Hour Loop, Inc
For the period ended Jun 30, 2025. Filed Aug 12, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 12, 2025
HOUR$1.46-3.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-12.
0001641172-25-009683
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-12.
0001641172-25-023113
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 102 previous paragraphs and 114 current paragraphs.
63 unchanged; 33 reworded; 15 added; 5 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 9 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
As of April 2025, our policy for domestic inventory procurement was expanded to keep our inventory coverage from 1.5-2 months to 3-6 months. This adjustment was made to safeguard fulfillment continuity and buffer against potential mid-year disruptions, including indirect tariff spillover effects or local supply tightness caused by global volatility.
Current report
In parallel, the Company initially suspended all containerized exports for shipments originating from China when the new tariff policy was originally enacted, as we were unwilling to incur significantly higher import costs. Following the implementation of a 90-day tariff relief window under a temporary U.S.–China trade agreement, we promptly resumed exports and front-loaded the remainder of our 2025 sales-related inventory within that window. This approach allowed us to avoid elevated duties while reducing exposure to future trade uncertainties in a still-fluid regulatory environment.
Current report
These proactive measures have successfully enabled the Company to secure adequate inventory to meet its 2025 sales projection. Therefore, we do not foresee any material impact from future tariff changes in the immediate term, although we will continue to monitor trade policy developments and stand prepared to adjust our strategy as required.
Current report
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 report
Other Expenses, Net
Current report
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 report
For the six months ended June 30, 2025 compared to the six months ended June 30, 2024
Current report
Revenues
Current report
Cost of Goods Sold
Current report
Operating Expenses
Current report
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 report
Other Expenses, Net
Current report
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 report
Total Comprehensive Income
Current report
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.
Removed paragraphs (5)
Previous report
Effective April 2025, the company expanded its inventory holding policy from a baseline of 1.5–2 months to a more resilient 3–6 month coverage. This adjustment is intended to mitigate supply chain disruptions and preserve fulfillment continuity amid fluctuating trade conditions.
Previous report
Given the material impact of recent tariff adjustments on shipments originating from China, the company temporarily suspended all containerized exports from China as a precautionary measure. This suspension will remain in effect pending a comprehensive reassessment of tariff developments and their operational implications.
Previous report
Other Income (Expenses), Net
Previous report
Other income (expenses), net, was $15,071 and $(35,234), respectively, for the three months ended March 31, 2025 and 2024.
Previous report
Despite the increase in revenue to $25,837,090 for the three months ended March 31, 2025, as compared to $24,681,122 for the three months ended March 31, 2024, the revenue increase was offset by a corresponding increase in cost of revenues.
Reworded paragraphs (33)
Previous wording
The Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), provide a safe harbor for forward-looking statements made by or on behalf of Hour Loop, Inc. (“Hour Loop” or the “Company”). The Company and its representatives may from time to time make written or oral statements that are “forward-looking,” including statements contained in this report and other filings with the Securities and Exchange Commission (“SEC”) and in our reports and presentations to stockholders or potential stockholders. In some cases, forward-looking statements can be identified by words such as “believe,” “expect,” “anticipate,” “plan,” “potential,” “continue” or similar expressions. Such forward-looking statements include risks and uncertainties and there are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors, risks and uncertainties can be found in Part I, Item 1A, “Risk Factors,” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as the same may be updated from time to time, including in Part II, Item 1A, “Risk Factors,” of this Quarterly Report on Form 10-Q.
Current wording
The Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), provide a safe harbor for forward-looking statements made by or on behalf of Hour Loop, Inc. (“we,” “us,” “our,” “Hour Loop” or the “Company”). The Company and its representatives may from time to time make written or oral statements that are “forward-looking,” including statements contained in this report and other filings with the Securities and Exchange Commission (“SEC”) and in our reports and presentations to stockholders or potential stockholders. In some cases, forward-looking statements can be identified by words such as “believe,” “expect,” “anticipate,” “plan,” “potential,” “continue” or similar expressions. Such forward-looking statements include risks and uncertainties and there are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors, risks and uncertainties can be found in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as the same may be updated from time to time, including in Part II, Item 1A, “Risk Factors,” of this Quarterly Report on Form 10-Q.
