INNO HOLDINGS INC. 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2026 ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934: For the transition period from __________ to __________. Commission file number: 001-41882 INNO HOLDINGS INC. (Exact name of registrant as specified in its charter) Texas 87-4294543 (State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.) Room 805S, 8/F, Block 1 , 33 Canton Road Tsim Sha Tsui , Kowloon , Hong Kong 999077 (Address of principal executive offices, including ZIP Code) +852 - 54795450 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Trading Symbol(s) Name of each exchange on which registered Common stock, no par value INHD The Nasdaq Stock Market Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☒ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ As of August 18, 2026, there were 2,520,581 shares of common stock, no par value, issued and outstanding. Table of Contents Page PART I FINANCIAL INFORMATION ITEM 1: Financial Statements Condensed Consolidated Balance Sheets – June 30, 2026 (Unaudited) and September 30, 2025 1 Condensed Consolidated Statements of Operations - Three and Nine Months Ended June 30, 2026 and 2025 (Unaudited) 2 Condensed Consolidated Statements of Changes in Stockholders’ Equity - Three and Nine Months Ended June 30, 2026 and 2025 (Unaudited) 3 Condensed Consolidated Statements of Cash Flows - Nine Months Ended June 30, 2026 and 2025 (Unaudited) 4 Notes to Unaudited Condensed Consolidated Financial Statements 5 ITEM 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations 23 ITEM 3: Quantitative and Qualitative Disclosures About Market Risk 30 ITEM 4: Controls and Procedures 30 PART II OTHER INFORMATION ITEM 1: Legal Proceedings 31 ITEM 1A: Risk Factors 31 ITEM 2: Unregistered Sales of Equity Securities and Use of Proceeds 33 ITEM 3: Defaults Upon Senior Securities 33 ITEM 4: Mine Safety Disclosures 33 ITEM 5: Other Information 33 ITEM 6: Exhibits 34 SIGNATURES 35 i INNO HOLDINGS INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets June 30, 2026 September 30, 2025 (unaudited) ASSETS Current assets Cash and cash equivalent $ 33,238,616 $ 10,130,942 Accounts receivable 935,666 - Inventories 3,994,120 2,107,000 Prepayments and other current assets 16,170,591 1,567,441 Total current assets 54,338,993 13,805,383 Non-current assets Right of use asset 225,884 - Property and equipment, net 11,164 - Equity investment 1,500,000 2,200,000 Total non-current assets 1,737,048 2,200,000 Total assets $ 56,076,041 $ 16,005,383 LIABILITIES AND EQUITY Current liabilities Advance from customer - 100,000 Other payables and accrued liabilities 161,407 318,110 Short-term loan payable 50,000 50,000 Lease liability – current 184,574 - Total current liabilities 395,981 468,110 Non-current liabilities SEPA liabilities - 370,546 Lease liability - non-current 45,221 - Total non-current liabilities 45,221 370,546 Total liabilities 441,202 838,656 June 30, 2026 September 30, 2025 (unaudited) Stockholders’ Equity Common stock, no par value; 1,000,000,000 and 100,000,000 shares authorized as of June 30, 2026 and September 30, 2025 ; 2,520,581 and 26,976 shares issued and outstanding on June 30, 2026 and September 30, 2025 * - - Additional paid in capital 73,173,060 29,984,734 Accumulated deficit ( 17,538,221 ) ( 14,818,007 ) Total equity 55,634,839 15,166,727 Total liabilities and equity $ 56,076,041 $ 16,005,383 * On December 22, 2025, the Company completed a 1-for-24 reverse stock split of its issued and outstanding Common Stock, no par value (the “December 2025 Reverse Split”). On May 4, 2026, the Company completed a 1-for-20 reverse stock split of its issued and outstanding common stock, no par value, (the “May 2026 Reverse Split”, and together with the December 2025 Reverse Split, the “Reverse Stock Splits”). As a result of the Reverse Stock Splits, the number of issued and outstanding shares of Common Stock of the Company as of June 30, 2026 was reduced from 50,410,884 to 2,520,581 shares, and the number of issued and outstanding shares of Common Stock as of September 30, 2025 was retroactively adjusted to 26,976 shares to give effect to the Reverse Stock Splits. The Reverse Stock Splits 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 Splits affected all stockholders uniformly. Except to the extent that the Reverse Stock Split resulted in the stockholders’ fractional shares being rounded up on the participant level, no other effects affect stockholder’s ownership percentage of the Company’s shares of Common Stock. All references to number of shares, and to per share information in the consolidated financial statements have been retroactively adjusted to give effects to the Reverse Stock Splits. The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 1 INNO HOLDINGS INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations For the Three Months and Nine Months Ended June 30, 2026 and 2025 (unaudited) 2026 2025 2026 2025 For the Three Months Ended June 30, For the Nine Months Ended June 30, 2026 2025 2026 2025 REVENUES: Revenue - products $ 2,067,662 $ 1,086,250 $ 4,456,054 $ 1,760,350 Total revenue 2,067,662 1,086,250 4,456,054 1,760,350 COSTS OF REVENUE: Costs of goods sold 1,974,238 1,102,300 4,266,648 1,718,900 Total cost of sales 1,974,238 1,102,300 4,266,648 1,718,900 GROSS PROFIT 93,424 ( 16,050 ) 189,406 41,450 OPERATING EXPENSES: Selling, general and administrative expenses (exclusive of expenses shown separately below) 1,602,051 1,544,590 2,975,757 3,425,985 Impairment loss on goodwill - - - 3,514 Total operating expenses 1,602,051 1,544,590 2,975,757 3,429,499 LOSS FROM OPERATIONS ( 1,508,627 ) ( 1,560,640 ) ( 2,786,351 ) ( 3,388,049 ) OTHER INCOME (EXPENSE) Interest income, net 293,868 14,549 596,167 25,966 Gain/(loss) on investment disposal ( 200,000 ) 100 ( 200,000 ) ( 2,152,522 ) Change in fair value of SEPA - - 370,546 - Change in fair value of Investment ( 200,000 ) - ( 700,000 ) - Other non-operating income (expense) ( 416 ) ( 297 ) ( 576 ) 9,436 Total other income (expenses), net ( 106,548 ) 14,352 66,137 ( 2,117,120 ) LOSS BEFORE INCOME TAXES ( 1,615,175 ) ( 1,546,288 ) ( 2,720,214 ) ( 5,505,169 ) PROVISION FOR INCOME TAXES - - - - NET LOSS FROM CONTINUING OPERATIONS ( 1,615,175 ) ( 1,546,288 ) ( 2,720,214 ) ( 5,505,169 ) Net loss from discontinued operations - - - ( 195,796 ) NET LOSS $ ( 1,615,175 ) $ ( 1,546,288 ) $ ( 2,720,214 ) ( 5,700,965 ) Non-controlling interest - - - 69,517 NET LOSS ATTRIBUTABLE TO INNO HOLDINGS INC. $ ( 1,615,175 ) $ ( 1,546,288 ) $ ( 2,720,214 ) $ ( 5,770,482 ) WEIGHTED AVERAGE NUMBER OF COMMON STOCK* Basic and Diluted 2,317,314 10,738 949,236 8,543 LOSSES PER SHARE Basic and Diluted from Continuing Operation ( 0.70 ) ( 144.00 ) ( 2.87 ) ( 644.40 ) Basic and Diluted from Discontinuing Operation - - - ( 31.06 ) Basic and Diluted, Total $ ( 0.70 ) $ ( 144.00 ) $ ( 2.87 ) $ ( 675.46 ) * On December 22, 2025, the Company completed a 1-for-24 reverse stock split of its issued and outstanding Common Stock, no par value (the “December 2025 Reverse Split”). On May 4, 2026, the Company completed a 1-for-20 reverse stock split of its issued and outstanding common stock, no par value, (the “May 2026 Reverse Split”, and together with the December 2025 Reverse Split, the “Reverse Stock Splits”). As a result of the Reverse Stock Splits, the number of issued and outstanding shares of Common Stock of the Company as of June 30, 2026 was reduced from 50,410,884 to 2,520,581 shares, and the number of issued and outstanding shares of Common Stock as of September 30, 2025 was retroactively adjusted to 26,976 shares to give effect to the Reverse Stock Splits. The Reverse Stock Splits 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 Splits affected all stockholders uniformly. Except to the extent that the Reverse Stock Split resulted in the stockholders’ fractional shares being rounded up on the participant level, no other effects affect stockholder’s ownership percentage of the Company’s shares of Common Stock. All references to number of shares, and to per share information in the consolidated financial statements have been retroactively adjusted to give effects to the Reverse Stock Splits. The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 2 INNO HOLDINGS INC. AND SUBSIDIARIES Condensed Consolidated Statements of Changes in Stockholders’ Equity For the Three and Nine Months Ended June 30, 2026 and 2025 Shares Amount * Capital Deficit interest Receivable Total Common Stock* Additional Paid in Accumulated Non- controlling Subscription Shares Amount Capital Deficit interest Receivable Total Balance, September 30, 2024 4,750 $ - $ 10,748,534 $ ( 7,738,644 ) $ ( 212,354 ) $ - $ 2,797,536 Net loss - - - ( 603,697 ) ( 1,712 ) - ( 605,409 ) Shares issued for cash 4,019 - 7,250,000 - - — 7,250,000 Balance, December 31, 2024 (unaudited) 8,769 $ - $ 17,998,534 $ ( 8,342,341 ) $ ( 214,066 ) $ - $ 9,442,127 Net loss - - - ( 3,620,497 ) 71,229 - ( 3,549,268 ) Disposal of subsidiary - - - - 142,837 - 142,837 Stock-based compensation 419 - 1,041,005 - - - 1,041,005 Balance, March 31, 2025 (unaudited) 9,188 $ - $ 19,039,539 $ ( 11,962,838 ) $ - $ - $ 7,076,701 Net loss - - - ( 1,546,288 ) ( 1,546,288 ) Shares issued for cash 5,121 - 1,579,000 - - ( 293,750 ) 1,285,250 Stock-based compensation 1,833 - 1,135,200 - - 1,135,200 Balance, June 30, 2025 (unaudited) 16,142 $ - $ 21,753,739 $ ( 13,509,126 ) $ - $ ( 293,750 ) $ 7,950,863 Shares Amount * Capital Deficit Total Common Stock* Additional Paid in Accumulated Shares Amount Capital Deficit Total Balance, September 30, 2025 26,976 $ - $ 29,984,734 $ ( 14,818,007 ) $ 15,166,727 Net loss - - - ( 28,618 ) ( 28,618 ) Fractional shares round up due to Reverse stock split 2 - - - - Shares issued for cash 327,083 - 32,020,150 - 32,020,150 Balance, December 31, 2025 (unaudited) 354,060 $ - $ 62,004,884 $ ( 14,846,625 ) $ 47,158,259 Net loss - - - ( 1,076,421 ) ( 1,076,421 ) Shares issued for cash 66,600 - 732,600 - 732,600 Balance, March 31, 2026 (unaudited) 420,660 $ - $ 62,737,484 $ ( 15,923,046 ) $ 46,814,438 Balance 420,660 $ - $ 62,737,484 $ ( 15,923,046 ) $ 46,814,438 Net loss - - - ( 1,615,175 ) ( 1,615,175 ) Shares issued for cash 2,099,883 - 10,435,576 - 10,435,576 Reverse stock split 38 - - - - Balance, June 30, 2026 (unaudited) 2,520,581 $ - $ 73,173,060 $ ( 17,538,221 ) $ 55,634,839 Balance 2,520,581 $ - $ 73,173,060 $ ( 17,538,221 ) $ 55,634,839 * On December 22, 2025, the Company completed a 1-for-24 reverse stock split of its issued and outstanding Common Stock, no par value (the “December 2025 Reverse Split”). On May 4, 2026, the Company completed a 1-for-20 reverse stock split of its issued and outstanding common stock, no par value, (the “May 2026 Reverse Split”, and together with the December 2025 Reverse Split, the “Reverse Stock Splits”). As a result of the Reverse Stock Splits, the number of issued and outstanding shares of Common Stock of the Company as of June 30, 2026 was reduced from 50,410,884 to 2,520,581 shares, and the number of issued and outstanding shares of Common Stock as of September 30, 2025 was retroactively adjusted to 26,976 shares to give effect to the Reverse Stock Splits. The Reverse Stock Splits 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 Splits affected all stockholders uniformly. Except to the extent that the Reverse Stock Split resulted in the stockholders’ fractional shares being rounded up on the participant level, no other effects affect stockholder’s ownership percentage of the Company’s shares of Common Stock. All references to number of shares, and to per share information in the consolidated financial statements have been retroactively adjusted to give effects to the Reverse Stock Splits. The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 3 INNO HOLDINGS INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows 2026 2025 For the Nine Months Ended June 30, (unaudited) 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss from continuing operation $ ( 2,720,214 ) $ ( 5,505,169 ) Net loss from discontinuing operation - ( 265,313 ) Adjustments to reconcile net income to cash used in operating activities: Stock-based compensation expense - 2,185,205 Depreciation expense 1,592 Loss from investment disposal 200,000 2,152,522 Impairment loss - 3,514 Change in fair value of SEPA ( 370,546 ) - Change in fair value of investment 700,000 - Accounts receivable ( 935,666 ) - Inventories ( 1,887,120 ) ( 2,058,800 ) Prepayments and other current assets ( 6,367,574 ) 1,026,834 Accounts payable - ( 805,579 ) Advance from customer ( 100,000 ) - Other payables and accrued liabilities ( 156,703 ) ( 38,912 ) Operating lease liabilities 3,911 - Operating cash flow used by discontinued operations - ( 398,948 ) Net cash used in operating activities ( 11,632,320 ) ( 3,704,646 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment ( 12,756 ) - Purchase of investment in equity investee ( 3,000,000 ) ( 1,672,600 ) Proceed from investment disposal - 177,000 Net cash used in investing activities by discontinued operations - ( 26,853 ) Net cash used in investing activities ( 3,012,756 ) ( 1,522,453 ) CASH FLOWS FROM FINANCING ACTIVITY: Proceeds from issuance of shares 37,752,750 8,535,250 Net cash provided by financing activity 37,752,750 8,535,250 CHANGES IN CASH AND CASH EQUIVALENT 23,107,674 3,308,151 CASH AND CASH EQUIVALENT, beginning of period 10,130,942 1,077,138 CASH AND CASH EQUIVALENT, ending of period $ 33,238,616 $ 4,385,289 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for interest $ - $ - The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 4 INNO HOLDINGS INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements Note 1 — Nature of business and organization INNO HOLDINGS, INC., a Texas corporation (the “Company”), was incorporated on September 8, 2021. The Company is currently an innovative technology company that engages in the business of recycled consumer electronic devices. The Company sources and purchases 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. The recycled consumer electronic devices offered by the Company include smartphones (various models of iPhone) and tablets (various models of iPad). The Company conducts its 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. On January 18, 2022, the Company formed a limited liability company, Castor Building Tech LLC (“CBT”), in California. The Company owned 53 % of the equity interest in CBT. On October 16, 2023, the Company and the noncontrolling interest parties reached a new ownership agreement that the Company’s ownership increased to 55 %. According to the new ownership agreement, the ownership percentage change is retroactively effective from January 18, 2022. The impact of historical noncontrolling interest allocation from this ownership percentage change is immaterial. Effective as of January 21, 2022, the Company acquired 100 % of the ordinary shares of Inno Metal Studs Corp. (“IMSC”), a Texas corporation incorporated on October 31, 2019. Pursuant to the terms of the Share Purchase Agreement with IMSC’s former