UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-K

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2024~~2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______, 20 ____, to ______, 20_____.

Commission File Number 001-41204

HOUR LOOP, INC.

(Exact name of registrant as specified in its charter)

Delaware

47-2869399

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

8201 164^th Ave. NE

Redmond, WA

98052-7615

(Address of principal executive offices)

(Zip Code)

(206) 385-0488, ext. 100

(Registrant’s telephone number, including area code)

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

Securities registered pursuant to section 12(g) of the Act:

N/A

(Title of class)

N/A

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		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. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to Sec. 240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of the voting and non-voting common equity held by non-affiliates based upon the closing price of $01.~~934~~43 per share of common stock as of June 2830, ~~2024~~2025 (the last business day of the registrant’s most recently completed second fiscal quarter) was $12,~~611~~501,~~150~~309.

As of March 2724, ~~2025~~2026, there were 35,~~151~~183,~~440~~ 890 shares of common stock, par value $0.0001 per share, of the registrant issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None.

Table of Contents

		Page
Part I
Item 1.	Business	1
Item 1A.	Risk Factors	1311
Item 1B.	Unresolved Staff Comments	3530
Item 1C.	Cybersecurity	3530
Item 2.	Properties	3631
Item 3.	Legal Proceedings	3731
Item 4.	Mine Safety Disclosures	3731
Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	3732
Item 6.	Reserved	3933
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3933
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	5242
Item 8.	Financial Statements and Supplementary Data	5242
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	5242
Item 9A.	Controls and Procedures	5243
Item 9B.	Other Information	5343
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	5343
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	5344
Item 11.	Executive Compensation	5949
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	7361
Item 13.	Certain Relationships and Related Transactions, and Director Independence	7563
Item 14.	Principal Accountant Fees and Services	7865
Part IV
Item 15.	Exhibit and Financial Statement Schedules	8066
Item 16.	Form 10-K Summary	8268
	Signatures	8369

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements contained in this annual report may constitute “forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements contained in this annual report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the following risks, uncertainties and other factors:

	●	the level of demand for our products and services;

	●	competition in our markets;

	●	our ability to grow and manage growth profitably;

	●	our ability to access additional capital;

	●	changes in applicable laws or regulations;

	●	our ability to attract and retain qualified personnel;

	●	the possibility that we may be adversely affected by other economic, business, and/or competitive factors; and

	●	other risks and uncertainties, including those listed under the captions “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

PART I

ITEM 1. BUSINESS

This Business section, along with other sections of this annual report on Form 10-K, includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe that these industry publications and third-party research, surveys and studies are reliable, we have not independently verified such data and we do not make any representation as to ~~the~~ the accuracy of the information. Unless the context otherwise requires, “Hour Loop,” “we,” “us,” “our,” or the “Company” refers to Hour Loop, Inc., ~~and~~together with Flywheel Consulting Limited, its ~~consolidated~~wholly ~~subsidiaries~~owned subsidiary (“Flywheel”).

Overview

Our Business

We are an online retailer engaged in e-commerce retailing in the U.S. market. We have operated as a third-party seller on www.amazon.com (“Amazon”) since 2013, and on www.walmart.com (“Walmart”) since 2020. We have also sold merchandise on our website at www.hourloop.com since 2013. ~~We expanded our operations to other marketplaces such as Walmart, eBay and Etsy in recent years.~~ To date, we have generated practically all of our revenue as a third-party seller on ~~www.amazon.com~~Amazon and only a negligible amount of revenue from our operations on our website at www.hourloop.com and as a third-party seller on ~~other marketplaces~~Walmart. We manage more than 100,000 stock-keeping units (“SKUs”). Product categories include home/garden décor, toys, kitchenware, ~~apparels~~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~~fourth 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 ~~while improving profitability~~.

Business Model

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~~ 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~~ merchandise on their platform. As stated above, to date, we have generated only a negligible amount of revenues as a third-party seller on ~~www~~Walmart.~~walmart.com.~~

The advantages of selling via a wholesale model include the following:

	●	Purchase lower unit quantities with wholesale orders than private label products.
	●	Selling wholesale is less time intensive and easier to scale than sourcing products via retail arbitrage.
	●	More brands will want to work with us because we can provide broader Amazon presence.

The challenges of selling via a wholesale model include the following:

● Fierce competition on listing for Buy Box on ~~amazon.com~~Amazon (as described below). ● Developing and maintaining relationships with brand manufacturers.

~~Market Description/Opportunities~~Formation

~~According~~We towere ~~Marketplace~~founded ~~Pulse~~in 2013 by Sam Lai, ~~total~~our ~~U.S.~~Chairman ~~retail~~of ~~sales~~the ~~increased~~Board, ~~2.5%~~Chief toExecutive ~~$7.42~~Officer, ~~trillion~~interim inChief ~~2024~~Financial ~~from~~Officer ~~$7.24~~and ~~trillion~~significant stockholder, inand ~~2023~~Maggie Yu, our Senior Vice President, a member of our Board of Directors and a significant stockholder. UMr.S. ~~ecommerce~~Lai ~~sales~~and ~~increased~~Ms. 6Yu are husband and wife.6% toWith $1their vision,~~192.29~~ ~~billion~~leadership, inand ~~2024~~software ~~from~~development $1skills,~~118~~ the Company grew rapidly.68 ~~billion~~From in2013 ~~2023~~to 2025, net sales grew from $0 to $142,440,236.

~~Amazon~~We were originally incorporated ~~accounted~~under ~~for~~the ~~approximately~~laws ~~40%~~of the State of ~~all~~Washington ~~e-commerce~~on inJanuary ~~the~~13, ~~United~~2015. ~~States~~In ~~and~~2019, ~~that~~we ~~makes~~formed ~~Amazon~~Flywheel, ~~the~~a ~~biggest~~wholly ~~ecommerce~~owned ~~giant~~subsidiary, ~~currently~~to inprovide business ~~the~~operating ~~market~~consulting services exclusively to Hour Loop. On April 7, 2021, Hour Loop converted from a Washington corporation to a Delaware corporation.

~~Formation~~Competitive Advantage

~~The Company~~Among ~~was founded in 2013 by Sam Lai, our Chairman of~~ the ~~Board,~~approximately ~~Chief~~1.9 ~~Executive~~million ~~Officer,~~active ~~interim~~third-party ~~Chief~~sellers ~~Financial~~on ~~Officer and significant stockholder~~Amazon, ~~and Maggie Yu, our Senior Vice President, a member of our Board of Directors and a significant stockholder. With their vision,~~ ~~leadership,~~we ~~and~~believe ~~software~~we ~~development~~have ~~skills,~~two ~~the~~main ~~Company~~competitive ~~grew rapidly. From 2013 to 2024, net sales grew from $0 to $138,252,861.~~advantages:

~~We were~~● ~~originally~~First, ~~incorporated~~we ~~under~~have ~~the~~strong ~~laws~~operations ofand ~~the~~sales ~~State~~teams ofexperienced ~~Washington~~in onlisting, ~~January~~shipment, 13advertising, ~~2015~~reconciliation and sales. InBy ~~2019,~~delivering wehigh ~~formed~~quality aresults ~~wholly~~and ~~owned~~enhancing ~~subsidiary~~procedures through the process, ~~Flywheel~~ ~~Consulting~~our ~~Ltd~~teams are competitive. ~~(“Flywheel”)~~● Second, we believe our proprietary software system gives us an advantage over our competition. The system is highly customized to ~~provide~~our business ~~operating~~model; ~~consulting~~it ~~services,~~collects ~~exclusively~~and processes large amounts of data every day to ~~Hour~~optimize ~~Loop~~our operation and sales. OnThrough ~~April 7,~~advanced ~~2021~~software, ~~Hour~~we ~~Loop~~can ~~converted~~identify ~~from~~product agaps ~~Washington~~and ~~corporation~~keep tothem ain ~~Delaware~~stock ~~corporation.~~all year round.

~~Competitive~~With respect ~~Advantage~~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.

~~Among~~Tariff ~~the~~Impact ~~approximately~~and ~~1.9~~Response ~~million active third-party sellers on Amazon, we believe we have two main competitive advantages:~~Measures

●In the ~~First,~~first wequarter ~~have~~ended ~~strong~~March ~~operations and sales teams experienced in listing~~31, ~~shipment~~2025, ~~advertising,~~the ~~reconciliation~~U.S. ~~and~~presidential ~~sales.~~administration’s Byannouncement ~~delivering~~of ~~high~~additional ~~quality~~tariff ~~results~~increases—particularly on ~~and~~China-origin ~~enhancing~~goods—introduced ~~procedures~~elevated ~~through~~volatility ~~the~~and ~~process,~~uncertainty ~~our~~across ~~teams~~global ~~are~~supply ~~competitive~~chains. ●In ~~Second~~response, wethe ~~believe~~Company ~~our~~undertook a ~~proprietary~~strategic ~~software~~reassessment ~~system~~of ~~gives~~its usprocurement anand ~~advantage~~inventory ~~over~~management ~~our~~policies, ~~competition.~~anticipating ~~The~~both ~~system~~rising isimport ~~highly~~costs ~~customized to our business model; it collects~~ and ~~processes~~the ~~large~~risk ~~amounts~~ of inventory ~~data~~shortages ~~every~~driven ~~day~~by toaccelerated ~~optimize~~market ~~our operation and sales~~stockpiling. ~~Through advanced software, we can identify product gaps and keep them in stock all year round.~~

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.2

2Throughout 2025, the Company navigated a volatile trade environment characterized by expansive tariffs on China-origin goods. To mitigate these impacts, we successfully front-loaded approximately 3-6 months of sales-related inventory and adjusted our international commercial terms (“Incoterms”) to ensure supply chain stability. Although the Incoterms adjustment resulted in higher overall costs, it ensured continuity and stability across our supply chain.

~~Historical~~In parallel, ~~Performance~~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.

~~Our~~To offset ~~year~~increased ~~end~~input ~~net~~costs ~~revenues~~ and ~~net~~reduce ~~income~~the ~~(loss)~~risk ~~from~~of ~~2013~~stockouts, ~~through~~we ~~2024~~implemented ismeasured ~~presented~~price increases on select finished goods inventory. These actions were designed to support margin stability and ensure product availability in ~~the~~a ~~table~~highly ~~below:~~dynamic trade environment.

Year	Net Revenue		Year-over- Year %			Net Income (Loss)			Net Income (Loss) %			Year-over -Year %
2013	$	26,135		-		$	4,682			18	%		-
2014	$	1,102,237		4117	%	$	150,300			14	%		3110	%
2015	$	2,567,267		133	%	$	228,009			9	%		52	%
2016	$	7,337,012		186	%	$	77,752			1	%		NA
2017	$	17,487,124		138	%	$	(122,176	)		(1	)%		(257	)%
2018	$	24,402,144		40	%	$	657,821			3	%		NA
2019	$	26,564,693		9	%	$	(423,073	)		(2	)%		(165	)%
2020	$	38,655,264		46	%	$	3,820,698			10	%		NA
2021	$	62,792,981		62	%	$	4,783,773			8	%		25	%
2022	$	95,930,091		53	%	$	(1,477,623	)		(2	)%		(131	)%
2023	$	132,124,202		38	%	$	(2,429,694	)		(2	)%		64	%
2024	$	138,252,861		5	%	$	657,447			0	%		NA

These proactive measures successfully enabled the Company to secure adequate inventory to meet its 2025 sales projection. However, the regulatory landscape shifted fundamentally in the first quarter of 2026. On February 20, 2026, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (“IEEPA”) does not authorize the imposition of tariffs, effectively invalidating the 2025 reciprocal tariff regime. While the Company is evaluating the potential for retroactive refunds of duties paid in 2025, the U.S. administration immediately transitioned to a new tariff framework.

InEffective ~~2024~~February ~~and~~24, ~~2023~~2026, U.S. ~~approximately~~President Donald Trump invoked Section 122 of the Trade Act of 1974, as amended (the “Trade Act”), imposing a temporary 9910% ~~and~~global ~~99%,~~import ~~respectively~~surcharge on most goods entering the United States for an initial period of 150 days. Additionally, the administration continued the suspension of ~~our~~the ~~revenue~~“de ~~was~~minimis” ~~through~~exemption for low-value shipments ($800 or ~~with~~less), ~~the~~which ~~Amazon~~now ~~sales~~requires ~~platform~~formal entry and payment of duties on all parcels, including those from China.

~~Pricing~~Further, ~~Strategy~~on March 11, 2026, the Office of the U.S. Trade Representative (the “USTR”) self-initiated new Section 301 investigations into manufacturing overcapacity and ~~Policies~~forced labor across 16 economies, including China. These investigations could result in significant, non-timebound tariffs that may replace or exceed the current 10% surcharge.

InWhile anour ~~ideal~~proactive ~~world,~~2025 ~~we would~~inventory ~~like~~positioning toprovided ~~price our products at key stone pricing or double wholesale cost. However, we operate in~~ a ~~hyper~~temporary ~~competitive environment and we must stay competitive. Therefore~~buffer, wethese ~~must~~2026 ~~draw~~developments—specifically athe ~~good~~Section ~~balance~~122 ~~between~~surcharge ~~gross margin~~ and ~~revenue.~~the ~~Our~~increased ~~main objectives focus on increasing~~compliance ~~volume~~costs ~~and~~associated ~~maximizing profits, which is achieved~~ with athe ~~customized~~loss ~~auto~~of ~~pricing~~de ~~system~~minimis wetreatment—are ~~developed~~expected ~~internally,~~to inincrease ~~combination~~our ~~with~~landed ~~well-trained business managers’ judgment on pricing skills as well as constant monitoring~~costs. ~~One~~We ~~principal~~continue ~~feature~~to ofmonitor ~~the~~these ~~pricing system is that~~fluid ittrade ~~automatically~~policy ~~syncs~~developments ~~public~~and ~~data~~may ofimplement ~~competing~~further ~~offers from Amazon regularly, so business managers can make~~ price ~~settings and~~ adjustments ~~based~~ onor ~~accurate~~supply ~~data,~~chain ~~and~~diversifications ~~thus be able~~ to ~~set~~maintain ~~optimal~~margin ~~selling prices for products~~stability. ~~In addition, the system is constantly improved with new features and optimizations.~~

~~At a high level, our automated~~Historical pricing tool helps us stay competitive while our business managers mainly focus on increasing gross margins. Our proprietary repricing tool analyze sales trend, projected sales, inventory age, inventory cost, potential profits, Fulfillment by Amazon (“FBA”) fees, competing offers, and seasonality and determines an urgency level, then depending on the level of urgency, it automatically adjusts prices accordingly.Performance

3Our year end net revenues and net income (loss) from 2013 through 2025 is presented in the table below:

Business managers, after establishing the bases for prices, begin to develop pricing strategies for each product while taking the current market conditions, company goals (e.g., increasing short-term or long-term profits) and strategies into consideration. Furthermore, business managers consider different marketing segments such as costs and competitions in order to develop effective pricing strategies and policies.

Year	Net Revenue		Year-over- Year % Increase			Net Income (Loss)			Net Income (Loss) %			Year-over -Year % Increase (Decrease)
2013	$	26,135		-		$	4,682			18	%		-
2014	$	1,102,237		4117	%	$	150,300			14	%		3110	%
2015	$	2,567,267		133	%	$	228,009			9	%		52	%
2016	$	7,337,012		186	%	$	77,752			1	%		NA
2017	$	17,487,124		138	%	$	(122,176	)		(1	)%		(257	)%
2018	$	24,402,144		40	%	$	657,821			3	%		NA
2019	$	26,564,693		9	%	$	(423,073	)		(2	)%		(165	)%
2020	$	38,655,264		46	%	$	3,820,698			10	%		NA
2021	$	62,792,981		62	%	$	4,783,773			8	%		25	%
2022	$	95,930,091		53	%	$	(1,477,623	)		(2	)%		(131	)%
2023	$	132,124,202		38	%	$	(2,429,694	)		(2	)%		64	%
2024	$	138,252,861		5	%	$	657,447			0	%		NA
2025	$	142,440,236		3	%	$	1,704,849			1	%		159	%

~~The~~In 2025 ~~following~~and ~~subsections provide~~2024, ~~more~~approximately ~~insight~~98% ~~into~~and ~~various~~99%, ~~pricing~~respectively, ~~strategies~~of weour ~~have~~revenue ~~developed~~was ~~over~~through or with the ~~years~~Amazon sales platform. ~~Our~~As ~~internal~~noted ~~training~~in ~~mainly~~our consolidated ~~focuses~~financial onstatements, ~~competition-based pricing~~as ~~policy~~of ~~and~~December ~~value-based~~31, ~~pricing~~2025, ~~policy~~we had retained earnings of $1,109,674.

1. Competition-Based Pricing Policy: 15% of our products are toys, which are extremely popular and competitive. In this type of environment where volume is high but gross margin is low, our main strategy is to purchase large quantities, so we can increase sales volume and price competitively while maintaining an average return on investment (“ROI”) of at least 15%. We are using the competition-based pricing policy to match competitors’ prices, which means constantly winning Buy Box (as described below). Our pricing system is capable of automatically matching all Buy Box. 2. Promotional Pricing Policy: To boost lagging sales, we adapted our own promotional pricing policy, which involves offering modest discounts on products with inventory age over 45 days, which proves to be cost-effective at reducing the number of low turn-over SKUs. 3. Value-Based Pricing Policy: We incorporate a value-based pricing strategy when inventories are constrained, which can happen when customer demand suddenly spikes due to external factors, supply shortage, or seasonal spikes. We set prices to reflect the value perceived by customers, especially on products under gift categories when consumer demands are higher. Contrary to a typical seller, we opt to maintain high gross margin instead of marking down prices and running special deals during the high-demand season during Q4. Therefore, business managers can achieve increases in both sales and high average ROI of 40%.

~~Buy~~Pricing ~~Box~~Strategy on amazon.com is the top right section on a product page where customers can directly add items to their shopping carts. Since many sellers on amazon.com can sell the same product, they must compete to “win the Buy Box” for a certain product. Winning the Amazon Buy Box simply means that you were chosen for the Buy Box placement. When you win this placement, customers have a button to directly add your product to their carts, giving you an advantage over competing sellers. For a seller to be eligible for the Buy Box, they must meet a set of performance-based requirements, including order defect rate, customer shopping experience, time and ~~experience on the Amazon selling platform, and status as a professional seller.~~Policies

~~Overview~~In an ideal world, we would like to price our products at key stone pricing or double wholesale cost. However, we operate in a hyper competitive environment and we must stay competitive. Therefore, we must draw a good balance between gross margin and revenue. Our main objectives focus on increasing volume and maximizing profits, which is achieved with a customized auto pricing system we developed internally, in combination with well-trained business managers’ judgment on pricing skills, as well as constant monitoring. One principal feature of ~~Market~~the &pricing ~~Competition~~system is that it automatically syncs public data of competing offers from Amazon regularly, so business managers can make price settings and adjustments based on accurate data, and thus be able to set optimal selling prices for products. In addition, the system is constantly improved with new features and optimizations.

~~According~~At toa ~~Marketplace~~high ~~Pulse~~level, ~~total~~our ~~U.S.~~automated ~~retail~~pricing ~~sales~~tool ~~increased~~helps ~~2.5%~~us tostay ~~$7.42~~competitive ~~trillion~~while inour ~~2024~~business ~~from~~managers ~~$7.24~~mainly ~~trillion~~focus inon ~~2023.~~increasing Ugross margins.S. Our ~~ecommerce~~proprietary repricing tool analyzes sales trends, projected sales, inventory age, inventory cost, potential profits, Fulfillment ~~increased~~by ~~6.6%~~Amazon to(“FBA”) $1fees,~~192.29~~ ~~billion~~competing inoffers, ~~2024~~and ~~from~~seasonality $1and determines an urgency level,~~118.68~~ ~~billion~~then independing ~~2023~~on the level of urgency, it automatically adjusts prices accordingly.

~~In 2024~~Business managers, ~~total~~after ~~U.S.~~establishing ~~ecommerce sales~~the ~~reached~~bases 1for prices,~~192.29~~ ~~billion~~begin to develop pricing strategies for each product, ~~representing~~while ataking 6current market conditions and Company goals (e.6%g., ~~year~~increasing short-~~over~~term or long-~~year~~term ~~increase~~profits) ~~from~~and ~~$1,118.68 billion~~strategies ininto ~~2023~~consideration. ~~This~~Furthermore, isbusiness managers ~~less~~consider ~~than~~different ~~the~~marketing ~~U.S.~~segments, ~~ecommerce~~such ~~growth~~as ~~rate~~costs ofand ~~2023~~competition, ~~during~~in ~~which~~order ~~total~~to ~~sales~~develop ~~increased~~effective bypricing 7%strategies ~~year-over-year~~and ~~from 2022~~policies.

4The following subsections provide more insight into various pricing strategies we have developed over the years. Our internal training mainly focuses on competition-based pricing policy and value-based pricing policy.

~~Despite~~1. ~~the~~Competition-Based ~~slowdown~~Pricing Policy: 15% of our products are toys, ~~total U~~which are extremely popular and competitive.S. ~~ecommerce~~In this type of environment, where volume is high but gross margin is low, our main strategy is to purchase large quantities, so we can increase sales involume ~~2024~~and ~~still~~price ~~marked~~competitively ~~the~~while ~~highest~~maintaining an average return on ~~record~~investment (“ROI”) of at least 15%. ~~This~~We are using the competition-based pricing policy to match competitors’ prices, which means constantly winning Buy Box (as described below). Our pricing system is ancapable ~~impressive~~of ~~increase~~automatically ~~from~~matching aall ~~decade~~Buy ~~ago~~Box. in2. ~~2011~~Promotional ~~when~~Pricing ~~online~~ Policy: To boost lagging sales, inwe adapted our own promotional pricing policy, which involves offering modest discounts on products with inventory age over 45 days, which proves to be cost-effective at reducing the ~~U.S.~~number ~~totaled~~of ~~$199~~low turn-over SKUs.3 ~~billion~~3. AValue-Based ~~year~~Pricing ~~later~~Policy: We incorporate a value-based pricing strategy when inventories are constrained, itwhich ~~breached~~can ~~the~~happen ~~$200~~when ~~billion~~customer ~~mark~~demand ~~for~~suddenly ~~the~~spikes ~~very~~due ~~first~~to ~~time~~external factors, supply shortage, or seasonal spikes. ~~From~~We ~~2011~~set prices to ~~2024~~reflect the value perceived by customers, ~~annual~~ Uespecially on products under gift categories when consumer demands are higher.S Contrary to a typical seller, we opt to maintain high gross margin instead of marking down prices and running special deals during the high-demand season during Q4. ~~ecommerce~~Therefore, business managers can achieve increases in both sales ~~multiplied~~and byhigh ~~approximately~~average 10ROI ~~times~~of 40%.

~~Target~~Buy Box ~~Market~~on ~~Size~~amazon.com is the top right section on a product page where customers can directly add items to their shopping carts. Since many sellers on amazon.com can sell the same product, they must compete to “win the Buy Box” for a certain product. Winning the Amazon Buy Box simply means that you were chosen for the Buy Box placement. When you win this placement, customers have a button to directly add your product to their carts, giving you an advantage over competing sellers. For a seller to be eligible for the Buy Box, they must meet a set of performance-based requirements, including order defect rate, customer shopping experience, time and experience on the Amazon selling platform, and status as a professional seller.

~~Total Addressable Market~~4

~~As an e-commerce company retailing~~Overview inof ~~the~~Market ~~U.S.~~& ~~market, our total addressable market covers all U.S. residents with Internet access, which segmentally includes repeat customers and new customers to online shopping every year.~~Competition

~~Growth~~According to Marketplace Pulse (based on U.S. Census Bureau data), total U.S. retail sales increased 3.5% to approximately $7.68 trillion in 2025, from $7.42 trillion in 2024. Consumers spent $1,233.7 billion online with U.S. merchants in 2025, which represents approximately 16.4% of ~~E-commerce~~total vsU.S. ~~Total~~retail ~~Retail~~sales ~~Sales~~for the year, compared to 16.07% in 2024.

~~According to U.S. Department~~Amazon ofis ~~Commerce~~estimated ~~data,~~to ~~e-commerce’s~~account ~~share~~for ofapproximately ~~total retail sales has steadily increased, peaking at 16~~40.4% ~~in the second quarter~~ of ~~2020. By~~all ~~the fourth quarter of 2024, it accounted for 16.4%, indicating a sustained and significant presence in the retail sector. Total~~ U.S. ~~retail~~ e-commerce sales, ~~increased~~according ~~2.5%~~ to ~~$7.42~~third-party ~~trillion~~industry ~~in 2024 from $7.24 trillion in 2023. Consumers spent $1~~analyses,~~192.29~~ ~~billion~~making ~~online~~it ~~with U.S.~~the ~~merchants~~largest ine-commerce ~~2024,~~retailer ~~which~~currently isin ~~around 16.07% of total U.S. retail sales for~~ the ~~year compared to 15~~market.~~45% in 2023.~~

~~Amazon~~In ~~accounted~~2025, ~~for~~total ~~approximately~~U.S. e-commerce sales reached $1,233.7 billion, 40representing a 3.4% year-over-year increase from $1,192.6 billion in 2024. This is less than the U.S. e-commerce growth rate of ~~all~~2024, during which total sales increased by 6.6% year-over-year from 2023. Despite the slowdown, total U.S. e-commerce sales in 2025 still marked the ~~United~~highest ~~States~~on ~~and~~record. ~~that~~This ~~makes~~is ~~Amazon~~an ~~the~~impressive ~~biggest~~increase ~~ecommerce~~from ~~giant~~2011, ~~currently~~when online sales in the ~~market~~U.S. totaled $199.3 billion. A year later, it breached the $200 billion mark for the very first time. From 2011 to 2025, annual U.S. e-commerce sales multiplied by approximately 7.6 times.

~~Growth~~Target Market ~~of Amazon Prime Members~~Size

~~Amazon has over 180 million~~Total ~~Prime~~Addressable ~~members in the U.S., and we were seeing continuous year-over-year growth over the past years.~~Market

5As an e-commerce company retailing in the U.S. market, our total addressable market covers all U.S. residents with Internet access, which segmentally includes repeat customers and new customers to online shopping every year.

~~Operational~~Growth of ~~Advantages~~E-commerce vs. Total Retail Sales

AsAccording to U.S. Department of ~~March~~Commerce 27(U.S. Census Bureau) data, ~~2025~~e-commerce’s share of total U.S. retail sales has steadily increased over time, ~~Hour~~peaking ~~Loop~~at ~~was~~16.4% ~~recognized~~in asthe ~~one~~second quarter of 2020. By the ~~top~~fourth 23quarter ~~third-party~~of ~~sellers~~2024, it accounted for 16.4% in total retail sales, and this share remained essentially unchanged into 2025 based on the most recent quarterly data. Total U.S. ~~Amazon,~~retail ~~according~~sales increased 3.5% to ~~Marketplace~~approximately ~~Pulse~~$7.68 trillion in 2025, ~~highlighting~~ ~~its~~from ~~continued~~$7.42 ~~growth~~trillion in 2024. Consumers spent $1,233.7 ~~industry~~billion ~~leadership~~online with U.S. merchants in 2025, ~~and~~which ~~outstanding~~represents approximately 16.4% of total U.S. retail sales ~~performance~~for the year, compared to 16.07% in 2024.

~~Automation~~Amazon is estimated to account for approximately 40.4% of all U.S. e-commerce sales, according to third-party industry analyses, making it the largest e-commerce retailer currently in the market.

~~We developed a proprietary~~Growth ~~software~~of ~~that~~Amazon isPrime tailor made to all our operational needs. This includes managing order review process, shipment management, inventory management, accounting, and complete end-to-end third-party integrations. This allows us to scale, reduce cost, and improve quality.Members

~~Profitability~~Amazon has ~~Management~~over 180 million Prime members in the U.S., and we were seeing continuous year over year growth over the past years.

We have experienced operations managers tracking team performances with key performance indicators. We have departments specializing in logistic costs, advertising, marketing, and product management. We hold monthly process reviews to identify early red flags and look for areas to optimize. Each quarter, we set increasingly difficult bars both to grow gross margin and further reduce expenses.5

~~Continuous Process Optimization~~Operational Advantages

InAs ~~order~~of toMarch ~~improve~~18, ~~operating efficiencies~~2026, weHour ~~have~~Loop ~~effective~~was ~~process~~recognized ~~optimization~~as ~~adapting~~number to25 ~~the~~in ~~changing~~Marketplace Pulse’s ~~policies~~Top ofAmazon ~~the~~Marketplace ~~e-commerce~~Sellers ~~marketplace.~~list ~~We continuously analyze our performance~~ based on ~~data.~~positive ~~We conduct pricing~~ reviews, ~~inventory~~received ~~planning~~in ~~and profitability analysis using this data. This analysis provides us with insights on~~ the ~~processes~~last ~~that~~30 ~~add~~days ~~the~~among ~~most value~~U. ~~Using these insights, we develop guidelines that help us improve our operations~~S. ~~These~~Amazon ~~guidelines are incorporated into our operations which include (but are not limited to)~~sellers, ~~identifying and~~ ~~ordering~~highlighting at optimal inventory levels, managing merchandise storage costs, optimizing transit times, and pricing at appropriate levels. Our operations staff follows these guidelines which help them perform optimally. By continuously analyzing data, we are able to find insights for improving our business. This drives continuous process optimization and its ~~implementation~~continued ~~into our operations. In addition~~growth, ~~our~~industry ~~proprietary software allows us to continually accelerate process effectiveness based on specific requirements. Over time~~leadership, our system eliminates unnecessary procedures that could be replaced by an advanced algorithm. For instance, we simplify the FBA shipment process through application programming interface (“API”) integration. Our self-developed system also tracks insightful analysis of our profitability, clearer visualizes the drivers and ~~optimums~~outstanding tosales ~~better manage operational costs~~performance. We monitor operational parameters that drive our business and proactively try to optimize them. These include fine tuning our item selection, managing our inventory levels, estimating demand and pricing to maximize our profitability.

~~Data-Driven Approach~~Automation

We ~~make decisions based on~~ ~~analysis~~developed ~~and~~proprietary ~~interpretation~~software ofthat ~~the~~is ~~data~~tailor-made ~~sets~~to ~~rather~~all ~~than~~our ~~observations~~operational ~~over the market trend~~needs. ByThis ~~standardizing~~includes ~~processes~~managing ~~and~~order ~~combine~~review ~~data-driven~~process, shipment management, weinventory ~~can~~management, ~~ensure~~accounting, ~~the organization maintains consistency that is high quality. Our business managers use historical data~~ and ~~sales projection~~complete ~~provided by our proprietary software~~ end-to-end ~~find~~third-party ~~potential product gaps and keep products in stock all year round~~integrations. This ~~advantage enables~~allows ~~powerful~~us ~~predictive~~to ~~insights~~scale, inreduce ~~correlating~~cost, and ~~real-time~~improve ~~data with past sales patterns~~quality.

~~Training Programs~~Profitability Management

~~Our effective training programs~~We ~~accelerate~~have ~~employees’~~experienced ~~professional~~operations ~~development~~managers ~~and~~tracking ~~enable~~team ~~the~~performances ~~Company~~with tokey ~~hire~~performance ~~new~~indicators. ~~graduates~~We orhave ~~people~~departments ~~without~~specializing ~~experience. Our training~~in ~~programs~~logistic ~~are~~costs, ~~very~~advertising, ~~task-specific~~marketing, and weproduct ~~continually~~management. ~~improve~~We ~~the~~hold ~~materials~~monthly inprocess ~~order~~reviews to ~~fit~~identify ~~new~~early ~~industry~~red ~~needs.~~flags ~~Other~~and ~~than~~look for ~~the~~areas ~~training~~to ~~material~~optimize. Each quarter, we ~~assign~~set ~~mentors~~increasingly todifficult ~~evaluate~~bars ~~and~~with ~~monitor~~the ~~trainees’~~goals ~~performance~~of atgrowing ~~each~~gross ~~stage~~margin ofand ~~the~~further ~~training~~reducing ~~program~~expenses.

6Continuous Process Optimization

~~Task~~In order ~~Generalization~~to improve operating efficiencies, we have effective process optimization adapting to the changing policies of the e-commerce marketplace. We continuously analyze our performance based on data. We conduct pricing reviews, inventory planning and profitability analysis using this data. This analysis provides us with insights on the processes that add the most value. Using these insights, we develop guidelines that help us improve our operations. These guidelines are incorporated into our operations which include (but are not limited to), identifying and ordering at optimal inventory levels, managing merchandise storage costs, optimizing transit times, and pricing at appropriate levels. Our operations staff follows these guidelines which help them perform optimally. By continuously analyzing data, we are able to find insights for improving our business. This drives continuous process optimization and its implementation into our operations. In addition, our proprietary software allows us to continually accelerate process effectiveness based on specific requirements. Over time, our system eliminates unnecessary procedures that could be replaced by an advanced algorithm. For instance, we simplify the FBA shipment process through application programming interface (“API”) integration. Our self-developed system also tracks insightful analysis of our profitability, clearer visualizes the drivers and optimums to better manage operational costs. We monitor operational parameters that drive our business and proactively try to optimize them. These include fine tuning our item selection, managing our inventory levels, estimating demand and pricing to maximize our profitability.

~~By generalizing each task~~Data-Driven with a standard process, we are able to shift assignments at regular intervals in order to find the most suitable employee for each specific task. Moreover, business managers are also able to rotate the vendors they manage easily. This allows our organization to effectively and consistently manage a vendor when a key employee who previously managed such vendor is no longer with the company. In addition, the task generalization allows the Company to hire remote teams to further reduce labor costs.Approach

~~Multicultural~~We make ~~Management~~decisions based on analysis and interpretation of the data sets rather than observations over the market trend. By standardizing processes and combine data-driven management, we can ensure the organization maintains consistency that is high quality. Our business managers use historical data and sales projection provided by our proprietary software to find potential product gaps and keep products in stock all year round. This advantage enables powerful predictive insights in correlating real-time data with past sales patterns.

~~We have a multicultural management~~Training team that is linguistically and culturally diverse in order to make judgments from different perspectives. Our remote teams in Taiwan and the Philippines provide diverse professional insights on specific tasks.Programs

~~Technological~~Our effective ~~advantages~~training programs accelerate employees’ professional development and enable the Company to hire new graduates or people without experience. Our training programs are very task-specific and we continually improve the materials in order to fit new industry needs. Other than the training material, we assign mentors to evaluate and monitor trainees’ performance at each stage of the training program.

~~Our software architecture~~Task was designed from the ground up to be scalable, secured, and easily extensible. By using JRuby on Rails, we can make use of the best parts of Java, Ruby, and Rails without paying for their disadvantages. For example, we can use the massive collections of Java library, portability, speed, multi-threading, and maturity, but we do not have to be tied down with verbose code and strict typing. Rails allow us to quickly build web pages and integrate both the frontend and the backend. The application runs on Amazon Web Services (“AWS”) and can be easily scaled up to as many hosts as needed. It is accessible from a browser, so there is no need to set up or install anything on the client-side.Generalization

~~Cost~~By generalizing ~~Advantage~~each task with a standard process, we are able to shift assignments at regular intervals in order to find the most suitable employee for each specific task. Moreover, business managers are also able to rotate the vendors they manage easily. This allows our organization to effectively and consistently manage a vendor when a key employee who previously managed such vendor is no longer with the company. In addition, the task generalization allows us to hire remote teams to further reduce labor costs.

~~Access to Low Product Costs~~6

~~We lower our product average~~Multicultural costs by directly importing items that have high volume, purchasing in bulk with better prices, and negotiating discounts or rebates over increased purchase volume every year. Our strong growth of purchasing every year allows us to negotiate better discounts than the rivals. Therefore, we have the cost advantages to compete at low prices.Management

~~Efficient~~We have ~~Processes~~a multicultural management team that is linguistically and ~~Technologies~~culturally diverse in order to make judgments from different perspectives. Our remote teams in Taiwan and the Philippines provide diverse professional insights on specific tasks.

~~Our proprietary software allows~~Technological us to tailor make tools based on our specific use cases and leverage technologies to greatly reduce manual operations. We also saved the expense of using third-party software in managing inventory, orders, product listings, and especially the advertising analytic tool.advantages

~~Low~~Our software ~~Distribution~~architecture was designed from the ground up to be scalable, secured, and ~~Logistic~~easily ~~costs~~extensible. By using JRuby on Rails, we can make use of the best parts of Java, Ruby, and Rails without paying for their disadvantages. For example, we can use the massive collections of Java library, portability, speed, multi-threading, and maturity, but we do not have to be tied down with verbose code and strict typing. Rails allow us to quickly build web pages and integrate both the frontend and the backend. The application runs on Amazon Web Services (“AWS”) and can be easily scaled up to as many hosts as needed. It is accessible from a browser, so there is no need to set up or install anything on the client-side.

~~We saved the cost of managing~~Cost the warehouse, shipping, and product distribution as we are enrolled in Amazon’s FBA program. The program allows us to reduce fixed costs of the physical assets and quickly scale up the business without thinking much about infrastructure complexity. Apart from using the FBA program, we also use FedEx, Amazon partnered carrier, Amazon Freight, and Amazon Global Logistics to reduce expense. The competitive shipping rates we secured provide us a cost-efficient way to deliver shipments from overseas and domestic to Amazon warehouse.Advantage

7Access to Low Product Costs

~~Efficiently~~We lower ~~Managed~~our ~~Operations~~product average costs by directly importing items that have high volume, purchasing in bulk with better prices, and negotiating discounts or rebates over increased purchase volume every year. Our strong growth of purchasing every year allows us to negotiate better discounts than the rivals. Therefore, we have the cost advantages to compete at low prices.

