NASDAQ: INHD

We
expect to expand our products into more categories in the future including but not limited to laptops, such as MacBook, and other accessories,
such as smartwatches and headphones.

Our
Customers

Currently
we derive all of our revenues from wholesale customers. Such wholesaler customers purchase recycled consumer electronic devices from
us and then re-sell them in Southeast Asia, Middle East Asia, Europe and other regions.

Our
Suppliers

We
currently rely on a limited number of suppliers that collect pre-owned consumer electronic devices from network carriers, companies,
and individuals. For the year ended September 30, 2025, two suppliers accounted for all of the Company’s total purchases. We endeavor
to broaden our supplier base. However, we maintain a high standard requirement for supplies of recycled consumer electronic devices.
Before purchasing products from a new supplier, the Company will perform a background check, taken into consideration the new supplier’s
past track record.

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Our
Competitive Strengths

Purchase
and sale of high quality Like-New products

Recycled
consumer electronic devices vary greatly in their quality. Our business strategy is purchasing and selling high quality Like-New electronic
devices that have minimal signs of use, scratches, cracks or scuffs to the screen or rear housing. Such business strategy contributes
to not only high efficiency on inspection, testing and refurbishment of the purchased products but also extremely low return rate from
our global customers.

Dynamic
inventory level management

We
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.

Fast
response to our customers’ needs

We
respond fast to our customers’ needs. The fast response is enabled by the inventories maintained in our leased warehouse in Hong
Kong that are ready for shipping to our customers. Also, since our products are high quality Like-New devices, our warehouse personnels
can quickly package and ship the goods via third party couriers. These measures help shorten the time between our receipt of customers’
orders and the delivery of the goods. Fast response to our customers’ needs contribute to higher level of customer loyalty to our
products.

Flexible
product pricing algorithm

We
have developed a database and algorithm for pricing strategies in purchase and sales of recycled consumer electronic devices. We are
able to set prices in a flexible way to balance demands and profitability by comprehensively considering factors including the current
market price of similar products, historical transaction prices of similar products, size of the order, specifications of the products,
and the quantity of the products.

Strategic
location of Hong Kong

Our
operating subsidiaries, Lear Group Limited and Baymax High Technology Co., Limited, are located in Hong Kong. Hong Kong is one of the
busiest ports and enjoys the advantage of duty-free status, making it a major hub for the global recycled electronic devices industry.
Located in Hong Kong, the Company can conveniently receive recycled electronic devices from, and have them dispatched to, most of the
regions in the world.

Marketing

We
endeavor to broaden our customer base. Our marketing strategy is a long-term plan to achieve our Company’s mission by understanding
the needs of customers and creating a distinct and sustainable competitive advantage. We intend to leverage our marketing and sales efforts
to establish new potential customers. We also intend to leverage customer referrals, which in the past have been a source of new business.
We believe that the reputation we have developed with our current customers represents an important part of our marketing effort.

We
have a digital market channel and a social media presence. Our marketing channels include creating and implementing ad campaigns, and
word of mouth. Also, we are actively conducting market research to determine the viability of our new products and new patents. We have
increased our marketing budget and formed a professional sales team to increase our online marketing, which we believe can help us grow
our revenue.

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Business
Plan

Diversify
the product portfolio

We
built a solid business model of recycling and reselling smartphones and tablets. With the experience and capital gained over the years,
we plan to further diversify our product portfolio by participating in laptops, such as MacBook, and other accessories, such as smartwatches
and headphones.

Expand
into strategic overseas markets

The
Company expects the recycled consumer electronic devices market to experience robust growth in Southeast and Middle Asia in the near
future. To shorten the supply chain and better interact with the clients located in these strategic markets, the Company intends to set
up offices in Singapore, Malaysia, Dubai and other areas in Southeast and Middle Asia in the next five years. We expect this strategic
move to help increase its revenues and market presence.

Expand
the wholesale business and develop a B2B Marketplace Platform

We
plan to further expand our wholesale customer base in recycled consumer electronic devices. The Company is now in process of developing
a Business to Business (“B2B”) marketplace platform that will facilitate manufacturers and distributors as suppliers to sell
direct to business buyers as wholesalers. This marketplace platform, empowered by cloud computing, big data, and high-frequency matchmaking
technology, will provide sellers with marketplace technology to enhance and grow their business while offering buyers access to an exclusive
collection of top brands at or below wholesale prices. The platform is expected to supplement the Company’s traditional business
model of individual negotiations and attract potential customers. We expect to obtain more customers and suppliers through this marketplace
platform.

