Hour Loop, Inc

Previous wording

We are an online retailer engaged in e-commerce retailing in the U.S. market. We have operated as a third-party seller onwww.amazon.comsince 2013, and onwww.walmart.com since 2020. We have also sold merchandise on our website atwww.hourloop.com since 2013. To date, we have generated practically all of our revenue as a third-party seller onwww.amazon.com (“Amazon”) and only a negligible amount of revenue from our operations on our website atwww.hourloop.com and as a third-party seller onwww.walmart.com. We manage more than 100,000 stock-keeping units (“SKUs”). Product categories include home/garden décor, toys, kitchenware, apparel, and electronics. Our primary strategy is to bring most of our vendors’ product selections to the customers. We have advanced software that assists us in identifying product gaps so we can keep such products in stock year-round including the entirety of the last quarter (holiday season) of the calendar year (“Q4”). In upcoming years, we plan to expand our business rapidly by increasing the number of business managers, vendors and SKUs.

Current wording

We are an online retailer engaged in e-commerce retailing in the U.S. market. We have operated as a third-party seller onwww.amazon.com(“Amazon”) since 2013, and onwww.walmart.com (“Walmart”) since 2020. We have also sold merchandise on our website atwww.hourloop.com since 2013. To date, we have generated practically all of our revenue as a third-party seller on Amazon and only a negligible amount of revenue from our operations on our website atwww.hourloop.com and as a third-party seller on Walmart. We manage more than 100,000 stock-keeping units (“SKUs”). Product categories include home/garden décor, toys, kitchenware, apparel, and electronics. Our primary strategy is to bring most of our vendors’ product selections to the customers. We have advanced software that assists us in identifying product gaps so we can keep such products in stock year-round including the entirety of the fourth quarter (holiday season) of the calendar year. In upcoming years, we plan to expand our business rapidly by increasing the number of business managers, vendors and SKUs.

Previous wording

There are three main types of business models on Amazon: wholesale, private label and retail arbitrage. Our business model is wholesale, also known as reselling, which refers to buying products in bulk directly from the brand or manufacturer at a wholesale price and making a profit by selling the product on Amazon. We sell merchandise on Amazon and the sales are fulfilled by Amazon. We pay Amazon fees for allowing us to sell on their platform. Our relationship with Walmart is also similar. We pay Walmart fees for allowing us to sell our merchandise on their platform. As stated above, to date, we have generated only a negligible amount of revenues as a third-party seller onwww.walmart.com.

Current wording

There are three main types of business models on Amazon: wholesale, private label and retail arbitrage. Our business model is wholesale, also known as reselling, which refers to buying products in bulk directly from the brand or manufacturer at a wholesale price and making a profit by selling the product on Amazon. We sell merchandise on Amazon and the sales are fulfilled by Amazon. We pay Amazon fees for allowing us to sell on their platform. Our relationship with Walmart is also similar. We pay Walmart fees for allowing us to sell our merchandise on their platform. As stated above, to date, we have generated only a negligible amount of revenues as a third-party seller on Walmart.

Previous wording

Amazon accounted for approximately 40% of all e-commerce in the United States, which Amazon the biggest ecommerce giant currently in the market.

Current wording

Amazon accounted for approximately 40% of all e-commerce in the United States, which makes Amazon the biggest ecommerce giant currently in the market.

Previous wording

With respect to our advertising strategy, we advertise those products that we estimate will have greater demand based on our experience. This lets us allocate our advertising budget in a fashion that delivers positive value. We advertise our products on Amazon. We allocate our advertising dollars prudently. This is accomplished by advertising items that deliver the most return for our advertising spending. We monitor the items being advertised by our competitors. On the operations side, we constantly refine our processes based on learnings from historical data. The combination of managing the business operations effectively along with allocating our advertising budget to high value items allows us to grow profitably. In cases where the advertising is fierce, we allocate the spending appropriately. Our strategy for competing with larger competitors is to monitor their pricing and not compete with them when their pricing is low or at a loss. Competitors sell at low prices or at a loss due to a variety of reasons, including, but not limited to, their desire to liquidate inventory or achieve short-term increase in revenue. During these times, we avoid matching their prices. This strategy allows us to stay profitable.