~~We have a good management~~Efficient ~~structure~~Processes ~~within the firm~~ and ~~a data-driven system that allows employees to manage tasks quickly and cost-efficiently.~~Technologies

~~Reduced~~Our proprietary ~~Labor~~software ~~Costs~~allows us to tailor make tools based on our specific use cases and leverage technologies to greatly reduce manual operations. We also saved the expense of using third-party software in managing inventory, orders, product listings, and especially the advertising analytic tool.

~~We leverage third-party logistic~~Low ~~companies~~Distribution to forward or prep our shipments to Amazon, which reduces our logistic operation labor costs. We also work with a labor outsourcing partner located in the Philippines that provides virtual assistants to help us with data entry and ~~repetitive~~Logistic ~~work, which is a very cost-effective way to do a lot of grunt work.~~costs

~~Key~~We saved ~~Competitors~~the bycost ~~Market~~of ~~Size/Share~~managing the warehouse, shipping, and product distribution as we are enrolled in Amazon’s FBA program. The program allows us to reduce fixed costs of the physical assets and quickly scale up the business without thinking much about infrastructure complexity. Apart from using the FBA program, we also use FedEx, Amazon partnered carrier, Amazon Freight, and Amazon Global Logistics to reduce expense. The competitive shipping rates we secured provide us a cost-efficient way to deliver shipments from overseas and domestic to Amazon warehouse.

~~Our key competitor is Amazon~~Efficiently ~~Retail.~~Managed Amazon Retail frequently buys from the same brands we sell and sells them at a loss. Amazon Retail offers can be identified by the “Sold by Amazon” tag on Amazon’s site, and they are formed by two components: (i) Amazon Vendor Central, and (ii) the Sold by Amazon (“SBA”) program. We do not consider other third-party sellers as key competitors, because none of them represents enough market share to influence sales outcome. The addressable market is incredibly vast; thus, we believe there are plenty of opportunities for everyone.Operations

~~Amazon~~We have ~~Vendor~~a ~~Central~~good management structure within the firm and a data-driven system that allows employees to manage tasks quickly and cost-efficiently.

~~Amazon Vendor Central allows~~Reduced ~~manufacturers~~Labor and brand owners to sell directly to Amazon as a first-party seller. This is one of the key competitive factors as Amazon usually buys bulk from the brands and sells at a very low price, which leads to hyper-competitive pricing. On pricing control, Amazon does not always follow the minimum advertised pricing (“MAP”) guidelines from manufacturers, which also puts us at a disadvantage when selling the same products.Costs

~~Sold~~We leverage bythird-party logistic companies to prepare and forward our shipments to Amazon, ~~Program~~which reduces our logistic operation labor costs. In addition, we work with a labor outsourcing partner in the Philippines that supplies virtual assistants to support data entry and other routine, repetitive operational tasks in a highly cost-effective manner.

~~With the rise of e-commerce~~Key ~~platforms,~~Competitors ~~Amazon~~by isMarket looking for opportunities to attract customers away from its retail store rivals. In 2019, Amazon rolled out its new SBA program to help sellers grow their business. This program gives brand owners the control of inventory management and listings with Amazon having the authority to constantly monitor and change the price to make sure customers are getting the best deals. Once the products are enrolled in the SBA program, Amazon will set the minimum gross proceeds (“MGP”) to pay sellers the lowest possible amount on each unit sold. This new program is another threat to our company as Amazon is the one taking control of pricing, and they set the price very low in order to compete with competitors’ low price strategy.Size/Share

~~Competitor~~Our key ~~Strengths~~competitor is Amazon Retail. Amazon Retail frequently buys from the same brands we sell and ~~Weaknesses~~sells them at a loss. Amazon Retail offers can be identified by the “Sold by Amazon” tag on Amazon’s site, and they are formed by two components: (i) Amazon Vendor Central, and (ii) the Sold by Amazon (“SBA”) program. We do not consider other third-party sellers as key competitors, because none of them represents enough market share to influence sales outcome. The addressable market is incredibly vast; thus, we believe there are plenty of opportunities for everyone.

~~Strengths of Sold by Amazon~~7

~~First, ship from and SBA creates competition for potential customers who prefer to buy products from~~ Amazon ~~rather than a third-party seller. Secondly, Amazon monitors~~ ~~and~~Vendor manages pricing which makes the product price range at a highly competitive level. In fact, the chance of Amazon winning buy box is even higher as they have the best deal for customers. Finally, Amazon is not restricted by its policy to third-party sellers. One of the critical policies is the restock limit. Amazon limits certain items’ restock quantities based on recent sales activity, and this affects the in-stock rate of popular items that needs a greater volume.Central

8Amazon Vendor Central allows manufacturers and brand owners to sell directly to Amazon as a first-party seller. This is one of the key competitive factors as Amazon usually buys bulk from the brands and sells at a very low price, which leads to hyper-competitive pricing. On pricing control, Amazon does not always follow the minimum advertised pricing (“MAP”) guidelines from manufacturers, which also puts us at a disadvantage when selling the same products.

~~Weaknesses of~~ Sold by Amazon Program

AsWith the ~~Amazon~~rise ~~focuses~~of one-commerce ~~sales more~~platforms, ~~than~~Amazon ~~relationships~~is ~~with~~looking ~~vendors,~~for ~~they~~opportunities doto ~~not~~attract ~~follow~~customers ~~vendors’~~away ~~MAP~~from ~~strictly~~its retail store rivals. WeIn ~~believe~~2019, Amazon ~~this~~rolled ~~has~~out ~~led~~its new SBA program to help sellers grow their business. This program gives brand owners the ~~devaluation~~control of ~~brands~~inventory management and ~~will~~listings ~~have~~with aAmazon ~~negative~~having ~~impact~~the onauthority ~~building~~to aconstantly ~~long-term~~monitor ~~relationship~~and ~~with~~change the ~~vendors~~price to make sure customers are getting the best deals. Once the ~~vendor~~products ~~hands~~are ~~over~~enrolled ~~their~~in ~~price~~the ~~control to~~SBA ~~Amazon~~program, weAmazon ~~believe~~will itset isthe ~~unlikely~~minimum ~~for~~gross ~~them~~proceeds (“MGP”) to ~~sell~~pay atsellers the ~~their~~lowest ~~original~~possible ~~target~~amount ~~price~~on ~~further,~~each ~~and~~unit itsold. ~~influences~~This ~~their~~new ~~offline~~program ~~sales.~~is ~~And in~~another ~~fact,~~threat itto ~~makes~~our acompany ~~huge~~as ~~difference~~Amazon inis ~~profitability~~the toone ~~both~~taking ~~Amazon~~control of pricing, and they set the ~~vendor~~price ~~when~~very ~~reacting~~low in order to ~~the~~compete ~~competitive~~with ~~pricing~~competitors’ ~~changes~~low price strategy.

~~Apart from the weaknesses~~Competitor ofStrengths ~~business relationships, we believe Amazon also has disadvantages in the niche marketplaces, where product offerings are narrower~~ and ~~more~~ personalized. As a third-party seller, we cooperate with vendors in developing custom projects that bring product differentiation and scarcity effect. However, we believe Amazon only concentrates on the masses, which gives them the deficiency of having products that are targeted in certain market segments.Weaknesses

~~Potential Substitute Products Posing Credible~~Strengths ~~Threat~~of toSold ~~Company~~by ~~Products~~Amazon

NoFirst, ship from and SBA creates competition for potential ~~substitute~~customers who prefer to buy products from Amazon rather than a third-party seller. ~~would~~Secondly, ~~pose~~Amazon monitors and manages pricing which makes the product price range at a ~~credible~~highly ~~threat~~competitive tolevel. ~~our~~In ~~company~~fact, the chance of Amazon winning Buy Box is even higher as wethey have ~~developed~~the abest ~~wide~~deal ~~product~~for ~~diversification~~customers. Finally, Amazon is not restricted by its policy to third-party sellers. One of the critical policies is the restock limit. Amazon limits certain items’ restock quantities based on recent sales activity, and this affects the in-stock rate of popular items that needs a greater volume.

~~As a company that focuses~~Weaknesses ~~on reselling wholesale products, we have the resilience to find substitution~~ of ~~products~~Sold ~~or brands. We established product diversification~~ by managing wide range of SKUs and continually expand our product categories. Our business strategy allows us to mitigate risk and generate significant profit by selling low volumes items diversified across a large variety of products.Amazon

InAs Amazon ~~contrast~~focuses on sales more than relationships with vendors, ~~private~~they ~~label sellers~~do ~~manage~~not ~~small~~follow ~~number~~vendors’ MAP strictly. We believe this has led to the devaluation of ~~SKUs~~brands ~~that~~and will have ~~large~~a ~~volumes~~negative inimpact ~~return~~on ~~with~~building ~~higher~~a ~~profit~~long-term ~~per~~relationship ~~unit~~with the vendors. ~~However~~Once the vendor hands over their price control to Amazon, ~~private~~we ~~labels~~believe ~~have~~it ~~much~~is ~~higher risk~~unlikely ~~when~~for ~~experiencing~~them ~~stagnant~~to orsell ~~declining~~at their original target price further, and it influences their offline sales. asAnd ~~they~~in ~~would~~fact, ~~have~~it ~~lower~~makes ~~capability~~a huge difference in profitability to ~~find~~both ~~sales~~Amazon ~~replacements~~and ~~that~~the ~~are~~vendor ~~already~~when ~~established~~reacting to the competitive pricing changes.

~~Strength~~Apart from the weaknesses of ~~Barriers~~business torelationships, ~~Entry~~we believe Amazon also has disadvantages in niche marketplaces, where product offerings are narrower and more personalized. As a third-party seller, we cooperate with vendors in developing custom projects that bring product differentiation and scarcity effect. However, we believe Amazon only concentrates on the masses, which gives them the deficiency of having products that are targeted in certain market segments.

~~Higher Capital, Low Margin:~~Potential ~~Selling~~Substitute ~~online~~Products isPosing ~~generally~~Credible ~~low~~Threat ~~margin, but it requires high capital investment in order~~ to ~~purchase~~Company ~~goods and run advertising.~~Products

~~Product Differentiation:~~We ~~Our~~do ~~proprietary~~not ~~software~~believe ~~allows~~there usare toany ~~manage~~potential asubstitute ~~huge number of SKUs. This allows us to participate in profitable long-tail~~ products ~~in addition~~that towould ~~well-known~~pose ~~popular ones. The turnover rate for long-tail products is slow, so newcomers are not likely to enter. It also requires~~ a ~~sophisticated~~credible ~~system~~threat to ~~manage. Furthermore~~us, ~~vendor~~as ~~relationships~~we dohave ~~not~~developed ~~happen~~wide ~~overnight~~product diversification.

~~Advanced System: We~~Since ~~have~~we ~~already~~focus ~~developed~~on areselling ~~highly~~wholesale ~~sophisticated~~products, ~~system~~we ~~which~~have ~~has~~the ~~been~~resilience ~~refined over time~~ to ~~become~~find ~~highly~~substitution ~~effective. Even if a new entrant has a team~~ of ~~the~~products ~~best~~or ~~software engineers in the world, it will still take them many years to refine their system~~brands. ~~There~~We isestablished aproduct ~~myriad of~~diversification ~~intricacies~~by asmanaging toa ~~the~~wide ~~effectiveness~~range of aSKUs ~~system.~~and ~~Even~~continually ifexpanding ~~the~~our ~~new~~product ~~entrants~~categories. ~~have~~Our ~~the~~business ~~system~~strategy ~~built,~~allows itus ~~will~~to ~~still~~mitigate ~~take~~risk ~~them years to collect~~and ~~historical~~generate ~~sales~~significant ~~data.~~profit Byby ~~the~~selling ~~time~~low ~~new~~volumes ~~entrants~~items ~~have~~diversified ~~done~~across ~~all~~a ~~that,~~large ~~our~~variety ~~system~~of ~~would have continued to mature~~products. ~~This means we would be able to manage more SKUs more profitably with lower costs.~~

9In contrast, private label sellers manage a small number of SKUs that have large volumes in return with higher profit per unit. However, private labels have much higher risk when experiencing stagnant or declining sales as they would have lower capability to find sales replacements that are already established.

~~Risk of Entry-Potential Entrants~~8

~~Vendor Vertical Integration:~~Strength Aof ~~vendor~~Barriers ~~may forward integrate into the e-commerce marketplace in order~~ to ~~directly engage with their online customers.~~Entry

~~Multichannel E-commerce:~~Higher ~~There~~Capital, isLower aMargin: ~~chance~~Selling ~~of established~~ online ~~retail~~is ~~firms~~generally ~~such~~low asmargin, ~~sellers~~but onit ~~eBay,~~requires ~~Walmart,~~a ~~and~~high ~~Etsy~~capital ~~expanding~~investment ~~their~~in ~~business~~order to ~~the~~purchase ~~Amazon~~goods ~~marketplace~~and run advertising.

~~Brick-and-Mortar~~Product Differentiation: AsOur proprietary software allows us to manage a large number of SKUs. This allows us to participate in profitable ~~online~~long-tail ~~retail~~products isin ~~growing~~addition ~~and~~to ~~offline~~well-known ~~retail~~popular ones. The turnover rate for long-tail products is ~~contracting~~slow, ~~there~~so newcomers are ~~more~~not ~~brick-and-mortar~~likely to ~~stores~~enter. ~~migrating~~It ~~from~~also ~~offline~~requires a sophisticated system to ~~online~~manage. Furthermore, vendor relationships do not happen overnight.

~~Improving~~Advanced System: ~~Sales~~We ofhave ~~Popular~~already ~~Items~~developed ~~and~~a ~~Securing~~highly sophisticated system which has been refined over time to become highly effective. Even if a new entrant has a team of the ~~Inventories~~best ~~Without~~software ~~Paying~~engineers ~~Higher~~in ~~Storage~~the ~~Fees~~world, Byit ~~Engaging~~will still take them many years to refine their system. There is a myriad of intricacies as to the ~~Services~~effectiveness of ~~Third~~a ~~Party~~system. ~~Warehouses~~Even if the new entrants have the system built, it will still take them years to collect historical sales data. By the time new entrants have done all that, our system would have continued to mature. This means we would be able to manage more SKUs more profitably with lower costs.

~~As a retailer, our success~~Risk ~~is heavily influenced by the inventory control~~ of our suppliers (vendors). However, many of our suppliers are having difficulties maintaining their stock level due to various reasons, such as the shortage of shipping containers, lack of labor, or disruption in manufacturing. The situation exacerbates during the pandemic and in peak season. In order to secure the inventories, we start to order large quantities of popular items or buying them out to store in the Amazon fulfillment center. However, the monthly storage fee of the Amazon fulfillment center in peak season (Q4) is 3.5 times higher than normal season, which puts pressure on our profits. To maintain the balance of inventory level and margins, we are currently contracting the warehousing services of thirdEntry-~~party~~Potential warehouses, including Rahl Distribution, Inc., Singh Logistics Inc, Founder, Carolina Prep & Ship, and Shenzhen Linkhub Co., Ltd to support our overall stock planning process. By doing this, we can improve sales by preventing popular items from going out of stock, since we had secured adequate inventories ahead of time. Furthermore, we can also avoid paying higher Amazon storage fees in Q4.Entrants

~~Growth~~Vendor Vertical ~~Objectives~~Integration: A vendor may forward integrate into the e-commerce marketplace in order to directly engage with their online customers.

~~In 2024, the U.S. e~~Multichannel E-commerce ~~market~~: ~~continued~~There ~~its~~is ~~upward~~a ~~trajectory.~~chance Inof ~~addition~~established toonline ~~our~~retail ~~sales-driven~~firms ~~initiatives,~~such weas ~~have~~sellers ~~been~~on ~~optimizing our procurement strategy by transitioning from preordering to a restocking model~~eBay, ~~implementing stringent inventory controls to maintain optimal levels and mitigate overstock risks. By adopting a more selective approach to product sourcing~~Walmart, ~~we aim to sustain profitability~~ and ~~ensure~~Etsy ~~robust~~expanding ~~cash~~their ~~flow.~~business ~~As product costs are projected~~ to ~~decline~~the ~~and~~Amazon ~~market competition stabilizes, we anticipate maintaining a steady workforce, with potential slight increases through natural attrition~~marketplace. ~~In 2025, we will continue executing these strategic initiatives, emphasizing profit maximization over revenue expansion.~~

~~Bank~~Brick-and-Mortar: As ofonline ~~America~~retail ~~Loan~~is growing and offline retail is contracting, there are more brick-and-mortar stores migrating from offline to online.

OnGrowth June 18, 2019, the Company issued a Promissory Note (the “BofA Note”) in the amount of $785,000 to Bank of America for a loan in the amount of $785,000. The BofA Note matures on June 18, 2024 and bears interest at a rate of 8.11% per annum. As of December 31, 2024, the aggregate principal amount of the BofA Note outstanding was $-0-. On June 30, 2024, the Company paid accrued interest in full.Objectives

10In 2025, we achieved solid profit growth supported by disciplined purchasing, inventory optimization, and multichannel expansion. Sales growth for the year was primarily driven by the continued expansion of our multi-channel business, including Walmart, eBay, Amazon Canada, and Amazon Mexico, which enabled us to capture demand and expand our customer reach. While year-end performance was tempered by tariff surcharges and weaker holiday demand, operational improvements across procurement, pricing, advertising, and shipping strengthened overall resilience.

~~Taishin~~Looking ~~International~~ahead to 2026, we ~~Bank~~face structural challenges, including higher inbound placement fees, tariff volatility, and the discontinuation of Amazon’s labeling service, which is expected to materially increase shipping and third party logistics (“3PL”) costs. These changes are reshaping our cost structure and testing the scalability of our operating model.

~~On August 18, 2022, Flywheel~~We ~~entered~~are ~~into~~actively apursuing ~~line~~vendor ofpartnerships ~~credit~~and ~~agreement~~3PL inprocess ~~the~~enhancements ~~amount~~to ofmitigate $6these impacts,~~940,063~~ ~~with~~while ~~Taishin~~continuing ofto ~~America~~refine ~~Loa.~~our ~~The line of credit initially matured~~operational ~~on August 30, 2023~~framework. OnDespite ~~August 11, 2023,~~ the ~~line of credit was extended for an additional year~~uncertainties, ~~revising~~we ~~the~~remain ~~maturity~~cautiously ~~date~~confident tothat ~~August 30, 2024. On May 28, 2024,~~ the ~~term~~optimizations ofimplemented ~~the~~in ~~loan~~2025 ~~was~~will ~~revised~~support ~~such~~stability and ~~that~~position ~~maturity~~us ~~date~~to ~~was~~capture ~~extended~~upside toas ~~November~~market ~~24,~~conditions ~~2024~~improve.

~~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.~~9

~~As of December 31, 2024 and~~Taishin ~~2023,~~International ~~the outstanding balance under the Taishin line of credit was $610,967 and $652,422, respectively.~~Bank

~~Affiliated~~On ~~Loans~~August 18, 2022, Flywheel entered into a line of credit agreement in the amount of $6,940,063 with Taishin International Bank (“Taishin”). As amended, the line of credit matures on May 18, 2026 and bears interest at a rate of 3.42% per annum.

~~From time to time, the Company receives loans and advances from its stockholders to fund its operations.~~ As of December 31, 2025 and 2024, the ~~Company~~outstanding ~~had~~balance aunder ~~total~~the ofTaishin ~~$4,192,995~~line ~~due~~of tocredit ~~related~~was ~~parties, which included~~ $3637,~~499,418~~348 ~~in stockholder payables~~ and $~~693~~610,~~577 accrued for bonuses. While stockholder payables are generally non-interest bearing and payable on demand~~967, ~~the Company and stockholders entered into loan agreements for loans with terms over one year~~respectively.

~~December 2020 Loan~~Affiliated Loans

OnFrom ~~December~~time 30to time, ~~2020~~we ~~and~~receive ~~later~~loans ~~modified~~and onadvances ~~September~~from ~~16,~~our ~~2021,~~stockholders ~~the~~to ~~Company,~~fund Mrour operations. ~~Lai~~As ~~and~~of ~~Ms.~~December Yu31, ~~entered~~2025, ~~into~~we had a ~~loan~~total ~~agreement~~ of $13,~~041~~810,~~353 and~~418 ~~converted~~due itto ~~into~~related aparties, ~~retroactive~~which ~~interest-bearing~~included ($2%),660,418 ~~loan~~in ~~with~~stockholder apayables ~~repayment~~and ~~date~~$1,150,000 ofaccrued ~~December~~for ~~31, 2021~~bonuses. OnAs ~~January~~of ~~18, 2022 and January~~December 2731, ~~2023~~2024, ~~the~~we ~~Company~~had ~~repaid~~a ~~the~~total ~~loan~~of ~~principal~~$4,192,995 ~~and~~due ~~accrued~~to ~~interest~~related ~~in full. Together~~parties, ~~Mr.~~which ~~Lai~~included ~~and~~$3,499,418 ~~Ms.~~in Yustockholder ~~hold~~payables ~~approximately~~and ~~94.9%~~$693,577 ~~of the~~accrued ~~Company’s~~for ~~outstanding shares~~bonuses. ~~Mr.~~While ~~Lai~~stockholder ispayables ~~the~~are ~~Company’s~~generally ~~Chairman~~non-interest ofbearing ~~the~~and ~~Board,~~payable ~~Chief~~on ~~Executive~~demand, ~~Officer~~we and ~~Interim~~our ~~Chief~~stockholders ~~Financial~~entered into ~~Officer.~~loan ~~Ms.~~agreements Yufor isloans ~~the~~with ~~Company’s~~terms ~~Senior~~over ~~Vice~~one ~~President and a member of the Company’s Board of Directors~~year.

July 2021 Loan

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~~As ~~annual interest rate was 2% and the original repayment date was December 31~~amended, ~~2022. On December 28, 2022,~~ the ~~Company, Mr. Lai and Ms. Yu agreed to extend the term of the~~ loan, ~~with~~matures ~~the~~on ~~new maturity date of~~ December 31, ~~2024.~~2026 ~~On December 31, 2024, the Company, Mr. Lai~~ and ~~Ms.~~has ~~Yu agreed to extend the term of the loan, with the new maturity date of December 31, 2025. As amended, the~~ an annual interest rate of ~~the loan is 5~~4.575%.

Employees

As of December 31, ~~2024~~2025, our headcount stands at ~~151~~159, signaling a modest increase ~~reduction~~ compared to ~~2023~~2024. We have intentionally opted for a less aggressive approach in terms of headcount. Looking ahead, we anticipate a planned increase to approximately ~~180~~165 in ~~2025~~2026 to support ~~the~~anticipated ~~growth~~future ofrevenue ~~our GMS~~growth. Our strategic focus is to enhance overall competency without a proportional increase in headcount.

11Executive Officers

~~Executive~~Set forth ~~Officers~~below is certain information regarding our executive officers.

Set forth below is certain information regarding our executive officers.

Name	Age	Position
Sam Lai	44	Chairman of the Board, Chief Executive Officer and Interim Chief Financial Officer
Sau Kuen (Maggie) Yu	49	Senior Vice President and Director

Name	Age	Position
Sam Lai	43	Chairman of the Board, Chief Executive Officer and Interim Chief Financial Officer
Sau Kuen (Maggie) Yu	48	Senior Vice President and Director

Sam Lai. Mr. Lai has served as our Chief Executive Officer and been a member of our Board of Directors since June 2013 and our Chairman of Board since April 2021. He has served as our Interim Chief Financial Officer since March 29, 2022. He is a seasoned software engineer who has designed and built software and code from the ground up at Hour Loop, Inc., Amazon.com, Inc., UnifiedEdge, Inc., Kits, and Applied Research Labs for the past 18 years. From December 2009 through June 2017, Mr. Lai served as a Software Development Engineer for Amazon.com, Inc. From March 2009 through December 2009, he served as a Senior Java Developer at UnifiedEdge, Inc. From February 2007 through March 2009, Mr. Lai served as a Senior Java Developer at Kits. From September 2005 through February 2007, he served as a Software Development Engineer for Amazon.com, Inc. From March 2003 through January 2004, Mr. Lai served as a Research Engineer Scientist Assistant at Applied Research Labs. Mr. Lai graduated with a Bachelor Degree in Computer Science from University of Texas at Austin in 2003 and a Masters Degree in Computer Science from University of California, San Diego in 2004. Mr. Lai does not hold, and has not previously held, any directorships in any other reporting companies.

Sam Lai. Mr. Lai has served as our Chief Executive Officer and been a member of our Board of Directors since June 2013 and our Chairman of Board since April 2021. He has served as our Interim Chief Financial Officer since March 29, 2022. He is a seasoned software engineer who has designed and built software and code from the ground up at Hour Loop, Inc., Amazon.com, Inc., UnifiedEdge, Inc., Kits, and Applied Research Labs for the past 18 years. From December 2009 through June 2017, Mr. Lai served as a Software Development Engineer for Amazon.com, Inc. From March 2009 through December 2009, he served as a Senior Java Developer at UnifiedEdge, Inc. From February 2007 through March 2009, Mr. Lai served as a Senior Java Developer at Kits. From September 2005 through February 2007, he served as a Software Development Engineer for Amazon.com, Inc. From March 2003 through January 2004, Mr. Lai served as a Research Engineer Scientist Assistant at Applied Research Labs. Mr. Lai graduated with a Bachelor Degree in Computer Science from University of Texas at Austin in 2003 and a Masters Degree in Computer Science from University of California, San Diego in 2004. Mr. Lai does not hold, and has not previously held, any directorships in any reporting companies.10

Sau Kuen (Maggie) Yu. Ms. Yu has served as our Senior Vice President and has been a member of our Board of Directors since June 2013. Ms. Yu graduated with a Bachelor Degree in Computer Science from University of California, San Diego in 2004. Ms. Yu does not hold, and has not previously held, any directorships in any other reporting companies.

Mr. Lai and Ms. Yu are married.

Legal Proceedings

From time to time, we are involved in various claims and legal actions arising in the ordinary course of business. To the knowledge of our management, there are no legal proceedings currently pending against us which we believe would have a material effect on our business, financial position or results of operations and, to the best of our knowledge, there are no such legal proceedings contemplated or threatened.

Properties

Our corporate headquarters are located at 8201 164th Ave. NE, #200, Redmond, WA 98052-7615, where we rent a virtual office from an unaffiliated third party under a virtual office/meeting room agreement. This agreement provides for daily telephone answering, messaging and fax services, and paid access to conference rooms on an as-needed basis. The virtual office arrangement expires on August 31, ~~2025~~2026. Terms of the virtual office arrangement provide for a rent payment of $59 per month.

We also lease a warehouse located at Qiaojiao Road, No. 1, Qiaojiao Middle Road, Tangxia Town, Dongguan City, Guangdong, China, who handle our storage and warehousing from an unaffiliated third party. The terms of this service provide for a base payment that is charged based on our usage. Flywheel, our wholly owned subsidiary, had ~~four~~two office leases in Taiwan in ~~2024~~2025. The respective lease terms are ~~February 9, 2023 to March 8, 2025, March 1, 2024 to~~ June 3010, 2025, ~~June 1, 2024~~ to ~~May~~July 319, ~~2025~~2027, and ~~August~~December 1, ~~2024~~2025 to ~~July~~November 3130, ~~2025~~2028 and the total contract amounts are $28127,~~652~~226, ~~$123,107,~~ ~~$52,434~~ and $7379,~~175~~971 respectively. We believe that these facilities are adequate for our current and near-term future needs.

12ITEM 1A. RISK FACTORS

~~ITEM~~An investment 1Ain our securities carries a significant degree of risk. ~~RISK~~You ~~FACTORS~~should carefully consider the following risks, as well as the other information contained in this annual report on Form 10-K, including our historical financial statements and related notes included elsewhere in this annual report on Form 10-K, before you decide to purchase our securities. Any one of these risks and uncertainties has the potential to cause material adverse effects on our business, prospects, financial condition and operating results which could cause actual results to differ materially from any forward-looking statements expressed by us and a significant decrease in the value of our common shares. Refer to “Cautionary Statement Regarding Forward-Looking Statements.”

AnWe may ~~investment~~not inbe ~~our~~successful ~~securities carries~~in apreventing ~~significant~~the ~~degree~~material ofadverse ~~risk.~~effects ~~You~~that ~~should~~any ~~carefully~~of ~~consider~~ the following risks, asand ~~well~~uncertainties asmay ~~the~~cause. ~~other~~These ~~information contained in~~potential ~~this~~risks ~~annual report on Form 10-K, including our historical financial statements~~ and ~~related~~uncertainties ~~notes~~may ~~included~~not ~~elsewhere~~be ina ~~this~~complete ~~annual~~list ~~report on~~of ~~Form~~the ~~10-K,~~risks ~~before~~and ~~you~~uncertainties ~~decide~~facing ~~to purchase our securities~~us. ~~Any~~There ~~one~~may ofbe ~~these~~additional risks and uncertainties that ~~has~~we ~~the~~are ~~potential~~presently tounaware ~~cause~~of, ~~material adverse~~or ~~effects~~presently onconsider ~~our business~~immaterial, ~~prospects,~~that ~~financial~~may ~~condition~~become ~~and~~material ~~operating~~in ~~results~~the ~~which~~future ~~could~~and ~~cause~~have ~~actual~~a ~~results~~material ~~to differ materially~~adverse ~~from~~effect ~~any~~on ~~forward-looking~~us. ~~statements~~You ~~expressed~~could bylose usall ~~and~~or a significant ~~decrease~~portion ~~in the value~~ of ~~our~~your ~~common~~investment ~~shares.~~due ~~Refer~~ to ~~“Cautionary Statement~~any ~~Regarding~~of ~~Forward-Looking~~these ~~Statements~~risks and uncertainties.”

~~We may not be successful~~Below inis ~~preventing the material adverse effects that any of the following risks and uncertainties may cause. These potential risks and uncertainties may not be~~ a ~~complete~~summary ~~list~~ of ~~the~~material risks, ~~and~~ uncertainties ~~facing us. There may be additional risks~~ and ~~uncertainties~~other ~~that~~factors ~~we are presently unaware of, or presently consider immaterial,~~ that ~~may~~could ~~become material in the future and~~ have a material ~~adverse~~ effect on ~~us.~~the ~~You~~Company ~~could lose all or a significant portion of your investment due to any of these risks~~ and ~~uncertainties.~~its operations:

~~Below~~● isWe aface ~~summary~~intense ofcompetition; ~~material risks,~~● ~~uncertainties~~Our ~~and~~business ~~other~~depends ~~factors~~on ~~that~~our ~~could~~ability ~~have~~to abuild ~~material~~and ~~effect~~maintain strong product listings on ~~the~~e-commerce ~~Company~~platforms. We may not be able to maintain and ~~its~~enhance our product listings if we receive unfavorable customer complaints, negative publicity or otherwise fail to live up to consumers’ expectations, which could materially adversely affect our business, results of operations: and growth prospects;

● We face intense competition; ● Our business depends on our ability to build and maintain strong product listings on e-commerce platforms. We may not be able to maintain and enhance our product listings if we receive unfavorable customer complaints, negative publicity or otherwise fail to live up to consumers’ expectations, which could materially adversely affect our business, results of operations and growth prospects; ● We experience significant fluctuations in our operating results and growth rate; ● We face risks related to successfully optimizing and operating our fulfillment and customer service operations; ● The variability in our retail business places increased strain on our operations; ● Continued increases in Amazon Marketplace fulfillment and storage fees could have an adverse impact on our profit margin and results of operations; ● A change in one or more of the Company’s vendors’ policies or the Company’s relationship with those vendors could adversely affect the Company’s results of operations; ● Our revenue is dependent upon maintaining our relationship with Amazon and failure to do so, or any restrictions on our ability to offer products on the Amazon Marketplace, could have an adverse impact on our business, financial condition and results of operations; ● Loss of key personnel or the inability to attract, train and retain qualified employees could adversely affect the Company’s results of operations; ● We may face difficulties in meeting our labor needs to effectively operate our business; ● Our business could be adversely affected by increased labor costs, including costs related to an increase in minimum wage and health care; ● Breach of data security could harm our business and standing with our customers; ● Our hardware and software systems are vulnerable to damage, theft or intrusion that could harm our business; ● Our inability or failure to protect our intellectual property rights, or any claimed infringement by us of third-party intellectual rights, could have a negative impact on our operating results; ● The Company’s business is influenced by general economic conditions; ● Disruption of global capital and credit markets may have a material adverse effect on the Company’s liquidity and capital resources; ● The Company is dependent upon access to capital for its liquidity needs; ● We may complete a future significant strategic transaction that may not achieve intended results or could increase the number of our outstanding shares or amount of outstanding debt or result in a change of control;11

13● Our business and results of operations could be materially and adversely affected by the new 10% global import surcharge and ongoing trade investigations; ● The termination of de minimis treatment for low-value shipments has increased our compliance costs and may disrupt our fulfillment model; ● We may be unable to recover duties paid under invalidated 2025 tariff regimes, and any recovery process may be costly and delayed; ● We experience significant fluctuations in our operating results and growth rate; ● We face risks related to successfully optimizing and operating our fulfillment and customer service operations; ● The variability in our retail business places increased strain on our operations; ● Continued increases in Amazon Marketplace fulfillment and storage fees could have an adverse impact on our profit margin and results of operations; ● A change in one or more of our vendors’ policies or our relationship with those vendors could adversely affect our results of operations; ● Our revenue is dependent upon maintaining our relationship with Amazon and failure to do so, or any restrictions on our ability to offer products on the Amazon Marketplace, could have an adverse impact on our business, financial condition and results of operations; ● Loss of key personnel or the inability to attract, train and retain qualified employees could adversely affect our results of operations; ● We may face difficulties in meeting our labor needs to effectively operate our business; ● Our business could be adversely affected by increased labor costs, including costs related to an increase in minimum wage and health care; ● Breach of data security could harm our business and standing with our customers; ● Our hardware and software systems are vulnerable to damage, theft or intrusion that could harm our business; ● Our inability or failure to protect our intellectual property rights, or any claimed infringement by us of third-party intellectual rights, could have a negative impact on our operating results; ● Our business is influenced by general economic conditions; ● Disruption of global capital and credit markets may have a material adverse effect on our liquidity and capital resources; ● We are dependent upon access to capital for its liquidity needs; ● We may complete a future significant strategic transaction that may not achieve intended results or could increase the number of our outstanding shares or amount of outstanding debt or result in a change of control; ● Historically, we have experienced declines, and we may continue to experience fluctuation in our level of sales and results from operations; ● Our ability to satisfy its liabilities and to continue as a going concern will continue to be dependent on the implementation of several items, the success of which is not certain; ● Parties with whom we do business may be subject to insolvency risks or may otherwise become unable or unwilling to perform their obligations;

● Historically, we have experienced declines, and we may continue to experience fluctuation in our level of sales and results from operations; ● The ability of the Company to satisfy its liabilities and to continue as a going concern will continue to be dependent on the implementation of several items, the success of which is not certain; ● Parties with whom the Company does business may be subject to insolvency risks or may otherwise become unable or unwilling to perform their obligations to the Company; ● Failure to comply with legal and regulatory requirements could adversely affect the Company’s results of operations; ● Litigation may adversely affect our business, financial condition and results of operations; ● The effects of natural disasters, terrorism, acts of war, and public health issues may adversely affect our business; ● A pandemic, epidemic or outbreak of an infectious disease, such as COVID-19, may materially and adversely affect our business; ● The loss of key senior management personnel or the failure to hire and retain highly skilled and other key personnel could negatively affect our business; ● The ability of Sam Lai, our Chairman of the Board, Chief Executive Officer and Interim Chief Financial Officer and a significant stockholder, and Maggie Yu, our Senior Vice President, a member of our Board of Directors and a significant stockholder, who are husband and wife, to control our business may limit or eliminate minority stockholders’ ability to influence corporate affairs; ● Government regulation is evolving and unfavorable changes could harm our business; ● We are subject to product liability claims when people or property are harmed by the products we sell; ● We could face prior period sales tax and corporate tax liabilities, penalties and collection obligations; ● There can be no assurance that we will be able to comply with continued listing standards of The Nasdaq Capital Market (“Nasdaq”); ● High state income tax rates could impact our financials negatively; ● The market price of our common stock may be volatile, and you could lose all or part of your investment; and12

14● Failure to comply with legal and regulatory requirements could adversely affect our results of operations; ● Litigation may adversely affect our business, financial condition and results of operations; ● The effects of natural disasters, terrorism, acts of war, and public health issues may adversely affect our business; ● A pandemic, epidemic or outbreak of an infectious disease, such as COVID-19, may materially and adversely affect our business; ● The loss of key senior management personnel or the failure to hire and retain highly skilled and other key personnel could negatively affect our business; ● The ability of Sam Lai, our Chairman of the Board, Chief Executive Officer and Interim Chief Financial Officer and a significant stockholder, and Maggie Yu, our Senior Vice President, a member of our Board of Directors and a significant stockholder, who are husband and wife, to control our business may limit or eliminate minority stockholders’ ability to influence corporate affairs; ● Government regulation is evolving and unfavorable changes could harm our business; ● We are subject to product liability claims when people or property are harmed by the products we sell; ● We could face prior period sales tax and corporate tax liabilities, penalties and collection obligations; ● There can be no assurance that we will be able to comply with continued listing standards of The Nasdaq Capital Market (“Nasdaq”); ● High state income tax rates could impact our financials negatively; and ● The market price of our common stock may be volatile, and you could lose all or part of your investment.

Risks Related to Our Business

We face intense competition.

The online retail business is rapidly evolving and intensely competitive. Some of our current and potential competitors have greater resources, longer histories, and/or more customers. They may secure better terms from vendors, adopt more aggressive pricing, and devote more resources to technology, infrastructure, fulfillment, and marketing.

