1 unchanged sentence
have our common stock listed on The Nasdaq Capital Market under the symbol “INHD”.
−Removed: of January 11, 2024, there were approximately 4 stockholders of record of our common stock.
−Removed: The actual number of stockholders is
−Removed: greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street
−Removed: name by brokers and other nominees.
−Removed: This number of holders of record also does not include stockholders whose shares may be held in trust
−Removed: by other entities.
+Added: of December 6, 2024, there were approximately 25 stockholders of record of our common stock.
+Added: The actual number of stockholders is greater
+Added: than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by
+Added: brokers and other nominees.
+Added: This number of holders of record also does not include stockholders whose shares may be held in trust by
+Added: other entities.
+Added: November 30, 2022, the Company effected a forward stock split (the “Stock Split”) of the Company’s issued and outstanding
+Added: shares of the common stock at a split ratio of 2-for-1.
+Added: Further on July 24, 2023, the Company effected a reverse stock split (the “Reverse
+Added: 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
+Added: 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
+Added: the number of authorized shares of common stock from 200,000,000 to 100,000,000.
+Added: Shortly after the Reverse Stock Split, the Board of
+Added: Directors of the Company approved issuance of additional shares to preserve the original purchase price per share of the shares sold
+Added: in the period from February 1 to June 30, 2023.
+Added: October 9, 2024, the Company completed a 1-for-10 reverse stock split of its issued and outstanding common stock, no par value, (the
+Added: “Reverse Stock Split”).
+Added: As a result of the Reverse Stock Split, each share of common stock issued and outstanding immediately
+Added: prior to October 9, 2024 were automatically converted into one-tenth (1/10) of a share of common stock.
+Added: The Common Stock began trading
+Added: on a Reverse Stock Split-adjusted basis on the Nasdaq Capital Market on October 10, 2024.
+Added: The trading symbols for the Common Stock remains
+Added: The Reverse Stock Split did not reduce the number of authorized shares of Common Stock and did not change the par
+Added: value of the Common Stock.
+Added: The Reverse Stock Split affected all stockholders uniformly.
+Added: Except to the extent that the Reverse Stock Split
+Added: resulted in the stockholders’ fractional shares being rounded up, no other effects affect stockholder’s ownership percentage
+Added: of the Company’s shares of Common Stock.
+Added: 199,787 fractional shares were issued in connection with the Reverse Stock Split.
+Added: common share and per-share amounts in this Form 10-K have been retroactively restated to reflect the effect of the Reverse Stock Split.
have not declared any cash dividends since inception, and we do not anticipate paying any dividends in the foreseeable future.
14 unchanged sentences
of common stock.
−Removed: December 3, 2022, the Company issued 142,857 shares of its common stock, on a pre-reverse stock split basis, to an accredited
−Removed: investor at $3.5 per share for $500,000 in cash.
−Removed: March 13, 2023, the Company issued 27,028 shares of its common stock, on a pre-reverse stock split basis, to an accredited investor
−Removed: at $3.7 per share for $100,000 in cash.
−Removed: April 25, 2023, The Company issued 78,947 shares of its common stock, on a pre-reverse stock split basis, to an accredited investor
−Removed: at $3.80 per share for $300,000 in cash.
−Removed: June 20, 2023, the Company issued 13,158 shares of its common stock, on a pre-reverse stock split basis, for a total value of
−Removed: $50,000 for services to be rendered during next twelve months by the immediate relative of
−Removed: the Company’s Chief Financial Officer.
−Removed: June 20, 2023, the Company issued 19,737 shares of its common stock, on a pre-reverse stock split basis, for a total value of
−Removed: $75,000 for services to be rendered during next twelve months by one nonemployee contractor.
+Added: 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
+Added: 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.
+Added: 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.
+Added: 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
+Added: next twelve months by the immediate relative of the Company’s Chief Financial Officer.
+Added: 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
+Added: next twelve months by one nonemployee contractor.
These shares were valued at $38 per share.
−Removed: July 24, 2023, the Company issued 13,514 shares of its common stock to an accredited investor
−Removed: for no additional consideration following the Company’s previously disclosed reverse
−Removed: July 24, 2023, the Company issued 39,473.50 shares of its common stock to an accredited investor
−Removed: for no additional consideration following the Company’s previously disclosed reverse
−Removed: July 24, 2023, the Company issued 6,579 shares of its common stock to an accredited investor
−Removed: for no additional consideration following the Company’s previously disclosed reverse
−Removed: July 24, 2023, the Company issued 9,868.50 shares of its common stock to an accredited investor
−Removed: for no additional consideration following the Company’s previously disclosed reverse
−Removed: July 24, 2023, the Company issued 71,428.50 shares of its common stock to an accredited investor
−Removed: for no additional consideration following the Company’s previously disclosed reverse
+Added: July 24, 2023, the Company issued 1,352 shares of its common stock to an accredited investor for no additional consideration following
+Added: the Company’s previously disclosed reverse stock split in July 2023.
+Added: July 24, 2023, the Company issued 3,947 shares of its common stock to an accredited investor for no additional consideration following
+Added: the Company’s previously disclosed reverse stock split in July 2023.
+Added: July 24, 2023, the Company issued 658 shares of its common stock to an accredited investor for no additional consideration following
+Added: the Company’s previously disclosed reverse stock split in July 2023.
+Added: July 24, 2023, the Company issued 987 shares of its common stock to an accredited investor for no additional consideration following
+Added: the Company’s previously disclosed reverse stock split in July 2023.
+Added: July 24, 2023, the Company issued 7,143 shares of its common stock to an accredited investor for no additional consideration following
+Added: the Company’s previously disclosed reverse stock split in July 2023.
+Added: 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
+Added: during next twelve months.
+Added: The advisory firm helps and supports the Company in the capital market, including developing capital market
+Added: strategies, sourcing different providers including investment banks and underwriters, etc.
+Added: These shares were issued by the transfer agent
+Added: on July 15,2024 and valued at $14 per share.
issuance of the common stock in private placements was deemed exempt from registration under Section 4(a)(2) of the Securities Act or
2 unchanged sentences
a view to or for sale in connection with any distribution thereof.
−Removed: (b) Warrants.