sole owner and CEO of the Company, Mr. Dekui Liu, the Company issued 15,170,000 shares of its common stock to Mr. Dekui Liu in exchange for his 100 % ownership in IMSC. Upon completion of the transaction, IMSC became a 100 % owned subsidiary of the Company. Inno Research Institute LLC (“IRI”), a Texas limited liability company was formed on September 8, 2021, is a 65 % owned subsidiary of IMSC. On January 27, 2024, IRI was voluntarily terminated and resulted in a disposal loss of $ 23,715 . The R&D activities carried out by IRI will be transferred to Inno AI Tech Corp, a new subsidiary of the Company. On January 21, 2024, the Company incorporated Inno Disrupts Inc., a wholly owned subsidiary in Texas. The purpose of Inno Disrupts Inc. is to remodel buildings using the Company’s framing steel products, enhance producing and marketing capabilities, manage the designated buildings in US, and other activities. On February 11, 2024, the Company incorporated Inno AI Tech Corp., a wholly owned entity to conduct AI tech research and consulting activities. On October 18, 2024, the Company completed the acquisition of 10,000 shares of Lear Group Limited (“Lear”), a Hong Kong company, from its shareholder for a total consideration of $ 1,300 . As a result of this transaction, Lear became a wholly-owned subsidiary of the Company. The acquisition of Lear was undertaken to support the Company’s entry into a new business initiative focused on electronic product trading. On December 13, 2024, the Company completed the acquisition of 10,000 shares of Baymax High Technology Co., Limited (“Baymax”), a Hong Kong company, from its shareholder for a total consideration of $ 1,300 . As a result of this transaction, Baymax became a wholly-owned subsidiary of the Company. On March 4, 2025, the Company entered into a Share Purchase Agreement with Architectix Limited, pursuant to which the Company sold all issued and outstanding shares it owns in Inno Metal Studs Corp and Inno AI Tech Corp for an aggregate purchase price of $ 1,000 . On March 28, 2025, the Company entered into a Membership Interest Purchase Agreement with Strucraft Group Limited, pursuant to which the Company sold all the membership interest it owns in Castor Building Tech LLC, which represents 55 % of the outstanding membership interest in Castor Building Tech LLC, for an aggregate purchase price of $ 1,000 . 5 On April 8, 2025, the Company entered into a Share Purchase Agreement with Strucraft Group Limited, pursuant to which the Company sold all issued and outstanding shares it owns in Inno Disrupts Inc. for an aggregate purchase price of $ 100 . On January 5, 2026, the Company incorporated a new wholly-owned subsidiary, Equicap Holdings Limited, in the British Virgin Islands. On January 20, 2026, the Company incorporated a new wholly-owned subsidiary, ApexVest Holdings Limited, in the British Virgin Islands. On June 23, 2026, ApexVest Holdings Limited incorporated a new wholly-owned subsidiary, Gulfcentlink Limited, in the British Virgin Islands. On July 16, 2026, the Company incorporated a new wholly-owned subsidiary, Hyperlink Group Limited, in the British Virgin Islands. Note 2 — Basis of Presentation and Summary of significant accounting policies Basis of presentation The accompanying financial statements have been prepared in accordance with the generally accepted accounting principles in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). The Company’s fiscal year end date is September 30. Certain information and footnote disclosures normally included in the Company’s annual audited financial statements and accompanying notes have been condensed or omitted in this accompanying interim consolidated financial statements and footnotes. Accordingly, the accompanying interim condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2025, filed with the Securities and Exchange Commission (“SEC”) on December 15, 2025. In the opinion of management, these unaudited consolidated financial statements include all adjustments and accruals, consisting only of normal, recurring adjustments that are necessary for a fair statement of the results of all interim periods reported herein. The results of the interim periods are not necessarily indicative of the results expected for the full fiscal year or any other interim period or any future year or period. Consolidated Principles of consolidation The Consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company balances and transactions have been eliminated. Going concern As disclosed in the notes to our consolidated financial statements of our 2025 Annual Report, our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern. This determination is based on our recurring losses from operations, negative cash flows and current liquidity position. These conditions raise substantial doubt about our ability to continue as a going concern within the twelve (12) months after the date that our financial statements are issued. Our management has evaluated plans to alleviate these conditions, including (i) seeking additional capital through equity or debt financings; (ii) pursuing strategic investments or partnerships; and (iii) improving operating cash flows through cost control measures and operational efficiencies. However, there can be no assurance that such plans will be successfully implemented or will be sufficient to mitigate the conditions described above. As of June 30, 2026, the Company had total cash and cash equivalent of $ 33,238,616 and accumulated deficit of $ 17,538,221 . For the nine months ended June 30, 2026, the Company had incurred a net loss of $ 2,720,214 and net cash used cash in operations of $ 11,632,320 . Based on our current operating and investing plan, the management has concluded that the Company’s has sufficient liquidity to meet its obligations and is able to continue as a going concern for 12 months from the date of issuance of these financial statements. The Company’s continuation as a going concern is dependent on its ability to generate sufficient cash flows from operations to meet its obligations, and/or obtaining additional financing from its shareholders or other sources, as may be required. There can be no assurance that the Company’s future capital needs will not increase to a level that renders its then-current liquidity insufficient, or that the Company’s operating plans will be realized as anticipated or that additional financing will be available on acceptable terms, or at all. If the Company’s plans or circumstances change materially, or if its actual future cash requirements exceed current estimates, substantial doubt about the Company’s ability to continue as a going concern may arise. 6 Standby Equity Purchase Agreement On July 4, 2025, the Company entered into the SEPA with the Investors. Pursuant to SEPA, the Company has the right, but not the obligation, to issue and sell, from time to time at the Company’s discretion, up to $ 6 million of shares of our common stock to the Investors at a price equal to 40%, or a percentage between 20% and 40% as determined by us, of the Minimum Price, or $1.20, subject to specified limitations and conditions, including a $0.5 million minimum per drawdown and a 9.99% beneficial ownership cap per investor. The SEPA has a three-year term and may be terminated earlier by the Company, and the Company expect to use any proceeds for working capital and general corporate purposes. The SEPA, in its entirety, is classified as a derivative liability because it did not meet the equity classification criteria under ASC 815-10, Derivatives and Hedging (“ASC 815-10”). The SEPA derivative is valued based on a scenario-based valuation model utilizing the expected draws, probability of the draws and risk-free rate inputs. The change in the fair value of the derivative is recorded in the Condensed Consolidated Statements of Operations. The SEPA was terminated by mutual agreement between the Investors and the Company on December 30, 2025. Use of estimates and assumptions The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities reported and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. Actual results could differ from these estimates. Cash and cash equivalents Cash and cash equivalents consist of amounts held as cash on hand, bank and money market deposits, and marketable securities with maturities of less than 90 days. From time to time, the Company may maintain bank balances in interest bearing accounts in the US in excess of the $ 250,000 , which is currently the maximum amount insured by the Federal Deposit Insurance Corporation for interest bearing accounts in the US (there is currently no insurance limit for deposits in noninterest bearing accounts), and may maintain bank balances in checking and savings accounts in Hong Kong in excess of the HKD 800,000 , which is currently the maximum amount insured by the Hong Kong Deposit Protection Board for checking and savings accounts in Hong Kong. The Company has not experienced any losses with respect to cash. Management believes the Company is not exposed to any significant credit risk with respect to its cash. Accounts receivable During the ordinary course of business, the Company extends unsecured credit to its customers. Accounts receivable are stated at the amount the Company expects to collect from customers. Management reviews its accounts receivable balances each reporting period to determine if an allowance for credit loss is required. In October 2020, the Company adopted ASU 2016-13, Topics 326 — Credit Loss, Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (CECL) methodology, for its accounting standard for its trade accounts receivable. The Company continuously monitors the recoverability of accounts receivable. If there are any indicators that a customer may not make payment, the Company may consider making provision for non-collectability for that particular customer. At the same time, the Company may cease further sales or services to such customer. The following are some of the factors that the Company develops allowance for credit losses: ● the customer fails to comply with its payment schedule; ● the customer is in serious financial difficulty; ● a significant dispute with the customer has occurred regarding job progress or other matters; ● the customer breaches any of its contractual obligations; ● the customer appears to be financially distressed due to economic or legal factors; ● the business between the customer and the Company is not active; and ● other objective evidence indicates non-collectability of the accounts receivable. 7 The adoption of the credit loss accounting standard has no material impact on the Company’s consolidated financial statements. Accounts receivable are recognized and carried at carrying amount less an allowance for credit losses, if any. The Company maintains an allowance for credit losses resulting from the inability of its customers to make required payments based on contractual terms. The Company reviews the collectability of its receivables on a regular and ongoing basis. The Company has also included in the calculation of allowance for credit losses based on its customers’ businesses and their ability to pay their accounts receivable. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. The Company also considers external factors to the specific customer, including current conditions and forecasts of economic conditions. In the event we recover amounts previously written off, we will reduce the specific allowance for credit losses. Equity Investment Equity investments without readily determinable fair values are measured at cost with adjustments for observable changes in price or impairments (referred to as the measurement alternative). We perform a qualitative assessment on a periodic basis and recognize an impairment if there are sufficient indicators that the fair value of the investment is less than carrying value. Changes in value are recorded in other income (expenses). Fair values of financial instruments ASC 825, “Disclosures about Fair Value of Financial Instruments,” requires disclosure of fair value information about financial instruments. ASC 820, “Fair Value Measurements” defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and all other current assets and liabilities are approximate fair values due to their short-term nature. For other financial instruments to be reported at fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines the fair value of its financial instruments based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels: Level 1 — Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; Level 2 — Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and Level 3 — Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data. On July 4, 2025, the Company entered into the SEPA with the Investors. Upon execution of the SEPA, the Company determined the fair value of the SEPA derivative liability to be $ 635,669 based on a scenario-based model. As of June 30, 2026, the Company terminated the SEPA and determined the fair value of the SEPA derivative liability to be $ Nil ; the change in fair value is recognized in other income and expense. The carrying amounts of SEPA derivative liability represent the remeasurement to fair value each reporting period based on unobservable, or Level 3, inputs, using assumptions made by us, including the market price of our common stock and the observed volatility of a peer group of companies. The SEPA was terminated by mutual agreement between the Investors and the Company on December 30, 2025. The following tables summarize the changes in fair value of SEPA derivative liability for the nine months ended June 30, 2026. The SEPA derivative liabilities were not present for the nine months ended June 30, 2026. Schedule of changes in fair value of derivative liabilities Level 3 Liabilities Fair Value at September 30, 2025 Issuances (Settlements) Change in Unrealized (Gains) Losses Fair Value at June 30, 2026 SEPA derivative liability $ 370,546 $ - $ ( 370,546 ) $ - Revenue recognition The Company has adopted Accounting Standards Codification (“ASC”) 606 since its inception and recognizes revenue from product and service sales revenues, net of promotional discounts and return allowances, if any, when the following revenue recognition criteria are met: a contract has been identified, separate performance obligations are identified, the transaction price is determined, the transaction price is allocated to separate performance obligations and revenue is recognized upon satisfying each performance obligation. The Company transfers the risk of loss or damage upon delivery, therefore, revenue from product sales is recognized when it is delivered to the customer. For services, all sales are recognized upon completion based on terms stated in the sales agreements. 