What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-12-15 compared with 2024-12-09 · 110 added, 195 removed, 62 unchanged (83% of the section changed)

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could differ materially from those discussed in the forward-looking statements as a result of various factors.

are a building technology company that primarily manufactures cold-formed-steel members and offers a full range of services required

to transform raw materials into precise steel framing products and prefabricated homes.

We transform raw material (coils of rolled steel

of various gauges and other materials) through our proprietary technologies to cut, punch and bend the steel into members or other components.

These work-in-process components are further processed into finished products which are used in a variety of building types, including

residential, commercial, industrial, and infrastructure.

At each stage of the process, we are adding value to the original rolled steel

(and other materials) to its final assembled use by businesses or directly to customers.

largest commodity expense is our primary raw material — rolled steel in various gauges and widths.

Like any commodity, steel is

subject to supply/demand-based price fluctuations which can have an impact on the profitability of our business if prices change between

the time we enter into a contract with a customer to deliver finished goods and the time the steel is purchased from the mill.

to mitigate our exposure to steel price fluctuations in two ways:

Entering fixed price forward contracts with steel mills/suppliers

for delivery in the future so that our bids for customer contracts have known pricing for the steel.

This is particularly useful in larger

projects that involve delivery of product over many months.

Maintaining an approximately three-month inventory of our most

actively used rolled steel coils (defined by width and gauge).

This inventory requires an active forward-looking assessment of steel

needs to meet expected demand.

Maintaining inventory is a real financial exposure especially during periods of pricing volatility.

our manufacturing operations, we offer consulting services to support clients in developing their own building technology companies.

Our subsidiary- Inno AI Tech Corp., formed in February 2024, specializes in providing research, consulting, incorporation assistance,

training, market research, and business development guidance.

In 2024, we successfully assisted a client in establishing a new steel

technology company.

Factors Affecting our Performance

a result of a number of factors, our historical results of operations may not be comparable to our results of operations in future periods,

and our results of operations may not be directly comparable from period to period.

Set forth below is a brief discussion of the key

factors impacting our results of operations.

of certain commodity products, including raw materials, are historically volatile and are subject to fluctuations arising from changes

in domestic and international supply and demand, labor costs, competition, market speculation, government regulations, trade restrictions

Increasing prices of the component materials for parts of our goods may impact the availability, quality and price of our

products as suppliers search for alternatives to existing materials and increase the prices they charge.

Our suppliers may also fail

to provide consistent quality of product as they may substitute lower cost materials to maintain pricing levels.

Rapid and significant

changes in commodity prices may negatively affect our profit margins, and it may be difficult to mitigate worsened margins through customer

pricing actions and cost reduction initiatives.

interest rates have also resulted in a shift in institutional holdings away from micro-cap equities, which has negatively influenced

our stock’s trading volume.

We continue to forge relationships with institutional investors and analysts in order to maintain a

healthy trading volume.

February 2022, Russia initiated significant military action against Ukraine.

In response, the U.S.

and certain other countries imposed

significant sanctions and export controls against Russia, Belarus and certain individuals and entities connected to Russian or Belarusian

political, business, and financial organizations, and the U.S.

and certain other countries could impose further sanctions, trade restrictions,

and other retaliatory actions should the conflict continue or worsen.

It is not possible to predict the broader consequences of these

conflicts, including related geopolitical tensions, and the measures and retaliatory actions taken by the U.S.

and other countries in

respect thereof as well as whether any counter measures or retaliatory actions in response, including, for example, potential cyberattacks

or the disruption of energy exports, are likely to cause regional instability and geopolitical shifts, which could materially adversely

affect global trade, currency exchange rates, regional economies and the global economy.

These situations remain uncertain, and while

it is difficult to predict the impact of any of the foregoing, the conflicts and actions taken in response to these conflicts could increase

our costs, reduce our sales and earnings, impair our ability to raise additional capital when needed on acceptable terms, if at all,

or otherwise adversely affect our business, financial condition, and results of operations.

addition, while we do not have any direct operations or significant sales in the Middle East nor Africa, geopolitical tensions and ongoing

conflicts in these regions, particularly in Gaza, northern Israel and southern Lebanon, the Red Sea, Sudan, and Ethiopia, may lead to

further global economic instability and fluctuating energy prices that could materially affect our business.

It is not possible to predict

the broader consequences of these conflicts, including related geopolitical tensions, and the measures and actions taken by other countries

in respect thereof, which could materially and adversely affect global trade, currency exchange rates, regional economies and the global

While it is difficult to predict the impact of any of the foregoing, these conflicts may increase our costs, disrupt our supply

chain, reduce our sales and earnings, impair our ability to raise additional capital when needed on acceptable terms, if at all, or otherwise

adversely affect our business, financial condition and results of operations.

are an innovative technology company that engages in the business of recycled consumer electronic devices.