−Removed: December 18, 2023, the Company issued warrants to AC Sunshine Securities LLC, the underwriter
−Removed: of its IPO (as defined below), to purchase up to 201,250 shares of common stock at an exercise price of $4.80
+Added: December 18, 2023, the Company issued warrants to AC Sunshine Securities LLC, the underwriter of its IPO (as defined below), to purchase
+Added: up to 20,125 shares of common stock at an exercise price of $48 per share.
of Proceeds from our Initial Public Offering of Common Stock
−Removed: December 18, 2023, we closed our initial public offering (the “IPO”), in which we sold and issued 2,500,000 shares of
−Removed: our common stock at a price to the public of $4.00 per share.
−Removed: We received approximately $7,859,533 in aggregate net proceeds from
−Removed: our IPO after deducting underwriting discounts and commissions and other offering expenses.
−Removed: AC Sunshine Securities LLC was the
−Removed: underwriter of our IPO.
+Added: December 18, 2023, we closed our initial public offering (the “IPO”), in which we sold and issued 250,000 shares of our common
+Added: stock at a price to the public of $40 per share.
+Added: We received approximately $7,859,533 in aggregate net proceeds from our IPO after deducting
+Added: underwriting discounts and commissions and other offering expenses.
+Added: AC Sunshine Securities LLC was the underwriter of our IPO.
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
10 unchanged sentences
12 of this Annual Report on Form 10-K.
−Removed: - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
−Removed: following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated
−Removed: financial statements and related notes that appear elsewhere in this Annual Report on Form 10-K.
−Removed: In addition to historical consolidated
−Removed: financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs.
−Removed: actual results could differ materially from those discussed in the forward-looking statements as a result of various factors, including
−Removed: those set forth under the heading “Cautionary Note Regarding Forward-Looking Statements” in this Annual Report on Form 10-K.
−Removed: are a building technology company that primarily manufactures cold-formed-steel members and offers a full range of services required
−Removed: to transform raw materials into precise steel framing products and prefabricated homes.
−Removed: We transform raw material (coils of rolled steel
−Removed: of various gauges and other materials) through our proprietary technologies to cut, punch and bend the steel into members or other components.
−Removed: These work-in-process components are further processed into finished products which are used in a variety of building types, including
−Removed: residential, commercial, industrial, and infrastructure.
−Removed: At each stage of the process, we are adding value to the original rolled steel
−Removed: (and other materials) to its final assembled use by businesses or directly to customers.
−Removed: largest commodity expense is our primary raw material — rolled steel in various gauges and widths.
−Removed: Like any commodity, steel is
−Removed: subject to supply/demand-based price fluctuations which can have an impact on the profitability of our business if prices change between
−Removed: the time we enter into a contract with a customer to deliver finished goods and the time the steel is purchased from the mill.
−Removed: to mitigate our exposure to steel price fluctuations in two ways:
−Removed: Entering fixed price forward
−Removed: contracts with steel mills/suppliers for delivery in the future so that our bids for customer contracts have known pricing for the
−Removed: This is particularly useful in larger projects that involve delivery of product over many months.
−Removed: Maintaining an approximately
−Removed: three-month inventory of our most actively used rolled steel coils (defined by width and gauge).
−Removed: This inventory requires an active
−Removed: forward-looking assessment of steel needs to meet expected demand.
−Removed: Maintaining inventory is a real financial exposure especially during
−Removed: periods of pricing volatility.
−Removed: Performance Indicators (“KPIs”)
−Removed: addition to the measures presented in our consolidated financial statements, our management regularly monitors certain KPIs for our business.
−Removed: The KPIs used by the Company include:
−Removed: capital turnover rate of raw-material procurement
−Removed: business is reliant on timely delivery of raw materials.
−Removed: At the same time, our primary raw material (steel) is expensive to warehouse.
−Removed: We strive to achieve roughly 1-3 months of raw materials inventory to balance our cost of inventory against the risk of not having raw
−Removed: materials when needed.
−Removed: We do this by setting up long-term cooperative relationship with multiple local and national suppliers, including
−Removed: the mills, so that we will gain a better payment cycle to secure the raw material, to maximize the usage of the funds.
−Removed: At the same time,
−Removed: to match the raw-material usage of the sales order each quarter, we will make the quarterly purchase plans ahead, so that the efficiency
−Removed: of capital turnover is higher.
−Removed: collection period of accounts receivable
−Removed: payments from customers are essential to a successful business.
−Removed: Based on our historical collectability experience, we will seek to gradually
−Removed: eliminate the types of small-size homebuilders and cooperate with large-size and professional companies to strengthen risk control of
−Removed: accounts receivable and shorten the days outstanding for accounts receivable.
−Removed: Eventually, we expect to achieve the goal of receiving
−Removed: 100% of the payment before products leave the shop.
−Removed: requires the coordination of many contractors, subcontractors, permitting, etc.
−Removed: that must be done on very exacting schedules where any
−Removed: delays will have a ripple effect down the chain.
−Removed: While there are many things we cannot control, we strive to communicate with the customers
−Removed: at a high frequency and make the best production arrangement to minimize storage period and shorten the lead time, which is one of the
−Removed: most important operating indicators of INNO.
−Removed: growth of total operating income
−Removed: maintain internal long-term targets for both gross profit and operating income, based partly on long-term revenue growth targets and
−Removed: partly on execution and internal controls.
−Removed: Ultimately, we strive to deliver profitable long-term growth.
−Removed: capacity improvement
−Removed: are committed to investing in the improvement of production capacity and production efficiency in an effort to support larger orders
−Removed: and to meet the goal of increasing total operating income.
−Removed: the years ended September 30, 2023, and 2022
−Removed: following table presents certain Consolidated statement-of-operations information and presentation of that data as a percentage of change
−Removed: from year to year.
−Removed: For the Years Ended September 30,
−Removed: Revenues– related party
−Removed: TOTAL REVENUES
−Removed: Costs of materials and labor
−Removed: Selling, general and administrative expenses (exclusive of depreciation and bad debt expenses shown
−Removed: separately below)
−Removed: Bad debt expense
−Removed: Operating loss
−Removed: Other income (expenses)
−Removed: Loss before income taxes
−Removed: Income tax expense
−Removed: Non-controlling interest
−Removed: Net loss attributable to INNO HOLDINGS INC.