8 The Company evaluates the criteria of ASC 606 — Revenue Recognition Principal Agent Considerations in determining whether it is appropriate to record the gross amount of product sales and related costs or the net amount earned as commissions. Generally, when the Company is primarily responsible for fulfilling the promise to provide a specified good or service, the Company is subject to inventory risk before the good or service has been transferred to a customer and the Company has discretion in establishing the price, revenue is recorded at gross. Payments received prior to the delivery of goods to customers are recorded as unearned revenue. Sales discounts are recorded in the period in which the related sale is recognized. Sales return allowances are estimated based on historical amounts and are recorded upon recognizing the related sales. Shipping and handling costs are recorded as selling expenses. Revenue from electronic products trading is recognized at the point of delivery when the customer obtains control of the products. Costs and expenses Costs and expenses are operating expenses, which consist of costs of material and labor, selling, general and administrative expenses, and depreciation, are expensed as incurred. Inventory Inventory consists of material and finished goods ready for sale and is stated at the lower of cost or net realizable value. The Company values its inventory using the FIFO costing method. The Company’s policy is to include as a part of cost of goods sold any freight incurred to ship the product from its vendors to warehouses. Outbound freight costs related to shipping costs to customers are considered periodic costs and are reflected in selling expenses. The Company regularly reviews inventory and considers forecasts of future demand, market conditions and product obsolescence. If the estimated realizable value of the inventory is less than cost, the Company makes provisions in order to reduce its carrying value to its estimated net realizable value. The Company regularly assesses its inventory for obsolescence and records an allowance only when the inventory is no longer suitable for sale. The Company’s inventory generally has a long life cycle and does not become obsolete quickly. Deferred offering costs The Company capitalizes certain legal, accounting and other third-party fees that are directly related to an equity financing that is probable of successful completion until such financing is consummated. After consummation of an equity financing, these costs are recorded as a reduction of the proceeds received as a result of the financing. Should a planned equity financing be abandoned, terminated or significantly delayed, the deferred offering costs are immediately written off to operating expenses in the consolidated statements of operations in the period of determination. Property and equipment Property and equipment is stated at their historical cost, less accumulated depreciation. Depreciation on property and equipment is provided using the straight-line method over the estimated useful lives of the assets as follows: Schedule of depreciation on property and equipment Machinery and equipment 7 years Office equipment 5 years Motor vehicles 5 years Leasehold improvements the shorter of the lease term or the estimated useful life of the improvements Expenditures for renewals and betterments are capitalized while repairs and maintenance costs are normally charged to the statement of operations in the year in which they are incurred. In situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of the asset, the expenditure is capitalized as an additional cost of the asset. Upon sale or disposal of an asset, the historical cost and related accumulated depreciation or amortization of such asset was removed from their respective accounts and any gain or loss is recorded in the statements of income. The Company reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition and other economic factors. Based on this assessment, no impairment expenses for property and equipment were recorded during the nine months ended June 30, 2026 and 2025. Goodwill Goodwill represents the excess of the purchase price of an acquired business over the amount assigned to the assets acquired and liabilities assumed. Goodwill is not amortized but are subject to impairment testing on an annually basis or more frequently if events or circumstances indicate a potential impairment. These events or circumstances could include a significant change in the business climate, regulatory environment, established business plans, operating performance indicators or competition. Potential impairment indicators may also include, but are not limited to, (i) significant changes to estimates and assumptions used in the most recent annual or interim impairment testing, (ii) downward revisions to internal forecasts, and the magnitude thereof, (iii) declines in our market capitalization below our book value, and the magnitude and duration of those declines, (iv) a reorganization resulting in a change to our operating segments, and (v) other macroeconomic factors, such as increases in interest rates that may affect the weighted average cost of capital, volatility in the equity and debt markets, or fluctuations in foreign currency exchange rates that may negatively impact our reported results of operations. Leases On its inception date, the Company adopted ASC 842 — Leases (“ASC 842”), which requires lessees to record right-of-use (“ROU”) assets and related lease obligations on the balance sheet, as well as disclose key information regarding leasing arrangements. ROU assets represent our right to use an underlying asset for the lease terms and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company generally uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. 9 Stock-based Compensation The Company applies ASC No. 718, “Compensation-Stock Compensation,” which requires that share-based payment transactions with employees and nonemployees upon adoption of ASU 2018-07, be measured based on the grant date fair value of the equity instrument and recognized as compensation expense over the requisite service period, with a corresponding addition to equity. Under this method, compensation cost related to employee share options or similar equity instruments is measured at the grant date based on the fair value of the award and is recognized over the period during which an employee is required to provide service in exchange for the award, which generally is the vesting period. In addition to the requisite service period, the Company also evaluates the performance condition and market condition under ASC 718-10-20. For an award which contains both a performance and a market condition, and where both conditions must be satisfied for the award to vest, the market condition is incorporated into the fair value of the award, and that fair value is recognized over the employee’s requisite service period or nonemployee’s vesting period if it is probable the performance condition will be met. If the performance condition is ultimately not met, compensation cost related to the award should not be recognized (or should be reversed) because the vesting condition in the award has not been satisfied. The Company will recognize forfeitures of such equity-based compensation as they occur. Segment Reporting The Company uses the management approach in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions, allocating resources and assessing performance as the source for determining the Company’s reportable segments. During the three and nine months ended June 30, 2026 and 2025, the Chief Executive Officer has been identified as the chief operating decision maker. The Company’s chief operating decision maker regularly reviews consolidated assets and consolidated operating results prepared under U.S. GAAP for the enterprise as a whole when making decisions about allocating resources and assessing performance of the Company. Consequently, management has determined that the Company only has one operating segment as defined under ASC 280-10-50. Income taxes The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their perspective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded, when necessary, to reduce deferred tax assets to the amount expected to be realized. As a result of the implementation of certain provisions of ASC 740, Income Taxes (“ASC 740”), which clarifies the accounting and disclosure for uncertainty in tax position, as defined, ASC 740 seeks to reduce the diversity in practice associated with certain aspects of the recognition and measurement related to accounting for income taxes. The Company has adopted the provisions of ASC 740 since inception and has analyzed filing positions in each of the federal and state jurisdictions where the Company is required to file income tax returns, as well as open tax years in such jurisdictions. The Company has identified the U.S. federal jurisdiction, and the states of Texas and California, as its “major” tax jurisdictions. However, the Company has certain tax attribute carryforwards which will remain subject to review and adjustment by the relevant tax authorities until the statute of limitations closes with respect to the year in which such attributes are utilized. The Company believes that its income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change to its financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740. The Company’s policy for recording interest and penalties associated with income-based tax audits is to record such items as a component of income taxes. 10 Commitments and contingencies In the ordinary course of business, the Company is subject to certain contingencies, including legal proceedings and claims arising out of the business that relate to a wide range of matters, such as government investigations and tax matters. The Company recognizes its liability for such contingency if it determines it is probable that a loss has occurred and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments including historical and specific facts and circumstances of each matter. Earnings per share Basic earnings per share are computed by dividing net income attributable to holders of common stock by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share reflect the potential dilution that could occur if securities to issue common stock were exercised. Subsequent events The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the date that the consolidated financial statements are available to be issued. Material subsequent events that required recognition or additional disclosure in the consolidated financial statements are presented. Note 3 — Inventories As of June 30, 2026 and September 30, 2025, inventories consisted of the following: Schedule of inventories June 30, 2026 September 30, 2025 (unaudited) Merchandise inventory $ 3,994,120 $ 2,107,000 Total $ 3,994,120 $ 2,107,000 As of June 30, 2026 and September 30, 2025, there was no allowance for obsolescence recorded. Note 4 — Prepayments and other current assets As of June 30, 2026 and September 30, 2025, prepayments and other current assets consisted of the following: Schedule of prepayment and other current assets June 30, 2026 September 30, 2025 (unaudited) Loan and Interest receivable $ 3,940,940 $ 916,164 Prepaid research and development costs 2,900,000 - Receivable from sales of equity investment 3,150,100 350,100 Receivable from sales of shares 5,435,576 - Advance to suppliers - 157,250 Prepaid rent - 48,000 Prepaid insurance - 34,028 Prepaid for legal fee 24,649 24,649 Deposits 37,159 24,000 Prepaid for consulting and professional services 654,167 - Other prepayments and current assets 28,000 13,250 Total $ 16,170,591 $ 1,567,441 11 On February 28, 2025, the Company entered into a loan agreement with HST Trading Limited, providing a principal amount of $ 500,000 at an annual interest rate of 5 %. The loan term is six months, with the principal and accrued interest due for repayment on or before February 27, 2026. On August 28, 2025, the Company entered into an Amendment to Loan Agreement with HST Trading Limited to extend the loan term from six months to twelve months with end date at February 27, 2026. On February 28, 2026, the Company entered into an Amendment to Loan Agreement with HST Trading Limited to extend the loan term for six months with end date at August 27, 2026. On August 7, 2025, the Company entered into a loan agreement with HST Trading Limited, providing a principal amount of $ 400,000 at an annual interest rate of 5 %. The loan term is six months, with the principal and accrued interest due for repayment on or before February 7, 2026. On February 8, 2026, the Company entered into an Amendment to Loan Agreement with HST Trading Limited to extend the loan term from six months to twelve months with end date at August 6, 2026. As of June 30, 2026, the outstanding balance of loan and interest receivable was $ 524,123 . On October 2, 2025, the Company entered into a loan agreement with Torchlight Group Limited, providing a principal amount of $ 2,000,000.00 at an annual interest rate of 4.5 %. The loan term is twelve months, with the principal and accrued interest due for repayment on or before October 1, 2026. As of June 30, 2026, the outstanding balance of loan and interest receivable was $ 884,935 . On December 1, 2025, the Company entered into a loan agreement with Shengshi Chuangtou Co., Limited, providing a principal amount of $ 2,000,000.00 at an annual interest rate of 4.5 %. The loan term is twelve months, with the principal and accrued interest due for repayment on or before November 30, 2026. As of June 30, 2026, the outstanding balance of loan and interest receivable was $ 717,088 . On June 1, 2026, the Company entered into a loan agreement with a third-party entity, providing a principal amount of $ 1,800,000.00 at an annual interest rate of 10 %. The loan term is twelve months, with the principal and accrued interest due for repayment on or before May 31, 2027. As of June 30, 2026, the outstanding balance of loan and interest receivable was $ 1,814,795 . Prepaid research and development costs consist of the expenses prepaid by the Company under multiple software and/or system development agreements, pursuant to which development service providers were engaged to design and develop software and/or system projects such as B2B E-commerce Platform. The Company expects such development projects to be completed before the end of calendar year 2026. The receivable from sale of equity investments represents proceeds from the Company’s disposition of its equity interests in Core Modu LLC and Megabyte Solutions Limited. The related sale agreements provide for installment payments. In July 2026, the Company received $ 1.0 million pursuant to the agreed payment terms and expects to collect the remaining balance within nine months. The receivable from sales of shares consists solely of the proceeds receivable from the shares of the Company’s common stock sold under the Sales Agreement and May 2026 Sales Agreement entered by the Company and Aegis Capital Corp. in connection with “at the market” offering program. The Company received all the proceeds in July 2026. Note 5 — Property and