466, $590,466 in transaction costs were incurred and paid by the company before the closing date. These costs were recorded as deferred offering costs and were offset to equity upon the completion of the IPO. $8,450,000 total net cash from the Offering has been received by the Company on December 19, 2023.

 

F-18

 

 

INNO HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

 

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 September 30, 2024 and 2023, $1,526,661 and $4,898, respectively, were deposited with various major financial institutions in the United States. Accounts at each institution in the United States are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000. As of September 30, 2024, the Company had deposits in excess of the FDIC insurance limit with two financial institutions in the United States with $757,744 uninsured. As of September 30, 2023, the Company did not have deposit in excess of the FDIC insurance limit.

 

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 year ended September 30, 2024, four customers accounted for 90% of the Company’s total revenues, respectively. For the year ended September 30, 2023, three customers accounted for 53%. As of September 30, 2024, $Nil outstanding of accounts receivable. Accounts receivable from one customer accounted for 100% of the Company’s total accounts receivable as of September 30, 2023.

 

For the year ended September 30, 2024, two suppliers accounted for 58% of the Company’s total purchases. For the year ended September 30, 2023, three suppliers accounted for 57% of the Company’s total purchases. As of September 30, 2024 and 2023, accounts payable to two suppliers accounted for 51% and 55% of the Company’s total accounts payable, respectively.

 

Note 13— Commitments and contingencies

 

Lease commitments

 

The Company has adopted ASC 842 since its inception date.

 

The Company has entered into a lease agreement for office and production space in Texas with a term from December 1, 2019 until December 31, 2024 at a rate of $4,129 to $5,089 per month. On January 1, 2024, the Company terminated the facility lease in Texas without penalty and entered into a new lease agreement with the landlord. The new lease term is from January 1, 2024 to January 1, 2027, with a monthly rent of $18,000. The facility consists of 15,000 square feet of indoor space and 2.5 acres of concrete slab in the yard. Subsequently, on February 1, 2024, a mutual amendment to the lease agreement was executed. Under the terms of the amendment, the Company has opted to prepay the lease payments covering the period up to December 31, 2026, with the due date set for April 1, 2024. This prepayment arrangement secures a rent-free period for the final year of the lease, spanning the entirety of 2027.

 

The Company has also entered into a lease agreement for office and production space in Corona, California with a term from May 1, 2022 until April 30, 2027 at a rate of $6,617 to $7,740 per month. In August 2023, the Company relocated its California office from Corona to Diamond Bar. The Company was obligated to pay the monthly rent for the office in Corona until February 1, 2024 when the landlord found a new lessee to occupy the facility. The right-of-use asset and lease liability were adjusted to reflect the termination of the lease. A loss of $24,710 was recognized in the income statement, representing the difference between the carrying amounts of the right-of-use assets $251,953 and the lease liability $221,156 (net with deposit of $39,699 ), as well as additional fees charged by the landlord. On June 20, 2024, the Company and the landlord settled the lease with a final lease payment of $55,000, resulting in $44,204 of non-operating income.

 

The lease in Diamond Bar, California has a term of 24 months from August 18, 2023 to August 17, 2025 at a rate of $4,730 to $4,926 per month.

 

In addition, the Company will be responsible for its pro rata share of certain costs, including utility costs, insurance and common area costs, as further detailed in the lease agreements.

 

F-19

 

 

INNO HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

 

Note 13— Commitments and contingencies (cont.)

 

Total commitment for the full term of the leases is $770,676. $570,295 and $437,770 of operating lease right-of-use assets and $60,236 and $488,094 of operating lease liabilities were reflected on the September 30, 2024 and 2023 consolidated balance sheets, respectively.

 Schedule of operating lease cost

		2024				2023
Lease cost		For the years ended September 30,
		2024				2023
Operating lease cost (included in G&A in the Company’s statement of operations)		$	258,636			$	153,241
Other information:
Cash paid for amounts included in the measurement of lease liabilities		$	720,487			$	109,430
Remaining term in years			0.5-3.25				1.25 – 3.58
Average discount rate – operating leases			9.5	%			8.5	%

 

The supplemental balance sheet information related to leases is as follows:

 Schedule of supplement balance sheet information related to lease

Operating leases		September 30, 2024				September 30, 2023
Right of use asset – non-current		$	570,295			$	437,770
Lease Liability – current			60,236				212,277
Lease Liability – non-current			0				275,817
Total operating lease liabilities		$	60,236			$	488,094

 

Maturities of the Company’s lease liabilities are as follows:

 Schedule of lease liabilities

		Operating Lease
For periods subsequent to September 30, 2024:
2025		$	62,792
Less: Imputed interest/present value discount			(2,556	)
Present value of lease liabilities		$	60,236

 

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 $73,000.

 

The Company is currently 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. While the case is in its early stages, initial investigations suggest that the Company did not receive any of these funds. The Company is vigorously contesting the plaintiff’s claims and have requested the dismissal of charges against the Company due to lack of evidence. Negotiations for dismissal are ongoing.

 

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.

 

F-20

 

 

INNO HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

 

Note 13— Commitments and contingencies (cont.)

 

Nasdaq Listing Rule 5550(a)(2)

 

On April 12, 2024, the Company received a letter (the “Notice”) from The Nasdaq notifying the Company that, because the closing bid price for its common stock has been below $1.00 per share for 30 consecutive business days, it no longer complies with the minimum bid price requirement for continued listing on The Nasdaq Capital Market (the “Minimum Bid Price Requirement”). Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid price of $1.00 per share (the “Minimum Bid Price Requirement”), and Listing Rule 5810(c)(3)(A) provides that a failure to meet the Minimum Bid Price Requirement exists if the deficiency continues for a period of 30 consecutive business days.

 

The Notice has no immediate effect on the listing of the Company’s common stock on The Nasdaq. Pursuant to Nasdaq Marketplace Rule 5810(c)(3)(A), the Company has been provided an initial compliance period of 180 calendar days, or until October 9, 2024 to regain compliance with the Minimum Bid Price Requirement. During the compliance period, the Company’s shares of common stock will continue to be listed and traded on The Nasdaq. To regain compliance, the closing bid price of the Company’s common stock must meet or exceed $1.00 per share for a minimum of 10 consecutive business days during the 180-calendar day grace period.

 

On October 25, 2024, the Company received written notice (the “Compliance Notice”) from the Nasdaq Office of General Counsel of The Nasdaq Stock Market LLC informing the Company that it has regained compliance with the bid price requirement in Nasdaq Listing Rule 5550(a)(2), which requires that companies listed on the Nasdaq Capital Market maintain a minimum bid price of $1.00 per share, and that the Company’s securities will continue to be listed and traded on The Nasdaq Stock Market.

 

Note 14 — Income taxes

 

On December 22, 2017, the President of the United States signed into law H.R.1, formerly known as the Tax Cuts and Jobs Act (the “Tax Legislation”). The Tax Legislation significantly revised the U.S. tax code by (i) lowering the U.S. federal statutory income tax rate from 35% to 21%, (ii) implementing a territorial tax system, (iii) imposing a one-time transition tax on deemed repatriated earnings of foreign subsidiaries, (iv) requiring a current inclusion of global intangible low taxed income of certain earnings of controlled foreign corporations in U.S. federal taxable income, (v) creating the base erosion anti-abuse tax regime, (vi) implementing bonus depreciation that will allow for full expensing of qualified property, and (vii) limiting deductibility of interest and executive compensation expense, among other changes. The Company has computed its tax expenses using the new statutory rate effective on January 1, 2018 of 21%.

 

Other provisions of the new legislation include, but are not limited to, limiting deductibility of interest and executive compensation expense. These additional items have been considered in the income tax provision for the years ended September 30, 2024 and 2023.

 

Texas imposes a franchise tax that applies to most business entities that are formed or qualified to do business, or which are otherwise doing business, in Texas. Under the Texas franchise tax, a 0.75% tax is imposed for the years ended September 30, 2024 and 2023 on the Company’s taxable margin that is apportioned to Texas. Taxable margin is generally defined as revenues less certain costs.

 

F-21

 

 

INNO HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

 

Note 14 — Income taxes (cont.)

 

The income tax provision for the years ended September 30, 2024 and 2023 consisted of the following:

 Schedule of income tax provision

		2024				2023
		September 30,
		2024				2023
Current:
Federal		$	—			$	—
State			800				—
Total current income tax provision			800				—
Deferred:
Federal			(1,532,244	)			(633,247	)
State			—				—
Increase/(decrease) in valuation allowance			1,532,244				633,247
Total deferred taxes			—				—
Total provision for income taxes		$	800			$	—

 

The deferred tax asset as of September 30, 2024 and 2023 consisted of the following:

 Schedule of deferred tax

		2024				2023
		September 30,
		2024				2023
Stock-based compensation		$	-			$	8,750
Net operating loss			1,493,981				626,793
Depreciation			(47,602	)			(53,588	)
Unearned revenue			72,917				—
Investment in Passthrough Entities			8,542				18,856
Allowance for Doubtful Accounts			-				266,272
Others			4,406				1,383
Total deferred tax assets			1,532,244				868,466
Less: valuation allowance			(1,532,244	)			(868,466	)
Deferred tax assets net		$	—			$	—

 

The company has net operating loss carry forwards of approximately $4.1 million and $2.5 million for the years ended September 30, 2024 and 2023, respectively. The operating losses do not expire.

 

Valuation Allowance

 

We periodically assess whether it is more likely than not whether we will generate sufficient taxable income to realize our deferred tax assets and establish a valuation allowance if it’s we deem that will not likely be able to realize the benefit associated with our deferred tax assets. We consider all available positive and negative evidence and make certain assumptions to make this determination. We review our deferred tax liabilities, historical earnings, history of cycles of earnings and losses within our industry, our business environment and the potential to generate current and future earnings. We cannot determine at this time when we will be able to generate sufficient taxable income to realize our deferred tax assets. We therefore have recorded a full valuation allowance against our net deferred tax assets.

 

F-22

 

 

INNO HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

 

Note 14 — Income taxes (cont.)

 

The Company is subject to U.S. federal income tax as well as state income tax in certain jurisdictions. The tax years 2021 to 2024 remain open to examination by the major taxing jurisdictions to which the Company is subject. The following is a reconciliation of income tax expenses at the effective rate to income tax at the calculated statutory rates:

 Schedule of effective rate income tax rate income tax

		September 30, 2024				September 30, 2023
Statutory tax rate
Federal			21.00	%			21.00	%
State (net of federal benefit)			(0.02	)%			—	%
Net effect of state income tax deduction and other permanent differences			(21.00	)%			(21.00	)%
Effective tax rate			(0.02	)%			—	%

 

As of September 30, 2024 and 2023, the outstanding income tax payable was both $0.

 

Note 15 — Subsequent events

 

On October 14, 2024, the Company entered into an equity investment agreement with an individual, securing a 15% ownership interest in CoreModu LLC, a company specializing in the production of light steel structural materials. The investment totaled $1.4 million.

 

On October 31, 2024, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain investors (the “Investors”), providing for the sale and issuance of 500,000 shares (the “Shares”) of the Company’s common stock, no par value (the “Common Stock”), for an aggregate purchase price of $2,000,000 at $4.00 per share. The purchase, sale, and issuance of the Shares (the “Closing”) are planned to take place on or before November 6, 2024. The Shares were issued pursuant to the Purchase Agreement, were not registered under the Securities Act of 1933, as amended (the “Securities Act”), and were issued in reliance on the exemption from registration requirements thereof provided by Section 4(a)(2) of the Securities Act or Regulation S promulgated under the Securities Act. The Company relied on these exemptions from registration based in part on representations made by the Investors.

 

On October 31, 2024, in connection with the Purchase Agreement, the Company entered into a Registration Rights Agreement with the Investors (the “Registration Rights Agreement”). The Registration Rights Agreement provided, among other things, that the Company will as soon as reasonably practicable, and in any event no later than December 31, 2024, file with the SEC (at the Company’s sole cost and expense) a registration statement registering the resale of the Shares of Common Stock. The Company agreed to use its commercially reasonable efforts to have such registration statement declared effective as soon as practicable after the filing thereof.

 

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, 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 Private Placement closed on November 20, 2024. As of November 27, 2024, the Company has received funds from six of the nine Purchasers and an aggregate purchase price of $2,475,000. The remaining three Purchasers are in the process of completing their wire transfers.

 

 

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCAIL DISCLOSURE.

 

None.

 

ITEM 9A. CONTROLS AND PROCEDURES

 

This annual report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of the company’s registered public accounting firm due to a transition period established by rules of the Securities and Exchange Commission for newly public companies.

 

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 Annual Report. Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that, as of September 30, 2024, 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

 

We have made no change in our internal control over financial reporting during the last fiscal year that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

ITEM 9B. OTHER INFORMATION

 

None.

 

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

 

Not applicable.

 

 

PART III

 

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 

Directors and Executive Officers

 

The following are our executive officers and directors and their respective ages and positions as of the date of this annual report.

 

Name		Age		Position
Ding Wei		44		Chief Executive Officer, Director and Chairman
Tianwei (Solomon) Li		36		Chief Financial Officer
Mengshu Shao		33		Director
Yufang Qu		58		Independent Director
Tao Tu		44		Independent Director
Yongbo Mo		28		Independent Director

 

Ding Wei — Chief Executive Officer, Director and Chairman

 

Mr. Wei, 44 years old, was appointed as our Chief Executive Officer, Director and Chairman on October 15, 2024. In addition, Mr. Wei is the founder, chairman, and general manager of Yangzhou Ruide Fei Technology Co., Ltd. and Yangzhou Yu Chen Saiwen Information Consulting Co., Ltd. since July 2014, where he was responsible for business operation and corporation management, including strategic planning, operations management, financial management, marketing, and team management. From 2009 to 2013, Mr. Wei served as the head of the administrative department at HYVA MECHANICS (CHINA) CO., LTD., during which he was responsible for human resources support, office operations management, team leadership, and compliance control. From 2006 to 2009, Mr. Wei was the deputy general manager and executive assistant to the chairman at Yangzhou Gaoshi Glasses Co., Ltd., and her was responsible for overseeing daily operations across multiple departments, developing and implementing organizational strategies, monitoring financial performance, and conducting performance evaluations. Mr. Wei holds a bachelor’s degree in computer science and information systems from CARICH Education of New Zealand.

 

Tianwei (Solomon) Li — Chief Financial Officer

 

Mr. Li, 36 years old, was appointed as our Chief Financial Officer on July 17,2023. Mr. Li is a highly accomplished finance professional with a diverse background spanning various prestigious institutions. From November 2021 to July 2023, he has served as a licensed banker at both J.P Morgan Securities LLC and JPMorgan Chase Bank, N.A., where he combined his matchless expertise in financial management, venture capital, and financial advisory to create real value for clients. Before joining INNO HOLDINGS INC, Mr. Li worked as an exclusive banker at J.P Morgan Securities LLC. From October 2021 to December 2021, he worked as a registered representative at Sutter Securities Inc, providing investment advice and navigating complex regulatory frameworks. Prior to that, from November 2020 to December 2021, he worked as a registered representative at Boustead Securities, LLC, where he offered investment, management, and consulting services to over 50 portfolio companies. Notably, Mr. Li held leadership positions as Vice President at both Multipoint Resources Management Corp, from April 2019 to December 2019, and CATHY LOGISTICS INC, from February 2019 to August 2019, where he demonstrated exceptional leadership skills and strategic decision-making abilities. With a master’s degree in Business Administration and holding the US Financial Industry Regulatory Agency Series 7 and 63 Securities licenses, Mr. Li exemplifies professionalism and regulatory compliance in his work. Combining his extensive practical experience with his strong academic foundation, Mr. Li is committed to delivering exceptional financial solutions and building long-lasting client relationships.

 

 

Mengshu Shao — Director

 

Ms. Shao, 33 years old, was appointed as a Director on October 23, 2024. Ms. Shao served as internal auditor manager at Agile Group from October 2021 to September 2024, where she was responsible for managing internal audit projects of corporation, including operational auditing, risk assessment and management, internal control evaluation, compliance monitoring, and fraud detection. From May 2019 to September 2021, Ms. Shao held the position of internal auditor at Cedar Holdings, where she worked on internal audit tasks of corporation, including risk assessment and management, operational audit, and internal control evaluation. From August 2016 to April 2019, Ms. Shao worked as an auditor at PwC Mainland China. Ms. Shao graduated from Jinan University in June 2016 with a master’s degree in accounting.

 

Yufang Qu — Independent Director

 

Ms. Qu, 58 years old, was appointed as a Director on October 15, 2024. Ms. Qu served as an accountant of Shuangyashan Shijixing Construction Engineering Co., Ltd. from 2004 to 2022, where she was responsible for organizing financial information, preparing financial statements, and providing financial analysis to help optimize financial structure and improve efficiency. Ms. Qu graduated from Shuangyashan Radio and Television University in 1993 with a bachelor’s degree in financial accounting.

 

Tao Tu — Independent Director

 

Mr. Tao TU, age 44, was appointed as a Director on May 31, 2024. Mr.Tu currently serves as the Director of Fuda Capital Ltd. and as the Chief Executive Officer at Jinyide Culture Media Co., Ltd., where he is responsible for strategic leadership, organizational management, external representation, financial Performance, and corporate governance. From 2017 to 2020, he served as the Chief Executive Officer at Jinyide Jewelry Co., Ltd., where he was responsible for corporate governance, marketing and development, customer relationship, and organizational development. Mr. Tu received his bachelor’s degree in Finance from the South-Central University for Nationalities.

 

Yongbo Mo — Independent Director

 

Mr. Mo, 28 years old, was appointed as a Director on October 23, 2024. Mr. Mo has been working at Shanghai Haineng Investment Consulting Company as a Product Manager since February 2022, where he is primarily responsible for leading and managing investment projects, including project screening, due diligence, financial analysis, risk assessment, project execution supervision, and post-project tracking and evaluation. From June 2018 to January 2022, Mr. Mo served as a Media Manager at Zhengzhou Houde Technology Co., Ltd., where he was primarily responsible for developing and implementing media strategies, which include maintaining media relationships, content operations, user operations, brand promotion, and commercial cooperation services. Mr. Mo graduated from Zhengzhou Information Technology Vocational School in September 2017 with a bachelor’s degree in Investment and Finance.