−Removed: $ (3,895,778 )
−Removed: $ (1,008,662 )
−Removed: Operating loss % of revenues
−Removed: Net loss % of revenues
−Removed: for the fiscal year ended September 30, 2023 declined 82% to $799,747 in comparison to $4,502,568 for the fiscal year ended September
−Removed: The decline in revenue primarily resulted from a decrease in customer construction activity, a decline in the number of customers,
−Removed: to 24 in the fiscal year ended September 30, 2023 from 48 in fiscal year 2022, and a decline in the average size of projects, which resulted
−Removed: in a decline in average revenue per customer to $33,323 in the fiscal year ended September 30, 2023 from $93,804 in the fiscal year ended
−Removed: September 30, 2022.
−Removed: We had nine repeat customers in the year ended September 30, 2023 compared to the year ended September 30, 2022.
−Removed: backlog as of September 30, 2023 was approximately $14,000,000 to $19,000,000.
−Removed: The range of backlog amount is comprised of all
−Removed: remaining payments related to our signed customer contracts and estimation of order adjustments.
−Removed: We expect revenue from these
−Removed: contracts to be realized within next 24 months.
−Removed: These signed contracts included an agreement in the amount of $15,875,800 with
−Removed: Vision Opportunity Fund LP, assigned to Vision 101 LLC (“Vision 101”), which is partially owned by one of our minority
−Removed: shareholders.
−Removed: None of the contract amount has been delivered to Vision 101 or recognized as revenue during the fiscal year ended
−Removed: September 30, 2023.
−Removed: revenues are significantly impacted by demand for residential and commercial buildings, economic conditions including interest rates
−Removed: and costs of labor, materials and other variables that impact the cost of our finished goods.
−Removed: We cannot ensure that growth will continue,
−Removed: and our business may be adversely affected by negative overall economic conditions currently being experienced.
−Removed: of Materials and Labor
−Removed: of materials and labor include raw materials (primarily rolled steel) and direct labor in the processing of raw materials through the
−Removed: manufacturing process.
−Removed: Fluctuations in raw materials pricing and production volume can have an impact on our costs as indicated in the
−Removed: table below, with raw steel contributing between approximately 40% of the cost of goods sold and 61% of the cost of goods sold, depending
−Removed: on price and volume.
−Removed: of materials and labor for the fiscal year ended September 30, 2023, declined 59% to $1,255,315 in comparison to $3,031,588 for the fiscal
−Removed: year ended September 30, 2022.
−Removed: The decrease was primarily due to the sharp year-over-year decline in revenue, as discussed above.
−Removed: revenue decline exceeded the cost reduction, partly because some fixed costs are not declined along with the revenue and some expenses
−Removed: were incurred for long-term projects that are not eligible for revenue recognition in the current year.
−Removed: the Company seeks to minimize the impact of fluctuations of steel prices by advance purchases of steel tied to the price to be paid by
−Removed: customers in their contracts, available capital resources has limited our ability to make advance purchases to about three months of
−Removed: supply, which has left us with some exposure to supply price changes.
−Removed: Among the uses of proceeds from our IPO, the Company intends
−Removed: to extend the number of months of supply to match the expected need for raw materials of purchases under contract.
−Removed: Steel Price Sensitivity Analysis
−Removed: Steel as % of COGS
−Removed: “Low Volume” assumes three tons of steel material used per one eight-hour shift;
−Removed: “High Volume” assumes
−Removed: seven tons of steel material used per shift.
−Removed: Steel price variance assumes a baseline price of $1,200 per U.S.
−Removed: General and Administrative Expenses
−Removed: general and administrative expenses for the fiscal year ended September 30, 2023, decreased 3% to $2,191,043 in comparison to $2,247,820
−Removed: for the fiscal year ended September 30, 2022.
−Removed: The decrease was primarily due to the decrease of nonemployee commission offset by the
−Removed: increase of overhead to support long-term growth.
−Removed: debt expense increased by $1,267,960 for the fiscal year ended September 30, 2023 compared to the same period in 2022 due to the reserves
−Removed: for doubtful accounts.
−Removed: We estimated the credit losses based on each customer’s financial situation, project status and the outstanding
−Removed: days of the accounts receivable balance.
−Removed: Following table illustrates the allowance for credit losses related to each age group of receivables.
−Removed: Aging Category
−Removed: Accounts receivable
−Removed: allowance for credit losses
−Removed: Accounts receivable, net
−Removed: the beginning of our 2023 fiscal year, we started to strengthen our risk control of accounts receivable and reduce the days outstanding
−Removed: for accounts receivable by discontinuing business with smaller customers with high credit risk.
−Removed: Most of our current customers adhere
−Removed: to a 30-day payment term.
−Removed: For the current year’s transactions, we have maintained a high collection rate.
−Removed: For aged outstanding
−Removed: balances, we assessed the provision for credit loss based on the aging groups, each customer’s business and project status, contractual
−Removed: term, and financial situation.
−Removed: We reserved 95% of the balance that is aged over nine months.
−Removed: Below, we have summarized the nature of
−Removed: our current collection issues:
−Removed: We were notified that the
−Removed: ownership of one of our projects had been transferred in the middle of construction.
−Removed: We had collection issues from the former owner
−Removed: and reserved approximately $0.5 million credit losses accordingly.
−Removed: As a subcontractor to provide
−Removed: the designing service and prefab products, we recognize the revenue upon completion of our performance obligations.
−Removed: However, there
−Removed: are two projects that had been significantly changed during the later stage of construction, our delivered services and prefab products
−Removed: had been replaced.
−Removed: We are experiencing difficulties in collecting payment for the services rendered and prefab products delivered.
−Removed: The related balance of approximately $0.3 million has been reserved as credit losses.
−Removed: We were notified that several
−Removed: customers have cash flow issues and are facing challenges in securing loans.
−Removed: We are experiencing difficulties in collecting payment
−Removed: for the services rendered and prefab products delivered.
−Removed: We assessed the customers’ financial situation and reserved approximately
−Removed: $0.4 million as credit losses.
−Removed: continue to monitor our accounts receivable balances and limit small-size homebuilders and cooperate with large-size and professional
−Removed: companies to strengthen risk control of accounts receivable and shorten the days outstanding for accounts receivable.