Competition continues to intensify, including with the development of new business models and the entry of new and well-funded competitors, and as our competitors enter into business combinations or alliances and established companies in other market segments expand to become competitive with our business. In addition, new and enhanced technologies, including search, web and infrastructure computing services, digital content, and electronic devices continue to increase our competition. The Internet facilitates competitive entry and comparison shopping, which enhances the ability of new, smaller, or lesser-known businesses to compete against us. As a result of competition, our product offerings may not be successful, we may fail to gain or may lose business, and we may be required to increase our spending or lower prices, any of which could materially reduce our sales and profits.

Our business depends on our ability to build and maintain strong product listings on e-commerce platforms. We may not be able to maintain and enhance our product listings if we receive unfavorable customer complaints, negative publicity or otherwise fail to live up to consumers’ expectations, which could materially adversely affect our business, results of operations and growth prospects.13

~~Maintaining~~Our ~~and enhancing our product listings is critical in expanding and growing our~~ business. ~~However, a significant portion of our perceived performance to the customer~~ depends on ~~third parties outside of~~ our ~~control,~~ability ~~including~~to ~~suppliers~~build and ~~third-party~~maintain ~~delivery~~strong ~~agents~~product aslistings ~~well as~~on ~~online~~e-commerce ~~retailers such as Amazon and Walmart~~platforms. ~~Because~~We ~~our agreements with our online retail partners are generally terminable at will, we~~ may not be ~~unable~~able to maintain ~~these relationships,~~ and enhance our ~~results~~product oflistings ~~operations~~if ~~could fluctuate significantly from period to period. Because~~ we ~~rely~~receive onunfavorable ~~third~~customer ~~parties to deliver our products~~complaints, wenegative ~~are~~publicity ~~subject to shipping delays~~ or ~~disruptions~~otherwise ~~caused~~fail ~~by inclement weather, natural disasters, labor activism, health epidemics or bioterrorism. We may also experience shipping delays or disruptions due~~ to ~~other~~live ~~carrier-related issues~~up ~~relating~~ to ~~their own internal operational capabilities. Further, we rely on the business continuity plans of these third parties~~consumers’ ~~to operate during pandemics~~expectations, ~~like~~which ~~the~~could ~~COVID-19~~materially ~~pandemic,~~adversely ~~and~~affect weour ~~have limited ability to influence their plans~~business, ~~prevent~~results ~~delays,~~of ~~and/or cost~~operations ~~increases due to reduced availability~~ and ~~capacity~~growth ~~and increased required safety measures~~prospects.

~~Customer~~Maintaining ~~complaints~~and orenhancing ~~negative publicity about~~ our ~~products,~~product ~~delivery~~listings ~~times,~~is orcritical ~~marketing~~in ~~strategies,~~expanding ~~even~~and ifgrowing ~~not~~our ~~accurate,~~business. ~~especially on blogs~~However, ~~social~~ ~~media~~a ~~websites~~significant ~~and~~portion ~~third-party~~of ~~market~~our ~~sites,~~perceived performance ~~could~~to ~~rapidly~~the ~~and~~customer ~~severely~~depends ~~diminish~~on ~~consumer~~third ~~view~~parties outside of our ~~product~~control, ~~listings~~including suppliers and ~~result in~~third-party ~~harm~~delivery toagents ~~our~~as ~~brands.~~well as ~~Customers~~online ~~may~~retailers ~~also~~such ~~make~~as ~~safety-related~~Amazon ~~claims~~and ~~regarding~~Walmart. ~~products~~Because ~~sold~~our ~~through~~agreements with our online retail partners, ~~such as~~are ~~Amazon,~~generally ~~which~~terminable at will, we may ~~result~~be inunable anto ~~online~~maintain ~~retail~~these ~~partner~~relationships, ~~removing~~and ~~the~~our ~~product~~results ~~from~~of ~~its~~operations ~~marketplace.~~could Wefluctuate ~~have~~significantly from ~~time~~period to ~~time experienced~~period. ~~such~~Because ~~removals~~we ~~and~~rely ~~such~~on ~~removals~~third ~~may~~parties ~~materially~~to ~~impact~~deliver our ~~financial~~products, ~~results~~we ~~depending~~are onsubject ~~the~~to ~~product~~shipping ~~that~~delays isor ~~removed~~disruptions ~~and~~caused ~~length~~by ofinclement ~~time~~weather, ~~that~~natural itdisasters, islabor ~~removed~~activism, health epidemics or bioterrorism. We may also ~~use~~experience ~~and~~shipping delays or disruptions due to other carrier-related issues relating to their own internal operational capabilities. Further, we rely on ~~other~~the ~~services~~business ~~from~~continuity plans of these third parties, ~~such~~to asoperate ~~our~~during ~~telecommunications services~~pandemics, and ~~those~~we ~~services may~~have belimited ~~subject~~ability to ~~outages~~influence their plans, prevent delays, and/or ~~interruptions~~cost ~~that~~increases due ~~are~~to ~~not~~reduced ~~within~~availability ~~our~~and ~~control~~capacity and increased required safety measures.

WeCustomer complaints ~~experience~~or ~~significant~~negative publicity about our products, delivery times, or marketing strategies, even if not accurate, especially on blogs, ~~fluctuations~~social media websites and third-party market sites, could rapidly and severely diminish consumer view of our product listings and result in harm to our ~~operating~~brands. Customers may also make safety-related claims regarding products sold through our online retail partners, such as Amazon, which may result in an online retail partner removing the product from its marketplace. We have from time to time experienced such removals and such removals may materially impact our financial results depending on the product that is removed and ~~growth~~length ~~rate~~of time that it is removed. We also use and rely on other services from third parties, such as our telecommunications services, and those services may be subject to outages and interruptions that are not within our control.

~~We are~~Our ~~not~~business ~~always able to accurately forecast our growth rate. We base our expense levels~~ and ~~investment~~results ~~plans~~of onoperations ~~sales estimates. A significant~~could ~~portion~~be ofmaterially ~~our expenses~~ and ~~investments~~adversely isaffected ~~fixed,~~by ~~and~~the wenew ~~are~~10% ~~not~~global ~~always~~import ~~able~~surcharge toand ~~adjust~~ongoing ~~our~~trade ~~spending quickly enough if our sales are less than expected~~investigations.

~~Our revenue~~Following ~~growth~~the ~~may~~U.S. ~~not~~Supreme Court’s beFebruary ~~sustainable~~20, ~~and~~2026 ~~our~~ruling ~~percentage~~that ~~growth~~invalidated ~~rates~~certain ~~may~~prior ~~decrease~~tariff regimes, the U.S. ~~Our~~administration ~~revenue~~immediately ~~and~~implemented a ~~operating~~new ~~profit~~10% ~~growth~~ad ~~depend~~valorem ~~on the~~global ~~continued~~import ~~growth~~surcharge ofunder ~~demand~~Section ~~for~~122 of the ~~products~~Trade ~~offered~~Act, byeffective usFebruary 24, ~~and~~2026. ~~our~~This ~~business~~surcharge isapplies ~~affected~~to nearly byall ~~general~~of ~~economic~~our ~~and~~imported ~~business~~goods, ~~conditions~~including those from China. A ~~softening~~While ofthis ~~demand,~~measure ~~whether~~is ~~caused~~currently byscheduled ~~changes~~to expire in ~~customer~~July ~~preferences~~2026, there oris ano ~~weakening~~guarantee ofit ~~the~~will ~~U.S.~~not ~~economy,~~be ~~may~~extended ~~result~~by inCongress ~~decreased revenue~~ or ~~growth~~replaced by more aggressive measures.

~~Our~~Furthermore, on March 11, ~~sales~~2026, ~~and~~the ~~operating~~USTR ~~results~~initiated ~~will~~new ~~also~~Section ~~fluctuate~~301 ~~for~~investigations ~~many~~into ~~other~~manufacturing ~~reasons,~~overcapacity and labor practices in certain sourcing regions, including ~~due~~China and Southeast Asia. While these investigations could lead to ~~factors~~additional ~~described~~duties ~~elsewhere~~beyond inthe ~~this~~150-day ~~section~~statutory ~~and~~limit of the ~~following:~~Section 122 surcharge, we currently do not expect them to have a material impact on our margins or overall financial performance.

●The ~~our~~termination ~~ability to retain and increase sales to existing customers, attract new customers, and satisfy our customers’ demands; ● our ability to retain and expand our network~~ of ~~vendors;~~de ●minimis ~~our~~treatment for ability to offer products on favorable terms, manage inventory, and fulfill orders; ● the introduction of competitive products, price decreases, or improvements; ● changes in usage or adoption rates of the Internet, elow-~~commerce,~~value ~~electronic~~shipments ~~devices,~~has ~~and~~increased ~~web~~our ~~services;~~compliance ~~● timing, effectiveness, and~~ costs ~~of expansion~~ and ~~upgrades~~has ofno our systems and infrastructure; ● the extent to which we finance, and the terms of any such financing for, our current operations and future growth; ● the outcomes of legal proceedings and claims, which may include significant monetary damages or injunctive relief and could have a material ~~adverse~~ impact onin our ~~operating~~fulfillment ~~results;~~model.

15In February 2026, the U.S. government reaffirmed and continued the permanent suspension of the “de minimis” exemption (Section 321) for all international shipments, regardless of value. Previously, shipments with a retail value of $800 or less entered the U.S. duty-free and with minimal formal entry requirements.

●Under ~~variations~~current in2026 the mix of products we sell; ● variations in our level of merchandise and vendor returns; ● the extent to which we offer fast and free delivery and provide additional benefits to our customers; ● factors affecting our reputation; ● the extent to which we invest in technology and contentregulations, all ~~fulfillment,~~such ~~and~~shipments—including ~~other~~those ~~expense~~sent ~~categories;~~via ●international ~~increases~~postal in the prices of fuel and gasoline, as well as increases in the prices of other energy products and commodities like paper and packing supplies and hardware products; ● the extent to which operators of the networks—are ~~between~~now ~~our~~subject ~~customers and us, the online retailer, successfully charge fees~~ to grant our customers unimpaired and unconstrained access to our online services; ● our ability to collect amounts owed to us when they become due; ● the extent to which new and existing technologies, or industry trends, restrict online advertising or affect our ability to customize advertising or otherwise tailor our product and service offerings; ● the extent to which use of our services is affected by spyware, viruses, phishing and other spam emails, denial of service attacks, data theft, computer intrusions, outages, and similar events; and ● disruptions from natural or man-made disasters, extreme weather, geopolitical events and security issues (including terrorist attacks and armed hostilities), labor or trade disputes, and similar events.:

We● ~~face~~Formal ~~risks~~Entry ~~related to~~Requirements: ~~successfully~~Mandating ~~optimizing~~the use of licensed customs brokers and ~~operating~~the ~~our~~filing ~~fulfillment~~of formal entry types in the Automated Commercial Environment (ACE). ● Direct Duties: Payment of the 10% Trade Act Section 122 surcharge and ~~customer~~any ~~service~~other ~~operations~~applicable statutory duties. ● New Processing Fees: Additional flat fees for postal items and increased carrier surcharges for duty handling.

~~Failures to~~These ~~adequately~~changes ~~predict~~have ~~customer~~no ~~demand~~material impact oron ~~otherwise optimize and operate~~ our ~~fulfillment~~per-unit ~~and~~landed ~~customer service operations successfully from time to time result in excess or insufficient fulfillment or customer service capacity, increased~~ costs, ~~and~~for ~~impairment~~small-parcel ~~charges, any of which could materially harm our business. As we continue to add~~ fulfillment and ~~customer~~administrative ~~service capability or add new businesses with different requirements, our fulfillment and customer service operations become increasingly complex and operating them becomes more challenging~~burdens. ~~There can be no assurance that we will be able to operate our operations effectively.~~

~~In addition, failure to optimize inventory in our fulfillment operations increases our net shipping cost by requiring long-zone or partial shipments.~~ We may be unable to ~~adequately~~recover ~~staff~~duties ~~our~~paid under ~~fulfillment~~invalidated ~~and~~2025 ~~customer~~tariff ~~service~~regimes, ~~operations.~~and ~~Our~~any ~~failure~~recovery toprocess ~~properly handle such inventory or to accurately forecast product demand~~ may ~~result~~be incostly ~~us being unable to secure sufficient storage space or to optimize our fulfillment operations or cause other unexpected costs~~ and ~~other harm to our business and reputation~~delayed.

~~We rely~~Although onthe aU.S. ~~limited~~Supreme Court ~~number~~recently ofruled ~~shipping~~that ~~companies~~the toIEEPA-based ~~deliver~~tariffs ~~inventory~~imposed toin us2025 ~~and~~were ~~completed~~unauthorized, ~~orders~~the toprocess ~~our~~for ~~customers.~~obtaining ~~The~~refunds ~~inability~~of tothe ~~negotiate~~duties we ~~acceptable~~paid ~~terms~~during ~~with~~that ~~these~~period ~~companies~~remains orhighly ~~performance~~uncertain. ~~problems~~As orof ~~other~~March ~~difficulties~~2026, ~~experienced~~U.S. byCustoms ~~these~~and ~~companies~~Border orProtection byhas ~~our~~indicated ~~own~~that ~~transportation~~refunds will ~~systems~~only ~~could~~be ~~negatively~~available ~~impact~~through ~~our~~a ~~operating~~specific ~~results~~direct-deposit platform and ~~customer~~may ~~experience.~~require Inindividual ~~addition,~~importers ~~our ability~~ to ~~receive~~initiate ~~inbound~~formal ~~inventory~~protests ~~efficiently~~or litigation. ~~and~~We ~~ship~~cannot ~~completed~~predict ~~orders~~the totiming ~~customers~~or ~~also~~success ~~may~~of beour ~~negatively~~refund ~~affected~~claims. byIf ~~natural~~we orare ~~man-made~~unable ~~disasters,~~to ~~extreme~~secure ~~weather~~these refunds, ~~geopolitical~~or if the cost of the recovery ~~events~~process ~~and~~exceeds ~~security~~the ~~issues~~potential benefit, ~~labor~~our or2025 ~~trade~~financial ~~disputes,~~results ~~and~~will ~~similar~~remain ~~events~~negatively impacted by these invalidated costs.

16We experience significant fluctuations in our operating results and growth rate.

~~The variability~~We inare not always able to accurately forecast our ~~retail~~growth ~~business~~rate. ~~places~~We ~~increased~~base ~~strain~~our expense levels and investment plans on sales estimates. A significant portion of our ~~operations~~expenses and investments is fixed, and we are not always able to adjust our spending quickly enough if our sales are less than expected.

~~Demand~~Our ~~for~~revenue ~~our~~growth ~~retail~~may ~~products~~not ~~can~~be ~~fluctuate significantly for many reasons~~sustainable, ~~including~~and as a result of seasonality, promotions, product launches, or unforeseeable events, such as in response to natural or man-made disasters, extreme weather, or geopolitical events. For example, we expect a disproportionate amount of our ~~retail~~percentage ~~sales~~growth torates ~~occur~~may ~~during our fourth quarter~~decrease. Our ~~failure to stock or restock popular products in sufficient amounts such that we fail to meet customer demand could significantly affect our~~ revenue and ~~our~~operating ~~future~~profit growth. ~~When~~depend weon ~~overstock~~the ~~products,~~continued wegrowth ~~may~~of bedemand ~~required~~for tothe ~~take~~products ~~significant~~offered ~~inventory~~by ~~markdowns~~us, ~~or write-offs~~ and ~~incur commitment costs, which could materially reduce profitability. We regularly experience increases in~~ our ~~net~~business ~~shipping~~is ~~cost~~affected ~~due~~by togeneral ~~FBA~~economic ~~fee increases, split-shipments,~~ and ~~additional long-zone~~business ~~shipments necessary to ensure timely delivery for the holiday season~~conditions. ~~If too many customers access the websites on which we~~ ~~engage~~A insoftening ~~online retailing within a short period~~ of ~~time due to increased~~ demand, wewhether ~~may~~caused ~~experience~~by ~~system~~changes ~~interruptions~~in ~~that~~customer ~~make~~preferences ~~the websites unavailable~~ or ~~prevent~~a usweakening ~~from efficiently fulfilling orders, which may reduce the volume~~ of ~~goods we offer or sell and~~ the ~~attractiveness of our products~~U.S. ~~In addition~~economy, we may beresult ~~unable~~in ~~to adequately staff for fulfillment of orders and customer service during these peak periods~~decreased ~~and~~revenue ~~delivery~~or ~~and other fulfillment companies and customer service co-sourcers may be unable to meet the seasonal demand~~growth.

AsOur ~~a result of holiday~~ sales, ~~as of December 31 of each year, our cash, cash equivalents,~~ and ~~marketable~~operating ~~securities~~results ~~balances~~will ~~typically~~also ~~reach their~~fluctuate ~~highest~~for ~~level~~many (other ~~than~~reasons, asincluding adue ~~result~~to offactors ~~cash~~described ~~flows~~elsewhere ~~provided by or used~~ in ~~investing~~this section and ~~financing activities). This operating cycle results in a corresponding increase in accounts payable as of December 31. Our accounts payable balance generally declines during~~ the ~~first~~ ~~three months of the year, resulting in a corresponding decline in our cash, cash equivalents, and marketable securities balances.~~following:

~~Continued~~● ~~increases in~~our ~~Amazon~~ability ~~Marketplace~~to ~~fulfillment~~retain and ~~storage~~increase ~~fees~~sales ~~could~~to ~~have~~existing ancustomers, ~~adverse~~attract ~~impact~~new customers, and satisfy our customers’ demands; ● our ability to retain and expand our network of vendors; ● our ability to offer products on favorable terms, manage inventory, and fulfill orders; ● the introduction of competitive products, price decreases, or improvements; ● changes in usage or adoption rates of the Internet, e-commerce, electronic devices, and web services; ● timing, effectiveness, and costs of expansion and upgrades of our ~~profit~~systems ~~margin~~and infrastructure; ● the extent to which we finance, and ~~results~~the terms of any such financing for, our current operations. and future growth; ● the outcomes of legal proceedings and claims, which may include significant monetary damages or injunctive relief and could have a material adverse impact on our operating results;

The Company utilizes Amazon’s FBA platform to store their products at the Amazon fulfillment center and to pack and distribute these products to customers. If Amazon continues to increase its FBA fees, our profit margin could be adversely affected.14

A● ~~change~~variations in ~~one~~the ormix ~~more~~of products we sell; ● variations in our level of merchandise and vendor returns; ● the ~~Company’s vendors’~~extent ~~policies~~to orwhich we offer fast and free delivery and provide additional benefits to our customers; ● factors affecting our reputation; ● the ~~Company’s~~extent ~~relationship~~to ~~with~~which ~~those~~we ~~vendors~~invest ~~could~~in ~~adversely~~technology and content, fulfillment, and other expense categories; ● increases in the prices of fuel and gasoline, as well as increases in the prices of other energy products and commodities like paper and packing supplies and hardware products; ● the extent to which operators of the networks between our customers and us, the online retailer, successfully charge fees to grant our customers unimpaired and unconstrained access to our online services; ● our ability to collect amounts owed to us when they become due; ● the extent to which new and existing technologies, or industry trends, restrict online advertising or affect our ability to customize advertising or otherwise tailor our product and service offerings; ● the ~~Company’s~~extent ~~results~~to which use of ~~operations~~our services is affected by spyware, viruses, phishing and other spam emails, denial of service attacks, data theft, computer intrusions, outages, and similar events; and ● disruptions from natural or man-made disasters, extreme weather, geopolitical events and security issues (including terrorist attacks and armed hostilities), labor or trade disputes, and similar events.

~~The~~We ~~Company~~face isrisks ~~dependent~~related ~~on its vendors~~ to ~~supply~~successfully ~~merchandise~~optimizing ~~in a timely~~ and ~~efficient~~operating ~~manner.~~our Iffulfillment aand ~~vendor~~customer ~~fails~~service ~~to deliver on its commitments, whether due to financial difficulties or other reasons, the Company could experience merchandise shortages that could lead to lost sales~~operations.

~~Historically,~~Failures ~~the~~to ~~Company~~adequately ~~has~~predict ~~not~~customer ~~experienced~~demand ~~difficulty~~or otherwise optimize and operate our fulfillment and customer service operations successfully from time to time result in ~~obtaining~~excess ~~satisfactory~~or ~~sources~~insufficient offulfillment ~~supply~~or customer service capacity, increased costs, and ~~management~~impairment ~~believes~~charges, any ~~that~~of itwhich ~~will~~could materially harm our business. As we continue to add fulfillment and customer service capability or add new businesses ~~have~~with ~~access~~different torequirements, ~~adequate~~our ~~sources~~fulfillment ofand ~~supply~~customer service operations become increasingly complex and operating them becomes more challenging. NoThere ~~individual~~can ~~vendor~~be ~~exceeded~~no ~~15%~~assurance ofthat ~~purchases~~we inwill ~~the~~be ~~year~~able ~~ended~~to ~~December~~operate ~~31,~~our ~~2024~~operations effectively.

~~Our~~In addition, ~~revenue~~failure ~~is dependent~~to ~~upon~~optimize ~~maintaining~~inventory in our ~~relationship~~fulfillment ~~with~~operations ~~Amazon~~increases ~~and~~our ~~failure~~net toshipping docost ~~so,~~by requiring long-zone or ~~any~~partial shipments. ~~restrictions~~We onmay be unable to adequately staff our ~~ability~~fulfillment and customer service operations. Our failure to ~~offer~~properly ~~products~~handle onsuch ~~the~~inventory ~~Amazon~~or ~~Marketplace,~~to ~~could~~accurately ~~have~~forecast anproduct ~~adverse~~demand ~~impact~~may onresult in us being unable to secure sufficient storage space or to optimize our fulfillment ~~business,~~operations ~~financial~~or ~~condition~~cause other unexpected costs and ~~results~~other ofharm ~~operations~~to our business and reputation.

ToWe ~~date,~~rely weon ~~have~~a ~~generated~~limited ~~practically~~number ~~all~~ of ~~our~~shipping ~~revenue~~companies asto adeliver ~~third-party~~inventory ~~seller~~to onus ~~Amazon~~and ~~Marketplace.~~completed Inorders ~~2024~~to ~~and~~our ~~2023,~~customers. ~~99%~~The ~~and~~inability ~~99%,~~to ~~respectively,~~negotiate ofacceptable ~~our~~terms ~~net~~with ~~revenue~~these ~~was~~companies ~~through~~ or ~~with~~performance ~~the~~problems ~~Amazon~~or ~~sales~~other ~~platform.~~difficulties ~~Therefore,~~experienced weby ~~depend~~these ~~entirely~~companies onor by our ~~relationship~~own ~~with Amazon for growth.~~transportation Insystems ~~particular,~~could wenegatively ~~depend~~impact on our ~~ability~~operating toresults ~~offer~~and ~~products~~customer onexperience. ~~the~~In ~~Amazon~~addition, ~~Marketplace.~~our Weability ~~also~~to ~~depend~~receive oninbound ~~Amazon~~inventory efficiently ~~for~~and ~~the~~ship ~~timely~~completed ~~delivery of~~orders ~~products~~ to customers. ~~Any~~also ~~adverse~~may ~~change~~be innegatively ~~our~~affected ~~relationship~~by ~~with~~natural ~~Amazon,~~or ~~including~~man-made ~~restrictions~~disasters, onextreme ~~the ability to offer products~~weather, orgeopolitical ~~termination~~events ofand ~~the~~security ~~relationship~~issues, ~~could~~labor ~~adversely~~or ~~affect~~trade ~~our~~disputes, ~~continued growth~~ and ~~financial~~similar ~~condition and results of operations~~events.

1715

~~Our profit is dependent~~The onvariability ~~reimbursements from Amazon and any change~~ in ~~Amazon’s~~our ~~policy~~retail ~~regarding~~business ~~reimbursement~~places ~~could~~increased ~~adversely~~strain ~~impact~~on our ~~ability to generate profits~~operations.

~~Amazon~~Demand for ~~reimburses~~our usretail products can fluctuate significantly for ~~any~~many reasons, including as a result of seasonality, promotions, product launches, ~~lost~~or ~~and~~unforeseeable ~~damaged~~events, ~~merchandise~~such as in response to natural or man-made disasters, extreme weather, or geopolitical events. ~~These~~For ~~reimbursements~~example, we ~~form~~expect a ~~substantial~~disproportionate ~~portion~~amount of our ~~profits~~retail sales to occur during our fourth quarter. ~~Any~~Our ~~change~~failure into ~~Amazon~~stock ~~policy~~or ~~regarding~~restock ~~these~~popular products ~~reimbursements~~in sufficient amounts such that we fail to meet customer demand could ~~impact~~significantly affect our ~~profit~~revenue ~~adversely~~and our future growth. ~~Additionally,~~When we overstock ~~are~~products, ~~dependent~~we onmay ~~Amazon’s~~be ~~ability~~required to ~~track~~take significant inventory markdowns or write-offs and ~~process~~incur ~~these~~commitment costs, which could ~~reimbursements~~materially reduce profitability. ~~Any~~We ~~deficiencies~~regularly experience increases in ~~Amazon’s~~our ~~ability~~net shipping cost due to ~~process~~FBA ~~these~~fee ~~reimbursements~~increases, ~~could~~split-shipments, and ~~impact~~additional long-zone shipments necessary to ensure timely delivery for the holiday season. If too many customers access the websites on which we engage in online retailing within a short period of time due to increased demand, we may experience system interruptions that make the websites unavailable or prevent us from efficiently fulfilling orders, which may reduce the volume of goods we offer or sell and the attractiveness of our ~~profits~~products. In addition, we may be unable to adequately staff for fulfillment of orders and customer service during these peak periods and delivery and other fulfillment companies and customer service co-sourcers may be unable to meet the seasonal demand.

~~Loss~~As a result of ~~key~~holiday ~~personnel or~~sales, ~~the~~as ~~inability~~of toDecember ~~attract~~31 of each year, ~~train~~our cash, cash equivalents, and ~~retain~~marketable ~~qualified~~securities ~~employees~~balances ~~could~~typically ~~adversely~~reach their ~~affect~~highest ~~the~~level ~~Company’s~~(other than as a result of cash flows provided by or used in investing and financing activities). This operating cycle results in a corresponding increase in accounts payable as of ~~operations~~December 31. Our accounts payable balance generally declines during the first three months of the year, resulting in a corresponding decline in our cash, cash equivalents, and marketable securities balances.

~~The~~Continued ~~Company~~increases ~~believes~~in ~~that~~Amazon ~~its~~Marketplace ~~future~~fulfillment ~~prospects~~and ~~depend,~~storage tofees acould ~~significant~~have ~~extent,~~an onadverse ~~the~~impact ~~services of its executive officers. Our future success will also depend~~ on our ~~ability~~profit tomargin ~~attract~~ and ~~retain qualified key personnel. The loss of the services of certain of the Company’s executive officers and other key management personnel could adversely affect the Company’s~~ results of operations.

InWe ~~addition~~utilize ~~to our executive officers, the Company~~Amazon’s ~~business~~FBA isplatform ~~dependent on our ability~~ to ~~attract,~~store ~~train and retain qualified team members. Our ability to meet~~ our ~~labor~~products ~~needs~~at ~~while~~the ~~controlling~~Amazon ~~our~~fulfillment ~~costs~~center isand ~~subject~~ to ~~external~~pack ~~factors~~and ~~such~~distribute asthese ~~unemployment levels, health~~products ~~care~~to ~~costs and changing demographics~~customers. If weAmazon ~~are~~continues ~~unable~~ to ~~attract~~increase ~~and~~its ~~retain~~FBA ~~adequate numbers of qualified team members~~fees, our ~~operations and~~profit ~~support~~margin ~~functions~~ could ~~suffer.~~be ~~Those factors, together with increased wage and benefit costs, could~~ adversely ~~affect our results of operations~~affected.

WeA change ~~may~~in ~~face~~one ~~difficulties in~~or ~~meeting~~more of our ~~labor~~vendors’ ~~needs~~policies toor ~~effectively~~our ~~operate~~relationship with those vendors could adversely affect our ~~business~~results of operations.

We are ~~heavily~~ dependent ~~upon~~on our ~~labor~~vendors ~~workforce. Our compensation packages are designed~~ to ~~provide~~supply ~~benefits~~merchandise ~~commensurate~~in ~~with~~a ~~our~~timely ~~level of~~and ~~expected~~efficient ~~service~~manner. ~~However,~~If wea ~~face~~vendor ~~the~~fails ~~challenge~~to ofdeliver ~~filling~~on ~~many~~its ~~positions~~commitments, whether atdue ~~wage scales that are appropriate~~ to ~~the~~financial ~~industry~~difficulties ~~and competitive~~or ~~factors. We also face~~ other ~~risks in meeting our labor needs~~reasons, ~~including~~we ~~competition~~could ~~for~~experience ~~qualified~~merchandise ~~personnel,~~shortages ~~overall~~that ~~unemployment levels. Changes in any of these factors, including a shortage of available workforce,~~ could ~~interfere~~lead ~~with our ability~~ to ~~adequately~~lost ~~service our customers and could result in increasing labor costs~~sales.

~~Our~~Historically, we ~~business~~have ~~could be~~not ~~adversely~~experienced ~~affected~~difficulty byin ~~increased~~obtaining ~~labor~~satisfactory ~~costs,~~sources ~~including~~of ~~costs~~supply ~~related~~and management believes that we will continue to anhave access ~~increase~~to adequate sources of supply. No individual vendor exceeded 15% of purchases in ~~minimum~~the ~~wage~~year ~~and~~ended ~~health~~December ~~care~~31, 2025.

~~Labor~~Our revenue is ~~one~~dependent ofupon ~~the~~maintaining ~~primary components in the cost of operating~~ our ~~business.~~relationship ~~Increased~~with ~~labor~~Amazon ~~costs,~~and ~~whether~~failure ~~due~~ to ~~competition,~~do ~~unionization~~so, ~~increased~~ ~~minimum wage, state unemployment rates, health care,~~ or ~~other~~any ~~employee~~restrictions ~~benefits~~on ~~costs may adversely impact~~ our ~~operating~~ability ~~expenses.~~to offer ~~Additionally,~~products ~~there~~on isthe noAmazon ~~assurance~~Marketplace, ~~that~~could ~~future~~have ~~health~~an ~~care~~adverse ~~legislation~~impact ~~will~~on ~~not~~our ~~adversely~~business, ~~impact~~financial ~~our~~condition and results orof operations.

18To date, we have generated practically all of our revenue as a third-party seller on Amazon Marketplace. In 2025 and 2024, 98% and 99%, respectively, of our net revenue was through or with the Amazon sales platform. Therefore, we depend entirely on our relationship with Amazon for growth. In particular, we depend on our ability to offer products on the Amazon Marketplace. We also depend on Amazon for the timely delivery of products to customers. Any adverse change in our relationship with Amazon, including restrictions on the ability to offer products or termination of the relationship, could adversely affect our continued growth and financial condition and results of operations.

~~Breach~~Our profit ofis ~~data security~~dependent ~~could~~on ~~harm~~reimbursements ~~our~~from ~~business~~Amazon and ~~standing~~any ~~with~~change in Amazon’s policy regarding reimbursement could adversely impact our ~~customers~~ability to generate profits.

~~The~~Amazon ~~protection~~reimburses ~~of our supplier (vendor), employee and business data is critical to~~ us. Our business, like that of most companies, involves confidential information about our employees, our suppliers and our Company. We rely on commercially available systems, software, tools and monitoring to provide security for ~~processing,~~any transmission and storage of all such data, including confidential information. Despite the security measures we have in place, our facilities and systems, and those of our third-party service providers, may be vulnerable to security breaches, acts of vandalism, computer viruses, misplaced or lost data, programming or human errors, or other similar events. Unauthorized parties may attempt to gain access to our systems or information through fraud or other means, including deceiving our employees or third-party service providers. The methods used to obtain unauthorized access, disable or degrade service, or sabotage systems are also constantly changing and ~~evolving,~~damaged ~~and may be difficult to anticipate or detect~~merchandise. WeThese ~~have~~reimbursements ~~implemented~~form ~~and~~a ~~regularly~~substantial ~~review~~portion ~~and update our control systems, processes and procedures to protect against unauthorized access to or use~~ of ~~secured data and to prevent data loss. However, the ever-evolving threats mean we must continually evaluate and adapt~~ our ~~systems and processes, and there is no guarantee that they will be adequate to safeguard against all data security breaches or misuses of data~~profits. Any ~~security~~change ~~breach~~in ~~involving the misappropriation,~~Amazon ~~loss~~policy orregarding ~~other~~these ~~unauthorized~~reimbursements ~~disclosure of customer payment card or personal information or employee personal or confidential information, whether by us or our vendors,~~ could ~~damage our reputation, expose us to risk of litigation and liability, disrupt our operations, harm our business and have an adverse~~ impact ~~upon~~ our ~~net~~profit ~~sales and profitability~~adversely. ~~As the regulatory environment related to information security~~Additionally, ~~data~~ collection and use, and privacy becomes increasingly rigorous, with new and changing requirements applicable to our business, compliance with those requirements could also result in additional costs. Further, if we are ~~unable~~dependent toon ~~comply~~Amazon’s ~~with~~ability ~~the security standards established~~to bytrack ~~banks~~ and ~~the~~process ~~credit~~these ~~card~~reimbursements. ~~industry,~~Any wedeficiencies ~~may~~in beAmazon’s ~~subject~~ability to ~~fines,~~process ~~restrictions~~these ~~and~~reimbursements ~~expulsion from card acceptance programs, which~~ could ~~adversely~~ ~~affect~~impact our ~~retail operations~~profits.

~~We face risks related to system interruption and lack of redundancy.~~16

WeLoss ~~experience~~of ~~occasional~~key ~~system~~personnel ~~interruptions and delays that make the websites on which we engage in online retailing unavailable~~ or ~~slow to respond and prevent us from efficiently accepting or fulfilling orders or providing services to third parties, which may reduce our net sales and~~ the ~~attractiveness~~inability ~~of our products and services. Steps we take~~ to ~~add software and hardware~~attract, ~~upgrade~~train ~~our systems~~ and ~~network infrastructure,~~retain ~~and~~qualified ~~improve~~employees ~~the stability and efficiency of our systems may not be sufficient to avoid system interruptions or delays that~~ could adversely affect our ~~operating~~ results of operations.

~~Our~~We ~~computer~~believe ~~and~~that ~~communications~~our ~~systems and operations in the past have been, or in the~~ future ~~could~~prospects bedepend, ~~damaged or interrupted due~~ to ~~events such~~a assignificant ~~natural or man-made disasters~~extent, ~~extreme~~on ~~weather,~~the ~~geopolitical~~services ~~events~~of ~~and~~our ~~security~~executive ~~issues~~officers. ~~(including~~Our ~~terrorist~~future ~~attacks~~success ~~and armed~~will ~~hostilities),~~also ~~computer~~depend ~~viruses,~~on ~~physical~~our orability ~~electronic~~to ~~break-ins,~~attract and ~~similar~~retain ~~events~~qualified orkey ~~disruptions~~personnel. ~~Any~~The ~~of these events could cause system interruption, delays, and~~ loss of ~~critical~~the ~~data,~~services ~~and~~of ~~could~~certain ~~prevent~~of usour ~~from~~executive ~~accepting~~ officers and ~~fulfilling~~other ~~customer~~key ~~orders~~management ~~and~~personnel ~~providing services, which~~ could ~~make~~adversely ~~our~~affect ~~product offerings less attractive and subject us to liability. Our systems are not fully redundant and~~ our ~~disaster recovery~~results ~~planning may not be sufficient. In addition, our insurance may not provide sufficient coverage to compensate for related losses. Any~~ of ~~these events could damage our reputation and be expensive to remedy~~operations.

~~Our~~In addition ~~hardware~~to our executive officers, our business is dependent on our ability to attract, train and retain qualified team members. Our ~~software~~ability ~~systems~~to meet our labor needs while controlling our costs is subject to external factors such as unemployment levels, health care costs and changing demographics. If we are ~~vulnerable~~unable to ~~damage~~attract and retain adequate numbers of qualified team members, ~~theft~~our oroperations ~~intrusion~~and ~~that~~support functions could ~~harm~~suffer. Those factors, together with increased wage and benefit costs, could adversely affect our ~~business~~results of operations.

~~Any~~We ~~failure~~may offace ~~our~~difficulties ~~computer hardware or software systems that causes an interruption~~ in meeting our ~~operations~~labor orneeds ~~a decrease in inventory tracking could result in reduced net sales and profitability. Additionally, if any data intrusion, security breach, misappropriation or theft were~~ to ~~occur,~~effectively weoperate ~~could incur significant costs in responding to such event, including responding to any resulting claims, litigation or investigations, which could harm~~ our ~~operating results~~business.

19We are heavily dependent upon our labor workforce. Our compensation packages are designed to provide benefits commensurate with our level of expected service. However, we face the challenge of filling many positions at wage scales that are appropriate to the industry and competitive factors. We also face other risks in meeting our labor needs, including competition for qualified personnel, overall unemployment levels. Changes in any of these factors, including a shortage of available workforce, could interfere with our ability to adequately service our customers and could result in increasing labor costs.

Our business ~~inability~~could ~~or failure~~be toadversely ~~protect~~affected ~~our~~by ~~intellectual~~increased ~~property~~labor ~~rights~~costs, orincluding ~~any~~costs ~~claimed~~related ~~infringement~~to byan usincrease ofin ~~third-party~~minimum ~~intellectual~~wage ~~rights,~~and ~~could~~health ~~have a negative impact on our operating results~~care.