Potential
acquisitions for horizonal and vertical integration

In
accordance with our growth strategy, the Company intends to pursue horizonal and vertical integration by acquiring companies operating
within the industry of recycled consumer electronic devices. The objective of this horizonal and vertical integration is to strengthen
and expand our capabilities within the market. We will position ourselves to offer a comprehensive range of solutions encompassing the
entire value chain of recycled consumer electronic devices.

To
fortify our supply chain and augment our capabilities, we will consider the strategic acquisition of distributors/wholesalers with the
proceeds from our equity and/or debt financing activities to pursue potential acquisitions. The targeted companies would include the
ones that enjoy the popularities in the industry, including but not limited to the companies that have already built stable sales connection
to whole and retail customers in regions that we currently do not reach to, such as North and South America. The Company may also consider
the strategic acquisition of its competitors within the industry in order to strengthen its capabilities of inspection, testing and refurbishment
as well as pricing.

Recruit
additional employees

We
plan to employ additional personnel to meet the Company’s growth needs. Our hiring plan includes the recruitment of marketing personnel
to build and improve our brand recognition, the sales personnels to meet and satisfy the increased wholesale demands from our existing
and new customers, and also a financial and accounting team to strengthen our financial control system.

Enhance
business infrastructures

The
Company plans to upgrade its business infrastructure to better prepare for its future growth, including the inventory management and
information system. In order to improve our dynamic inventory management, we plan to upgrade the inventory management system so that
the Company’s inventories of recycled consumer electronic devices can be maintained at a more efficient and flexible level. In
addition, the Company may develop a proprietary device testing software to further facilitate the inspection and testing process of purchased
recycled consumer electronic devices. With the updated infrastructures, we expect to increase the efficiency and data security in our
business operations.

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Seasonality

We
experience a moderate level of seasonality in our business primarily as a result of new product launches by consumer electronic devices
manufacturers and promotional campaigns by e-commerce platforms. New product launches by major cell phone brands such as Apple each year
also boost our customer traffic and purchase orders. All of these activities can affect our results for those quarters. The seasonality
in our business also results from major promotions and holidays such as Black Friday, Cyber Monday, and Christmas Holiday. Overall, the
historical seasonality of our business has been relatively moderate. Our financial condition and results of operations for future periods
may continue to fluctuate.

Radio
Dealers License (unrestricted)

Our
operating subsidiaries Lear Group Limited and Baymax High Technology Co., Limited have obtained the Radio Dealers License (Unrestricted),
the document required to conduct the trade or business in apparatus or material for radio-communications or any components part thereof,
including the performing of repairs and refurbishment, and the import and export of radio-communications transmitting apparatus. The
current term of the License of Lear Group Limited and Baymax High Technology Co., Limited will expire on September 30, 2025 and December
31, 2025, respectively. We will comply with the requirements and keep the license valid.

Competition

The
recycled consumer electronic wholesale industry in Hong Kong is competitive and relatively fragmented, with approximately 1,000 wholesalers
engaged in sourcing, grading, refurbishing and resale of pre-owned consumer electronic devices. The major competitors of the Company
include the following:

●
Guang Yi Co. Ltd., founded
in 2020, is primarily engaged in the international wholesaling and trading of cellphones and other consumer electronic devices in
various grades, including brand new, nearly new, and average grading. Suppliers of Guang Yi Co. Ltd. include telecommunication companies
and over 100 other vendors. In addition, the Guang Yi Co. Ltd. has built a global buy-back network to recycle pre-owned cellphones
through a B2C channel.

●
Brightway Trading Co.,
established in 2013, is focusing on the submarket of cell phones returned by customers. Brightway Trading Co. sources cellphones
of all conditions from Europe, the U.K., the U.S.

●
CommNet Telecom Limited,
a Hong Kong based consumer electronic devices recycling firm that started its business in 2004, specializes in the import and export
of brand new and used cell phones. The majority of CommNet Telecom Limited’s suppliers are located in the U.S. and the U.K.

Government
Regulations

As
we conduct business in Hong Kong through our wholly-owned subsidiaries, our business operations are subject to various regulations and
rules promulgated by the Hong Kong government. The following is a brief summary of the Hong Kong laws and regulations that currently
and materially affect our business. This section does not purport to be a comprehensive summary of all present and proposed regulations
and legislation relating to the industries in which we operate.