−Removed: loss was $3,984,008 for the fiscal year ended September 30, 2023, in comparison to operating loss of $809,978 for the fiscal year ended
−Removed: September 30, 2022.
−Removed: The increased loss was primarily attributed to lower revenue and increased expenses, as discussed above.
−Removed: Income (Expense)
−Removed: expenses for the fiscal year ended September 30, 2023, were $39,196, in comparison to other expenses of $310,114 for the fiscal year
−Removed: ended September 30, 2022.
−Removed: The decrease in expense was primarily related to stock compensation expense recorded for the fiscal year ended
−Removed: September 30, 2022.
−Removed: loss for the fiscal year ended September 30, 2023 was $4,023,204, in comparison to net loss of $1,130,007 for the fiscal year ended September
−Removed: The year-over-year increase in net loss was primarily due to changes in revenue, costs and expenses as outlined above, including
−Removed: lower year-over-year revenue, occurred bad debt expenses and higher expenses as a result of the increase of headcounts and our public
−Removed: filing process.
−Removed: Factors That Affect Operating Results
−Removed: following are factors that affect our operating results.
−Removed: Acquisition of new (large
−Removed: size) builders, developers, and other types of customers and assisting them to complete the structural design and engineering more
−Removed: Consistently providing value-added
−Removed: professional services for our customers, saving costs, and shortening construction periods to win more loyal customers.
−Removed: Maintaining technological
−Removed: leadership, competitive prices, and other advantages over competitors.
−Removed: Consistent investment in
−Removed: automation and other systems to improve efficiencies required to improve margins.
−Removed: Investment in employees in
−Removed: an effort to efficiently manage operations, finances, and other corporate efforts.
−Removed: Demand for residential and
−Removed: commercial buildings can be substantially impacted by the cost of borrowing money.
−Removed: Recent increases in interest rates and recessionary
−Removed: fears have slowed building activities.
−Removed: However, we believe demand for affordable housing remains stable.
−Removed: Builders in this segment are
−Removed: driven to seek breakthroughs and optimization in terms of cost and lead time, which we believe may benefit INNO.
−Removed: Ability to Create Value for Our Users and Generate Revenue
−Removed: ability to create value for our users and generate our revenues from merchants is driven by the factors described below:
−Removed: Our competitors include traditional
−Removed: wood framing, competing steel framing solutions, and other building techniques, as well as prefab homes and prefabricated building
−Removed: With respect to framing solutions, we expect cost savings, quality, and construction efficiency over our competitors to
−Removed: be the main driver of outperformance for INNO.
−Removed: For prefab homes and components, we differentiate through modern design, high quality,
−Removed: technology innovation, and affordability, and we believe our product is differentiated in this large and growing market space.
−Removed: From applying AI design technology,
−Removed: innovation of new products, and exploration of new materials, to developing a whole new structural system, we provide customers with
−Removed: the most optimized solutions and LGS framing, which can lead to lower costs and construction times.
−Removed: Our steel framing products
−Removed: are formed by automated CNC production lines.
−Removed: We currently own five automatic production lines that can cover 3 ⅝ ”
−Removed: to 12 ” studs/tracks of different thickness ranging from 25 gauge to 12 gauge.
−Removed: We believe our lead time is faster than
−Removed: other traditional suppliers.
−Removed: Supply Chain Disruption, and Price Fluctuations
−Removed: pressures of the past year, as evidenced by rising interest rates and cost of living indices, have had a direct impact on all aspects
−Removed: of our business from the cost of the raw materials we use to the demand for our finished goods.
−Removed: While we have no control over the decisions
−Removed: our customers make of whether to move forward with construction projects in the face of recessionary fears, we endeavor to limit our
−Removed: exposure by carefully managing our steel purchases to match expected demand and maintaining a flexible as-needed work force.
−Removed: steel material remains more expensive than wood on an absolute basis, we believe demand for our steel framing products will continue
−Removed: to grow due to significant advantages, including lower construction times (shorter time to building completion, lower labor costs), higher
−Removed: quality (limited waste, true and straight walls, durability), and insurance savings.
−Removed: We saw evidence of this in the fiscal year ended
−Removed: September 30, 2022, when steel prices increased sharply (price increases peaked at +143% year to year), yet demand remained strong, and
−Removed: our revenue grew approximately 50% year to year.
−Removed: We also note that steel and softwood price changes tend to track reasonably closely
−Removed: over time, which held even through the pandemic (see figure below).
−Removed: We believe this suggests that our steel framing products will likely
−Removed: remain competitive with wood framing, even in periods of high price volatility.
−Removed: Mill Products and Softwood Pricing Trends, 2018-2022
−Removed: Bureau of Labor Statistics, Producer Price Index by Commodity:
−Removed: Lumber and Wood Products:
−Removed: Softwood Lumber [WPS0811], retrieved from
−Removed: FRED, Federal Reserve Bank of St.
−Removed: Louis, and Metals and Metal
−Removed: Steel Mill Products [WPU1017], retrieved from FRED, Federal Reserve
−Removed: supply chain covers material sourcing, logistics, and macroeconomic factors.
−Removed: INNO is a technology-based
−Removed: manufacturing company, with all manufacturing operations currently based in the U.S.
−Removed: We currently source our steel from U.S.-based
−Removed: steel mills, which greatly reduces our exposure to global supply chain concerns;
−Removed: however, we may in the future source steel from other
−Removed: We may also source other materials internationally from time-to-time to ensure we maintain an efficient cost profile.
−Removed: Timely transportation of
−Removed: our inbound raw materials and outbound finished goods are critical to our operations and meeting our obligations to our customers.
−Removed: We are exposed to the overall shortage in capacity in the transportation industry including the well-publicized driver shortage and
−Removed: volatile fuel price.
−Removed: We have mitigated some of the transportation shortages and maintained high service levels by having one company-owned
−Removed: truck and may add more if demand warrants it.
−Removed: An additional innovation
−Removed: aiding in our logistics strategy, is our patent-pending Mobile Factory.
−Removed: Our Mobile Factory can be transported to the jobsite for production.
−Removed: Once launched, our Mobile Factory can greatly reduce the logistic costs of all or a portion of finished products produced at the factory.