~~Our~~Labor ~~trademark,~~is ~~trade~~one ~~secrets~~of ~~and~~the ~~other~~primary ~~intellectual~~components ~~property,~~in ~~including~~the ~~proprietary~~cost ~~software,~~of ~~are~~operating ~~valuable assets that are critical to~~ our ~~success~~ business. ~~The~~Increased ~~unauthorized~~labor ~~reproduction~~costs, orwhether ~~other~~due ~~misappropriation~~to ofcompetition, ~~our~~unionization, increased ~~intellectual~~minimum ~~property~~wage, ~~could~~state ~~cause~~unemployment arates, ~~decline~~health ~~in our revenue. In addition~~care, ~~any infringement~~ or other ~~intellectual~~employee ~~property~~benefits ~~claim~~costs ~~made~~may ~~against~~adversely usimpact ~~could~~our beoperating ~~time-consuming to address, result in costly litigation,~~expenses. ~~cause product delays~~Additionally, ~~require~~there usis tono ~~enter~~assurance ~~into~~that ~~royalty~~future orhealth ~~licensing~~care ~~agreements~~legislation orwill ~~result~~not inadversely impact our ~~loss~~results ~~of ownership~~ or ~~use of the intellectual property~~operations.

~~The Company’s~~Breach ~~business~~of isdata ~~influenced~~security bycould ~~general~~harm ~~economic~~our ~~conditions~~business and standing with our customers.

The ~~Company’s~~protection ~~performance~~of our supplier (vendor), employee and business data is ~~subject~~critical to ~~general~~us. ~~economic~~Our ~~conditions~~business, like that of most companies, involves confidential information about our employees, our suppliers and ~~their~~our ~~impact~~Company. We rely on ~~levels~~commercially available systems, software, tools and monitoring to provide security for processing, transmission and storage of ~~discretionary~~all ~~consumer~~such ~~spending~~data, including confidential information. ~~General~~Despite ~~economic~~the ~~conditions~~security ~~impacting~~measures ~~discretionary~~we ~~consumer~~have ~~spending~~in ~~include~~place, ~~among~~our ~~others~~facilities and systems, ~~wages~~and those of our third-party service providers, may be vulnerable to security breaches, acts of vandalism, computer viruses, misplaced or lost data, programming or human errors, or other similar events. Unauthorized parties may attempt to gain access to our systems or information through fraud or other means, including deceiving our employees or third-party service providers. The methods used to obtain unauthorized access, disable or degrade service, or sabotage systems are also constantly changing and ~~employment~~evolving, ~~consumer~~and ~~debt~~may be difficult to anticipate or detect. We have implemented and regularly review and update our control systems, ~~reductions~~processes inand procedures to protect against unauthorized access to or use of secured data and to prevent data loss. ~~net~~However, ~~worth~~the ever-evolving threats mean we must continually evaluate and adapt our systems and processes, ~~residential~~and ~~real~~there ~~estate~~is no guarantee that they will be adequate to safeguard against all data security breaches or misuses of data. Any security breach involving the misappropriation, loss or other unauthorized disclosure of customer payment card or personal information or employee personal or confidential information, whether by us or our vendors, could damage our reputation, expose us to risk of litigation and ~~mortgage~~liability, ~~markets~~disrupt our operations, ~~taxation~~harm our business and have an adverse impact upon our net sales and profitability. As the regulatory environment related to information security, data ~~fuel~~collection and ~~energy~~use, ~~prices~~and privacy becomes increasingly rigorous, ~~interest~~with ~~rates~~new and changing requirements applicable to our business, ~~consumer~~compliance with ~~confidence~~those requirements could also result in additional costs. Further, if we are unable to comply with the security standards established by banks and ~~other~~the credit card industry, we may be subject to fines, restrictions and expulsion from card acceptance programs, which could ~~macroeconomic~~adversely ~~factors~~affect our retail operations.

Consumer purchases of discretionary items generally decline during recessionary periods and other periods where disposable income is adversely affected. A downturn in the economy affects retailers disproportionately, as consumers may prioritize reductions in discretionary spending, which could have a direct impact on purchases of our products and services and adversely impact our results of operations. In addition, reduced consumer spending may drive us and our competitors to offer additional products at promotional prices, which would have a negative impact on gross profit.17

~~Disruption of global~~We ~~capital~~face ~~and~~risks ~~credit~~related ~~markets~~to ~~may~~system ~~have~~interruption ~~a material adverse effect on the Company’s liquidity~~ and ~~capital~~lack ~~resources~~of redundancy.

~~Distress~~We inexperience occasional system interruptions and delays that make the ~~financial~~websites ~~markets~~on ~~has~~which we engage in ~~the~~online ~~past~~retailing unavailable or slow to respond and ~~can~~prevent inus ~~the~~from ~~future~~efficiently ~~result~~accepting inor ~~extreme~~fulfilling ~~volatility~~orders inor ~~security~~providing ~~prices~~services to third parties, ~~diminished~~which ~~liquidity~~may ~~and~~reduce our ~~credit~~net ~~availability.~~sales ~~There~~and ~~can~~the beattractiveness noof ~~assurance~~our ~~that~~products ~~our~~and ~~liquidity~~services. ~~will~~Steps ~~not~~we betake ~~affected~~to byadd ~~changes~~software inand ~~the~~hardware, ~~financial~~upgrade ~~markets~~our systems and ~~the global~~network ~~economy~~infrastructure, orand ~~that~~improve ~~our~~the ~~capital~~stability ~~resources~~and ~~will~~efficiency atof ~~all~~our ~~times~~systems may not be sufficient to ~~satisfy~~avoid system interruptions or delays that could adversely affect our ~~liquidity~~operating ~~needs~~results.

~~The~~Our computer ~~Company~~and iscommunications systems and operations in the past have been, or in the future could be, damaged or interrupted due to events ~~dependent~~such ~~upon~~as ~~access~~natural or man-made disasters, extreme weather, geopolitical events and security issues (including terrorist attacks and armed hostilities), computer viruses, physical or electronic break-ins, and similar events or disruptions. Any of these events could cause system interruption, delays, and loss of critical data, and could prevent us from accepting and fulfilling customer orders and providing services, which could make our product offerings less attractive and subject us to ~~capital~~liability. Our systems are not fully redundant and our disaster recovery planning may not be sufficient. In addition, our insurance may not provide sufficient coverage to compensate for related ~~its~~losses. ~~liquidity~~Any ~~needs~~of these events could damage our reputation and be expensive to remedy.

~~The~~Our ~~Company~~hardware ~~must~~and ~~have~~software ~~sufficient~~systems ~~sources~~are ofvulnerable ~~liquidity~~ to ~~fund its working capital requirements and indebtedness. The future availability of financing will depend on a variety of factors~~damage, ~~such~~theft asor ~~economic~~intrusion ~~and~~that ~~market conditions, the availability of credit and the Company’s credit rating, as well as the Company’s reputation with potential lenders. These factors~~ could ~~materially~~harm ~~adversely~~our ~~affect the Company’s ability to fund its working capital requirements, costs of borrowing, and the Company’s financial position and results of operations would be adversely impacted~~business.

WeAny failure ~~may~~of ~~complete a~~our ~~future~~computer ~~significant~~hardware ~~strategic~~or ~~transaction~~software systems that ~~may~~causes ~~not~~an ~~achieve~~interruption ~~intended~~in ~~results~~our operations or a decrease in inventory tracking could ~~increase~~result ~~the~~in ~~number~~reduced ofnet ~~our~~sales ~~outstanding~~and ~~shares or~~profitability. ~~amount~~Additionally, ofif ~~outstanding~~any ~~debt~~data intrusion, security breach, misappropriation or ~~result~~theft were to occur, we could incur significant costs in aresponding ~~change~~to ofsuch ~~control~~event, including responding to any resulting claims, litigation or investigations, which could harm our operating results.

WeOur ~~will~~inability ~~evaluate~~or ~~and~~failure ~~may~~to inprotect ~~the~~our ~~future~~intellectual ~~enter~~property ~~into~~rights, ~~strategic~~or ~~transactions.~~any ~~Any~~claimed ~~such~~infringement ~~transaction~~by ~~could~~us ~~happen~~of atthird-party ~~any~~intellectual ~~time~~rights, ~~could be material~~ ~~to our business and~~ could ~~take~~have ~~any number of forms, including, for example, an acquisition, merger or~~ a ~~sale~~negative ofimpact ~~all~~on ~~or substantially all of~~ our ~~assets~~operating results.

~~Evaluating~~Our ~~potential~~trademark, ~~transactions~~trade secrets and ~~integrating~~other ~~completed~~intellectual ~~ones~~property, ~~may~~including ~~divert~~proprietary ~~the~~software, ~~attention~~are ofvaluable ~~our~~assets ~~management~~that ~~from~~are ~~ordinary~~critical ~~operating~~to ~~matters~~our success. The ~~success~~ ofunauthorized ~~these~~reproduction ~~potential~~or ~~transactions~~other ~~will~~misappropriation ~~depend,~~of ~~in part, on~~ our ~~ability~~intellectual toproperty ~~realize~~could ~~the~~cause ~~anticipated~~a ~~growth~~decline ~~opportunities~~in ~~and cost synergies through the successful integration of the businesses we acquire with~~ our ~~existing business~~revenue. ~~Even~~In addition, ifany weinfringement ~~are~~or ~~successful~~other inintellectual ~~integrating the~~property ~~acquired~~claim ~~businesses,~~made weagainst ~~cannot~~us ~~assure~~could ~~you~~be ~~that~~time-consuming ~~these~~to ~~integrations~~address, ~~will~~ result in ~~the~~costly litigation, ~~realization~~cause ofproduct ~~the~~delays, ~~full~~require ~~benefit~~us ofto ~~any~~enter ~~anticipated growth~~into ~~opportunities~~royalty or ~~cost~~licensing ~~synergies~~agreements or ~~that~~result ~~these~~in ~~benefits~~our ~~will~~loss beof ~~realized~~ownership ~~within~~or ~~the expected time frames. In addition, acquired~~use ~~businesses~~of ~~may~~the ~~have~~intellectual ~~unanticipated liabilities or contingencies~~property.

IfOur webusiness ~~complete~~is aninfluenced ~~acquisition,~~by ~~investment~~general oreconomic ~~other strategic transaction, we may require additional financing that could result in an increase in the number of our outstanding shares or the aggregate principal amount of our debt~~conditions. ~~A strategic transaction may result in a change in control of our company or otherwise materially and adversely affect our business.~~

20Our performance is subject to general economic conditions and their impact on levels of discretionary consumer spending. General economic conditions impacting discretionary consumer spending include, among others, wages and employment, consumer debt, reductions in net worth, residential real estate and mortgage markets, taxation, fuel and energy prices, interest rates, consumer confidence and other macroeconomic factors.

~~Historically,~~Consumer purchases weof discretionary items generally decline during recessionary periods and other periods where disposable income is adversely ~~have~~affected. ~~experienced~~A ~~declines~~downturn in the economy affects retailers disproportionately, ~~and~~as weconsumers may ~~continue~~prioritize toreductions ~~experience~~in ~~fluctuation~~discretionary inspending, which ~~our~~could ~~level~~have a direct impact on purchases of ~~sales~~our products and services and adversely impact our results ~~from~~of operations. In addition, reduced consumer spending may drive us and our competitors to offer additional products at promotional prices, which would have a negative impact on gross profit.

ADisruption ~~variety~~ of ~~factors~~global ~~has~~capital ~~historically affected,~~ and ~~will~~credit ~~continue~~markets tomay ~~affect,~~have ~~our~~a ~~sales~~material ~~results~~adverse ~~and~~effect ~~profit~~on ~~margins. These factors include general economic conditions; competition; actions taken by~~ our ~~competitors;~~liquidity ~~consumer trends~~ and ~~preferences;~~capital ~~access to third party marketplaces; and new product introductions and changes in our product mix~~resources.

~~There~~Distress isin nothe ~~assurance~~financial ~~that~~markets wehas ~~will~~in ~~achieve~~the ~~positive~~past ~~levels~~and ofcan ~~sales~~in ~~and~~the ~~earnings~~future ~~growth~~result in extreme volatility in security prices, diminished liquidity and ~~any~~credit ~~decline~~availability. inThere can be no assurance that our ~~future~~liquidity ~~growth~~will ornot ~~performance could~~be ~~have~~affected aby ~~material~~changes ~~adverse~~in ~~effect~~the onfinancial markets and the global economy or that our ~~business~~capital ~~and~~resources ~~results~~will ofat ~~operations~~all times be sufficient to satisfy our liquidity needs.

~~The ability of the Company to satisfy its liabilities and to continue as a going concern will continue to be dependent on the implementation of several items, the success of which is not certain.~~18

~~The~~We ~~Company’s~~are ~~primary~~dependent ~~source~~upon ofaccess ~~liquidity is available cash and cash equivalents, which is limited. Therefore, the ability of the Company~~ to ~~meet~~capital ~~its~~for ~~liabilities and to continue as a going concern is dependent on, among other things, improved profitability, the continued implementation of~~ its ~~business~~liquidity strategy, the availability of future funding, implementation of one or more corporate initiatives to reduce costs at the parent company level and other strategic alternatives, including selling all or part of the remaining business or assets of the Companyneeds.

~~There~~We ~~can~~must behave nosufficient ~~assurance~~sources ~~that~~of weliquidity ~~will~~to befund ~~successful~~our inworking ~~further~~capital ~~implementing~~requirements ~~our~~and ~~business~~indebtedness. ~~strategy~~The orfuture ~~that~~availability ~~the~~of ~~strategy~~financing will depend on a variety of factors, ~~including~~such as economic and market conditions, the ~~completed initiatives~~availability of credit and our credit rating, ~~will~~as bewell as ~~successful~~our inreputation ~~sustaining~~with ~~acceptable~~potential ~~levels~~lenders. These factors could materially adversely affect our ability to fund our working capital requirements, costs of ~~sales~~borrowing, ~~growth~~and our financial position and ~~profitability~~results of operations would be adversely impacted.

~~Parties~~We may ~~with~~complete ~~whom the~~a ~~Company~~future ~~does~~significant ~~business~~strategic ~~may~~transaction bethat ~~subject~~may tonot ~~insolvency~~achieve ~~risks~~intended results or ~~may~~could ~~otherwise~~increase ~~become~~the ~~unable~~number of our outstanding shares or ~~unwilling~~amount toof ~~perform~~outstanding ~~their~~debt ~~obligations to~~or ~~the~~result ~~Company~~in a change of control.

~~The~~We ~~Company~~will isevaluate ~~a party to contracts, transactions~~ and ~~business~~may ~~relationships~~in ~~with~~the ~~various~~future ~~third~~enter ~~parties,~~into ~~including~~strategic ~~partners, vendors, suppliers, service providers and lenders, pursuant to which such third parties have performance, payment and other obligations to the Company~~transactions. ~~In some~~Any ~~cases, the Company depends upon~~ such ~~third~~transaction ~~parties~~could tohappen ~~provide~~at ~~essential~~any ~~products~~time, ~~services~~could orbe ~~other benefits, including with respect~~material to ~~merchandise,~~our ~~advertising, software development and support, logistics, other agreements for goods and services in order to operate the Company’s~~ business ~~in the ordinary course, extensions of credit, credit card accounts~~ and ~~related receivables, and other vital matters. Economic, industry and market conditions~~ could ~~result~~take ~~in increased risks to the Company associated with the potential financial distress or insolvency of such third parties. If~~ any ofnumber ~~these third parties were to become subject to bankruptcy, receivership or similar proceedings, the rights and benefits~~ of ~~the Company in relation to its contracts~~forms, ~~transactions and business relationships with such third parties could be terminated~~including, ~~modified in a manner adverse to the Company, or otherwise impaired. The Company cannot make any assurances that it would be able to arrange~~ for ~~alternate or replacement contracts~~example, ~~transactions~~an ~~or business relationships on terms as favorable as the Company’s existing contracts~~acquisition, ~~transactions~~merger or ~~business~~a ~~relationships,~~sale ifof at all. ~~Any~~or ~~inability on the part of the Company~~substantially toall ~~do so could negatively affect the Company’s cash flows, financial condition and results~~ of ~~operations~~our assets.

21Evaluating potential transactions and integrating completed ones may divert the attention of our management from ordinary operating matters. The success of these potential transactions will depend, in part, on our ability to realize the anticipated growth opportunities and cost synergies through the successful integration of the businesses we acquire with our existing business. Even if we are successful in integrating the acquired businesses, we cannot assure you that these integrations will result in the realization of the full benefit of any anticipated growth opportunities or cost synergies or that these benefits will be realized within the expected time frames. In addition, acquired businesses may have unanticipated liabilities or contingencies.

~~Failure~~If we tocomplete ~~comply with~~an ~~legal~~acquisition, ~~and~~investment ~~regulatory~~or ~~requirements~~other strategic transaction, we may require additional financing that could ~~adversely~~result ~~affect~~in an increase in the ~~Company’s~~number ~~results~~of our outstanding shares or the aggregate principal amount of ~~operations~~our debt. A strategic transaction may result in a change in control of our company or otherwise materially and adversely affect our business.

~~The~~Historically, ~~Company’s~~we ~~business~~have isexperienced ~~subject~~declines, ~~to a wide array of laws~~ and ~~regulations.~~we ~~Significant~~may ~~legislative~~continue ~~changes~~to ~~that~~experience ~~impact~~fluctuation ~~our~~in ~~relationship with~~ our ~~workforce~~level ~~(none~~ of ~~which~~sales ~~is represented by unions) could increase our expenses~~ and ~~adversely~~results ~~affect~~from ~~our~~ operations. Examples of possible legislative changes impacting our relationship with our workforce include changes to an employer’s obligation to recognize collective bargaining units, the process by which collective bargaining units are negotiated or imposed, minimum wage requirements, health care mandates, and changes in overtime regulations.

~~Our~~A ~~policies,~~variety ~~procedures~~of ~~and~~factors ~~internal~~has ~~controls~~historically ~~are designed to comply with all applicable laws and regulations~~affected, ~~including those imposed by the Securities~~ and ~~Exchange~~will ~~Commission~~continue ~~(the~~to ~~“SEC”) and Nasdaq~~affect, asour ~~well~~sales asresults ~~applicable~~and ~~employment~~profit ~~laws~~margins. ~~Additional~~These ~~legal~~factors ~~and~~include ~~regulatory~~general ~~requirements~~economic ~~increase~~conditions; ~~the~~competition; ~~complexity~~actions oftaken ~~the~~by ~~regulatory~~our ~~environment~~competitors; inconsumer ~~which~~trends ~~we operate~~ and ~~the~~preferences; ~~related~~access ~~cost of compliance. Failure~~ to ~~comply~~third ~~with~~party ~~such laws~~ marketplaces; and ~~regulations~~new ~~may~~product ~~result~~introductions ~~in damage to our reputation, financial condition~~ and ~~market~~changes ~~price~~in of our ~~stock~~product mix.

~~The~~There is ~~certificate~~no ofassurance ~~incorporation and bylaws provide~~ that ~~state~~we orwill ~~federal~~achieve ~~court~~positive ~~located~~levels ~~within the state~~ of ~~Delaware~~sales ~~will~~and beearnings ~~the~~growth, ~~sole~~ and ~~exclusive~~any ~~forum~~decline ~~for~~in ~~substantially all disputes between us and~~ our ~~stockholders,~~future ~~which~~growth or performance could ~~limit~~have ~~its stockholders’ ability to obtain~~ a ~~favorable~~material ~~judicial~~adverse ~~forum~~effect ~~for~~on ~~disputes with us or~~ our ~~directors,~~business ~~officers~~and orresults ~~other~~of ~~employees~~operations.

~~Section~~Our ability 21to ofsatisfy our ~~certificate of~~liabilities ~~incorporation~~ and ~~Section 7.4 of our bylaws provide that “[u]nless the corporation consents in writing~~ to ~~the~~continue ~~selection~~as ~~of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting~~ a ~~claim~~going ofconcern ~~breach~~will ofcontinue ~~a fiduciary duty owed by any director, officer or other employee of the Corporation~~ to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, or (iv) any action asserting a claim governed by the internal affairs doctrine shall be adependent ~~state~~on ~~or federal court located in~~ the ~~county~~implementation ~~in which the principal office~~ of ~~the corporation in the State of Delaware is established, in all cases subject to the court’s having personal~~several ~~jurisdiction over the indispensable parties named as defendants. Notwithstanding the foregoing~~items, the ~~exclusive~~success ~~forum provision will not apply to suits brought to enforce any liability or duty created by the Securities Exchange~~ of ~~1934, as amended (the “Exchange Act”), the Securities Act of 1933, as amended (the “Securities Act”), or any claim for~~ which ~~the~~is ~~federal courts have exclusive or concurrent jurisdiction.” Therefore, the exclusive forum provision in our certificate of incorporation and our bylaws will~~ not relieve us of our duty to comply with the federal securities laws and the rules and regulations thereunder, and stockholders will not be deemed to have waived our compliance with these laws, rules and regulationscertain.

~~This exclusive forum provision~~Our ~~may~~primary ~~limit~~source aof ~~stockholder’s~~liquidity ~~ability~~is toavailable ~~bring~~cash aand ~~claim~~cash inequivalents, awhich ~~judicial~~is ~~forum~~limited. ofTherefore, ~~its~~our ~~choosing~~ability ~~for~~to ~~disputes~~meet ~~with us or~~ our ~~directors, officers~~liabilities orand ~~other~~to ~~employees,~~continue ~~which~~as ~~may~~a ~~discourage~~going ~~lawsuits~~concern ~~against~~is usdependent ~~or our directors~~on, ~~officers~~among or other ~~employees.~~things, Inimproved ~~addition~~profitability, ~~stockholders who do bring a claim in~~ the ~~state~~continued orimplementation ~~federal court in the State~~ of ~~Delaware~~its ~~could face additional litigation costs in pursuing any such~~business ~~claim~~strategy, ~~particularly if they do not reside in or near Delaware. The state or federal court of~~ the ~~State~~availability of ~~Delaware~~future ~~may also reach different judgments or results than would other courts~~funding, ~~including~~implementation ~~courts~~of ~~where~~one ~~a stockholder would otherwise choose to bring the action, and such judgments~~ or ~~results may be~~ more ~~favorable~~corporate toinitiatives ~~us than~~ to ~~our~~reduce ~~stockholders.~~costs ~~However,~~at the ~~enforceability~~parent ~~of similar exclusive forum provisions~~company inlevel ~~other companies’ certificates of incorporation have been challenged in legal proceedings,~~ and itother isstrategic ~~possible that a court could find this type of provision to be inapplicable to~~alternatives, orincluding ~~unenforceable~~selling inall ~~respect of, one~~ or ~~more~~part of ~~the specified types of actions or proceedings. If a court were to find the exclusive forum provision contained in~~ our ~~certificate~~remaining ofbusiness ~~incorporation and our bylaws to be inapplicable~~ or ~~unenforceable in an action, we might incur additional costs associated with resolving such action in other jurisdictions~~assets.

22There can be no assurance that we will be successful in further implementing our business strategy or that the strategy, including the completed initiatives, will be successful in sustaining acceptable levels of sales growth and profitability.

By purchasing our common stock, you are bound by the fee-shifting provision contained in our bylaws, which may discourage you from pursuing actions against us and could discourage stockholder lawsuits that might otherwise benefit the Company and its stockholders.19

~~Section 7.4 of our bylaws~~Parties ~~provides~~with ~~that~~whom ~~“[i]f~~we ~~any~~do ~~action~~business ismay ~~brought~~be bysubject ~~any~~to ~~party~~insolvency ~~against~~risks ~~another party, relating to~~ or ~~arising~~may ~~out~~otherwise ofbecome ~~these~~unable ~~Bylaws,~~ or ~~the enforcement~~unwilling ~~hereof, the prevailing party shall be entitled~~ to ~~recover~~perform ~~from~~their ~~the other party reasonable attorneys’ fees, costs and~~obligations ~~expenses incurred in connection with the prosecution or defense of such action, provided that the provisions of this sentence shall not apply with respect~~ to ~~‘internal corporate claims’ as defined in Section 109(b) of the DGCL~~us.”

~~Our~~We ~~bylaws~~are ~~provide~~a ~~that~~party ~~for~~to ~~this section~~contracts, ~~the~~transactions ~~term~~and ~~“attorneys’~~business ~~fees”~~relationships orwith ~~“attorneys’~~various ~~fees~~third ~~and~~parties, ~~costs”~~including ~~means~~partners, vendors, suppliers, ~~the~~service ~~fees~~providers and ~~expenses~~lenders, ofpursuant ~~counsel~~ to ~~the~~which ~~Company~~such ~~and~~third ~~any~~parties have performance, payment and other ~~parties~~obligations ~~asserting~~to aus. ~~claim~~In ~~subject~~some cases, we depend upon such third parties to ~~Section~~provide ~~7.4~~essential ofproducts, ~~the~~services ~~bylaws~~or other benefits, ~~which~~including ~~may include~~with ~~printing~~respect to merchandise, ~~photocopying~~advertising, software ~~duplicating~~development and support, logistics, other ~~expenses~~agreements for goods and services in order to operate our business in the ordinary course, ~~air~~extensions ~~freight~~of ~~charges~~credit, credit card accounts and ~~fees~~related ~~billed~~receivables, ~~for~~and ~~law~~other ~~clerks~~vital matters. Economic, ~~paralegals~~industry and ~~other~~market conditions ~~persons~~could ~~not~~result ~~admitted~~in increased risks to the ~~bar~~Company ~~but~~associated ~~performing~~with ~~services~~the ~~under~~potential ~~the~~financial ~~supervision~~distress or insolvency of ansuch ~~attorney~~third parties. If any of these third parties were to become subject to bankruptcy, ~~and~~receivership ~~the~~or ~~costs~~similar ~~and~~proceedings, ~~fees~~our ~~incurred~~rights and benefits in ~~connection~~relation to our contracts, transactions and business relationships with ~~the~~such ~~enforcement~~third parties could be terminated, modified in a manner adverse to us, or ~~collection~~otherwise ofimpaired. We cannot make any ~~judgment~~assurances ~~obtained~~that init ~~any~~would ~~such~~be ~~proceeding~~able to arrange for alternate or replacement contracts, transactions or business relationships on terms as favorable as our existing contracts, transactions or business relationships, if at all. Any inability on our part to do so could negatively affect our cash flows, financial condition and results of operations.

WeFailure ~~adopted the fee-shifting provision~~ to ~~eliminate~~comply orwith ~~decrease~~legal ~~nuisance~~ and ~~frivolous~~regulatory ~~litigation.~~requirements Wecould ~~intend~~adversely toaffect ~~apply~~our ~~the~~results ~~fee-shifting~~of ~~provision broadly to all actions except for claims brought under the Exchange Act and the Securities Act~~operations.

~~There~~Our business is nosubject ~~set level of recovery required~~ to ~~be met by~~ a ~~plaintiff~~wide toarray ~~avoid~~of ~~payment~~laws ~~under~~and ~~this provision~~regulations. ~~Instead,~~Significant ~~whoever~~legislative ischanges ~~the~~that ~~prevailing party~~impact isour ~~entitled~~relationship ~~to recover the reasonable attorneys’ fees, costs and expenses incurred in connection~~ with ~~the~~our ~~prosecution or defense~~workforce (none of ~~such~~which ~~action.~~is ~~Any~~represented ~~party~~by ~~who~~unions) ~~brings~~could anincrease ~~action,~~our expenses and ~~the~~adversely ~~party~~affect ~~against~~our ~~whom~~operations. ~~such~~Examples ~~action~~of ispossible ~~brought~~legislative changes ~~under~~impacting ~~Section~~our ~~7.4~~relationship ofwith our ~~bylaws,~~workforce ~~which could~~ include, ~~but~~changes ~~is not limited~~ to ~~former~~an ~~and~~employer’s ~~current~~obligation ~~stockholders,~~to ~~Company~~recognize ~~directors,~~collective ~~officers, affiliates, legal counsel, expert witnesses~~bargaining ~~and other parties~~units, ~~are subject to this provision. Additionally, any party who brings an action, and~~ the ~~party~~process ~~against~~by ~~whom~~which ~~such~~collective ~~action is~~bargaining ~~brought~~units ~~under~~are ~~Section~~negotiated ~~7.4~~or ~~of our bylaws~~imposed, ~~which~~minimum ~~could~~wage ~~include~~requirements, ~~but~~health iscare ~~not limited to former and current stockholders~~mandates, ~~Company directors,~~and ~~officers,~~changes ~~affiliates,~~in ~~legal~~overtime ~~counsel, expert witnesses and other parties, would be able to recover fees under this provision~~regulations.

InOur ~~the~~policies, ~~event~~procedures ~~you~~and ~~initiate~~internal orcontrols ~~assert~~are adesigned ~~claim~~to ~~against~~comply ~~us,~~with inall ~~accordance~~applicable ~~with~~laws ~~the~~and ~~dispute~~regulations, ~~resolution~~including ~~provisions~~those ~~contained~~imposed inby the ~~our~~Securities ~~Bylaws,~~ and ~~you~~ doExchange ~~not,~~Commission in(the a“SEC”) ~~judgment~~and ~~prevail~~Nasdaq, ~~you~~as ~~will~~well beas ~~obligated~~applicable toemployment ~~reimburse~~laws. usAdditional ~~for~~legal ~~all reasonable costs~~ and regulatory ~~expenses~~requirements ~~incurred~~increase inthe ~~connection with~~complexity ~~such~~of ~~claim,~~the ~~including,~~regulatory ~~but~~environment ~~not~~in ~~limited~~which ~~to,~~we ~~reasonable~~operate ~~attorney’s fees~~ and ~~expenses~~the ~~and~~related ~~costs~~cost of ~~appeal, if any~~compliance. ~~Additionally,~~ ~~this~~Failure ~~provision~~to incomply ~~Section~~with ~~7.4~~such oflaws ~~our~~and ~~bylaws~~regulations ~~could~~may ~~discourage~~result ~~stockholder~~in ~~lawsuits~~damage ~~that~~to ~~might~~our ~~otherwise~~reputation, ~~benefit~~financial ~~the~~condition ~~Company~~ and ~~its~~market ~~stockholders~~price of our stock.

~~THE~~The ~~FEE~~certificate ~~SHIFTING~~of ~~PROVISION~~incorporation ~~CONTAINED~~and INbylaws ~~THE~~provide ~~BYLAWS~~that ISstate ~~NOT~~or ~~INTENDED~~federal TOcourt BElocated ~~DEEMED~~within Athe ~~WAIVER~~state BYof ~~ANY~~Delaware ~~HOLDER~~will OFbe ~~COMMON~~the ~~STOCK~~sole ~~OF THE COMPANY’S~~and ~~COMPLIANCE~~exclusive ~~WITH~~forum ~~THE~~for ~~U.S.~~substantially ~~FEDERAL~~all ~~SECURITIES~~disputes ~~LAWS~~between ~~AND~~us ~~THE~~and ~~RULES~~our ~~AND~~stockholders, ~~REGULATIONS~~which ~~PROMULGATED~~could ~~THEREUNDER.~~limit ~~THE~~its ~~FEE~~stockholders’ ~~SHIFTING~~ability ~~PROVISION CONTAINED~~to INobtain ~~THE~~a ~~BYLAWS~~favorable DOjudicial ~~NOT~~forum ~~APPLY~~for TOdisputes ~~CLAIMS~~with ~~BROUGHT~~us ~~UNDER~~or ~~THE~~our ~~EXCHANGE~~directors, ~~ACT~~officers ~~AND~~or ~~SECURITIES~~other ~~ACT~~employees.

23Our certificate of incorporation contains a forum selection clause and Section 7.4 of our bylaws provides that “[u]nless the corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, or (iv) any action asserting a claim governed by the internal affairs doctrine shall be a state or federal court located in the county in which the principal office of the corporation in the State of Delaware is established, in all cases subject to the court’s having personal jurisdiction over the indispensable parties named as defendants. If any action is brought by any party against another party, relating to or arising out of [the] Bylaws, or the enforcement hereof, the prevailing party shall be entitled to recover from the other party reasonable attorneys’ fees, costs and expenses incurred in connection with the prosecution or defense of such action, provided that the provisions of this sentence shall not apply with respect to “internal corporate claims” as defined in Section 115 of the DGCL or in connection with any other claim that a stockholder, acting in its capacity as a stockholder or in the right of the Corporation, has brought in an action, suit or proceeding…. Notwithstanding the foregoing, the exclusive forum provision will not apply to suits brought to enforce any liability or duty created by the Securities Exchange of 1934, as amended, the Securities Act of 1933, as amended, or any claim for which the federal courts have exclusive or concurrent jurisdiction. Unless the Corporation consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, including, in each case, any and all claims brought either directly or derivatively.” Therefore, the exclusive forum provision in our certificate of incorporation and our bylaws will not relieve us of our duty to comply with the federal securities laws and the rules and regulations thereunder, and stockholders will not be deemed to have waived our compliance with these laws, rules and regulations.

~~Litigation~~This exclusive forum provision may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with ~~adversely~~us ~~affect~~or our ~~business~~directors, ~~financial~~officers ~~condition~~or other employees, which may discourage lawsuits against us or our directors, officers or other employees. In addition, stockholders who do bring a claim in the state or federal court in the State of Delaware could face additional litigation costs in pursuing any such claim, particularly if they do not reside in or near Delaware. The state or federal court of the State of Delaware may also reach different judgments or results than would other courts, including courts where a stockholder would otherwise choose to bring the action, and such judgments or results may be more favorable to us than to our stockholders. However, the enforceability of ~~operations~~similar exclusive forum provisions in other companies’ certificates of incorporation have been challenged in legal proceedings, and it is possible that a court could find this type of provision to be inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings. If a court were to find the exclusive forum provision contained in our certificate of incorporation and our bylaws to be inapplicable or unenforceable in an action, we might incur additional costs associated with resolving such action in other jurisdictions.

Our business is subject to the risk of litigation by employees, consumers, partners, suppliers, competitors, stockholders, government agencies or others through private actions, class actions, administrative proceedings, regulatory actions or other litigation. The outcome of litigation, particularly class action lawsuits and regulatory actions, is difficult to assess or quantify. We may incur losses relating to these claims, and in addition, these proceedings could cause us to incur costs and may require us to devote resources to defend against these claims that could adversely affect our results of operations.20

~~The~~By purchasing ~~effects~~our ~~of natural~~common ~~disasters~~stock, ~~terrorism,~~you ~~acts~~are ofbound ~~war~~by the fee-shifting provision contained in our bylaws, which may discourage you from pursuing actions against us and ~~public~~could ~~health~~discourage ~~issues~~stockholder ~~may~~lawsuits ~~adversely~~that ~~affect~~might otherwise benefit us and our ~~business~~stockholders.

~~Natural disasters,~~Section ~~including earthquakes, hurricanes, floods, and tornadoes may affect store and distribution center operations~~7.4 ~~In addition, acts~~ of ~~terrorism,~~our ~~acts~~bylaws ofprovides ~~war,~~that ~~and~~“[i]f ~~military~~any action ~~both~~is ~~in the United States and abroad can have a significant effect on economic conditions~~brought ~~and~~by ~~may~~any ~~negatively~~party ~~affect~~against ~~our~~another ~~ability~~party, torelating ~~purchase merchandise from suppliers for sale~~ to ~~our~~or ~~customers.~~arising ~~Public~~out ~~health~~of ~~issues~~these Bylaws, ~~such as flu~~ or ~~other pandemics, whether occurring in~~ the ~~United~~enforcement ~~States or abroad~~hereof, ~~could~~the ~~disrupt~~prevailing ~~our~~party ~~operations and result in a significant part~~shall ofbe ~~our~~entitled ~~workforce being unable~~ to ~~operate~~recover orfrom ~~maintain~~the ~~our infrastructure or perform~~ other ~~tasks~~party ~~necessary~~reasonable ~~to conduct our business. Additionally, public health issues may disrupt, or have an adverse effect on, our suppliers~~attorneys’ ~~operations~~fees, ~~our~~costs ~~operations,~~and ~~our~~expenses ~~customers,~~incurred orin ~~customer demand.~~connection ~~Our~~with ~~ability to mitigate~~ the ~~adverse~~prosecution or ~~effect~~defense of ~~these~~such ~~events depends~~action, inprovided ~~part,~~that ~~upon~~ the ~~effectiveness~~provisions of ~~our~~this ~~disaster~~sentence ~~preparedness and~~shall ~~response~~not ~~planning~~apply aswith ~~well~~respect asto ~~business~~“internal ~~continuity~~corporate ~~planning.~~claims” as ~~However,~~defined wein ~~cannot~~Section be115 ~~certain~~of ~~that~~the ~~our~~DGCL ~~plans will be adequate~~ or ~~implemented properly~~ in ~~the~~connection ~~event~~with ofany another ~~actual~~claim ~~disaster.~~that Wea ~~may~~stockholder, beacting ~~required to suspend operations~~ in ~~some~~its orcapacity ~~all~~as ~~our locations, which could have~~ a stockholder ~~material~~or ~~adverse~~in ~~effect~~the onright ~~our~~of ~~business,~~the ~~financial condition~~Corporation, ~~and~~has ~~results~~brought ~~of operations. Any significant declines~~ in ~~public~~an ~~safety~~action, suit or ~~uncertainties~~ ~~regarding future economic prospects that affect customer spending habits could have a material adverse effect on customer purchases of our products~~proceeding.”

AOur bylaws ~~pandemic~~provide that for this section, ~~epidemic~~ the term “attorneys’ fees” or ~~outbreak~~“attorneys’ fees and costs” means the fees and expenses of ancounsel ~~infectious~~to ~~disease,~~the ~~such~~Company asand ~~COVID-19~~any other parties asserting a claim subject to Section 7.4 of the bylaws, which may include ~~materially~~printing, photocopying, duplicating and ~~adversely~~other ~~affect~~expenses, ~~our~~air ~~business~~freight charges, and fees billed for law clerks, paralegals and other persons not admitted to the bar but performing services under the supervision of an attorney, and the costs and fees incurred in connection with the enforcement or collection of any judgment obtained in any such proceeding.