Hong
Kong Laws and Regulations Relating to Trade Descriptions

Trade
Descriptions Ordinance (Chapter 362 of the Laws of Hong Kong) (the “TDO”), which came into full effect in Hong Kong on April
1, 1981, aims to prohibit false or misleading trade description and statements to goods and services provided to the customers during
or after a commercial transaction. Pursuant to the TDO, any person in the course of any trade or business applies a false trade description
to any goods or supply or offers to supply them commits an offence and a person also commits the same offence if he/she is in possession
for sale or for any purpose of trade or manufacture of any goods with a false description. The TDO also provides that traders may commit
an offence if they engage in a commercial practice that has a misleading omission of material information of the goods, an aggressive
commercial practice, involves bait advertising, bait and switch or wrong acceptance of payment. It is also an offence for any person
to have in his possession for sale or for any purpose of trade or manufacture any goods to which a false trade description is applied.
To amount to a false trade description, the falsity of the trade descriptions has to be to a material degree. Trivial errors or discrepancies
in trade descriptions would not constitute an offence. What constitutes a material degree will vary with the facts.

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Contravention
of the prohibitions in the TDO is an offence, with a maximum penalty of up to HK$500,000 and five years’ imprisonment. However,
the TDO also provides regulators with the ability to accept (and publish) written undertakings from businesses and individuals not to
continue, repeat or engage in unfair trade practices in return of which regulator will not commence or continue investigations or proceedings
relating to that matter. Regulators will also be empowered to seek an injunction against businesses and persons engaging in unfair trade
practices or who have breached an undertaking.

Hong
Kong Laws and Regulations Relating to Sale of Goods

Pursuant
to Sale of Goods Ordinance (Chapter 26 of the Laws of Hong Kong) (the “SOGO”), which came into full effect in Hong Kong on
August 1, 1896, in every contract of sale, there is an implied warranty that the goods are free, and will remain free until the time
when the property is to pass, from any charge or encumbrance not disclosed or known to the buyer before the contract is made and that
the buyer will enjoy quiet possession of the goods except so far as it may be disturbed by the owner or other person entitled to the
benefit of any charge or encumbrance so disclosed or known. The SOGO provides that there is an implied condition that the goods shall
correspond with the description where there is a contract for the sale of goods by description, and there is any implied condition or
warranty as to the quality or fitness for any particular purpose of goods supplied under a contract of sale. Where the seller sells goods
in the course of a business, there is an implied condition that the goods supplied under the contract are of merchantable quality, except
that there is no such condition (i) as regards defects specifically drawn to the buyer’s attention before the contract is made;
or (ii) if the buyer examines the goods before the contract is made, as regards defects which that examination ought to reveal; or (iii)
if the contract is a contract for sale by sample, as regards defects which would have been apparent on a reasonable examination of the
sample. Where there is a contract for sale by sample, there are implied conditions that (i) the bulk shall correspond with the sample
in quality, (ii) the buyer shall have a reasonable opportunity of comparing the bulk with the sample, and (iii) the goods shall be free
from any defect, rendering them unmerchantable, which would not be apparent on reasonable examination of the sample. Under SOGO, where
any right, duty or liability would arise under a contract of sale of goods by implication of law, it may (subject to the Control of Exemption
Clauses Ordinance (Chapter 71 of the Laws of Hong Kong)) be negatived or varied by express agreement, or by the course of dealing between
the parties, or by usage if the usage is such as to bind both parties to the contract.

Telecommunications
Ordinance (Chapter 106 of the Laws of Hong Kong) (the ‘‘TO’’)

Under
the TO, a license, namely Radio Dealers License (Unrestricted), is required for dealing in the course of trade or business in apparatus
or material for radio communications or in any component part of any such apparatus or in apparatus of any kind that generates and emits
radio waves whether or not the apparatus is intended, or capable of being used, for radio communications. However, the above requirement
does not apply to licensed exempted radio communications apparatus (e.g., mobile phones, short-range walkie-talkies, cordless phones)
meeting prescribed specifications. Under the Radio Dealers License (Unrestricted), the licensee is permitted to deal in radio communications
apparatus pursuant to section 9 of the TO. A Radio Dealers License (Unrestricted) is generally valid for a period of 12 months, and is
renewable on payment of the prescribed fee, at the discretion of Office of the Communications Authority (“OFCA”).

