What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-12-09 compared with 2024-01-16 · 610 added, 586 removed, 427 unchanged (74% of the section changed)

2 unchanged sentences

Statements as of and for the Fiscal Years Ended September 30, 2024 and 2023

of Independent Registered Public Accounting Firm PCAOB ID# (0 5854 )

Balance Sheets as of September 30, 2023 and 2022

Statements of Operations for the years ended September 30, 2023 and 2022

Statements of Changes in Stockholders’ Equity for the years ended September 30, 2023 and 2022

Statements of Cash Flows for the years ended September 30, 2023 and 2022

to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm PCAOB ID# ( 2485 )

Report of Independent Registered Public Accounting Firm PCAOB ID# (0 5854 )

Consolidated Balance Sheets as of September 30, 2024 and 2023

Consolidated Statements of Operations for the years ended September 30, 2024 and 2023

Consolidated Statements of Changes in Stockholders’ Equity for the years ended September 30, 2024 and 2023

Consolidated Statements of Cash Flows for the years ended September 30, 2024 and 2023

Notes to Consolidated Financial Statements

of Independent Registered Public Accounting Firm

and Board of Directors

Holdings Inc.

on the Consolidated Financial Statements

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.

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.

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.

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.

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 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.

Simon & Edward, LLP (PCAOB

have served as the Company’s auditor since 2024.

Heights, California

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

on the Financial Statements

have audited the accompanying consolidated balance sheets of INNO HOLDINGS INC.

have audited the accompanying consolidated balance sheet of INNO HOLDINGS INC.

and its subsidiaries (the Company) as of September 30,

30, 2023 and 2022, and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for each of

the years in the two-year period 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 2022, and the results of its operations and

its cash flows for each of the years in the two-year period ended September 30, 2023, in conformity with accounting principles

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.

23 unchanged sentences

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.

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.

have served as the Company’s auditor since 2022.

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

Bar, California

January 16, 2024

HOLDINGS INC.

AND SUBSIDIARIES

Consolidated Balance Sheets

As of September 30, 2023 and 2022

and cash equivalent

receivable, net

receivable – related party

receivable, net

offering costs

Balance Sheets

of September 30, 2024 and September 30, 2023

Current assets

Cash and cash

Accounts receivable, net

Deferred offering costs

and other current assets

current assets

and equipment, net

Non-current assets

Property and equipment,

non-current assets

payable – related party

cards payable

payables and accrued liabilities

payables – related party

liability – current

non-current assets

LIABILITIES AND

Current liabilities

Accounts payable

Accounts payable –

related party

Accounts payable

Unearned revenue

Other payables and accrued

Other payables –

related party

Other payables

Short-term loan payable

Lease liability –

notes payable – current portion

current liabilities

liability – non-current

Non-current liabilities

Notes payable

liability – non-current

non-current liabilities

and contingency

Commitments and contingency

HOLDINGS INC.

AND SUBSIDIARIES

Consolidated Balance Sheets — (Continued)

As of September 30, 2023 and 2022

Stockholders’

Equity (Deficit)

stock, no par value;

Balance Sheets

of September 30, 2024, and September 30, 2023

Stockholders’ Equity (Deficit)

Common stock, no

shares authorized;

18,251,726 and 17,970,000 shares issued and outstanding at September 30, 2023

and 1,825,173

shares issued and outstanding on September 30, 2024 and September

paid in capital

Accumulated deficit

( 7,738,644 )

( 4,524,815 )

Non-controlling

Total stockholders’ equity (deficit)

equity (deficit)

( 1,943,586 )

Total liabilities and stockholders’ equity (deficit)

November 30, 2022, the Company implemented a 2-for-1 forward split of the issued and outstanding shares of Common Stock of the Company.

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 .

All references to number of shares, and to per share information in the consolidated

financial statements have been retroactively adjusted.

liabilities and equity (deficit)

* Adjusted retroactively

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

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

1 unchanged sentence

AND SUBSIDIARIES

Consolidated Statements of Operations

For the Years Ended September 30, 2023 and 2022

Statements of Operations

the Years Ended September 30, 2024 and 2023

the Years Ended

September 30,

– related party

- consulting services

– licensing income

AND EXPENSES:

of materials and labor

general and administrative expenses (exclusive of depreciation and bad debt expense shown separately below)

general and administrative expenses (exclusive of expenses shown separately below)

costs and expenses

1 unchanged sentence

( 3,373,502 )

( 3,984,008 )

INCOME (EXPENSE)

compensation expense

income (expenses), net

non-operating income (expense)

11 unchanged sentences

AVERAGE NUMBER OF COMMON STOCK

November 30, 2022, the Company implemented a 2-for-1 forward split of the issued and outstanding shares of Common Stock of the Company.

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 .

The computation of basic and diluted Losses Per Share were retroactively adjusted for

all periods presented.

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.