~~Our~~We ~~business,~~adopted ~~results~~the offee-shifting ~~operations,~~provision ~~and~~to ~~financial~~eliminate ~~condition~~or ~~may~~decrease benuisance ~~materially~~and ~~adversely~~frivolous ~~impacted~~litigation. ifWe aintend ~~public~~to ~~health~~apply ~~outbreak, including~~ the ~~recent~~ ~~COVID~~fee-19shifting ~~pandemic,~~provision broadly ~~interferes~~to ~~with~~all ~~our~~actions ~~ability,~~except orfor ~~the~~claims ~~ability~~brought ~~of our employees, contractors, suppliers, and other business partners~~under tothe ~~perform~~Exchange ~~our~~Act and ~~their respective responsibilities and obligations relative to~~ the ~~conduct~~Securities ~~of our business~~Act.

~~The~~There ~~COVID-19~~is ~~pandemic~~no ~~has~~set ~~adversely~~level ~~affected~~of ~~and~~recovery ~~may~~required ~~continue~~ to ~~adversely~~be ~~affect~~met ~~the~~by ~~economies~~a ~~and~~plaintiff ~~financial~~to ~~markets~~avoid ~~worldwide~~payment under this provision. Instead, ~~resulting~~whoever is the prevailing inparty anis ~~economic~~entitled ~~downturn~~to ~~that~~recover ~~could~~the ~~impact~~reasonable ~~our~~attorneys’ ~~business~~fees, ~~financial~~costs ~~condition~~ and ~~results~~expenses incurred in connection with the prosecution or defense of ~~operations~~such action. AsAny aparty ~~result~~who brings an action, and the party against whom such action is brought under Section 7.4 of our ~~ability~~bylaws, which could include, but is not limited to ~~fund through~~former ~~public~~and orcurrent ~~private~~stockholders, ~~equity~~Company ~~offerings~~directors, ~~debt~~officers, ~~financings~~affiliates, ~~and~~legal ~~through~~counsel, expert witnesses and other ~~means~~parties, atare ~~acceptable~~subject ~~terms,~~to ifthis atprovision. ~~all~~Additionally, ~~may~~any beparty ~~disrupted~~who brings an action, in and the ~~event~~party ~~our~~against ~~financing~~whom such ~~needs~~action ~~for~~is ~~the~~brought ~~foreseeable~~under ~~future~~Section ~~are~~7.4 of our bylaws, which could include, but is not ~~able~~limited to beformer ~~met~~and bycurrent ~~our~~stockholders, ~~balances~~Company directors, ofofficers, ~~cash~~affiliates, ~~cash~~legal ~~equivalents~~counsel, expert witnesses and ~~cash generated~~other ~~from~~parties, ~~operations~~would be able to recover fees under this provision.

In ~~addition,~~ the ~~continuation~~event ofyou ~~the~~initiate ~~COVID-19~~or ~~pandemic~~assert ~~and~~a ~~various~~claim ~~governmental~~against ~~responses~~us, in ~~the~~accordance ~~United~~with ~~States~~the ~~has~~dispute ~~adversely~~resolution ~~affected~~provisions ~~and may~~contained ~~continue to adversely affect our business operations, including our ability to carry on business development activities, restrictions~~ in ~~business-related travel, delays or disruptions in~~ our ~~on-going projects~~Bylaws, and ~~unavailability of the employees of the Company or third~~ ~~parties~~you ~~with~~do ~~whom we conduct business~~not, ~~due to illness or quarantines, among others. Our business was negatively impacted by disruptions~~ in ~~our~~a ~~supply~~judgment ~~chain~~prevail, ~~which~~you ~~limited~~will ~~our ability to source merchandise, and limits on products fulfillment placed by Amazon. For example, we may~~ be ~~unable~~obligated to ~~launch~~reimburse ~~new~~us ~~products, replenish inventory~~ for ~~existing products, ship into or receive inventory in our third-party warehouses in each case on a timely basis or at~~ all. ~~The~~reasonable ~~extent~~costs ~~to which COVID-19 could impact our business will depend on future developments, which are highly uncertain~~ and ~~cannot~~expenses beincurred ~~predicted~~in connection with ~~confidence,~~such ~~and will depend on many factors~~claim, including, ~~the~~but ~~duration~~not oflimited ~~the outbreak~~to, ~~the~~ ~~effect~~reasonable ofattorney’s ~~travel~~fees ~~restrictions~~ and ~~social~~expenses ~~distancing efforts in the United States~~ and ~~other~~costs ~~countries, the scope and length~~ of ~~business closures or business disruptions~~appeal, ~~and~~if ~~the actions taken by governments to contain and treat the disease. As such, we cannot presently predict the scope and extent of~~ any ~~potential business shutdowns or disruptions~~. ~~Possible effects may include~~Additionally, ~~but are not limited to,~~ ~~disruption~~this toprovision ~~our customers and revenue, absenteeism~~ in ~~our~~Section ~~labor~~7.4 ~~workforce, unavailability~~ of ~~products~~our ~~and~~bylaws ~~supplies~~could ~~used~~discourage instockholder ~~our~~lawsuits ~~operations, shutdowns~~ that ~~may~~might beotherwise ~~mandated~~benefit orthe ~~requested~~Company ~~by governmental authorities,~~ and aits ~~decline in the value of our assets, including various long-lived assets~~stockholders.

24THE FEE SHIFTING PROVISION CONTAINED IN THE BYLAWS IS NOT INTENDED TO BE DEEMED A WAIVER BY ANY HOLDER OF COMMON STOCK OF THE COMPANY’S COMPLIANCE WITH THE U.S. FEDERAL SECURITIES LAWS AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER. THE FEE SHIFTING PROVISION CONTAINED IN THE BYLAWS DO NOT APPLY TO CLAIMS BROUGHT UNDER THE EXCHANGE ACT AND SECURITIES ACT.

~~The loss of key~~Litigation ~~senior~~may ~~management~~adversely ~~personnel~~affect orour ~~the~~business, ~~failure~~financial tocondition ~~hire~~ and ~~retain~~results ~~highly~~of ~~skilled and other key personnel could negatively affect our business~~operations.

WeOur ~~depend~~business onis ~~our~~subject ~~senior~~to ~~management~~the ~~and~~risk ~~other~~of ~~key~~litigation ~~personnel~~by employees, ~~particularly~~consumers, ~~Sam~~partners, ~~Lai~~suppliers, ~~our~~competitors, ~~Chairman of the Board~~stockholders, ~~Chief~~government ~~Executive Officer and~~agencies ~~Interim~~or ~~Chief~~others ~~Financial~~through ~~Officer.~~private Weactions, doclass ~~not~~actions, ~~have~~administrative ~~“key~~proceedings, ~~person”~~regulatory ~~life~~actions ~~insurance~~or ~~policies~~other litigation. WeThe ~~also~~outcome ~~rely~~of litigation, onparticularly ~~other~~class ~~highly~~action ~~skilled personnel.~~lawsuits ~~Competition~~and ~~for~~regulatory ~~qualified~~actions, ~~personnel~~is indifficult ~~the~~to ~~technology~~assess ~~industry~~or ~~has~~quantify. ~~historically~~We ~~been~~may ~~intense,~~incur ~~particularly~~losses ~~for~~relating to ~~software~~these ~~engineers~~claims, ~~computer~~ ~~scientists,~~ and ~~other~~in ~~technical~~addition, ~~staff.~~these ~~The~~proceedings ~~loss~~could ofcause ~~any~~us ofto ~~our~~incur ~~executive~~costs ~~officers~~and ormay ~~other~~require ~~key~~us ~~employees~~to ordevote ~~the~~resources ~~inability~~ to ~~hire,~~defend against ~~train,~~these ~~retain,~~claims ~~and~~that ~~manage~~could ~~qualified~~adversely ~~personnel,~~affect ~~could~~our ~~harm~~results ~~our~~of ~~business~~operations.

The ability of Sam Lai, our Chairman of the Board, Chief Executive Officer and Interim Chief Financial Officer and a significant stockholder, and Maggie Yu, our Senior Vice President, a member of our Board of Directors and a significant stockholder, who are husband and wife, to control our business may limit or eliminate minority stockholders’ ability to influence corporate affairs.21

~~As of March 27, 2025,~~The ~~Sam~~effects ~~Lai, our Chairman~~ of ~~the~~natural ~~Board~~disasters, ~~Chief Executive Officer~~terrorism, ~~and~~acts ~~Interim Chief Financial Officer, and a significant stockholder, and Maggie Yu, our Senior Vice President, member~~ of ~~the Board~~war, and apublic ~~significant~~health ~~stockholder,~~issues ~~who~~may ~~are~~adversely ~~husband~~affect ~~and wife, together beneficially owned an aggregate of 33,381,462 shares of~~ our common stock, which represents approximately 94.9% of the voting power of our outstanding common stock. Because of this voting control through the shares of the common stock they beneficially own, they are able to significantly influence membership of our Board of Directors, as well as all other matters requiring stockholder approval. The interests of our Chief Executive Officer and Senior Vice President may differ from the interests of other stockholders with respect to the issuance of shares, business ~~transactions with or sales to other companies, selection of other officers and directors and other business decisions~~. ~~The minority stockholders will have no way of overriding decisions made by our Chief Executive Officer and our Senior Vice President.~~

AsNatural disasters, including earthquakes, hurricanes, floods, and tornadoes may affect store and distribution center operations. In addition, acts of terrorism, acts of war, and military action both in the United States and abroad can have a ~~controlled~~significant ~~company~~effect on economic conditions and may negatively affect our ability to purchase merchandise from suppliers for sale to our customers. Public health issues, such as flu or other pandemics, whether occurring in the United States or abroad, could disrupt our operations and result in a significant part of our workforce being unable to operate or maintain our infrastructure or perform other tasks necessary to conduct our business. Additionally, public health issues may disrupt, or have an adverse effect on, our suppliers’ operations, our operations, our customers, or customer demand. Our ability to mitigate the adverse effect of these events depends, in part, upon the effectiveness of our disaster preparedness and response planning as well as business continuity planning. However, we ~~are~~cannot ~~not~~be ~~subject~~certain that our plans will be adequate or implemented properly in the event of an actual disaster. We may be required to suspend operations in some or all our locations, which could have a material adverse effect on our business, financial condition, and results of ~~Nasdaq’s~~operations. ~~corporate~~Any ~~governance~~significant ~~rules~~declines in public safety or uncertainties regarding future economic prospects that affect customer spending habits could have a material adverse effect on customer purchases of our products.

~~The “controlled company”~~A ~~exception to the Nasdaq rules provides that a company of which more than 50% of the voting power is held by an individual~~pandemic, ~~group~~epidemic or ~~another company,~~outbreak ~~a “controlled company,” need not comply with certain requirements~~ of the Nasdaq corporate governance rules. As of March 27, 2025, Mr. Lai, our Chairman of the Board, Chief Executive Officer, Interim Chief Financial Officer, and a significant stockholder, and Ms. Yu, our Senior Vice President, a member of the Board, and a significant stockholder, who are husband and wife, together beneficially owned an ~~aggregate~~infectious ~~of 33~~disease,~~381,462~~ shares of our common stock, which represents approximately 94.9% of the voting power of our outstanding common stock. We are a “controlled company” within the meaning of Nasdaq’s corporate governance rules. Controlled companies are exempt from Nasdaq’s corporate governance rules requiring that listed companies have (i) a majority of the board of directors consist of “independent” directors under the Nasdaq listing standards, (ii) a nominating/corporate governance committee composed entirely of independent directors and a written nominating/corporate governance committee charter meeting Nasdaq’s requirements, and (iii) a compensation committee composed entirely of independent directors and a written compensation committee charter meeting the Nasdaq requirements. We currently utilize and presently intend to continue to utilize these exemptions. As a result, we may not have a majority of independent directors, our nomination and corporate governance committee and compensation committee may not consist entirely of independent directors and such ~~committees~~as ~~may not be subject to annual performance evaluations. Accordingly~~COVID-19, ~~you~~ may ~~not~~materially ~~have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of Nasdaq. See “Management—Board Committees~~ and ~~Director~~adversely ~~Independence—Controlled~~affect ~~Company~~our ~~and Director Independence”~~business.

25Our business, results of operations, and financial condition may be materially adversely impacted if a public health outbreak, interferes with our ability, or the ability of our employees, contractors, suppliers, and other business partners to perform our and their respective responsibilities and obligations relative to the conduct of our business.

~~Government regulation~~The isCOVID-19 ~~evolving~~pandemic adversely affected financial markets worldwide, and ~~unfavorable~~any ~~changes~~pandemics in the future that had the reach similar to COVID-19, may result in an economic downturn that could ~~harm~~impact our business, financial condition and results of operations. As a result, our ability to fund through public or private equity offerings, debt financings, and through other means at acceptable terms, if at all, may be disrupted, in the event our financing needs for the foreseeable future are not able to be met by our balances of cash, cash equivalents and cash generated from operations.

WeIn ~~are~~addition, ~~subject~~the toCOVID-19 ~~general~~pandemic ~~business regulations~~ and ~~laws,~~various asgovernmental ~~well~~responses asin ~~regulations~~the ~~and~~United ~~laws~~States ~~specifically~~adversely ~~governing~~affected ~~the~~our ~~Internet~~business ~~and e-commerce~~operations. Any ~~These~~future ~~regulations~~pandemics ~~and~~may ~~laws~~also ~~cover~~adversely ~~taxation,~~affect ~~privacy,~~our ~~data~~business ~~protection~~operations, ~~data~~including ~~security,~~our ~~network~~ability ~~security,~~to ~~consumer~~carry ~~protection,~~on ~~pricing,~~business ~~content~~development activities, ~~copyrights,~~restrictions ~~distribution,~~in ~~transportation,~~business-related ~~mobile communications~~travel, ~~electronic~~delays ~~device~~or ~~certification,~~disruptions ~~electronic~~in ~~waste,~~our ~~energy~~on-going ~~consumption~~projects, ~~environmental~~ ~~regulation, electronic contracts~~ and ~~other~~unavailability ~~communications,~~of ~~competition,~~the ~~employment,~~employees ~~trade~~of ~~and~~the ~~protectionist measures, web~~Company ~~services,~~or ~~the~~third ~~provision~~parties ofwith ~~online~~whom ~~payment~~we ~~services,~~conduct ~~registration~~business, ~~licensing,~~due ~~and~~to ~~information~~illness ~~reporting~~or ~~requirements~~quarantines, ~~unencumbered~~among ~~Internet access~~others. toOur ~~our~~business ~~services~~was orpreviously ~~access~~negatively toimpacted by ~~our~~disruptions ~~facilities,~~in ~~the~~our ~~design~~supply ~~and operation of websites~~chain, ~~health,~~which ~~safety,~~limited ~~and~~our ~~sanitation~~ability ~~standards,~~to ~~the characteristics,~~source ~~legality~~merchandise, and ~~quality~~limits ofon products ~~and~~fulfillment ~~services,~~placed ~~product~~by ~~labeling~~Amazon. For example, ~~the~~we ~~commercial~~may ~~operation~~be ofunable ~~unmanned~~to ~~aircraft~~launch ~~systems~~new products, ~~and~~ ~~other~~replenish ~~matters.~~inventory Itfor isexisting ~~not~~products, ~~clear~~ship ~~how~~into ~~existing~~or ~~laws~~receive ~~governing~~inventory ~~issues~~in ~~such~~our third-party aswarehouses ~~property~~in ~~ownership,~~each ~~libel,~~case ~~privacy,~~on ~~data~~a ~~protection,~~timely ~~data security,~~basis ~~network~~or ~~security,~~at ~~and~~all. ~~consumer~~The ~~protection~~extent ~~apply~~ to ~~aspects~~which offuture ~~our~~pandemics ~~operations~~could ~~such~~impact asour ~~the~~business ~~Internet,~~will depend ~~e-commerce,~~on ~~digital~~future ~~content~~developments, ~~web~~ ~~services,~~which ~~electronic~~are ~~devices,~~highly ~~advertising,~~uncertain and ~~artificial~~cannot ~~intelligence~~be ~~technologies~~predicted with confidence, and ~~services.~~will Adepend ~~large~~on ~~number~~many offactors, ~~jurisdictions~~including ~~regulate~~the ~~our~~duration ~~operations,~~of ~~and~~ the ~~extent~~outbreak, ~~nature,~~the ~~and~~effect ~~scope~~ of ~~such~~travel ~~regulations~~restrictions isand ~~evolving~~social ~~and~~distancing ~~expanding~~efforts asin the ~~scope~~United ofStates ~~our~~and ~~businesses expands.~~other ~~Unfavorable regulations~~countries, the ~~laws,~~scope ~~decisions,~~and orlength ~~interpretations~~of bybusiness ~~government~~closures or ~~regulatory~~business ~~authorities~~disruptions, ~~applying those laws~~ and ~~regulations,~~ orthe ~~inquiries,~~actions ~~investigations,~~taken orby ~~enforcement~~governments ~~actions~~to ~~threatened~~contain orand ~~initiated~~treat bythe ~~them~~disease. As such, ~~could~~we ~~cause~~cannot uspresently topredict ~~incur~~the ~~substantial costs,~~scope ~~expose~~and usextent toof ~~unanticipated~~any ~~civil~~potential ~~and~~business ~~criminal~~shutdowns ~~liability~~ or ~~penalties~~disruptions. ~~(including~~Possible ~~substantial~~effects ~~monetary~~may ~~fines)~~include, but ~~diminish~~are ~~the~~not ~~demand for~~limited to, ordisruption ~~availability~~to ~~of,~~ our ~~products~~customers and revenue, ~~increase~~absenteeism in our ~~cost~~labor ofworkforce, ~~doing~~unavailability ~~business,~~of ~~require~~products usand tosupplies used ~~change~~in our ~~business~~operations, ~~practices~~shutdowns inthat amay ~~manner~~be ~~materially adverse~~mandated toor ~~our~~requested ~~business,~~by ~~damage~~governmental ~~our reputation~~authorities, ~~impede~~and ~~our~~a ~~growth,~~decline orin ~~otherwise~~the ~~have~~value aof ~~material~~our ~~effect~~assets, including onvarious ~~our~~long-lived ~~operations~~assets.

~~We are subject~~The toloss ~~product~~of ~~liability~~key ~~claims~~senior ~~when~~management ~~people~~personnel or ~~property~~the ~~are~~failure ~~harmed~~to byhire ~~the~~and ~~products~~retain wehighly ~~sell~~skilled and other key personnel could negatively affect our business.

~~Some~~We ofdepend ~~the~~on ~~products~~our wesenior ~~sell~~management ~~expose~~and usother tokey ~~product~~personnel, ~~liability~~particularly ~~claims~~Sam ~~relating~~Lai, toour ~~personal~~Chairman ~~injury,~~of ~~illness,~~the ~~death~~Board, orChief ~~environmental~~Executive orOfficer ~~property~~and ~~damage,~~Interim ~~and~~Chief ~~can~~Financial ~~require~~Officer. ~~product~~We ~~recalls~~do ornot ~~other~~have ~~actions.~~“key ~~Although~~person” welife ~~maintain liability~~ insurance, wepolicies. ~~cannot~~We bealso ~~certain~~rely ~~that~~on ~~our~~other ~~coverage~~highly skilled ~~will~~personnel. beCompetition ~~adequate~~ for ~~liabilities~~qualified ~~actually~~personnel ~~incurred~~in orthe ~~that~~technology ~~insurance~~industry ~~will~~has ~~continue~~historically tobeen beintense, ~~available~~particularly tofor ussoftware onengineers, computer ~~economically~~scientists, ~~reasonable~~and ~~terms, or~~other attechnical ~~all~~staff. ~~Some~~The loss of any of our ~~agreements~~executive ~~with~~officers ~~our~~or ~~vendors~~other dokey ~~not~~employees ~~indemnify~~or usthe ~~from~~inability ~~product~~to hire, ~~liability~~train, retain, and manage qualified personnel, could harm our business.

~~We could face prior period sales tax and corporate tax liabilities, penalties and collection obligations.~~22

WeThe ability ~~make~~of anSam ~~assessment~~Lai, ofour ~~sales tax~~Chairman ~~payable~~of ~~including~~the ~~any~~Board, ~~related~~Chief ~~interest~~Executive ~~and~~Officer ~~penalties~~ and ~~accrues~~Interim ~~these~~Chief ~~estimates~~Financial onOfficer ~~the~~and ~~financial~~a ~~statements.~~significant ~~Pursuant~~stockholder, and toMaggie ~~the Wayfair decision~~Yu, ~~each~~our ~~state~~Senior ~~enforced~~Vice ~~sales~~President, ~~tax~~a ~~collection~~member atof ~~different~~our ~~dates.~~Board Weof ~~collect~~Directors and ~~remit~~a ~~sales~~significant ~~tax~~stockholder, inwho ~~accordance~~are ~~with~~husband ~~the~~and ~~state regulations.~~wife, Weto ~~estimate~~control ~~that~~our asbusiness ofmay ~~December~~limit ~~31,~~or ~~2024,~~eliminate weminority ~~owe~~stockholders’ ~~$-0-~~ability into ~~sales~~influence ~~taxes~~corporate ~~along with penalties and interest~~affairs.

~~We are~~As ~~subject~~of toMarch a24, ~~variety~~2026, ofSam ~~taxes~~Lai, ~~and~~our ~~tax~~Chairman ~~collection~~of ~~obligations in~~ the ~~U.S.~~Board, ~~(federal~~Chief ~~and state). We may recognize additional tax expense~~Executive Officer, and beInterim ~~subject~~Chief toFinancial ~~additional tax liabilities~~Officer, ~~including~~and ~~other~~a ~~liabilities~~significant ~~for tax collection obligations due to changes in laws~~stockholder, ~~regulations, administrative~~and ~~practices,~~Maggie ~~principles~~Yu, ~~and~~our ~~interpretations~~Senior ~~related~~Vice ~~to tax~~President, ~~including~~member ~~changes~~of to the ~~global tax framework~~Board, ~~competition,~~ and ~~other~~a ~~laws~~significant ~~and~~stockholder, ~~accounting~~who ~~rules~~are inhusband ~~various~~and ~~jurisdictions.~~wife, ~~Such~~together ~~changes~~beneficially ~~could~~owned ~~come~~an ~~about~~aggregate ~~as a result~~ of ~~economic~~33, ~~political~~394,442 ~~and~~shares ~~other conditions. An increasing number~~ of ~~jurisdictions~~our ~~are~~common ~~considering~~stock, which orrepresents ~~have~~approximately ~~adopted~~94.8% ~~laws~~of orthe ~~administrative~~voting ~~practices~~power ~~that~~of ~~impose~~our ~~new~~outstanding ~~tax measures,~~common ~~including~~stock. Because ~~revenue-based~~of ~~taxes,~~this ~~targeting~~voting ~~online~~control ~~commerce and~~ through the ~~remote~~shares ~~selling~~ of ~~goods~~the ~~and~~common ~~services.~~stock ~~These~~they ~~include~~beneficially ~~new obligations to collect sales~~own, ~~consumption,~~they ~~value~~are ~~added,~~able orto ~~other~~significantly ~~taxes~~influence onmembership ~~online~~of ~~marketplaces~~our ~~and~~Board ~~remote~~of ~~sellers~~Directors, oras well ~~other~~as ~~requirements~~all ~~that~~other ~~may~~matters ~~result in~~requiring ~~liability~~stockholder ~~for third party obligations~~approval. ~~Our~~The ~~results~~interests of ~~operations~~our ~~and~~Chief ~~cash~~Executive ~~flows~~Officer ~~could~~and beSenior ~~adversely~~Vice ~~affected~~President bymay ~~additional taxes of~~differ ~~this~~from ~~nature~~the ~~imposed~~interests onof usother ~~prospectively~~stockholders orwith ~~retroactively~~respect orto ~~additional~~the ~~taxes~~issuance orof ~~penalties~~shares, ~~resulting~~business ~~from~~transactions ~~the failure to comply~~ with ~~any collection obligations~~ or ~~failure~~sales to ~~provide~~other ~~information about our customers~~companies, selection ~~suppliers,~~of ~~and~~ other ~~third~~officers ~~parties~~and ~~for~~directors ~~tax~~and ~~reporting~~other ~~purposes to~~business ~~various government agencies~~decisions. InThe ~~some~~minority ~~cases,~~stockholders wewill ~~also may not~~ have ~~sufficient~~no ~~notice~~way toof ~~enable~~overriding ~~us to build systems and adopt processes~~decisions tomade ~~properly~~by ~~comply~~our ~~with~~Chief ~~new~~Executive ~~reporting~~Officer orand ~~collection~~our ~~obligations~~Senior byVice ~~the effective date~~President.

26As a controlled company, we are not subject to all of Nasdaq’s corporate governance rules.

~~Our~~The “controlled company” exception to the Nasdaq rules ~~tax~~provides ~~expense~~that ~~and~~a ~~liabilities~~company ~~are~~of ~~also~~which ~~affected~~more than 50% of the voting power is held by ~~other~~an ~~factors~~individual, ~~such~~group asor ~~changes~~another incompany, ~~our~~a ~~business~~“controlled company,” ~~operations~~need not comply with certain requirements of the Nasdaq corporate governance rules. As of March 24, ~~acquisitions~~2026, ~~investments~~Mr. Lai, our ~~entry~~Chairman ~~into~~of ~~new~~the ~~businesses~~Board, ~~and~~Chief ~~geographies~~Executive Officer, ~~intercompany~~Interim ~~transactions~~Chief Financial Officer, ~~losses~~and ~~incurred~~a insignificant ~~jurisdictions~~stockholder, ~~for~~and ~~which~~Ms. weYu, ~~are~~our ~~not~~Senior Vice ~~able~~President, toa ~~realize related~~member ~~tax~~of ~~benefits~~the Board, ~~the~~and ~~applicability~~a ofsignificant ~~special~~stockholder, orwho ~~extraterritorial~~are ~~tax~~husband ~~regimes~~and wife, ~~changes~~together inbeneficially ~~foreign~~owned ~~currency~~an ~~exchange~~aggregate of ~~rates~~33,394,442 ~~changes in~~shares of our ~~stock~~common ~~price~~stock, ~~changes~~which torepresents approximately 94.8% of the voting power of our ~~forecasts~~outstanding common stock. We are a “controlled company” within the meaning of ~~income~~Nasdaq’s ~~and~~corporate ~~loss~~governance ~~and~~rules. Controlled companies are exempt from Nasdaq’s corporate governance rules requiring that listed companies have (i) a majority of the ~~mix~~board of ~~jurisdictions~~directors toconsist ~~which~~of “independent” ~~they~~directors ~~relate~~under the Nasdaq listing standards, (ii) a nominating/corporate governance committee composed entirely of independent directors and ~~changes~~a inwritten ~~our~~nominating/corporate governance committee charter meeting Nasdaq’s requirements, and (iii) ~~tax~~a ~~assets~~compensation committee composed entirely of independent directors and ~~liabilities~~a written compensation committee charter meeting the Nasdaq requirements. We currently utilize and ~~their~~presently ~~valuation~~intend to continue to utilize these exemptions. InAs ~~the~~a ~~ordinary~~result, ~~course~~we may not have a majority of independent directors, our ~~business,~~nomination ~~there~~and ~~are~~corporate ~~many~~governance ~~transactions~~committee and ~~calculations~~compensation ~~for~~committee may not consist entirely of independent directors ~~which~~and ~~the~~such ~~ultimate~~committees ~~tax~~may ~~determination~~not isbe ~~uncertain~~subject to annual performance evaluations. ~~Significant~~Accordingly, ~~judgment~~you ismay ~~required~~not inhave ~~evaluating~~the ~~and~~same ~~estimating~~protections ~~our~~afforded to ~~tax~~stockholders ~~expense,~~of ~~assets,~~companies that are subject to all of the corporate governance requirements of Nasdaq. See “Management—Board Committees and ~~liabilities~~Director Independence—Controlled Company and Director Independence”.

~~We are also subject to tax~~Government ~~controversies~~regulation inis ~~various~~evolving jurisdictions that can result in tax assessments against us. Developments in an audit, investigation, or other tax controversy can have a material effect on our operating results or cash flows in the period or periods for which that development occurs, as well as for prior and ~~subsequent~~unfavorable ~~periods.~~changes We regularly assess the likelihood of an adverse outcome resulting from these proceedings to determine the adequacy of our tax accruals. Although we believe our tax estimates are reasonable, the final outcome of audits, investigations, and any other tax controversies could beharm ~~materially different from~~ our ~~historical tax accruals~~business.

~~Related~~We are subject to ~~Ownership~~general business regulations and laws, as well as regulations and laws specifically governing the Internet and e-commerce. These regulations and laws cover taxation, privacy, data protection, data security, network security, consumer protection, pricing, content, copyrights, distribution, transportation, mobile communications, electronic device certification, electronic waste, energy consumption, environmental regulation, electronic contracts and other communications, competition, employment, trade and protectionist measures, web services, the provision of ~~Our~~online ~~Common~~payment ~~Stock~~services, registration, licensing, and information reporting requirements, unencumbered Internet ~~Lack~~access to our services or access to our facilities, the design and operation of ~~Liquidity~~websites, health, safety, and sanitation standards, the characteristics, legality, and quality of products and services, product labeling, the commercial operation of unmanned aircraft systems, and other matters. It is not clear how existing laws governing issues such as property ownership, libel, privacy, data protection, data security, network security, and consumer protection apply to aspects of our operations such as the Internet, e-commerce, digital content, web services, electronic devices, advertising, and artificial intelligence technologies and services. A large number of jurisdictions regulate our operations, and the extent, nature, and scope of such regulations is evolving and expanding as the scope of our businesses expands. Unfavorable regulations, laws, decisions, or interpretations by government or regulatory authorities applying those laws and regulations, or inquiries, investigations, or enforcement actions threatened or initiated by them, could cause us to incur substantial costs, expose us to unanticipated civil and criminal liability or penalties (including substantial monetary fines), diminish the demand for, or availability of, our products, increase our cost of doing business, require us to change our business practices in a manner materially adverse to our business, damage our reputation, impede our growth, or otherwise have a material effect on our operations.

~~There can be no assurance that we will be able to comply with Nasdaq’s continued listing standards.~~23

~~There is no guarantee that~~We weare ~~will~~subject ~~be able~~ to ~~maintain~~product ~~our~~liability ~~Nasdaq~~claims ~~listing~~when ~~for~~people ~~any~~or ~~period~~property ofare ~~time~~harmed by perpetually satisfying Nasdaq’s continued listing requirements. Our failure to continue to meet these requirements may result in our common stock being delisted from Nasdaq, which could have a material adverse effect on the ~~price~~products ofwe ~~our common stock~~sell.

~~The~~Some of ~~market~~the ~~price~~products we sell expose us to product liability claims relating to personal injury, illness, death, or environmental or property ofdamage, and can require product recalls or other actions. Although we maintain liability insurance, we cannot be certain that our ~~common~~coverage will ~~stock~~be ~~may~~adequate for liabilities actually incurred or that insurance will continue to be ~~volatile,~~available ~~and~~to ~~you~~us ~~could~~on ~~lose~~economically ~~all~~reasonable terms, or ~~part~~at all. Some of ~~your~~our ~~investment~~agreements with our vendors do not indemnify us from product liability.

WeRelated ~~cannot~~to ~~predict~~Ownership ~~the prices at which our common stock will trade in the future. The market price~~ of ~~our~~Our ~~common~~Common ~~stock~~Stock ~~may fluctuate substantially~~ and ~~will~~Lack ~~depend on a number~~ of factors, including those described in this “Risk Factors” section, many of which are beyond our control and may not be related to our operating performance. In addition, the limited public float of our common stock will tend to increase the volatility of the trading price of our common stock. These fluctuations could cause you to lose all or part of your investment in our common stock, since you might not be able to sell your shares. Factors that could cause fluctuations in the market price of our common stock include, but are not limited to, the following:Liquidity

●There can ~~actual~~be orno ~~anticipated~~assurance ~~changes~~that ~~or fluctuations in our results of operations; ● the financial projections~~ we ~~may~~will ~~provide~~be able to ~~the~~comply ~~public,~~with ~~any~~Nasdaq’s ~~changes~~continued inlisting ~~these projections, or our failure to meet these projections;~~standards.

27There is no guarantee that we will be able to maintain our Nasdaq listing for any period of time by perpetually satisfying Nasdaq’s continued listing requirements. Our failure to continue to meet these requirements may result in our common stock being delisted from Nasdaq, which could have a material adverse effect on the price of our common stock.

● announcements by us or our competitors of new products or new or terminated significant contracts, commercial relationships, or capital commitments; ● industry or financial analyst or investor reaction to our press releases, other public announcements, and filings with the SEC; ● rumors and The market ~~speculation involving us or other companies in our industry; ●~~ price ~~and volume fluctuations in the overall stock market from time to time; ● changes in operating performance and stock market valuations~~ of ~~other technology companies generally, or those in~~ our ~~industry in particular; ● the expiration of market stand-off or contractual lock-up agreements and sales of shares of our~~ common stock bymay usbe ~~or our stockholders; ● failure of industry or financial analysts to maintain coverage of us~~volatile, changes in financial estimates by any analysts who follow our company, or our failure to meet these estimates or the expectations of investors; ● actual or anticipated developments in our business, or our competitors’ businesses, or the competitive landscape generally; ● litigation involving us, our industry, or both, or investigations by regulators into our operations or those of our competitors; ● developments or disputes concerning our intellectual property rights, our products, or third-party proprietary rights; ● announced or completed acquisitions of businesses or technologies by us or our competitors; ● new laws or regulations or new interpretations of existing laws or regulations applicable to our business; ● any major changes in our management or our board of directors, particularly with respect to Mr. Lai; ● general economic conditions and ~~slow~~you orcould ~~negative~~lose ~~growth~~all ~~of our markets; and ● other events~~ or ~~factors,~~part ~~including those resulting from war, incidents~~ of ~~terrorism,~~your ~~or responses to these events~~investment.

28We cannot predict the prices at which our common stock will trade in the future. The market price of our common stock may fluctuate substantially and will depend on a number of factors, including those described in this “Risk Factors” section, many of which are beyond our control and may not be related to our operating performance. In addition, the limited public float of our common stock will tend to increase the volatility of the trading price of our common stock. These fluctuations could cause you to lose all or part of your investment in our common stock, since you might not be able to sell your shares. Factors that could cause fluctuations in the market price of our common stock include, but are not limited to, the following:

In● ~~addition,~~actual ~~the~~or ~~stock~~anticipated ~~market~~ changes or fluctuations in ~~general~~our ~~has~~results ~~experienced~~of ~~extreme~~operations; ~~price~~● ~~and~~the ~~volume~~financial ~~fluctuations~~projections ~~that~~we ~~have~~may ~~often~~provide ~~been~~to ~~unrelated~~the public, any changes in these projections, or ~~disproportionate~~our failure to ~~the~~meet ~~operating~~these ~~performance of~~projections; ~~companies.~~● ~~Broad~~announcements ~~market~~by ~~and~~us ~~industry~~or ~~factors~~our ~~may~~competitors ~~seriously~~of ~~affect~~new ~~the~~products ~~market~~or ~~price~~new ofor ~~our~~terminated ~~common~~significant ~~stock~~contracts, ~~regardless~~commercial ofrelationships, or capital commitments; ● industry or financial analyst or investor reaction to our ~~actual~~press ~~operating performance.~~releases, Inother ~~addition~~public announcements, inand filings with the ~~past,~~SEC; ~~following~~● ~~periods~~rumors ofand ~~volatility~~market speculation involving us or other companies in ~~the~~our ~~overall~~industry; ~~market~~● price and volume fluctuations in the overall stock market ~~prices~~from oftime ato ~~particular~~time; ~~company’s securities,~~● ~~securities~~changes ~~class~~in ~~action~~operating ~~litigation~~performance ~~has~~and ~~often~~stock ~~been~~market ~~instituted~~valuations ~~against~~of ~~that~~other ~~company.~~technology ~~Securities~~companies ~~litigation~~generally, ifor ~~instituted~~those ~~against us,~~in ~~could~~our ~~result~~industry in ~~substantial~~particular; ~~costs~~● ~~and~~the ~~divert~~expiration ~~our~~of ~~management’s~~market ~~attention~~stand-off or contractual lock-up agreements and ~~resources~~sales ~~from~~of shares of our ~~business.~~common ~~This~~stock ~~could~~by ~~materially adversely~~us ~~affect~~or our ~~business,~~stockholders; ● failure of industry or financial ~~condition,~~analysts ~~results~~to maintain coverage of ~~operations~~us, ~~and~~changes ~~prospects.~~in financial estimates by any analysts who follow our company, or our failure to meet these estimates or the expectations of investors;

~~Our common stock may be subject to the “penny stock” rules in the future. It may be more difficult to resell securities classified as “penny stock.”~~24

~~Our~~● ~~common~~actual ~~stock~~or ~~may~~anticipated bedevelopments ~~subject to “penny stock” rules (generally defined as non-exchange traded stock with a per-share price below $5.00)~~ in ~~the future. While~~ our ~~common stock is not currently considered “penny stock” since it is listed on the Nasdaq~~business, ifor ~~we are unable to maintain that listing and~~ our ~~common~~competitors’ ~~stock~~businesses, isor ~~no longer listed on~~ the ~~Nasdaq,~~competitive ~~unless~~landscape wegenerally; ~~maintain~~● alitigation ~~per-share~~involving ~~price above $5.00~~us, our ~~common~~industry, ~~stock will~~or ~~become~~both, ~~“penny~~or ~~stock.”~~investigations ~~These~~by ~~rules~~regulators ~~impose~~into ~~additional~~our ~~sales~~operations ~~practice requirements on broker-dealers that recommend the purchase~~ or ~~sale~~those of ~~penny~~our ~~stocks~~competitors; to● ~~persons~~developments ~~other~~or ~~than~~disputes ~~those~~concerning ~~who~~our ~~qualify~~intellectual asproperty ~~“established~~rights, ~~customers”~~our ~~or “accredited investors.” For example~~products, ~~broker~~or third-~~dealers~~party ~~must~~proprietary ~~determine~~rights; ~~the~~● ~~appropriateness~~announced ~~for~~or ~~non-qualifying~~completed ~~persons~~acquisitions of ~~investments~~businesses inor ~~penny~~technologies ~~stocks.~~by ~~Broker-dealers must~~us ~~also~~or ~~provide,~~our ~~prior~~competitors; to● anew ~~transaction~~laws inor aregulations ~~penny~~or ~~stock~~new ~~not~~interpretations ~~otherwise~~of ~~exempt~~existing ~~from~~laws ~~the~~or ~~rules,~~regulations aapplicable ~~standardized~~to ~~risk~~our ~~disclosure~~business; ~~document that~~● ~~provides~~any ~~information~~major ~~about~~changes ~~penny stocks and the risks~~ in ~~the~~our ~~penny~~management ~~stock~~or ~~market.~~our ~~The~~board ~~broker-dealer~~of ~~also~~directors, ~~must~~particularly ~~provide the customer~~ with ~~current~~respect ~~bid~~to ~~and~~Mr. ~~offer~~Lai; ~~quotations~~● ~~for~~general ~~the~~economic ~~penny~~conditions ~~stock,~~and ~~disclose~~slow ~~the~~or ~~compensation~~negative growth of ~~the~~our ~~broker-dealer~~markets; and ~~its~~● ~~salesperson~~other inevents ~~the~~or ~~transaction~~factors, ~~furnish~~ ~~monthly~~including ~~account~~those ~~statements~~resulting ~~showing~~from ~~the~~war, ~~market~~incidents ~~value~~ of ~~each penny stock held in the customer’s account~~terrorism, ~~provide~~or aresponses ~~special written determination that the penny stock is a suitable investment for the purchaser, and receive the purchaser’s written agreement~~ to ~~the~~these ~~transaction~~events.