equipment, net As of June 30, 2026 and September 30, 2025, property and equipment consisted of the following: Schedule of property plant and equipment June 30, 2026 September 30, 2025 (unaudited) Leaseholder Improvement $ 12,759 - Subtotal - Less: Accumulated depreciation ( 1,595 ) - Property and equipment, net $ 11,164 $ - Note 6 — Equity Investments As of June 30, 2026 and September 30, 2025, equity investment consisted of the following: Schedule of equity method investments June 30, 2026 September 30, 2025 (unaudited) Aurora Technology Holding Limited $ 1,000,000 $ 1,000,000 Flower Mouse Network Technology Limited 1,200,000 1,200,000 Total cost basis 2,200,000 2,200,000 Less: impairment loss ( 700,000 ) - Carrying value $ 1,500,000 $ 2,200,000 12 On May 28, 2025, the Company entered into an equity investment agreement with Aurora Technology Holding Limited (“Aurora”), securing a 16.67 % ownership interest in Aurora, and for which the Company does not have the ability to exercise significant influence. The investment totaled $ 1 million. The Company measure investments in equity investments without a readily determinable fair value using a measurement alternative that measures these securities at the cost method minus impairment, if any, plus or minus changes resulting from observable price changes on a non-recurring basis. A third-party independent appraiser was engaged to calculate pre-investment fair value of Aurora. Gains and losses on these securities are recognized in other income and expenses. For the nine months ended June 30, 2026 and 2025, impairment loss for Aurora amounted to $ 300,000 and $ Nil , respectively. On August 6, 2025, Lear Group Limited, the subsidiary of the Company, entered into an equity investment agreement with Flower Mouse Network Technology Limited (“Flower”), securing a 15 % ownership interest in Flower, and for which the Company does not have the ability to exercise significant influence. The investment totaled $ 1.2 million. The Company measure investments in equity investments without a readily determinable fair value using a measurement alternative that measures these securities at the cost method minus impairment, if any, plus or minus changes resulting from observable price changes on a non-recurring basis. A third-party independent appraiser was engaged to calculate pre-investment fair value of Flower. Gains and losses on these securities are recognized in other income and expenses. For the nine months ended June 30, 2026 and 2025, impairment loss for Flower amounted to $ 400,000 and $ Nil , respectively. On February 2, 2026, the Company entered into an equity investment agreement with Megabyte Solutions Limited (“Megabyte”), securing a 14.28 % ownership interest in Megabyte, and for which the Company does not have the ability to exercise significant influence. The investment totaled $ 3 million. The Company measure investments in equity investments without a readily determinable fair value using a measurement alternative that measures these securities at the cost method minus impairment, if any, plus or minus changes resulting from observable price changes on a non-recurring basis. Gains and losses on these securities are recognized in other income and expenses. On May 29, 2026, the Company entered into an equity transfer agreement with a third-party buyer, pursuant to which the Company sold all shares in Megabyte Solutions Limited, which represents 14.28 % of the total issued share capital in Megabyte Solutions Limited, for an aggregate purchase price of $ 2,800,000 . Note 7 — Goodwill, net As of June 30, 2026 and September 30, 2025, goodwill consisted of the following: Schedule of goodwill, net June 30, 2026 September 30, 2025 (unaudited) Goodwill, gross $ - $ 3,514 Less: Accumulated impairment loss - ( 3,514 ) Goodwill, net $ - $ - Goodwill of $ 3,514 consists of $ 1,597 attributable to the acquisition of Baymax that occurred on December 13, 2024 and $ 1,917 attributable to the acquisition of Lear that occurred on October 18, 2024. For the nine months ended June 30, 2026 and 2025, impairment loss amounted to $ 0 and $ 3,514 , respectively Note 8 — Lease In March 2026, the Company leased office space at RM 2309, No. 1 Hung To Road, Kwun Tong, Kowloon, Hongkong, under a lease term from April 1, 2026 to March 31, 2028 , at a monthly rent of HKD 45,000 . As the office was available for use by the Company at March 31,2026 and the lease term exceeds 12 months, the Company recognized right-of-use asset and lease liabilities related to this lease as of March 31, 2026. 13 In May 2026, the Company leased an office space at Shenzhen China, under a lease term from May 18, 2026 to October 14, 2028, at a monthly rent of CNY 32,010.60 . As the lease term exceeds 12 months, the Company recognized right-of-use asset and lease liabilities related to this lease as of May 18, 2026. As of June 30, 2026 and September 30, 2025, lease information related to the Company’s operation leases is as following: Schedule of operating leases June 30, 2026 September 30, 2025 (unaudited) Operating lease right-of-use assets $ 225,884 $ - Current liabilities – lease liability, current 184,574 - Non-current liabilities – lease liability, non-current 45,221 - Total operating lease liabilities $ 229,795 $ - The following table presents lease cost and supplemental information for the three and nine months ended June 30, 2026 and 2025: Schedule of lease cost supplemental information 2026 2025 2026 2025 For the Three Months Ended June 30, For the Nine Months Ended June 30, 2026 2025 2026 2025 Operating lease cost $ 21,136 $ - $ 21,136 $ - Other information: Cash paid for amounts included in measurement of lease liabilities $ 10,658 $ - $ 16,407 $ - Remaining term in years 1.56 - 1.56 - Average discount rate – Operating leases 4 % 4 % Maturities of the Company’s lease liabilities are as follows: Schedule of Maturities lease liabilities Operating Lease For periods subsequent to June 30, 2026 The remaining three months ended September 30, 2026 $ 136,380 From October 1, 2026 to September 30, 2027 68,853 From October 1, 2027 to September 30, 2028 28,689 Less: Imputed interest ( 4,127 ) Present value of operating lease liabilities $ 229,795 Note 9 — Other payables and accrued liabilities As of June 30, 2026 and September 30, 2025, prepayments and other current assets consisted of the following: Schedule of other payables and accrued liabilities June 30, 2026 September 30, 2025 (unaudited) Payable to service providers $ 127,122 $ 317,283 State tax payable - 800 Accrued expenses 34,275 - Other payables 10 27 Total $ 161,407 $ 318,110 Other payables and accrued liabilities $ 161,407 $ 318,110 14 Note 10 — Loans payable Short-term loans Short term loan without interest From June 2023 to August 2023, the Company borrowed short-term loans due on demand without interest, amounting to $ 230,000 from three individuals for operating purposes. As of June 30, 2026 and September 30, 2025, the outstanding loan balances due to these individuals were $ 50,000 and $ 50,000 , respectively. The balance was presented on the consolidated balance sheet as a short-term loan. Note 11 — Standby Equity Purchase Agreement On July 4, 2025, the Company entered into the SEPA with the Investors. Pursuant to SEPA, the Company has the right, but not the obligation, to issue and sell, from time to time at the Company’s discretion, up to $ 6 million of shares of our common stock to the Investors at a price equal to 40%, or a percentage between 20% and 40% as determined by us, of the Minimum Price, or $1.20, subject to specified limitations and conditions, including a $0.5 million minimum per drawdown and a 9.99% beneficial ownership cap per investor. The SEPA has a three-year term and may be terminated earlier by the Company, and the Company expect to use any proceeds for working capital and general corporate purposes. The SEPA, in its entirety, is classified as a derivative liability because it did not meet the equity classification criteria under ASC 815-10, Derivatives and Hedging (“ASC 815-10”). The SEPA derivative is valued based on a scenario-based valuation model utilizing the expected draws, probability of the draws and risk-free rate inputs. The change in the fair value of the derivative is recorded in the Condensed Consolidated Statements of Operations. The SEPA is accounted for as a derivative and is recognized as a liability measured at fair value in accordance with ASC 820. The Company intends to utilize the SEPA to access capital to fund its operations. A third-party independent appraiser was engaged to calculate the estimated fair value of the SEPA. The estimated fair value of the SEPA liability on September 30, 2025, was $ 370,546 , which was determined using a scenario-based valuation model. The liability was remeasured to its fair value was $ 370,546 as of September 30, 2025, and is classified within non-current liabilities in the Consolidated Balance Sheets. As the SEPA was terminated by mutual agreement between the Investors and the Company on December 30, 2025, the SEPA liability on June 30, 2026 was $ Nil . This remeasurement resulted in the recognition of a gain of $ 370,546 for the nine months ended June 30, 2026, classified as change in fair value of SEPA in the Condensed Consolidated Statement of Operations. Assumptions used in the valuation are described below: Schedule of fair value measurement inputs and valuation techniques Valuation assumptions: June 30, 2026 September 30, 2025 Expected draws $ - $ 3,600,000 Expected probability of draws - 90 % Risk-free interest rate - 1.07 % The estimated fair value of the liability was determined using a scenario-based valuation model which assigned a probability to a number of different outcomes. The inputs and assumptions utilized in the calculation require management to apply judgment and make estimates including: (a) total expected draws of $ 3,600,000 at September 30, 2025; (b) the expected probability of the draws on the SEPA, which the Company estimate based on our expectation of the draws being completed; and (c) risk-free interest rate, which was determined by reference to the U.S. Treasury yield curve for time periods commensurate with the expected term of the agreement in relation to the date of the expected draw. These estimates may be subjective in nature and involve uncertainties and matters of judgment and therefore cannot be determined with exact precision. 15 Note 12 — Discontinued operations On March 4, 2025, the Company entered into a Share Purchase Agreement with Architectix Limited, pursuant to which the Company sold all issued and outstanding shares it owns in Inno Metal Studs Corp (“IMSC”) and Inno AI Tech Corp (“AT”) for an aggregate purchase price of $ 1,000 . On March 28, 2025, the Company entered into a Membership Interest Purchase Agreement with Strucraft Group Limited, pursuant to which the Company sold all the membership interest it owns in Castor Building Tech LLC (“CBT”), which represents 55 % of the outstanding membership interest in Castor Building Tech LLC, for an aggregate purchase price of $ 1,000 . On April 8, 2025, the Company entered into a Share Purchase Agreement with Strucraft Group Limited, pursuant to which the Company sold all issued and outstanding shares it owns in Inno Disrupts Inc. (“Disrupts”) for an aggregate purchase price of $ 100 . The Company determined that Disrupts was not a significant subsidiary, and the disposition of Disrupts did not constitute a strategic shift that would have a major effect on the Company’s operations or financial results. As a result, the results of operations for Disrupts were not reported as discontinued operations under the guidance of ASC 205 “Presentation of Financial Statements.” The disposition of Disrupts resulted in the recognition of a loss of $ 26,200 for the year ended September 30, 2025, classified as loss on investment disposal in the Consolidated Statement of Operations. In accordance with the provisions of ASC 205-20, we have not included the results of operations from discontinued operations in the results of continuing operations in the consolidated statements of operations. The results of operations from discontinued operations for the three and nine months ended June 30, 2026 and 2025, have been reflected as discontinued operations in the condensed consolidated statements of operations for the three and nine months ended June 30, 2026 and 2025, and consist of the following: Schedule of discontinued operations 2026 2025 2026 2025 For the Three Months Ended June 30, For the Nine Months Ended June 30, 2026 2025 2026 2025 Revenue $ - $ - $ - $ 2,000 Cost of sales - - - - GROSS PROFIT / (LOSS) - - - 2,000 Selling, general and administrative expenses (exclusive of expenses shown separately below) - - - 188,282 Impairment loss on goodwill - - - - Bad debt expense - - - - Depreciation - - - 30,930 Total operating expenses - 219,212 LOSS FROM OPERATIONS - - - ( 217,212 ) Interest income (expenses), net - - - ( 2,522 ) Other non-operating income (expense) - - - 23,938 Total other (expenses) income, net - - - 21,416 Net loss from discontinued operations - - - ( 195,796 ) Non-controlling interest - - - 69,517 Net loss from discontinued operations to the Company $ - $ - $ - $ ( 265,313 ) 16 In accordance with the provisions of ASC 205-20, we have included the net cash provided by discontinued operations in the consolidated statements of cash flows. The net cash provided by discontinued operations in the consolidated statements of cash flows for the nine months ended June 30, 2026 and 2025, consists of the following: 2026 2025 For the Nine Months Ended June 30, (unaudited) 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss from discontinuing operation $ - $ ( 265,313 ) Adjustments to reconcile net income to cash used in operating activities: Non-controlling interest - 69,517 Depreciation expense - 30,930 Non-cash operating lease expense - 69,003 Fixed assets disposal loss - 63,035 Prepayments and other current assets - 85,535 Accounts payable - 11,798 Operating lease liabilities - ( 4,282 ) Other payables and accrued liabilities - ( 437,889 ) Note payable - ( 21,282 ) Net cash (used in)/ provided by operating activities by discontinued operations - ( 398,948 ) CASH FLOWS FROM INVESTING ACTIVITIES: Fixed assets additions - ( 26,853 ) Net cash used in investing activities by discontinued operations - ( 26,853 ) CASH FLOWS FROM FINANCING ACTIVITIES CHANGES IN CASH AND CASH EQUIVALENT $ - $ ( 425,801 ) Note 13 — Related party transactions On October 14, 2024, the Company entered into an equity investment agreement with an individual, securing a 15 % ownership interest in Core Modu LLC. During the three and nine months ended June 30, 2025, other income of employee lease service from Core Modu was $ 15,000 . On March 28, 2025, the Company agreed to sell all of the membership interest it owns in Core Modu LLC, which represents 15 % of the outstanding membership interest in Core Modu LLC. Core Modu LLC is no longer considered as related parties of the Company. During the three and nine months ended June 30, 2026, the Company does not have any related party transaction. Note 14 — Equity The Company was incorporated in Texas on September 8, 2021. The total authorized shares of capital stock upon incorporation were 200,000,000 shares without par value. On November 30, 2022, the Company effected a forward stock split (the “Stock Split”) of the Company’s issued and outstanding shares of the common stock at a split ratio of 2-for-1. Further on July 24, 2023, the Company effected a reverse stock split (the “Reverse Stock Split”) of the Company’s issued and outstanding shares of the common stock at a split ratio of 1-for-2 such that every holder of common stock of the Company shall receive one share of common stock for every two shares of common stock held and to reduce the number of authorized shares of common stock from 200,000,000 to 100,000,000 . Shortly after the Reverse Stock Split, the Board of Directors of the Company approved issuance of additional shares to preserve the original purchase price per share of the shares sold in the period from February 1 to June 30, 2023. On October 9, 2024, the Company completed a 1-for-10 reverse stock split of its issued and outstanding common stock, no par value, (the “Reverse Stock Split”). As a result of the Reverse Stock Split, each share of common stock issued and outstanding immediately prior to October 9, 2024 were converted into one-tenth (1/10) of a share of common stock. The Common Stock began trading on a Reverse Stock Split-adjusted basis on the Nasdaq Capital Market on October 10, 2024. The trading symbols for the Common Stock remains “INHD”. The Reverse Stock Split did not reduce the number of authorized shares of Common Stock and did not change the par value of the Common Stock. The Reverse Stock Split affected all stockholders uniformly. Except to the extent that the Reverse Stock Split resulted in the stockholders’ fractional shares being rounded up, no other effects affect stockholder’s ownership percentage of the Company’s shares of Common Stock. 