Previous wording
Although we believe the expectations reflected in our forward-looking statements are based upon reasonable assumptions, it is not possible to foresee or identify all factors that could have a material effect on the future financial performance of the Company. The forward-looking statements in this report are made on the basis of management’s assumptions and analyses, as of the time the statements are made, in light of their experience and perception of historical conditions, expected future developments and other factors believed to be appropriate under the circumstances.
Current wording
Although we believe the expectations reflected in our forward-looking statements are based upon reasonable assumptions, it is not possible to foresee or identify all factors that could have a material effect on our future financial performance. The forward-looking statements in this report are made on the basis of management’s assumptions and analyses, as of the time the statements are made, in light of their experience and perception of historical conditions, expected future developments and other factors believed to be appropriate under the circumstances.
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 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.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.
Previous wording
The Company was founded in 2013 by Sam Lai and Maggie Yu. With their vision, leadership, and software development skills, the Company grew rapidly. From 2013 to 2024, sales grew from $0 to $138,252,861.
Current wording
We were founded in 2013 by Sam Lai and Maggie Yu. With their vision, leadership, and software development skills, the Company grew rapidly. From 2013 to 2024, sales grew from $0 to $138,252,861.
Previous wording
******In the first quarter ended March 31, 2025, the U.S. administration’s announcement of additional tariff increases—particularly on China-origin goods—introduced elevated volatility and uncertainty across global supply chains. Anticipating both rising import costs and the risk of inventory shortages driven by accelerated market stockpiling, the company undertook a strategic reassessment of its procurement and inventory management policies.
Current wording
In the first quarter ended March 31, 2025, the U.S. presidential administration’s announcement of additional tariff increases—particularly on China-origin goods—introduced elevated volatility and uncertainty across global supply chains. In response, the Company undertook a strategic reassessment of its procurement and inventory management policies, anticipating both rising import costs and the risk of inventory shortages driven by accelerated market stockpiling.
Previous wording
To offset increased input costs and reduce the risk of stockouts, the company implemented measured price increases on select finished goods (FC) inventory. These actions are designed to support margin stability and ensure product availability in a highly dynamic trade environment.
Current wording
To offset increased input costs and reduce the risk of stockouts, we implemented measured price increases on select finished goods inventory. These actions were designed to support margin stability and ensure product availability in a highly dynamic trade environment.
Previous wording
For the three months ended March 31, 2025 and 2024, we generated net revenues of $25,837,090 and $24,681,122, respectively, and reported net income of $654,517 and $1,065,814, respectively, and cash flow (used in) provided by operating activities of $(23,891) and $492,943, respectively. As noted in our unaudited consolidated financial statements, as of March 31, 2025, we had retained earnings of $59,342.
Current 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.
Previous wording
The following table shows comparisons of our unaudited income statements for the three months ended March 31, 2025 and 2024.
Current wording
The following table shows comparisons of our unaudited income statements for the three and six months ended June 30, 2025 and 2024.
Previous wording
Cost of goods sold for the three months ended March 31, 2025 totaled $11,691,792, as compared to $10,228,916 for the three months ended March 31, 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 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.
Previous wording
Operating expenses for the three months ended March 31, 2025 totaled $13,224,433, representing a $310,399, or 2.4%, increase from the $12,914,034 of operating expenses for the three months ended March 31, 2024.
Current 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.
Previous wording
Total comprehensive income for the three months ended March 31, 2025, was $640,981, as compared with $1,049,281 for the three months ended March 31, 2024. The decrease in total comprehensive income was attributed to an increase in the Company’s cost of revenues in the three months ended March 31, 2025, compared to the three months ended March 31, 2024.
Current 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.
Previous wording
We generated $25,837,090 in revenues for the three months ended March 31, 2025, as compared to $24,681,122 in revenues for the same period in 2024. This represents an increase in revenues of $1,155,968, or 4.68%. 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 three months ended March 31, 2025 were approximately 1,229,792, as compared to 1,123,204 orders in the three months ended March 31, 2024, representing an increase of 9.49%. This surge in orders has played a pivotal role in driving the overall revenue growth. The substantial increase in order quantity indicates 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 9.49% 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 was slightly shy of fully matching this proportion.
Current 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.
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 $1,260,122 and $2,922,080 as of March 31, 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 $325,354 and $3,346,897 as of June 30, 2025 and 2024, respectively.
Previous wording
Since inception, we have generated liquidity from revenues generated by our ongoing business, from debt and from the Company’s initial public offering to fund our operations.