~~Legal~~In addition, ~~remedies~~the ~~available~~stock tomarket in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate anto ~~investor~~the inoperating ~~“penny~~performance ~~stocks”~~of companies. Broad market and industry factors may ~~include~~seriously affect the market price of our common stock, regardless of our actual operating performance. In addition, in the past, following: periods of volatility in the overall market and the market prices of a particular company’s securities, securities class action litigation has often been instituted against that company. Securities litigation, if instituted against us, could result in substantial costs and divert our management’s attention and resources from our business. This could materially adversely affect our business, financial condition, results of operations, and prospects.

●Our common ~~If a “penny~~ stock” ~~is sold to the investor in violation of the requirements listed above, or other federal or states securities laws, the investor~~ may be ~~able~~subject to ~~cancel~~ the ~~purchase and receive a refund of the investment. ● If a~~ “penny stock” isrules ~~sold to the investor~~ in ~~a fraudulent manner,~~ the ~~investor~~future. It may be ~~able~~more difficult to ~~sue~~resell ~~the~~securities ~~persons~~classified as ~~and~~“penny ~~firms that committed the fraud for damages~~stock.”

29Our common stock may be subject to “penny stock” rules (generally defined as non-exchange traded stock with a per-share price below $5.00) in the future. While our common stock is not currently considered “penny stock” since it is listed on the Nasdaq, if we are unable to maintain that listing and our common stock is no longer listed on the Nasdaq, unless we maintain a per-share price above $5.00, our common stock will become “penny stock.” These rules impose additional sales practice requirements on broker-dealers that recommend the purchase or sale of penny stocks to persons other than those who qualify as “established customers” or “accredited investors.” For example, broker-dealers must determine the appropriateness for non-qualifying persons of investments in penny stocks. Broker-dealers must also provide, prior to a transaction in a penny stock not otherwise exempt from the rules, a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, disclose the compensation of the broker-dealer and its salesperson in the transaction, furnish monthly account statements showing the market value of each penny stock held in the customer’s account, provide a special written determination that the penny stock is a suitable investment for the purchaser, and receive the purchaser’s written agreement to the transaction.

~~These requirements may have~~Legal ~~the~~remedies ~~effect~~available ofto ~~reducing~~an ~~the~~investor ~~level of trading activity, if any,~~ in ~~the secondary market for a security that becomes subject to the~~ “penny ~~stock~~ ~~rules.~~stocks” ~~The additional burdens imposed upon broker-dealers by such requirements~~ may ~~discourage~~include ~~broker-dealers from effecting transactions in our securities, which could severely limit~~ the ~~market price and liquidity of our securities. These requirements may restrict the ability of broker-dealers to sell our common stock and may affect your ability to resell our common stock.~~following:

~~Many~~● ~~brokerage~~If ~~firms~~a ~~will discourage~~“penny orstock” ~~refrain~~is ~~from~~sold ~~recommending~~to ~~investments~~the investor in ~~penny~~violation ~~stocks.~~of ~~Most~~the ~~institutional~~requirements ~~investors~~listed ~~will~~above, ~~not~~or ~~invest~~other infederal ~~penny~~or ~~stocks.~~states ~~In addition~~securities laws, ~~many~~the ~~individual~~investor ~~investors~~may ~~will~~be ~~not~~able ~~invest~~to incancel the purchase and receive a refund of the investment. ● If a “penny ~~stocks~~stock” ~~due,~~is ~~among~~sold ~~other~~to ~~reasons~~the investor in a fraudulent manner, the investor may be able to sue the ~~increased~~persons ~~financial~~and ~~risk~~firms ~~generally associated~~that ~~with~~committed ~~these~~the ~~investments~~fraud for damages.

~~For~~These requirements ~~these~~may ~~reasons~~have the effect of reducing the level of trading activity, ~~penny~~if ~~stocks~~any, in the secondary market for a security that becomes subject to the penny stock rules. The additional burdens imposed upon broker-dealers by such requirements may ~~have~~discourage abroker-dealers from ~~limited~~effecting ~~market~~transactions ~~and,~~in ~~consequently~~our securities, ~~limited~~which could severely limit the market price and liquidity of our securities. WeThese ~~can~~requirements may ~~give~~restrict nothe ~~assurance~~ability ~~that~~of broker-dealers to sell our common stock ~~will~~and ~~not~~may beaffect ~~classified as~~your aability ~~“penny~~to ~~stock”~~resell inour ~~the~~common ~~future~~stock.

~~If the benefits of any proposed acquisition do not meet the expectations of investors, stockholders or financial analysts, the market price of our common stock may decline.~~25

~~If the benefits of any proposed~~Many ~~acquisition~~brokerage dofirms ~~not~~will ~~meet~~discourage ~~the expectations of investors~~ or ~~securities~~refrain ~~analysts,~~from ~~the~~recommending ~~market~~investments ~~price~~in ofpenny ~~our~~stocks. ~~common~~Most ~~stock~~institutional ~~prior~~investors towill ~~the~~not ~~closing~~invest ofin ~~the~~penny ~~proposed acquisition may decline~~stocks. ~~The~~In ~~market~~addition, ~~values~~many ofindividual ~~our~~investors ~~common~~will ~~stock~~not atinvest ~~the~~in ~~time~~penny ofstocks ~~the~~due, ~~proposed~~among ~~acquisition~~other ~~may~~reasons, ~~vary~~to ~~significantly from their prices on~~ the ~~date~~increased ~~the~~financial risk ~~acquisition~~generally ~~target~~associated ~~was~~with ~~identified~~these investments.

InFor these ~~addition~~reasons, ~~broad~~penny ~~market and~~stocks ~~industry factors~~ may ~~materially~~have ~~harm~~a ~~the~~limited market ~~price~~and, ofconsequently, ~~our~~limited ~~common stock irrespective of our operating performance~~liquidity. ~~The~~We ~~stock~~can ~~market in~~give ~~general~~no ~~has~~assurance ~~experienced price and volume fluctuations~~ that ~~have~~our ~~often been unrelated or disproportionate to the operating performance~~common ofstock ~~the~~will ~~particular companies affected. The trading prices and valuations of these stocks, and of our securities, may~~ not be ~~predictable. A~~classified ~~loss~~as ofa ~~investor~~“penny ~~confidence in the market for retail stocks or the stocks of other companies which investors perceive to be similar to us could depress our~~ stock” ~~price regardless of our business, prospects, financial conditions or results of operations. A decline~~ in ~~the~~ ~~market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in~~ the future.

~~Changes~~If the inbenefits ~~accounting~~of ~~principles~~any ~~and~~proposed ~~guidance, or~~acquisition ~~their~~do ~~interpretation,~~not ~~could~~meet ~~result~~the inexpectations ~~unfavorable~~of ~~accounting~~investors, ~~charges~~stockholders or ~~effects~~financial analysts, ~~including~~the ~~changes~~market ~~to our previously filed financial~~price ~~statements,~~of ~~which could cause~~ our common stock ~~price~~may to decline.

~~We prepare our consolidated~~If ~~financial~~the ~~statements~~benefits inof ~~accordance~~any ~~with~~proposed ~~accounting~~acquisition ~~principles~~do ~~generally~~not ~~accepted~~meet in the ~~United~~expectations ~~States~~ of ~~America~~investors ~~(“GAAP”). These~~or ~~principles~~securities ~~are~~analysts, ~~subject~~the tomarket ~~interpretation~~price byof ~~the~~our ~~SEC~~common stock ~~and~~prior ~~various~~to ~~bodies~~the ~~formed~~closing toof ~~interpret~~the ~~and~~proposed ~~create~~acquisition ~~appropriate~~may ~~accounting~~decline. ~~principles and~~The ~~guidance.~~market Avalues ~~change~~of inour ~~these~~common ~~principles~~stock orat ~~guidance,~~the ortime inof ~~their~~the ~~interpretations,~~proposed acquisition may ~~have~~vary asignificantly ~~significant~~from ~~effect~~their prices on ~~our~~the ~~reported~~date ~~results and~~the ~~retroactively~~acquisition ~~affect~~target ~~previously~~was ~~reported results~~identified.

30In addition, broad market and industry factors may materially harm the market price of our common stock irrespective of our operating performance. The stock market in general has experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of our securities, may not be predictable. A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to be similar to us could depress our stock price regardless of our business, prospects, financial conditions or results of operations. A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.

AsChanges in anaccounting ~~“emerging~~principles ~~growth~~and ~~company” under~~guidance, ~~the~~or ~~Jumpstart~~their ~~Our~~interpretation, ~~Business~~could ~~Startups~~result ~~Act~~in ofunfavorable ~~2012~~accounting charges or effects, asincluding changes ~~amended~~to ~~(the~~our ~~“JOBS~~previously ~~Act”),~~filed wefinancial ~~are~~statements, ~~permitted~~which tocould ~~rely~~cause onour ~~exemptions from~~stock ~~certain~~price ~~disclosure~~to ~~requirements~~decline.

We prepare ~~qualify~~our asconsolidated anfinancial ~~“emerging growth~~statements ~~company”~~in ~~under~~accordance with accounting principles generally accepted in the ~~JOBS~~United ~~Act.~~States Asof aAmerica (“GAAP”). ~~result,~~These weprinciples are ~~permitted~~subject to, interpretation by the SEC and ~~intend~~various ~~to,~~bodies ~~rely~~formed onto ~~exemptions~~interpret ~~from~~and ~~certain~~create ~~disclosure~~appropriate ~~requirements~~accounting principles and guidance. ~~For~~A sochange ~~long~~in asthese weprinciples ~~are~~or anguidance, ~~emerging~~or ~~growth~~in ~~company~~their interpretations, wemay ~~will~~have ~~not~~a besignificant ~~required~~effect on ~~to:~~our reported results and retroactively affect previously reported results.

~~● have~~ As an ~~auditor~~“emerging ~~report~~growth oncompany” ~~our~~under ~~internal~~the ~~control~~Jumpstart ~~over~~Our ~~financial~~Business ~~reporting~~Startups ~~pursuant to Section 404(b) of the Sarbanes-Oxley~~ Act of ~~2002~~2012, as amended (the “~~Sarbanes-Oxley~~JOBS Act”); ● comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditors’ report providing additional information about the audit and the consolidated financial statements (i.e., we anare ~~auditor~~permitted ~~discussion and analysis); ● submit certain executive compensation matters~~ to ~~stockholder~~rely ~~advisory votes, such as “say-~~on~~-pay”~~ ~~and~~exemptions ~~“say-on-frequency”;~~from ~~and ● disclose~~ certain ~~executive~~disclosure ~~compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation~~requirements.

~~In addition, Section 102 of~~We ~~the~~qualify ~~JOBS~~as ~~Act also provides that~~ an “emerging growth company” ~~can~~under ~~take advantage of~~ the ~~extended~~JOBS ~~transition~~Act. ~~period~~As ~~provided in Section 7(~~a~~)(2)(B) of~~ ~~the~~result, ~~Securities~~we ~~Act~~are ~~for~~permitted ~~complying~~to, ~~with~~and ~~new~~intend ~~or revised accounting standards. In other words~~to, anrely ~~emerging~~on ~~growth company can delay the~~exemptions ~~adoption~~from of certain ~~accounting~~disclosure ~~standards until those standards would otherwise apply to private companies~~requirements. WeFor ~~have~~so ~~elected~~long toas ~~take~~we ~~advantage of~~are ~~the~~an ~~benefits~~emerging ofgrowth ~~this~~company, ~~extended~~we ~~transition~~will ~~period. Our consolidated financial statements may therefore~~ not be ~~comparable~~required to ~~those of companies that comply with such new or revised accounting standards.~~:

We● ~~will~~have ~~remain~~ an ~~emerging growth~~auditor ~~company~~report ~~until~~on ~~the~~our ~~earliest~~internal tocontrol ~~occur~~over ~~of:~~financial reporting pursuant to Section 404(ib) of the ~~end~~Sarbanes-Oxley Act of ~~the~~2002, ~~first~~as ~~fiscal~~amended ~~year~~(the in“Sarbanes-Oxley ~~which~~Act”); ~~our~~● ~~annual~~comply ~~gross~~with ~~revenue~~any isrequirement ~~$1.07~~that ~~billion or~~may ~~more;~~be ~~(ii)~~adopted by the ~~end~~Public ofCompany ~~the~~Accounting ~~fiscal~~Oversight ~~year~~Board inregarding ~~which~~mandatory ~~the~~audit ~~market~~firm ~~value~~rotation ofor ~~our~~a ~~common~~supplement ~~shares~~to ~~that~~the ~~are~~auditors’ ~~held~~report byproviding ~~non-affiliates~~additional isinformation atabout ~~least~~the ~~$700.0 million~~audit asand of the ~~last~~consolidated ~~business~~financial ~~day~~statements of(i.e., ~~our~~an ~~most~~auditor ~~recently~~discussion ~~completed~~and ~~second~~analysis); ~~fiscal~~● ~~quarter;~~submit ~~(iii)~~certain ~~the~~executive ~~date~~compensation onmatters ~~which~~to westockholder ~~have~~advisory votes, ~~during~~such ~~the previous~~as ~~three~~“say-~~year~~on-pay” ~~period,~~and ~~issued~~“say-on-frequency”; ~~more~~and ~~than~~● ~~$1.0~~disclose ~~billion~~certain inexecutive ~~non-convertible~~compensation ~~debt;~~related ~~and~~items ~~(iv)~~such as the ~~end~~correlation ofbetween ~~the~~executive ~~fiscal~~compensation ~~year~~and ~~during~~performance ~~which~~and comparisons of the ~~fifth~~ ~~anniversary~~chief ofexecutive ~~our~~officer’s ~~initial~~compensation ~~public~~to ~~offering~~median ~~occurs~~employee compensation.

Until such time, however, we cannot predict if investors will find our securities less attractive because we may rely on these exemptions. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the price of our securities may be more volatile.26

IfIn addition, weSection ~~are~~102 ~~unable~~of tothe ~~implement~~JOBS ~~and~~Act ~~maintain effective~~also ~~internal~~provides ~~control~~that ~~over~~an ~~financial~~emerging ~~reporting,~~growth ~~investors~~company ~~may~~can ~~lose~~take ~~confidence~~advantage of the extended transition period provided in Section 7(a)(2)(B) of the ~~accuracy~~Securities ~~and~~Act ~~completeness~~for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of ~~our~~certain ~~financial~~accounting ~~reports~~standards until those standards would otherwise apply to private companies. ~~and~~We have anelected ~~adverse~~to ~~effect~~take onadvantage of the ~~value~~benefits of ~~our~~this ~~securities~~extended transition period. Our consolidated financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

~~As a public company, we are~~We ~~required~~will toremain ~~maintain~~an ~~internal~~emerging ~~control~~growth ~~over~~company ~~financial~~until ~~reporting~~the ~~and~~earliest to ~~report~~occur ~~any~~of: ~~material~~(i) ~~weaknesses~~the inend ~~such~~of ~~internal~~the ~~control.~~first ~~Further, we~~fiscal ~~are~~year ~~required to report any changes~~ in ~~internal~~which ~~controls~~our onannual agross revenue ~~quarterly~~is ~~basis~~$1.07 Inbillion ~~addition,~~or wemore; ~~are~~(ii) ~~required to furnish a report by management on~~ the ~~effectiveness~~end of ~~internal control over financial reporting pursuant to Section 404 of~~ the ~~Sarbanes-Oxley~~fiscal ~~Act.~~year Wein ~~have,~~which ~~and will continue to, design, implement, and test~~ the ~~internal~~market ~~control~~value ~~over~~of ~~financial~~our ~~reporting~~common ~~required~~shares tothat ~~comply~~are ~~with~~held ~~these~~by ~~obligations. If we~~non-affiliates ~~identify~~is ~~material~~at ~~weaknesses~~least in$700.0 ~~our~~million ~~internal~~as ~~control~~of ~~over~~the ~~financial~~last ~~reporting,~~business ifday ~~we are unable to comply with the requirements~~ of ~~Section 404 in a timely manner or assert that~~ our ~~internal~~most ~~control~~recently ~~over~~completed ~~financial~~second ~~reporting~~fiscal isquarter; ~~effective,~~(iii) orthe ifdate ~~our~~on ~~independent registered public~~which ~~accounting~~we ~~firm~~have, isduring ~~unable to express an opinion as to~~ the ~~effectiveness~~previous ofthree-year ~~its~~period, ~~internal~~issued ~~control~~more ~~over~~than ~~financial~~$1.0 ~~reporting~~billion ~~when required, investors may lose confidence~~ in ~~the~~non-convertible ~~accuracy~~debt; and ~~completeness~~(iv) ~~of our financial reports and~~ the ~~value~~end of ~~our~~the ~~securities could be negatively~~fiscal ~~affected.~~year Weduring ~~also~~which ~~could become subject to investigations by~~ the ~~SEC~~fifth oranniversary ~~other~~of ~~regulatory~~our ~~authorities,~~initial ~~which~~public ~~could~~offering ~~require additional financial and management resources~~occurs.

31Until such time, however, we cannot predict if investors will find our securities less attractive because we may rely on these exemptions. If some investors find our securities less attractive as a result, there may be a less active trading market for our securities and the price of our securities may be more volatile.

AsIf we anare ~~emerging~~unable ~~growth~~to ~~company~~implement and maintain effective internal control over financial reporting, ~~our~~investors ~~auditor~~may lose confidence in the accuracy ~~will~~and ~~not~~completeness beof ~~required~~our tofinancial ~~attest~~reports toand have an adverse effect on the ~~effectiveness~~value of our ~~internal controls~~securities.

~~Our independent registered~~As a public ~~accounting~~company, ~~firm~~we ~~will~~are ~~not be~~ required to ~~attest~~maintain ~~to the effectiveness of our~~ internal control over financial reporting ~~while~~and weto ~~are an~~report ~~emerging~~any ~~growth~~material ~~company~~weaknesses in such internal control. ~~This~~Further, ~~means~~we ~~that~~are ~~the~~required ~~effectiveness~~to ofreport ~~our~~any ~~financial~~changes ~~operations~~in ~~may~~internal ~~differ~~controls ~~from~~on ~~our~~a ~~peer~~quarterly ~~companies~~basis. inIn ~~that~~addition, ~~they may~~we beare required to ~~obtain~~furnish ~~independent~~a ~~registered~~report ~~public~~by ~~accounting~~management ~~firm~~on ~~attestations as to~~ the effectiveness of ~~their~~ internal ~~controls~~ control over financial reporting ~~and~~pursuant weto ~~are~~Section ~~not~~404 of the Sarbanes-Oxley Act. ~~While~~We ~~our~~have, ~~management~~and will becontinue ~~required~~ to, ~~attest~~design, toimplement, and test the internal control over financial reporting ~~and~~ werequired ~~will~~to becomply ~~required~~with these toobligations. ~~detail~~If ~~changes~~we toidentify material weaknesses in our internal ~~controls~~control onover afinancial ~~quarterly basis~~reporting, if we ~~cannot~~are ~~provide~~unable ~~assurance~~to ~~that~~comply with the ~~independent registered~~requirements ~~public~~of ~~accounting~~Section ~~firm’s~~404 ~~review~~in ~~process~~a intimely ~~assessing~~manner ~~the~~or ~~effectiveness~~assert ofthat our internal ~~controls~~control over financial reporting~~, if~~ ~~obtained~~is effective, ~~would not find one~~ or ~~more~~if ~~material~~our independent ~~weaknesses~~registered orpublic ~~significant~~accounting ~~deficiencies.~~firm ~~Further,~~is ~~once~~unable ~~we cease~~ to beexpress an ~~emerging~~opinion ~~growth company~~as ~~and~~to ~~cease~~the toeffectiveness beof aits ~~smaller~~internal ~~reporting~~control ~~company~~over ~~(as~~financial reporting ~~described~~when ~~below)~~required, weinvestors ~~will~~may belose ~~subject~~confidence toin ~~independent~~the ~~registered~~accuracy ~~public~~and ~~accounting firm~~completeness ~~attestation regarding the effectiveness~~ of our ~~internal controls over~~ financial ~~reporting.~~reports ~~Even~~and ifthe ~~management~~value ~~finds~~of ~~such controls~~our tosecurities could be ~~effective,~~negatively ~~our~~affected. ~~independent~~We ~~registered~~also ~~public~~could ~~accounting~~become ~~firm~~subject ~~may decline~~ to ~~attest~~investigations toby the ~~effectiveness~~SEC ofor ~~such~~other ~~internal~~regulatory ~~controls~~authorities, which ~~and~~could ~~issue~~require aadditional ~~qualified~~financial ~~report~~and management resources.

WeAs an ~~are~~emerging agrowth ~~smaller reporting~~ company ~~and accordingly~~, ~~are~~ ~~exempt~~our ~~from~~auditor ~~certain~~will ~~disclosure~~not ~~requirements,~~be ~~which~~required ~~could~~to ~~make~~attest ~~our~~to ~~common~~the ~~stock~~effectiveness ~~less~~of ~~attractive~~our tointernal ~~potential investors~~controls.

~~Rule~~Our independent ~~12b-2~~registered ofpublic accounting firm will not be required to attest to the ~~Exchange Act~~effectiveness ~~defines~~of aour ~~“smaller~~internal control over financial reporting ~~company”~~while aswe are an ~~issuer~~emerging growth company. This means that isthe effectiveness of our financial operations may differ from our peer companies in that they may be required to obtain independent registered public accounting firm attestations as to the effectiveness of their internal controls over financial reporting and we are not. anWhile ~~investment~~our ~~company,~~management anwill ~~asset-backed~~be ~~issuer,~~required orto aattest ~~majority-owned~~to internal control ~~subsidiary~~over offinancial reporting and we will be required to detail changes to our internal controls on a ~~parent~~quarterly basis, we cannot provide assurance that isthe independent registered public accounting firm’s review process in assessing the effectiveness of our internal controls over financial reporting, if obtained, would not find one or more material weaknesses or significant deficiencies. Further, once we cease to be an emerging growth company and cease to be a smaller reporting company (as described below), we will be subject to independent registered public accounting firm attestation regarding the effectiveness of our internal controls over financial reporting. Even if management finds such controls to be effective, our independent registered public accounting firm may decline to attest to the effectiveness of such internal controls and ~~that:~~issue a qualified report.

● had a public float of less than $250 million as of the last business day of its most recently completed second fiscal quarter, computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity; or ● in the case of an initial registration statement under the Securities Act or the Exchange Act for shares of its common equity, had a public float of less than $250 million as of a date within 30 days of the date of the filing of the registration statement, computed by multiplying the aggregate worldwide number of such shares held by non-affiliates before the registration plus, in the case of a Securities Act registration statement, the number of such shares included in the registration statement by the estimated public offering price of the shares; or ● in the case of an issuer whose public float as calculated under the first or second bullets was zero or whose public float was less than $700 million, had annual revenues of less than $100 million during the most recently completed fiscal year for which audited financial statements are available.27

32We are a smaller reporting company and accordingly, are exempt from certain disclosure requirements, which could make our common stock less attractive to potential investors.

~~As a smaller reporting company,~~Rule we12b-2 ~~are~~of ~~not~~the ~~required,~~Exchange ~~and~~Act ~~may~~defines ~~not include,~~ a ~~Compensation~~“smaller ~~Discussion~~reporting ~~and~~company” ~~Analysis~~as ~~section~~an inissuer ~~our~~that ~~proxy~~is ~~statements; we will provide only two years of financial statements; and we need~~ not ~~provide~~an ~~the~~investment ~~table~~company, ofan ~~selected financial data. We also will have other “scaled”~~asset-backed ~~disclosure~~issuer, ~~requirements~~or ~~that~~a ~~are~~majority-owned ~~less~~subsidiary ~~comprehensive~~of ~~than~~a ~~issuers~~parent that ~~are~~is not a smaller reporting ~~companies~~company ~~which~~and ~~could make our common stock less attractive to potential investors, which could make it more difficult for our stockholders to sell their shares.~~that:

We● ~~incur~~had ~~significant~~a ~~increased~~public ~~costs~~float of less than $250 million as of the last business day of its most recently completed second fiscal quarter, computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity; or ● in the case of an initial registration statement under the Securities Act or the Exchange Act for shares of its common equity, had a ~~result~~public float of ~~operating~~less than $250 million as of a date within 30 days of the date of the filing of the registration statement, computed by multiplying the aggregate worldwide number of such shares held by non-affiliates before the registration plus, in the case of a Securities Act registration statement, the number of such shares included in the registration statement by the estimated public ~~company~~offering price of the shares; or ● in the case of an issuer whose public float as calculated under the first or second bullets was zero or whose public float was less than $700 million, ~~and~~had ~~our~~annual ~~management~~revenues isof ~~required~~less tothan ~~devote~~$100 ~~substantial~~million ~~time~~during tothe ~~new~~most ~~compliance~~recently ~~initiatives~~completed fiscal year for which audited financial statements are available.

As a ~~public~~smaller reporting company, we ~~incur significant~~are ~~legal~~not required, ~~accounting~~ and ~~other~~may ~~expenses.~~not ~~In addition~~include, ~~the~~a ~~Sarbanes-Oxley~~Compensation ~~Act~~Discussion ~~has~~and ~~imposed~~Analysis ~~various~~section ~~requirements~~in onour ~~public~~proxy ~~companies,~~statements; ~~including~~we ~~requiring~~will ~~establishment~~provide ~~and~~only ~~maintenance~~two years of ~~effective disclosure and~~ financial ~~controls.~~statements; ~~Our management~~ and ~~other~~we ~~personnel~~need ~~must devote~~not aprovide ~~substantial~~the ~~amount~~table of ~~time~~selected tofinancial ~~these compliance initiatives~~data. ~~Moreover,~~We ~~these~~also ~~rules and regulations have increased and~~ will ~~continue~~have toother ~~increase~~“scaled” ~~our~~disclosure ~~legal~~requirements ~~and~~that ~~financial~~are ~~compliance~~less ~~costs~~comprehensive ~~and~~than ~~will~~issuers ~~make~~that ~~some~~are ~~activities~~not ~~more~~smaller ~~time-consuming~~reporting ~~and costly. For example, we expect~~companies ~~that~~which ~~these~~could ~~rules and regulations may~~ make itour ~~more~~common ~~difficult~~stock ~~and~~less ~~more~~attractive ~~expensive for us~~ to ~~obtain~~potential ~~directors’ and officers’ liability insurance~~investors, which could make it more difficult for ~~us to attract and retain qualified members of~~ our ~~board~~stockholders ~~of directors. We cannot predict~~to orsell ~~estimate~~their ~~the amount of additional costs we will incur as a public company or the timing of such costs~~shares.

~~The Sarbanes-Oxley Act requires,~~We ~~among~~incur ~~other~~significant ~~things,~~increased ~~that~~costs weas ~~maintain~~a ~~effective~~result ~~internal control over financial reporting and disclosure controls and procedures. In particular, we must perform system and process evaluation and testing~~ of ~~our~~operating ~~internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting,~~ as ~~required~~a ~~by Section 404 of the Sarbanes-Oxley Act. In addition, we are required to have our independent registered~~ public accounting firm attest to the effectiveness of our internal control over financial reporting on the later of our second annual report on Form 10-K or the first annual report on Form 10-K following the date on which we are no longer an emerging growth company or a smaller reporting company. Our compliance with Section 404 of the Sarbanes-Oxley Act will require that we incur substantial accounting expense and expend significant management efforts. We currently do not have an internal audit group, and we will need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge. If we are not able to comply with the requirements of Section 404 in a timely manner, or if we or our ~~independent~~management ~~registered public~~is ~~accounting~~required ~~firm identify deficiencies in our internal control over financial reporting that are deemed~~ to bedevote ~~material weaknesses,~~substantial ~~the~~time ~~value of our securities could decline and we could be subject~~ to ~~sanctions~~new orcompliance ~~investigations by the SEC or other regulatory authorities, which would require additional financial and management resources~~initiatives.

~~Our~~As ~~ability~~a topublic ~~successfully~~company, ~~implement~~we ~~our~~incur ~~business~~significant ~~plan~~legal, accounting and ~~comply~~other ~~with~~expenses. ~~Section~~In ~~404~~addition, ~~requires~~the usSarbanes-Oxley toAct behas ~~able~~imposed tovarious requirements ~~prepare~~on ~~timely~~public companies, including requiring establishment and ~~accurate~~ maintenance of effective disclosure and financial ~~statements~~controls. WeOur management ~~expect~~and ~~that~~other wepersonnel ~~will~~must ~~need~~devote toa ~~continue~~substantial toamount ~~improve~~of ~~existing~~time ~~controls,~~to ~~and~~these ~~implement~~compliance ~~new~~initiatives. ~~operational~~Moreover, these rules and ~~financial~~regulations ~~systems,~~have ~~procedures~~increased and ~~controls~~will continue to ~~manage~~increase our ~~business~~legal ~~effectively.~~and ~~Any~~financial ~~delay~~compliance incosts ~~the~~and ~~implementation~~will ~~of,~~make orsome ~~disruption~~activities inmore ~~the transition~~time-consuming toand costly. For example, ~~new~~we orexpect ~~enhanced~~that ~~systems,~~these ~~procedures~~rules orand ~~controls,~~regulations may ~~cause~~make ~~our~~it ~~operations~~more todifficult ~~suffer~~ and wemore ~~may~~expensive befor ~~unable~~us to ~~conclude~~obtain ~~that our internal~~directors’ ~~control~~and ~~over~~officers’ ~~financial~~liability ~~reporting~~insurance, iswhich ~~effective~~could ~~and~~make toit ~~obtain~~more andifficult ~~unqualified~~for ~~report~~us onto ~~internal~~attract ~~controls~~and ~~from~~retain ~~our~~qualified ~~auditors~~members asof ~~required~~our ~~under~~board ~~Section 404~~ of ~~the Sarbanes-Oxley Act~~directors. ~~This,~~We incannot ~~turn,~~predict ~~could~~or ~~have~~estimate anthe ~~adverse~~amount ~~impact~~of onadditional ~~value~~costs ofwe ~~our~~will ~~securities,~~incur ~~and~~as ~~could~~a ~~adversely~~public ~~affect our~~company ~~ability~~or tothe ~~access~~timing ~~the~~of ~~capital~~such ~~markets~~costs.

33The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal control over financial reporting and disclosure controls and procedures. In particular, we must perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act. In addition, we are required to have our independent registered public accounting firm attest to the effectiveness of our internal control over financial reporting on the later of our second annual report on Form 10-K or the first annual report on Form 10-K following the date on which we are no longer an emerging growth company or a smaller reporting company. Our compliance with Section 404 of the Sarbanes-Oxley Act will require that we incur substantial accounting expense and expend significant management efforts. We currently do not have an internal audit group, and we will need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge. If we are not able to comply with the requirements of Section 404 in a timely manner, or if we or our independent registered public accounting firm identify deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the value of our securities could decline and we could be subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management resources.

~~Anti-takeover provisions contained in our certificate of incorporation and bylaws, as well as provisions of Delaware law, could impair a takeover attempt.~~28

~~The~~Our ~~Company’s~~ability ~~certificate~~to ofsuccessfully ~~incorporation~~implement our business plan and ~~bylaws~~comply ~~contain~~with ~~provisions~~Section 404 requires us to be able to prepare timely and accurate financial statements. We expect that ~~could~~we ~~have~~will ~~the~~need ~~effect~~to ofcontinue ~~delaying~~to orimprove ~~preventing~~existing ~~changes~~controls, and implement new operational and financial systems, procedures and controls to manage our business effectively. Any delay in ~~control~~the implementation of, or ~~changes~~disruption in the transition to, new or enhanced systems, procedures or controls, may cause our ~~management~~operations ~~without~~to ~~the~~suffer ~~consent~~and ofwe may be unable to conclude that our ~~board~~internal control over financial reporting is effective and to obtain an unqualified report on internal controls from our auditors as required under Section 404 of ~~directors~~the Sarbanes-Oxley Act. ~~These~~This, ~~provisions~~in ~~include:~~turn, could have an adverse impact on value of our securities, and could adversely affect our ability to access the capital markets.

●Anti-takeover provisions nocontained ~~cumulative voting~~ in ~~the election of directors, which limits the ability of minority stockholders to elect director candidates; ● the exclusive right of~~ our ~~board~~certificate of ~~directors~~incorporation toand ~~elect a director to fill a vacancy created by the expansion of the board of directors or the resignation~~bylaws, ~~death,~~as orwell ~~removal~~as ofprovisions ~~a director, which prevents stockholders from being able to fill vacancies on our board~~ of ~~directors;~~Delaware ~~● the ability of our board of directors to determine whether to issue shares of our preferred stock and to determine the price and other terms of those shares~~law, ~~including preferences and voting rights, without stockholder approval, which~~ could beimpair ~~used to significantly dilute the ownership of~~ a ~~hostile~~takeover acquirer; ● limiting the liability of, and providing indemnification to, our directors and officers; ● providing that a special meeting of the stockholders may only be called by a majority of the board of directors; ● providing that directors may be removed prior to the expiration of their terms by the affirmative vote of the holders of not less than 2/3 of the voting power of the issued and outstanding stock entitled to vote; and ● advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of the Companyattempt.

~~These~~Our ~~provisions,~~certificate ~~alone~~of orincorporation ~~together,~~and bylaws contain provisions that could ~~delay~~have ~~hostile~~the ~~takeovers~~effect ~~and~~of delaying or preventing changes in control ofor changes ~~the~~in ~~Company~~our ormanagement ~~changes~~without inthe consent of our board of directors ~~and management~~. These provisions include:

~~Any provision~~● no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; ● the exclusive right of our ~~certificate~~board of ~~incorporation~~directors orto ~~bylaws~~elect ora ~~Delaware~~director ~~law~~to ~~that~~fill ~~has~~a vacancy created by the ~~effect~~expansion of ~~delaying~~the board of directors or ~~deterring~~the resignation, death, or removal of a ~~change~~director, inwhich ~~control could~~prevents ~~limit~~stockholders from being able to fill vacancies on our board of directors; ● the ~~opportunity~~ability ~~for~~of our ~~security~~board ~~holders~~of directors to ~~receive~~determine awhether ~~premium~~to ~~for~~issue ~~their~~shares ~~securities~~of our preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could ~~also~~be ~~affect~~used to significantly dilute the ~~price~~ownership of a hostile acquirer; ● limiting the liability of, and providing indemnification to, our directors and officers; ● providing that ~~some investors~~a ~~are~~special ~~willing~~meeting of the stockholders may only be called by a majority of the board of directors; ● providing that directors may be removed prior to ~~pay~~the ~~for~~expiration of their terms by the affirmative vote of the holders of not less than 2/3 of the voting power of the issued and outstanding stock entitled to vote; and ● advance notice procedures that stockholders must comply with in order to nominate candidates to our ~~securities~~board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of the Company.

34These provisions, alone or together, could delay hostile takeovers and changes in control of the Company or changes in our board of directors and management.

WeAny provision ~~have~~of ~~never~~our ~~paid~~certificate ~~dividends~~of onincorporation ~~our~~or ~~common~~bylaws or Delaware law that has the effect of delaying or deterring a change in control ~~stock~~could ~~and~~limit ~~have~~the noopportunity ~~plans~~for our security holders to doreceive soa inpremium for their securities and could also affect the ~~future~~price that some investors are willing to pay for our securities.

~~Holders of shares of our common~~We ~~stock are entitled to receive such dividends as may be declared by our board of directors. To date, we~~ have never paid ~~no cash~~ dividends on our ~~shares of~~ common stock and wehave dono ~~not~~plans ~~expect~~ to ~~pay~~do ~~cash~~so ~~dividends on our common stock~~ in the ~~foreseeable~~ future. We intend to retain future earnings, if any, to provide funds for operation of our business. Therefore, any return investors in our common stock may have will be in the form of appreciation, if any, in the market value of their shares of common stock. See Part II, Item 5 “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Dividends.”