17 On December 22, 2025, the Company completed a 1-for-24 reverse stock split of its issued and outstanding common stock, no par value, (the “December 2025 Reverse Split”). As a result of the December 2025 Reverse Split, each share of common stock issued and outstanding immediately prior to December 22, 2025 were converted into one twenty-fourth (1/24) of a share of common stock. The December 2025 Reverse Split did not reduce the number of authorized shares of Common Stock and did not change the par value of the Common Stock. The December 2025 Reverse Split affected all stockholders uniformly. Except to the extent that the December 2025 Reverse Split resulted in the stockholders’ fractional shares being rounded up on the participant level, no other effects affect stockholder’s ownership percentage of the Company’s shares of Common Stock. 37 fractional shares were issued in connection with the December 2025 Reverse Split. All share numbers of the Company’s Common Stock are stated on a post-split basis. On May 4, 2026, the Company completed a 1-for-20 reverse stock split of its issued and outstanding common stock, no par value, (the “May 2026 Reverse Split”, and together with the December 2025 Reverse Split, the “Reverse Stock Split”). As a result of the May 2026 Reverse Split, the number of issued and outstanding shares of Common Stock of the Company was reduced from 50,410,884 shares before the May 2026 Reverse Split to 2,520,581 shares after fractional share settlement. The May 2026 Reverse Split did not reduce the number of authorized shares of Common Stock and did not change the par value of the Common Stock. The May 2026 Reverse Split affected all stockholders uniformly. Except to the extent that the May 2026 Reverse Split resulted in the stockholders’ fractional shares being rounded up on the participant level, no other effects affect stockholder’s ownership percentage of the Company’s shares of Common Stock. All references to number of shares, and to per share information in the consolidated financial statements have been retroactively adjusted. As of June 30, 2026 and September 30, 2025, after giving effect to the stock splits of the outstanding shares of Common Stock, there were 2,520,581 and 26,976 shares of Common Stock issued and outstanding, respectively. The total authorized number of shares of capital stock was 1,000,000,000 shares of Common Stock without par value. In December 2022, The Company issued 30 shares ( 596 shares pre–Reverse Stock Split) of its common stock at a price of $ 16,666.67 per share to an accredited investor for $ 500,000 in cash. In February 2023, The Company issued 6 shares ( 113 shares pre–Reverse Stock Split) of its common stock at a price of $ 16,666.67 per share to an accredited investor for $ 100,000 in cash. In March 2023, The Company issued 16 shares ( 329 shares pre–Reverse Stock Split) of its common stock at a price of $ 18,750 per share to an accredited investor for $ 300,000 in cash. On June 20, 2023, the Company issued 3 shares ( 55 shares pre-Reverse Stock Split) of its common stock for a total value of $ 50,000 for services to be rendered during next twelve months by the immediate relative of the Company’s Chief Financial Officer. On June 20, 2023, the Company issued 4 shares ( 83 shares pre-Reverse Stock Split) of its common stock for a total value of $ 75,000 for services to be rendered during next twelve months by one nonemployee contractor. These shares were valued at $ 17,857.14 per share, which was the per share price for the most recent sale of the Company’s capital stock to accredited investors. On January 1, 2024, the Company issued 10 shares ( 209 shares pre-Reverse Stock Split) of its common stock for a total value of $ 72,000 for services to be rendered during next twelve months by one advisor firm. The registration statement for the Company’s Initial Public Offering (the “Offering”) was declared effective on November 9, 2023. The Common Stock commenced trading on the Nasdaq Capital Market (the “Nasdaq”) on December 14, 2023, under the symbol “INHD.” The closing of the Offering took place on December 18, 2023. On December 18, 2023, in connection with the closing of the initial public offering of 521 shares (“the Shares”) ( 10,417 shares pre-Reverse Stock Split) 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 $ 19,200 per share, the Company also granted the underwriters an option exercisable for 45-days to purchase up to 78 shares ( 1,563 shares pre-Reverse Stock Split) 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 42 shares ( 839 shares pre-Reverse Stock Split) of Common Stock at an exercise price of $ 23,040 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 42 shares ( 839 shares pre-Reverse Stock Split) of the Company’s common stock in connection with the Company’s initial public offering. Pursuant to the warrant assumption agreement, the Company paid an aggregate amount of $ 13,000 for the assumption of the Warrants. The paid amount of $ 13,000 was recorded to reduce Additional Paid-in Capital. As of June 30, 2026, the Warrants are no longer outstanding. 18 The total gross proceeds from the Offering were $ 10,000,000 , before deducting underwriting discounts and other offering expenses associated with the Offering payable by the Company or paid by the Company. Transaction costs related to the offering amounted to $ 2,140,466 , consisting of $ 700,000 of underwriting fees, $ 345,876 of underwriting related expenses, $ 595,000 of legal fees and $ 499,590 of other costs. Of the total transaction cost of $ 2,140,466 , $ 590,466 in transaction costs were incurred and paid by the company before the closing date. These costs were recorded as deferred offering costs and were offset to equity upon the completion of the IPO. $ 8,450,000 total net cash from the Offering has been received by the Company on December 19, 2023. On October 31, 2024, the Company entered into a securities purchase agreement with certain investors, providing for the sale and issuance of 1,042 shares ( 20,834 shares pre-Reverse Stock Split) of the Company’s common stock, no par value, for an aggregate purchase price of $ 2,000,000 at $ 1,919.39 per share (the “October 2024 Private Placement”). The offering closed on November 6, 2024. On November 13, 2024, the Company entered into a securities purchase agreement with nine non-U.S. investors, pursuant to which the Company agreed to issue and sell in a private placement offering (the “November 2024 Private Placement”) an aggregate of 1,519 shares ( 30,382 shares pre-Reverse Stock Split) of common stock, no par value, at a purchase price per share of $ 2,300 , for gross proceeds of approximately $ 3.5 million, of which proceeds will be used for working capital and other general corporate purposes. The offering closed on December 13, 2024. On December 11, 2024, the Company entered into a securities purchase agreement with nine non-U.S. investors, pursuant to which the Company agreed to issue and sell in a private placement offering (the “December 2024 Private Placement”) an aggregate of 1,458 shares ( 29,167 shares pre-Reverse Stock Split) of common stock, no par value, at a purchase price per share of $ 1,200 , for gross proceeds of approximately $ 1.75 million, of which proceeds will be used for working capital and other general corporate purposes. The offering closed on December 23, 2024. On January 16, 2025, pursuant to the Omnibus Incentive Plan, the Company granted 313 shares ( 6,250 shares pre-Reverse Stock Split) of our common stock to our Chief Executive Officer Ding Wei, and 107 shares ( 2,140 shares pre-Reverse Stock Split) of our common stock to our Chief Financial Officer Mengshu Shao. On May 28, 2025, pursuant to 2025 Omnibus Incentive Plan, the Company granted 1,833 shares ( 36,667 shares pre-Reverse Stock Split) of its common stock to the Company’s employees. On June 2, 2025, the Company entered into a securities purchase agreement with certain investors, pursuant to which the Company agreed to issue and sell, in a registered direct offering by the Company directly to the investors (the “June 2025 Offering”), an aggregate of 2,204 shares ( 44,084 shares pre-Reverse Stock Split) (the “June 2025 Shares”) of its common stock, no par value, at a purchase price per share of $ 240.02 . The June 2025 Offering closed on June 6, 2025 and the Company received gross proceeds of $ 529,000 . On January 27, 2025, the Company entered into a Standby Equity Purchase Agreement (the “January SEPA”) with certain investors effective as of January 28, 2025. Pursuant to January SEPA, the Company has the right to issue and sell to the investors, from time to time, up to $ 15 million worth of shares of the Company’s common stock, no par value per share, subject to the terms and conditions specified in the January SEPA. On June 20,2025, the Company issued and sold an aggregate of 2,917 shares ( 58,334 shares pre-Reverse Stock Split) (the “January 2025 SEPA Shares”) of its common stock at a purchase price per share of $ 360 , pursuant to January SEPA. 19 On July 4, 2025, the Company entered into the Standby Equity Purchase Agreement (the “July SEPA”) with the Investors. Pursuant 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 6,667 shares ( 133,334 shares pre-Reverse Stock Split) of its common stock at a purchase price per share of $ 240 , pursuant to July SEPA. On 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, 2,500 shares ( 50,000 shares pre-Reverse Stock Split) of its common stock, at a purchase price of $ 1,720 per share and pre-funded warrants to purchase up to 1,667 shares ( 33,334 shares pre-Reverse Stock Split) of common stock, at a purchase price of $ 86.3998 per pre-funded warrant (equal to $ 86.4 minus the exercise price of $ 0.0002 per pre-funded warrant). The closing of the offering occurred on September 11, 2025. The Company 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 26, 2025, 799,998 pre-funded warrants were exercised for the issuance of 1,667 shares ( 33,334 shares pre-Reverse Stock Split) of the Company’s common stock. On November 12, 2025, the Company entered into a sales agreement (the “Sales Agreement”) with Aegis Capital Corp. (the “Sales 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 “Placement Shares”). From November 12, 2025 to May 12, 2026, the Company issued an aggregate of 2,277,083 shares of common stock (or 45,541,667 shares of common stock before the Reverse Stock Split effective on May 4, 2026) for the gross proceeds of approximately $ 38.7 million through the Sales Agent pursuant to the Sales Agreement. The Sales Agreement automatically terminated on May 12, 2026, the six-month anniversary of the execution date of the Sales Agreement, with 39,240 shares of common stock unsold as of the termination date. On December 26, 2025 the Company entered into a securities purchase agreement with each of ten (10) non-U.S. investors relating to the issuance and sale of an aggregate of 150,000 shares ( 3,000,000 shares pre-Reverse Stock Split) of the Company’s common stock with no par value, at the market price of $ 26.20 per share, for an aggregate purchase price of $ 3,930,000 . On January 16, 2026, 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 “January 2026 Offering”), an aggregate of 66,600 shares ( 1,332,000 shares pre-Reverse Stock Split)of its common stock, no par value, at a purchase price per share of $ 11 . The January 2026 Offering closed on January 21, 2026 and the Company received gross proceeds of $ 732,600 . On May 15, 2026, the Company entered into a sales agreement (the “May 2026 Sales Agreement”) with Aegis Capital Corp. (the “Sales Agent”), in connection with an “at the market” offering program. Pursuant to the May 2026 Sales Agreement, 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 $ 60.0 million (the “Shares”). From May 15, 2026 to June 30, 2026, the Company sold an aggregate of 39,123 shares of common stock, which was previously issued under the Sales Agreement dated November 12, 2025, for the gross proceeds of approximately $ 41,000 through the Sales Agent pursuant to the May 2026 Sales Agreement. Note 15 — Concentration of risk Credit risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. As of June 30, 2026 and September 30, 2025, $ 26,185,827 and $ 10,130,942 respectively, were deposited with various major financial institutions in the United States and in Hong Kong. Accounts at each institution in the United States are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $ 250,000 . As of June 30, 2026 and September 30, 2025, the Company had deposits in excess of the FDIC insurance limit with two financial institutions in the United States with $ 520,197 and $ 8,806,910 uninsured, respectively. Accounts at each institution in Hong Kong are insured by the Hong Kong Deposit Protection Board (HKDPB) for up to HKD 800,000 . As of June 30, 2026 and September 30, 2025, the Company had deposits in excess of the HKDPB insurance limit with three and one financial institutions in Hong Kong with $ 24,391,312 and $ 429,580 uninsured, respectively. 