Current wording

With respect to our advertising strategy, we advertise those products that we estimate will have greater demand based on our experience. This lets us allocate our advertising budget in a fashion that delivers positive value. We advertise our products on Amazon and allocate our advertising dollars prudently. This is accomplished by advertising items that deliver the most return for our advertising spending. We monitor the items being advertised by our competitors. On the operations side, we constantly refine our processes based on learnings from historical data. The combination of managing the business operations effectively, along with allocating our advertising budget to high value items, allows us to grow profitably. In cases where advertising is fierce, we allocate spending appropriately. Our strategy for competing with larger competitors is to monitor their pricing and not compete with them when their pricing is low or at a loss. Competitors sell at low prices or at a loss due to a variety of reasons, including, but not limited to, their desire to liquidate inventory or achieve a short-term increase in revenue. During these times, we avoid matching their prices. This strategy allows us to stay profitable.

Previous wording

For the three months ended June 30, 2025 and 2024, we generated net revenues of $27,103,106 and $28,070,707, respectively, and reported net income of $1,177,001 and $649,150, respectively, and cash flow (used in) provided by operating activities of $(901,539) and $456,232, respectively.

Current wording

For the three months ended September 30, 2025 and 2024, we generated net revenues of $33,424,703 and $31,075,498, respectively, and reported net income of $530,591 and $469,647, respectively.

Previous wording

For the six months ended June 30, 2025 and 2024, we generated net revenues of $52,940,196 and $52,751,829, respectively, and reported net income of $1,831,518 and $1,714,964, and cash flow (used in) provided by operating activities of $(925,430) and $949,175, respectively.

Current wording

For the nine months ended September 30, 2025 and 2024, we generated net revenues of $86,364,899 and $83,827,327, respectively, and reported net income of $2,362,109 and $2,184,611, and cash flow used in operating activities of $425,000 and $1,231,885, respectively.

Previous wording

As noted in our unaudited consolidated financial statements, as of June 30, 2025, we had retained earnings of $1,236,343.

Current wording

As noted in our unaudited consolidated financial statements, as of September 30, 2025, we had retained earnings of $1,766,934.

Previous wording

The following table shows comparisons of our unaudited income statements for the three and six months ended June 30, 2025 and 2024.

Current wording

The following table shows comparisons of our unaudited income statements for the three and nine months ended September 30, 2025 and 2024.

Previous wording

The Company generated $27,103,106 in revenues in the three months ended June 30, 2025, as compared to $28,070,707 in revenues in the same period in 2024. This represents a decrease in revenues of $967,601, or 3.45%. Our total orders in the three months ended June 30, 2025 were approximately 1,253,975, as compared to 1,268,890 orders in the three months ended June 30, 2024, representing a decrease of 1.18%. We attribute both decreases to the Company’s strategic shift toward prioritizing margin expansion in response to ongoing tariff uncertainties. During the three months ended June 30, 2025, the uncertainty of tariff rates led some manufacturers to suspend container imports temporarily. As a result, we proactively increased our inventory levels to prevent out-of-stock conditions while addressing concerns that tariffs could lead to higher costs and pricing. Despite marginal decreases in both metrics, our strategy effectively led to higher profitability compared to the three months ended June 30, 2024.

Current wording

The Company generated $33,424,703 in revenues in the three months ended September 30, 2025, as compared to $31,075,498 in revenues in the same period in 2024. This represents an increase in revenues of $2,349,205, or 7.56%. Our total orders in the three months ended September 30, 2025 were approximately 1,656,681, as compared to 1,472,515 orders in the three months ended September 30, 2024, representing an increase of 12.51%. We attribute both increases to the Company’s strategic focus on converting inventory into sales. During the three months ended September 30, 2025, sales growth was primarily driven by inventory procured three to six months earlier. We intentionally raised inventory levels to avoid stockouts and to mitigate potential cost and price impacts associated with tariff concerns. Supported by improvements in both metrics, this strategy resulted in higher profitability compared to the three months ended September 30, 2024.

Previous wording

Cost of goods sold for the three months ended June 30, 2025 totaled $11,605,754, as compared to $12,445,297 for the three months ended June 30, 2024. Cost of goods sold includes the cost of the merchandise sold and shipping costs, as well as estimated losses due to damage to goods.

Current wording

Cost of goods sold for the three months ended September 30, 2025 totaled $16,249,395, as compared to $14,036,187 for the three months ended September 30, 2024. Cost of goods sold includes the cost of the merchandise sold and shipping costs, as well as estimated losses due to damage to goods.