−Removed: of Global Conflicts and Uncertainties
−Removed: conflict between Russia and Ukraine continues to affect economic and global financial markets.
−Removed: The effects of the conflict have contributed
−Removed: to other ongoing economic challenges such as global supply-chain disruptions, labor shortages, inflation, and cybersecurity attacks,
−Removed: creating a challenging business environment for all industries.
−Removed: While we have not been materially affected by the conflict or these other
−Removed: economic challenges, future unpredictable and uncertain events and the protentional for future global conflicts could impact the Company.
−Removed: We continue monitor developments in the Russia-Ukraine conflict and evaluate our supply chain to mitigate any effects on our business,
−Removed: which includes currently sourcing all of our steel from the U.S.
−Removed: currently source all of our steel within the U.S.
−Removed: and ensure that the steel coils we source meet U.S.
−Removed: We may source steel
−Removed: and other materials internationally to ensure a favorable cost profile.
−Removed: Our robust supply chain efforts help ensure consistent quality
−Removed: standards are met.
−Removed: of COVID-19 and Any Future Pandemic
−Removed: this time the COVID-19 pandemic and shutdowns related to additional outbreaks have not had a material effect on our business.
−Removed: the pandemic continues to affect energy prices, inflation, labor supply, the global supply chain and capital resources.
−Removed: Future impacts
−Removed: related the pandemic remain uncertain and could have an adverse effect on our business, including with regard to the Company’s
−Removed: ability to acquire raw materials used in our finished goods at sufficiently low prices, find and hire qualified employees, and access
−Removed: taken our previous experiences operating during the pandemic and related shutdowns and used them to implement strategies to ensure our
−Removed: continued success.
−Removed: We have adapted to the ongoing COVID-19 pandemic in order to continue functioning.
−Removed: This has included implementing
−Removed: safety protocols and flexible remote work.
−Removed: supply chain has not been significantly impacted by the recent COVID-19 pandemic since we source raw materials locally which helps reduce
−Removed: lead times and minimize risk of disruptions.
−Removed: We also attempt to keep a safety stock of raw material inventory which can help to ensure
−Removed: that we have enough product on hand to meet urgent demand even if there are unexpected delays or disruptions in supply chain.
−Removed: and Capital Resources
−Removed: the years ended September 30, 2023, and 2022, we primarily funded our operations with cash generated from operations, sale of equity,
−Removed: as well as through borrowing under our revolving line of credit, a long term promissory note, and related parties.
−Removed: See Note 9, Note 10
−Removed: and Note 12 to the consolidated financial statements for details.
−Removed: We had cash of $4,898 as of September 30, 2023 compared to $50,628
−Removed: of cash as of September 30, 2022.
−Removed: The cash decrease was primarily the result of the increase in net cash used by operating activities
−Removed: and purchase of equipment in the fiscal year ended September 30, 2023.
−Removed: Company has participated in several private-placement offerings.
−Removed: On December 3, 2022, we closed on a private-placement offering pursuant
−Removed: to which we sold to an accredited investor an aggregate of $500,000 in common stock, at a purchase price of $3.50 per share.
−Removed: 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
−Removed: stock, at a purchase price of $3.70 per share.
−Removed: On March 29, 2023, we closed on a private-placement offering pursuant to which we sold
−Removed: to an accredited investor an aggregate of $300,000 in common stock, at a purchase price of $3.80 per share.
−Removed: The offerings were completed
−Removed: pursuant to an exemption from registration under Rule 506(b) of the Securities Act of 1933, as amended.
−Removed: do not believe the cash and cash equivalents on hand as of September 30, 2023 of $4,898 will be sufficient to fund its operations and
−Removed: capital expenditure requirements for the next twelve months from the date the consolidated financial statements are issued.
−Removed: required to raise additional capital to continue to fund operations and capital expenditures.
−Removed: As previously disclosed, on December 18,
−Removed: 2023, the Company successfully closed the IPO with gross proceeds of $10 million.
−Removed: The management has concluded that
−Removed: substantial doubt is not alleviated regarding the Company’s ability to continue as a going concern for 12 months from the date
−Removed: of issuance of these financial statements.
−Removed: We will be required to raise additional capital to continue to fund operations and capital
−Removed: The uncertainties surrounding our ability to access capital when needed creates substantial doubt about our ability to continue
−Removed: as a going concern.
−Removed: on our need to raise additional funds to implement our business plans for the next twelve months, we have included a discussion concerning
−Removed: the presentation of our financial statements on a going concern basis in the notes to our consolidated financial statements and our independent
−Removed: public accountants have included a similar discussion in their opinion on our financial statements through September 30, 2023.
−Removed: be required in the near future to issue debt or sell our Company’s equity securities in order to raise additional cash, although
−Removed: there are no firm arrangements in place for any such financing at this time.
−Removed: We cannot provide any assurances as to whether we will be
−Removed: able to secure the necessary financing, or the terms of any such financing transaction if one were to occur.
−Removed: The failure to secure such
−Removed: financing could severely curtail our plans for future growth or in more severe scenarios, the continued operations of our Company.
−Removed: of September 30, 2023 and 2022, our working (deficit) capital was $(2,913,827) and $378,782, respectively.
−Removed: The historical seasonality
−Removed: in our business during the year can cause cash and cash equivalents, inventory, and accounts payable to fluctuate, resulting in changes
−Removed: in our working capital.
−Removed: cash used in operating activities for the years ended September 30, 2023, and 2022 was $1,225,941 and $1,717,819, respectively.
−Removed: was mainly due to the combination of an increase in loss of $2.9 million offset by an increase of non-cash reconciling items of $1.1
−Removed: million and a decrease in working capital consumption of $2.3 million.
−Removed: the year ended September 30, 2023, net cash used in operating activities was $1.2 million, primarily driven by the net loss of
−Removed: $4.0 million, partially offset by non-cash items, which mainly included bad debt expense of $1.3 million.
−Removed: Working capital provided
−Removed: cash of $1.4 million, which was primarily driven by a $1.3 million increase in accounts payable, unearned revenue and other current
−Removed: liabilities, a $0.6 million decrease in account receivable and account receivable -related party, a $0.1 million decrease of
−Removed: prepayments and other current assets, and partially offset by a $0.5 million increase in deferred offering costs and a $0.1 million
−Removed: increase in inventories.