20 Accounts receivable are typically unsecured and derived from revenue earned from customers, thereby exposing the Company to credit risk. The risk is mitigated by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances. Other receivables are typically unsecured and derived from loans to other parties and other activities, thereby exposing the Company to credit risk. The risk is mitigated by the Company’s assessment of the counterparties’ creditworthiness and its ongoing monitoring of outstanding balances. Customer and vendor concentration risk For the three and nine months ended June 30, 2026, four customers accounted for 95 % of the Company’s total revenues and four customers accounted for 98 % of the Company’s total revenues, respectively. For the three and nine months ended June 30, 2025, two customers accounted for 100 % and 76 % of the Company’s total revenues, respectively. As of June 30, 2026 and September 30, 2025, $ 935,666 and $ Nil outstanding of accounts receivable. For the three and nine months ended June 30, 2026, three suppliers accounted for 82 % of the Company’s total purchases and three suppliers accounted for 83 % of the Company’s total purchases. For the three and nine months ended June 30, 2025, three suppliers accounted for 100 % of the Company’s total purchases. As of June 30, 2026 and September 30, 2025, $ Nil outstanding of accounts payable. Note 16 — Commitments and contingencies From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. In December 2024, a former shareholder of the Company (the “Shareholder”) filed a complaint against the Company and other entities and individuals affiliated with the Company in the Orange County Superior Court of California, alleging financial losses related to his investment in entities affiliated with the Company. The Shareholder claims he invested approximately $500,000 and later sold his shares for $7 million but alleges that, absent interference by an initial public offering organizer, the shares could have been sold for $9 million. Accordingly, he claims to have lost a potential gain of $2 million. In September 2025, the Shareholder submitted a request to the Orange County Superior Court of California for dismissal of the complaint without prejudice and the compliant was dismissed accordingly. The Company filed a memorandum of costs in October 2025 for a claim for attorney fees, and the Shareholder then filed a motion to tax the memorandum of costs filed by the Company. On April 6, 2026, the court denied the Company’s claim for attorney fees, and granted the Shareholder’s motion to tax costs, resulting in no cost award issued in the Company’s favor. Except as set forth above, we are not currently a party to any legal proceeding that we believe would adversely affect our financial position, results of operations, or cash flows and are not aware of any material legal proceedings contemplated by governmental authorities. Note 17 — Segment Information Reportable Segments The Company operates as a single one reportable segment, which is consistent with how the Chief Operating Decision Maker (“CODM”), the Chief Executive Officer, allocates resources and assesses performance. The Company’s operations are centralized and integrated, with financial results reviewed and managed on a consolidated basis. Accordingly, management has determined that the Company has one reportable segment under ASC Topic 280, Segment Reporting. Measure of Segment Profit or Loss The CODM reviews financial information on a consolidated basis, using Net Income as the primary measure of segment performance to monitor budget versus actual results and decide where to allocate and invest additional resources to achieve continued growth. Net Income is defined as revenue less cost of goods sold and operating expenses, and other segment items (including interest income, interest expense, other income and other expenses), and income taxes. 21 Significant Segment Expense Categories Provided to the CODM The CODM regularly receives and reviews the following expense categories, which are included in the segment’s measure of profit or loss. Schedule of segment information 2026 2025 2026 2025 For the Three Months Ended June 30, For the Nine Months Ended June 30, 2026 2025 2026 2025 Revenues $ 2,067,662 $ 1,086,250 $ 4,456,054 $ 1,760,350 Cost of revenues 1,974,238 1,102,300 4,266,648 1,718,900 Sales and marketing expenses – Marketing service expenses 50,000 60,000 150,000 80,000 General and administrative expenses – Payroll and stock-based compensation expenses 237,548 1,186,200 418,932 2,307,751 – Professional service expenses 1,236,720 263,065 2,216,976 894,916 – Office related expenses 31,574 18,325 71,640 113,818 – Lease expenses 46,209 17,000 118,209 29,500 Other segment expenses (income), net 106,548 ( 14,352 ) ( 66,137 ) 2,120,634 Income tax expense - - - Net loss from continuing operations $ ( 1,615,175 ) $ ( 1,546,288 ) $ ( 2,720,214 ) $ ( 5,505,169 ) Net loss from discontinued operations - - - ( 195,796 ) The following table presents revenues by geographic area based on the sales location of our products: Schedule of revenues by geographic area 2026 2025 2026 2025 For the Three Months Ended June 30, For the Nine Months Ended June 30, 2026 2025 2026 2025 Hong Kong $ 2,067,662 $ 1,086,250 $ 4,456,054 $ 1,760,350 Total revenue $ 2,067,662 $ 1,086,250 $ 4,456,054 $ 1,760,350 Note 18 — Stock-based compensation The Company recorded stock-based compensation expense as follows: Schedule of stock-based compensation expense 2026 2025 2026 2025 For the Three Months Ended June 30, For the Nine Months Ended June 30, 2026 2025 2026 2025 Restricted stock: – Stock awards $ - $ 1,135,200 $ - $ 2,185,205 Total $ - $ 1,135,200 $ - $ 2,185,205 Note 19 — Basic and diluted net loss per share Basic loss per share and diluted loss per share have been calculated in accordance with ASC 260 on computation of earnings per share for the three and nine months ended June 30, 2026 and 2025 as follows: Potential dilutive securities are excluded from the calculation of diluted EPS in loss periods as their effect would be anti-dilutive. Schedule of basic and diluted net loss per share 2026 2025 2026 2025 For the Three Months Ended June 30, For the Nine Months Ended June 30, 2026 2025 2026 2025 Statement of Operations Summary Information: Net loss from continued operation $ ( 1,615,175 ) $ ( 1,546,288 ) $ ( 2,720,214 ) $ ( 5,505,169 ) Weighted- average common shares outstanding – basic and diluted 2,317,314 10,738 949,236 8,543 Net loss per share, basic and diluted from continued operation $ ( 0.70 ) $ ( 144.00 ) $ ( 2.87 ) $ ( 644.40 ) Net loss from discontinued operation $ - $ - $ - $ ( 265,313 ) Weighted- average common shares outstanding – basic and diluted - 10,738 8,543 Net loss per share, basic and diluted from continued operation $ - $ - $ - $ ( 31.05 ) As of June 30, 2026 and September 30, 2025, there were no potentially dilutive shares. Note 20 — Subsequent events On July 10, 2026, the Company entered into an Equity Transfer Agreement with a third-party buyer, pursuant to which the Company sold all shares in Flower Mouse Network Technology Limited, which represents 15 % of the total issued share capital in Flower Mouse Network Technology Limited, for an aggregate purchase price of $ 800,000 . On July 16, 2026, the Company incorporated a new wholly-owned subsidiary, Hyperlink Group Limited, in the British Virgin Islands. 22 ITEM 2. - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes that appear elsewhere in this Quarterly Report on Form 10-Q. All share and per-share information presented in this report has been retroactively adjusted to reflect the 1-for-24 reverse stock split of our common stock, which was effective on December 22, 2025. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements as a result of various factors, including those set forth under the heading “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report on Form 10-Q. Cautionary Note Regarding Forward-Looking Statements Some of the information in this document contains, or has incorporated by reference, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements typically are identified by the use of terms such as “may,” “believe,” “anticipate,” “expect,” “plan,” “predict,” “estimate,” “will be,” or other similar words and phrases, although some forward-looking statements are expressed differently. You should be aware that our actual results could differ materially from results anticipated in the forward-looking statements due to a number of factors, including, but not limited to, our ability to effectively operate our business segments, our ability to manage our research, development, expansion, growth, and operating expenses, our ability to evaluate and measure our business, prospects, and performance metrics, our ability to complete, directly and indirectly, and succeed in a highly competitive and evolving industry, our ability to respond and adapt to changes in technology and customer behavior, our ability to protect our intellectual property and to develop, maintain, and enhance a strong brand, and other factors relating to our industry, operations, and results of operations. You should also consider carefully the statements under “Risk Factors,” as disclosed in our annual report on Form 10-K for the fiscal year ended September 30, 2025, which address additional factors that could cause our actual results to differ from those set forth in the forward-looking statements. Given these uncertainties, current or prospective investors are cautioned not to place undue reliance on any such forward-looking statements. We undertake no obligation to update any such factors or forward-looking statements to reflect future events or developments. Overview We are a Texas holding company. Through our Hong Kong operating subsidiaries, we are an innovative technology company that engages primarily in the business of recycled consumer electronic devices, as 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 currently derive all of our revenue in our business of recycled consumer electronic devices from Lear Group Limited, our wholly owned operating subsidiary in Hong Kong. We also have another wholly owned subsidiary in Hong Kong, Baymax High Technology Co., Limited, and other wholly owned subsidiaries incorporated in the British Virgin Islands through which we conduct research and development and other non-revenue generating technology-related activities intended to support and strengthen our recycled consumer electronics business. 23 Recent Developments May 2026 At the Market Offering On May 15, 2026, the Company entered into a sales agreement (the “May 2026 Sales Agreement”) with Aegis Capital Corp. (the “Sales Agent”), in connection with an “at the market” offering program. Pursuant to the May 2026 Sales Agreement, 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 $60.0 million (the “Shares”). The Company is not obligated to sell any Placement Shares under the Sales Agreement. Subject to the terms and conditions of the Sales Agreement, the Sales Agent will use commercially reasonable efforts, consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations and the rules of The Nasdaq Stock Market LLC (“Nasdaq”), to sell Placement Shares from time to time based upon the Company’s notice and instructions, up to the amount specified therein. Under the Sales Agreement, the Sales Agent may sell Placement Shares by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, including sales made directly on Nasdaq or on any other existing trading market or directly to the Sales Agent as principal in negotiated transactions. The Sales Agent may also sell Placement Shares by any other method permitted by law, including in privately negotiated transactions, with the Company’s consent. In accordance with the Sales Agreement, the Company will pay the Sales Agent in cash, upon each sale of Placement Shares pursuant to the Sales Agreement, an amount equal to three percent (3.0%) of the gross proceeds from each sale of Placement Shares. The Sales Agreement may be terminated by the Company and the Sales Agent at any time upon notice to the other party. If not terminated earlier, the Sales Agreement will automatically terminate upon the earlier to occur of (i) May 12, 2026 (the sixth month anniversary of the date of the Sales Agreement), or (ii) the issuance and sale of all of the Placement Shares under the Sales Agreement. From May 15, 2026 to June 30, 2026, the Company sold an aggregate of 39,123 shares of common stock, which was previously issued under the Sales Agreement dated November 12, 2025, for the gross proceeds of approximately $41,000 through the Sales Agent pursuant to the May 2026 Sales Agreement. May 2026 Reverse Stock Split On May 4, 2026, we effected a one-for-twenty (1:20) reverse stock split of our issued and outstanding shares of common stock (the “May 2026 Reverse Stock Split” or the “2026 Split”). As a result of the Split, every twenty (20) shares of common stock issued and outstanding immediately prior to the effective date was automatically converted into one share of common stock. The 2026 Split was implemented to comply with Nasdaq’s minimum bid price requirement. The Split did not reduce the number of authorized shares of common stock and did not affect the par value of the common stock. January Securities Purchase Agreement On January 16, 2026, 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 “January 2026 Offering”), an aggregate of 1,332,000 shares of its common stock, no par value, at a purchase price per share of $0.55. The January 2026 Offering closed on January 21, 2026 and the Company received gross proceeds of $732,600. 