Previous wording

Operating expenses for the three months ended June 30, 2025 totaled $13,876,501, representing a $811,713, or 5.53%, decrease from the $14,688,214 of operating expenses for the three months ended June 30, 2024. This change was caused by an increase in reimbursements paid by Amazon that reflect enhanced recovery for lost shipments.

Current wording

Operating expenses for the three months ended September 30, 2025 totaled $16,433,302, representing a $115,834, or 0.71%, increase from the $16,317,468 of operating expenses for the three months ended September 30, 2024. This change was caused by an increase in operating efficiency.

Previous wording

Other expenses, net, for the three months ended June 30, 2025 was $38,170, compared to other expenses, net, of $7,284 for the three months ended June 30, 2024.

Current wording

Other expenses, net, for the three months ended September 30, 2025 was $28,075, compared to other expenses, net, of $34,445 for the three months ended September 30, 2024.

Previous wording

Total comprehensive income for the three months ended June 30, 2025 was $1,331,940, as compared with $641,092 for the three months ended June 30, 2024. The increase in total comprehensive income was attributed to a decrease in the Company’s operating expenses in the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

Current wording

Total comprehensive income for the three months ended September 30, 2025 was $492,010, as compared with $485,613 for the three months ended September 30, 2024. The increase in total comprehensive income was attributed to a the reasons mentioned above.

Previous wording

The Company generated $52,940,196 in revenues in the six months ended June 30, 2025, as compared to $52,751,829 in revenues in the same period in 2024. This represents an increase in revenues of $188,367, or 0.36%. We attribute this increase to our continued growth and maturity in our operating model, despite an overall e-commerce traffic slowdown and intense competition. Our total orders in the six months ended June 30, 2025 were approximately 2,483,767, as compared to 2,392,094 orders in the six months ended June 30, 2024, representing an increase of 3.83%. This increase in orders played a pivotal role in driving the overall revenue growth. The increase in orders demonstrates a rising demand for our products, leading to a corresponding increase in revenue generated from these sales. As a result, the increase in orders has directly contributed to the overall growth in the Company’s revenues during the period. The 3.83% increase in orders reflects strong customer demand, but our pricing strategy, including competitive pricing pressure and discounts offered during the period, resulted in lower prices for products sold. As a consequence, even with the significant order volume increase, the revenue growth did not match this proportion.

Current wording

The Company generated $86,364,899 in revenues in the nine months ended September 30, 2025, as compared to $83,827,327 in revenues in the same period in 2024. This represents an increase in revenues of $2,537,572, or 3.03%. We attribute this increase to our continued growth and maturity in our operating model, despite an overall e-commerce traffic slowdown and intense competition. Our total orders in the nine months ended September 30, 2025 were approximately 4,140,448, as compared to 3,864,609 orders in the nine months ended September 30, 2024, representing an increase of 7.14%. This increase in orders played a pivotal role in driving the overall revenue growth. The increase in orders demonstrates a rising demand for our products, leading to a corresponding increase in revenue generated from these sales. As a result, the increase in orders has directly contributed to the overall growth in the Company’s revenues during the period. The 7.14% increase in orders reflects strong customer demand, but our pricing strategy, including competitive pricing pressure and discounts offered during the period, resulted in lower prices for products sold. As a consequence, even with the significant order volume increase, the revenue growth did not match this proportion.

Previous wording

Cost of goods sold for the six months ended June 30, 2025 totaled $23,297,546, as compared to $22,674,213 for the six months ended June 30, 2024. Cost of goods sold includes the cost of the merchandise sold and shipping costs, as well as estimated losses due to damage to goods.

Current wording

Cost of goods sold for the nine months ended September 30, 2025 totaled $39,546,941, as compared to $36,710,400 for the nine months ended September 30, 2024. Cost of goods sold includes the cost of the merchandise sold and shipping costs, as well as estimated losses due to damage to goods.

Previous wording

Operating expenses for the six months ended June 30, 2025 totaled $27,100,934, representing a $501,314, or 1.82%, decrease from the $27,602,248 of operating expenses for the six months ended June 30, 2024. This change was caused by an increase in reimbursements paid by Amazon that reflected enhanced recovery for lost shipments.

Current wording

Operating expenses for the nine months ended September 30, 2025 totaled $43,534,236, representing a $385,480, or 0.88%, decrease from the $43,919,716 of operating expenses for the nine months ended September 30, 2024. This change was caused by an increase in operating efficiency.

