Form 8-K - Current report

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

 

Date of report (Date of earliest event reported): November 12, 2024

 

HOUR LOOP, INC.

(Exact name of registrant as specified in its charter)

 

Delaware		001-41204		47-2869399
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification Number)

 

8201 164th Ave NE #200, Redmond, WA 98052-7615

(Address of principal executive offices)

 

[phone] ext. 100

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.)

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		HOUR		The Nasdaq Capital Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On November 12, 2024, Hour Loop, Inc. (the “Company”) issued a press release announcing its financial results for the three and nine months ended September 30, 2024. A copy of this press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. The information contained in the website is not a part of this current report on Form 8-K.

 

In accordance with General Instruction B.2 of Form 8-K, the information included in this Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.		Description
99.1		Press release issued by the registrant on November 12, 2024.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	HOUR LOOP, INC.
Dated: November 12, 2024	By:	/s/ Sam Lai
	Name:	Sam Lai
	Title:	Chief Executive Officer and Interim Chief Financial Officer

 

 

 

Exhibit 99.1

 

 

Hour Loop Reports Third Quarter 2024 Results

 

Profitability Continues Despite Warning Signs for the Overall Economy

 

Redmond, WA, Nov 12, 2024 – Hour Loop, Inc. (NASDAQ: HOUR) (“Hour Loop”), a leading online retailer, announces its financial and operational results for the quarter ended September 30, 2024.

 

Financial Highlights for Third Quarter 2024:

 

●	Net revenues in the third quarter increased 6.6% to $31.1 million, compared to $29.1 million in the year-ago period;
●	Net income in the third quarter totaled $0.5 million, compared to net loss of $0.02 million in the year-ago period; and
●	Cash used in operating activities for the nine months ended September 30, 2024, was $1.2 million, compared to $3.9 million in the year-ago period.

 

Management Commentary

 

“We are pleased to report our third quarter 2024 results, in which we continued to deliver good revenue growth, despite low active inventory level due to challenges from severe congestion in the inbound logistics,” said Sam Lai, CEO and interim CFO of Hour Loop. “The revenue growth rate for the third quarter was 6.6%, compared with the year-ago period.”

 

“Our gross margin and operating margin were both improved, compared with the year-ago period, because of efforts made for inventory quality and efficiency enhancement, operation efficiency improvement, as well as expenses management. Overall, we believe we’ve built a solid foundation to continue generating satisfactory growth while maintaining profitability.”

 

“Looking forward, we’re cautiously optimistic. Despite an uncertain economy, we continue to see good demand for our products so far in 2024. We are confident in our ability to continue delivering value to our vendors, customers, and shareholders.”

 

Third Quarter 2024 Financial Results

 

Net revenues in the third quarter of 2024 were $31.1 million, compared to $29.1 million in the year-ago period. The increase was primarily due to continued growth and maturity in our personnel and operating model, despite the overall e-commerce traffic slowdown, intense competition and congested inbound logistics.

 

Gross profit percentage in the third quarter increased 2.2% to 54.8%, compared to 52.6% of net revenues in the comparable period a year ago. The increase was a function of improved product costs, enhanced inventory quality and efficiency, and efforts made on margin increase.

 

 

 

Operating expenses as a percentage of net revenues in the third quarter decreased slightly, by 0.1%, to 52.5%, compared to 52.4% of net revenues in the year-ago period. The decrease reflected better management of normal and long-term storage fees despite a significant increase in inbound placement fees.

 

Net income in the third quarter of 2024 was $0.5 million, or $0.01 per diluted share, compared to net loss of $0.02 million, or $0.001 per diluted share, in the comparable year-ago period. The increase was driven by reduced costs as a result of the reasons mentioned above and efforts made for expenses management.

 

As of September 30, 2024, the Company had $1.2 million in cash and cash equivalents, compared to $2.5 million as of December 31, 2023. This decrease was mainly from an increase in inventory purchases for the upcoming holiday season.

 

Inventories as of September 30, 2024, were $29.1 million, compared to $14.3 million as of December 31, 2023. The increase was due to growth in inventory in view of the upcoming holiday season.