24 December 2025 Reverse Stock Split On December 22, 2025, we effected a one-for-twenty-four (1:24) reverse stock split of our issued and outstanding shares of common stock (the “May 2025 Reverse Stock Split” or the “Split”). As a result of the Split, every twenty-four (24) shares of common stock issued and outstanding immediately prior to the effective date was automatically converted into one share of common stock. The Split was implemented to comply with Nasdaq’s minimum bid price requirement. The Split did not reduce the number of authorized shares of common stock and did not affect the par value of the common stock. At the Market Offering On November 12, 2025, the Company entered into a sales agreement (the “Sales Agreement”) with Aegis Capital Corp. (the “Sales 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 “Placement Shares”). The Company is not obligated to sell any Placement Shares under the Sales Agreement. Subject to the terms and conditions of the Sales Agreement, the Sales Agent will use commercially reasonable efforts, consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations and the rules of The Nasdaq Stock Market LLC (“Nasdaq”), to sell Placement Shares from time to time based upon the Company’s notice and instructions, up to the amount specified therein. Under the Sales Agreement, the Sales Agent may sell Placement Shares by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, including sales made directly on Nasdaq or on any other existing trading market or directly to the Sales Agent as principal in negotiated transactions. The Sales Agent may also sell Placement Shares by any other method permitted by law, including in privately negotiated transactions, with the Company’s consent. In accordance with the Sales Agreement, the Company will pay the Sales Agent in cash, upon each sale of Placement Shares pursuant to the Sales Agreement, an amount equal to three percent (3.0%) of the gross proceeds from each sale of Placement Shares. The Sales Agreement may be terminated by the Company and the Sales Agent at any time upon notice to the other party. If not terminated earlier, the Sales Agreement will automatically terminate upon the earlier to occur of (i) May 12, 2026 (the sixth month anniversary of the date of the Sales Agreement), or (ii) the issuance and sale of all of the Placement Shares under the Sales Agreement. From November 12, 2025 to March 31, 2026, the Company issued an aggregate of 3,541,667 shares of common stock (or 85,000,000 shares of common stock before the December 2025 Reverse Stock Split) for the gross proceeds of approximately $28 million through the Sales Agent pursuant to the Sales Agreement. From March 31, 2026 to May 12, 2026, the Company issued 1) 2,099,883 shares of common stock (or 41,997,660 shares of common stock before the May 2026 Reverse Stock Split) for the gross proceeds of approximately $10.7 million through the Sales Agent pursuant to the Sales Agreement; and 2) 2,000,117 shares of common stock (the “Issued and Unsold Shares”), none of which were sold till the termination of the Sales Agreement. In July 2026, all of the Issued and Unsold Shares were returned to the transfer agent of the Company and then cancelled. In accordance with the Sales Agreement, the Sales Agreement automatically terminated on May 12, 2026, the six-month anniversary of the execution date of the Sales Agreement. December Securities Purchase Agreement On December 26, 2025, the Company entered into a securities purchase agreement with certain investors, pursuant to which the Company agreed to issue and sell, by the Company directly to the investors (the “December 2025 Offering”), an aggregate of 3,000,000 shares (the “December 2025 Shares”), on a post-reverse stock split basis, of its common stock, no par value, at a purchase price per share of $1.31. The December 2025 Offering closed on January 6, 2026 and the Company received gross proceeds of $3.93 million. 25 Key Performance Indicators (“KPIs”) In addition to the measures presented in our consolidated financial statements, our management regularly monitors certain KPIs for our business carried out through our Hong Kong operating subsidiaries. The KPIs used by the Company include: The turnover rate of inventory Our business is reliant on timely delivery of our products by our Hong Kong operating subsidiaries. At the same time, our products are expensive to warehouse. Our Hong Kong operating subsidiaries strive to achieve roughly 3-6 months of inventory to balance our cost of inventory against the risk of not having products when needed. Our Hong Kong operating subsidiaries do this by setting up long-term cooperative relationship with multiple local and national suppliers to obtain a better payment cycle to secure the products and to maximize the use of funds. At the same time, our Hong Kong operating subsidiaries maintain a dynamic level of inventories of recycled consumer electronic devices, based on our knowledge of the prevailing market trend and estimation of electronic devices price fluctuation. We continuously adjust our inventory levels by lowering inventory of products in downward trend and increasing inventory of those in upward trend. The collection period of accounts receivable Timely payments from customers are essential to our Hong Kong operating subsidiaries’ successful business. Based on our historical collectability experience, we will target strategic relationships with large-scale and professional suppliers to reduce the risk associated with accounts receivable and reduce the days outstanding for accounts receivable. Eventually, we expect to achieve the goal of receiving 100% of the payment before products leave the shop of our Hong Kong operating subsidiaries. The growth of total operating income We maintain internal long-term targets for both gross profit and operating income, based partly on long-term revenue growth targets and partly on execution and internal controls. Ultimately, we strive to deliver profitable long-term growth. Results of Operation The following table presents certain Consolidated statement-of-operations information and presentation of that data as a percentage of change from year to year. For the Three Months Ended June 30, 2026, and 2025 Three Months Ended June 30, 2026 2025 Revenues $ 2,067,662 $ 1,086,250 90 % Costs of goods sold 1,974,238 1,102,300 79 % Selling, general and administrative expenses (exclusive of items shown separately below) 1 ,602,051 1,544,590 4 % Operating loss (1 ,508,627 ) (1,560,640 ) -3 % Other income (expenses) (106,548 ) 14,352 -842 % Loss before income taxes (1,615,175 ) (1,546,288 ) 4 % Income tax expense - - - % Net loss from discontinued operations (1,615,175 ) (1,546,288 ) 63 % Net loss (1,615,175 ) (1,546,288 ) 4 % Non-controlling interest - - - % Net loss attributable to Inno Holdings Inc. $ (1,6 15,175 ) $ (1,546,288 ) 4 % 26 For the Nine Months Ended June 30, 2026, and 2025 Nine Months Ended June 30, 2026 2025 Revenues $ 4,456,054 $ 1,760,350 153 % Costs of goods sold 4,266,648 1,718,900 148 % Selling, general and administrative expenses (exclusive of items shown separately below) 2 ,975,757 3,425,985 -13 % Impairment loss - 3,514 -100 % Operating loss (2,786,351 ) (3,388,049 ) -18 % Other income (expenses) 66,137 (2,117,120 ) -103 % Loss before income taxes (2,720,214 ) (5,505,169 ) -51 % Income tax expense - - % Net loss from discontinued operations - (195,796 ) -100 % Net loss (2,720,214 ) (5,700,965 ) -52 % Non-controlling interest - 69,517 -100 % Net loss attributable to Inno Holdings Inc. $ (2,720,214 ) $ (5,770,482 ) -53 % Revenues Revenue for the three months ended June 30, 2026 increased 90% to $2,067,662 in comparison to $1,086,250 for the three months ended June 30, 2025. Revenue for the three months ended June 30, 2026 consists solely of the Company’s business of electronic products trading. The business of electronic products trading contributes to the increase in revenue for the three months ended June 30, 2026 against the comparable period in 2025. Our revenues are significantly impacted by demand for economic conditions including costs of labor, materials and other variables that impact the cost of our finished goods. We cannot ensure that growth will continue, and our business may be adversely affected by the negative overall economic conditions currently being experienced. Costs of Goods Sold Cost of Goods Sold (COGS) includes electronic products purchased from our suppliers. COGS for the three months ended June 30, 2026, increased to $1,974,238 in comparison to $1,102,300 for the three months ended June 30, 2025. COGS for the three months ended June 30, 2026 consists solely of electronic products purchased from our suppliers in the Company’s business of electronic products trading. The business of electronic products trading contributes to the increase in COGS for the three months ended June 30, 2026 against the comparable period in 2025. Selling, General and Administrative Expenses Selling, general and administrative expenses for the three months ended June 30, 2026, increased 4% to $1,602,051 in comparison to $1,544,590 for the comparable period in 2025. The main reason for the increase was an increase in professional expenses such as legal fees. Operating Loss Operating loss was $1,508,627 for the three months ended June 30, 2026, in comparison to an operating loss of $1,560,640 for the comparable period in 2025. The increase in operating loss was primarily attributed to the increase in selling, general and administrative expenses, as discussed above. 27 Other Income (Expense) Other expense for the three months ended June 30, 2026, was $106,548, in comparison to other income of $14,352 for the comparable period in 2025. Other expense for the three months ended June 30, 2026, primarily consisted of a $293,868 interest income from bank deposits and a $200,000 loss in fair value of equity investment. In contrast, other income for the three months ended June 30, 2025, primarily consisted of a $14,549 interest income. Net Loss Net loss for the three months ended June 30, 2026 was $1,615,175, in comparison to net loss of $1,546,288 for the three months ended June 30, 2025. The increase in net loss was primarily due to changes in revenue, costs and expenses as outlined above. Liquidity and Capital Resources Sources of Liquidity During the three months ended June 30, 2026 and 2025, we primarily funded our operations with cash generated from operations, private shares offerings, and at the market offering. We had cash of $33,238,616 as of June 30, 2026 compared to $10,130,942 of cash as of September 30, 2025. The cash increase was primarily due to the proceeds from the at-the market offering and private-placement offering during the periods ended June 30, 2026, and offset by the cash usage in operating and investing activities during the periods ended June 30, 2026. The Company has participated in at-the-market offering and private-placement offering during the nine months ended June 30, 2026. On November 12, 2025, the Company entered into a sales agreement (the “Sales Agreement”) with Aegis Capital Corp. (the “Sales 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 May 12, 2026, the Company issued an aggregate of 2,277,083 shares of common stock (or 45,541,667 shares of common stock before the Reverse Stock Split effective on May 4, 2026) for the gross proceeds of approximately $38.7 million through the Sales Agent pursuant to the Sales Agreement. On December 26, 2025, the Company entered into a securities purchase agreement with certain investors, providing for the sale and issuance of 3,000,000 shares of the Company’s common stock, no par value, for an aggregate purchase price of $3.93 million at $1.31 per share (the “December 2025 Offering”). The offering closed on January 6, 2026. On January 16, 2026, 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 “January 2026 Offering”), an aggregate of 1,332,000 shares of its common stock, no par value, at a purchase price per share of $0.55. The January 2026 Offering closed on January 21, 2026 and the Company received gross proceeds of $732,600. On May 15, 2026, the Company entered into a sales agreement (the “May 2026 Sales Agreement”) with Aegis Capital Corp. (the “Sales Agent”), in connection with an “at the market” offering program. Pursuant to the May 2026 Sales Agreement, 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 $60.0 million (the “2026 At-the-Market Offering”). From May 15, 2026 to June 30, 2026, the Company sold an aggregate of 39,123 shares of common stock, which was previously issued under the Sales Agreement dated November 12, 2025, for the gross proceeds of approximately $41,000 through the Sales Agent pursuant to the May 2026 Sales Agreement. As disclosed in the notes to our consolidated financial statements of our 2025 Annual Report, our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern. This determination is based on our recurring losses from operations, negative cash flows and liquidity position at the time of issuance of our financial statements in our 2025 Annual Report, which raised substantial doubt about our ability to continue as a going concern within the twelve (12) months after the date that our financial statements were issued in our 2025 Annual Report. Since then, our management has undertaken plans to alleviate our liquidation conditions primarily through seeking additional capital through equity financings. Our management has also evaluated other plans including (i) seeking additional capital through equity or debt financings; (ii) pursuing strategic investments or partnerships; and (iii) improving operating cash flows through cost control measures and operational efficiencies. Based on our current operating plans as evaluated by our management, we believe our cash and cash equivalents on hand as of June 30, 2026 of $33,238,616 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. 28 There can be no assurance that our future capital needs will not increase to a level that renders our then-current liquidity insufficient, that our operating plans will be successfully realized as anticipated or will be sufficient to mitigate any liquidity issues, or that additional financing will be available on acceptable terms, or at all. If our plans or circumstances change materially, or if our actual future cash requirements exceed current estimates, substantial doubt about our ability to continue as a going concern may arise. We may 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. We may be required in the near future to issue debt or sell our Company’s equity securities in order to raise additional cash, although there are no firm arrangements in place for any such financing at this time. We cannot provide any assurances as to whether we will be able to secure the necessary financing, or the terms of any such financing transaction if one were to occur. The failure to secure such financing could severely curtail our plans for future growth or in more severe scenarios, the continued operations of our Company. Working Capital As of June 30, 2026 and September 30, 2025, our working capital was $53,943,012 and $13,337,273, respectively. The historical seasonality in our business and our capital raising activities during the year can cause cash and cash equivalents, inventory, and accounts payable to fluctuate, resulting in changes in our working capital. Cash Flows Operating Activities For the nine months ended June 30, 2026, net cash used in operating activities was $11,632,320, primarily driven by the net loss from continuing operation of $2,720,214, change in fair value of SEPA of $370,546, change in fair value of investment of $700,000, a $1,887,120 increase in inventories, a $6,367,574 increase in prepayments and other current assets, and a $156,703 decrease in other payables and accrued liabilities. For the nine months ended June 30, 2025, net cash used in operating activities was $3,704,646, primarily driven by the net loss from continuing operation of $5,505,169 and net loss from discontinuing operation of $265,313, partially offset by non-cash items of stock-based compensation expense of $2,185,205 and loss from investment disposal of $2,152,522, and working capital used cash of $1,872,943, which was primarily driven by a $1,026,834 increase in prepayments and other current assets, a $2,058,800 increase in inventories and a $805,579 increase in accounts payable, and operating cash flow used by discontinued operations of $398,948. Investing Activities For the nine months ended June 30, 2026, net cash used in investing activities was $3,012,756 which is purchase of investment in equity investee. For the nine months ended June 30, 2025, net cash used in investing activities was $1,522,453 and was primarily the purchase of investment in equity investee. Financing Activities Net cash provided by financing activities was $37,752,750 and $8,535,250, respectively, for the nine months ended June 30, 2026 and 2025. For the nine months ended June 30, 2026, net cash provided by financing activities was due to the $37,752,750 net cash from the at the market offering and the private-placement offerings. For the nine months ended June 30, 2025, net cash provided by financing activities was due to the $8,535,250 net cash from the several private-placement offerings. 