Previous wording

Other expenses, net, for the six months ended June 30, 2025 was $23,099, compared to other expense, net, of $42,518 for the six months ended June 30, 2024. The decrease in other expenses represents the repayment of part of the loans from stockholders for the six months ended June 30, 2025, which led to a reduction in interest expenses.

Current wording

Other expenses, net, for the nine months ended September 30, 2025 was $51,174, compared to other expense, net, of $76,963 for the nine months ended September 30, 2024. The decrease in other expenses represents the repayment of part of the loans from stockholders for the nine months ended September 30, 2025, which led to a reduction in interest expenses.

Previous wording

Total comprehensive income for the six months ended June 30, 2025 was $1,972,921, as compared with $1,690,373 for the six months ended June 30, 2024. The increase in total comprehensive income was attributed to a decrease in the Company’s operating expenses in the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

Current wording

Total comprehensive income for the nine months ended September 30, 2025 was $2,464,931, as compared with $2,175,986 for the nine months ended September 30, 2024. The increase in total comprehensive income was attributed to reasons mentioned above.

Previous wording

Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. We had cash of $325,354 and $3,346,897 as of June 30, 2025 and 2024, respectively.

Current wording

Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. We had cash of $796,307 and $1,194,239 as of September 30, 2025 and 2024, respectively.

Previous wording

The following table shows a summary of our cash flows for the six months ended June 30, 2025 and 2024.

Current wording

The following table shows a summary of our cash flows for the nine months ended September 30, 2025 and 2024.

Previous wording

For the six months ended June 30, 2025, cash used in operating activities amounted to $925,430, as compared to $949,175 of cash provided by operating activities for the six months ended June 30, 2024. The $1,874,605 increase in cash used in operating activities was driven by the increase in our inventory purchase.

Current wording

For the nine months ended September 30, 2025, cash used in operating activities amounted to $425,000, as compared to $1,231,885 of cash provided by operating activities for the nine months ended September 30, 2024. The decrease in cash used in operating activities was driven by our strategic policy to front-load our inventory since the second quarter of 2025.

Previous wording

For the six months ended June 30, 2025, $801 in cash was used in investing activities, compared to $34,593 in cash used in investing activities for the six months ended June 30, 2024. The decrease primarily reflects lower purchases of property and equipment for the six months ended June 30, 2025.

Current wording

For the nine months ended September 30, 2025, $48,963 in cash was used in investing activities, compared to $35,031 in cash used in investing activities for the nine months ended September 30, 2024. The increase primarily reflects higher purchases of property and equipment for the nine months ended September 30, 2025.

Previous wording

For the six months ended June 30, 2025, cash used in financing activities amounted to $839,000, as compared to cash provided by financing activities of $-0- for the six months ended June 30, 2024. The increase in cash outflows was primarily due to repayments made to related parties for the six months ended June 30, 2025.

Current wording

For the nine months ended September 30, 2025, cash used in financing activities amounted to $839,000, as compared to cash provided by financing activities of $-0- for the nine months ended September 30, 2024. The increase in cash outflows was primarily due to repayments made to related parties for the nine months ended September 30, 2025.

Previous wording

On August 18, 2022, Flywheel entered into a line of credit agreement in the amount of $6,940,063 with Taishin International Bank. The line of credit initially matured on August 30, 2023. On August 11, 2023, the line of credit was extended for an additional year, revising the maturity date to August 30, 2024. On May 28, 2024, the term of the loan was revised such that maturity date was extended to November 24, 2024. On November 25, 2024, the term of the loan was revised such that maturity date was extended to May 23, 2025. On May 23, 2025, the term of the loan was revised such that maturity date was extended to November 19, 2025. The line of credit bears interest at a rate of 3.33% per annum.

Current wording

On August 18, 2022, Flywheel entered into a line of credit agreement in the amount of $6,940,063 with Taishin International Bank. The line of credit initially matured on August 30, 2023, but was subsequently extended to November 19, 2025. The line of credit bears interest at a rate of 3.33% per annum.

Previous wording

As of June 30, 2025 and December 31, 2024, the outstanding balance under the Taishin line of credit was $683,760 and $610,967, respectively.

Current wording

As of September 30, 2025 and December 31, 2024, the outstanding balance under the Taishin line of credit was $658,003 and $610,967, respectively.