 

Family Relationships

 

There are no familial relationships between the directors or executive officers of the Company.

 

Code of Ethics

 

Our Board has adopted a written code of business conduct and ethics (“Code of Ethics”) that applies to our directors, officers, and employees, including our principal executive officer, principal financial officer and principal accounting officer or controller, or persons performing similar functions. We intend to post on our website a current copy of the Code of Ethics and all disclosures that are required by law regarding any amendments to, or waivers from, any provision of the Code of Ethics. Any person may obtain a copy of our Code of Ethics, without charge, by mailing a request to the Company at the address appearing on the front page of this annual Report on Form 10-K or by viewing it on our website found at https://www.innoholdings.com/code-of-business-conduct-and-ethics.

 

 

Insider Trading Policy

 

All officers, directors and employees of, and consultants and contractors to, us or any of our subsidiaries are subject to our Insider Trading Policy. The Insider Trading Policy prohibits the unauthorized disclosure of any nonpublic information acquired in the workplace and the misuse of material nonpublic information in the trading of our securities. To ensure compliance with the Insider Trading Policy and applicable federal and state securities laws, all officers, directors and employees of, and consultants and contractors to, us or any of our subsidiaries must refrain from the sale or purchase of our securities except in specific designated trading windows or pursuant to 10b5-1 trading plans that were preapproved. Even during a trading window period, certain insiders, including our named executive officers and directors, must comply with our designated pre-clearance policy prior to trading in our securities.

 

Board Leadership Structure and Risk Oversight

 

Our Board has responsibility for the oversight of our risk management processes and, either as a whole or through its committees, regularly discusses with management our major risk exposures, their potential impact on our business and the steps we take to manage them. The risk oversight process includes receiving regular reports from board committees and members of senior management to enable our Board to understand our risk identification, risk management, and risk mitigation strategies with respect to areas of potential material risk, including operations, finance, legal, regulatory, cybersecurity, strategic, and reputational risk. While the Company has not yet experienced a significant impact related to the situation in Ukraine caused by the Russian invasion, the Board will also closely monitor the risks in relation to such developments, including but not limited to risks related to cybersecurity, sanctions, supply chain, suppliers and service providers. Similarly, our board is monitoring US-China relations to monitor risks such as political disruption, supply chain, and foreign exchange.

 

Board of Directors

 

Our business and affairs are managed under the direction of our Board. Our Board consists of 5 directors, 3 of whom qualify as “independent” under the listing standards of Nasdaq.

 

Directors serve until the next annual meeting and until their successors are elected and qualified. Officers are appointed to serve until their successors have been elected and qualified.

 

Director Independence

 

Our Board is composed of a majority of “independent directors” as defined under the rules of Nasdaq. Nasdaq Listing Rule 5605(a)(2) provides that an “independent director” is a person other than an officer or employee of the company or any other individual having a relationship which, in the opinion of the Company’s Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

 

Under such definition, our Board has undertaken a review of the independence of each director. Based on information provided by each director concerning his or her background, employment and affiliations, our Board has determined that Yufang Qu, Tao Tu and Yongbo Mo are all independent directors of the Company.

 

Committees of the Board of Directors

 

Committees of the Board were established and took effect upon the closing of our IPO on December 18, 2023. Our committees include an audit committee and a compensation committee. Each such committee has the composition and responsibilities described below:

 

 

Audit Committee

 

Our audit committee consists of Yufang Qu, Tao Tu and Yongbo Mo. Yufang Qu is the chairman of the audit committee. In addition, our Board has determined that Yufang Qu is an audit committee financial expert within the meaning of Item 407(d) of Regulation S-K under the Securities Act of 1933, as amended, or the Securities Act. The audit committee’s duties, which are specified in our Audit Committee Charter, include, but are not limited to:

 

	(a)	reviewing and discussing with management and the independent auditor the annual audited financial statements, and recommending to the Board whether the audited financial statements should be included in our annual disclosure report;
	(b)	discussing with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of our financial statements;
	(c)	discussing with management major risk assessment and risk management policies;
	(d)	monitoring the independence of the independent auditor;
	(e)	verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law;
	(f)	reviewing and approving all related-party transactions;
	(g)	inquiring and discussing with management our compliance with applicable laws and regulations;
	(h)	preapproving all audit services and permitted non-audit services to be performed by our independent auditor, including the fees and terms of the services to be performed;
	(i)	appointing or replacing the independent auditor;
	(j)	determining the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work;
	(k)	establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies; and
	(l)	approving reimbursement of expenses incurred by our management team in identifying potential target businesses.

 

The audit committee is composed exclusively of “independent directors” who are “financially literate” as defined under the Nasdaq listing standards. The Nasdaq listing standards define “financially literate” as being able to read and understand fundamental financial statements, including a company’s balance sheet, income statement and cash flow statement.

 

In addition, the Company has certified to Nasdaq that the committee has, and will continue to have, at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting, or other comparable experience or background that results in the individual’s financial sophistication.

 

 

Compensation Committee

 

Our compensation committee consists of Yufang Qu, Tao Tu and Yongbo Mo, each of whom is an independent director. Each member of our compensation committee is also a non-employee director, as defined under Rule 16b-3 promulgated under the Exchange Act. Yufang Qu is the chairman of the compensation committee. The compensation committee’s duties, which are specified in our Compensation Committee Charter, include, but are not limited to:

 

	(a)	reviews, approves and determines, or makes recommendations to our Board regarding, the compensation of our executive officers;
	(b)	administers our equity compensation plans;
	(c)	reviews and approves, or makes recommendations to our Board, regarding incentive compensation and equity compensation plans; and
	(d)	establishes and reviews general policies relating to compensation and benefits of our employees.

 

Involvement in Certain Legal Proceedings

 

To our knowledge, none of our current directors or executive officers has, during the past ten (10) years:

 

	(a)	been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
	(b)	had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two (2) years prior to that time;
	(c)	been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his or her involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;
	(d)	been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;
	(e)	been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
	(f)	been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in section 3(a)(26) of the Exchange Act), any registered entity (as defined in section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

 

Director Qualifications

 

In accordance with its charter, our nominating and corporate governance committee develops and recommends to our board of directors appropriate criteria, including desired qualifications, expertise, skills and characteristics, for selection of new directors and periodically reviews the criteria adopted by our board of directors and, if appropriate, recommends changes to such criteria.

 

 

Board Diversity

 

Our board of directors desires to seek members from diverse professional backgrounds who combine a strong professional reputation and knowledge of our business and industry with a reputation for integrity. Our board of directors does not have a formal policy with respect to diversity and inclusion but is in process of establishing a policy on diversity. Diversity of experience, expertise and viewpoints is one of many factors the nominating and corporate governance committee considers when recommending director nominees to our board of directors. Further, our board of directors seeks highly qualified women and individuals from minority groups to include in the pool from which new candidates are selected. Our board of directors also seeks members that have experience in positions with a high degree of responsibility or are, or have been, leaders in the companies or institutions with which they are, or were, affiliated, but may seek other members with different backgrounds, based upon the contributions they can make to our company. We believe that our current board composition reflects our commitment to diversity in the areas of professional background.

 

Delinquent Section 16(a) Reports

 

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors, executive officers and persons who own more than 10% of our outstanding shares of common stock (“Ten Percent Holders”) to file with the SEC reports of their share ownership and changes in their share ownership of our common stock. Directors, executive officers and Ten Percent Holders are also required to furnish us with copies of all ownership reports they file with the SEC. To our knowledge, based solely on a review of the copies of such reports furnished to us, the following former directors, former executive officers and former Ten Percent Holders did not comply with all Section 16(a) filing requirements during the fiscal year ended September 30, 2024 as follows: Messrs. Liu, Li, Sung, Zhang and Haws, and Mses. Gong and Liu, filed their Form 3s late in 2023. Mr. Liu Dekui filed his Form 4 late in 2024. ZFounder Organization Inc. and West Lake Club Inc. filed their Form 3s late in 2024.

 

ITEM 11. EXECUTIVE COMPENSATION

 

Compensation for our Named Executive Officers

 

As an emerging growth company, we have opted to comply with the executive compensation disclosure rules applicable to “smaller reporting companies,” as such term is defined in the rules promulgated under the Securities Act. This section discusses the material components of the executive compensation program for our named executive officers (“NEOs”) for the fiscal year ending September 30, 2024 (“Fiscal Year 2024”) and the fiscal year ending September 30, 2023 (“Fiscal Year 2023”).

 

For Fiscal Year 2024 and 2023, the Company’s NEOs were:

 

	●	Dekui Liu, former Chief Executive Officer;
	●	Tianwei (Solomon) Li, Chief Financial Officer and former Chief Executive Officer; and
	●	Dr. Li (Alice) Gong, former Chief Operation Officer and General Manager of Inno Metal Studs Corp (a subsidiary of the Company); and
	●	Weston Twigg, former Chief Financial Officer.

 

Compensation Program

 

The objective of the compensation program of the Company and its subsidiaries (the “Company Group”) is to provide a total compensation package to each NEO that will enable the Company Group to attract, motivate and retain outstanding individuals, align the interests of our executive team with those of our shareholders, encourage individual and collective contributions to the successful execution of our short- and long-term business strategies and reward NEOs for performance.

 

	●	Base Salary. Each of the NEOs is paid a base salary commensurate with the executive’s skill set, experience, performance, role and responsibilities.
	●	Short-Term Cash Incentives. During Fiscal Years 2024 and 2023, except for a one-time award of $50,000 to Mr. Tianwei Li upon the consummation of the IPO, the Company Group did not grant any short-term cash bonuses to any of the NEOs.
	●	Long-Term Equity Incentives. During Fiscal Years 2024 and 2023, the Company Group did not grant any incentive equity awards to any of the NEOs.

 

 

Summary Compensation Table

 

The following table presents information regarding the total compensation awarded to, earned by and paid to the Company’s NEOs for services rendered to the Company Group in all capacities in its Fiscal Years 2024 and 2023.

 

Name and Principal Position		Year		Salary ($)				Bonus ($)				Total ($)
Ding Wei (1)		2024			-				-				-
Chief Executive Officer		2023			-				-				-
Dekui Liu (2)		2024			70,833				-				70,833
Former Chief Executive Officer		2023			11,000	(3)			-				11,000
Tianwei (Solomon) Li(4)		2024			180,000				50,000				230,000
Chief Financial Officer and Former Chief Executive Officer		2023			45,000				-				45,000
Dr. Li (Alice) Gong(5)		2024			152,587				-				152,587
Former Chief Operation Officer and General Manager of Inno Metal Studs Corp		2023			100,347				-				100,347
Weston Twigg(6)		2024			-				-				-
Former Chief Financial Officer		2023			104,527				-				104,527

 

(1) On October 15, 2024, the Board appointed Ding Wei, to fill the Chief Executive Officer. The Company will compensate Ding Wei for his service as chief executive officer at a salary of $60,000 annually, subject to his continued service.

 

(2) On May 31, 2024, Mr. Liu resigned from his position as Chief Executive Officer, Chairman, and as a Director of the Board of the Company.

 

(3) In June 2023, the Board approved a temporary reduction in Mr. Liu’s base salary for Fiscal Year 2023, from $80,000 to $11,000.

 

(4) On June 3, 2024, the Board appointed Tianwei Li as Chief Executive Officer of the Company and continue to serve as the Company’s Chief Financial Officer following his appointment as Chief Executive Officer. On October 15, 2024, Mr. Li resigned from his position as Chief Executive Officer of the Company and continues to serve as the Company’s Chief Financial Officer.

 

(5) On October 15, 2024, Ms. Gong resigned from her position as Chief Operations Officer.

 

(6) Mr. Li was appointed Chief Financial Officer, effective July 17, 2023. Mr. Twigg resigned from the Company, effective July 3, 2023.

 

Narrative Disclosure to the Summary Compensation Table

 

Employee Benefits

 

The executive officers, including the NEOs, are eligible to receive the same employee benefits that are generally available to all full-time employees, subject to the satisfaction of certain eligibility requirements. In structuring these benefit plans, the Company Group seeks to provide an aggregate level of benefits that are comparable to those provided by similar companies.

 

 

Agreements with our NEOs

 

Other than Mr. Li, our NEOs not currently subject to an employment agreement with the Company Group.

 

Effective July 17, 2023, Mr. Li was appointed by the Board to serve as the Company Group’s Chief Financial Officer. Pursuant to the terms of his Offer Letter with the Company, dated July 14, 2023 (the “Li Offer Letter”). Mr. Li’s initial employment term will run from July 17, 2023 to July 17, 2024. Starting July 17, 2024, his employment will be at-will. Pursuant to the Offer Letter Mr. Li will receive an annual base salary of $180,000 and be eligible for an annual performance-based bonus of Company options worth $200,000 disbursed proportionally on a monthly basis, subject to the Omnibus Plan. Subject to the consummation of the IPO and pursuant to the Offer Letter, Mr. Li is eligible for a one-time award of $50,000 within one week after consummation of the IPO for pre-IPO consulting services provided. The option awards have not been awarded as of the date of this filing. The IPO bonus of $50,000 was paid on April 19, 2024. Mr. Li is also will be eligible to participate in all benefit plans generally offered to other senior executives of the Company in similar positions and with similar responsibilities.

 

2023 Omnibus Incentive Plan

 

Our Board adopted, and our shareholders approved, the Inno Holdings, Inc. 2023 Omnibus Incentive Plan (the “Omnibus Plan”), effective July 18, 2023. No incentive equity awards have been granted under the Omnibus Plan as of the date hereof.

 

The purpose of the Omnibus Plan is to: (i) encourage the profitability and growth of the Company through short-term and long-term incentives that are consistent with the Company’s objectives; (ii) give participants an incentive for excellence in individual performance; (iii) promote teamwork among its participants; and (iv) give the Company a significant advantage in attracting and retaining key employees, non-employee directors, and consultants. To accomplish these purposes, the Omnibus Plan provides for the grant of awards in the form of incentive stock options within the meaning of Section 422 of the Code, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based awards (including performance shares, performance units and performance bonus awards), and other stock-based or cash-based awards. A total of 2,013,552 shares of common stock was initially reserved and available for issuance under the Omnibus Plan.

 

Outstanding Equity Awards at 2024 Fiscal Year-End

 

None of our NEOs had any outstanding equity awards in the Company as of September 30, 2024.

 

Potential Payments Upon Termination or Change in Control

 

As of September 30, 2024, none of our NEOs were eligible for any potential payments upon any form of termination or resignation of employment or a change in control of the Company. During Fiscal Years 2024 and 2023, none of our former NEOs received any payments or benefits in connection with their resignation from the Company.

 

Director Compensation Table

 

All of the independent directors are entitled to receive $10,000 in cash per quarter, subject to their continued service on the Board.

 

Shaoren Liu and Ying Liu served as the Company’s non-employee directors during Fiscal Year 2023. Neither of the Company’s non-employee directors received any compensation related to the director’s Board service in Fiscal Year 2023 and 2024 or had any outstanding equity awards as of September 30, 2024. Mr. Shaoren Liu resigned as a member of the Board, effective December 18, 2023. On October 15, 2024, Ms. Ying Liu resigned from her position as Chairwoman and a director of the Board.

 

Incentive Based Compensation Recoupment Policy

 

On October 30, 2023,  our Board of Directors adopted an executive compensation recoupment policy consistent with the requirements of the Exchange Act Rule 10D-1 and listing standards of The Nasdaq Stock Market LLC thereunder, to help ensure that incentive compensation is paid based on accurate financial and operating data, and the correct calculation of performance against incentive targets. Our policy addresses recoupment of amounts from performance-based awards paid to all corporate officers, including awards under our equity incentive plans, in the event of a financial restatement to the extent that the payout for such awards would have been less, or in the event of fraud, or intentional, willful or gross misconduct that contributed to the need for a financial restatement.

 

 

Emerging Growth Company Status

 

We are an “emerging growth company,” as defined in the Jobs Act. We will remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act; (ii) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; and (iv) the date on which we are deemed to be a large accelerated filer under applicable SEC rules. We expect that we will remain an emerging growth company for the foreseeable future, but we cannot retain our emerging growth company status indefinitely and will no longer qualify as an emerging growth company on or before the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act. For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from specified disclosure requirements that are applicable to other public companies that are not emerging growth companies.

 

These exemptions include:

 

	●	being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosures;
	●	not being required to comply with the requirement of an auditor needing to attest to our internal controls over financial reporting;
	●	not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or providing a supplement to the auditor’s report regarding additional information about the audit and the financial statements;
	●	reduced disclosure obligations regarding executive compensation; and
	●	not being required to hold a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

 

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 

The following table sets forth information with respect to the beneficial ownership, within the meaning of Rule 13d-3 under the Exchange Act, of our Common Stock Shares as of the date of this annual report, with respect to the holdings of (1) each person who is the beneficial owner of more than 5% of Company voting stock, (2) each of our directors, (3) each executive officer, and (4) all of our current directors and executive officers as a group.

 

Beneficial ownership of the voting stock is determined in accordance with the rules of the SEC and includes any shares of company voting stock over which a person exercises sole or shared voting or investment power, or of which a person has a right to acquire ownership at any time within 60 days of December 6, 2024. Except as otherwise indicated, we believe that the persons named in this table have sole voting and investment power with respect to all shares of voting stock held by them. Applicable percentage ownership in the following table is based on 3,057,043 shares of common stock issued and outstanding as of December 6, 2024.

 

To the best of our knowledge, except as otherwise indicated, each of the persons named in the table has sole voting and investment power with respect to the shares of our common stock beneficially owned by such person, except to the extent such power may be shared with a spouse. To our knowledge, none of the shares listed below are held under a voting trust or similar agreement, except as noted. To our knowledge, there is no arrangement, including any pledge by any person of securities of the Company, the operation of which may at a subsequent date result in a change in control of the Company.