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

1 unchanged sentence

AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders’ Equity

For the Years Ended September 30, 2023 and 2022

September 30, 2021

Statements of Changes in Stockholders’ Equity

the Years Ended September 30, 2024 and 2023

Balance, September 30, 2022

$ ( 629,037 )

$ ( 121,345 )

issued for cash

( 3,895,778 )

( 4,023,204 )

Shares issued for cash

issued for service

September 30, 2022

Balance, September 30, 2023

$ ( 4,524,815 )

4 unchanged sentences

$ ( 1,943,586 )

issued for cash

issued for service

September 30, 2023

( 3,213,829 )

( 3,251,127 )

Shares issued upon IPO

Disposal of subsidiary

Warrants assumption

Shares issued for service

shares round up due to reverse stock split

Balance, September 30, 2024

$ ( 7,738,644 )

2 unchanged sentences

$ ( 212,354 )

January 21, 2022, the sole owner of the Company and Inno Metal Studs Corp.

(“IMSC”), Mr.

Dekui Liu, entered into an agreement

to sell 100 % of his ownership in IMSC for 15,170,000 shares of the Company’s common stock (the “Transaction”).

ASC 805-40 and ASC 805-50, the Transaction was considered as a reverse acquisition between entities under common control.

the outstanding shares of common stock upon completion of the Transaction was presented retroactively as outstanding for all reporting

November 30, 2022, the Company implemented a 2-for-1 forward split of the issued and outstanding shares of Common Stock of the Company.

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 .

All references to number of shares, and to per share information in the consolidated

financial statements have been retroactively adjusted.

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.

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

1 unchanged sentence

AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the Years Ended September 30, 2023 and 2022

the Years Ended September 30,

FLOWS FROM OPERATING ACTIVITIES:

$ ( 4,023,204 )

Statements of Cash Flows

the Years Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

$ ( 3,251,127 )

to reconcile net income to cash used in operating activities:

compensation expense

operating lease expense

in operating assets and liabilities

$ ( 4,023,204 )

receivable – related party

offering costs

and other current assets

non-current assets

payable – related party

cards payable

payables and accrued liabilities

Adjustments to reconcile

net income to cash used in operating activities:

Depreciation expense

Stock-based compensation

Non-cash operating lease

Bad debt expense

Loss from settlement

Fixed assets disposal loss

Subsidiary disposal loss

Impairment loss

Change in operating assets

and liabilities

Accounts receivable

Accounts receivable –

related party

Deferred offering costs

Prepayments and other current

Other non-current assets

Accounts payable

Accounts payable –

related party

Unearned revenue

Operating lease liabilities

Other current liabilities

non-current liabilities

cash used in operating activities

Net cash used in operating

( 5,075,412 )

( 1,225,941 )

FLOWS FROM INVESTING ACTIVITIES:

from sale of truck

cash used in investing activities

FLOWS FROM FINANCING ACTIVITIES:

from related parties

to related parties

from short-term loans

to short-term loans

from long-term note

to long-term note

CASH FLOWS FROM INVESTING ACTIVITIES:

Fixed assets additions

from fixed assets disposal

Net cash used in investing

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from related parties

Payments to related parties

Proceeds from short-term

Payments to short-term

Payment to long-term note

Warrants assumption

issued for cash

cash provided by financing activities

AND CASH EQUIVALENT, beginning of year

AND CASH EQUIVALENT, end of year

CASH FLOW INFORMATION:

Net cash provided by financing

CHANGES IN CASH

CASH AND CASH EQUIVALENT,

beginning of period

CASH AND CASH EQUIVALENT, ending of period

SUPPLEMENTAL CASH FLOW INFORMATION:

paid for income tax

paid for interest

DISCLOSURE OF NON-CASH INVESTING AND FINANCING TRANSACTIONS:

of use assets acquired under new operating leases

Cash paid for interest

Noncash deferred offering

costs offset to APIC upon IPO completion

Right-of-use assets obtained

in exchange for operating lease liabilities

Deposit applied to lease

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

1 unchanged sentence

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

As of September 30, 2023 and 2022 and for the years Ended

September 30, 2023 and 2022

to Consolidated Financial Statements

1 — Nature of business and organization

3 unchanged sentences

January 18, 2022, the Company formed a limited liability company, Castor Building Tech LLC (“CBT”), in California.

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 changed to 55 %.

According to the new ownership agreement, the ownership percentage change is retroactively effective from January 18, 2022.

of historical noncontrolling interest allocation from this ownership percentage change is immaterial.

January 21, 2022, the Company acquired 100 % of the ordinary shares of Inno Metal Studs Corp.

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.

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 sole owner, Mr.

who was also the sole owner and CEO of the Company, the Company issued 15,170,000 shares of its common stock to Mr.

Dekui Liu in exchange

for his 100 % ownership in IMSC.

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

Upon completion of the transaction, IMSC became a 100 % owned subsidiary of the Company.

See Note 3 below

Research Institute LLC, a Texas limited liability company incorporated on September 8, 2021, is a 65 % owned subsidiary of IMSC.

Research Institute LLC (“IRI”), a Texas limited liability company incorporated on September 8, 2021, is a 65 % owned subsidiary

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.

January 21, 2024, the Company established Inno Disrupts Inc., a wholly owned subsidiary in Texas.