Previous wording

On July 27, 2021, we entered into a loan agreement with Mr. Lai and Ms. Yu for a principal amount of $4,170,418. The loan is subordinated. The original annual interest rate was 2% and the original repayment date was December 31, 2022. On December 28, 2022, we agreed to extend the term of the loan, with a new maturity date of December 31, 2024. On December 31, 2024, we agreed to extend the term of the loan, with a new maturity date of December 31, 2025. As amended, the annual interest rate of the loan is 5.5%.

Current wording

On July 27, 2021, we entered into a loan agreement with Mr. Lai and Ms. Yu for a principal amount of $4,170,418. The loan is subordinated. The original annual interest rate was 2% and the original repayment date was December 31, 2022. As subsequently amended, the loan agreement provides for an annual interest rate of 5.5%, with a maturity date of December 31, 2025.

Previous wording

We have two operating leases (via Flywheel, with its two offices lease in Taiwan). The respective lease terms are August 1, 2024 to July 31, 2025; and June 10, 2025 to July 9, 2027, respectively.

Current wording

We have one operating lease (via Flywheel, with its one office lease in Taiwan). The lease term is June 10, 2025 to July 9, 2027.

Previous wording

Policy for inventory allowance: The Company writes down the cost of obsolete and slow-moving inventories to the estimated net realizable value, based on inventory obsolescence trends, historical experience, forecasted consumer demand and application of the specific identification method. As of June 30, 2025 and December 31, 2024, $416,196 and $560,293, respectively, were written down from the cost of inventories to their net realizable values. Full inventory allowance is recorded for the inventory SKU not sold for more than one year.

Current wording

Policy for inventory allowance: The Company writes down the cost of obsolete and slow-moving inventories to the estimated net realizable value, based on inventory obsolescence trends, historical experience, forecasted consumer demand and application of the specific identification method. As of September 30, 2025 and December 31, 2024, $499,752 and $560,293, respectively, were written down from the cost of inventories to their net realizable values. Full inventory allowance is recorded for the inventory SKU not sold for more than one year.

Previous wording

Impairment of Long-lived Assets- In accordance with ASC 360-10-35-17, if the carrying amount of an asset or asset group (in use or under development) is evaluated and found not to be fully recoverable (the carrying amount exceeds the estimated gross, undiscounted cash flows from use and disposition), then an impairment loss must be recognized. The impairment loss is measured as the excess of the carrying amount over the asset’s (or asset group’s) fair value. The Company did not record any impairment charges for the three and six months ended June 30, 2025 and 2024.

Current wording

Impairment of Long-lived Assets- In accordance with ASC 360-10-35-17, if the carrying amount of an asset or asset group (in use or under development) is evaluated and found not to be fully recoverable (the carrying amount exceeds the estimated gross, undiscounted cash flows from use and disposition), then an impairment loss must be recognized. The impairment loss is measured as the excess of the carrying amount over the asset’s (or asset group’s) fair value. The Company did not record any impairment charges for the three and nine months ended September 30, 2025 and 2024.

Previous wording

The Company derives its revenue from the sale of consumer products. The Company sells its products directly to consumers through online retail channels. The Company considers customer order confirmations to be a contract with the customer. For each contract, the promise to transfer products is identified as the sole performance obligation. Transaction prices are evaluated for potential refunds or adjustments, determining the net consideration expected. Revenues for the three and six months ended June 30, 2025 and 2024 were recognized at a point in time. Customer confirmations are executed at the time an order is placed through third-party online channels. For all of the Company’s sales and distribution channels, revenue is recognized when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied), which typically occurs at shipment date. As a result, the Company has a present and unconditional right to payment and record the amount due from the customer in accounts receivable.

Current wording

The Company derives its revenue from the sale of consumer products. The Company sells its products directly to consumers through online retail channels. The Company considers customer order confirmations to be a contract with the customer. For each contract, the promise to transfer products is identified as the sole performance obligation. Transaction prices are evaluated for potential refunds or adjustments, determining the net consideration expected. Revenues for the three and nine months ended September 30, 2025 and 2024 were recognized at a point in time. Customer confirmations are executed at the time an order is placed through third-party online channels. For all of the Company’s sales and distribution channels, revenue is recognized when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied), which typically occurs at shipment date. As a result, the Company has a present and unconditional right to payment and record the amount due from the customer in accounts receivable.

Previous wording

The customer can return the products within 30 days after the products are delivered and estimated sales returns are calculated based on the expected returns. The rates of sales returns were 6.92% and 5.94% of gross sales for the six months ended June 30, 2025 and 2024, respectively.