 

 

Name and Address of Beneficial Owner(1)		Title		Beneficially owned				Percent
Officers and Directors
Ding Wei		Chief Executive Officer, Director and Chairman			—				—
Tianwei Li		Chief Financial Officer			—				—
Mengshu Shao		Director			—				—
Yufang Qu		Independent Director			—				—
Tao Tu		Independent Director			—				—
Yongbo Mo		Independent Director			—				—
Officers and Directors as a Group (total of 6 persons)					—				—
5%+ Stockholders
Changzheng Ye,(2)		Investor			157,079				5.14	%
West Lake Club Inc. (3)		Investor			640,000				20.94	%

 

(1)	Unless otherwise indicated, the business address for each of the individuals is 2465 Farm Market 359 South, Brookshire, TX 77423.
(2)	The address for Changzheng Ye is Qianhai Maple Leaf Building, Tower A, 5F07, Shenzhen, Guangdong, China.
(3)	The address for West Lake Club Inc. is 14738 SW 23rd Street, Miami, FL 33185. The foregoing information is based solely on Schedule 13D of West Lake Club Inc. filed on September 11, 2024, which we do not know or have reason to believe is not complete or accurate and on which we are relying pursuant to applicable SEC regulations.

 

Equity Compensation Plan Information

 

As of September 30, 2024, no awards were issued by the Company under its equity compensation plan.

 

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

 

Unless described below, during the last two fiscal years, there are no transactions or series of similar transactions to which we were a party or will be a party, in which:

 

	●	the amounts involved exceed or will exceed $120,000; and
	●	any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family of any of the foregoing had, or will have, a direct or indirect material interest.

 

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 September 30, 2024, the amount due to Mr. Liu was $2,000. As of September 30, 2023, the amount due to Mr. Liu was $327,372.

 

The Company engaged Yunited Assets LLC (“Yunited”), a limited liability company owned by Mr. Cheng Yu, the minority owner of the Company’s subsidiary, Inno Research Institute, for consultation services on a project-by-project basis. During the year ended September 30, 2023, the Company recorded $4,375 of project-based consulting service fees and $110,000 consulting fee to Yunited for Mr. Yu’s daily operating services included in the general and administrative expenses. No such services have been provided for the year ended September 30, 2024. As of September 30, 2024 and 2023, the outstanding balance of accounts payable – related party due to Yunited was $Nil and $50,000.

 

 

The Company purchases prefab home, materials and supplies, including design services from Baicheng Trading LLC (“Baicheng”), a company with a director related to the Chairwoman. During the year ended September 30, 2024, Baicheng provided the renovation design services with a fee of $52,000. Additionally, the Company prepaid $225,511 to Baicheng for roof materials for the factory improvement project. As of September 30, 2024, the outstanding balance of prepayments to Baicehng was $225,511. As of September 30, 2023, the outstanding accounts payable-related party due to Baicheng was $485,595.

 

Starting in December 2022, for operation and cashflow needs, the Company advances funds from Zfounder Organization Inc., (“Zfounder”), one of the Company’s 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 September 30, 2024, the outstanding balance, due to Zfounder and Wise Hill, has been fully paid off. As of September 30, 2023, the outstanding balance due to Zfounder and Wise Hill, were $55,000 and $122,000, respectively.

 

In March 2023, the Company entered into an agreement with Vision Opportunity Fund LP, a Florida limited partnership partially owned by a former 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 $15,875,800 plus applicable taxes. As of September 30, 2024, amount of $244,185 has been received and recorded as deferred revenue, and $Nil amount of revenue has been recognized.

 

Policies and Procedures for Related Person Transactions

 

We have adopted a written related person transaction policy that set forth the following policies and procedures for the review and approval or ratification of related person transactions. A “related person transaction” is a transaction, arrangement or relationship in which INNO or any of its subsidiaries was, is or will be a participant, the amount of which involved exceeds $120,000, and in which any related person had, has or will have a direct or indirect material interest. A “related person” means:

 

	●	any person who is, or at any time during the applicable period was, one of INNO’s executive officers or directors;
	●	any person who is known by INNO to be the beneficial owner of more than 5% of INNO’s voting securities;
	●	any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother in-law or sister-in-law of a director, executive officer or a beneficial owner of more than 5% of INNO’s voting securities, and any person (other than a tenant or employee) sharing the household of such director, executive officer or beneficial owner of more than 5% of INNO’s voting securities; and
	●	any firm, corporation or other entity in which any of the foregoing persons is a partner or principal, or in a similar position, or in which such person has a 10% or greater beneficial ownership interest.

 

We intend to establish policies and procedures designed to minimize potential conflicts of interest arising from any dealings we may have with our affiliates and to provide appropriate procedures for the disclosure of any real or potential conflicts of interest that may exist from time to time. Specifically, pursuant to its audit committee charter, the audit committee have the responsibility to review related party transactions.

 

Director Independence

 

A majority of our Board are independent directors, see the discussion above under the section “Item 10. Directors, Executive Officers and Corporate governance.”

 

 

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

 

Independent Auditor

 

For the years ended September 30, 2024 and 2023, the Company’s independent public accounting firms were Simon & Edward, LLP and TAAD LLP, respectively.

 

Fees Paid to Principal Independent Registered Public Accounting Firm

 

The aggregate fees billed by our Independent Registered Public Accounting Firm, for the years ended September 30, 2024 and 2023 are as follows:

 

		2024				2023
Audit Fees (1)		$	92,500			$	178,383
Audit Related Fees (2)			-				-
Tax Fees (3)			-				-
All other fees (4)			-				-
Total Fees		$	92,500			$	178,383

 

	(1) Audit fees represent fees for professional services provided in connection with the audit of our annual financial statements and the review of our quarterly financial statements and those services normally provided in connection with statutory or regulatory filings or engagements including comfort letters, consents and other services related to SEC matters. This information is presented as of the latest practicable date for this annual report.
	(2) Audit-related fees represent fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and not reported above under “Audit Fees.”
	(3)TAAD did not provide us with tax compliance, tax advice or tax planning services
	(4) All other fees include fees billed by our independent auditors for products or services other than as described in the immediately preceding three categories. No such fees were incurred during the fiscal years ended September 30, 2024 and 2023.

 

Audit Committee Pre-Approval Policies

 

The charter of our audit committee provides that the duties and responsibilities of our audit committee include the pre-approval of all audit and non-audit services permitted by law or applicable SEC regulations (including fee and terms of engagement) to be performed by our external auditor.

 

PART IV

 

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 

The following documents are filed as part of this report:

 

(1) Financial Statements

 

All financial statements of the Company as set forth under Item 8 of this Annual Report on Form 10-K.

 

(2) Financial Statement Schedules

 

All schedules have been omitted because the required information is included in the financial statements or notes thereto or because they are not required.

 

 

(3) Exhibits.

 

The following exhibits are filed, furnished or incorporated by reference as part of this Annual Report on Form 10-K.

 

EXHIBIT INDEX

 

				Incorporated by Reference
Exhibit		Description		Schedule/ Form		File Number		Exhibits		Filing Date
3.1		Amended and Restated Certificate of Formation dated July 14, 2023		S-1		333-273429		3.5		October 20, 2023
3.2		Amended and Restated Bylaws of Inno Holdings Inc., dated December 18, 2023		8-K		001-41882		3.1		December 18, 2023
4.1		Underwriter’s Warrant, dated December 18, 2023, issued by Inno Holdings Inc.		8-K		001-41882		4.1		December 18, 2023
4.2		Form of Common Stock Certificate		S-1		333-273429		4.1		October 20, 2023
4.3		Description of Inno Holding Inc.’s Capital Stock		10-K		001-41882		4.3		January 16, 2024
10.1		Form of Indemnification Agreement		S-1		333-273429		10.1		October 20, 2023
10.2++		Development and Supply Agreement, by and between Vision Fund LP and Inno Metal Studs Corp, dated March 24, 2023.		S-1		333-273429		10.2		October 20, 2023
10.3++		Addendum to Development and Supply Agreement, by and among Vision Opportunity Fund LP, New Vision 101 LLC and Inno Metal Studs Corp, dated August 9, 2023.		S-1		333-273429		10.5		October 20, 2023
10.4		Inno Holdings Inc. 2023 Omnibus Incentive Plan		10-K		001-41882		10.4		January 16, 2024
10.5		Offer Letter, by and between Inno Holdings, Inc. and Tianwei Li, dated July 14, 2023.		S-1		333-273429		10.4		October 20, 2023
10.6		Agreement for Purchase and Sale and Escrow Instructions, dated January 4, 2024		8-K		001-41882		10.1		January 16, 2024
10.7		Limited Waiver of Underwriting Agreement, dated March 1, 2024, by and between the Company and the Representative.		8-K		001-41882		10.1		March 4, 2024
10.8		Warrant Assumption Agreement, dated March 1, 2024, by and between the Company and the Representative		8-K		001-41882		10.2		March 4, 2024
10.9		SPA I, dated September 6, 2024, by and between the Company, Zfounder, West Lake Club, Next Level and each of the investors signatory thereto.		8-K		001-41882		10.1		September 12, 2024
10.10		SPA II, dated September 6, 2024, by and between the Company, Zfounder, and each of the investors signatory thereto.		8-K		001-41882		10.2		September 12, 2024
10.11		SPA III, dated September 6, 2024, by and between the Company, Zfounder, West Lake Club, Next Level and each of the investors signatory thereto.		8-K		001-41882		10.3		September 12, 2024
14.1		Code of Business Conduct and Ethics		10-K		001-41882		14.1		January 16, 2024
19.1*		Insider Trading Policy and Procedures
21.1		List of Subsidiaries of the Registrant		S-1		333-273429		21.1		October 20, 2023
31.1*		Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
97.1		Inno Holdings Inc. Incentive Based Compensation Recoupment Policy		10-K		001-41882		97.1		January 16, 2024
99.1		Audit Committee Charter		10-K		001-41882		99.1		January 16, 2024
99.2		Compensation Committee Charter		10-K		001-41882		99.2		January 16, 2024

 

*	Filed or furnished herewith.
++	Portions of this exhibit have been redacted in compliance with Regulation S-K Item 601(b)(10). The omitted information is not material and would likely cause competitive harm to the Company if publicly disclosed. The Company agrees to furnish an unredacted copy to the SEC upon its request.
#	Certain schedules and exhibits have been omitted in compliance with Regulation S-K Item 601(a)(5). The Company agrees to furnish a copy of any omitted schedule or exhibit to the SEC upon its request.

 

ITEM 16. FORM 10-K SUMMARY.

 

None.

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) 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.
	By:	/s/ Ding Wei
		Ding Wei
		Chief Executive Officer (Principal Executive Officer)
	Date: December 9, 2024

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

Name		Position		Date
/s/ Ding Wei		Chief Executive Officer, Director and Chairman		December 9, 2024
Ding Wei		(Principal Executive Officer)
/s/ Tianwei Li		Chief Financial Officer		December 9, 2024
Tianwei Li		(Principal Financial and Accounting Officer)
/s/ Yufang Qu		Director		December 9, 2024
Yufang Qu
/s/ Mengshu Shao		Director		December 9, 2024
Mengshu Shao
/s/ Tao Tu		Director		December 9, 2024
Tao Tu
/s/ Yongbo Mo		Director		December 9, 2024
Yongbo Mo

 

 

 

Exhibit 19.1

 

INNO HOLDINGS INC. INSIDER TRADING POLICY

 

Dated: December 6, 2024

 

Purpose

 

This Insider Trading Policy (this “Policy”) provides guidelines with respect to transactions in the securities of Inno Holdings Inc., a Texas corporation (the “Company”), and the handling of confidential information about the Company and the companies with which the Company does business.

 

The Company’s Board of Directors (“Board”) has adopted this Policy to promote compliance with federal, state, and foreign securities laws that prohibit certain persons who are aware of material nonpublic information about a company from: (i) trading in securities of that company (e.g., purchasing and selling of securities, including purchases and sales of options and warrants on securities, as well as short sales); or (ii) providing material nonpublic information to other persons who may trade on the basis of that information.

 

Persons Subject to the Policy

 

This Policy applies to all officers of the Company and its subsidiaries, all members of the Board and all employees of the Company and its subsidiaries. The Company may also determine that other persons should be subject to this Policy, such as contractors or consultants who have access to material nonpublic information. This Policy also applies to family members, other members of a person’s household and entities controlled by a person covered by this Policy, as described below.

 

Transactions Subject to the Policy

 

This Policy applies to transactions in the Company’s securities (collectively referred to in this Policy as “Company Securities”), including the Company’s common stock, options to purchase common stock, or any other type of securities that the Company may issue, including, but not limited to, preferred stock, convertible debentures and warrants, as well as derivative securities that are not issued by the Company, such as exchange-traded put or call options or swaps relating to the Company’s Securities. There are certain exceptions that are discussed in this Policy under “Transactions Under Company Plans,” “Transactions Not Involving a Purchase or Sale,” and “Rule 10b5-1 Plans.”

 

Individual Responsibility

 

Persons subject to this Policy have ethical and legal obligations to maintain the confidentiality of information about the Company and to not engage in transactions in Company Securities while in possession of material nonpublic information.

 

 

Persons subject to this Policy must not engage in illegal trading and must avoid the appearance of improper trading. Each individual is responsible for making sure that he or she complies with this Policy, and that any family member, household member, or entity whose transactions are subject to this Policy, as discussed below, also comply with this Policy.

 

In all cases, the responsibility for determining whether an individual is in possession of material nonpublic information rests with that individual, and any action on the part of the Company, the Compliance Officer, or any other employee or director pursuant to this Policy or otherwise does not in any way constitute legal advice or insulate an individual from liability under applicable securities laws.

 

You could be subject to severe legal penalties and disciplinary action by the Company for any conduct prohibited by this Policy or applicable securities laws, as described below in more detail under the heading “Consequences of Violations.”

 

Administration of the Policy

 

Ding Wei shall serve as the Compliance Officer for the purposes of this Policy. The Compliance Officer is authorized to consult with the Company’s securities counsel without notice and at such times as he may deem necessary or appropriate at the expense of the Company. All determinations and interpretations by the Compliance Officer shall be final and not subject to further review. The duties of the Compliance Officer include, but are not limited to, the following:

 

	●	assisting with implementation and enforcement of this Policy;
	●	circulating this Policy to all employees and ensuring that this Policy is amended as necessary to remain up-to-date with insider trading laws;
	●	ensuring that the Company obtain and maintain written acknowledgments from employees that they have read the policy;
	●	overseeing the responses to questions from individual employees;
	●	providing for employee training sessions;
	●	ensuring that relevant files on policy compliance and implementation are maintained;
	●	pre-clearing all trading in securities of the Company in accordance with the procedures as discussed in this Policy under “Pre-Clearance Procedures”;
	●	providing approval of any Rule 10b5-1 plans as discussed in this Policy under “Rule 10b5-1 Plans” and any prohibited transactions as discussed in this Policy; and
	●	providing a reporting system with an effective whistleblower protection mechanism.

 

 

Statement of Policy

 

It is the policy of the Company that no director, officer, or other employee of the Company (or any other person designated by this Policy or by the Compliance Officer as subject to this Policy) who is aware of material nonpublic information relating to the Company may, directly, or indirectly through family members or other persons or entities:

 

	1.	Engage in transactions in Company Securities, except as otherwise specified in this Policy under the headings “Transactions Under Company Plans,” “Transactions Not Involving a Purchase or Sale,” and “Rule 10b5-1 Plans”;
	2.	Recommend the purchase or sale of any Company Securities;
	3.	Disclose material nonpublic information to persons within the Company whose jobs do not require them to have that information, or outside of the Company to other persons, including, but not limited to, family, friends, business associates, investors, and expert consulting firms, unless any such disclosure is made in accordance with the Company’s policies regarding the protection or authorized external disclosure of information regarding the Company; or
	4.	Assist anyone engaged in the above activities.

 

In addition, it is the policy of the Company that no director, officer, or other employee of the Company or any other person designated as subject to this Policy who, in the course of working for the Company, learns of material nonpublic information about a company with which the Company does business, including a customer or supplier of the Company, may trade in that company’s securities until the information becomes public or is no longer material.

 

There are no exceptions to this Policy, except as specifically noted herein. Transactions that may be necessary or justifiable for independent reasons (such as the need to raise money for an emergency expenditure), or small transactions, are not excepted from this Policy. The securities laws do not recognize any mitigating circumstances, and, in any event, even the appearance of an improper transaction must be avoided to preserve the Company’s reputation for adhering to the highest standards of conduct.

 

Definition of Material Nonpublic Information

 

Information is considered “material” if a reasonable investor would consider that information important in making a decision to buy, hold, or sell securities. Any information that could be expected to affect a company’s stock price, whether it is positive or negative, should be considered material. There is no bright-line standard for assessing materiality; rather, materiality is based on an assessment of all of the facts and circumstances and is often evaluated by enforcement authorities with the benefit of hindsight.

 

 

While it is not possible to define all categories of material information, some examples of information that ordinarily would be regarded as material are:

 

	●	Projections of future earnings or losses, or other earnings guidance;
	●	Changes to previously announced earnings guidance, or decisions to suspend earnings guidance;
	●	A pending or proposed merger, acquisition, or tender offer;
	●	A pending or proposed acquisition or disposition of a significant asset;
	●	A pending or proposed joint venture;
	●	A Company restructuring;
	●	Significant related party transactions;
	●	A change in dividend policy, the declaration of a stock split, or an offering of additional securities;
	●	Bank borrowings or other financing transactions out of the ordinary course of business;
	●	The establishment of a repurchase program for Company Securities;
	●	A change in the Company’s pricing or cost structure;
	●	Major marketing changes;
	●	A change in management;
	●	A change in auditors or notification that the auditor’s report may no longer be relied upon;
	●	Development of a significant new product, process, or service;
	●	Pending or threatened significant litigation, or the resolution of such litigation;
	●	Impending bankruptcy or the existence of severe liquidity problems;
	●	The gain or loss of a significant customer or supplier;
	●	The results of clinical trials or testing of the Company’s products or services;

 

 

	●	A significant cybersecurity incident, such as a data breach, or any other significant disruption in the Company’s operations or loss, potential loss, breach, or unauthorized access of its property or assets, whether at its facilities or through its information technology infrastructure; or
	●	The imposition of an event-specific restriction on trading in the Company’s Securities or the securities of another company or the extension or termination of such restriction.