Our
operating subsidiaries Lear Group Limited and Baymax High Technology Co., Limited are licensees of the Radio Dealers Licenses (Unrestricted).
The material licensing conditions are: (a) to store the licensed apparatus at a specified address, (b) to display the license at the
licensed premises, (c) to keep and maintain complete and accurate registers for the last twelve months, of the licensed apparatus and
of the licensee’s dealings and transactions therewith, except those apparatus which have been exempted, (d) not to deal locally
in radio apparatus which is not of a type approved by the Communications Authority or not licensable in Hong Kong; and to only deliver
radio apparatus to a customer if (i) they have been exempted by statute, (ii) the customer is not a tourist and is licensed to possess
or use the apparatus, or (iii) the customer is a tourist who intends to export the apparatus after purchase.

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Radio
Dealers Licenses have different dates of grant and are valid for a period of 12 months. Lear Group Limited’s and Baymax High Technology
Co., Limited’s radio dealers license will expire on September 30, 2026 and December 31, 2025, respectively, and will be renewed
upon expiry (subject to the discretion of OFCA). We will renew the Radio Dealers Licenses in accordance with the Telecommunications Regulations
(Chapter 106A of the Laws of Hong Kong) by paying the required renewal fee to OFCA. We are not aware of any legal impediment to renew
the Radio Dealers Licenses subject to the conditions below: (I) We have to pay to OFCA the required renewal fee as may from time to time
be determined and required by OFCA on or before the respective date of expiry of the Radio Dealers Licenses; and (II) We have to comply
with the “General Conditions to be observed by Licensee of Radio Dealers License (Unrestricted)” and the “Conditions”
set out in the Radio Dealers Licenses.

Consumer
Goods Safety Ordinance (Chapter 456 of the Laws of Hong Kong) (the “CGSO”) and Consumer Goods Safety Regulation (Chapter
456A of the Laws of Hong Kong) (the “CGSR”)

The
CGSO is enacted to impose a duty on manufacturers, importers and suppliers of certain consumer goods to ensure that the consumer goods
they supply are safe. Electrical products and any other goods the safety of which is controlled by specific legislation are not covered
by the CGSO.

The
CGSO prohibits a person from supplying, manufacturing, or importing into Hong Kong consumer goods unless the consumer goods comply with
the general safety requirement or an approved standard for consumer goods. Currently there is no approved standard which has been approved
in any regulation to the CGSO. Contravention with the above requirement is an offence and the offender is liable on first conviction
to a fine at HK$100,000 and to imprisonment for one year, and on subsequent conviction to a fine of HK$500,000 and to imprisonment for
two years.

It
is a defense to the above offence if the commission of the offence was due to (a) the act or default of another person or reliance on
information given by another, and (b) that it was reasonable in all the circumstances for him to have relied on the information, having
regard in particular (i) to the steps which he took, and those which might reasonably have been taken, for the purpose of verifying the
information; and (ii) to whether he had any reason to disbelieve the information. A court may take into consideration the existence of
a certificate from an approved laboratory showing that the samples of consumer goods which are the subject of the prosecution had been
tested before being sold and had complied with the safety standard or safety specification set out in the certificate.

The
CGSR requires any warning or caution affixed on any consumer goods or their packages to be in both the English and the Chinese languages.
The warning or caution shall be legible and be placed in a conspicuous position on (a) the consumer goods; (b) any package of the consumer
goods; (c) a label securely affixed to the package; or (d) a document enclosed in the package. Any person who supplies consumer goods
which do not comply with the above requirements commits an offence and is liable (a) on first conviction to a fine at HK$100,000 and
to imprisonment for one year; and (b) on subsequent conviction to a fine of HK$500,000 and to imprisonment for two years.

Hong
Kong Laws and Regulations Relating to Intellectual Properties Rights

Trade
Marks Ordinance (Chapter 559 of the Laws of Hong Kong) (“TMO”), which came into full effect in Hong Kong on April 4,
2003 provides the framework for the Hong Kong’s system of registration of trademarks and sets out the rights attached to a registered
trade mark, including logo and a brand name. The TMO restricts unauthorized use of a sign which is identical or similar to the registered
mark for identical and/or similar goods and/or services for which the mark was registered, where such use is likely to cause confusion
on the part of the public. The TMO provides that a person may also commit a criminal offence if that person fraudulently uses a trademark,
including selling and importing goods bearing a forged trade mar, or possessing or using equipment for the purpose of forging a trademark.
However, pursuant to section 20 of the TMO, a registered trade mark is not infringed by the use of trade mark in relation to goods which
have been put on the market anywhere in the world under that trade mark by the owner or with his consent (whether express or implied
or conditional or unconditional), unless the condition of the goods has been changed or impaired after they have been put on the market,
and the use of the registered trade mark in relation to those goods is detrimental to the distinctive character or repute of the trade
mark.