The purpose of Inno Disrupts Inc.

to remodel buildings using the Company’s framing steel products, enhance producing and marketing capabilities, manage the designated

buildings in US, and other activities.

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

2 — Basis of Presentation and Summary of significant accounting policies

5 unchanged sentences

Principles of consolidation

Consolidated financial statements include the accounts of the Company and its subsidiaries, Inno Metal Studs Corp., Castor Building Tech

LLC, and Inno Research Institute LLC.

All inter-company balances and transactions have been eliminated.

Reclassification

Reclassification could involve changes in accounting

policies, adjustments to prior period amounts, or shifts in the classification of specific items.

Certain items in the financial statements

of comparative year have been reclassified to conform to the financial statements for the current year because of prior year adjustment

as disclosed in Note 16.

of September 30, 2023, the Company had total cash of $ 4,898

and accumulated deficit of $ 4,524,815 .

For the year ended September 30, 2023, the Company had incurred a net loss of $ 4,023,204

and used net cash in operations of $ 1,225,941 .

These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

As described in Note 17,

Subsequent events, on December 18, 2023, the Company successfully closed the initial public offering with gross proceeds of $ 10

Based on our current operating and investing plan, the management has concluded that substantial doubt is not alleviated

regarding the Company’s ability to continue as a going concern for 12 months from the date of issuance of these financial

Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet

its obligations, in which it has not been successful, and/or obtaining additional financing from its shareholders or other sources, as

may be required.

Consolidated financial statements include the accounts of the Company and its subsidiaries.

All inter-company balances and transactions

have been eliminated.

Reclassifications

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.

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.

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

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.

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

HOLDINGS INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

As of September 30, 2023 and 2022 and for the years Ended

September 30, 2023 and 2022

to Consolidated Financial Statements

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

is endeavoring to increase revenue-generating operations.

While priority is on generating cash from operations through the sale of the

Company’s products, management is also seeking to raise additional working capital through various financing sources, including

the sale of the Company’s equity and/or debt securities, which may not be available on commercially reasonable terms to the Company,

or which may not be available at all.

If such financing is not available on satisfactory terms, the Company may not be able to continue

operations or may be required to delay, scale back or eliminate some or all of its ongoing research and development efforts and other

The Company’s ability to access capital when needed is not assured and, if not achieved on a timely basis, will materially

harm its business, financial condition and results of operations.

In addition, any financing arrangement may have potentially adverse

effects on us and/or our stockholders.

Debt financing (if available and undertaken) will increase expenses, must be repaid regardless

of operating results and may involve restrictions limiting our operating flexibility.

If we issue equity securities to raise additional

funds, the percentage ownership of our existing stockholders will be reduced, and the new equity securities may have rights, preferences

or privileges senior to those of the current holders of our common stock.

Given the uncertainties associated with the Company’s

ability to access capital and its business growth strategy, management has concluded that substantial doubt exists regarding the Company’s

ability to continue as a going concern for the next twelve months from the date the condensed consolidated financial statements are issued.

Consolidated financial statements have been prepared assuming that we will continue as a going concern.

Such assumption contemplates

the realization of assets and satisfaction of liabilities in the normal course of business.

These Consolidated financial statements do

not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts

and classifications of liabilities that may result should the Company be unable to continue as a going concern.

of estimates and assumptions

4 unchanged sentences

Actual results could differ from these estimates.

acquisition under common control

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 sole owner, Mr.

who was also the sole owner and CEO of the Company, 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.

As such, Under

ASC 805-40 and ASC 805-50, the Transaction is a reverse acquisition between entities under common control, in which INNO HOLDINGS, INC.

is the accounting acquiree and IMSC is the accounting acquirer.

The assets, liabilities and operations of the two entities are combined

at their historical carrying amounts, with all historical periods adjusted as if the entities had always been combined.

The consolidated

financial statements represent the continuation of the financial statements of IMSC except for its capital structure.

and cash equivalents

and cash equivalents consist of amounts held as cash on hand and bank deposits.

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.

time to time, the Company may maintain bank balances in interest bearing accounts in excess of the $ 250,000 , which is currently the maximum

4 unchanged sentences

is not exposed to any significant credit risk with respect to its cash.

HOLDINGS INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

As of September 30, 2023 and 2022 and for the years Ended

September 30, 2023 and 2022

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

the ordinary course of business, the Company extends unsecured credit to its customers.

1 unchanged sentence

the Company expects to collect from customers.

Management reviews its accounts receivable balances each reporting period to determine

if an allowance for credit loss is required.

October 2020, the Company adopted ASU 2016-13, Topics 326 — Credit Loss, Measurement of Credit Losses on Financial Instruments,

which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss

(CECL) methodology, for its accounting standard for its trade accounts receivable.

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.

Company continuously monitors the recoverability of accounts receivable.

11 unchanged sentences

objective evidence indicates non-collectability of the accounts receivable.

adoption of the credit loss accounting standard has no material impact on the Company’s consolidated financial statements.

receivable are recognized and carried at carrying amount less an allowance for credit losses, if any.