 

Information that has not been disclosed to the public is generally considered to be nonpublic information. In order to establish that the information has been disclosed to the public, it may be necessary to demonstrate that the information has been widely disseminated. Information generally would be considered widely disseminated if it has been disclosed through the Dow Jones “broad tape,” newswire services, a broadcast on widely-available radio or television programs, publication in a widely-available newspaper, magazine or news website, or public disclosure documents filed with the Securities and Exchange Commission (“SEC”) that are available on the SEC’s website, or subject to the Compliance Officer’s determination, disclosure on the Company’s website, or through social media.

 

By contrast, information would likely not be considered widely disseminated if it is available only to the Company’s employees. Nonpublic information may also include: (i) information available to a select group of analysts or brokers or institutional investors; (ii) undisclosed facts that are the subject of rumors, even if the rumors are widely circulated; and (iii) information that has been entrusted to the Company on a confidential basis until a public announcement of the information has been made and enough time has elapsed for the market to respond to a public announcement of the information (normally two (2) trading days).

 

Once information is widely disseminated, it is still necessary to provide the investing public with sufficient time to absorb the information. As a general rule, information should not be considered fully absorbed by the marketplace until after the second (2nd) business day after the day on which the information is released. If, for example, the Company were to make an announcement on a Monday, you should not trade in Company Securities until Thursday. Depending on the particular circumstances, the Company may determine that a longer or shorter period should apply to the release of specific material nonpublic information. For purposes of this Policy, a “business day” is any day that The Nasdaq Stock Market LLC is open for trading.

 

As with questions of materiality, if you are not sure whether information is considered public, you should either consult with the Compliance Officer or assume that the information is nonpublic and treat it as confidential.

 

Transactions by Family Members and Others

 

This Policy applies to your family members who reside with you (including a spouse, a child, a child away at college, stepchildren, grandchildren, parents, stepparents, grandparents, siblings, and in-laws), anyone

 

 

else who lives in your household, and any family members who do not live in your household but whose transactions in Company Securities are directed by you or are subject to your influence or control, such as parents or children who consult with you before they trade in Company Securities (collectively referred to as “Family Members”).

 

You are responsible for the transactions of these other persons and therefore should make them aware of the need to confer with you before they trade in Company Securities, and you should treat all such transactions for the purposes of this Policy and applicable securities laws as if the transactions were for your own account.

 

This Policy does not, however, apply to personal securities transactions of Family Members where the purchase or sale decision is made by a third party not controlled by, influenced by or related to you or your Family Members.

 

Transactions by Entities that You Influence or Control

 

This Policy applies to any entities that you influence or control, including any corporations, partnerships, or trusts (collectively referred to as “Controlled Entities”), and transactions by these Controlled Entities should be treated for the purposes of this Policy and applicable securities laws as if they were for your own account.

 

Transactions Under Company Plans

 

This Policy does not apply in the case of the following transactions, if currently applicable, except as specifically noted:

 

Stock Option Exercises

 

This Policy does not apply to the exercise of an employee stock option acquired pursuant to the Company’s plans, or to the exercise of a tax withholding right pursuant to which a person has elected to have the Company withhold shares subject to an option to satisfy tax withholding requirements. This Policy does apply, however, to any sale of stock as part of a broker-assisted cashless exercise of an option, or any other market sale for the purpose of generating the cash needed to pay the exercise price of an option.

 

Restricted Stock Awards

 

This Policy does not apply to the vesting of restricted stock, or the exercise of a tax withholding right pursuant to which you elect to have the Company withhold shares of stock to satisfy tax withholding requirements upon the vesting of any restricted stock. The Policy does apply, however, to any market sale of restricted stock.

 

 

401(k) Plan

 

This Policy does not apply to purchases of Company Securities in the Company’s 401(k) plan resulting from your periodic contribution of money to the plan pursuant to your payroll deduction election.

 

This Policy does apply, however, to certain elections you may make under the 401(k) plan, including: (i) an election to increase or decrease the percentage of your periodic contributions that will be allocated to the Company stock fund; (ii) an election to make an intra-plan transfer of an existing account balance into or out of the Company stock fund; (iii) an election to borrow money against your 401(k) plan account if the loan will result in a liquidation of some or all of your Company stock fund balance; and (iv) an election to pre-pay a plan loan if the pre-payment will result in allocation of loan proceeds to the Company stock fund. It should be noted that sales of Company Securities from a 401(k) account are also subject to Rule 144, and therefore affiliates should ensure that a Form 144 is filed when required.

 

Employee Stock Purchase Plan

 

This Policy does not apply to purchases of Company Securities in the employee stock purchase plan resulting from your periodic contribution of money to the plan pursuant to the election you made at the time of your enrollment in the plan. This Policy also does not apply to purchases of Company Securities resulting from lump sum contributions to the plan, provided that you elected to participate by lump sum payment at the beginning of the applicable enrollment period.

 

This Policy does apply, however, to your election to participate in the plan for any enrollment period, and to your sales of Company Securities purchased pursuant to the plan.

 

Dividend Reinvestment Plan

 

This Policy does not apply to purchases of Company Securities under the Company’s dividend reinvestment plan resulting from your reinvestment of dividends paid on Company Securities.

 

This Policy does apply, however, to voluntary purchases of Company Securities resulting from additional contributions you choose to make to the dividend reinvestment plan, and to your election to participate in the plan or increase your level of participation in the plan. This Policy also applies to your sale of any Company Securities purchased pursuant to the plan.

 

Other Similar Transactions

 

Any other purchase of Company Securities from the Company or sales of Company Securities to the Company are not subject to this Policy.

 

 

Transactions Not Involving a Purchase or Sale

 

Bona fide gifts are not transactions subject to this Policy, unless the person making the gift has reason to believe that the recipient intends to sell the Company Securities while the officer, employee, or director is aware of material nonpublic information, or the person making the gift is subject to the trading restrictions specified below under the heading “Additional Procedures” and the sales by the recipient of the Company Securities occur during a blackout period.

 

Further, transactions in mutual funds that are invested in Company Securities are not transactions subject to this Policy.

 

Special and Prohibited Transactions

 

Certain transactions are of concern not only because of insider trading considerations, but also because of the appearance created by the transaction and the potential repercussions that the transaction may have with investors, regulators, and others.

 

Accordingly, the Company has determined that there is a heightened legal risk and/or the appearance of improper or inappropriate conduct if the persons subject to this Policy engage in certain types of transactions. It therefore is the Company’s policy that any persons covered by this Policy may not engage in any of the following transactions, or should otherwise consider the Company’s preferences as described below.

 

Short-Term Trading

 

Short-term trading of Company Securities may be distracting to the person and may unduly focus the person on the Company’s short-term stock market performance instead of the Company’s long-term business objectives. For these reasons, any director, officer, or other employee of the Company who purchases Company Securities in the open market may not sell any Company Securities of the same class during the six (6) months following the purchase or vice versa. Directors and officers should note the short-term trading restrictions of Section 16(b) of the Securities Exchange Act of 1934, as amended (“Exchange Act”).

 

Short Sales

 

Short sales of Company Securities (i.e., the sale of a security that the seller does not own) may evidence an expectation on the part of the seller that the securities will decline in value, and therefore have the potential to signal to the market that the seller lacks confidence in the Company’s prospects. In addition, short sales may reduce a seller’s incentive to seek to improve the Company’s performance. For these reasons, short sales of Company Securities are prohibited. In addition, Section 16(c) of the Exchange Act prohibits officers and directors from engaging in short sales. (Short sales arising from certain types of hedging transactions are governed by the paragraph below captioned “Hedging Transactions.”)

 

 

Publicly-Traded Options

 

Given the relatively short term of publicly-traded options, transactions in options may create the appearance that a director, officer, or employee is trading based on material nonpublic information and focus a director’s, officer’s, or other employee’s attention on short-term performance at the expense of the Company’s long-term objectives. Accordingly, transactions in put options, call options, or other derivative securities, on an exchange or in any other organized market, are prohibited by this Policy. (Option positions arising from certain types of hedging transactions are governed by the next paragraph below.)

 

Hedging Transactions

 

Hedging or monetization transactions can be accomplished through a number of possible mechanisms, including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars, and exchange funds. Such transactions may permit a director, officer, or employee to continue to own Company Securities obtained through employee benefit plans or otherwise, but without the full risks and rewards of ownership. When that occurs, the director, officer, or employee may no longer have the same objectives as the Company’s other shareholders. Therefore, directors, officers, and employees are prohibited from engaging in any such transactions.

 

Margin Accounts and Pledged Securities

 

Securities held in a margin account as collateral for a margin loan may be sold by the broker without the customer’s consent if the customer fails to meet a margin call. Similarly, securities pledged or hypothecated as collateral for a loan may be sold in foreclosure if the borrower defaults on the loan. Because a margin sale or foreclosure sale may occur at a time when the pledgor is aware of material nonpublic information or otherwise is not permitted to trade in Company Securities, directors, officers, and other employees are prohibited from holding Company Securities in a margin account and are strongly discouraged from pledging Company Securities as collateral for a loan. Any person wishing to enter into a legitimate loan pledge arrangement must first submit the proposed transaction in writing for approval by the Compliance Officer at least two (2) weeks prior to the proposed execution of documents evidencing the proposed transaction and must set forth a justification for the proposed transaction and clearly demonstrate the financial capacity to repay the loan without resorting to the pledged securities. The person making the request shall have no other contact with the Compliance Officer on that matter and the Compliance Officer’s decision shall be final and binding. (Pledges of Company Securities arising from certain types of hedging transactions are governed by the paragraph above captioned “Hedging Transactions.”)

 

Standing and Limit Orders

 

Standing and limit orders, except standing and limit orders under approved Rule 10b5-1 Plans, as described below, create heightened risks for insider trading violations similar to the use of margin

 

 

accounts. There is no control over the timing of purchases or sales that result from standing instructions to a broker, and as a result the broker could execute a transaction when a director, officer, or other employee is in possession of material nonpublic information. The Company therefore discourages placing standing or limit orders on Company Securities. If a person subject to this Policy determines that they must use a standing order or limit order, the order should be limited to short duration and should otherwise comply with the restrictions and procedures outlined below under the heading “Additional Procedures.”

 

Additional Procedures

 

The Company has established additional procedures in order to assist the Company in the administration of this Policy, to facilitate compliance with laws prohibiting insider trading while in possession of material nonpublic information, and to avoid the appearance of any impropriety. These additional procedures are applicable only to those individuals described below.

 

Pre-Clearance Procedures

 

The persons designated by the Compliance Officer as being subject to these procedures, as well as the Family Members and Controlled Entities of such persons, may not engage in any transaction in Company Securities without first obtaining pre-clearance of the transaction from the Compliance Officer.

 

A written request for pre-clearance should be submitted to the Compliance Officer at least two (2) business days in advance of the proposed transaction. The Compliance Officer is under no obligation to approve a transaction submitted for pre-clearance, and may determine not to permit the transaction. If a person seeks preclearance and permission to engage in the transaction is denied, then he or she should refrain from initiating any transaction in Company Securities, and should not inform any other person of the restriction.

 

When a request for pre-clearance is made, the requestor should carefully consider whether he or she may be aware of any material nonpublic information about the Company, and should describe fully those circumstances to the Compliance Officer. The requestor should also indicate whether he or she has effected any non-exempt “opposite-way” transactions within the past six months, and should be prepared to report the proposed transaction on an appropriate Form 4 or Form 5. The requestor should also be prepared to comply with SEC Rule 144 and file Form 144, if necessary, at the time of any sale.

 

All pre-cleared trades must be effected within five (5) business days of receipt of pre-clearance unless an exception is granted. Transactions not effected within the time limit are subject to pre-clearance again. Within three (3) business days after the execution of the transaction, the requestor shall notify the Compliance Officer of the date and size of the transaction.

 

The Compliance Officer shall document and maintain records relating to the pre-clearing request, the date of grant or denial, and other pertinent information.

 

 

Blackout Periods

 

The persons designated by the Compliance Officer as subject to this restriction, as well as their Family Members or Controlled Entities, may not conduct any transactions involving the Company’s Securities (other than as specified by this Policy), during a “Blackout Period” beginning two weeks prior to the end of each fiscal quarter and ending on the second (2nd) business day following the date of the public release of the Company’s earnings results for that quarter. In other words, these persons may only conduct transactions in Company Securities during the “Window Period” beginning on the third (3rd) business day following the public release of the Company’s quarterly earnings and ending fifteen (15) days prior to the close of the next fiscal quarter.

 

Under certain very limited circumstances, a person subject to this restriction may be permitted to trade during a Blackout Period, but only if the Compliance Officer, with the advice of securities counsel if requested by the Compliance Officer, concludes that the person does not in fact possess material nonpublic information and may otherwise trade.

 

Persons wishing to trade during a Blackout Period must make such request in writing to the Compliance Officer for approval at least three (3) business days in advance of any proposed transaction involving Company Securities. All such trades are subject to the pre-clearance procedures set forth above under “Pre-Clearance Procedures.”

 

Event-Specific Trading Restriction Periods

 

From time to time, an event may occur that is material to the Company and is known by only a few executives or directors (e.g., negotiation of mergers, acquisitions or dispositions, investigation and assessment of cybersecurity incidents, or new product developments). The involved directors or officers shall promptly notify the Compliance Officer of such event. While such event remains material and nonpublic, the Company may impose special blackout periods (“Special Blackout Period”) during which executive officers, directors, and such other persons designated by the Compliance Officer, together with their family members, are prohibited from trading in the Company’s securities. If the Company imposes a Special Blackout Period, it will notify those affected and will not announce its existence other than to those who are aware of the event giving rise to the Special Blackout Period. If you know of the event, then even if the Compliance Officer has not designated you as a person who should not trade due to an event-specific restriction, you should not trade while you are aware of material nonpublic information. Exceptions will not be granted during an event-specific trading restriction period. Any person made aware of the existence of a Special Blackout Period should not disclose its existence to any other person.

 

In addition, the Company’s financial results may be sufficiently material in a particular fiscal quarter that, in the judgment of the Compliance Officer, designated persons should refrain from trading in Company Securities even later than the typical Blackout Period described above.

 

 

Exceptions

 

The quarterly trading restrictions and event-specific trading restrictions do not apply to those transactions to which this Policy does not apply, as described above under the headings “Transactions Under Company Plans” and “Transactions Not Involving a Purchase or Sale.” Further, the requirement for pre-clearance, the quarterly trading restrictions, and event-specific trading restrictions do not apply to transactions conducted pursuant to approved Rule 10b5-1 plans, described under the heading “Rule 10b5-1 Plans.”

 

Rule 10b5-1 Plans

 

Rule 10b5-1 under the Exchange Act provides a defense from insider trading liability under Rule 10b-5. In order to be eligible to rely on this defense, a person subject to this Policy must enter into a Rule 10b5- 1 plan for transactions in Company Securities that meets certain conditions specified in Rule 10b-5-1 (a “Rule 10b5-1 Plan”). If the plan meets the requirements of Rule 10b5-1, Company Securities may be purchased or sold without regard to certain insider trading restrictions.

 

To comply with the Policy, a Rule 10b5-1 Plan must be approved by the Compliance Officer and meet the requirements of Rule 10b5-1 and the Company’s “Guidelines for Rule 10b5-1 Plans,” which may be obtained from the Compliance Officer. In general, a Rule 10b5-1 Plan must be entered into at a time when the person entering into the plan is not aware of material nonpublic information. Once the plan is adopted, the person must not exercise any influence over the amount of securities to be traded, the price at which they are to be traded, or the date of the trade. The plan must either specify the amount, pricing, and timing of transactions in advance or provide a third party irrevocable authority to effect such transactions at its own discretion, so long as the third party does not possess material inside information about the Company at the time of the transaction.

 

Any Rule 10b5-1 Plan must be submitted in writing for approval by the Compliance Officer no less than five (5) business days prior to the entry into the Rule 10b5-1 Plan. No further pre-approval of transactions conducted pursuant to the Rule 10b5-1 Plan will be required.

 

The Company may, on a case-by-case basis, announce publicly (whether by press release, on the Company website, or otherwise) that a key insider has established a pre-arranged plan at the time the plan is entered into, in order to mitigate potentially adverse publicity if a programmed trade on behalf of that insider occurs on some later date when the insider is in possession of material nonpublic information about the Company.

 

Post-Termination Transactions

 

This Policy continues to apply to transactions in Company Securities even after termination of service to the Company. If an individual is in possession of material nonpublic information when his or her service terminates, that individual may not trade in Company Securities until that information has become public or is no longer material.

 

 

Consequences of Violations

 

The purchase or sale of securities while aware of material nonpublic information, or the disclosure of material nonpublic information to others who then trade in the Company’s Securities, is prohibited by the federal and state laws. Insider trading violations are pursued vigorously by the SEC, U.S. attorneys, and state enforcement authorities as well as the laws of foreign jurisdictions.

 

In addition, a person who “tips” others may also be liable for transactions by the tippees to whom he or she has disclosed material nonpublic information. Tippers can be subject to the same penalties and sanctions as the tippees, and the SEC has imposed large penalties even when the tipper did not profit from the transaction.

 

Punishment for insider trading violations is severe, and could include significant fines and imprisonment. While the regulatory authorities concentrate their efforts on the individuals who trade, or who “tip” inside information to others who trade, the federal securities laws also impose potential liability on companies and other “controlling persons” if they fail to take reasonable steps to prevent insider trading by company personnel.