We source and purchase pre-owned

consumer electronic devices such as smartphones and tablets from suppliers and sell the electronic devices to wholesalers that re-sell

these products to their wholesale and/or retail customers in Southeast Asia, Middle East Asia, Europe and other regions.

We conduct our

business of recycled consumer electronic devices through two Hong Kong-based wholly-owned subsidiaries Lear Group Limited and Baymax

High Technology Co., Limited, acquired by the Company in October and December 2024, respectively.

the Company engaged in the business of manufacturing cold-formed-steel and offering a range of services required to transform raw materials

into precise steel framing products and prefabricated homes.

In the second quarter of 2025, the Company decided to discontinue its cold-formed-steel

business and sold all of the Company’s ownership in the subsidiaries through which the Company conducted its cold-formed-steel

From March 2025 till April 2025, the Company completed the disposition of all its ownership or membership interests in its

former wholly- and partially-owned subsidiaries, namely Inno Metal Studs Corp, Inno AI Tech Corp., Inno Disrupts Inc., and Castor Building

following table presents certain Consolidated statement-of-operations information and presentation of that data as a percentage of change

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Revenue - products

Revenue - consulting services

Revenue – License income

Total Revenue

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Selling, general and administrative expenses (exclusive of items shown separately below)

Impairment loss

Bad debt expense

Impairment loss on goodwill

Operating loss

Other income (expenses)

Loss before income taxes

Income tax expense

Net loss from discontinued operations

Non-controlling interest

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$ (3,213,829 )

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

February 2024, we started our second revenue stream by offering consulting service through our newly formed subsidiary, Inno AI Tech

Throughout the year, we successfully supported a client in establishing a steel technology company.

Our services included incorporation

assistance, comprehensive training programs, in-depth market research, and strategic business development guidance.

This engagement generated

consulting revenue of $205,000.

During the fourth quarter of 2024, we entered into a one-time licensing agreement with an individual

and his startup company.

This agreement provided them with a license to utilize our logo, technology, trademarks and other intellectual

property for the purpose of startup operations and marketing development.

The agreement generated $285,000 in licensing income.

product revenue decreased 51% to $395,495 in comparison to $799,747 for the year ended September 30, 2023.

The decrease was primarily

due to the various statuses and stages of projects.

To mitigate collection issues, the Company has focused on developing relationships

with larger customers.

During the year ended September 30, 2024, the Company has been working on obtaining permits for large projects

and exploring new business opportunities with larger customers.

backlog as of September 30, 2024 was approximately $14,000,000 to $19,000,000.

The range of backlog amount is comprised of all remaining

payments related to our signed customer contracts and estimation of order adjustments.

The timing of revenue recognition from these contracts

is subject to variation based on each project’s permit status and construction progress.

These signed contracts included an agreement,

amount of $15,875,800, with Vision Opportunity Fund LP (assigned to Vision 101) partially owned by one of our shareholders.

contract amount has been delivered to Vision 101 or recognized as revenue as of September 30, 2024.

revenues are significantly impacted by demand for residential and commercial buildings, economic conditions including interest rates

and costs of labor, materials and other variables that impact the cost of our finished goods.

We cannot ensure that growth will continue,

and our business may be adversely affected by negative overall economic conditions currently being experienced.

for the year ended September 30, 2025 increased 100% to $2,846,250 in comparison to $Nil for the year ended September 30, 2024.

for the year ended September 30, 2025 consists solely of the Company’s new business of electronic products trading that started

since October 2024.

The new business of electronic products trading contributes to the increase in revenue for the year ended September

30, 2025 against the comparable period in 2024.

revenues are significantly impacted by demand for economic conditions including costs of labor, materials and other variables that impact

the cost of our finished goods.

We cannot ensure that growth will continue, and our business may be adversely affected by the negative

overall economic conditions currently being experienced.

of Materials and Labor

of materials and labor include raw materials (primarily rolled steel) and direct labor in the processing of raw materials through the

manufacturing process.

Costs of materials and labor for the year ended September 30, 2024 was $409,169 compared to $1,255,315 for the

year ended September 30, 2023.

The decrease in the Cost of Goods Sold (COGS), pertaining to materials and labor, is predominantly due

to the decrease in product sales volume.

primary cost of consulting service revenue in fiscal year 2024 was the payroll expense for office employees, which is included in selling,

general, and administrative expenses.

of Goods Sold (COGS) includes electronic products purchased from our suppliers.