 

Full Year 2024 Financial Outlook

 

For the full year 2024, Hour Loop maintained its guidance for net revenue to be in the range of $165 million to $250 million, representing 25% to 89% year-over-year growth. The Company also maintained its guidance for net income in 2024 to be in the range of $4 million to $6 million.

 

About Hour Loop, Inc.

 

Hour Loop is an online retailer engaged in e-commerce retailing in the U.S. market. It has operated as a third-party seller on www.amazon.com and has sold merchandise on its website at www.hourloop.com since 2013. Hour Loop further expanded its operations to other marketplaces such as Walmart, eBay, and Etsy. To date, Hour Loop has generated practically all its revenue as a third-party seller on www.amazon.com and only a negligible amount of revenue from its own website and other marketplaces. Hour Loop manages more than 100,000 stock-keeping units (“SKUs”). Product categories include home/garden décor, toys, kitchenware, apparel, and electronics. Hour Loop’s primary strategy is to bring most of its vendors’ product selections to the customers. It has advanced software that assists Hour Loop in identifying product gaps so it can keep such products in stock year-round including the entirety of the last quarter (holiday season) of the calendar year. In upcoming years, Hour Loop plans to expand its business rapidly by increasing the number of business managers, vendors, and SKUs.

 

Forward-Looking Statements

 

This press release contains statements that constitute “forward-looking statements,” including with respect to Hour Loop’s business strategy, product development and industry trends. Forward-looking statements are subject to numerous conditions, many of which are beyond the control of Hour Loop. While Hour Loop believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to Hour Loop on the date of this release. These forward-looking statements are based upon current estimates and assumptions and are subject to various risks and uncertainties, including, without limitation, those set forth in Hour Loop’s filings with the Securities and Exchange Commission, as the same may be updated from time to time. Thus, actual results could be materially different. Hour Loop undertakes no obligation to update these statements whether as a result of new information, future events or otherwise, after the date of this release, except as required by law.

 

Investor Contact

 

Finance Department, Hour Loop, Inc.

[e-mail]

 

 

 

HOUR LOOP, INC.

CONSOLIDATED BALANCE SHEETS

(In U.S. Dollars, except for share and per share data)

As of September 30, 2024 and December 31, 2023

(Unaudited)

 

		September 30,				December 31,
		2024				2023
ASSETS
Current assets
Cash		$	1,194,239			$	2,484,153
Accounts receivable, net			548,224				747,650
Inventory, net			29,081,306				14,276,555
Prepaid expenses and other current assets			759,391				504,973
Total current assets			31,583,160				18,013,331
Property and equipment, net			80,081				148,788
Deferred tax			567,347				1,304,215
Operating lease right-of-use lease assets			173,786				83,946
Total non-current assets			821,214				1,536,949
TOTAL ASSETS		$	32,404,374			$	19,550,280
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable		$	15,453,334			$	3,812,954
Credit cards payable			4,229,677				4,404,445
Short-term loan			632,911				652,422
Operating lease liabilities-current			178,746				82,269
Accrued expenses and other current liabilities			1,050,363				1,972,512
Total current liabilities			21,545,031				10,924,602
Non-current liabilities
Operating lease liabilities-non-current			-				2,363
Due to related parties			4,170,418				4,170,418
Total non-current liabilities			4,170,418				4,172,781
Total liabilities			25,715,449				15,097,383
Commitments and contingencies			-
Stockholders’ equity
Preferred stock: $0.0001 par value, 10,000,000 shares authorized, none issued and outstanding as of September 30, 2024 and December 31, 2023			-				-
Common stock: $0.0001 par value, 300,000,000 shares authorized, 35,132,480 and 35,082,464 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively			3,513				3,508
Additional paid-in capital			5,787,687				5,727,650
Retained earnings (accumulated deficit)			931,989				(1,252,622	)
Accumulated other comprehensive loss			(34,264	)			(25,639	)
Total stockholders’ equity			6,688,925				4,452,897
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	32,404,374			$	19,550,280

 

The accompanying footnotes are an integral part of these unaudited consolidated financial statements.