4 unchanged sentences

The Company has also included in the calculation of allowance for

credit losses the potential impact of the COVID-19 pandemic on our customers’ businesses and their ability to pay their accounts

After all attempts to collect a receivable have failed, the receivable is written off against the allowance.

also considers external factors to the specific customer, including current conditions and forecasts of economic conditions, including

the potential impact of the COVID-19 pandemic.

In the event we recover amounts previously written off, we will reduce the specific allowance

for credit losses.

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.

values of financial instruments

4 unchanged sentences

approximate fair values due to their short-term nature.

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

HOLDINGS INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

As of September 30, 2023 and 2022 and for the years Ended

September 30, 2023 and 2022

to Consolidated Financial Statements

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

other financial instruments to be reported at fair value, the Company utilizes valuation techniques that maximize the use of

observable inputs and minimize the use of unobservable inputs to the extent possible.

The Company determines the fair value of its

financial instruments based on assumptions that market participants would use in pricing an asset or liability in the principal or

most advantageous market.

When considering market participant assumptions in fair value measurements, the following fair value

hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

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

are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

3 unchanged sentences

inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no

of September 30, 2023 and 2022, the Company did not have any other financial instruments reported at fair value.

Company has adopted Accounting Standards Codification (“ASC”) 606 since its inception and recognizes revenue from product

and service sales revenues, net of promotional discounts and return allowances, if any, when the following revenue recognition criteria

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

a contract has been identified, separate performance obligations are identified, the transaction price is determined, the transaction

7 unchanged sentences

the good or service has been transferred to a customer and the Company has discretion in establishing the price, revenue is recorded

received prior to the delivery of goods to customers are recorded as customer deposits.

received prior to the delivery of goods or services to customers are recorded as unearned revenue.

discounts are recorded in the period in which the related sale is recognized.

2 unchanged sentences

Shipping and handling costs are recorded as selling expenses.

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.

and expenses are operating expenses, which consist of costs of material and labor, selling, general and administrative expenses, and

11 unchanged sentences

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

As of September 30, 2023 and 2022 and for the years Ended

September 30, 2023 and 2022

to Consolidated Financial Statements

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

1 unchanged sentence

to its estimated net realizable value.

The Company also reviews inventory for slow moving inventory and obsolescence and records allowance

for obsolescence.

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.

offering costs

7 unchanged sentences

and equipment

and equipment is stated at the historical cost, less accumulated depreciation.

and equipment is stated at their historical cost, less accumulated depreciation.

Depreciation on property and equipment is provided using

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competition and other economic factors.

Based on this assessment, no impairment expenses for property and equipment were recorded during

the years ended September 30, 2023 and 2022.

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.

impairment expenses for property and equipment were recorded during the year ended September 30, 2023.

its inception date, the Company adopted ASC 842 — Leases (“ASC 842”), which requires lessees to record right-of-use

12 unchanged sentences

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

As of September 30, 2023 and 2022 and for the years Ended

September 30, 2023 and 2022

to Consolidated Financial Statements

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

15 unchanged sentences

Company will recognize forfeitures of such equity-based compensation as they occur.

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.

Company accounts for income taxes under the asset and liability method.

34 unchanged sentences

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

As of September 30, 2023 and 2022 and for the years Ended

September30, 2023 and 2022

to Consolidated Financial Statements

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

(loss) per share

earnings (loss) per share are computed by dividing net income (loss) 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.

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.

issued but not yet adopted accounting pronouncements

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

Early adoption is permitted on a prospective basis.

We are currently evaluating the impact of this ASU on our annual income tax

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.

adoption is permitted.

We are currently evaluating the impact of this ASU on our segment disclosures.

June 2022, FASB issued ASU 2022-03, Fair Value Measurement (Topic 820):

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The Company does not expect the adoption of this standard to have a material impact on the consolidated financial statements.

issued and adopted accounting pronouncements

January 2020, the FASB issued ASU 2020-01, “Investments — Equity Securities (Topic 321), Investments — Equity Method

and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and

Topic 815.” This ASU among other things clarifies that a company should consider observable transactions that require a company

to either apply or discontinue the equity method of accounting under Topic 323, Investments — Equity Method and Joint Ventures,

for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing

the equity method.

The new ASU clarifies that, when determining the accounting for certain forward contracts and purchased options a

company should not consider, whether upon settlement or exercise, if the underlying securities would be accounted for under the equity

method or fair value option.

The Company adopted ASU 2020-01 on October 1, 2022.

The adoption did not have a material impact on the Company’s

consolidated financial statements.

December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) — Simplifying the Accounting for Income Taxes.

is intended to simplify the current rules regarding the accounting for income taxes and addresses several technical topics including

accounting for franchise taxes, allocating income taxes between a loss in continuing operations and in other categories such as discontinued

operations, reporting income taxes for legal entities that are not subject to income taxes, and interim accounting for enacted changes

The Company adopted ASU 2019-12 on October 1, 2022.

The adoption did not have a material impact on the Company’s consolidated

financial statements.

Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material

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AND SUBSIDIARIES

Notes to Consolidated Financial Statements

As of September 30, 2023 and 2022 and for the years Ended

September 30, 2023 and 2022

to Consolidated Financial Statements

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

3 unchanged sentences

consolidated financial statements are presented.

3 — Reverse Acquisition under Common Control

January 21, 2022, the sole owner of the Company and IMSC, Mr.

Dekui Liu, entered into an agreement to sell 100 % of his ownership in IMSC

in exchange for 15,170,000 shares of the Company’s common stock (the “Transaction”).

Below are the charts illustrating

the structure before and after the Transaction:

HOLDINGS INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

As of September 30, 2023 and 2022 and for the years Ended

September 30, 2023 and 2022

3 — Reverse Acquisition under Common Control (cont.)

ASC 805, Business Combination, A common-control transaction is typically a transfer of net assets or an exchange of equity interests

between entities under the control of the same parent.

While a common-control transaction is similar to a business combination for the

entity that receives the net assets or equity interests, such a transaction does not meet the definition of a business combination because

there is no change in control over the net assets.

Therefore, the accounting and reporting for a transaction between entities under common

control is outside the scope of the business combinations guidance in ASC 805-10, ASC 805-20, and ASC 805-30 and is addressed in the

“Transactions Between Entities Under Common Control” subsections of ASC 805-50.

3 — Accounts Receivable, Net

1 unchanged sentence

of accounts receivable

allowance for credit losses

Accounts receivable

allowance for credit

( 1,267,960 )

receivable, net

receivable – related party

receivable, net

Accounts receivable, net

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:

of activities in the allowance for expected credit losses

September 30,

Allowance for credit losses, beginning

Add/ (Deduct):

Provision for credit loss

( 1,327,895 )

for credit losses, end

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

4 — Inventories

of September 30, 2023 and 2022, inventories consisted of the following:

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

of inventories

Production inventory

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

5 unchanged sentences

As of September

30, 2023 and 2022, deferred offering costs amounted to $ 538,765 and $ 0 , respectively.

Subsequently 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 as disclosed

in Note 17, Subsequent events.

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.

6 — Prepayments and other current assets

1 unchanged sentence

of prepayments and other current assets

prepayments and current assets

Prepaid marketing and promotional

Advance to other service providers

Advance to suppliers

Prepaid insurance

Prepaid for services by stock grants

Other prepayments and

current assets

HOLDINGS INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

As of September 30, 2023 and 2022 and for the years Ended

September 30, 2023 and 2022

to Consolidated Financial Statements

7 — Property and equipment, net

1 unchanged sentence

of property and equipment

and equipment

and equipment, gross

Machinery and equipment

Office equipment

Motor vehicles

Construction-in-progress

Leasehold improvements

Property and equipment, gross

accumulated depreciation

and equipment, net

Property and equipment,

Construction-in-progress is related to the project to expand the Company’s operation and manufacturing capabilities in a factory

This project is expected to be completed by the end of February 2025.

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.

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

5 unchanged sentences

Interest shall be due and payable monthly as it accrues.

The accrued unpaid interest and the principal is due and payable

in twelve (12) months from September 16, 2022.

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 majority shareholder and CEO of the Company.

On April 14, 2023,

a modification agreement was entered to reset the maturity date of the outstanding balance of the Note to July 14, 2023.

The agreement

required monthly interest payments starting from April 16, 2023.

The Note was defaulted on May 14, 2023 due to non-payment of interest.

For the years ended September 30, 2023 and 2022, the Company recorded interest expense related to the Line of Credit of $ 60,957 and $ - ,

respectively.

As of September 30, 2023 and 2022, the total outstanding balance of the Note was $ 560,000 and $ 710,000 , respectively.

balance was presented on the consolidated balance sheet as a short-term loan.

The Company subsequently paid $ 300,000 on December 29,

2023, and the remaining balance is scheduled to be paid off by the end of February 2024.

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

term loan without interest

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, 2023, the outstanding balance due to these individuals was $ 230,000 .

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.

4 unchanged sentences

a Security Agreement and Financing Statement that covers certain properties of the Company and guaranteed by Mr.

Dekui Liu, the majority

shareholder and CEO of the Company.

the years ended September 30, 2023 and 2022, the Company recorded interest expense of $ 8,903 and $ 10,114 , respectively.

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.

of September 30, 2024 and 2023, the total outstanding balance of the Note was $ 110,846 and $ 160,239 , respectively, which was presented

1 unchanged sentence

9 — Related party transactions

Company borrows short term loans without interest from its majority shareholder and CEO, Mr.

Dekui Liu, for operation and cashflow needs

from time to time.

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, 2022, the outstanding balance

As of September 30, 2023, the amount due to Mr.

Liu was $ 327,372 .

1 unchanged sentence

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

As of September 30, 2023 and 2022 and for the years Ended

September 30, 2023 and 2022

to Consolidated Financial Statements

9 — Related party transactions (cont.)

the year ended September 30, 2022, the Company engaged Yunited Assets LLC (“Yunited”), a limited liability company owned

Cheng Yu, the minority owner of the Company’s subsidiary, Inno Research Institute, for consultation services on a project-by-project

During the years ended September 30, 2023 and 2022, the Company recorded $ 4,375 and $ 19,950 , respectively, of project-based consulting

service fees, included in cost of materials and labor.