−Removed: the year ended September 30, 2022, net cash used in operating activities was $1.7 million, primarily driven by the net loss of $1.1 million,
−Removed: partially offset by non-cash items, which mainly included stock compensation expense of $0.3 million.
−Removed: Working capital consumption of
−Removed: $0.9 million, which was primarily driven by a $1.4 million increase in account receivable and account receivable -related party, a $0.2
−Removed: million increase of prepayments and other current assets, and partially offset by a $0.7 million increase in accounts payable, unearned
−Removed: revenue and other current liabilities.
−Removed: the years ended September 30, 2023, and 2022, net cash used in investing activities was the result of additions to property and equipment
−Removed: of $244,899 and $684,815, respectively, which are mainly related to the purchase of machinery, tools, motor vehicles, and leasehold improvements.
−Removed: cash provided by financing activities was $1,425,110 and $2,356,401, respectively, for the years ended September 30, 2023, and 2022.
−Removed: The main reason for the decrease in net cash provided was primarily due to decrease in proceeds from shares sold for cash, short term loans and
−Removed: long-term note and offset by the increase in proceeds from related parties during the year ended September 30, 2023.
−Removed: Accounting Policies and Estimate
−Removed: prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States, or GAAP
−Removed: and pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”).
−Removed: The preparation of consolidated
−Removed: financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in
−Removed: the consolidated financial statements and accompanying notes.
−Removed: Actual results could differ from those estimates.
−Removed: In some cases, changes
−Removed: in the accounting estimates are reasonably likely to occur from period to period.
−Removed: Accordingly, actual results could differ materially
−Removed: from our estimates.
−Removed: To the extent that there are material differences between these estimates and actual results, our financial condition
−Removed: and results of operations will be affected.
−Removed: We base our estimates on experience and other assumptions that we believe are reasonable
−Removed: under the circumstances, and we evaluate these estimates on an ongoing basis.
−Removed: We refer to accounting estimates of this type as critical
−Removed: accounting policies, which we discuss further below.
−Removed: While our significant accounting policies are more fully described in note 2 to
−Removed: our audited consolidated financial statements, we believe that the following accounting policies are critical to the process of making
−Removed: significant judgments and estimates in the preparation of our audited consolidated financial statements.
−Removed: of consolidation
−Removed: consolidated financial statements include the accounts of the Company and its subsidiaries, Inno Metal Studs Corp, Castor Building Tech
−Removed: LLC, and Inno Research Institute LLC.
−Removed: All intercompany balances and transactions have been eliminated.
−Removed: Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet
−Removed: its obligations, in which it has not been successful, and/or obtaining additional financing from its shareholders or other sources, as
−Removed: may be required.
−Removed: consolidated financial statements have been prepared assuming that we will continue as a going concern.
−Removed: Such an assumption contemplates
−Removed: the realization of assets and satisfaction of liabilities in the normal course of business.
−Removed: These consolidated financial statements do
−Removed: not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts
−Removed: and classifications of liabilities that may result should the Company be unable to continue as a going concern.
−Removed: is endeavoring to increase revenue-generating operations.
−Removed: While priority is on generating cash from operations through the sale of the
−Removed: Company’s products and services, management is also seeking to raise additional working capital through various financing sources,
−Removed: including the sale of the Company’s equity and/or debt securities, which may not be available on commercially reasonable terms
−Removed: to our Company, or which may not be available at all.
−Removed: If such financing is not available on satisfactory terms, we may be unable to continue
−Removed: our business as desired and our operating results will be adversely affected.
−Removed: In addition, any financing arrangement may have potentially
−Removed: adverse effects on us and/or our stockholders.
−Removed: Debt financing (if available and undertaken) will increase expenses, must be repaid regardless
−Removed: of operating results and may involve restrictions limiting our operating flexibility.
−Removed: If we issue equity securities to raise additional
−Removed: funds, the percentage ownership of our existing stockholders will be reduced, and the new equity securities may have rights, preferences
−Removed: or privileges senior to those of the current holders of our common stock.
−Removed: acquisition under common control
−Removed: January 21, 2022, the Company acquired 100% of the common stock of Inno Metal Studs Corp (“IMSC”), a Texas corporation incorporated
−Removed: on October 31, 2019.
−Removed: Pursuant to the terms of the Share Purchase Agreement with IMSC’s sole owner, Mr.
−Removed: Dekui Liu, who was also
−Removed: the sole owner and CEO of the Company, the Company issued 15,170,000 shares of its common stock to Mr.
−Removed: Dekui Liu in exchange for his
−Removed: 100% ownership in IMSC.
−Removed: Upon completion of the transaction, IMSC became a 100% owned subsidiary of the Company.
−Removed: As such, Under ASC 805-40
−Removed: and ASC 805-50, the transaction is a reverse acquisition between entities under common control, in which INNO HOLDINGS INC.
−Removed: is the accounting
−Removed: acquiree and IMSC is the accounting acquirer.
−Removed: The assets, liabilities and operations of the two entities are combined at their historical
−Removed: carrying amounts, with all historical periods adjusted as if the entities had always been combined.
−Removed: The consolidated financial statements
−Removed: represent the continuation of the financial statements of IMSC except for its capital structure.
−Removed: the ordinary course of business, the Company extends unsecured credit to its customers.
−Removed: Accounts receivable are stated at the amount
−Removed: the Company expects to collect from customers.
−Removed: Management reviews its accounts receivable balances each reporting period to determine
−Removed: if an allowance for credit loss is required.
−Removed: October 2020, the Company adopted ASU 2016-13, Topics 326 — Credit Loss, Measurement of Credit Losses on Financial Instruments,
−Removed: which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss
−Removed: (CECL) methodology, for its accounting standard for its trade accounts receivable.
−Removed: Company continuously monitors the recoverability of accounts receivable.
−Removed: If there are any indicators that a customer may not make payment,
−Removed: the Company may consider making a provision for non-collectability for that particular customer.
−Removed: At the same time, the Company may cease
−Removed: further sales or services to such a customer.
