Inno Holdings Inc 10-K for FY2024

Inno Holdings Inc. (INHD)

10-K 2024-12-09 For: 2024-09-30

Added on April 10, 2026

About this 10-K

Inno Holdings Inc filed this 10-K on December 9, 2024, covering the fiscal year ended September 30, 2024 (FY2024).

Headline figures

Fiscal year ended September 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $885.5K; up 10.7% from $799.75K a year earlier
Net loss: $3.21M; compared with a net loss of $3.9M a year earlier
Diluted EPS: -$1.59; compared with -$2.15 a year earlier

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

Title of Each Class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, no par value		INHD		The Nasdaq Stock Market

Large accelerated filer ☐		Accelerated filer ☐
Non-accelerated filer ☒		Smaller reporting company ☒
		Emerging growth company ☒

		Page
PART I

ITEM 1:	BUSINESS	1
ITEM 1A:	RISK FACTORS	15
ITEM 1B:	UNRESOLVED STAFF COMMENTS	15
ITEM 1C:	CYBERSECURITY	15
ITEM 2:	PROPERTIES	16
ITEM 3:	LEGAL PROCEEDINGS	16
ITEM 4:	MINE SAFETY DISCLOSURES	16

PART II

ITEM 5:	MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND PURCHASES OF EQUITY SECURITIES	17
ITEM 6:	[RESERVED]	19
ITEM 7:	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION	19
ITEM 7A:	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	25
ITEM 8:	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	F-1
ITEM 9:	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	26
ITEM 9A.	CONTROLS AND PROCEDURES	26
ITEM 9B:	OTHER INFORMATION	26
ITEM 9C	DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	26

PART III

ITEM 10:	DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE	27
ITEM 11:	EXECUTIVE COMPENSATION	32
ITEM 12:	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	35
ITEM 13:	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	36
ITEM 14:	PRINCIPAL ACCOUNTING FEES AND SERVICES	38

PART IV

ITEM 15:	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	38
ITEM 16:	FORM 10-K SUMMARY	39

SIGNATURES		40

	●	the “Company,” “INNO,” the “registrant,” “we,” “our,” or “us” mean INNO HOLDINGS INC. and its subsidiaries;

	●	“year” or “fiscal year” means the year ending September 30;

	●	all dollar or $ references, when used in this prospectus, refer to United States dollars;

	●	“framing” means the process of connecting building materials together to create a structure;

	●	“stud” means a vertical framing member which forms part of a wall or partition, also known as a wall stud, a fundamental component of frame construction;

	●	“truss” means a web-like roof design that uses tension and compression to create strong, light components that can span a long distance;

	●	“joist” means a horizontal structural member used in framing to span an open space, often between beams that subsequently transfer loads to vertical members;

	●	“cold-formed steel” or “CFS” or “light-gauge steel” or “LGS” means steel products shaped by cold-working processes carried out near room temperature, such as rolling, pressing, stamping, bending, etc.;

	●	“turnkey cost” is the total cost that must be covered before a product or service is ready to be sold and used by consumers;

	●	“prefab” means a building manufactured in sections to enable assembly on site.

	●	Light-gauged studs and tracks;

	●	Prefabricated wall panels and trusses;

	●	Structure framing work on site;

	●	Services;

	●	Machine sales; and

	●	Replicable Apartment product.

	●	Materials — Rolled steel represents the single largest cost. We manage our relationship with suppliers (primarily US Steel) very adroitly by building in purchase orders and their associated costs to the customer to minimize our exposure to changes in steel prices for any specific project. We manage our purchases and deliveries as close to “just in time” as possible.

	●	Labor — Labor is potentially the most variable component of cost of sales. We have a team of hourly workers who largely work onsite at the factory producing parts from raw steel and assembling them into prefabricated pieces to be delivered to job sites. Contractors are non-employee hourly workers who largely work in our turnkey projects. As-needed hourly labor is largely available in our markets.

	●	Freight and Shipping — Our policy is to include any freight incurred to ship the product from our vendors to warehouses as a part of cost of goods sold. Outbound freight costs related to shipping costs to customers are considered periodic costs and are reflected in selling expenses.

	●	Steel has the highest strength-to-weight ratio of any framing material.

	●	Non-combustible. Steel will not contribute fuel to the spread of fire.

	●	Steel is termite and rodent resistant.