 

The SEC can seek substantial civil penalties from any person who, at the time of an insider trading violation, “directly or indirectly controlled the person who committed such violation,” which would apply to the Company and/or management and supervisory personnel. These controlling persons may be held liable for up to the greater of $2.3 million or three times the amount of the profits gained or losses avoided. Even for violations that result in a small or no profit, the SEC can seek penalties from a company and/or its management and supervisory personnel as controlling persons.

 

In addition, an individual’s failure to comply with this Policy may subject the individual to Company- imposed sanctions, including dismissal for cause, whether or not the employee’s failure to comply results in a violation of law. Needless to say, a violation of law, or even an SEC investigation that does not result in prosecution, can tarnish a person’s reputation and irreparably damage a career. Given the severity of the potential penalties, compliance with this Policy is absolutely mandatory.

 

Company Assistance

 

Any person who has a question about this Policy or its application to any proposed transaction may obtain additional guidance from the Compliance Officer, who can be reached by telephone at +86-17898843943 or via e-mail at ocean_wei147258369@163.com.

 

Certification

 

All persons subject to this Policy must certify their understanding of, and intent to comply with, this Policy. Please complete and sign the accompanying Certification page and return to Ding Wei at: ocean_wei147258369@163.com.

 

 

 

Exhibit 31.1

 

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Ding Wei, certify that:

 

	1.	I have reviewed this annual report on Form 10-K of Inno Holdings Inc. (the “Registrant”);
	2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
	3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
	4.	The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

 

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Omitted;
	(c)	Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

 

5.

The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

 

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

 

Date: December 9, 2024

 

	By:	/s/ Ding Wei
		Ding Wei
		Chief Executive Officer (Principal Executive Officer)

 

 

 

Exhibit 31.2

 

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Tianwei Li, certify that:

 

	1.	I have reviewed this annual report on Form 10-K of Inno Holdings Inc. (the “Registrant”);
	2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
	3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
	4.	The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have:

 

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Omitted;
	(c)	Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

 

5.

The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

 

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

 

Date: December 9, 2024

 

	By:	/s/ Tianwei Li
		Tianwei Li
		Chief Financial Officer (Principal Financial Officer and Accounting Officer)

 

 

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Annual Report on Form 10-K for the year ended September 30, 2024 of Inno Holdings Inc., a Texas corporation (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Principal Executive Officer of the Company hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

 

	(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
	(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

Date: December 9, 2024

 

	By:	/s/ Ding Wei
		Ding Wei
		Chief Executive Officer (Principal Executive Officer)

 

 

 

Exhibit 32.2

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Annual Report on Form 10-K for the year ended September 30, 2024 of Inno Holdings Inc., a Texas corporation (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Principal Financial Officer of the Company hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

 

	(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
	(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

Date: December 9, 2024

 

	By:	/s/ Tianwei Li
		Tianwei Li
		Chief Financial Officer (Principal Financial Officer and Accounting Officer)

 

 

v3.24.3

Cover - USD ($)	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Dec. 03, 2024	Mar. 31, 2024
Cover [Abstract]
Document Type	10-K
Amendment Flag	false
Document Annual Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2024
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--09-30
Entity File Number	001-41882
Entity Registrant Name	INNO HOLDINGS INC.
Entity Central Index Key	0001961847
Entity Tax Identification Number	87-4294543
Entity Incorporation, State or Country Code	TX
Entity Address, Address Line One	2465 Farm Market 359 South
Entity Address, City or Town	Brookshire
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77423
City Area Code	(800)
Local Phone Number	909-8800
Title of 12(b) Security	Common stock, no par value
Trading Symbol	INHD
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Entity Shell Company	false
Entity Public Float				$ 2,798,633
Entity Common Stock, Shares Outstanding			3,057,043
Documents Incorporated by Reference [Text Block]	None
ICFR Auditor Attestation Flag	false
Document Financial Statement Error Correction [Flag]	false
Auditor Firm ID	2485	5854
Auditor Opinion [Text Block]	We have audited the accompanying consolidated balance sheet of Inno Holdings Inc. and its subsidiaries (the “Company”) as of September 30, 2024, the related consolidated statements of operations, changes in stockholders' equity, and cash flows for the year then ended, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at September 30, 2024, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
Auditor Name	Simon & Edward, LLP	TAAD LLP
Auditor Location	Rowland Heights, California	Diamond Bar, California

v3.24.3

Consolidated Balance Sheets - USD ($)		Sep. 30, 2024	Sep. 30, 2023
Current assets
Cash and cash equivalent		$ 1,526,661	$ 4,898
Accounts receivable, net			70,435
Inventories		333,074	394,293
Deferred offering costs			538,765
Prepayments and other current assets		428,873	180,467
Total current assets		2,288,608	1,188,858
Non-current assets
ROU assets		570,295	437,770
Property and equipment, net		1,300,583	869,584
Other non-current assets		9,851	49,550
Total non-current assets		1,880,729	1,356,904
Total assets		4,169,337	2,545,762
Current liabilities
Unearned revenue		590,260	1,137,828
Other payables and accrued liabilities		287,952	92,164
Short-term loan payable		50,000	790,000
Lease liability – current		60,236	212,277
Long-term notes payable – current portion		51,898	49,393
Total current liabilities		1,312,853	4,102,685
Non-current liabilities
Notes payable		58,948	110,846
Lease liability – non-current			275,817
Total non-current liabilities		58,948	386,663
Total liabilities		1,371,801	4,489,348
Commitments and contingency
Stockholders’ Equity (Deficit)
Common stock, no par value; 100,000,000 shares authorized; 2,279,960 and 1,825,173 shares issued and outstanding on September 30, 2024 and September 30, 2023	[1]
Additional paid in capital		10,748,534	2,830,000
Accumulated deficit		(7,738,644)	(4,524,815)
Non-controlling interest		(212,354)	(248,771)
Total equity (deficit)		2,797,536	(1,943,586)
Total liabilities and equity (deficit)		4,169,337	2,545,762
Nonrelated Party [Member]
Current liabilities
Accounts payable		271,507	781,056
Related Party [Member]
Current liabilities
Accounts payable			535,595
Other payables		$ 1,000	$ 504,372
[1] Adjusted retroactively for reverse stock split that occurred on October 9, 2024, see Note 2

v3.24.3

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2024	Sep. 30, 2023	Jul. 24, 2023	Jul. 23, 2023	Sep. 08, 2021
Statement of Financial Position [Abstract]
Common stock, par value	$ 0	$ 0
Common stock, shares authorized	100,000,000	100,000,000	100,000,000	200,000,000	200,000,000
Common stock, shares issued	2,279,960	1,825,173
Common stock, shares outstanding	2,279,960	1,825,173

v3.24.3

Consolidated Statements of Operations - USD ($)	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Total Revenue	$ 885,495	$ 799,747
COSTS AND EXPENSES:
Costs of materials and labor	409,169	1,255,315
Selling, general and administrative expenses (exclusive of expenses shown separately below)	3,678,866	2,191,043
Impairment loss	23,911
Depreciation	87,116	69,437
Bad debt expense	59,935	1,267,960
Total costs and expenses	4,258,997	4,783,755
LOSS FROM OPERATIONS	(3,373,502)	(3,984,008)
OTHER INCOME (EXPENSE)
Interest income (expenses), net	76,047	(72,118)
Other non-operating income (expense)	47,128	32,922
Total other income (expenses), net	123,175	(39,196)
LOSS BEFORE INCOME TAXES	(3,250,327)	(4,023,204)
PROVISION FOR INCOME TAXES	800
NET LOSS	(3,251,127)	(4,023,204)
Non-controlling interest	(37,298)	(127,426)
NET LOSS ATTRIBUTABLE TO INNO HOLDINGS INC.	$ (3,213,829)	$ (3,895,778)
WEIGHTED AVERAGE NUMBER OF COMMON STOCK
Basic	2,022,263	1,815,510
Diluted	2,022,263	1,815,510
LOSSES PER SHARE
Basic	$ (1.59)	$ (2.15)
Diluted	$ (1.59)	$ (2.15)
Product [Member]
Total Revenue	$ 395,495	$ 799,747
Service [Member]
Total Revenue	205,000
Licensing Income [Member]
Total Revenue	$ 285,000

v3.24.3

Consolidated Statements of Changes in Stockholders' Equity - USD ($)		Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Noncontrolling Interest [Member]	Total
Balance at Sep. 30, 2022			$ 1,805,000	$ (629,037)	$ (121,345)	$ 1,054,618
Balance, shares at Sep. 30, 2022	[1]	1,797,000
Net loss				(3,895,778)	(127,426)	(4,023,204)
Shares issued for cash			900,000			900,000
Shares issued for cash, shares	[1]	24,883
Shares issued for service			125,000			125,000
Shares issued for service, shares	[1]	3,289
Balance at Sep. 30, 2023			2,830,000	(4,524,815)	(248,771)	(1,943,586)
Balance, shares at Sep. 30, 2023	[1]	1,825,173
Net loss				(3,213,829)	(37,298)	(3,251,127)
Shares issued for service			72,000			72,000
Shares issued for service, shares	[1]	5,000
Shares issued upon IPO completion			7,859,534			7,859,534
Shares issued upon IPO completion, shares	[1]	250,000
Disposal of subsidiary					73,715	73,715
Warrants assumption			(13,000)			(13,000)
Fractional shares round up due to reverse stock split
Fractional shares round up due to reverse stock split, shares	[1]	199,787
Balance at Sep. 30, 2024			$ 10,748,534	$ (7,738,644)	$ (212,354)	$ 2,797,536
Balance, shares at Sep. 30, 2024	[1]	2,279,960
[1] Adjusted retroactively for reverse stock split that occurred on October 9, 2024, see Note 2. All references to number of shares, and to per share information in the consolidated financial statements have been retroactively adjusted.

v3.24.3

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (3,251,127)	$ (4,023,204)
Adjustments to reconcile net income to cash used in operating activities:
Depreciation expense	87,116	69,437
Stock-based compensation expense	146,333	41,667
Non-cash operating lease expense	224,216	120,803
Bad debt expense	59,935	1,267,960
Loss from settlement	28,796
Fixed assets disposal loss	5,035
Subsidiary disposal loss	23,715
Impairment loss	23,911
Change in operating assets and liabilities
Accounts receivable	10,500	468,895
Accounts receivable – related party		100,000
Inventories	61,219	(64,389)
Deferred offering costs	(51,701)	(538,765)
Prepayments and other current assets	(322,739)	79,457
Other non-current assets		(9,851)
Accounts payable	(480,886)	309,278
Accounts payable – related party	(485,595)	50,000
Unearned revenue	(547,568)	936,098
Operating lease liabilities	(729,359)	(76,991)
Other current liabilities	122,787	46,121
Other non-current liabilities		(2,457)
Net cash used in operating activities	(5,075,412)	(1,225,941)
CASH FLOWS FROM INVESTING ACTIVITIES:
Fixed assets additions	(559,629)	(244,899)
Proceed from fixed assets disposal	12,569
Net cash used in investing activities	(547,060)	(244,899)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from related parties		627,000
Payments to related parties	(503,372)	(134,861)
Proceeds from short-term loans		230,000
Payments to short-term loans	(740,000)	(150,000)
Payment to long-term note	(49,393)	(47,029)
Warrants assumption	(13,000)
Shares issued for cash	8,450,000	900,000
Net cash provided by financing activities	7,144,235	1,425,110
CHANGES IN CASH	1,521,763	(45,730)
CASH AND CASH EQUIVALENT, beginning of period	4,898	50,628
CASH AND CASH EQUIVALENT, ending of period	1,526,661	4,898
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income tax	800	3,500
Cash paid for interest	23,697	43,909
Noncash deferred offering costs offset to APIC upon IPO completion	590,466
Right-of-use assets obtained in exchange for operating lease liabilities	356,741	104,690
Deposit applied to lease liability	$ 39,699

v3.24.3

Pay vs Performance Disclosure - USD ($)	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure [Table]
Net Income (Loss)	$ (3,213,829)	$ (3,895,778)

v3.24.3

Insider Trading Arrangements	3 Months Ended
	Sep. 30, 2024
Insider Trading Arrangements [Line Items]
No Insider Trading Flag	true

v3.24.3

Nature of business and organization	12 Months Ended
	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of business and organization	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 53% of the equity interest in CBT. On October 16, 2023, the Company and the noncontrolling interest parties reached a new ownership agreement that the Company’s ownership increased to 55%. According to the new ownership agreement, the ownership percentage change is retroactively effective from January 18, 2022. The impact of historical noncontrolling interest allocation from this ownership percentage change is immaterial.   Effective as of January 21, 2022, the Company acquired 100% of the ordinary shares of Inno Metal Studs Corp. (“IMSC”), a Texas corporation incorporated on October 31, 2019. Pursuant to the terms of the Share Purchase Agreement with IMSC’s former sole owner and CEO of the Company, Mr. Dekui Liu, the Company issued 15,170,000 shares of its common stock to Mr. Dekui Liu in exchange for his 100% ownership in IMSC. Upon completion of the transaction, IMSC became a 100% owned subsidiary of the Company.   Inno Research Institute LLC (“IRI”), a Texas limited liability company incorporated on September 8, 2021, is a 65% owned subsidiary of IMSC. On January 27, 2024, IRI was voluntarily terminated and resulted in a disposal loss of $ 23,715. The R&D activities carried out by IRI will be transferred to Inno AI Tech Corp, a new subsidiary of the Company.   On January 21, 2024, the Company established 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 formed Inno AI Tech Corp., a wholly owned entity to conduct AI tech research and consulting activities.

v3.24.3

Basis of Presentation and Summary of significant accounting policies	12 Months Ended
	Sep. 30, 2024
Accounting Policies [Abstract]
Basis of Presentation and Summary of significant accounting policies	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.   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.   Reclassifications   Certain amounts on the prior year’s consolidated balance sheets, consolidated statements of operations and cash flows were reclassified to conform to the current year presentation, with no effect on ending stockholders’ equity.   Reverse Stock Split   On November 30, 2022, the Company effected a forward stock split (the “Stock Split”) of the Company’s issued and outstanding shares of the common stock at a split ratio of 2-for-1. Further on July 24, 2023, the Company effected a reverse stock split (the “Reverse Stock Split”) of the Company’s issued and outstanding shares of the common stock at a split ratio of 1-for-2 such that every holder of common stock of the Company shall receive one share of common stock for every two shares of common stock held and to reduce the number of authorized shares of common stock from 200,000,000 to 100,000,000. Shortly after the Reverse Stock Split, the Board of Directors of the Company approved issuance of additional shares to preserve the original purchase price per share of the shares sold in the period from February 1 to September 30, 2023.   On October 9, 2024, the Company completed a 1-for-10 reverse stock split of its issued and outstanding common stock, no par value, (the “Reverse Stock Split”). As a result of the Reverse Stock Split, each share of common stock issued and outstanding immediately prior to October 9, 2024 were automatically converted into one-tenth (1/10) of a share of common stock. The Common Stock began trading on a Reverse Stock Split-adjusted basis on the Nasdaq Capital Market on October 10, 2024. The trading symbols for the Common Stock remains “INHD”. The Reverse Stock Split did not reduce the number of authorized shares of Common Stock and did not change the par value of the Common Stock. The Reverse Stock Split affected all stockholders uniformly. Except to the extent that the Reverse Stock Split resulted in the stockholders’ fractional shares being rounded up, no other effects affect stockholder’s ownership percentage of the Company’s shares of Common Stock. 199,787 fractional shares were issued in connection with the Reverse Stock Split.   All common share and per-share amounts in this Form 10-K have been retroactively restated to reflect the effect of the Reverse Stock Split.     INNO HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements   Note 2 — Basis of Presentation and Summary of significant accounting policies (cont.)   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 $250,000, which is currently the maximum amount insured by the Federal Deposit Insurance Corporation for interest bearing accounts (there is currently no insurance limit for deposits in noninterest bearing accounts). The Company has not experienced any losses with respect to cash. Management believes the Company is not exposed to any significant credit risk with respect to its cash.   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 using expected credit loss (CECL) methodology each reporting period to determine if an allowance for credit loss is required.   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.   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.   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     INNO HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements   Note 2 — Basis of Presentation and Summary of significant accounting policies (cont.)   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.   Revenue recognition   The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, accounting for product, service and licensing revenue, 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 or services 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.   License income originates from licensing our logo, technology and intellectual property where we receive fixed license fees over licensing periods. Our 2024 license revenue was derived from one-time licensing agreement with an individual and his startup company for the purpose of startup operations and marketing development. Revenue from the licensing has minimal associated direct costs, and thus is highly profitable.   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.   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.     INNO HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements   Note 2 — Basis of Presentation and Summary of significant accounting policies (cont.)   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:   Schedule of depreciation on property and equipment Machinery and equipment   7 years Office equipment   5 years Motor vehicles   5 years Leasehold improvements   the shorter of the lease term or the estimated useful life of the 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, the Company recorded $23,911 impairment loss during the year ended September 30, 2024 to write down the leasehold improvement balance as a result of the early termination of the lease in Corona CA. No impairment expenses for property and equipment were recorded during the year ended September 30, 2023.   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.     INNO HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements   Note 2 — Basis of Presentation and Summary of significant accounting policies (cont.)   Stock-based Compensation   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.   Segment Reporting   The Company uses the management approach in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions, allocating resources and assessing performance as the source for determining the Company’s reportable segments. During the years ended September 30, 2024 and 2023, the Chief Executive Officer has been identified as the chief operating decision maker. The Company’s chief operating decision maker regularly reviews consolidated assets and consolidated operating results prepared under U.S. GAAP for the enterprise as a whole when making decisions about allocating resources and assessing performance of the Company. Consequently, management has determined that the Company only has one operating segment as defined under ASC 280-10-50.   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.   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.     INNO HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements   Note 2 — Basis of Presentation and Summary of significant accounting policies (cont.)   Loss per share   Basic loss 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 its annual reporting in fiscal year 2025 and for interim period reporting beginning the first quarter of fiscal year 2026 on a retrospective basis. Early adoption is permitted. We are currently evaluating the impact of this ASU on our segment disclosures.   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.   In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606) as if the entity had originated the contracts. The guidance is effective for fiscal years beginning after December 15, 2023, with early application permitted. 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.     INNO HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements   Note 2 — Basis of Presentation and Summary of significant accounting policies (cont.)   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.