Patents
Ordinance (Chapter 514 of the Laws of Hong Kong), which came into full effect in Hong Kong on June 27, 1997 provides the framework
for “re-registration” system of Chinese, UK and European patents in Hong Kong. Pursuant to Patents (Amendment) Ordinance
2016, which came into full effect in Hong Kong on December 19, 2019 provide a new framework for a new patent system — an “original
grant patent” system, running in parallel with the “re-registration” system.

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Copyright
Ordinance (Chapter 528 of the Laws of Hong Kong) (“CO”), which came into full effect in Hong Kong on June 27, 1997 provides
comprehensive protection for recognized categories of underlying works such as literary, dramatic, musical and artistic works. The CO
restricts unauthorized acts such as copying and/or making available copies to the public of a copy right work. The CO provides that a
person commits an offence if he, without the license of the copyright owner of a copyright work imports an infringing copy of the work
into Hong Kong, at any time within 15 months beginning on the first day of publication of the work in Hong Kong or elsewhere, otherwise
than for his private and domestic use.

Human
Capital Resources

The
success of our business depends in large part on our ability to attract, retain, and develop a workforce of skilled employees at all
levels of our organization. We provide employees with base wages and salaries that we believe are competitive and consistent with each
employee’s position. We also work with local, regional, and state-wide agencies to facilitate workforce hiring and development
initiatives. We had five and four full-time employees as of September 30, 2025 and 2024, respectively.

Corporate
Structure

Our
Company, INNO HOLDINGS INC., was incorporated in Texas on September 8, 2021. It originally had three subsidiaries, Inno Metal Studs Corp
(“IMSC”), Castor Building Tech LLC (“CBT”), and Inno Research Institute LLC (“IRI”).

On
January 21, 2024, the Company established Inno Disrupts Inc. (“Disrupts”), 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
January 27, 2024, the Company and the minority shareholder of IRI agreed to dissolve IRI, a subsidiary of IMSC with 65% ownership. The
R&D activities previously carried out by IRI will be transferred to the new subsidiary, Inno AI Tech Corp.

On
February 11, 2024, the Company formed Inno AI Tech Corp. (“AT”), a wholly owned entity in Texas to conduct AI tech research
and consulting activities.

On
October 18, 2024, the Company acquired all of the issued and outstanding shares of Lear Group Limited (“Lear”), a Hong Kong
company, for a total consideration of $1,300. As a result of this transaction, Lear became a wholly-owned subsidiary of the Company.

On
December 13, 2024, the Company acquired all of the issued and outstanding shares of Baymax High Technology Co., Limited (“Baymax”),
a Hong Kong company, 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 a third-party Buyer, pursuant to which the Company sold all issued
and outstanding shares of its wholly owned subsidiaries, IMSC and AT, to the Buyer for an aggregate purchase price of $1,000 in cash.

On
March 28, 2025, the Company entered into a Membership Interest Purchase Agreement with a third-party Buyer and Core Modu LLC, a Texas
limited liability company (“CM”), pursuant to which the Company sold all of the membership interest it owned in CM, which
represented 15% of the outstanding membership interest in CM, to the Buyer for an aggregate purchase price of $700,000.

On
March 28, 2025, the Company entered into a Membership Interest Purchase Agreement with a third-party Buyer and Castor Building Tech LLC,
a California limited liability company (“CBT”), pursuant to which the Company sold all of the membership interest it owned
in CBT, which represented 55% of the outstanding membership interest in CBT, to the Buyer for an aggregate purchase price of $1,000.

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On
April 8, 2025, the Company entered into a Share Purchase Agreement with a third-party Buyer, pursuant to which the Company sold all issued
and outstanding shares it owns in Disrupts for an aggregate purchase price of $100.

Below
is the corporate structure of the Company as of September 30, 2025:

Corporate
Information

Our
principal executive office is located at RM1, 5/F, No. 43 Hung To Road, Kwun Tong, Kowloon, Hong Kong 999077. Our corporate website address
is https://www.innoholdings.com. Our telephone number is +852-54795450.

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