	●	Steel ensures dimensional stability. Will not rot, warp, crack or shrink.

	●	Lower builder’s risk insurance.

	●	Permanently straight walls. No call backs for nail pops.

	●	No toxicity contribution. Free of resins, adhesives, and chemicals normally present in other framing material.

	●	Consistent material quality. No regional variation.

	●	Grounded against electrical storms.

	●	Steel is inorganic. Unlike traditional framing products, steel is not vulnerable to mold.

	●	Steel is the most recycled product in the world. Optimum sustainability.

	●	A first floor non-combustible (concrete) podium with parking and retail space

	●	Residential dwellings on levels 2-5

	●	Roof-top/penthouse space atop level 5 housing building services.

	●	New optimized design for Roll Former CNC machine that efficiently produces C&U type studs and tracks to be used in building high quality, quick erection structures. (Application number: 63427583)

	●	Cube 200, which is a new optimized design for a Roll Former CNC machine that efficiently produces C&U type studs and tracks to be used in building high quality, quick erection structures. (Application number: 63437142)

	●	Z-shaped pendant for castor exterior wall to replace the Z-shaped pendant for sheetrock with honeycomb aluminum plate. (Application number: 63434155)

	●	Cube 300, which is a new optimized design for a Roll Former CNC machine that efficiently produces C&U type studs and tracks to be used in building high quality, quick erection structures. (Application number: 63437143)

	●	Aluminum honeycomb plate for interior wall construction. (Application number: 63367663)

	●	On July 24, 2023, the Company issued 7,143 shares of its common stock to an accredited investor for no additional consideration following the Company’s previously disclosed reverse stock split in July 2023.

	●	On January 1, 2024, the Company granted 5,000 shares to one advisory firm for a total value of $72,000 for advisory services to be rendered during next twelve months. The advisory firm helps and supports the Company in the capital market, including developing capital market strategies, sourcing different providers including investment banks and underwriters, etc. These shares were issued by the transfer agent on July 15,2024 and valued at $14 per share.

	●	Entering fixed price forward contracts with steel mills/suppliers for delivery in the future so that our bids for customer contracts have known pricing for the steel. This is particularly useful in larger projects that involve delivery of product over many months.

	●	Maintaining an approximately three-month inventory of our most actively used rolled steel coils (defined by width and gauge). This inventory requires an active forward-looking assessment of steel needs to meet expected demand. Maintaining inventory is a real financial exposure especially during periods of pricing volatility.

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

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

	September 30, 2024		September 30, 2023
ASSETS
Current assets
Cash and cash equivalent	$	1,526,661	$	4,898
Accounts receivable, net		-		70,435
Inventories		333,074		394,293
Deferred offering costs		-		538,765
Prepayments and other current assets		428,873		180,467
Total current assets		2,288,608		1,188,858

Non-current assets
ROU assets		570,295		437,770
Property and equipment, net		1,300,583		869,584
Other non-current assets		9,851		49,550
Total non-current assets		1,880,729		1,356,904
Total assets	$	4,169,337	$	2,545,762

LIABILITIES AND EQUITY
Current liabilities
Accounts payable		271,507		781,056
Accounts payable – related party		-		535,595
Accounts payable		-		535,595
Unearned revenue		590,260		1,137,828
Other payables and accrued liabilities		287,952		92,164
Other payables – related party		1,000		504,372
Other payables		1,000		504,372
Short-term loan payable		50,000		790,000
Lease liability – current		60,236		212,277
Long-term notes payable – current portion		51,898		49,393
Total current liabilities		1,312,853		4,102,685

Non-current liabilities
Notes payable		58,948		110,846
Lease liability – non-current		-		275,817
Total non-current liabilities		58,948		386,663
Total liabilities		1,371,801		4,489,348

Commitments and contingency		—		—

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

	2024			2023
	For the Years Ended September 30,
	2024			2023
Revenue - products	$	395,495		$	799,747
Revenue - consulting services		205,000			-
Revenue – licensing income		285,000			-
Total Revenue		885,495			799,747

COSTS AND EXPENSES:
Costs of materials and labor		409,169			1,255,315
Selling, general and administrative expenses (exclusive of expenses shown separately below)		3,678,866			2,191,043
Impairment loss		23,911			-
Depreciation		87,116			69,437
Bad debt expense		59,935			1,267,960
Total costs and expenses		4,258,997			4,783,755