v3.24.3

Accounts Receivable, Net	12 Months Ended
	Sep. 30, 2024
Credit Loss [Abstract]
Accounts Receivable, Net	Note 3 — Accounts Receivable, Net   Accounts receivable for the Company consisted of the following as of the dates indicated below:   Schedule of accounts receivable     September 30, 2024     September 30, 2023   Accounts receivable   $ -     $ 1,338,395   Less: allowance for credit losses     -       (1,267,960 ) Accounts receivable, net   $ -     $ 70,435     The Company wrote off the allowance for credit losses subsequent to exhaustive efforts to recover the receivable, which typically occurs within a 12-month period following the initial reservation for the allowance. A summary of the activities in the allowance for expected credit losses for the years ended September 30, 2024 and 2023 is as follows:   Schedule of activities in the allowance for expected credit losses     September 30, 2024     September 30, 2023   Allowance for credit losses, beginning   $ 1,267,960     $ -   Add/ (Deduct):                 Provision for credit loss     59,935       1,267,960   Write-offs     (1,327,895 )     -   Allowance for credit losses, end   $ -     $ 1,267,960     The Company recorded credit losses of $59,935 and $1,267,960 for the years ended September 30, 2004 and 2023, respectively.

v3.24.3

Inventories	12 Months Ended
	Sep. 30, 2024
Inventory Disclosure [Abstract]
Inventories	Note 4 — Inventories   As of September 30, 2024 and September 30, 2023, inventories consisted of the following:   Schedule of inventories     September 30, 2024     September 30, 2023   Raw material   $ 73,109     $ 134,299   Production inventory     259,965       259,994   Total   $ 333,074     $ 394,293     As of September 30, 2024 and 2023, there was no allowance for obsolescence recorded.

v3.24.3

Deferred offering costs	12 Months Ended
	Sep. 30, 2024
Deferred Offering Costs
Deferred offering costs	Note 5 — Deferred offering costs   Deferred offering costs consisted of fees and expenses incurred in connection with the sale of the Company’s common stock in the IPO, including the legal, accounting, printing and other offering related costs. Upon completion of the IPO, these deferred offering costs are to be reclassified from current assets to stockholders’ equity and recorded against the net proceeds from the offering. As of September 30, 2024 and September 30, 2023, deferred offering costs amounted to $Nil and $538,765, respectively. On December 18, 2023, the whole amount of deferred offering costs was charged to additional paid in capital upon the completion of the initial public offering.

v3.24.3

Prepayments and other current assets	12 Months Ended
	Sep. 30, 2024
Prepayments And Other Current Assets
Prepayments and other current assets	Note 6 — Prepayments and other current assets   As of September 30, 2024 and 2023, prepayments and other current assets consisted of the following:   Schedule of prepayments and other current assets     September 30, 2024     September 30, 2023   Prepaid marketing and promotional services   $ 73,750     $ -   Advance to other service providers     57,624       -   Advance to suppliers     250,638       87,217   Prepaid insurance     36,809       3,663   Prepaid for services by stock grants     -       83,333   Other prepayments and current assets     10,052       6,254   Total   $ 428,873     $ 180,467       INNO HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

v3.24.3

Property and equipment, net	12 Months Ended
	Sep. 30, 2024
Property, Plant and Equipment [Abstract]
Property and equipment, net	Note 7 — Property and equipment, net   As of September 30, 2024 and 2023, property and equipment consisted of the following:   Schedule of property and equipment     September 30, 2024     September 30, 2023   Machinery and equipment   $ 346,900     $ 346,900   Office equipment     3,064       5,488   Motor vehicles     109,276       64,082   Construction-in-progress     980,883       497,000   Leasehold improvements     18,000       54,049   Total     1,458,123       967,519   Property and equipment, gross     1,458,123       967,519   Less: accumulated depreciation     (157,540 )     (97,935 ) Property and equipment, net   $ 1,300,583     $ 869,584     The Construction-in-progress is related to the project to expand the Company’s operation and manufacturing capabilities in a factory in Texas. This project is expected to be completed by the end of February 2025.   In connection with the termination of the lease in Corona, CA as disclosed in Note 13, the Company recorded $23,911 impairment loss during the year ended September 30, 2024 to write down the leasehold improvement balance.   For the years ended September 30, 2024 and 2023, depreciation expenses amounted to $87,116 and $69,437, respectively.

v3.24.3

Loans payable	12 Months Ended
	Sep. 30, 2024
Debt Disclosure [Abstract]
Loans payable	Note 8 — Loans payable   Short-term loans   Revolving line of credit   On September 16, 2022, the Company entered into an agreement with Origin Bank for a revolving line of credit (the “Line of Credit”) of up to $1,000,000 with interest at the floating Prime Rate plus one percent (1.0%) per annum, which is to be adjusted daily to the rate in effect. Interest shall be due and payable monthly as it accrues. The Line of Credit is secured by a Security Agreement and Financing Statement that covers certain properties of the Company and guaranteed by Mr. Dekui Liu, the former CEO of the Company. As of September 30, 2024, the line of credit was fully paid off and closed. For the years ended September 30, 2024 and 2023, the Company recorded interest expense related to the Line of Credit of $ 15,881 and $60,957, respectively. As of September 30, 2024 and 2023, the total outstanding balance of the Note was $Nil and $560,000, respectively. The balance was presented on the consolidated balance sheet as a short-term loan.   Short term loan without interest   From June 2023 to August 2023, the Company borrowed short-term loans due on demand without interest, amounting to $230,000 from three individuals for operating purposes. As of September 30, 2024 and 2023, the outstanding balance due to these individuals were $50,000 and $230,000, respectively. The balance was presented on the consolidated balance sheet as a short-term loan.   Long-term loan   Promissory note payable   On October 28, 2021, the Company issued to BancorpSouth Bank a five-year unsecured 4.75% promissory note, payable in equal monthly installments of $4,661 commencing November 28, 2021 (the “Note”). The principal amount of the Note was $248,500. The Note is secured by a Security Agreement and Financing Statement that covers certain properties of the Company and guaranteed by Mr. Dekui Liu, the former CEO of the Company. For the years ended September 30, 2024 and 2023, the Company recorded interest expense related to the note of $6,773 and $8,903, respectively.   As of September 30, 2024 and 2023, the total outstanding balance of the Note was $110,846 and $160,239, respectively, which was presented on the consolidated balance sheet as a current portion of $51,898 and $49,393, and a non-current portion of $58,948 and $110,846, respectively.

v3.24.3

Related party transactions	12 Months Ended
	Sep. 30, 2024
Related Party Transactions [Abstract]
Related party transactions	Note 9 — 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 September 30, 2024, the amount due to Mr. Liu was $1,000. As of September 30, 2023, the amount due to Mr. Liu was $327,372.     INNO HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements   Note 9 — Related party transactions (cont.)   The Company engaged Yunited Assets LLC (“Yunited”), a limited liability company owned by Mr. Cheng Yu, the minority owner of the Company’s subsidiary, Inno Research Institute, for consultation services on a project-by-project basis. During the year ended September 30, 2023, the Company recorded $4,375 of project-based consulting service fees and $110,000 consulting fee to Yunited for Mr. Yu’s daily operating services included in the general and administrative expenses. No such services have been provided for the year ended September 30, 2024. As of September 30, 2024 and 2023, the outstanding balance of accounts payable – related party due to Yunited was $Nil and $50,000, respectively.   The Company purchases prefab home, materials and supplies, including design services from Baicheng Trading LLC (“Baicheng”), a company with a director related to the Chairwoman. During the year ended September 30, 2024, Baicheng provided the renovation design services with a fee of $52,000. Additionally, the Company prepaid $225,511 to Baicheng for roof materials for the factory improvement project. As of September 30, 2024, the outstanding balance of prepayments to Baicehng was $225,511. As of September 30, 2023, the outstanding accounts payable-related party due to Baicheng was $485,595.   Starting in December 2022, for operation and cashflow needs, the Company advances funds from Zfounder Organization Inc., (“Zfounder”), one of the Company’s 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 September 30, 2024, the outstanding balance, due to Zfounder and Wise Hill, has been fully paid off. As of September 30, 2023, the outstanding balance due to Zfounder and Wise Hill, were $55,000 and $122,000, respectively.   In March 2023, the Company entered into an agreement with Vision Opportunity Fund LP, a Florida limited partnership partially owned by a former 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 $15,875,800 plus applicable taxes. As of September 30, 2024, amount of $244,185 has been received and recorded as deferred revenue, and $Nil amount of revenue has been recognized during the year ended September 30, 2024.

v3.24.3

Other payables and accrued liabilities	12 Months Ended
	Sep. 30, 2024
Payables and Accruals [Abstract]
Other payables and accrued liabilities	Note 10 — Other payables and accrued liabilities   As of September 30, 2024 and 2023, Other payables and accrued liabilities consisted of the following:  Schedule of other payables and accrued liabilities     September 30, 2024     September 30, 2023   Payable to service providers     185,793       -   Accrued compensation     74,915       -   Other payable     27,244       92,164   Other payables and accrued liabilities   $ 287,952     $ 92,164       INNO HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

v3.24.3

Equity	12 Months Ended
	Sep. 30, 2024
Equity [Abstract]
Equity	Note 11 — Equity   The Company was incorporated in Texas on September 8, 2021. The total authorized shares of capital stock were 200,000,000 shares without par value.   As of September 30, 2024 and September 30, 2023, after giving effect to the stock splits of the outstanding shares of Common Stock, there were 2,279,960 and 1,825,173 shares of Common Stock issued and outstanding, respectively. The total authorized number of shares of capital stock was 100,000,000 shares without par value.   In December 2022, The Company issued 14,286 shares of its common stock at a price of $35.0 per share to an accredited investor for $500,000 in cash.   In February 2023, The Company issued 2,703 shares of its common stock at a price of $37.0 per share to an accredited investor for $100,000 in cash.   In March 2023, The Company issued 7,895 shares of its common stock at a price of $38.0 per share to an accredited investor for $300,000 in cash.   On June 20, 2023, the Company issued 1,316 shares of its common stock for a total value of $50,000 for services to be rendered during next twelve months by the immediate relative of the Company’s Chief Financial Officer. On June 20, 2023, the Company issued 1,973 shares of its common stock for a total value of $75,000 for services to be rendered during next twelve months by one nonemployee contractor. These shares were valued at $38.0 per share, which was the per share price for the most recent sale of the Company’s capital stock to accredited investors. On January 1, 2024, the Company issued 5,000 shares of its common stock for a total value of $72,000 for services to be rendered during next twelve months by one advisor firm. For the years ended September 30, 2024 and 2023, the Company recorded $146,333 and $41,667 as stock compensation expense under Selling, general and administrative expenses. As of September 30, 2024 and September 30, 2023, the remaining balance of $9,000 and $83,333 was recorded as Prepayments and other current assets, respectively.   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 250,000 shares (“the Shares”) of its common stock, no par value, the Company adopted its Amended and Restated Bylaws, effective the same day. In connection with the Offering of the Shares at an offering price of $40.0 per share, the Company also granted the underwriters an option exercisable for 45-days to purchase up to 37,500 shares of Common Stock as the Public Offering Price, less the underwriting discount to cover-over allotment. Additionally, the Company also issued warrants to the underwriters to purchase up to 20,125 shares of Common Stock at an exercise price of $48.0 per share, subject to adjustment as set forth in the warrants, exercisable from June 18, 2024 and valid until December 18, 2028. On March 1, 2024, the Company entered into a warrant assumption agreement with the underwriter to assume those certain underwriter’s warrants for the purchase an aggregate amount of 20,125 shares of the Company’s common stock in connection with the Company’s initial public offering. Pursuant to the warrant assumption agreement, the Company paid an aggregate amount of $13,000 for the assumption of the Warrants. The paid amount of $13,000 was recorded to reduce Additional Paid-in Capital. As of September 30, 2024, the Warrants are no longer outstanding.   The total gross proceeds from the Offering were $10,000,000, before deducting underwriting discounts and other offering expenses associated with the Offering payable by the Company or paid by the Company. Transaction costs related to the offering amounted to $2,140,466, consisting of $700,000 of underwriting fees, $345,876 of underwriting related expenses, $595,000 of legal fees and $499,590 of other costs. Of the total transaction cost of $2,140,466, $590,466 in transaction costs were incurred and paid by the company before the closing date. These costs were recorded as deferred offering costs and were offset to equity upon the completion of the IPO. $8,450,000 total net cash from the Offering has been received by the Company on December 19, 2023.     INNO HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

v3.24.3

Concentration of risk	12 Months Ended
	Sep. 30, 2024
Risks and Uncertainties [Abstract]
Concentration of risk	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 September 30, 2024 and 2023, $1,526,661 and $4,898, respectively, were deposited with various major financial institutions in the United States. Accounts at each institution in the United States are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000. As of September 30, 2024, the Company had deposits in excess of the FDIC insurance limit with two financial institutions in the United States with $757,744 uninsured. As of September 30, 2023, the Company did not have deposit in excess of the FDIC insurance limit.   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 year ended September 30, 2024, four customers accounted for 90% of the Company’s total revenues, respectively. For the year ended September 30, 2023, three customers accounted for 53%. As of September 30, 2024, $Nil outstanding of accounts receivable. Accounts receivable from one customer accounted for 100% of the Company’s total accounts receivable as of September 30, 2023.   For the year ended September 30, 2024, two suppliers accounted for 58% of the Company’s total purchases. For the year ended September 30, 2023, three suppliers accounted for 57% of the Company’s total purchases. As of September 30, 2024 and 2023, accounts payable to two suppliers accounted for 51% and 55% of the Company’s total accounts payable, respectively.

v3.24.3

Commitments and contingencies	12 Months Ended
	Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
Commitments and contingencies	Note 13— Commitments and contingencies   Lease commitments   The Company has adopted ASC 842 since its inception date.   The Company has entered into a lease agreement for office and production space in Texas with a term from December 1, 2019 until December 31, 2024 at a rate of $4,129 to $5,089 per month. On January 1, 2024, the Company terminated the facility lease in Texas without penalty and entered into a new lease agreement with the landlord. The new lease term is from January 1, 2024 to January 1, 2027, with a monthly rent of $18,000. The facility consists of 15,000 square feet of indoor space and 2.5 acres of concrete slab in the yard. Subsequently, on February 1, 2024, a mutual amendment to the lease agreement was executed. Under the terms of the amendment, the Company has opted to prepay the lease payments covering the period up to December 31, 2026, with the due date set for April 1, 2024. This prepayment arrangement secures a rent-free period for the final year of the lease, spanning the entirety of 2027.   The Company has also entered into a lease agreement for office and production space in Corona, California with a term from May 1, 2022 until April 30, 2027 at a rate of $6,617 to $7,740 per month. In August 2023, the Company relocated its California office from Corona to Diamond Bar. The Company was obligated to pay the monthly rent for the office in Corona until February 1, 2024 when the landlord found a new lessee to occupy the facility. The right-of-use asset and lease liability were adjusted to reflect the termination of the lease. A loss of $24,710 was recognized in the income statement, representing the difference between the carrying amounts of the right-of-use assets $251,953 and the lease liability $221,156 (net with deposit of $39,699 ), as well as additional fees charged by the landlord. On June 20, 2024, the Company and the landlord settled the lease with a final lease payment of $55,000, resulting in $44,204 of non-operating income.   The lease in Diamond Bar, California has a term of 24 months from August 18, 2023 to August 17, 2025 at a rate of $4,730 to $4,926 per month.   In addition, the Company will be responsible for its pro rata share of certain costs, including utility costs, insurance and common area costs, as further detailed in the lease agreements.     INNO HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements   Note 13— Commitments and contingencies (cont.)   Total commitment for the full term of the leases is $770,676. $570,295 and $437,770 of operating lease right-of-use assets and $60,236 and $488,094 of operating lease liabilities were reflected on the September 30, 2024 and 2023 consolidated balance sheets, respectively.  Schedule of operating lease cost     2024     2023   Lease cost   For the years ended September 30,       2024     2023   Operating lease cost (included in G&A in the Company’s statement of operations)   $ 258,636     $ 153,241   Other information:                 Cash paid for amounts included in the measurement of lease liabilities   $ 720,487     $ 109,430   Remaining term in years     0.5-3.25       1.25 – 3.58   Average discount rate – operating leases     9.5 %     8.5 %   The supplemental balance sheet information related to leases is as follows:  Schedule of supplement balance sheet information related to lease Operating leases   September 30, 2024     September 30, 2023   Right of use asset – non-current   $ 570,295     $ 437,770   Lease Liability – current     60,236       212,277   Lease Liability – non-current     0       275,817   Total operating lease liabilities   $ 60,236     $ 488,094     Maturities of the Company’s lease liabilities are as follows:  Schedule of lease liabilities     Operating Lease   For periods subsequent to September 30, 2024:         2025   $ 62,792   Less: Imputed interest/present value discount     (2,556 ) Present value of lease liabilities   $ 60,236     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 $73,000.   The Company is currently 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. While the case is in its early stages, initial investigations suggest that the Company did not receive any of these funds. The Company is vigorously contesting the plaintiff’s claims and have requested the dismissal of charges against the Company due to lack of evidence. Negotiations for dismissal are ongoing.   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.     INNO HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements   Note 13— Commitments and contingencies (cont.)   Nasdaq Listing Rule 5550(a)(2)   On April 12, 2024, the Company received a letter (the “Notice”) from The Nasdaq notifying the Company that, because the closing bid price for its common stock has been below $1.00 per share for 30 consecutive business days, it no longer complies with the minimum bid price requirement for continued listing on The Nasdaq Capital Market (the “Minimum Bid Price Requirement”). Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid price of $1.00 per share (the “Minimum Bid Price Requirement”), and Listing Rule 5810(c)(3)(A) provides that a failure to meet the Minimum Bid Price Requirement exists if the deficiency continues for a period of 30 consecutive business days.   The Notice has no immediate effect on the listing of the Company’s common stock on The Nasdaq. Pursuant to Nasdaq Marketplace Rule 5810(c)(3)(A), the Company has been provided an initial compliance period of 180 calendar days, or until October 9, 2024 to regain compliance with the Minimum Bid Price Requirement. During the compliance period, the Company’s shares of common stock will continue to be listed and traded on The Nasdaq. To regain compliance, the closing bid price of the Company’s common stock must meet or exceed $1.00 per share for a minimum of 10 consecutive business days during the 180-calendar day grace period.   On October 25, 2024, the Company received written notice (the “Compliance Notice”) from the Nasdaq Office of General Counsel of The Nasdaq Stock Market LLC informing the Company that it has regained compliance with the bid price requirement in Nasdaq Listing Rule 5550(a)(2), which requires that companies listed on the Nasdaq Capital Market maintain a minimum bid price of $1.00 per share, and that the Company’s securities will continue to be listed and traded on The Nasdaq Stock Market.