During the years ended September 30, 2023 and 2022, the Company also recorded

$ 110,000 and $ 80,000 consulting fee to Yunited for Mr.

Yu’s daily operating services included in the general and administrative

As of September 30, 2023, the outstanding balance of accounts payable – related party due to Yunited was $ 50,000 .

of September 30, 2022, there were no unpaid balances due to Yunited.

the year ended September 30, 2022, the Company purchased prefab home and other material and supplies from Baicheng Trading LLC, in which

the father of Mr.

Dekui Liu, the Company’s majority shareholder and CEO, is a director.

As of September 30, 2023 and 2022, the

outstanding balance of accounts payable-related party was both of $ 485,595 .

March 2022, the Company entered into an agreement with Wise Hill Inc.

(“Wise Hill”), a Florida corporation wholly owned by

a minority shareholder of the Company.

Pursuant to the agreement, the Company sold prefab home products of $ 250,000 to Wise Hill.

the year ended September 30, 2022, the Company recorded revenue-related party of $ 250,000 .

As of September 30, 2023 and 2022, the outstanding

balance of accounts receivable — related party due from Wise Hill was $ 0 and $ 100,000 , respectively.

March 2023, the Company entered into an agreement with Vision Opportunity Fund LP, a Florida limited partnership partially owned by a

minority shareholder of the Company.

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.

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, Nil amount of revenue has been recognized.

the year ended September 30, 2023, the Company advanced $ 55,000 without interest from Zfounder Organization Inc., one of the Company’s

minority shareholders for operation and cashflow needs.

In addition, the Company advanced $ 222,000 without interest from Wise Hill Inc.,

a company owned by a minority shareholder of the Company who also serves as the CEO and Board member of Zfounder Organization Inc., for

operation and cashflow needs.

$ 100,000 of the advanced amounts have been considered as the payment of accounts receivable due from Wise

As of September 30, 2023, the outstanding balance due to Zfounder Organization Inc.

and Wise Hill Inc.

was $ 55,000 and $ 122,000 ,

respectively.

11 — Losses per share

following table sets forth the computation of basic and diluted losses per share for the periods presented:

of Losses per share

the years ended September 30,

loss attributable to INNO HOLDINGS INC.

$ ( 3,895,778 )

$ ( 1,008,662 )

Weighted-average

shares used in computing basic and diluted losses per share*

per share of ordinary shares:

– basic and diluted

January 21, 2022, the sole owner of the Company and Inno Metal Studs Corp.

(“IMSC”), Mr.

Dekui Liu, entered into an agreement

to sell 100 % of his ownership in IMSC for 15,170,000 shares of the Company’s common stock (the “Transaction”).

ASC 805-40 and ASC 805-50, the Transaction was considered as a reverse acquisition between entities under common control.

the outstanding shares of common stock upon completion of the Transaction was presented retroactively as outstanding for all reporting

November 30, 2022, the Company implemented a 2-for-1 forward split of the issued and outstanding shares of Common Stock of the Company.

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 .

The computation of basic and diluted EPS was retroactively adjusted for all periods presented.

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.

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

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 .

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.

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

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.

10 — Other payables and accrued liabilities

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

of other payables and accrued liabilities

Payable to service providers

Accrued compensation

Other payable

Other payables and accrued

HOLDINGS INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

As of September 30, 2023 and 2022 and for the years Ended

September 30, 2023 and 2022

to Consolidated Financial Statements

Company was incorporated in Texas on September 8, 2021.

The total authorized shares of capital stock were 200,000,000 shares without

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.

All share numbers of the Company’s Common Stock are stated on a post-split basis.

the inception date, September 8, 2021, the Company issued 1,000,000 shares of common stock to its founder, Mr.

February 2, 2022, the Company issued 15,170,000 shares of its common stock to Mr.

Dekui Liu in exchange for his 100 % ownership in IMSC.

See Note 3 above for details.

January 31, 2022, the Company issued 1,500,000 of its series A convertible preferred stock to three accredited investors for $ 1,500,000

During 2022, the 1,500,000 shares of series A convertible preferred stock had been converted to 1,500,000 shares of common stock

after giving effect to the stock splits.

January 31 and September 30, 2022, the Company issued a total of 300,000 shares of common stock to an investor for services.

were valued at $ 1.0 per share, which was the per share price for the most recent sale of the Company’s capital stock to accredited

For the year ended September 30, 2022, the Company recorded $ 300,000 as stock compensation expense.

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.

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

1 unchanged sentence

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

April and May 2023, Mr.

Dekui Liu, the Company’s chief executive officer, sold 118,421 shares of the Company’s common stock

he owned to three investors at $ 3.80 per share for $ 450,000 in cash.

Liu then lent the $ 450,000 to the Company as a short-term loan,

which is due on demand without interest.