LOSS FROM OPERATIONS		(3,373,502	)		(3,984,008	)

OTHER INCOME (EXPENSE)
Interest income (expenses), net		76,047			(72,118	)

Other non-operating income (expense)		47,128			32,922
Total other income (expenses), net		123,175			(39,196	)

LOSS BEFORE INCOME TAXES		(3,250,327	)		(4,023,204	)

PROVISION FOR INCOME TAXES		800			-
NET LOSS		(3,251,127	)		(4,023,204	)

Non-controlling interest		(37,298	)		(127,426	)

NET LOSS ATTRIBUTABLE TO INNO HOLDINGS INC.	$	(3,213,829	)	$	(3,895,778	)

WEIGHTED AVERAGE NUMBER OF COMMON STOCK
Basic and Diluted		2,022,263			1,815,510

LOSSES PER SHARE
Basic and Diluted	$	(1.59	)	$	(2.15	)

	Shares		Amount		Capital			Deficit			interest			Total
	Common Stock*				Additional Paid in			Accumulated			Non- controlling
	Shares		Amount		Capital			Deficit			interest			Total
Balance, September 30, 2022		1,797,000	$	—	$	1,805,000		$	(629,037	)	$	(121,345	)	$	1,054,618
Net loss		—		—		—			(3,895,778	)		(127,426	)		(4,023,204	)
Shares issued for cash		24,883		—		900,000			—			—			900,000
Shares issued for service		3,289		—		125,000			—			—			125,000

Balance, September 30, 2023		1,825,173	$	—	$	2,830,000		$	(4,524,815	)	$	(248,771	)	$	(1,943,586	)
Balance		1,825,173	$	—	$	2,830,000		$	(4,524,815	)	$	(248,771	)	$	(1,943,586	)
Net loss									(3,213,829	)		(37,298	)		(3,251,127	)
Shares issued upon IPO completion		250,000		—		7,859,534			—			—			7,859,534
Disposal of subsidiary		—		—		—			—			73,715			73,715
Warrants assumption		—		—		(13,000	)		—			—			(13,000	)
Shares issued for service		5,000		—		72,000			—			—			72,000
Fractional shares round up due to reverse stock split		199,787		—		—			—			—			—

Balance, September 30, 2024		2,279,960	$	—	$	10,748,534		$	(7,738,644	)	$	(212,354	)	$	2,797,536
Balance		2,279,960	$	—	$	10,748,534		$	(7,738,644	)	$	(212,354	)	$	2,797,536

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

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.

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

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

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

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

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

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

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

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

	2024			2023
	September 30,
	2024			2023
Current:
Federal	$	—		$	—
State		800			—
Total current income tax provision		800			—

Deferred:
Federal		(1,532,244	)		(633,247	)
State		—			—
Increase/(decrease) in valuation allowance		1,532,244			633,247
Total deferred taxes		—			—

Total provision for income taxes	$	800		$	—

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

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

	(a)	reviewing and discussing with management and the independent auditor the annual audited financial statements, and recommending to the Board whether the audited financial statements should be included in our annual disclosure report;

	(b)	discussing with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of our financial statements;

	(c)	discussing with management major risk assessment and risk management policies;

	(d)	monitoring the independence of the independent auditor;

	(e)	verifying the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law;

	(f)	reviewing and approving all related-party transactions;

	(g)	inquiring and discussing with management our compliance with applicable laws and regulations;

	(h)	preapproving all audit services and permitted non-audit services to be performed by our independent auditor, including the fees and terms of the services to be performed;

	(i)	appointing or replacing the independent auditor;

	(j)	determining the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work;

	(k)	establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or reports which raise material issues regarding our financial statements or accounting policies; and

	(l)	approving reimbursement of expenses incurred by our management team in identifying potential target businesses.

	(a)	reviews, approves and determines, or makes recommendations to our Board regarding, the compensation of our executive officers;

	(b)	administers our equity compensation plans;

	(c)	reviews and approves, or makes recommendations to our Board, regarding incentive compensation and equity compensation plans; and

	(d)	establishes and reviews general policies relating to compensation and benefits of our employees.

	(a)	been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

	(b)	had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two (2) years prior to that time;

	(c)	been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his or her involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;

	(d)	been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

	(e)	been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

	(f)	been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in section 3(a)(26) of the Exchange Act), any registered entity (as defined in section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.