WeHolders of ~~will~~shares ~~indemnify~~of ~~and~~our ~~hold~~common ~~harmless~~stock are entitled to receive such dividends as may be declared by our board of directors. To date, we have paid ~~officers~~no cash dividends on our shares of common stock and ~~directors~~we do not expect to pay cash dividends on our common stock in the ~~maximum~~foreseeable ~~extent~~future. We ~~permitted~~intend byto ~~Delaware~~retain ~~law~~future earnings, if any, to provide funds for operation of our business. Therefore, any return investors in our common stock may have will be in the form of appreciation, if any, in the market value of their shares of common stock. See Part II, Item 5 “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Dividends.”

Our certificate of incorporation provides that we will indemnify and hold harmless our officers and directors against claims arising from our activities, to the maximum extent permitted by Delaware law. If we were called upon to perform under our indemnification obligations, then the portion of our assets expended for such purpose would reduce the amount otherwise available for our business.29

~~ITEM~~We will ~~1B.~~indemnify ~~UNRESOLVED~~and ~~STAFF~~hold ~~COMMENTS~~harmless our officers and directors to the maximum extent permitted by Delaware law.

~~None~~Our certificate of incorporation provides that we will indemnify and hold harmless our officers and directors against claims arising from our activities, to the maximum extent permitted by Delaware law. If we were called upon to perform under our indemnification obligations, then the portion of our assets expended for such purpose would reduce the amount otherwise available for our business.

ITEM 1C 1B. ~~CYBERSECURITY~~UNRESOLVED STAFF COMMENTS

~~Cybersecurity Risk Management and Strategy~~None.

~~The cybersecurity risk management~~ITEM program, processes and strategy outlined in this section are limited to the personal and business information belonging to or maintained by the Company (collectively, “Confidential Information”), the Company’s critical third-party systems and services supporting or used by the Company (collectively, “Critical Systems”), and service providers1C. CYBERSECURITY

~~We will develop and implement~~Cybersecurity aRisk ~~cybersecurity~~Management ~~risk management program to safeguard the confidentiality, integrity,~~ and availability of our Confidential Information and Critical Systems. Our cybersecurity risk management program will be integrated into our broader enterprise risk management framework and includes a cybersecurity incident response plan.Strategy

~~Our~~ The cybersecurity risk management program, ~~shall~~processes ~~include:~~and strategy outlined in this section are limited to the personal and business information belonging to or maintained by the Company (collectively, “Confidential Information”), the Company’s critical third-party systems and services supporting or used by the Company (collectively, “Critical Systems”), and service providers.

●We will ~~risk~~develop and ~~assessments~~implement toa ~~identify~~cybersecurity ~~material~~risk ~~cybersecurity~~management ~~risks~~program to ~~our~~safeguard ~~Confidential~~the ~~Information~~confidentiality, ~~Critical~~integrity, ~~Systems~~ and ~~broader~~availability of ~~enterprise~~our ITConfidential ~~environment;~~Information ●and aCritical ~~dedicated~~Systems. ~~security~~Our ~~team responsible for managing (1)~~ cybersecurity risk ~~assessment~~management ~~processes,~~program ~~(2)~~will ~~security~~be ~~controls,~~integrated ~~and~~into ~~(3)~~our ~~response~~broader toenterprise risk ~~cybersecurity~~management ~~incidents;~~framework ~~● cybersecurity awareness training including spear-phishing resistance for employees,~~ and ~~senior~~includes ~~management; ●~~ a cybersecurity incident response plan ~~outlining procedures for detecting, responding to, and mitigating cybersecurity incidents; and ● a vendor management policy to oversee cybersecurity risks associated with service providers~~.

35Our cybersecurity risk management program shall include:

We● ~~have~~risk ~~not identified~~assessments ~~any~~to ~~known~~identify material cybersecurity ~~threats,~~risks ~~including~~to ~~prior~~our ~~incidents~~Confidential Information, ~~that~~Critical ~~have~~Systems ~~materially~~and ~~affected~~broader orenterprise ~~are~~IT ~~reasonably~~environment; ~~likely~~● ~~to materially~~a ~~affect~~dedicated ~~our~~security ~~operations,~~team ~~business~~responsible ~~strategy~~for managing (1) cybersecurity risk assessment processes, ~~results~~(2) ofsecurity ~~operations~~controls, orand ~~financial~~(3) ~~condition.~~response ~~However,~~to wecybersecurity ~~recognize~~incidents; ~~that~~ ● cybersecurity ~~threats~~awareness ~~pose~~training ~~ongoing~~including ~~risks~~spear-phishing ~~which,~~resistance iffor ~~realized~~employees, ~~could~~and ~~have~~senior management; ● a ~~material~~cybersecurity ~~adverse~~incident ~~impact~~response onplan ~~our~~outlining ~~business~~procedures for detecting, ~~financial condition~~responding to, and ~~results~~mitigating ofcybersecurity ~~operations~~incidents; and ● a vendor management policy to oversee cybersecurity risks associated with service providers.

~~Cybersecurity~~We have ~~Governance~~not identified any known cybersecurity threats, including prior incidents, that have materially affected or are reasonably likely to materially affect our operations, business strategy, results of operations, or financial condition. However, we recognize that cybersecurity threats pose ongoing risks which, if realized, could have a material adverse impact on our business, financial condition and results of operations.

~~Our executive management team,~~Cybersecurity in collaboration with our managed information technology service provider, is responsible for assessing and managing cybersecurity risks to the Company, including our Confidential Information and Critical Systems. The team holds primary responsibility for our cybersecurity risk management program and works closely with our IT service provider to ensure its effective implementation.Governance

Our executive management team, ~~meets regularly~~in collaboration with our ITmanaged information technology service provider, tois ~~review~~responsible ~~current~~for ~~cybersecurity~~assessing ~~issues.~~and managing ~~These~~cybersecurity ~~discussions~~risks ~~may~~to ~~cover~~the ~~efforts~~Company, toincluding ~~prevent,~~our ~~detect, mitigate,~~Confidential Information and ~~remediate~~Critical Systems. The team holds primary responsibility for our cybersecurity ~~risks~~risk management program and ~~incidents~~works ~~through~~closely ~~various~~with ~~means,~~our ~~including:~~IT service provider to ensure its effective implementation.

~~● threat intelligence from governmental, public private, and external sources ● alerts and reports generated by security tools deployed in the IT environment, including a spear-phishing report.~~30

Our management ~~Board~~team ~~incorporates~~meets regularly with our IT service provider to review current cybersecurity issues. These discussions may cover efforts to prevent, detect, mitigate, and remediate cybersecurity risks ~~into~~and ~~its~~incidents ~~broader~~through ~~risk~~various ~~oversight~~means, ~~responsibility.~~including:

~~Our~~● ~~Board~~threat ~~oversees~~intelligence ~~the~~from ~~implementation of~~governmental, ~~our~~public ~~cybersecurity~~private, ~~risk~~and ~~management~~external ~~program.~~sources ~~The~~● ~~executive~~alerts ~~management~~and ~~team~~reports ~~provides~~generated ~~updates~~by tosecurity ~~the~~tools ~~Board,~~deployed asin ~~needed~~the IT environment, onincluding ~~significant~~a ~~cybersecurity incidents~~spear-phishing report.

Our Board ~~receives~~incorporates ~~periodic reports from management on~~ cybersecurity risks ~~and~~into ~~the~~its ~~cybersecurity~~broader risk ~~management~~oversight ~~program~~responsibility.

~~ITEM~~Our Board 2oversees the implementation of our cybersecurity risk management program. ~~PROPERTIES~~The executive management team provides updates to the Board, as needed, on significant cybersecurity incidents.

Our ~~corporate headquarters~~ ~~are~~Board ~~located~~receives atperiodic ~~8201~~reports ~~164th Ave. NE, #200, Redmond, WA 98052-7615, where we rent a virtual office~~ from anmanagement ~~unaffiliated~~on ~~third~~cybersecurity ~~party~~risks ~~under a virtual office/meeting room agreement. This agreement provides for daily telephone answering, messaging~~ and ~~fax services, and paid access to conference rooms on an as-needed basis. The virtual office arrangement expires on August 31, 2025. Terms of~~ the ~~virtual~~cybersecurity ~~office~~risk ~~arrangement provide~~management ~~for a rent payment of $59 per month~~program.

~~We also lease a warehouse~~ITEM ~~located at Qiaojiao Road, No~~2. 1, Qiaojiao Middle Road, Tangxia Town, Dongguan City, Guangdong, China, who handle our storage and warehousing from an unaffiliated third party. The terms of this service provide for a base payment that is charged based on our usage.PROPERTIES

~~Flywheel~~Our corporate headquarters is located at 8201 164th Ave. NE, ~~our~~#200, ~~wholly~~Redmond, ~~owned subsidiary~~Washington 98052-7615, ~~had~~where ~~four~~we ~~office~~rent ~~leases~~a invirtual ~~Taiwan~~office infrom ~~2024.~~an unaffiliated ~~The~~third ~~respective~~party ~~lease~~under ~~terms~~a ~~are~~virtual ~~February~~office/meeting 9,room ~~2023~~agreement. toThis ~~March~~agreement 8,provides ~~2025,~~for ~~March~~daily 1telephone answering, ~~2024~~messaging toand ~~June~~fax 30services, ~~2025,~~and ~~June~~paid 1,access ~~2024~~ to ~~May~~conference ~~31,~~rooms ~~2025,~~on ~~and~~an ~~August~~as-needed 1,basis. ~~2024~~The tovirtual ~~July~~office arrangement expires on August 31, 2026. ~~2025~~Terms ~~and~~of the ~~total~~virtual ~~contract~~office ~~amounts~~arrangement ~~are~~provide ~~$28,652,~~for ~~$123,107, $52,434~~a ~~and~~rent payment of $~~73,175~~59 ~~respectively~~per month.

We also ~~believe~~lease ~~that~~a ~~these~~warehouse ~~facilities are~~located ~~adequate~~at ~~for~~Qiaojiao Road, No. 1, Qiaojiao Middle Road, Tangxia Town, Dongguan City, Guangdong, China, who handle our ~~current~~storage and ~~near-term~~warehousing ~~future~~from ~~needs~~an unaffiliated third party. The terms of this service provide for a base payment that is charged based on our usage.

36Flywheel, our wholly owned subsidiary, had two office leases in Taiwan in 2025. The respective lease terms are June 10, 2025 to July 9, 2027, and December 1, 2025 to November 30, 2028 and the total contract amounts are $127,226, and $79,971 respectively.

~~ITEM~~We believe 3.that ~~LEGAL~~these ~~PROCEEDINGS~~facilities are adequate for our current and near-term future needs.

~~From time to time, we are~~ITEM ~~involved in various claims and legal actions arising in the ordinary course of business~~3. ToLEGAL the knowledge of our management, there are no legal proceedings currently pending against us which we believe would have a material effect on our business, financial position or results of operations and, to the best of our knowledge, there are no such legal proceedings contemplated or threatened.PROCEEDINGS

~~ITEM~~From time 4to time, we are involved in various claims and legal actions arising in the ordinary course of business. ~~MINE~~To ~~SAFETY~~the ~~DISCLOSURES~~knowledge of our management, there are no legal proceedings currently pending against us which we believe would have a material effect on our business, financial position or results of operations and, to the best of our knowledge, there are no such legal proceedings contemplated or threatened.

~~Not applicable~~ITEM 4. MINE SAFETY DISCLOSURES

~~PART II~~Not applicable.

~~ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES~~31

~~Market Information~~PART II

~~Our common stock is listed~~ITEM ~~The Nasdaq Capital Market and its stock symbol is “HOUR~~5.” ~~The~~MARKET ~~closing~~FOR ~~price~~REGISTRANT’S ofCOMMON ~~our~~EQUITY, ~~common~~RELATED ~~stock~~STOCKHOLDER onMATTERS ~~Nasdaq~~AND onISSUER ~~March~~PURCHASES ~~26, 2025~~OF ~~was~~EQUITY ~~$2.00.~~SECURITIES

~~Holders~~Market Information

AsOur ~~of March 27, 2025, there were 35,151,440 shares of~~ common stock ~~issued~~is ~~and~~listed ~~outstanding,~~The ~~and~~Nasdaq weCapital ~~had~~Market ~~approximately~~and 5its ~~holders of record of our common~~ stock. ~~The~~symbol ~~number~~is of“HOUR.” ~~record~~The ~~holders~~closing ~~does~~price ~~not include beneficial owners~~ of our common stock ~~whose~~on ~~shares~~Nasdaq ~~are~~on ~~held~~March ~~in the names of banks~~23, ~~brokers, nominees~~2026 orwas ~~other fiduciaries~~$1.89.

~~Dividends~~Holders

WeAs ~~have~~of ~~not~~March ~~paid~~24, ~~any~~2026, ~~cash dividends~~there onwere ~~our~~35,183,890 shares of common stock issued and dooutstanding, ~~not~~and ~~currently~~we ~~anticipate~~had ~~paying~~approximately ~~cash~~5 ~~dividends~~holders inof ~~the~~record ~~foreseeable~~of ~~future~~our common stock. WeThe ~~intend~~number toof ~~retain~~record ~~future~~holders does not include ~~earnings,~~beneficial ifowners ~~any,~~of ~~for~~common ~~reinvestment~~stock whose shares are held in the ~~development~~names ~~and~~of ~~expansion~~banks, ofbrokers, ~~our~~nominees ~~business~~or other fiduciaries.

~~Securities Authorized for Issuance Under Equity Compensation Plans~~Dividends

~~On June 27, 2021, our Board~~We ofhave ~~Directors~~not ~~and~~paid ~~stockholders~~any ~~holding~~cash adividends ~~majority~~on of our ~~outstanding shares of~~ common stock ~~approved~~and ~~the~~do ~~Hour~~not ~~Loop,~~currently ~~Inc.~~anticipate ~~2021~~paying Equity Incentive Plan (the “2021 Plan”). Under the 2021 Plan, a total of 4,995,000 shares of common stock were originally authorized for issuance pursuant to the grant of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance units, performance shares or other cash- ordividends ~~stock-based awards to officers, directors, employees and eligible consultants to the Company or its subsidiaries. Pursuant to the terms of the 2021 Plan and subject to adjustment as provided~~ in the ~~2021~~foreseeable ~~Plan, the maximum aggregate~~future. ~~number~~We ofintend ~~shares that may be issued under the 2021 Plan will be cumulatively increased on January 1, 2022 and on each subsequent January 1, by a number of shares equal~~ to ~~the~~retain ~~smaller~~future ~~of (i) 3% of the number of shares of common stock issued and outstanding on the immediately preceding December 31~~earnings, orif ~~(ii) an amount determined by our Board of Directors. As of March 27~~any, ~~2025, there were 8,097,909 shares authorized~~ for ~~issuance~~reinvestment ~~under~~in the ~~2021~~development ~~Plan,~~ and ~~8,097,909~~expansion ~~shares~~of ~~available~~our ~~for issuance under the 2021 Plan~~business.

37Securities Authorized for Issuance Under Equity Compensation Plans

~~Recent~~On ~~Sales~~June 27, 2021, our Board of ~~Unregistered~~Directors ~~Securities~~ and stockholders holding a majority of our outstanding shares of common stock approved the Hour Loop, Inc. 2021 Equity Incentive Plan (the “2021 Plan”). Under the 2021 Plan, a total of 4,995,000 shares of common stock were originally authorized for issuance pursuant to the grant of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance units, performance shares or other cash- or stock-based awards to officers, directors, employees and eligible consultants to the Company or its subsidiaries. Pursuant to the terms of the 2021 Plan and subject to adjustment as provided in the 2021 Plan, the maximum aggregate number of shares that may be issued under the 2021 Plan will be cumulatively increased on January 1, 2022 and on each subsequent January 1, by a number of shares equal to the smaller of (i) 3% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or (ii) an amount determined by our Board of Directors. As of March 24, 2026, there were 9,152,213 shares available for issuance under the 2021 Plan.

~~On January 4, 2023, the Company~~Recent ~~issued~~Sales ~~1,001 shares~~ of ~~Company~~Unregistered common stock to each of Sam Lai, Maggie Yu, Michael Lenner, Douglas Branch, and Alan Gao, with a fair market value of $2.9985 per share as compensation for the services as executives or directors to the Company pursuant to the terms of their respective Executive Employment Agreements or Director Agreements with the Company.Securities

On January ~~April 3~~2, ~~2023~~2025, the Company issued 1,~~365,~~596 ~~1,365, 1,365, 1,365, 1,365 and 606~~ shares of Company common stock to each of Sam Lai, Maggie Yu, Michael Lenner, ~~Douglas Branch,~~ Alan Gao and Hillary Bui, ~~respectively,~~ with a fair market value of $21.~~1985~~8799 per share as compensation for the services as executives or directors of the Company pursuant to the terms of their respective Executive Employment Agreements or Director Agreements with the Company.

On April ~~June 30~~1, ~~2023~~2025, the Company issued 1,~~752~~750 shares of Company common stock to each of Sam Lai, Maggie Yu, Michael Lenner, ~~Douglas Branch,~~ Alan Gao and Hillary Bui, with a fair market value of $1.~~7125~~7140 per share as compensation for the services as executives or directors of the Company pursuant to the terms of their respective Executive Employment Agreements or Director Agreements with the Company.

On July ~~October~~ 2, ~~2023~~2025, the Company issued 12,~~948~~275 shares of Company common stock to each of Sam Lai, Maggie Yu, Michael Lenner, ~~Douglas Branch,~~ Alan Gao and Hillary Bui, with a fair market value of $1.543185 per share as compensation for the services as executives or directors of the Company pursuant to the terms of their respective Executive Employment Agreements or Director Agreements with the Company.

On October ~~January 2~~3, ~~2024~~2025, the Company issued ~~2,139~~951 shares of Company common stock to each of Sam Lai, Maggie Yu, Michael Lenner, ~~Douglas Branch,~~ Alan Gao and Hillary Bui, with a fair market value of $13.~~4025~~1530 per share as compensation for the services as executives or directors of the Company pursuant to the terms of their respective Executive Employment Agreements or Director Agreements with the Company.

~~On March 29, 2024, the Company~~The ~~issued~~above ~~2,251~~issuances ~~shares~~were ofmade ~~Company~~pursuant ~~common stock~~ to ~~each~~an ofexemption ~~Sam~~from ~~Lai,~~registration ~~Maggie~~as ~~Yu,~~set ~~Michael~~forth ~~Lenner,~~in ~~Douglas~~Rule ~~Branch,~~506 ~~Alan~~of ~~Gao~~Regulation D and ~~Hillary~~Section ~~Bui, with~~ 4(a)(2) ~~fair market value~~ of ~~$1.3330 per share as compensation for~~ the ~~services~~Securities asAct ~~executives~~ and/or ~~directors~~Regulation ofS ~~the~~promulgated ~~Company~~under ~~pursuant to~~ the ~~terms of~~Securities ~~their respective Executive Employment Agreements or Director Agreements with the Company~~Act.

On July 1, 2024, the Company issued 2,946 shares of Company common stock to each of Sam Lai and Maggie Yu (both of whom are executive officers, directors and significant stockholders of the Company), and Michael Lenner, Douglas Branch, Alan Gao and Hillary Bui (each of whom was a director of the Company as of such date), with a fair market value of $1.0185 per share as compensation for the services as executives or directors of the Company pursuant to the terms of their respective Executive Employment Agreements or Director Agreements with the Company. Subsequently, on July 22, 2024, Mr. Branch resigned his position as a member of the Company’s Board of Directors.32

~~On July 25, 2024, following~~Purchases ~~Mr. Branch’s resignation, the Company issued 6,000 shares~~ of ~~restricted~~Equity ~~common~~Securities ~~stock~~by tothe ~~Mr.~~Issuer ~~Branch~~and asAffiliated ~~compensation for services rendered.~~Purchasers

38None.

~~On October 1, 2024, the Company~~Transfer ~~issued~~Agent ~~2,196 shares of Company common stock to each of Sam Lai, Maggie Yu, Michael Lenner, Alan Gao~~ and Hillary Bui, with a fair market value of $1.3660 per share as compensation for the services as executives or directors of the Company pursuant to the terms of their respective Executive Employment Agreements or Director Agreements with the Company.Registrar

~~The~~Our transfer ~~above~~agent ~~issuances~~is ~~were~~Nevada ~~made pursuant~~Agency toand anTransfer ~~exemption~~Company. ~~from~~The ~~registration~~transfer asagent’s ~~set~~address ~~forth~~is in50 ~~Rule~~West ~~506~~Liberty ofStreet, ~~Regulation~~Suite D880, Reno, Nevada 89501, and ~~Section~~its ~~4(a)(2)~~telephone ofnumber ~~the~~is ~~Securities~~(775) ~~Act~~322-0626.

~~Purchases of Equity Securities by the Issuer~~ITEM ~~and~~6. ~~Affiliated Purchasers~~RESERVED

~~None~~ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~Transfer~~Special Note ~~Agent~~Regarding ~~and~~Forward-Looking ~~Registrar~~Statements

~~The~~All statements ~~Company~~other than statements of historical fact included in this annual report on Form 10-K, including, without limitation, statements under “Management’s ~~transfer~~Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial ~~agent~~position, isbusiness ~~Nevada~~strategy ~~Agency~~and the plans and ~~Transfer~~objectives ~~Company~~of management for future operations, are forward-looking statements. ~~The~~When ~~transfer~~used in ~~agent’s~~this ~~address~~annual isreport, 50words ~~West~~such ~~Liberty~~as ~~Street~~“anticipate,” ~~Suite~~“believe,” ~~880~~“estimate,” ~~Reno~~“expect,” ~~Nevada~~“intend” and ~~89501~~similar expressions, as they relate to us or our management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and ~~its~~information ~~telephone~~currently ~~number~~available isto, ~~(775)~~our ~~322~~management. Actual results could differ materially from those contemplated by the forward-~~0626~~looking statements as a result of certain factors detailed in our filings with the SEC.

~~ITEM~~The 6following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this annual report on Form 10-K. ~~RESERVED~~Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Unless the context otherwise requires, “Hour Loop,” “we,” “us,” “our,” or the “Company” refers to Hour Loop, Inc., together with Flywheel Consulting Limited, its wholly owned subsidiary (“Flywheel”).

~~ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~Overview

~~Special Note Regarding Forward-Looking Statements~~Our Business

~~All~~We are ~~statements~~an ~~other~~online ~~than statements~~retailer ofengaged ~~historical~~in ~~fact~~e-commerce ~~included~~retailing in ~~this~~the ~~annual~~U.S. ~~report~~market. onWe ~~Form~~have ~~10-K,~~operated ~~including,~~as ~~without~~a ~~limitation,~~third-party ~~statements~~seller ~~under~~on ~~“Management’s~~www.amazon.com ~~Discussion~~since ~~and~~2013. ~~Analysis~~We ofhave ~~Financial~~also ~~Condition~~sold ~~and~~merchandise ~~Results~~on ofour ~~Operations”~~website ~~regarding~~at ~~the~~www.hourloop.com ~~Company’s~~since ~~financial~~2013. ~~position,~~We ~~business~~expanded our operations to www.walmart.com ~~strategy~~in ~~and~~October ~~the~~2020. ~~plans~~To date, we have generated practically all of our revenue as a third-party seller on www.amazon.com and ~~objectives~~only a negligible amount of ~~management~~revenue ~~for~~from ~~future~~our operations, ~~are~~on ~~forward-looking~~our ~~statements~~website at www.hourloop.com ~~When~~and ~~used~~as ina ~~this~~third-party ~~annual~~seller ~~report,~~on www.walmart.com. ~~words~~We ~~such~~manage asmore ~~“anticipate~~than 100,”000 stock-keeping units (“~~believe,~~SKUs”). ~~“estimate~~Product categories include home/garden décor,” ~~“expect~~toys,” ~~“intend”~~kitchenware, apparel, and ~~similar~~ ~~expressions,~~electronics. asOur ~~they~~primary ~~relate~~strategy is to usbring ormost ~~the~~of ~~Company~~our vendors’s ~~management,~~product ~~identify~~selections ~~forward-looking~~to ~~statements~~the customers. ~~Such~~We ~~forward-looking~~have advanced ~~statements~~software ~~are~~that ~~based~~assists onus ~~the~~in ~~beliefs~~identifying ofproduct ~~management,~~gaps asso ~~well~~we ascan ~~assumptions~~keep ~~made~~such ~~by,~~products ~~and~~in ~~information~~stock ~~currently~~year-round ~~available~~including ~~to,~~the entirety of the ~~Company’s~~last ~~management.~~quarter ~~Actual~~(holiday ~~results~~season) ~~could~~of ~~differ~~the ~~materially~~calendar ~~from~~year ~~those~~(“Q4”). ~~contemplated~~In byupcoming ~~the~~years, ~~forward-looking~~we ~~statements~~plan asto aexpand ~~result~~our ofbusiness ~~certain~~rapidly ~~factors~~by increasing ~~detailed~~the innumber ~~our~~of ~~filings~~business ~~with~~managers, ~~the~~vendors ~~SEC~~and SKUs.

~~The following discussion~~Business and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this annual report on Form 10-K. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Unless the context otherwise requires, “Hour Loop,” “we,” “us,” “our,” or the “Company” refers to Hour Loop, Inc. and its consolidated subsidiaries.Model

39There 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 www.walmart.com.

~~Overview~~33

~~Our~~The advantages ~~Business~~of selling via a wholesale model:

~~We are~~● anPurchase ~~online~~lower ~~retailer~~unit ~~engaged~~quantities inwith ~~e-commerce~~wholesale ~~retailing~~orders inthan ~~the~~private ~~U.S.~~label ~~market~~products. We● ~~have~~Selling ~~operated~~wholesale asis aless ~~third-party~~time ~~seller~~intensive onand ~~www.amazon.com since~~easier ~~2013. We have also sold merchandise on our website at www.hourloop.com since 2013. We expanded our operations~~ to ~~www.walmart.com in~~scale October 2020. To date, we have generated practically all of our revenue as a third-party seller on www.amazon.com and only a negligible amount of revenue from our operations on our website at www.hourloop.com and as a third-party seller on www.walmart.com. We manage more than ~~100,000~~sourcing ~~stock-keeping~~products ~~units~~via ~~(“SKUs”).~~retail ~~Product categories include home/garden décor, toys, kitchenware, apparel, and electronics~~arbitrage. ~~Our~~● ~~primary~~More ~~strategy~~brands iswill towant ~~bring most of our vendors’ product selections~~ to ~~the~~work ~~customers.~~with ~~We have advanced software that assists~~ us inbecause ~~identifying product gaps so~~ we can ~~keep~~provide ~~such~~broader ~~products~~Amazon ~~in stock year-round including the entirety of the last quarter (holiday season) of the calendar year (“Q4”)~~presence. ~~In upcoming years, we plan to expand our business rapidly by increasing the number of business managers, vendors and SKUs.~~

~~Business~~The challenges ~~Model~~of selling via a wholesale model:

~~There are~~● ~~three~~Fierce ~~main~~competition ~~types of business models~~ on ~~Amazon:~~listing ~~wholesale,~~for ~~private~~Buy ~~label~~Box ~~and~~on ~~retail arbitrage~~amazon.com ~~Our business model is wholesale, also known~~ (as ~~reselling,~~described ~~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~~below). We● ~~sell~~Developing ~~merchandise on Amazon~~ and ~~the~~maintaining ~~sales~~relationships ~~are fulfilled by Amazon. We pay Amazon fees for allowing us to sell on their platform. Our relationship~~ with ~~Walmart~~brand ~~is also similar~~manufacturers. 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 www.walmart.com.

~~The~~Market ~~advantages of selling via a wholesale model:~~Description/Opportunities

●According to ~~Purchase~~Marketplace ~~lower~~Pulse ~~unit~~(based ~~quantities~~on ~~with~~U.S. ~~wholesale~~Census ~~orders~~Bureau ~~than~~data), ~~private~~total ~~label~~U.S. ~~products~~retail sales increased 3.5% ●to ~~Selling~~approximately ~~wholesale~~$7.68 istrillion ~~less~~in 2025, ~~time~~from ~~intensive~~$7.42 ~~and~~trillion ~~easier~~in to2024. ~~scale~~Consumers ~~than~~spent ~~sourcing~~$1,233.7 ~~products~~billion ~~via~~online ~~retail~~with ~~arbitrage~~U.S. ●merchants ~~More~~in ~~brands~~2025, ~~will~~which ~~want~~represents approximately to16.4% ~~work~~of ~~with~~total usU.S. ~~because~~retail wesales ~~can~~for ~~provide~~the ~~broader~~year, ~~Amazon~~compared ~~presence~~to 16.07% in 2024.

~~The~~Amazon ~~challenges~~accounted for approximately 40% of ~~selling~~all ~~via~~e-commerce ain ~~wholesale~~the ~~model:~~United States and that makes Amazon the biggest e-commerce giant currently in the market.

~~● Fierce competition on listing for Buy Box on amazon.com (as described below). ● Developing and maintaining relationships with brand manufacturers.~~Formation

~~Market~~The Company ~~Description/Opportunities~~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 2025, sales grew from $0 to $142,440,236.

~~Total U.S.~~We ~~retail~~were ~~sales~~originally ~~increased~~incorporated ~~2.5%~~under tothe ~~$7.42~~laws ~~trillion~~of inthe ~~2024~~State ~~from~~of ~~$7.24~~Washington on ~~trillion~~January in13, ~~2023~~2015. ~~Consumers~~In ~~spent $1~~2019,~~192.29~~ ~~billion~~we ~~online~~formed ~~with U.S.~~Flywheel, ~~merchants~~a inwholly ~~2024~~owned subsidiary, ~~which~~to isprovide ~~around~~business ~~16.07%~~operating ofconsulting ~~total~~services Uexclusively to Hour Loop.S. ~~retail~~On ~~sales~~April ~~for~~7, ~~the~~2021, ~~year~~Hour ~~compared~~Loop converted from a Washington corporation to ~~15.45%~~a inDelaware ~~2023~~corporation.

~~Amazon~~Competitive ~~accounted for approximately 40% of all e-commerce in the United States and that makes Amazon the biggest ecommerce giant currently in the market.~~ Advantage

~~Formation~~Among the approximately 1.9 million active third-party sellers on Amazon, we believe we have two main competitive advantages:

~~The Company~~● ~~was~~First, ~~founded~~we have strong operations and sales teams experienced in ~~2013~~listing, byshipment, ~~Sam~~advertising, ~~Lai~~reconciliation and ~~Maggie Yu~~sales. ~~With~~By ~~their~~delivering ~~vision~~high quality results and enhancing procedures through the process, ~~leadership~~our teams are competitive. ● Second, ~~and~~we believe our proprietary software ~~development~~system ~~skills,~~gives ~~the~~us ~~Company~~an ~~grew rapidly~~advantage over our competition. ~~From~~The ~~2013~~system is highly customized to ~~2024,~~our ~~sales~~business ~~grew~~model; ~~from~~it $0collects and processes large amounts of data every day to ~~$138~~optimize our operation and sales. Through advanced software,~~252,861~~ we can identify product gaps and keep them in stock all year round.

40With 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.

We were originally incorporated under the laws of the State of Washington on January 13, 2015. In 2019, we formed a wholly owned subsidiary, Flywheel Consulting Ltd. (“Flywheel”), to provide business operating consulting services, exclusively to Hour Loop. On April 7, 2021, Hour Loop converted from a Washington corporation to a Delaware corporation.34

~~Competitive~~Our Financial ~~Advantage~~Position

~~Among~~ For the ~~approximately~~fiscal years ended December 31, 2025 and 2024, we generated net revenues of $142,440,236 and $138,252,861, respectively, and reported net income of $1,704,849 and $657,447, respectively, and cash flow provided by operating activities of $2,581,256 and $313,140, respectively.9 ~~million~~As ~~active~~noted ~~third-party~~in ~~sellers~~our onconsolidated ~~Amazon~~financial statements, weas of ~~believe~~December 31, 2025, we ~~have~~had ~~two~~retained ~~main~~earnings ~~competitive~~of ~~advantages:~~$1,109,674.

● First, we have strong operations and sales teams experienced in listing, shipment, advertising, reconciliation and sales. By delivering high quality results and enhancing procedures through the process, our teams are competitive. ● Second, we believe our proprietary software system gives us an advantage over our competition. The system is highly customized to our business model; it collects and processes large amounts Results of ~~data every day to optimize our operation and sales. Through advanced software, we can identify product gaps and keep them in stock all year round.~~Operations

~~With~~Year ~~respect~~Ended toDecember ~~our advertising strategy~~31, we2025 ~~advertise~~Compared 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~~Year ~~items~~Ended ~~allows~~December ~~us to grow profitably. In cases where the advertising is fierce~~31, 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.2024

~~Our~~The following ~~Financial~~table ~~Position~~shows a comparison of our 2025 and 2024 income statements.

For the fiscal years ended December 31, 2024 and 2023, we generated net revenues of $138,252,861 and $132,124,202, respectively, and reported net income (loss) of $657,447 and $(2,429,694), respectively, and cash flow provided by (used in) operating activities of $313,140 and $(2,063,375), respectively. As noted in our consolidated financial statements, as of December 31, 2024, we had retained earnings of $(595,175).

	Year Ended December 31,
	2025			2024

Statement of Operations Data
Total revenues	$	142,440,236		$	138,252,861
Total cost of goods sold		(67,806,565	)		(66,242,153	)
Gross profit		74,633,671			72,010,708
Total operating expenses		72,172,741			71,279,768
Income from operations		2,460,930			730,940
Total other non-operating (expense) income		(63,345	)		228,621
Income tax expense		(692,736	)		(302,114	)
Net income		1,704,849			657,447
Other comprehensive income (loss)		69,267			(25,644	)
Total comprehensive income	$	1,774,116		$	631,803

41Revenue

~~Results~~The Company generated $142,440,236 in revenues in 2025, as compared to $138,252,861 in revenues in the same period in 2024. This represents an increase in revenues of ~~Operations~~$4,187,375, 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 2025 were approximately 6,588,014, as compared to 6,337,492 orders in 2024, representing an increase of 3.95%. This growth in orders has played a pivotal role in driving the overall revenue growth. The meaningful 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 our revenues during the period. The 3.95% 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.

~~Year Ended December 31, 2024 Compared to~~Cost ~~Year~~of ~~Ended~~Goods ~~December 31, 2023~~Sold

~~The~~Cost of ~~following~~goods ~~table~~sold ~~shows~~for athe ~~comparison~~year ofended ~~our~~ December 31, 2025 totaled $67,806,565, as compared to $66,242,153 for the year ended December 31, 2024. Cost of goods sold includes the cost of the merchandise sold and ~~2023~~shipping ~~income~~costs, ~~statements~~as well as estimated losses due to damage to goods.

	Year Ended December 31,
	2024			2023
Statement of Operations Data
Total revenues	$	138,252,861		$	132,124,202
Total cost of goods sold		(66,242,153	)		(65,606,947	)
Gross profit		72,010,708			66,517,255
Total operating expenses		71,279,768			69,520,678
Income (loss) from operations		730,940			(3,003,423	)
Total other non-operating income (expense)		228,621			(157,031	)
Income tax (expense) benefit		(302,114	)		730,760
Net income (loss)		657,447			(2,429,694	)
Other comprehensive loss		(25,644	)		(2,597	)
Total comprehensive income (loss)	$	631,803		$	(2,432,291	)

Operating Expense

~~Revenue~~Operating expenses for the year ended December 31, 2025 totaled $72,172,741, representing a $892,973, or 1.25%, increase from the $71,279,768 of operating expenses for the year ended December 31, 2024. This change was caused by an increase in operating efficiency.

We generated $138,252,861 in revenues in 2024, as compared to $132,124,202 in revenues in the same period in 2023. This represents an increase in revenues of $6,128,659, or 4.64%. 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 2024 were approximately 6,337,492, as compared to 5,749,107 orders in 2023, representing an increase of 10.23%. 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 10.23% 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.35

~~Cost~~Other (Expenses) ofIncome, ~~Goods Sold~~Net

~~Cost~~Other (expenses) ofincome, ~~goods~~net ~~sold~~ for the year ended December 31, ~~2024~~2025 ~~totaled~~was $66(63,~~242~~345),~~153,~~ as compared to $65228,~~606,947~~621 for the year ended December 31, ~~2023~~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.~~

42Total Comprehensive Income

~~Operating~~Total comprehensive ~~Expense~~income for the year ended December 31, 2025 was $1,774,116, as compared to $631,803 for the year ended December 31, 2024. The increase in total comprehensive income was attributed to an increase in our gross revenues in 2025, compared to 2024.

~~Operating expenses for the~~Liquidity year ended December 31, 2024 totaled $71,279,768, representing a $1,759,090, or 2.53%, increase from the $69,520,678 of operating expenses for the year ended December 31, 2023. This change was caused by an increase in platform fees and ~~fees~~Capital ~~paid to Amazon. The Amazon fees are proportional to revenues. The increase in revenues in 2024 over the same period in 2023 drove the increase in platform fees and higher Amazon fees.~~ Resources

~~Other~~Cash Flows ~~Expenses~~for the Years Ended December 31, ~~Net~~2025 and 2024

~~Other~~Liquidity is ~~expenses,~~the ~~net~~ability ~~for~~of ~~the year~~an ~~ended~~enterprise ~~December~~to ~~31,~~generate ~~2024~~adequate ~~was~~amounts ~~$228,621,~~of ascash ~~compared~~ to ~~$(157,031)~~meet its needs for ~~the~~cash ~~year~~requirements. ~~ended~~We had cash of $3,792,033 and $2,119,581 as of December 31, ~~2023~~2025 and 2024, respectively.