See Note 10 — Related party transactions .

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

4 unchanged sentences

to accredited investors.

For the year ended September 30, 2023, the Company recorded $ 41,667 as stock compensation expense.

As of September

30, 2023, the remaining balance of $ 83,333 was recorded as Prepayments and other current assets.

of September 30, 2023 and 2022, after giving effect to the stock splits of the outstanding shares of Common Stock, there were 18,251,726

and 17,970,000 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.

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.

registration statement for the Company’s Initial Public Offering (the “Offering”) was declared effective on November

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.

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.

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.

total transaction cost of $ 2,140,466 , $ 590,466 in transaction costs were incurred and paid by the company before the closing date.

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.

HOLDINGS INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

As of September 30, 2023 and 2022 and for the years Ended

September 30, 2023 and 2022

to Consolidated Financial Statements

12 — Concentration of risk

instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents

and accounts receivable.

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

receivable are typically unsecured and derived from revenue earned from customers, thereby exposing the Company to credit risk.

is mitigated by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances.

and vendor concentration risk

the year ended September 30, 2024, four customers accounted for 90 % of the Company’s total revenues, respectively.

ended September 30, 2023, three customers accounted for 53 %.

As of September 30, 2024, $ Nil outstanding of accounts receivable.

receivable from one customer accounted for 100 % of the Company’s total accounts receivable as of September 30, 2023.

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.

13— Commitments and contingencies

Company has adopted ASC 842 since its inception date.

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.

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

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.

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.

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

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.

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.

HOLDINGS INC.

AND SUBSIDIARIES

to Consolidated Financial Statements

13— Commitments and contingencies (cont.)

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.

of operating lease cost

the years ended

Operating lease cost (included

in G&A in the Company’s statement of operations)

Other information:

Cash paid for amounts included in the measurement

of lease liabilities

Remaining term in years

Average discount rate – operating leases

supplemental balance sheet information related to leases is as follows:

of supplement balance sheet information related to lease

asset – non-current

Lease Liability – current

Lease Liability –

Total operating lease

of the Company’s lease liabilities are as follows:

of lease liabilities

For periods subsequent to September 30, 2024:

Imputed interest/present

value discount

Present value of lease liabilities

Contingencies

time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business.

July 23, 2024, the Company reached a settlement with a subcontractor’s customer for $ 73,000 .

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

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.

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.

HOLDINGS INC.

AND SUBSIDIARIES

to Consolidated Financial Statements

13— Commitments and contingencies (cont.)

Listing Rule 5550(a)(2)

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.

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.

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.

14 — Income taxes

18 unchanged sentences

Taxable margin is generally defined as revenues less certain costs.

HOLDINGS INC.

AND SUBSIDIARIES

to Consolidated Financial Statements

14 — Income taxes (cont.)

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

1 unchanged sentence

current income tax provision

( 1,532,244 )

Increase/(decrease)

1 unchanged sentence

deferred taxes

provision for income taxes

Total provision for

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

of deferred tax

operating loss

in Passthrough Entities

for Doubtful Accounts

deferred tax assets

Stock-based compensation

Net operating loss

Unearned revenue

Investment in Passthrough Entities

Allowance for Doubtful Accounts

Total deferred tax assets

valuation allowance

tax assets net

company has net operating loss carry forwards of approximately $ 2.5

million and $ 0.5

million for the years ended September 30, 2023 and 2022, respectively.

The losses do not expire.

( 1,532,244 )

Deferred tax assets net

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.

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

HOLDINGS INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

As of September 30, 2023 and 2022 and for the years Ended

September 30, 2023 and 2022

to Consolidated Financial Statements

14 — Income taxes (cont.)

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.

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.

Company is subject to U.S.

5 unchanged sentences

of effective rate income tax rate income tax

(net of federal benefit)

Statutory tax rate

State (net of federal benefit)

effect of state income tax deduction and other permanent differences

Effective tax rate

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

14 — Concentration of risk

instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents

and accounts receivable.

of September 30, 2023 and 2022, $ 4,898 and $ 50,628 , respectively, were deposited with various major financial institutions in the United

Accounts at each institution in the United States are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $ 250,000 .

The Company did not have deposit in excess of the FDIC insurance limit, as of September 30, 2023 and 2022.

receivable are typically unsecured and derived from revenue earned from customers, thereby exposing the Company to credit risk.

is mitigated by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances.

and vendor concentration risk

the years ended September 30, 2023 and 2022, three customers accounted for 53 % and one customer accounted for 15 % of the Company’s

total revenues, respectively.

As of September 30, 2023 and 2022, accounts receivable from one customers accounted for 100 % and five customers

accounted for 80 % of the Company’s total accounts receivable, respectively.

the years ended September 30, 2023 and 2022, three suppliers accounted for 57 % and three suppliers accounted for 75 % of the Company’s

total purchases, respectively.

As of September 30, 2023 and 2022, accounts payable to two suppliers accounted for 55 % and three suppliers

accounted for 94 % of the Company’s total accounts payable, respectively.

HOLDINGS INC.