v3.24.3

Income taxes	12 Months Ended
	Sep. 30, 2024
Income Tax Disclosure [Abstract]
Income taxes	Note 14 — Income taxes   On December 22, 2017, the President of the United States signed into law H.R.1, formerly known as the Tax Cuts and Jobs Act (the “Tax Legislation”). The Tax Legislation significantly revised the U.S. tax code by (i) lowering the U.S. federal statutory income tax rate from 35% to 21%, (ii) implementing a territorial tax system, (iii) imposing a one-time transition tax on deemed repatriated earnings of foreign subsidiaries, (iv) requiring a current inclusion of global intangible low taxed income of certain earnings of controlled foreign corporations in U.S. federal taxable income, (v) creating the base erosion anti-abuse tax regime, (vi) implementing bonus depreciation that will allow for full expensing of qualified property, and (vii) limiting deductibility of interest and executive compensation expense, among other changes. The Company has computed its tax expenses using the new statutory rate effective on January 1, 2018 of 21%.   Other provisions of the new legislation include, but are not limited to, limiting deductibility of interest and executive compensation expense. These additional items have been considered in the income tax provision for the years ended September 30, 2024 and 2023.   Texas imposes a franchise tax that applies to most business entities that are formed or qualified to do business, or which are otherwise doing business, in Texas. Under the Texas franchise tax, a 0.75% tax is imposed for the years ended September 30, 2024 and 2023 on the Company’s taxable margin that is apportioned to Texas. Taxable margin is generally defined as revenues less certain costs.     INNO HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements   Note 14 — Income taxes (cont.)   The income tax provision for the years ended September 30, 2024 and 2023 consisted of the following:  Schedule of income tax provision     2024     2023       September 30,       2024     2023   Current:                 Federal   $ —     $ —   State     800       —   Total current income tax provision     800       —                     Deferred:                 Federal     (1,532,244 )     (633,247 ) State     —       —   Increase/(decrease) in valuation allowance     1,532,244       633,247   Total deferred taxes     —       —                     Total provision for income taxes   $ 800     $ —     The deferred tax asset as of September 30, 2024 and 2023 consisted of the following:  Schedule of deferred tax     2024     2023       September 30,       2024     2023   Stock-based compensation   $ -     $ 8,750   Net operating loss     1,493,981       626,793   Depreciation     (47,602 )     (53,588 ) Unearned revenue     72,917       —   Investment in Passthrough Entities     8,542       18,856   Allowance for Doubtful Accounts     -       266,272   Others     4,406       1,383   Total deferred tax assets     1,532,244       868,466   Less: valuation allowance     (1,532,244 )     (868,466 ) Deferred tax assets net   $ —     $ —     The company has net operating loss carry forwards of approximately $4.1 million and $2.5 million for the years ended September 30, 2024 and 2023, respectively. The operating losses do not expire.   Valuation Allowance   We periodically assess whether it is more likely than not whether we will generate sufficient taxable income to realize our deferred tax assets and establish a valuation allowance if it’s we deem that will not likely be able to realize the benefit associated with our deferred tax assets. We consider all available positive and negative evidence and make certain assumptions to make this determination. We review our deferred tax liabilities, historical earnings, history of cycles of earnings and losses within our industry, our business environment and the potential to generate current and future earnings. We cannot determine at this time when we will be able to generate sufficient taxable income to realize our deferred tax assets. We therefore have recorded a full valuation allowance against our net deferred tax assets.     INNO HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements   Note 14 — Income taxes (cont.)   The Company is subject to U.S. federal income tax as well as state income tax in certain jurisdictions. The tax years 2021 to 2024 remain open to examination by the major taxing jurisdictions to which the Company is subject. The following is a reconciliation of income tax expenses at the effective rate to income tax at the calculated statutory rates:  Schedule of effective rate income tax rate income tax     September 30, 2024     September 30, 2023   Statutory tax rate                 Federal     21.00 %     21.00 % State (net of federal benefit)     (0.02 )%     — % Net effect of state income tax deduction and other permanent differences     (21.00 )%     (21.00 )% Effective tax rate     (0.02 )%     — %   As of September 30, 2024 and 2023, the outstanding income tax payable was both $0.

v3.24.3

Subsequent events	12 Months Ended
	Sep. 30, 2024
Subsequent Events [Abstract]
Subsequent events	Note 15 — Subsequent events   On October 14, 2024, the Company entered into an equity investment agreement with an individual, securing a 15% ownership interest in CoreModu LLC, a company specializing in the production of light steel structural materials. The investment totaled $1.4 million.   On October 31, 2024, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain investors (the “Investors”), providing for the sale and issuance of 500,000 shares (the “Shares”) of the Company’s common stock, no par value (the “Common Stock”), for an aggregate purchase price of $2,000,000 at $4.00 per share. The purchase, sale, and issuance of the Shares (the “Closing”) are planned to take place on or before November 6, 2024. The Shares were issued pursuant to the Purchase Agreement, were not registered under the Securities Act of 1933, as amended (the “Securities Act”), and were issued in reliance on the exemption from registration requirements thereof provided by Section 4(a)(2) of the Securities Act or Regulation S promulgated under the Securities Act. The Company relied on these exemptions from registration based in part on representations made by the Investors.   On October 31, 2024, in connection with the Purchase Agreement, the Company entered into a Registration Rights Agreement with the Investors (the “Registration Rights Agreement”). The Registration Rights Agreement provided, among other things, that the Company will as soon as reasonably practicable, and in any event no later than December 31, 2024, file with the SEC (at the Company’s sole cost and expense) a registration statement registering the resale of the Shares of Common Stock. The Company agreed to use its commercially reasonable efforts to have such registration statement declared effective as soon as practicable after the filing thereof.   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, 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 Private Placement closed on November 20, 2024. As of November 27, 2024, the Company has received funds from six of the nine Purchasers and an aggregate purchase price of $2,475,000. The remaining three Purchasers are in the process of completing their wire transfers.

v3.24.3

Basis of Presentation and Summary of significant accounting policies (Policies)	12 Months Ended
	Sep. 30, 2024
Accounting Policies [Abstract]
Basis of presentation	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.
Consolidated Principles of consolidation	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.
Reclassifications	Reclassifications   Certain amounts on the prior year’s consolidated balance sheets, consolidated statements of operations and cash flows were reclassified to conform to the current year presentation, with no effect on ending stockholders’ equity.
Reverse Stock Split	Reverse Stock Split   On November 30, 2022, the Company effected a forward stock split (the “Stock Split”) of the Company’s issued and outstanding shares of the common stock at a split ratio of 2-for-1. Further on July 24, 2023, the Company effected a reverse stock split (the “Reverse Stock Split”) of the Company’s issued and outstanding shares of the common stock at a split ratio of 1-for-2 such that every holder of common stock of the Company shall receive one share of common stock for every two shares of common stock held and to reduce the number of authorized shares of common stock from 200,000,000 to 100,000,000. Shortly after the Reverse Stock Split, the Board of Directors of the Company approved issuance of additional shares to preserve the original purchase price per share of the shares sold in the period from February 1 to September 30, 2023.   On October 9, 2024, the Company completed a 1-for-10 reverse stock split of its issued and outstanding common stock, no par value, (the “Reverse Stock Split”). As a result of the Reverse Stock Split, each share of common stock issued and outstanding immediately prior to October 9, 2024 were automatically converted into one-tenth (1/10) of a share of common stock. The Common Stock began trading on a Reverse Stock Split-adjusted basis on the Nasdaq Capital Market on October 10, 2024. The trading symbols for the Common Stock remains “INHD”. The Reverse Stock Split did not reduce the number of authorized shares of Common Stock and did not change the par value of the Common Stock. The Reverse Stock Split affected all stockholders uniformly. Except to the extent that the Reverse Stock Split resulted in the stockholders’ fractional shares being rounded up, no other effects affect stockholder’s ownership percentage of the Company’s shares of Common Stock. 199,787 fractional shares were issued in connection with the Reverse Stock Split.   All common share and per-share amounts in this Form 10-K have been retroactively restated to reflect the effect of the Reverse Stock Split.     INNO HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements   Note 2 — Basis of Presentation and Summary of significant accounting policies (cont.)
Use of estimates and assumptions	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   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 $250,000, which is currently the maximum amount insured by the Federal Deposit Insurance Corporation for interest bearing accounts (there is currently no insurance limit for deposits in noninterest bearing accounts). The Company has not experienced any losses with respect to cash. Management believes the Company is not exposed to any significant credit risk with respect to its cash.
Accounts receivable	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 using expected credit loss (CECL) methodology each reporting period to determine if an allowance for credit loss is required.   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.   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	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.   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     INNO HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements   Note 2 — Basis of Presentation and Summary of significant accounting policies (cont.)   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.
Revenue recognition	Revenue recognition   The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, accounting for product, service and licensing revenue, 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 or services 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.   License income originates from licensing our logo, technology and intellectual property where we receive fixed license fees over licensing periods. Our 2024 license revenue was derived from one-time licensing agreement with an individual and his startup company for the purpose of startup operations and marketing development. Revenue from the licensing has minimal associated direct costs, and thus is highly profitable.
Costs and expenses	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.
Inventory	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.     INNO HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements   Note 2 — Basis of Presentation and Summary of significant accounting policies (cont.)   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	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   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:   Schedule of depreciation on property and equipment Machinery and equipment   7 years Office equipment   5 years Motor vehicles   5 years Leasehold improvements   the shorter of the lease term or the estimated useful life of the 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, the Company recorded $23,911 impairment loss during the year ended September 30, 2024 to write down the leasehold improvement balance as a result of the early termination of the lease in Corona CA. No impairment expenses for property and equipment were recorded during the year ended September 30, 2023.
Leases	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.     INNO HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements   Note 2 — Basis of Presentation and Summary of significant accounting policies (cont.)
Stock-based Compensation	Stock-based Compensation   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.
Segment Reporting	Segment Reporting   The Company uses the management approach in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions, allocating resources and assessing performance as the source for determining the Company’s reportable segments. During the years ended September 30, 2024 and 2023, the Chief Executive Officer has been identified as the chief operating decision maker. The Company’s chief operating decision maker regularly reviews consolidated assets and consolidated operating results prepared under U.S. GAAP for the enterprise as a whole when making decisions about allocating resources and assessing performance of the Company. Consequently, management has determined that the Company only has one operating segment as defined under ASC 280-10-50.
Income taxes	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.   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	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.     INNO HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements   Note 2 — Basis of Presentation and Summary of significant accounting policies (cont.)
Loss per share	Loss per share   Basic loss 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	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 its annual reporting in fiscal year 2025 and for interim period reporting beginning the first quarter of fiscal year 2026 on a retrospective basis. Early adoption is permitted. We are currently evaluating the impact of this ASU on our segment disclosures.   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.   In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606) as if the entity had originated the contracts. The guidance is effective for fiscal years beginning after December 15, 2023, with early application permitted. 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.     INNO HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements   Note 2 — Basis of Presentation and Summary of significant accounting policies (cont.)
Subsequent events	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.

v3.24.3

Basis of Presentation and Summary of significant accounting policies (Tables)	12 Months Ended
	Sep. 30, 2024
Accounting Policies [Abstract]
Schedule of depreciation on property and equipment	Schedule of depreciation on property and equipment Machinery and equipment   7 years Office equipment   5 years Motor vehicles   5 years Leasehold improvements   the shorter of the lease term or the estimated useful life of the improvements

v3.24.3

Accounts Receivable, Net (Tables)	12 Months Ended
	Sep. 30, 2024
Credit Loss [Abstract]
Schedule of accounts receivable	Accounts receivable for the Company consisted of the following as of the dates indicated below:   Schedule of accounts receivable     September 30, 2024     September 30, 2023   Accounts receivable   $ -     $ 1,338,395   Less: allowance for credit losses     -       (1,267,960 ) Accounts receivable, net   $ -     $ 70,435
Schedule of activities in the allowance for expected credit losses	Schedule of activities in the allowance for expected credit losses     September 30, 2024     September 30, 2023   Allowance for credit losses, beginning   $ 1,267,960     $ -   Add/ (Deduct):                 Provision for credit loss     59,935       1,267,960   Write-offs     (1,327,895 )     -   Allowance for credit losses, end   $ -     $ 1,267,960

v3.24.3

Inventories (Tables)	12 Months Ended
	Sep. 30, 2024
Inventory Disclosure [Abstract]
Schedule of inventories	As of September 30, 2024 and September 30, 2023, inventories consisted of the following:   Schedule of inventories     September 30, 2024     September 30, 2023   Raw material   $ 73,109     $ 134,299   Production inventory     259,965       259,994   Total   $ 333,074     $ 394,293

v3.24.3

Prepayments and other current assets (Tables)	12 Months Ended
	Sep. 30, 2024
Prepayments And Other Current Assets
Schedule of prepayments and other current assets	As of September 30, 2024 and 2023, prepayments and other current assets consisted of the following:   Schedule of prepayments and other current assets     September 30, 2024     September 30, 2023   Prepaid marketing and promotional services   $ 73,750     $ -   Advance to other service providers     57,624       -   Advance to suppliers     250,638       87,217   Prepaid insurance     36,809       3,663   Prepaid for services by stock grants     -       83,333   Other prepayments and current assets     10,052       6,254   Total   $ 428,873     $ 180,467

v3.24.3

Property and equipment, net (Tables)	12 Months Ended
	Sep. 30, 2024
Property, Plant and Equipment [Abstract]
Schedule of property and equipment	As of September 30, 2024 and 2023, property and equipment consisted of the following:   Schedule of property and equipment     September 30, 2024     September 30, 2023   Machinery and equipment   $ 346,900     $ 346,900   Office equipment     3,064       5,488   Motor vehicles     109,276       64,082   Construction-in-progress     980,883       497,000   Leasehold improvements     18,000       54,049   Total     1,458,123       967,519   Property and equipment, gross     1,458,123       967,519   Less: accumulated depreciation     (157,540 )     (97,935 ) Property and equipment, net   $ 1,300,583     $ 869,584

v3.24.3

Other payables and accrued liabilities (Tables)	12 Months Ended
	Sep. 30, 2024
Payables and Accruals [Abstract]
Schedule of other payables and accrued liabilities	As of September 30, 2024 and 2023, Other payables and accrued liabilities consisted of the following:  Schedule of other payables and accrued liabilities     September 30, 2024     September 30, 2023   Payable to service providers     185,793       -   Accrued compensation     74,915       -   Other payable     27,244       92,164   Other payables and accrued liabilities   $ 287,952     $ 92,164

v3.24.3

Commitments and contingencies (Tables)	12 Months Ended
	Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
Schedule of operating lease cost	Schedule of operating lease cost     2024     2023   Lease cost   For the years ended September 30,       2024     2023   Operating lease cost (included in G&A in the Company’s statement of operations)   $ 258,636     $ 153,241   Other information:                 Cash paid for amounts included in the measurement of lease liabilities   $ 720,487     $ 109,430   Remaining term in years     0.5-3.25       1.25 – 3.58   Average discount rate – operating leases     9.5 %     8.5 %
Schedule of supplement balance sheet information related to lease	The supplemental balance sheet information related to leases is as follows:  Schedule of supplement balance sheet information related to lease Operating leases   September 30, 2024     September 30, 2023   Right of use asset – non-current   $ 570,295     $ 437,770   Lease Liability – current     60,236       212,277   Lease Liability – non-current     0       275,817   Total operating lease liabilities   $ 60,236     $ 488,094
Schedule of lease liabilities	Maturities of the Company’s lease liabilities are as follows:  Schedule of lease liabilities     Operating Lease   For periods subsequent to September 30, 2024:         2025   $ 62,792   Less: Imputed interest/present value discount     (2,556 ) Present value of lease liabilities   $ 60,236

v3.24.3

Income taxes (Tables)	12 Months Ended
	Sep. 30, 2024
Income Tax Disclosure [Abstract]
Schedule of income tax provision	The income tax provision for the years ended September 30, 2024 and 2023 consisted of the following:  Schedule of income tax provision     2024     2023       September 30,       2024     2023   Current:                 Federal   $ —     $ —   State     800       —   Total current income tax provision     800       —                     Deferred:                 Federal     (1,532,244 )     (633,247 ) State     —       —   Increase/(decrease) in valuation allowance     1,532,244       633,247   Total deferred taxes     —       —                     Total provision for income taxes   $ 800     $ —
Schedule of deferred tax	The deferred tax asset as of September 30, 2024 and 2023 consisted of the following:  Schedule of deferred tax     2024     2023       September 30,       2024     2023   Stock-based compensation   $ -     $ 8,750   Net operating loss     1,493,981       626,793   Depreciation     (47,602 )     (53,588 ) Unearned revenue     72,917       —   Investment in Passthrough Entities     8,542       18,856   Allowance for Doubtful Accounts     -       266,272   Others     4,406       1,383   Total deferred tax assets     1,532,244       868,466   Less: valuation allowance     (1,532,244 )     (868,466 ) Deferred tax assets net   $ —     $ —
Schedule of effective rate income tax rate income tax	Schedule of effective rate income tax rate income tax     September 30, 2024     September 30, 2023   Statutory tax rate                 Federal     21.00 %     21.00 % State (net of federal benefit)     (0.02 )%     — % Net effect of state income tax deduction and other permanent differences     (21.00 )%     (21.00 )% Effective tax rate     (0.02 )%     — %