Current wording
We generate liquidity from revenues generated by our ongoing business, and from debt and equity issuances to fund our operations.
Previous wording
The following table shows a summary of our cash flows for the three months ended March 31, 2025 and 2024.
Current wording
The following table shows a summary of our cash flows for the six months ended June 30, 2025 and 2024.
Previous wording
For the three months ended March 31, 2025, cash used in operating activities amounted to $23,891, as compared to $492,943 of cash provided by operating activities for the three months ended March 31, 2024. This was driven by our net income of $654,517 for the three months ended March 31, 2025, as compared to $1,065,814 for the same period in 2024.
Current 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.
Previous wording
For the three months ended March 31, 2025, $720 in cash was used in investing activities, compared to $17,798 in cash used in investing activities for the three months ended March 31, 2024.
Current 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.
Previous wording
For the three months ended March 31, 2025, cash used in financing activities amounted to $839,000, as compared to cash provided by financing activities of $-0- for the three months ended March 31, 2024.
Current 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.
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.
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. 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.
Previous wording
As of March 31, 2025 and December 31, 2024, the outstanding balance under the Taishin line of credit was $603,227 and $610,967, respectively.
Current 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.
Previous wording
From time to time, the Company receives loans and advances from its stockholders to fund its operations. As of March 31, 2025, the Company had a total of $2,660,418 due to related parties.
Current wording
From time to time, we receive loans and advances from our stockholders to fund our operations. As of June 30, 2025, we had a total of $2,660,418 due to related parties.
Previous wording
On July 27, 2021, the Company, Mr. Lai and Ms. Yu entered into a loan agreement with 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, the Company, Mr. Lai and Ms. Yu agreed to extend the term of the loan, with a new maturity date of December 31, 2024. On December 31, 2024, the Company, Mr. Lai and Ms. Yu 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. 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%.
Previous wording
The Company has three operating leases (Flywheel has three offices lease in Taiwan). The respective lease terms are March 1, 2024 to June 30, 2025, June 1, 2024 to May 31, 2025, and August 1, 2024 to July 31, 2025, respectively.
Current 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.
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 March 31, 2025 and December 31, 2024, $497,347 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 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.
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 months ended March 31, 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 six months ended June 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 months ended March 31, 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 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.
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 6.35% and 5.53% of gross sales for the three months ended March 31, 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 6.92% and 5.94% of gross sales for the six months ended June 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 $5,748,972 and $5,705,385 for the three months ended March 31, 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 $11,659,356 and $11,886,764 for the six months ended June 30, 2025 and 2024, respectively, recorded as selling and marketing expenses.
Previous wording
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 and assessing performance as the source for determining the Company’s reportable segments. The Company’s chief operating decision maker has been identified as the chief executive officer of the Company who reviews financial information of separate operating segments based on U.S. GAAP. The chief operating decision maker now reviews results analyzed by customers. This analysis is only presented at the revenue level with no allocation of direct or indirect costs. Consequently, the Company has determined that it has only one operating segment.
Current wording
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 (“CODM”) for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s CODM has been identified as the chief executive officer of the Company who reviews financial information of separate operating segments based on U.S. GAAP. The CODM now reviews results analyzed by customers. This analysis is only presented at the revenue level with no allocation of direct or indirect costs. Consequently, the Company has determined that it has only one operating segment.
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 months ended March 31, 2025 and 2024, the Company had no customer that accounted for 10% or more of total net revenues. In addition, as of March 31, 2025 and December 31, 2024, the Company had no customer that accounted for 10% or more of gross accounts receivable. As of March 31, 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 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.
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 three months ended March 31, 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 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.
Previous wording
Advertising and Promotion Expenses – Our policy is to recognize advertising costs as they are incurred. Advertising and promotion expenses were $1,004,083 and $884,000 for the three months ended March 31, 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 $964,824 and $1,953,155 for the six months ended June 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 months ended March 31, 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 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.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
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 report — wording carried from elsewhere
As noted in our unaudited consolidated financial statements, as of June 30, 2025, we had retained earnings of $1,236,343.
Current report — wording carried from elsewhere
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.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
On November 25, 2024, the term of the loan was revised such that maturity date was extended to May 23, 2025. The line of credit bears interest at a rate of 3.33% per annum.