−Removed: The following are some of the factors that the Company develops allowance for credit losses:
−Removed: the customer fails to comply
−Removed: with its payment schedule;
−Removed: the customer is in serious
−Removed: financial difficulty;
−Removed: a significant dispute with
−Removed: the customer has occurred regarding job progress or other matters;
−Removed: the customer breaches any
−Removed: of its contractual obligations;
−Removed: the customer appears to be
−Removed: financially distressed due to economic or legal factors;
−Removed: the business between the
−Removed: customer and the Company is not active;
−Removed: other objective evidence
−Removed: indicates non-collectability of the accounts receivable.
−Removed: adoption of the credit loss accounting standard has no material impact on the Company’s consolidated financial statements.
−Removed: receivable are recognized and carried at carrying amount less an allowance for credit losses, if any.
−Removed: The Company maintains an allowance
−Removed: for credit losses resulting from the inability of its customers to make required payments based on contractual terms.
−Removed: The Company reviews
−Removed: the collectability of its receivables on a regular and ongoing basis.
−Removed: The Company has also included in calculation of allowance for credit
−Removed: losses the potential impact of the COVID-19 pandemic on our customers’ businesses and their ability to pay their accounts receivable.
−Removed: After all attempts to collect a receivable have failed, the receivable is written off against the allowance.
−Removed: The Company also considers
−Removed: external factors to the specific customer, including current conditions and forecasts of economic conditions, including the potential
−Removed: impact of the COVID-19 pandemic.
−Removed: In the event we recover amounts previously written off, we will reduce the specific allowance for credit
−Removed: Company has adopted Accounting Standards Codification (“ASC”) 606 since its inception and recognizes revenue from product
−Removed: and service sales revenues, net of promotional discounts and return allowances, if any, when the following revenue recognition criteria
−Removed: a contract has been identified, separate performance obligations are identified, the transaction price is determined, the transaction
−Removed: price is allocated to separate performance obligations and revenue is recognized upon satisfying each performance obligation.
−Removed: transfers the risk of loss or damage upon shipment, therefore, revenue from product sales is recognized when it is shipped to the customer.
−Removed: Return allowances, which reduce product revenue by the Company’s best estimate of expected product returns, are estimated using
−Removed: historical experience.
−Removed: For services, all sales are recognized upon completion based on terms stated in the sales agreements.
−Removed: Company evaluates the criteria of ASC 606 — Revenue Recognition Principal Agent Considerations in determining whether it is appropriate
−Removed: to record the gross amount of product sales and related costs or the net amount earned as commissions.
−Removed: Generally, when the Company is
−Removed: primarily responsible for fulfilling the promise to provide a specified good or service, the Company is subject to inventory risk before
−Removed: the good or service has been transferred to a customer and the Company has discretion in establishing the price, revenue is recorded
−Removed: received prior to the delivery of goods to customers are recorded as customer deposits.
−Removed: discounts are recorded in the period in which the related sale is recognized.
−Removed: Sales return allowances are estimated based on historical
−Removed: amounts and are recorded upon recognizing the related sales.
−Removed: Shipping and handling costs are recorded as selling expenses.
−Removed: and expenses are operating expenses, which consist of costs of material and labor, selling, general and administrative expenses, and
−Removed: depreciation, are expensed as incurred.
−Removed: consists of material and finished goods ready for sale and is stated at the lower of cost or net realizable value.
−Removed: The Company values
−Removed: its inventory using the FIFO costing method.
−Removed: The Company’s policy is to include as a part of cost of goods sold any freight incurred
−Removed: to ship the product from its vendors to warehouses.
−Removed: Outbound freight costs related to shipping costs to customers are considered periodic
−Removed: costs and are reflected in selling expenses.
−Removed: The Company regularly reviews inventory and considers forecasts of future demand, market
−Removed: conditions and product obsolescence.
−Removed: the estimated realizable value of the inventory is less than cost, the Company makes provisions in order to reduce its carrying value
−Removed: to its estimated market value.
−Removed: The Company also reviews inventory for slow moving inventory and obsolescence and records allowance for
−Removed: obsolescence.
−Removed: and equipment
−Removed: and equipment is stated at the historical cost, less accumulated depreciation.
−Removed: Depreciation on property and equipment is provided using
−Removed: the straight-line method over the estimated useful lives of the assets as follows:
−Removed: tools and equipment
−Removed: furniture and equipment
−Removed: shorter of the lease term or the estimated useful life of the improvements
−Removed: for renewals and betterments are capitalized while repairs and maintenance costs are normally charged to the statement of operations
−Removed: in the year in which they are incurred.
−Removed: In situations where it can be clearly demonstrated that the expenditure has resulted in an increase
−Removed: in the future economic benefits expected to be obtained from the use of the asset, the expenditure is capitalized as an additional cost
−Removed: of the asset.
−Removed: sale or disposal of an asset, the historical cost and related accumulated depreciation or amortization of such asset were removed from
−Removed: their respective accounts and any gain or loss is recorded in the statements of income.
−Removed: Company reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying
−Removed: value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition.
−Removed: In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an
−Removed: amount by which the carrying value exceeds the fair value of assets.
−Removed: The factors considered by management in performing this assessment
−Removed: include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand,
−Removed: competition and other economic factors.
−Removed: Based on this assessment, no impairment expenses for property and equipment were recorded during
−Removed: the years ended September 30, 2023 and 2022.
−Removed: its inception date, the Company adopted ASC 842 — Leases (“ASC 842”), which requires lessees to record right-of-use
−Removed: (“ROU”) assets and related lease obligations on the balance sheet, as well as disclose key information regarding leasing
−Removed: arrangements.
−Removed: assets represent our right to use an underlying asset for the lease terms and lease liabilities represent our obligation to make lease
−Removed: payments arising from the lease.
−Removed: Operating lease ROU assets and liabilities are recognized at commencement date based on the present
−Removed: value of lease payments over the lease term.
−Removed: As the Company’s leases do not provide an implicit rate, the Company generally uses
−Removed: its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease
−Removed: payments at commencement date.
−Removed: The operating lease ROU asset also includes any lease payments made and excludes lease incentives.
−Removed: expense for lease payments is recognized on a straight-line basis over the lease term.
−Removed: Company applies ASC No.