COGS for the year ended September 30, 2025 increased

to $2,790,500 in comparison to $Nil for the year ended September 30, 2024.

COGS for the year ended September 30, 2025 consists solely

of electronic products purchased from our suppliers in the Company’s new business of electronic products trading that started since

October 2024.

The new business of electronic products trading contributes to the increase in COGS for the year ended September 30, 2025

against the comparable period in 2024.

General and Administrative Expenses

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the comparable period in 2024.

This increase was primarily driven by higher overhead costs, including rent, payroll, insurance, consulting

and professional fees, marketing, and promotional expenses.

These additional expenses were incurred to support our growth in the consulting

business and comply with the regulatory requirements of a public company.

debt expense decreased by $1,208,025 for the year ended September 30, 2024 compared to the same period in 2023.

We estimated the credit

losses based on each customer’s financial situation, project status and the outstanding days of the accounts receivable balance.

Starting prior year, we strengthened our risk control of accounts receivable and reduced the days outstanding for accounts receivable

by discontinuing business with smaller customers with high credit risk.

Most of our current customers adhere to a 30-day payment term.

For the current year’s transactions, we have maintained a high collection rate.

loss was $3,373,502 for the year ended September 30,2024, in comparison to an operating loss of $3,984,008 for the comparable period

The increase in operating loss was primarily attributed to the lower revenue and increased expenses offset by the decrease in

bad debt expense, as discussed above.

This increase was primarily driven by stock compensation, legal expenses, auditing expenses and consulting

loss was $4,362,473 for the year ended September 30,2025, in comparison to an operating loss of $844,844 for the comparable period in

The increase in operating loss was primarily attributed to the increase in selling, general and administrative expenses, as discussed

Income (Expense)

income for the year ended September 30, 2024, was $123,175, in comparison to other expenses of $39,196 for the comparable period in 2023.

The increase in other income was primarily due to interest earned on bank deposits of $76,047, supporting services provided to a customer

of $104,674, and offset by settlements with former lessor, customers and subcontractor.

Other expenses for the year ended September 30,

2023, were primarily attributable to loan interest.

expenses for the year ended September 30, 2025, was $2,450,777, in comparison to other income of $237,952 for the comparable period in

The increase in other expenses was primarily due to loss on investment disposal.

Other income for the year ended September 30,

2024, were primarily attributable to the recognition of supporting services provided to one of customers and the interest income.

loss for the year ended September 30, 2025 was $7,009,846, in comparison to a net loss of $3,251,127 for the year ended September 30,

The decrease in net loss was primarily due to changes in revenue, costs, expenses and other income (expense) as outlined above.

The increase in net loss was primarily due to changes in revenue, costs, expenses and other income (expense) as outlined above.

and Capital Resources

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The cash increase was primarily

due to the proceeds from the initial public offering closed in December 2023 and offset by the cash usage in operating and investing

activities during the periods ended September 30, 2024.

Company has participated in several private-placement offerings.

On December 3, 2022, we closed on a private-placement offering pursuant

to which we sold to an accredited investor an aggregate of $500,000 in common stock, at a purchase price of $35 per share.

2023, we closed on a private-placement offering pursuant to which we sold to an accredited investor an aggregate of $100,000 in common

stock, at a purchase price of $37 per share.

On March 29, 2023, we closed on a private-placement offering pursuant to which we sold to

an accredited investor an aggregate of $300,000 in common stock, at a purchase price of $38 per share.

The offerings were completed pursuant

to an exemption from registration under Rule 506(b) of the Securities Act of 1933, as amended.

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

do not believe the cash and cash equivalents on hand as of September 30, 2024 of $1,526,661 will be sufficient to fund our operations

and capital expenditure requirements for the next twelve months from the date the consolidated financial statements are issued.

be required to raise additional capital to continue to fund operations and capital expenditure.

The uncertainties surrounding our ability

to access capital when needed creates substantial doubt about our ability to continue as a going concern.

Based on our need to raise

additional funds to implement our business plans for the next twelve months, we have included a discussion concerning the presentation

of our financial statements on a going concern basis in the notes to our consolidated financial statements.

We will be required in the

near future to issue debt or sell our Company’s equity securities in order to raise additional cash, although there are no firm

arrangements in place for any such financing at this time.

We cannot provide any assurances as to whether we will be able to secure the

necessary financing, or the terms of any such financing transaction if one were to occur.

The failure to secure such financing could

severely curtail our plans for future growth or in more severe scenarios, the continued operations of our Company.