 

 

 

HOUR LOOP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(In U.S. Dollars, except for share and per share data)

For the Three and Nine Months Ended September 30, 2024 and 2023

(Unaudited)

 

		Three Months				Three Months				Nine Months				Nine Months
		Ended				Ended				Ended				Ended
		September 30,				September 30,				September 30,				September 30,
		2024				2023				2024				2023
Revenues, net		$	31,075,498			$	29,152,360			$	83,827,327			$	72,637,417
Cost of revenues			(14,036,187	)			(13,819,798	)			(36,710,400	)			(36,331,604	)
Gross profit			17,039,311				15,332,562				47,116,927				36,305,813
Operating expenses
Selling and marketing			14,585,652				13,632,333				38,603,540				33,385,216
General and administrative			1,731,816				1,631,484				5,316,176				5,311,323
Total operating expenses			16,317,468				15,263,817				43,919,716				38,696,539
Income (loss) from operations			721,843				68,745				3,197,211				(2,390,726	)
Other (expenses) income
Other expense			(516	)			(3,527	)			(6,449	)			(7,470	)
Interest expense			(62,862	)			(62,476	)			(186,958	)			(185,964	)
Other income			28,933				19,750				116,444				56,102
Total other expenses, net			(34,445	)			(46,253	)			(76,963	)			(137,332	)
Income (loss) before income taxes			687,398				22,492				3,120,248				(2,528,058	)
Income tax (expense) benefit			(217,751	)			(37,548	)			(935,637	)			508,390
Net income (loss)			469,647				(15,056	)			2,184,611				(2,019,668	)
Other comprehensive loss
Foreign currency translation adjustments			15,966				(12,032	)			(8,625	)			(19,885	)
Total comprehensive income (loss)			485,613				(27,088	)			2,175,986				(2,039,553	)
Basic and diluted income (loss) per common share		$	0.01			$	(0.00	)		$	0.06				(0.06	)
Weighted-average number of common shares outstanding			35,130,677				35,058,340				35,111,844				35,061,286

 

The accompanying footnotes are an integral part of these unaudited consolidated financial statements.

 

 

 

HOUR LOOP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In U.S. Dollars)

For the Nine Months Ended September 30, 2024 and 2023

(Unaudited)

 

		Nine Months				Nine Months
		Ended				Ended
		September 30,				September 30,
		2024				2023
Cash flows from operating activities
Net income (loss)		$	2,184,611			$	(2,019,668	)
Reconciliation of net income (loss) to net cash used in operating activities:
Depreciation expenses			98,624				100,441
Amortization of operating lease right-of-use lease assets			157,520				262,913
Deferred tax			736,868				(508,390	)
Stock-based compensation			60,042				34,333
Inventory allowance			578,622				972,582
Changes in operating assets and liabilities:
Accounts receivable			199,426				(384,775	)
Inventory			(15,383,373	)			(5,896,260	)
Prepaid expenses and other current assets			(254,418	)			(412,309	)
Accounts payable			11,640,380				5,439,274
Credit cards payable			(174,768	)			(412,770	)
Accrued expenses and other current liabilities			(922,149	)			(842,318	)
Operating lease liabilities			(153,270	)			(280,333	)
Net cash used in operating activities			(1,231,885	)			(3,947,280	)
Cash flows from investing activities:
Purchases of property and equipment			(35,031	)			(14,024	)
Net cash used in investing activities			(35,031	)			(14,024	)
Effect of changes in foreign currency exchange rates			(22,998	)			(38,673	)
Net change in cash			(1,289,914	)			(3,999,977	)
Cash at beginning of the period			2,484,153				4,562,589
Cash at end of the period		$	1,194,239			$	562,612
Supplemental disclosures of cash flow information:
Cash paid for interest		$	15,266			$	172,964
Cash paid for income tax		$	210,811			$	362
Noncash investing and financing activities:
Operating lease right-of-use of assets and operating lease liabilities recognized		$	248,917			$	27,330

 

The accompanying footnotes are an integral part of these unaudited consolidated financial statements.

 

 

 

Cover	Nov. 12, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 12, 2024
Entity File Number	001-41204
Entity Registrant Name	HOUR LOOP, INC.
Entity Central Index Key	0001874875
Entity Tax Identification Number	47-2869399
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	8201 164th Ave NE #200
Entity Address, City or Town	Redmond
Entity Address, State or Province	WA
Entity Address, Postal Zip Code	98052-7615
City Area Code	206
Local Phone Number	385-0488 ext. 100
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock
Trading Symbol	HOUR
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

---