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

As of September 30, 2023 and 2022 and for the years Ended

September 30, 2023 and 2022

15 — Commitments and contingencies

Company has adopted ASC 842 since its inception date.

Company has entered into a lease agreement for office and production space in Texas with a lease period from December 1, 2019 until December

31, 2024 at a rate of $ 4,129 to $ 5,089 per month.

Company has also entered into a lease agreement for office and production space in Corona, California with a lease period 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 is obligated to pay the monthly rent for the office in Corona California until the landlord finds a new lessee

to occupy the facility.

The new lease in Diamond Bar, California has a term of 24 months from August 1, 2023 to July 31, 2025 at a rate

of $ 4,730 to $ 4,926 per month.

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.

present value of commitment for the full term of these leases is $ 710,116 .

and $ 453,883

of operating lease right-of-use assets and $ 488,094

and $ 460,395

lease liabilities were reflected on the September 30, 2023 and 2022 consolidated balance sheets,

respectively.

years ended September 30, 2023 and 2022:

of Operating Lease Liabilities

lease cost (included in G&A in the Company’s statement of operations)

paid for amounts included in the measurement of lease liabilities

term in years

discount rate – operating leases

supplemental balance sheet information related to leases is as follows:

of Supplement Balance Sheet Information Related to Lease

of use asset – non-current

Liability – current

Liability – non-current

operating lease liabilities

of the Company’s lease liabilities are as follows:

of Lease Liabilities

periods subsequent to September 30, 2023:

Imputed interest/present value discount

value of lease liabilities

Contingencies

Except a garnishment order described in Note 17, the

Company is not currently a party to any material legal proceedings, investigations or claims.

As the Company may, from time to time,

be involved in legal matters arising in the ordinary course of its business, there can be no assurance that such matters will not arise

in the future or that any such matters in which the Company is involved, or which may arise in the ordinary course of the Company’s

business, will not at some point proceed to litigation or that such litigation will not have a material adverse effect on the business,

financial condition or results of operations of the Company.

16 — Correction of Immaterial Misstatements in Prior Period Financial Statement

accordance with Staff Accounting Bulletin (“SAB”) No.

99, Materiality, and SAB No.

108, Considering the Effects of Prior

Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, the Company evaluated the errors and determined

that the impact was not material to any of our previously issued financial statements.

Company’s Consolidated Statements of Operations for the year ended September 30, 2022 contained reclassification of Cost of materials

and labor to Selling general and administrative expense.

The error had no impact on Net income.

of Prior Period Adjustment Restatement

previously reported

statements of operations

of materials and labor

general and administrative expenses (exclusive of depreciation shown separately below)

15 — Subsequent events

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 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 2,500,000 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 $ 4.00 per share, the Company also granted the underwriters an option exercisable

for 45-days to purchase up to 375,000 shares of Common Stock as the Public Offering Price, less the underwriting discount to cover-over

Additionally, the Company also issued warrants to the underwriters to purchase up to 201,250 shares of Common Stock at an exercise

price of $ 4.80 per share, subject to adjustment as set forth in the warrants, exercisable from June 18, 2024 and valid until December

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.

Transaction costs related to the offering amounted to $ 2,140,467 , consisting of $ 700,000 of underwriting fees, $ 345,876 of underwriting

related expenses, $ 595,000 of legal fees and $ 499,591 of other costs.

The Company intends to use the net proceeds from the Offering to

increase our marketing capabilities, increase production capacity, expand research and development, evaluate strategic opportunities and

other working capital and general corporate purposes.

On December 27, 2023, a garnishment order resulting from a legal action

initiated by a creditor against the Company was issued by a court in the state of Ohio.

The Creditor is seeking a total amount of $ 67,978 (owed amount plus interest

and other expenses).

Because of the garnishment order, the Company’s

bank account was debited in the amount of $ 17,330 .

disclosed in Note 9, on December 29, 2023, the Company paid $ 300,000 of the line of credit principal amount, and the remaining balance

is scheduled to be paid off by the end of February 2024.

January 4, 2024, the Company entered into an agreement to acquire certain real property located at 300 South Park Avenue, Pomona, Los

Angeles, California, approximately 120,776 sq.

office and commercial building (the building together with the land), with a total

purchase price of $ 14,600,000 .

The amount of $ 440,000 was deposited with Escrow on January 10, 2024.

The Company has forty-five (45)

calendar days from the opening of Escrow (“Due Diligence Period”) to diligently perform reviews, inspections, and investigations

regarding the real property and the condition of title thereto as the Company deems necessary or appropriate, and to submit a written

application to the lender for the assumption of the exiting loan (approximately $ 9.7 million).

and has one hundred twenty (120) days

from the opening of escrow for a loan assumption contingency period.

Following the expiration of the Due Diligence Period without any

termination of the agreement by the Company, the deposit shall become fully non-refundable to the Company absent a termination of the

agreement as a result of a default by the seller, or due to condemnation or casualty in accordance with the terms and provisions of the

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.

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.

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.

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.

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

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.

What changed 10-K

Item 8. Financial Statements and Supplementary Data