October 31, 2024, the Company entered into a Securities Purchase Agreement with certain investors to issue and sell 500,000 shares of

its common stock at a price of $4.00 per share, for an aggregate purchase price of $2,000,000.

due to the proceeds from the multiple private offerings during the periods ended September 30, 2025 and offset by the cash usage in operating

and investing activities during the periods ended September 30, 2025.

Company has participated in several private-placement offerings during the quarter ended December 31, 2024.

On October 31, 2024, the

Company entered into a securities purchase agreement with certain investors, providing for the sale and issuance of 500,000 shares of

the Company’s common stock, no par value, for an aggregate purchase price of $2,000,000 at $4.00 per share (the “October

2024 Private Placement”).

The offering closed on November 6, 2024.

November 13, 2024, the Company entered into a securities purchase agreement with nine non-U.S.

investors to issue and sell an aggregate

of 729,167 shares of common stock in a private placement offering at a price per share of $4.80, for total proceeds of approximately

$3.5 million.

of September 30, 2024 and September 30, 2023, our working capital (deficit) was $975,755 and $(2,913,827), respectively.

The historical

seasonality in our business during the year can cause cash and cash equivalents, inventory, and accounts payable to fluctuate, resulting

in changes in our working capital.

cash used in operating activities for the year ended September 30, 2024 was $5,075,412 compared to $1,225,941 of net cash used in operating

activities for the year ended September 30, 2023.

The increase of net cash usage in operating activities was mainly due to a $128,733

increase of loss with non-cash reconciling items adjustment and a $3,720,738 increase of working capital outflow.

the year ended September 30, 2024, net cash used in operating activities was $5,075,412, primarily driven by the net loss of $3,251,127,

partially offset by non-cash items of $599,057 and working capital used cash of $2,423,342, which was primarily driven by a $322,739

increase of prepayments and other current assets, including prepaid insurance and prepayments to service suppliers, a $547,568 decrease

in unearned revenue, a $729,359 decrease in operating lease liabilities and a $843,694 decrease in accounts payable, accounts payable

- related party, and other current liabilities.

the year ended September 30, 2023, net cash used in operating activities was $1,225,941, primarily driven by the net loss of $4,023,204,

partially offset by non-cash items of $1,499,867, which mainly included bad debt expense of $1,267,960.

Working capital provided cash

of $1,297,396, which was primarily driven by a $936,098 increase in unearned revenue, a $325,951 increase in accounts payable, accounts

payable - related party, operating lease liabilities and other current liabilities, a $468,895 decrease in account receivable, a $79,457

decrease of prepayments and other current assets, and partially offset by a $64,389 increase in inventories and a $538,765 increase in

deferred offering costs.

the year ended September 30, 2024 and 2023, net cash used in investing activities was primarily the result of additions to property and

equipment of $559,629 and $244,899, respectively, which are mainly related to the additions of machinery, tools, motor vehicles, and

leasehold improvements.

investors, pursuant to which the Company

agreed to issue and sell in a private placement offering (the “November 2024 Private Placement”) an aggregate of 729,167

shares of common stock, no par value, at a purchase price per share of $4.80, for gross proceeds of approximately $3.5 million, of which

proceeds will be used for working capital and other general corporate purposes.

The offering closed on December 13, 2024.

December 11, 2024, the Company entered into a securities purchase agreement with nine non-U.S.

investors, pursuant to which the Company

agreed to issue and sell in a private placement offering (the “December 2024 Private Placement”) an aggregate of 700,000

shares of common stock, no par value, at a purchase price per share of $2.50, for gross proceeds of approximately $1.75 million, of which

proceeds will be used for working capital and other general corporate purposes.

The offering closed on December 23, 2024.

June 2, 2025, the Company entered into a securities purchase agreement with certain investors, pursuant to which the Company agreed to

issue and sell, in a registered direct offering by the Company directly to the investors (the “June 2025 Offering”), an aggregate

of 1,058,000 shares (the “June 2025 Shares”) of its common stock, no par value, at a purchase price per share of $0.50.

June 2025 Offering closed on June 6, 2025 and the Company received gross proceeds of $529,000.

January 27, 2025, the Company entered into a Standby Equity Purchase Agreement (the “January SEPA”) with certain investors

effective as of January 28, 2025.

Pursuant to January SEPA, the Company has the right to issue and sell to the investors, from time to

time, up to $15 million worth of shares of the Company’s common stock, no par value per share, subject to the terms and conditions

specified in the January SEPA.

On June 20,2025, the Company issued and sold an aggregate of 1,400,000 shares (the “January 2025

SEPA Shares”) of its common stock at a purchase price per share of $0.75, pursuant to January SEPA.