Current wording

The customer can return the products within 30 days after the products are delivered and estimated sales returns are calculated based on the expected returns. The rates of sales returns were 7.09% and 6.00% of gross sales for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

A performance obligation, defined as the promise to transfer a distinct good, is the unit of account in ASC Topic 606. The Company treats shipping and handling as fulfillment activities, not separate performance obligations. Costs for shipping and handling were $11,659,356 and $11,886,764 for the six months ended June 30, 2025 and 2024, respectively, recorded as selling and marketing expenses.

Current wording

A performance obligation, defined as the promise to transfer a distinct good, is the unit of account in ASC Topic 606. The Company treats shipping and handling as fulfillment activities, not separate performance obligations. Costs for shipping and handling were $19,232,988 and $18,749,793 for the nine months ended September 30, 2025 and 2024, respectively, recorded as selling and marketing expenses.

Previous wording

The Company maintains reserves for potential credit losses on customer accounts when deemed necessary. Significant customers are those which represent more than 10% of the Company’s total net revenue or gross accounts receivable balance at the balance sheet date. During the three and six months ended June 30, 2025 and 2024, the Company had no customer that accounted for 10% or more of total net revenues. In addition, as of June 30, 2025 and December 31, 2024, the Company had no customer that accounted for 10% or more of gross accounts receivable. As of June 30, 2025 and December 31, 2024, all of the Company’s accounts receivable were held by the Company’s sales platform agent, Amazon, which collects money on the Company’s behalf from its customers. Therefore, the Company’s accounts receivable are comprised of receivables due from Amazon and the reimbursement from Amazon to the Company usually takes less than seven days.

Current wording

The Company maintains reserves for potential credit losses on customer accounts when deemed necessary. Significant customers are those which represent more than 10% of the Company’s total net revenue or gross accounts receivable balance at the balance sheet date. During the three and nine months ended September 30, 2025 and 2024, the Company had no customer that accounted for 10% or more of total net revenues. In addition, as of September 30, 2025 and December 31, 2024, the Company had no customer that accounted for 10% or more of gross accounts receivable. As of September 30, 2025 and December 31, 2024, all of the Company’s accounts receivable were held by the Company’s sales platform agent, Amazon, which collects money on the Company’s behalf from its customers. Therefore, the Company’s accounts receivable are comprised of receivables due from Amazon and the reimbursement from Amazon to the Company usually takes less than seven days.

Previous wording

The Company’s business is reliant on one key vendor which currently provides the Company with its sales platform, logistics and fulfillment operations, including certain warehousing for the Company’s net goods, and invoicing and collection of its revenue from the Company’s end customers. During the six months ended June 30, 2025 and 2024, approximately 99% and 99%, respectively, of the Company’s revenue was through or with the Amazon sales platform.

Current wording

The Company’s business is reliant on one key vendor which currently provides the Company with its sales platform, logistics and fulfillment operations, including certain warehousing for the Company’s net goods, and invoicing and collection of its revenue from the Company’s end customers. During the nine months ended September 30, 2025 and 2024, approximately 99% and 99%, respectively, of the Company’s revenue was through or with the Amazon sales platform.

Previous wording

Advertising and Promotion Expenses – Our policy is to recognize advertising costs as they are incurred. Advertising and promotion expenses were $964,824 and $1,953,155 for the six months ended June 30, 2025 and 2024, respectively.

Current wording

Advertising and Promotion Expenses – Our policy is to recognize advertising costs as they are incurred. Advertising and promotion expenses were $3,190,480 and $3,096,997 for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

**Earnings per Share -**The Company computes basic earnings per common share using the weighted-average number of shares of common stock outstanding during the period. For the period in which the Company reports net losses, diluted net loss per share attributable to stockholders is the same as basic net loss per share attributable to stockholders, because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. There were no dilutive securities or other items that would affect earnings per for the three and six months ended June 30, 2025 and 2024. Therefore, the diluted earnings per share is the same as the basic earnings per share.

Current wording

**Earnings per Share -**The Company computes basic earnings per common share using the weighted-average number of shares of common stock outstanding during the period. For the period in which the Company reports net losses, diluted net loss per share attributable to stockholders is the same as basic net loss per share attributable to stockholders, because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. There were no dilutive securities or other items that would affect earnings per share for the three and nine months ended September 30, 2025 and 2024. Therefore, the diluted earnings per share is the same as the basic earnings per share.