−Removed: 718, “Compensation-Stock Compensation,” which requires that share-based payment transactions with
−Removed: employees and nonemployees upon adoption of ASU 2018-07, be measured based on the grant date fair value of the equity instrument and
−Removed: recognized as compensation expense over the requisite service period, with a corresponding addition to equity.
−Removed: Under this method, compensation
−Removed: cost related to employee share options or similar equity instruments is measured at the grant date based on the fair value of the award
−Removed: and is recognized over the period during which an employee is required to provide service in exchange for the award, which generally
−Removed: is the vesting period.
−Removed: In addition to the requisite service period, the Company also evaluates the performance condition and market condition
−Removed: under ASC 718-10-20.
−Removed: For an award which contains both a performance and a market condition, and where both conditions must be satisfied
−Removed: for the award to vest, the market condition is incorporated into the fair value of the award, and that fair value is recognized over
−Removed: the employee’s requisite service period or nonemployee’s vesting period if it is probable the performance condition will
−Removed: If the performance condition is ultimately not met, compensation cost related to the award should not be recognized (or should
−Removed: be reversed) because the vesting condition in the award has not been satisfied.
−Removed: Company will recognize forfeitures of such equity-based compensation as they occur.
−Removed: Company accounts for income taxes under the asset and liability method.
−Removed: Deferred tax assets and liabilities are recognized for future
−Removed: tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and
−Removed: their perspective tax bases.
−Removed: Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income
−Removed: in the years in which the temporary differences are expected to be recovered or settled.
−Removed: The effect on deferred tax assets and liabilities
−Removed: of a change in tax rates is recognized in income in the period that includes the enactment date.
−Removed: Valuation allowances are recorded, when
−Removed: necessary, to reduce deferred tax assets to the amount expected to be realized.
−Removed: a result of the implementation of certain provisions of ASC 740, Income Taxes (“ASC 740”), which clarifies the accounting
−Removed: and disclosure for uncertainty in tax position, as defined, ASC 740 seeks to reduce the diversity in practice associated with certain
−Removed: aspects of the recognition and measurement related to accounting for income taxes.
−Removed: The Company has adopted the provisions of ASC 740
−Removed: since inception and has analyzed filing positions in each of the federal and state jurisdictions where the Company is required to file
−Removed: income tax returns, as well as open tax years in such jurisdictions.
−Removed: The Company has identified the U.S.
−Removed: federal jurisdiction, and the
−Removed: states of Texas and California, as its “major” tax jurisdictions.
−Removed: However, the Company has certain tax attribute carryforwards
−Removed: which will remain subject to review and adjustment by the relevant tax authorities until the statute of limitations closes with respect
−Removed: to the year in which such attributes are utilized.
−Removed: Company believes that its income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments
−Removed: that will result in a material change to its financial position.
−Removed: Therefore, no reserves for uncertain income tax positions have been
−Removed: recorded pursuant to ASC 740.
−Removed: The Company’s policy for recording interest and penalties associated with income-based tax audits
−Removed: is to record such items as a component of income taxes.
−Removed: and contingencies
−Removed: the ordinary course of business, the Company is subject to certain contingencies, including legal proceedings and claims arising out
−Removed: of the business that relate to a wide range of matters, such as government investigations and tax matters.
−Removed: The Company recognizes its
−Removed: liability for such contingency if it determines it is probable that a loss has occurred, and a reasonable estimate of the loss can be
−Removed: The Company may consider many factors in making these assessments including historical and specific facts and circumstances of
−Removed: earnings per share are computed by dividing net income attributable to holders of common stock by the weighted average number of shares
−Removed: of common stock outstanding during the year.
−Removed: Diluted earnings per share reflect the potential dilution that could occur if securities
−Removed: to issue common stock were exercised.
−Removed: issued but not yet adopted accounting pronouncements
−Removed: June 2022, FASB issued ASU 2022-03, Fair Value Measurement (Topic 820):
−Removed: Fair Value Measurement of Equity Securities Subject to Contractual
−Removed: Sale Restrictions.
−Removed: The amendments in this ASU clarify the guidance in ASC 820 on the fair value measurement of an equity security that
−Removed: is subject to a contractual sale restriction and require specific disclosures related to such an equity security.
−Removed: This standard is effective
−Removed: for fiscal years beginning after December 15, 2024.
−Removed: The Company does not expect the adoption of this standard to have a material impact
−Removed: on the consolidated financial statements.
−Removed: October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities
−Removed: from Contracts with Customers.
−Removed: This ASU clarifies that an acquirer of a business should recognize and measure contract assets and contract
−Removed: liabilities in a business combination in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606) as if the entity
−Removed: had originated the contracts.
−Removed: The guidance is effective for fiscal years beginning after December 15, 2023, with early application permitted.
−Removed: The Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements.
−Removed: issued and adopted accounting pronouncements
−Removed: January 2020, the FASB issued ASU 2020-01, “Investments — Equity Securities (Topic 321), Investments — Equity Method
−Removed: and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and
−Removed: Topic 815.” This ASU among other things clarifies that a company should consider observable transactions that require a company
−Removed: to either apply or discontinue the equity method of accounting under Topic 323, Investments — Equity Method and Joint Ventures,
−Removed: for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing
−Removed: the equity method.
−Removed: The new ASU clarifies that, when determining the accounting for certain forward contracts and purchased options a
−Removed: company should not consider, whether upon settlement or exercise, if the underlying securities would be accounted for under the equity
−Removed: method or fair value option.
−Removed: The Company adopted ASU 2020-01 on October 1, 2022.
−Removed: The adoption did not have a material impact on the Company’s
−Removed: consolidated financial statements.
−Removed: December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) — Simplifying the Accounting for Income Taxes.
−Removed: is intended to simplify the current rules regarding the accounting for income taxes and addresses several technical topics including
−Removed: accounting for franchise taxes, allocating income taxes between a loss in continuing operations and in other categories such as discontinued
−Removed: operations, reporting income taxes for legal entities that are not subject to income taxes, and interim accounting for enacted changes
−Removed: The Company adopted ASU 2019-12 on October 1, 2022.
−Removed: The adoption did not have a material impact on the Company’s consolidated
−Removed: financial statements.
−Removed: Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material
−Removed: effect on the consolidated financial position, statements of operations and cash flows.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.