July 4, 2025, the Company entered into the Standby Equity Purchase Agreement (the “July SEPA”) with the Investors.

to July SEPA, the Company has the right to issue and sell to the investors, from time to time, up to $6 million worth of shares of the

Company’s common stock, no par value per share, subject to the terms and conditions specified in the July SEPA.

On August 27,2025,

the Company issued and sold an aggregate of 3,200,000 shares of its common stock at a purchase price per share of $0.48, pursuant to

September 10, 2025, the Company entered into a securities purchase agreement with certain institutional investors, pursuant to which

the Company offered, in a registered direct offering, 1,200,000 shares of its common stock, at a purchase price of $3.60 per share and

pre-funded warrants to purchase up to 800,000 shares of common stock, at a purchase price of $3.59999 per pre-funded warrant (equal to

$3.60 minus the exercise price of $0.00001 per pre-funded warrant).

The closing of the offering occurred on September 11, 2025.

received net proceeds of approximately $6.69 million from the offering, after deducting the estimated offering expenses payable by the

Company, including the placement agent fees.

As of September 30, 2025, 799,998 pre-funded warrants were exercised for the issuance of

799,998 shares of the Company’s common stock.

November 12, 2025, the Company entered into a sales agreement (the “Sales Agreement”) with Aegis Capital Corp.

Agent”), pursuant to which the Company may offer and sell, from time to time, to or through the Sales Agent, shares of the Company’s

common stock, with no par value, having an aggregate offering price of up to $50.0 million (the “At-the-Market Offering”).

From November 12, 2025 to December 15, 2025, the Company issued an aggregate of 85,000,000 shares of Common Stock for the gross proceeds

of approximately $28 million through the Sales Agent pursuant to the Sales Agreement.

As of December 15, 2025, the Sales Agreement remains

of September 30, 2025 and 2024, our working capital was $13,527,273 and $2,797,536, respectively.

The historical seasonality in our business

during the year can cause cash and cash equivalents, inventory, and accounts payable to fluctuate, resulting in changes in our working

the year ended September 30, 2025, net cash used in operating activities was $4,728,738, primarily driven by the net loss from continuing

operation of $6,814,050 and net loss from discontinuing operation of $265,313, partially offset by non-cash items of stock-based compensation

expense of $2,185,205, loss from investment disposal of $2,152,522, a $370,546 increase in fair value of SEPA, and working capital used

cash of $1,962,214, which was primarily driven by a $133,710 increase in prepayments and other current assets, and a $2,107,000 increase

in inventories, and operating cash flow used by discontinued operations of $398,948.

the year ended September 30, 2024, net cash used in operating activities was $5,521,976, primarily driven by the net loss from continuing

operation of $607,692 and net loss from discontinuing operation of $2,606,137, partially offset by non-cash items of $146,333 and working

capital used cash of $3,882,169, which was primarily driven by a $3,844,630 increase of prepayments and other current assets, and a $37,539

decrease in accounts payable, accounts payable - related party, unearned revenue, operating lease liabilities and other current liabilities,

and operating cash flow provided by discontinued operations of $1,479,390.

the year ended September 30, 2025, net cash used in investing activities was $3,277,453 and was primarily the result of investment in

equity investee of $2,200,000, which is related to the investment in Aurora Technology Holding Limited and Flower Mouse Network Technology

the year ended September 30, 2024, net cash used in investing activities was $547,060 and was mainly related to the purchase of machinery,

tools, motor vehicles, and leasehold improvements by discontinued operations.

cash provided by financing activities was $17,059,995 and $7,144,235, respectively, for the year ended September 30, 2025 and 2024.

the year ended September 30, 2025, net cash provided by financing activities was due to the $17,059,995 net cash from the several private-placement

the year ended September 30, 2024, net cash provided by financing activities was primarily due to the $8,450,000 net cash from the initial

public offering, offset by $740,000 payment of short-term loans, $503,372 repayment to related parties, $49,393 payments of notes payable,

and an aggregate amount payment of $13,000 for the assumption of the Warrants.

the year ended September 30, 2023, net cash provided by financing activities was primarily due to the $900,000 proceeds from stock issuance,

$627,000 proceeds from related parties, $230,000 proceeds from short-term loans and offset by $150,000 payment of short-term loans, $134,861

repayment to related parties, and $47,029 payments of notes payable.

public offering, offset by $627,000 repayment to related parties and $180,000 payment of short-term loans and $485,765 used in financing

activities by discontinued operations.

Accounting Policies and Estimate

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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 7. Management’s Discussion and Analysis