v3.24.3

Nature of business and organization (Details Narrative) - USD ($)			12 Months Ended
	Jan. 27, 2024	Jan. 21, 2022	Sep. 30, 2024	Sep. 30, 2023	Oct. 16, 2023	Jan. 18, 2022	Sep. 08, 2021
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Disposal loss	$ 23,715		$ (23,715)
Mr Dekui Liu [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Stock issued of common stock, shares		15,170,000
Inno Metal Studs Corp [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Acquired percentage of ordinary shares		100.00%
Inno Metal Studs Corp [Member] | Inno Research Institute LLC [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Owned subsidiary percentage							65.00%
Castor Building Tech LLC [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Owned subsidiary percentage						53.00%
Castor Building Tech LLC [Member] | New Ownership Agreement [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Owned subsidiary percentage					55.00%
Inno Metal Studs Corp [Member] | Mr Dekui Liu [Member]
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Owned subsidiary percentage		100.00%

v3.24.3

Schedule of depreciation on property and equipment (Details)	Sep. 30, 2024
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of assets	7 years
Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of assets	5 years
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Estimated useful lives of assets	5 years
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, Plant, and Equipment, Useful Life, Term, Description [Extensible Enumeration]	Useful Life, Lease Term [Member]

v3.24.3

Basis of Presentation and Summary of significant accounting policies (Details Narrative) - USD ($)			12 Months Ended
	Oct. 09, 2024	Nov. 30, 2022	Sep. 30, 2024	Sep. 30, 2023	Jul. 24, 2023	Jul. 23, 2023	Sep. 08, 2021
Subsequent Event [Line Items]
Stock split		On November 30, 2022, the Company effected a forward stock split (the “Stock Split”) of the Company’s issued and outstanding shares of the common stock at a split ratio of 2-for-1.
Common stock, shares authorized			100,000,000	100,000,000	100,000,000	200,000,000	200,000,000
Interest bearing amount			$ 250,000
Impairment loss			$ 23,911
Subsequent Event [Member]
Subsequent Event [Line Items]
Stock split	On October 9, 2024, the Company completed a 1-for-10 reverse stock split of its issued and outstanding common stock, no par value, (the “Reverse Stock Split”).
Shares issued for cash, shares	199,787

v3.24.3

Schedule of accounts receivable (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Credit Loss [Abstract]
Accounts receivable		$ 1,338,395
Less: allowance for credit losses		(1,267,960)
Accounts receivable, net		$ 70,435

v3.24.3

Schedule of activities in the allowance for expected credit losses (Details) - USD ($)	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Credit Loss [Abstract]
Allowance for credit losses, beginning	$ 1,267,960
Provision for credit loss	59,935	1,267,960
Write-offs	(1,327,895)
Allowance for credit losses, end		$ 1,267,960

v3.24.3

Accounts Receivable, Net (Details Narrative) - USD ($)	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Credit Loss [Abstract]
Credit losses	$ 59,935	$ 1,267,960

v3.24.3

Schedule of inventories (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023
Inventory Disclosure [Abstract]
Raw material	$ 73,109	$ 134,299
Production inventory	259,965	259,994
Total	$ 333,074	$ 394,293

v3.24.3

Inventories (Details Narrative) - USD ($)	Sep. 30, 2024	Sep. 30, 2023
Inventory Disclosure [Abstract]
Allowance for obsolescence	$ 0	$ 0

v3.24.3

Deferred offering costs (Details Narrative) - USD ($)	Sep. 30, 2024	Sep. 30, 2023
Deferred Offering Costs
Deferred offering costs		$ 538,765

v3.24.3

Schedule of prepayments and other current assets (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023
Prepayments And Other Current Assets
Prepaid marketing and promotional services	$ 73,750
Advance to other service providers	57,624
Advance to suppliers	250,638	87,217
Prepaid insurance	36,809	3,663
Prepaid for services by stock grants		83,333
Other prepayments and current assets	10,052	6,254
Total	$ 428,873	$ 180,467

v3.24.3

Schedule of property and equipment (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 1,458,123	$ 967,519
Less: accumulated depreciation	(157,540)	(97,935)
Property and equipment, net	1,300,583	869,584
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	346,900	346,900
Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	3,064	5,488
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	109,276	64,082
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	980,883	497,000
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 18,000	$ 54,049

v3.24.3

Property and equipment, net (Details Narrative) - USD ($)	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Property, Plant and Equipment [Abstract]
Lease impairment loss	$ 23,911
Depreciation expenses	$ 87,116	$ 69,437

v3.24.3

Loans payable (Details Narrative) - USD ($)			3 Months Ended	12 Months Ended
	Nov. 28, 2021	Oct. 28, 2021	Aug. 31, 2023	Sep. 30, 2024	Sep. 30, 2023	Sep. 16, 2022
Line of Credit Facility [Line Items]
Line of credit, maximum borrowing capacity						$ 1,000,000
Floating prime rate plus						1.00%
Interest expense				$ 6,773	$ 8,903
Line of credit outstanding					560,000
Short term loans without interest					230,000
Outstanding loan balance				50,000	790,000
Promissory note percentage		4.75%
Promissory note monthly installments	$ 4,661
Principal amount		$ 248,500
Debt outstanding balance				110,846	160,239
Long-term notes payable current portion				51,898	49,393
Long-term notes payable noncurrent portion				58,948	110,846
Three Individuals [Member]
Line of Credit Facility [Line Items]
Short term loans without interest			$ 230,000
Individuals [Member]
Line of Credit Facility [Line Items]
Outstanding loan balance				50,000	230,000
Line of Credit [Member]
Line of Credit Facility [Line Items]
Interest expense				$ 15,881	$ 60,957

v3.24.3

Related party transactions (Details Narrative) - USD ($)	1 Months Ended	12 Months Ended
	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023
Related Party Transaction [Line Items]
Outstanding balance		$ 27,244	$ 92,164
Prepaid expenses		10,052	6,254
Yunited Assets LLC [Member]
Related Party Transaction [Line Items]
Service fee			110,000
Outstanding accounts payable related party			50,000
Baicheng Trading LLC [Member]
Related Party Transaction [Line Items]
Service fee		52,000
Outstanding accounts payable related party		225,511	485,595
Prepaid expenses		225,511
Z founder Organization Inc [Member]
Related Party Transaction [Line Items]
Outstanding balance			55,000
Wise Hill Inc [Member]
Related Party Transaction [Line Items]
Outstanding balance			122,000
Mr Dekui Liu [Member]
Related Party Transaction [Line Items]
Outstanding balance		1,000	327,372
Inno Research Institute [Member]
Related Party Transaction [Line Items]
Service fee			$ 4,375
Vision Opportunity Fund LP [Member]
Related Party Transaction [Line Items]
Supplies expense	$ 15,875,800
Deferred revenue		244,185
Revenue

v3.24.3

Schedule of other payables and accrued liabilities (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023
Payables and Accruals [Abstract]
Payable to service providers	$ 185,793
Accrued compensation	74,915
Other payable	27,244	92,164
Other payables and accrued liabilities	$ 287,952	$ 92,164

v3.24.3

Equity (Details Narrative) - USD ($)							1 Months Ended			12 Months Ended
		Mar. 01, 2024	Jan. 01, 2024	Dec. 19, 2023	Dec. 18, 2023	Jun. 20, 2023	Mar. 31, 2023	Feb. 28, 2023	Dec. 31, 2022	Sep. 30, 2024	Sep. 30, 2023	Apr. 12, 2024	Jul. 24, 2023	Jul. 23, 2023	Sep. 08, 2021
Accumulated Other Comprehensive Income (Loss) [Line Items]
Authorized number of shares of capital stock										100,000,000	100,000,000		100,000,000	200,000,000	200,000,000
Common stock issued										2,279,960	1,825,173
Common stock, shares outstanding										2,279,960	1,825,173
Share price						$ 38.0
Value issued for cash											$ 900,000
Value issued for service										$ 72,000	125,000
Stock compensation expense										146,333	41,667
Prepayments and other current assets										$ 9,000	$ 83,333
Common stock, no par value										$ 0	$ 0
Share price												$ 1.00
Warrant right exercise price										$ 48.0
Warrants and rights outstanding, maturity date										Dec. 18, 2028
Net cash from offering		$ 10,000,000		$ 8,450,000
Total transaction costs		2,140,466
Payments for underwriting expense		700,000
Underwriting fees		345,876
Legal fees		595,000
Other costs		499,590
Payment for offering transaction costs		$ 590,466
Warrant Assumption Agreement [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Warrants to underwriters purchase		20,125
Aggregate amount of warrants		$ 13,000
Warrants outstanding
Maximum [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Warrants to underwriters purchase										20,125
IPO [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Common stock issued					250,000
Common stock, no par value					$ 0
Share price					$ 40.0
Shares granted the underwriters option exercisable					37,500
Chief Financial Officer [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Shares issued for service						1,316
Value issued for service						$ 50,000
One Nonemployee Contractor [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Shares issued for service			5,000			1,973
Value issued for service			$ 72,000			$ 75,000
Common Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Shares issued for cash	[1]										24,883
Value issued for cash
Shares issued for service	[1]									5,000	3,289
Value issued for service
Common Stock [Member] | Investor [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Shares issued for cash							7,895	2,703	14,286
Share price							$ 38.0	$ 37.0	$ 35.0
Value issued for cash							$ 300,000	$ 100,000	$ 500,000
[1] Adjusted retroactively for reverse stock split that occurred on October 9, 2024, see Note 2. All references to number of shares, and to per share information in the consolidated financial statements have been retroactively adjusted.

v3.24.3

Concentration of risk (Details Narrative) - USD ($)	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Concentration Risk [Line Items]
Cash	$ 1,526,661	$ 4,898
Cash uninsured limit	757,744
Outstanding of accounts receivable
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Four Customers [Member]
Concentration Risk [Line Items]
Concentration risk percentage	90.00%
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | Three Customers [Member]
Concentration Risk [Line Items]
Concentration risk percentage		53.00%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | One Customer [Member]
Concentration Risk [Line Items]
Concentration risk percentage		100.00%
Supplier Concentration Risk [Member] | Cost of Goods and Service Benchmark [Member] | Two Suppliers [Member]
Concentration Risk [Line Items]
Concentration risk percentage	58.00%
Supplier Concentration Risk [Member] | Cost of Goods and Service Benchmark [Member] | Three Suppliers [Member]
Concentration Risk [Line Items]
Concentration risk percentage		57.00%
Supplier Concentration Risk [Member] | Accounts Payable [Member] | Two Suppliers [Member]
Concentration Risk [Line Items]
Concentration risk percentage	51.00%	55.00%
Maximum [Member]
Concentration Risk [Line Items]
Cash FDIC insurance limit	$ 250,000	$ 250,000

v3.24.3

Schedule of operating lease cost (Details) - USD ($)		12 Months Ended
	Jun. 20, 2024	Sep. 30, 2024	Sep. 30, 2023
Loss Contingencies [Line Items]
Cash paid for amounts included in the measurement of lease liabilities	$ 55,000	$ 720,487	$ 109,430
Average discount rate - operating leases		9.50%	8.50%
Minimum [Member]
Loss Contingencies [Line Items]
Remaining term in years		6 months	1 year 3 months
Maximum [Member]
Loss Contingencies [Line Items]
Remaining term in years		3 years 3 months	3 years 6 months 29 days
General and Administrative Expense [Member]
Loss Contingencies [Line Items]
Operating lease cost (included in G&A in the Company’s statement of operations)		$ 258,636	$ 153,241

v3.24.3

Schedule of supplement balance sheet information related to lease (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Aug. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Right of use asset – non-current	$ 570,295	$ 437,770	$ 251,953
Lease Liability – current	60,236	212,277
Lease Liability - non-current		275,817
Total operating lease liabilities	$ 60,236	$ 488,094	$ 221,156

v3.24.3

Schedule of lease liabilities (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023	Aug. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
2025	$ 62,792
Less: Imputed interest/present value discount	(2,556)
Total operating lease liabilities	$ 60,236	$ 488,094	$ 221,156

v3.24.3

Commitments and contingencies (Details Narrative)						1 Months Ended	12 Months Ended
	Oct. 25, 2024 $ / shares	Jul. 23, 2024 USD ($)	Jun. 20, 2024 USD ($)	Apr. 12, 2024 $ / shares	Jan. 01, 2024 USD ($) ft²	Aug. 31, 2023 USD ($)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Jan. 01, 2024 a
Loss Contingencies [Line Items]
Accres of land					15,000				2.5
Termination of lease						$ 24,710
Operating lease right of use asset						251,953	$ 570,295	$ 437,770
Operating lease liabilities						221,156	60,236	488,094
Lease deposits						$ 39,699
Lease payment			$ 55,000				720,487	109,430
Non operating income lease			$ 44,204				123,175	$ (39,196)
Operating lease cost							770,676
Settlement amount		$ 73,000
Litigation payment		$ 1,300,000
Minimum bid price | $ / shares				$ 1.00
Share price | $ / shares				$ 1.00
Subsequent Event [Member]
Loss Contingencies [Line Items]
Minimum bid price | $ / shares	$ 1.00
January 1, 2024 to January 1, 2027 [Member]
Loss Contingencies [Line Items]
Payment lease agreement					$ 18,000
Minimum [Member] | December 1, 2019 Until December 31, 2024 [Member]
Loss Contingencies [Line Items]
Payment lease agreement							4,129
Minimum [Member] | May 1, 2022 And April 30, 2027 [Member]
Loss Contingencies [Line Items]
Payment lease agreement							6,617
Minimum [Member] | August 18, 2023 to August 17, 2025 [Member]
Loss Contingencies [Line Items]
Payment lease agreement							4,730
Maximum [Member] | December 1, 2019 Until December 31, 2024 [Member]
Loss Contingencies [Line Items]
Payment lease agreement							5,089
Maximum [Member] | May 1, 2022 And April 30, 2027 [Member]
Loss Contingencies [Line Items]
Payment lease agreement							7,740
Maximum [Member] | August 18, 2023 to August 17, 2025 [Member]
Loss Contingencies [Line Items]
Payment lease agreement							$ 4,926

v3.24.3

Schedule of income tax provision (Details) - USD ($)	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Current:
Federal
State	800
Total current income tax provision	800
Deferred:
Federal	(1,532,244)	(633,247)
State
Increase/(decrease) in valuation allowance	1,532,244	633,247
Total deferred taxes
Total provision for income taxes	$ 800

v3.24.3

Schedule of deferred tax (Details) - USD ($)	Sep. 30, 2024	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Stock-based compensation		$ 8,750
Net operating loss	1,493,981	626,793
Depreciation	(47,602)	(53,588)
Unearned revenue	72,917
Investment in Passthrough Entities	8,542	18,856
Allowance for Doubtful Accounts		266,272
Others	4,406	1,383
Total deferred tax assets	1,532,244	868,466
Less: valuation allowance	(1,532,244)	(868,466)
Deferred tax assets net

v3.24.3

Schedule of effective rate income tax rate income tax (Details)				12 Months Ended
	Jan. 01, 2018	Dec. 22, 2017	Dec. 21, 2017	Sep. 30, 2024	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Federal	21.00%	21.00%	35.00%	21.00%	21.00%
State (net of federal benefit)				(0.02%)
Net effect of state income tax deduction and other permanent differences				(21.00%)	(21.00%)
Effective tax rate				(0.02%)

v3.24.3

Income taxes (Details Narrative) - USD ($)				12 Months Ended
	Jan. 01, 2018	Dec. 22, 2017	Dec. 21, 2017	Sep. 30, 2024	Sep. 30, 2023
Income Tax Disclosure [Abstract]
Effective income tax rate reconciliation, at federal statutory income tax rate, percent	21.00%	21.00%	35.00%	21.00%	21.00%
Enacted tax rate				0.75%	0.75%
Operating loss carry forwards				$ 4,100,000	$ 2,500,000
Income tax payable				$ 0	$ 0

v3.24.3

Subsequent events (Details Narrative) - USD ($)					12 Months Ended
		Nov. 27, 2024	Nov. 13, 2024	Oct. 31, 2024	Sep. 30, 2023	Oct. 14, 2024	Sep. 30, 2024	Jun. 20, 2023
Common stock, no par value					$ 0		$ 0
Issuance of shares, aggregate price					$ 900,000
Issuance of shares, price per share								$ 38.0
Common Stock [Member]
Shares issued for cash, shares	[1]				24,883
Issuance of shares, aggregate price
Subsequent Event [Member] | Purchase Agreement [Member] | Common Stock [Member]
Shares issued for cash, shares				500,000
Common stock, no par value				$ 0
Issuance of shares, aggregate price				$ 2,000,000
Issuance of shares, price per share				$ 4.00
Subsequent Event [Member] | Purchase Agreement [Member] | Common Stock [Member] | From Six of the Nine Purchasers [Member]
Issuance of shares, aggregate price		$ 2,475,000
Subsequent Event [Member] | Purchase Agreement [Member] | Common Stock [Member] | Private Placement [Member] | Nine Investors [Member]
Shares issued for cash, shares			729,167
Common stock, no par value			$ 0
Issuance of shares, aggregate price			$ 3,500,000
Issuance of shares, price per share			$ 4.80
Subsequent Event [Member] | CoreModu LLC [Member]
Investments						$ 1,400,000
CoreModu LLC [Member] | Subsequent Event [Member]
Ownership interest						15.00%
[1] Adjusted retroactively for reverse stock split that occurred on October 9, 2024, see Note 2. All references to number of shares, and to per share information in the consolidated financial statements have been retroactively adjusted.

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