29 Critical Accounting Policies and Estimate The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires us to make judgments, assumptions, and estimates that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Note 2 — Basis of Presentation and Summary of significant accounting policies in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of our most recently filed Form 10-K, describes the significant accounting policies and methods used in the preparation of the Consolidated Financial Statements. Our critical accounting estimates, identified in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our most recently filed Form 10-K, include the discussion of estimates used for revenue recognition, inventory valuation, going concern assessment, and our provision for income taxes. Such accounting estimates require significant judgments and assumptions to be used in the preparation of the Condensed Consolidated Financial Statements included in this Form 10-Q, and actual results could differ materially from the amounts reported. New Accounting Standards From time to time, the FASB or other standards-setting bodies issue new accounting pronouncements. Updates to the FASB Accounting Standards Codification are communicated through issuance of an Accounting Standards Update. To understand the impact of recently issued guidance, whether adopted or to be adopted, please review the information provided in Note 2 — Basis of Presentation and Summary of significant accounting policies, “Recently issued but not yet adopted accounting pronouncements”, in the Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q. Unless otherwise discussed, we believe that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on our Condensed Consolidated Financial Statements upon adoption. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. As a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information requested by this item. ITEM 4. CONTROLS AND PROCEDURES. Disclosure Controls and Procedures An evaluation was performed under the supervision of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this Quarterly Report. Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that, as of June 30, 2026, our disclosure controls and procedures were not effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms due to material weaknesses in our internal controls described below. ● Lack of adequate policies and procedures in internal control function to ensure that proper control and procedures have been designed and implemented over key business cycles. We plan to hire additional personnel or consultant with relevant experience and qualifications to design and implement internal control over key business cycles to strengthen the internal control system. However, we cannot assure you that we will remediate our material weaknesses in a timely manner. Inherent Limitations Over Internal Controls Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Our control systems are designed to provide such reasonable assurance of achieving their objectives. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Changes in Internal Control over Financial Reporting There have not been any changes in our internal controls over financial reporting during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 30 PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. On June 24, 2026, Kingbird Ventures LLC (“Kingbird”) filed a complaint and ex parte motion in the U.S. District Court for the Southern District of Texas (the “Court”) for a temporary restraining order and preliminary injunction. On June 25, 2026, the Court entered a temporary restraining order (the “TRO”) against the Company. On July 10, 2026, a Memorandum and Recommendation (the “Memorandum”) was entered by the Magistrate Judge who was referred to work on this case by the District Judge of the Court. The Memorandum stated that the TRO expired by its own terms as of July 9, 2026, that there was no TRO in place, and that certain motions made by the parties to modify, extend or vacate the TRO should be denied as moot. On August 6, 2026, the Senior District Judge of the Court ordered, among other things, that the Magistrate Judge’s Memorandum be adopted and Kingbird’s emergency motions to extend the TRO be denied. As of the date of this report, the parties’ motions are pending before the Court. The Company cannot predict when the Magistrate Judge will rule on the pending motions. The Company and its CEO, Ding Wei have to file an answer to the complaint or a motion to dismiss by September 28, 2026, based on the docket of the case. There are no hearings currently scheduled and no other motions pending. The Company finds Kingbird’s allegations without merit and has defended, and will continue to defend itself vigorously. ITEM 1A. RISK FACTORS. As a “smaller reporting company,” as defined by Rule 12b-2 of the Exchange Act, we are not required to provide the information in this Item. However, we are voluntarily providing the following risk factors disclosure for the convenience of investors. The risk factors set forth below supplement and should be read together with the risk factors previously disclosed in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 filed with the SEC on May 1, 2026 (the “March 31, 2026 10-Q”) and our 2025 Annual Report on Form 10-K filed with the SEC on December 15, 2025 (the “2025 Annual Report”). Except as set forth below, there have been no material changes in our risk factors as previously disclosed in our March 31, 2026 10-Q and our 2025 Annual Report. Risks Related to Our Business and Operations Our business is primarily focused on recycled consumer electronics product trading, and our efforts to diversify into AI-related businesses may not succeed. Our current business operations are primarily focused on recycled consumer electronic devices. As a result, our business and financial performance are substantially dependent on market conditions affecting this industry, including the availability and cost of recycled consumer electronics products, fluctuations in supply and demand, changes in commodity and resale prices, competition, customer and supplier relationships, and applicable environmental and trade regulations. Adverse developments in this industry could materially and adversely affect our business, financial condition and results of operations. We may seek to diversify and enhance our business prospects by developing, investing in or acquiring AI-related systems or products through our subsidiaries. For example, On June 8, 2026, we entered into a Development Services Agreement, through a subsidiary, with a Hong Kong based AI service provider that will develop an AI-powered used mobile phone sales and customer acquisition AI agent system on behalf of us. These initiatives, although designed to improve our performance in the recycled consumer electronic devices industry, may require significant capital expenditures and management resources, and we may lack the experience, technical expertise, personnel, customer relationships and other resources necessary to compete successfully with rapidly evolving AI technologies. We may also face intense competition, technological obsolescence, regulatory uncertainty, difficulties integrating acquired technologies, and challenges in developing commercially viable products or services. Such initiatives may not become profitable within our anticipated timeframe, or at all, and may divert management’s attention and resources from our existing operations. If our diversification efforts are unsuccessful, we may incur substantial costs, losses or impairment charges, which could materially and adversely affect our business, financial condition, results of operations and prospects. Risks Related to Litigation The trading halt of our common stock from June 9, 2026 to July 31,2026 or any future trading halts could expose us to securities litigation and other claims. On June 8, 2026, the Nasdaq Stock Market LLC imposed a trading halt under Code T12 on our common stock. Although the trading halt was lifted and our common stock resumed trading on Nasdaq on July 31, 2026, stockholders and other investors may institute securities class action litigation or other legal proceedings against the Company and our directors and officers. To this end on June 24, 2026, Kingbird Ventures LLC (“Kingbird”) filed a complaint and an ex parte motion in the U.S. District Court for the Southern District of Texas (the “Court”) seeking a temporary restraining order and preliminary injunction. As of the date of this report, there is no temporary restraining order against us and the Court denied Kingbird’s emergency motions to extend the temporary restraining order. Kingbird’s motion for a preliminary injunction and the parties’ discovery-related motions are fully briefed and pending before the Court, and the timing of rulings is uncertain. The Company and its CEO, Ding Wei, have to file an answer to the complaint or a motion to dismiss by September 28, 2026, according to the docket of the case. No hearings are currently scheduled and no other motions are pending. While we believe the allegations are without merit and intend to defend vigorously, litigation is inherently uncertain, and we may not prevail. 31 The Kingbird litigation or any other litigation or proceeding, whether or not meritorious, could result in substantial costs and expenses, require significant management attention and resources, harm our reputation and adversely affect our ability to raise capital. We may also be required to indemnify our directors and officers for certain costs and liabilities arising from such proceedings. The outcome of any litigation or regulatory proceeding is inherently uncertain, and an adverse outcome could have a material adverse effect on our business, financial condition, results of operations and prospects. Our common stock may be subject to a future trading halt or suspension, which could adversely affect the liquidity and market price of our common stock and our ability to raise capital. Trading in our common stock may be halted or suspended by Nasdaq, the U.S. Securities and Exchange Commission (the “SEC”), or another regulatory authority in the future for a variety of reasons, including questions regarding the accuracy or adequacy of our public disclosures, our compliance with applicable securities laws or Nasdaq’s listing requirements, regulatory inquiries, unusual market activity or volatility, or other circumstances determined to warrant a trading halt or suspension. We cannot predict whether or when a trading halt or suspension may occur, the duration of any such halt or suspension, or whether trading would resume following any such event. Any future trading halt or suspension could materially impair the ability of our stockholders to buy or sell our common stock in the public market and could result in significant volatility or a substantial decline in the market price of our common stock when trading resumes. A prolonged trading halt or suspension could also impair our ability to access the public capital markets, make it more difficult for us to raise additional financing, adversely affect our ability to use our equity securities for acquisitions or other corporate purposes, and negatively affect our relationships with investors, employees, customers, suppliers and other business counterparties. In addition, a trading halt or suspension could result in increased regulatory scrutiny, inquiries or investigations and could expose us and our directors and officers to securities litigation or other claims, including claims by stockholders alleging that our public disclosures were inaccurate or misleading or that they suffered losses as a result of the circumstances giving rise to the trading halt or the subsequent decline in the market price of our common stock. Any such litigation, investigation or proceeding, whether or not meritorious, could result in substantial costs and expenses, require significant management attention and resources and adversely affect our reputation, business, financial condition and results of operations. If trading in our common stock were to be halted or suspended for an extended period, we could also face additional consequences, including potential delisting from Nasdaq, defaults or acceleration under certain contractual obligations, loss of investor confidence and reduced liquidity in our common stock. Any of these events could have a material adverse effect on our business, financial condition, results of operations and prospects. 32 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. (A) Unregistered Sales of Equity Securities None. (B) Use of Proceeds Not applicable. (C) Issuer Purchases of Equity Securities None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None. ITEM 4. MINE SAFETY DISCLOSURES. None. ITEM 5. OTHER INFORMATION. During the quarter ended June 30, 2026, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K. 33 ITEM 6. EXHIBITS EXHIBIT INDEX Incorporated by Reference Exhibit Description Schedule/ Form File Number Exhibits Filing Date 3.1* Certificate of Amendment to the Certificate of Formation, as amended, of Inno Holdings Inc., as filed with the Secretary of State of the State of Texas on April 30, 2026 8-K 001-41882 3.1 May 4, 2026 10.1 Sales Agreement, dated May 15, 2026, by and between Inno Holdings Inc. and Aegis Capital Corp. 8-K 001-41882 1.1 May 20, 2026 31.1* Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2* Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1* Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2* Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101.INS* Inline XBRL Instance Document 101.SCH* Inline XBRL Taxonomy Extension Schema Document 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibits 101). * Filed or furnished herewith. 34 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. INNO HOLDINGS, INC. Date: August 18, 2026 By: /s/ Ding Wei Ding Wei Chief Executive Officer (Principal Executive Officer) Date: August 18, 2026 By: /s/ Mengshu Shao Mengshu Shao Chief Financial Officer (Principal Financial and Accounting Officer) 35