~~Total~~Our primary ~~Comprehensive~~uses ~~income~~of ~~(loss)~~cash have been for inventory, payments to Amazon related to sales and shipping of products, for services provided, payments for marketing and advertising and salaries paid to our employees. We have received funds from the sales of products that we sell online. The following trends are reasonably likely to result in changes in our liquidity over the near- to long-term:

~~Total~~● ~~comprehensive~~An ~~income (loss)~~increase ~~for~~in working capital requirements to finance the ~~year~~rapid ~~ended~~growth ~~December~~in 31our current business, ~~2024~~● ~~was~~An ~~$631,803,~~increase asin ~~compared~~fees paid to ~~$(2,432,291)~~Amazon ~~for~~and ~~the~~other ~~year~~partners ~~ended~~as ~~December~~our ~~31,~~sales ~~2023.~~grows ● The ~~decrease in~~cost ~~total~~of ~~comprehensive~~being ~~loss~~a ~~was~~public ~~attributed~~company; to● anMarketing ~~increase~~and inadvertising ~~the~~expenses ~~Company’s~~for ~~gross~~attracting ~~revenues~~new incustomers; ~~2024,~~and ~~compared~~● toCapital ~~2023.~~requirements for the development of additional infrastructure

~~Liquidity~~Since inception, we have generated liquidity from the profitability of our ongoing business and ~~Capital~~from ~~Resources~~debt to fund our operations.

~~Cash~~The following ~~Flows~~table shows a summary of our cash flows for the ~~Years~~years ~~Ended~~ended December 31, ~~2024~~2025 and ~~2023~~2024.

Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. We had cash of $2,119,581 and $2,484,153 as of December 31, 2024 and 2023, respectively.

	Year Ended December 31,
	2025			2024

Statement of Cash Flows
Net cash provided by operating activities	$	2,581,256		$	313,140
Net cash used in investing activities	$	(75,097	)	$	(35,996	)
Net cash used in financing activities	$	(839,000	)	$	(671,000	)
Effect of changes in foreign currency rates	$	5,293		$	29,284
Net increase (decrease) in cash	$	1,672,452		$	(364,572	)
Cash - beginning of the period	$	2,119,581		$	2,484,153
Cash - end of the period	$	3,792,033		$	2,119,581

Our primary uses of cash have been for inventory, payments to Amazon related to sales and shipping of products, for services provided, payments for marketing and advertising and salaries paid to our employees. We have received funds from the sales of products that we sell online. The following trends are reasonably likely to result in changes in our liquidity over the near- to long-term:36

●Net Cash AnProvided ~~increase~~by inOperating working capital requirements to finance the rapid growth in our current business, ● An increase in fees paid to Amazon and other partners as our sales grows ● The cost of being a public company; ● Marketing and advertising expenses for attracting new customers; and ● Capital requirements for the development of additional infrastructureActivities

~~Since~~For ~~inception~~the fiscal year ended December 31, we2025, ~~have~~cash ~~generated~~provided by operating ~~liquidity~~activities ~~from~~amounted to $2,581,256, as compared to $313,140 for the ~~profitability~~year ofended December 31, 2024. This was driven by our ~~ongoing~~net ~~business~~income ~~and~~of $1,704,849 ~~from~~for ~~debt~~the year ended December 31, 2025, as compared to ~~fund~~$657,447 ~~our~~for ~~operations~~the same period in 2024.

43Despite the increase in revenue to $142,440,236 for the year ended December 31, 2025, as compared to $138,252,861 for the year ended December 31, 2024, the revenue increase was offset by a corresponding increase in cost of goods sold of $1,564,412 and an increase in operating expenses of $892,973.

~~The following table shows~~Net aCash ~~summary~~Used ofin ~~our~~Investing ~~cash flows for the years ended December 31, 2024 and 2023.~~Activities

	Year Ended December 31,
	2024			2023
Statement of Cash Flows
Net cash provided by (used in) operating activities	$	313,140		$	(2,063,375	)
Net cash used in investing activities	$	(35,996	)	$	(14,823	)
Net cash used in financing activities	$	(671,000	)	$	-
Effect of changes in foreign currency rates	$	29,284		$	(238	)
Net decrease in cash	$	(364,572	)	$	(2,078,436	)
Cash - beginning of the period	$	2,484,153		$	4,562,589
Cash - end of the period	$	2,119,581		$	2,484,153

For the fiscal year ended December 31, 2025, $75,097 in cash was used in investing activities, as compared to $35,996 in cash used in investing activities for the fiscal year ended December 31, 2024. The increase primarily reflects higher purchases of property and equipment for the year ended December 31, 2025.

Net Cash ~~Provided~~Used ~~by (used~~ in) ~~Operating~~Financing Activities

For the fiscal year ended December 31, ~~2024~~2025, cash ~~provided by (~~used in) ~~operating~~ financing activities amounted to $~~313~~1,~~140~~339,000, as compared to $(2671,~~063,375)~~000 cash used in financing activities for the fiscal year ended December 31, ~~2023~~2024. The ~~This~~increase in cash outflows was ~~driven~~primarily bydue ~~our~~to ~~net~~repayments ~~income~~made ~~(loss)~~to ofrelated ~~$657,447~~parties for the year ended December 31, ~~2024, as compared to $(2,429,694) for the same period in 2023~~2025.

~~Despite the increase in revenue~~Off-Balance toSheet ~~$138,252,861~~Financing for the year ended December 31, 2024, as compared to $132,124,202 for the year ended December 31, 2023, the revenue increase was offset by a corresponding increase in cost of goods sold of $635,206 and an increase in operating expenses of $1,759,090.Arrangements

~~Net~~We have ~~Cash~~no ~~Used~~obligations, assets or liabilities which would be considered off-balance sheet arrangements. We do not participate in ~~Investing~~transactions that ~~Activities~~create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

~~For the fiscal year ended~~Contractual ~~December 31, 2024, $35,996 in cash was used in investing activities, as compared to $14,823 in cash used in investing activities for the fiscal year ended December 31, 2023.~~Obligations

~~Net~~Except as ~~Cash~~set ~~Used~~forth inbelow, ~~Financing~~we ~~Activities~~do not have any long-term capital lease obligations, operating lease obligations or long-term liabilities.

~~For the fiscal year ended~~Taishin ~~December~~International ~~31, 2024, cash used in financing activities amounted to $671,000, as compared to $-0- cash used in financing activities for the fiscal year ended December 31, 2023.~~Bank

44On August 18, 2022, Flywheel entered into a line of credit agreement in the amount of $6,940,063 with Taishin International Bank (“Taishin”). As amended, the line of credit matures on May 18, 2026 and bears interest at a rate of 3.42% per annum.

~~Off-Balance~~As of ~~Sheet~~December ~~Financing~~31, ~~Arrangements~~2025 and 2024, the outstanding balance under the Taishin line of credit was $637,348 and $610,967, respectively.

We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.37

~~Contractual Obligations~~Affiliated Loans

~~Except~~From time asto ~~set~~time, ~~forth~~we ~~below~~receive loans and advances from our stockholders to fund our operations. As of December 31, 2025, we had a total of $3,810,418 due to related parties, which included $2,660,418 in stockholder payables and $1,150,000 accrued for bonuses. As of December 31, 2024, we dohad ~~not~~a ~~have~~total ~~any~~of ~~long-term~~$4,192,995 ~~capital~~due ~~lease~~to ~~obligations~~related parties, ~~operating~~which ~~lease~~included ~~obligations~~$3,499,418 orin ~~long~~stockholder payables and $693,577 accrued for bonuses. While stockholder payables are generally non-~~term~~interest ~~liabilities~~bearing and payable on demand, we and our stockholders entered into loan agreements for loans with terms over one year.

~~Bank~~July 2021 ~~of America~~ Loan

On ~~June~~ 18July 27, ~~2019~~2021, the Company, ~~issued~~Mr. aLai ~~Promissory~~and ~~Note~~Ms. ~~(the~~Yu ~~“BofA~~entered ~~Note”)~~into ~~in the amount of $785,000 to Bank of America for~~ a loan inagreement ~~the~~with a principal amount of $~~785~~4,~~000~~170,418. The ~~BofA~~loan ~~Note~~is ~~matures on June 18, 2024 and bears interest at a rate of 8~~subordinated.~~11%~~ ~~per annum.~~ As ~~of December 31~~amended, ~~2024,~~ the ~~aggregate~~loan ~~principal~~matures ~~amount~~on ofDecember ~~the BofA Note outstanding was $-0-. On June 30~~31, ~~2024,~~2026 ~~the~~and ~~Company~~has ~~paid~~an annual ~~accrued~~ interest inrate ~~full~~of 4.75%.

~~Taishin International Bank~~Leases

OnWe have ~~August~~two ~~18,~~operating ~~2022,~~leases (Flywheel ~~entered~~ ~~into~~has atwo ~~line~~offices oflease ~~credit agreement~~ in ~~the amount of $6,940,063 with Taishin of America Loa~~Taiwan). The ~~line~~respective oflease ~~credit~~terms ~~initially~~are ~~matured on~~June ~~August 30~~10, ~~2023.~~2025 Onto ~~August~~July 119, ~~2023~~2027, ~~the~~and December ~~line of credit was extended for an additional year~~1, ~~revising~~2025 ~~the maturity date~~ to ~~August~~November 30, ~~2024.~~ ~~On May 28~~2028, ~~2024, the term of the loan was revised such that maturity date was extended to November 24, 2024~~respectively.

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.

For the Year Ending December 31,	Amount

2026	$	94,036
2027		61,330
2028		26,890
2029 and thereafter		-
Total minimum lease payments		182,256
Less: effect of discounting		(6,623	)
Present value of the future minimum lease payment		175,633
Less: operating lease liabilities-current		(92,362	)
Total operating lease liabilities-non-current	$	83,271

~~As of December 31, 2024 and~~Critical ~~2023,~~Accounting ~~the~~Policies ~~outstanding balance under the Taishin line of credit was $610,967~~ and ~~$652,422, respectively.~~Estimates

~~Affiliated~~The preparation ~~Loans~~of consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates.

~~From~~Cash ~~time~~and toCash ~~time,~~Equivalents ~~the~~– ~~Company~~We ~~receives~~consider ~~loans~~all ~~and~~highly ~~advances~~liquid ~~from~~financial ~~its~~instruments ~~stockholders~~purchased towith ~~fund~~original ~~its~~maturities ~~operations~~of three months or less to be cash. AsOur ofcash ~~December~~is ~~31,~~held ~~2024,~~in the ~~Company~~bank ~~had~~and acovered ~~total~~by ofthe ~~$4,192,995~~Federal ~~due~~Deposit toInsurance ~~related~~Corporation ~~parties~~(“FDIC”), ~~which~~subject to ~~included~~applicable limits. Deposits are insured up to $3250,~~499,418~~000 inper ~~stockholder~~depositor, ~~payables~~per ~~and $693~~FDIC-insured bank,~~577~~ ~~accrued~~per ~~for~~ownership ~~bonuses~~category. ~~While~~Cash ~~stockholder~~equivalents and ~~payables~~marketable securities are ~~generally~~comprised ~~non-interest~~of ~~bearing~~time ~~and~~deposits, ~~payable~~money onmarket ~~demand~~funds, ~~the~~highly ~~Company~~liquid government bonds, corporate debt securities, mortgage-backed and ~~stockholders~~asset-backed ~~entered~~securities, ~~into~~and ~~loan~~marketable ~~agreements~~equity ~~for~~securities. ~~loans~~Our ~~with~~cash ~~terms~~and ~~over~~cash ~~one~~equivalents ~~year~~primarily consisted of cash and money market funds. Such amounts are recorded at fair value.

~~December 2020 Loan~~38

OnAccounts ~~December~~Receivable 30and Allowance for Credit Losses - Accounts receivable are stated at historical cost less allowance for doubtful accounts. On a periodic basis, ~~2020~~management evaluates its accounts receivable and ~~later~~determines ~~modified~~whether onto ~~September~~provide ~~16,~~an ~~2021,~~allowance for credit losses in accordance with the ~~Company,~~Financial ~~Mr.~~Accounting ~~Lai~~Standards ~~and~~Board’s ~~Ms.~~(“FASB”) YuAccounting ~~entered~~Standards ~~into~~Codification (“ASC”) Topic 326, credit losses based on a ~~loan~~past ~~agreement~~history of $1write-offs,~~041~~ collections,~~353~~ current credit conditions, current economic conditions, reasonable and ~~converted~~supportable itforecasts ~~into~~of afuture ~~retroactive~~economic ~~interest-bearing~~conditions. ~~(2%)~~The ~~loan~~evaluation ~~with~~is performed on a ~~repayment~~collective ~~date~~basis ofwhere ~~December~~similar 31characteristics exist, ~~2021~~primarily based on similar services or products offerings. OnWe ~~January~~adopted ~~18,~~the ~~2022~~standard ~~and~~effective January 27 1, 2023,. The impact of the adoption ~~Company~~was ~~repaid~~not considered material to the ~~loan~~financial ~~principal~~statements and ~~accrued~~primarily ~~interest~~resulted in ~~full.~~new/enhanced ~~Together,~~disclosures Mronly. ~~Lai~~A ~~and~~receivable is ~~Ms.~~considered Yupast ~~hold~~due ~~approximately~~if 94the Company has not received payments based on agreed-upon terms.9% ofThe ~~the~~ Company’s ~~outstanding~~generally ~~shares.~~does ~~Mr.~~not ~~Lai~~require isany security ~~the~~or ~~Company’s~~collateral ~~Chairman~~to ofsupport ~~the~~its ~~Board,~~receivables. ~~Chief~~The ~~Executive~~collection ~~Officer~~is primarily through Amazon and ~~Interim~~the ~~Chief~~collection ~~Financial~~period is usually less ~~Officer.~~than Ms7 days. YuWe isperform ~~the~~on-going ~~Company’s~~evaluations ~~Senior~~of ~~Vice~~our ~~President~~customers and amaintains ~~member~~an ofallowance ~~the~~for ~~Company’s~~credit ~~Board~~losses as we deem necessary or appropriate. As of ~~Directors~~December 31, 2025 and 2024, we did not deem it necessary to have an allowance for credit loss.

45Inventory and Cost of Goods Sold – Our inventory consists mainly of finished goods. Inventories are stated at the lower of cost or net realizable value. Cost is principally determined on a first-in-first-out basis. Our costs include the amounts we pay manufacturers for product, tariffs and duties associated with transporting product across national borders, and freight costs associated with transporting the product from its manufacturers to its warehouses, as applicable. The merchandise with terms of FOB shipping point from vendors was recorded as the inventory-in-transit when inventory left the shipping dock of the vendors but not yet reached our receiving dock. Management continually evaluates its estimates and judgments including those related to merchandise inventory.

~~July~~The “Cost ~~2021~~of ~~Loan~~revenues” line item in the unaudited consolidated statements of operations is principally inventory sold to customers during the reporting period.

OnPolicy ~~July~~for ~~27,~~inventory ~~2021,~~allowance: ~~the~~We ~~Company,~~write ~~Mr.~~down ~~Lai~~the ~~and~~cost ~~Ms.~~of Yuobsolete ~~entered~~and ~~into~~slow-moving ainventories ~~loan~~to ~~agreement~~the ~~with~~estimated anet ~~principal~~realizable ~~amount of $4~~value,~~170,418.~~ ~~The loan is subordinated.~~based ~~The~~on ~~original~~inventory ~~annual~~obsolescence ~~interest rate was 2% and the original repayment date was December 31~~trends, ~~2022.~~historical ~~On December 28~~experience, ~~2022,~~forecasted ~~the~~consumer ~~Company,~~demand ~~Mr. Lai~~ and ~~Ms.~~application ~~Yu agreed to extend the term~~ of the ~~loan,~~specific ~~with~~identification amethod. As ~~new maturity date~~ of December 31, ~~2024.~~2025 Onand ~~December 31,~~ 2024, ~~the Company~~$447, ~~Mr.~~841 ~~Lai~~ and ~~Ms.~~$560,293, Yurespectively, ~~agreed~~were towritten ~~extend~~down from the ~~term~~cost of ~~the~~inventories ~~loan,~~to ~~with~~our anet ~~new~~realizable values. ~~maturity~~Full ~~date~~inventory ofallowance ~~December~~is ~~31,~~recorded ~~2025.~~for Asthe ~~amended,~~inventory ~~the~~SKU ~~annual~~not ~~interest rate~~sold offor ~~the~~more ~~loan~~than isone 5year.~~5%.~~

~~Leases~~Property and Equipment - Property and equipment are recorded at cost and depreciated or amortized over the estimated useful life of the asset using the straight-line method. We elected to expense any individual property and equipment items under $2,500.

The ~~Company has four operating~~ ~~leases~~majority ~~(Flywheel~~of ~~has~~our ~~four~~property ~~offices~~and ~~lease~~equipment inis ~~Taiwan). The respective lease terms are February 9~~computers, ~~2023 to March 8, 2025, March 1, 2024 to June 30, 2025, June 1, 2024 to May 31, 2025,~~ and ~~August~~the 1,estimated ~~2024~~useful tolife ~~July~~is ~~31,~~three ~~2025, respectively~~years.

For the Year Ending December 31,	Amount
2025	$	115,652
2026		-
2027		-
2028 and thereafter		-
Total minimum lease payments		115,652
Less: effect of discounting		(1,112	)
Present value of the future minimum lease payment		114,540
Less: operating lease liabilities-current		(114,540	)
Total operating lease liabilities-non-current	$	-

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. We did not record any impairment charges for the years ended December 31, 2025 and 2024.

~~Sales~~Leases - ~~Taxes~~Leases are classified at lease commencement date as either a finance lease or an operating lease. A lease is a finance lease if it meets any of the following criteria: (a) the lease transfers ownership of the underlying asset to the lessee by the end of the lease term, (b) the lease grants the lessee an option to purchase the underlying asset that the lessee is reasonably certain to exercise, (c) the lease term is for the major part of the remaining economic life of the underlying asset, (d) the present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease payments equals or exceeds substantially all of the fair value of the underlying asset or (e) the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. When none of the foregoing criteria is met, the lease shall be classified as an operating lease.

We ~~make~~typically anutilize ~~assessment~~operating ofleases ~~sales~~for ~~tax~~our ~~payable,~~office ~~including~~space ~~any~~requirements. ~~related~~This ~~interest~~means ~~and~~that ~~penalties,~~we ~~and~~lease ~~accrue~~office ~~these~~space, ~~estimates~~categorizing on the ~~financial~~lease ~~statements.~~arrangement ~~Pursuant~~as toan ~~the~~operating ~~Wayfair decision, each state enforces sales tax collection at different dates~~lease. WeUnder ~~collect~~this ~~and~~arrangement, ~~remit~~we ~~sales~~do ~~tax~~not inhold ~~accordance with~~ownership ~~state regulations. We estimate that as~~ of ~~December~~the ~~31,~~leased ~~2024,~~assets webut ~~owed~~instead ~~$-0-~~pays inrent ~~sales~~for ~~taxes,~~the ~~along~~right ~~with~~to ~~penalties and interest~~use them.

~~Critical Accounting Policies and Estimates~~39

~~The~~For a ~~preparation~~lessee, ofa ~~consolidated~~lease ~~financial~~is ~~statements and~~recognized ~~related~~as ~~disclosures~~an inoperating ~~conformity~~lease right-of-use asset with ~~accounting~~a ~~principles~~corresponding ~~generally~~liability ~~accepted~~at inlease commencement date. The lease liability is calculated at the ~~United~~present ~~States~~value of ~~America~~the ~~(“U.S.~~lease ~~GAAP”). U.S.~~payments ~~GAAP~~not ~~requires~~yet ~~management~~paid toby ~~make~~using ~~estimates~~the lease term and ~~assumptions~~discount ~~that~~rate ~~affect~~determined at ~~the~~lease ~~reported~~commencement. ~~amounts~~The operating lease right-of-use ~~assets~~asset ~~and~~is ~~liabilities~~calculated as the lease liability, ~~disclosure of~~increased ~~contingent~~by ~~assets~~any initial direct costs, and ~~liabilities~~prepaid atlease ~~the~~payments, ~~date~~reduced by any lease incentives received before lease commencement. The operating lease right-of-use ~~the~~asset itself ~~financial~~is ~~statements,~~amortized ~~and~~on ~~income~~a ~~and~~straight-line ~~expenses~~basis ~~during~~unless another systematic method better reflects how the ~~periods~~underlying ~~reported.~~asset ~~Actual~~will be used by ~~results~~and ~~could~~benefits ~~materially~~the ~~differ~~lessee ~~from~~over ~~those~~the ~~estimates~~lease term.

46Fair Value Measurement - Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable, due to related parties and short-term debt at fair value or cost, which approximates fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest.

~~Cash and Cash Equivalents - The~~Fair ~~Company~~value ~~considers~~is ~~all~~defined ~~highly~~as ~~liquid~~the ~~financial~~price ~~instruments~~that ~~purchased~~would ~~with~~be ~~original~~received ~~maturities~~to ofsell ~~three~~an ~~months~~asset or ~~less~~paid to betransfer ~~cash.~~a ~~Our~~liability ~~cash is held~~ in ~~the~~an ~~bank~~orderly ~~and~~transaction ~~covered by the Federal Deposit Insurance Corporation (“FDIC”), subject to applicable limits. Deposits~~between ~~are~~market ~~insured~~participants upat tothe ~~$250,000~~measurement ~~per depositor, per FDIC-insured bank, per ownership category~~date. ~~Cash~~To ~~equivalents~~increase ~~and~~the ~~marketable~~comparability ~~securities are comprised~~ of ~~time~~fair ~~deposits,~~value ~~money market funds~~measures, ~~highly~~the ~~liquid~~following ~~government~~hierarchy ~~bonds, corporate debt securities, mortgage-backed and asset-backed~~prioritizes ~~securities,~~the ~~and~~inputs ~~marketable~~to ~~equity~~valuation ~~securities.~~methodologies ~~Our~~used ~~cash~~to ~~and~~measure ~~cash equivalents primarily consisted of cash and money market funds. Such amounts are recorded at~~ fair value.:

~~Accounts Receivable and Allowance for Credit Losses - Accounts receivable are stated at historical cost less allowance for doubtful accounts~~i. OnLevel a1 ~~periodic basis,~~— ~~management~~Valuations evaluates its accounts receivable and determines whether to provide an allowance for credit losses in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 326, credit losses based on aquoted ~~past~~prices ~~history~~for ofidentical ~~write-offs,~~assets ~~collections, current credit conditions, current economic conditions, reasonable~~ and ~~supportable~~ ~~forecasts~~liabilities ofin ~~future~~active ~~economic~~markets. ~~conditions~~ii. ~~The~~Level ~~evaluation~~2 is— ~~performed~~Valuations ~~on a collective basis where similar characteristics exist, primarily~~ based on ~~similar~~observable ~~services~~inputs orother ~~products~~than ~~offerings.~~quoted Weprices ~~adopted~~included ~~the~~in ~~standard~~Level ~~effective January~~ 1, ~~2023.~~such ~~The~~as ~~impact~~quoted ofprices ~~the~~for ~~adoption was~~similar ~~not~~assets ~~considered material to the financial statements~~ and ~~primarily~~liabilities ~~resulted~~ in ~~new/enhanced~~active ~~disclosures~~markets, ~~only.~~quoted Aprices ~~receivable~~for isidentical ~~considered past~~or ~~due~~similar ifassets ~~the~~and ~~Company~~liabilities ~~has~~in ~~not~~markets ~~received~~that ~~payments~~are ~~based on agreed-upon terms. The Company generally does~~ not ~~require~~active, ~~any security~~ or ~~collateral to~~other ~~support~~inputs ~~its~~that ~~receivables.~~are ~~The~~observable ~~collection~~or iscan ~~primarily~~be ~~through~~corroborated ~~Amazon~~by ~~and~~observable ~~the~~market ~~collection~~data. ~~period~~iii. isLevel ~~usually~~3 ~~less~~— ~~than~~Valuations 7based ~~days. The Company performs~~ on~~-going~~ ~~evaluations~~unobservable ofinputs ~~its~~reflecting ~~customers~~our ~~and~~own ~~maintains~~assumptions, anconsistent ~~allowance~~with ~~for~~reasonably ~~credit~~available ~~losses~~assumptions asmade ~~the~~by ~~Company~~other ~~deems~~market ~~necessary or appropriate~~participants. As ofThese ~~December~~valuations ~~31,~~require ~~2024~~significant ~~and 2023, the Company did not deem it necessary to have an allowance for credit loss~~judgment.

~~Inventory~~Revenue Recognition ~~and Cost of Goods Sold~~ - ~~The Company’s~~We ~~inventory~~account ~~consists~~for ~~mainly~~revenue ~~of finished goods. Inventories are stated at the lower of cost or net realizable value. Cost is principally determined on a first-~~in~~-first-out~~ ~~basis.~~accordance ~~The~~with ~~Company’s~~ASC ~~costs~~Topic ~~include the amounts it pays manufacturers for product~~606, ~~tariffs~~ ~~and~~Revenue ~~duties~~from ~~associated~~Contracts with ~~transporting~~Customers ~~product~~(“ASC ~~across~~Topic ~~national~~606”). We ~~borders,~~adopted ~~and~~ASC ~~freight~~Topic ~~costs~~606 ~~associated~~as ~~with~~of ~~transporting~~January ~~the product from its manufacturers to its warehouses~~1, ~~as applicable~~2019. The ~~merchandise~~standard ~~with~~did ~~terms~~not ofaffect ~~FOB~~our ~~shipping~~consolidated ~~point~~financial ~~from~~position, ~~vendors~~or ~~was~~cash ~~recorded~~flows. asThere ~~the~~were ~~inventory-in-transit~~no ~~when~~changes ~~inventory~~to ~~left~~ the ~~shipping~~timing ~~dock~~ of ~~the~~revenue ~~vendors~~recognition ~~but~~as ~~not~~a ~~yet~~result ~~reached the receiving dock~~ of the ~~Company~~adoption. ~~Management continually evaluates its estimates and judgments including those related to merchandise inventory.~~

~~The~~We recognize ~~“Cost~~revenue ofin ~~revenues”~~accordance ~~line~~with ~~item~~ASC ~~in the~~Topic ~~unaudited~~606, ~~consolidated~~which ~~statements~~provided ofa ~~operations~~five-step ismodel ~~principally~~for ~~inventory~~recognizing ~~sold~~revenue tofrom ~~customers~~contracts ~~during~~with ~~the~~customers as ~~reporting period.~~follows:

~~Policy~~● ~~for~~Identify ~~inventory allowance: The Company writes down~~ the ~~cost~~contract ofwith ~~obsolete~~a ~~and~~customer. ~~slow-moving~~● ~~inventories~~Identify to the ~~estimated~~performance ~~net~~obligations ~~realizable~~in ~~value,~~the ~~based~~contract. on● ~~inventory~~Determine ~~obsolescence trends, historical experience, forecasted consumer demand and application of~~ the ~~specific~~transaction ~~identification method~~price. As● ofAllocate ~~December~~the ~~31,~~transaction ~~2024~~price ~~and~~to ~~2023,~~the ~~$560,293 and~~performance ~~$675,886,~~obligations ~~respectively,~~in ~~were written down from~~ the ~~cost of inventories to their net realizable values~~contract. ~~Full~~● ~~inventory~~Recognize ~~allowance~~revenue ~~is recorded~~when ~~for~~or ~~the~~as ~~inventory~~performance ~~SKU~~obligations ~~not~~are ~~sold for more than one year~~satisfied.

~~Property~~We evaluated ~~and~~principal ~~Equipment~~versus -agent ~~Property~~considerations ~~and~~to ~~equipment~~determine whether it is appropriate to record platform fees paid to Amazon as an expense or as a reduction of revenue. Platform fees are recorded atas ~~cost~~sales and ~~depreciated~~distribution orexpenses ~~amortized~~and ~~over~~are ~~the~~not ~~estimated~~recorded ~~useful~~as ~~life~~a reduction of revenue because the ~~asset~~Company ~~using~~as principal owns and controls all the ~~straight-line~~goods ~~method~~before they are transferred to the customer. ~~The~~We ~~Company~~can, at any time, direct ~~elected~~Amazon, similarly, other third-party logistics providers (“Logistics Providers”), to ~~expense~~return our inventories to any ~~individual~~location specified ~~property~~by the Company. It is our responsibility to make any returns made by customers directly to Logistics Providers and ~~equipment~~we ~~items~~retain the ~~under~~back-end $2inventory risk. Further,~~500~~ we are subject to credit risk (i.e., credit card chargebacks), establishes prices of its products, can determine who fulfills the goods to the customer (Amazon or the Company) and can limit quantities or stop selling the goods at any time. Based on these considerations, the Company is the principal in this arrangement.

~~The majority of the Company’s property and equipment is computers, and the estimated useful life is 3 years.~~40

47We derive our revenue from the sale of consumer products. We sell our products directly to consumers through online retail channels. We consider 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 years ended December 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 our 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, we have a present and unconditional right to payment and record the amount due from the customer in accounts receivable.

~~Impairment of Long-lived Assets- In accordance~~The ~~with~~customer ~~ASC~~can ~~360-10-35-17,~~return if the ~~carrying~~products ~~amount~~within of30 andays ~~asset~~after orthe ~~asset~~products ~~group~~are ~~(in~~delivered ~~use or under development) is evaluated~~ and ~~found not to be fully recoverable (the carrying amount exceeds the~~ estimated ~~gross,~~sales ~~undiscounted~~returns ~~cash~~are ~~flows~~calculated ~~from~~based ~~use and disposition), then an impairment~~on ~~loss~~the ~~must~~expected ~~be recognized~~returns. The ~~impairment~~rates ~~loss is measured as the excess~~ of ~~the~~sales ~~carrying~~returns ~~amount~~were ~~over~~7.26% ~~the~~and ~~asset’s (or asset group’s) fair value~~7.19% ~~The~~of ~~Company~~gross ~~did~~sales ~~not record any impairment charges~~ for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively.

~~Leases - Leases are classified at lease~~From ~~commencement~~time ~~date~~to astime, ~~either~~we aoffer ~~finance~~price ~~lease~~discounts oron ancertain ~~operating~~selected ~~lease.~~items ~~A lease is a finance lease if it meets any of the following criteria: (a) the lease transfers ownership of the underlying asset~~ to ~~the~~stimulate ~~lessee by~~ the ~~end~~sales of ~~the~~those ~~lease~~items. ~~term,~~Revenue ~~(b)~~is ~~the~~measured ~~lease~~as ~~grants~~ the ~~lessee~~amount anof ~~option~~consideration tofor ~~purchase~~which ~~the~~we ~~underlying~~expect ~~asset that the lessee is reasonably certain~~ to ~~exercise,~~be ~~(c)~~entitled ~~the~~in ~~lease~~exchange ~~term is~~ for ~~the~~transferring ~~major~~goods. ~~part of~~Consistent ~~the~~with ~~remaining~~this ~~economic life of the underlying asset~~policy, ~~(d)~~we ~~the~~reduce ~~present value of~~ the ~~sum of the lease payments and any residual value~~amount ~~guaranteed by the lessee that is not already reflected in the lease payments equals or exceeds substantially all~~ of ~~the~~these ~~fair~~discounts ~~value~~from of the ~~underlying~~gross ~~asset~~revenue ~~or (e) the underlying asset is of such a specialized nature that it is expected~~ to ~~have~~calculate ~~no alternative use to~~ the ~~lessor~~ atnet ~~the~~revenue ~~end~~recorded ofon the ~~lease~~statement ~~term. When none~~ of ~~the foregoing criteria is met, the lease shall be classified as an operating lease~~operations.

~~The~~A performance ~~Company~~obligation, ~~typically~~defined ~~utilizes~~as ~~operating~~the ~~leases for~~promise ~~its~~to ~~office~~transfer ~~space~~a ~~requirements.~~distinct ~~This~~good, ~~means~~is ~~that~~ the ~~Company~~unit ~~leases~~of ~~office~~account ~~space,~~in ~~categorizing~~ASC ~~the~~Topic ~~lease~~606. ~~arrangement~~We astreat ~~an operating~~shipping ~~lease.~~and ~~Under~~handling ~~this~~as ~~arrangement~~fulfillment activities, ~~The~~not ~~Company~~separate ~~does~~performance ~~not~~obligations. ~~hold~~Costs ~~ownership~~for ofshipping and handling were $32,050,121 and $31,480,104 for the ~~leased~~years ~~assets~~ended ~~but~~December ~~instead~~31, ~~pays~~2025 ~~rent~~and ~~for~~2024, ~~the~~respectively, ~~right~~recorded toas ~~use~~selling ~~them~~and marketing expenses.

~~For a lessee, a lease is recognized as an operating~~Segment ~~lease~~Information ~~right-of-use~~– ~~asset~~We ~~with~~only ahave ~~corresponding~~one liability at lease commencement date. The lease liability is calculated at the present value of the lease payments not yet paid by using the lease term and discount rate determined at lease commencement. The operating lease right-of-use asset is calculated as the lease liabilitysegment, ~~increased~~which ~~by any initial direct costs, and prepaid lease payments, reduced by any lease incentives received before lease commencement. The operating lease right-of-use asset itself~~ is ~~amortized~~online onretail ~~a straight~~(e-~~line basis unless another systematic method better reflects how the underlying asset will be used by and benefits the lessee over the lease term~~commerce).

~~Fair~~We use ~~Value~~the ~~Measurement~~“management -approach” ~~Fair~~in ~~value~~determining ~~is defined~~reportable asoperating ~~the~~segments. ~~exchange~~The ~~price~~management ~~that~~approach ~~would~~considers bethe ~~received~~internal organization ~~for~~and anreporting ~~asset~~used orby ~~paid~~our tochief ~~transfer~~operating adecision ~~liability~~maker ~~(an~~for ~~exit~~making ~~price)~~operating indecisions ~~the~~and ~~principal~~assessing ~~or most~~performance ~~advantageous~~as ~~market~~the source for ~~the~~determining ~~asset~~our orreportable ~~liability~~segments. inOur anchief ~~orderly~~operating ~~transaction~~decision ~~between~~maker ~~market~~has ~~participants~~been atidentified as the ~~measurement~~chief ~~date.~~executive ~~The~~officer ~~carrying~~of ~~amounts reported in~~ the ~~consolidated~~Company ~~balance~~who ~~sheets~~reviews ~~for~~financial ~~cash~~information ~~and~~of ~~cash~~separate ~~equivalents,~~operating ~~accounts~~segments ~~receivable,~~based ~~accounts~~on ~~payable,~~U.S. ~~due to~~GAAP. ~~related~~The ~~parties~~chief ~~and~~operating ~~short-term~~decision ~~debt~~maker now atreviews ~~fair~~results ~~value~~analyzed orby ~~cost,~~customers. ~~which~~This ~~approximates~~analysis ~~fair~~is ~~value~~only ~~because~~presented ofat the ~~short~~revenue ~~period~~level ofwith ~~time~~no ~~between the~~allocation ~~origination~~ of ~~such~~direct ~~instruments~~or ~~and~~indirect costs. ~~their~~Consequently, ~~expected~~we ~~realization~~have ~~and~~determined ~~their~~that ~~current~~it ~~market~~has ~~rates~~only ofone ~~interest~~operating segment.

~~Fair value is defined as the price that would~~Income beTaxes ~~received~~- toIncome ~~sell~~tax anexpense ~~asset~~includes ~~or paid to transfer a liability in an orderly transaction between market participants at the measurement date~~U.S. To(federal ~~increase~~and ~~the~~state) ~~comparability~~and offoreign ~~fair~~income ~~value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:~~taxes.

i.We ~~Level~~also 1complied —with ~~Valuations~~state ~~based~~tax oncodes ~~quoted prices for identical assets~~ and ~~liabilities in active markets. ii. Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1~~regulations, ~~such~~including aswith respect ~~quoted~~to ~~prices~~California ~~for~~franchise ~~similar~~taxes. ~~assets~~Management ~~and~~has ~~liabilities~~evaluated inour ~~active~~tax ~~markets,~~positions ~~quoted prices for identical or similar assets~~ and ~~liabilities~~has inconcluded ~~markets~~ that ~~are~~we ~~not~~had ~~active,~~taken orno ~~other~~uncertain ~~inputs~~tax positions that ~~are~~could ~~observable~~require adjustment or ~~can~~disclosure bein ~~corroborated~~the byfinancial ~~observable~~statements ~~market~~to ~~data.~~comply ~~iii.~~with ~~Level~~provisions 3set —forth ~~Valuations~~in ~~based~~ASC onSection ~~unobservable inputs reflecting our own assumptions~~740, Income ~~consistent with reasonably available assumptions made by other market participants~~Taxes. ~~These valuations require significant judgment.~~

48Deferred tax assets represent amounts available to reduce income taxes payable in future periods. Deferred tax assets are evaluated for future realization and reduced by a valuation allowance to the extent we believe they will not be realized. We consider many factors when assessing the likelihood of future realization of our deferred tax assets, including recent cumulative loss experience and expectations of future earnings, capital gains and investment in such jurisdiction, the carry-forward periods available to us for tax reporting purposes, and other relevant factors.

~~Revenue Recognition - The Company accounts~~Concentration ~~for~~of ~~revenue~~Credit inRisks ~~accordance~~- ~~with~~Financial ~~ASC~~instruments ~~Topic~~that ~~606,~~potentially ~~Revenue~~subject ~~from~~us ~~Contracts~~to ~~with~~concentrations ~~Customers~~of ~~(“ASC~~credit ~~Topic~~risk ~~606”).~~consist ~~The~~primarily ~~Company~~of ~~adopted~~cash and ~~ASC~~cash ~~Topic~~equivalents ~~606~~and asaccounts ofreceivable. ~~January~~We 1,maintain ~~2019.~~cash ~~The~~and ~~standard~~cash ~~did~~equivalents ~~not~~with ~~affect~~various ~~the~~domestic ~~Company’s~~and ~~consolidated~~foreign financial ~~position,~~institutions of orhigh ~~cash~~credit ~~flows~~quality. ~~There were~~We noperform ~~changes~~periodic toevaluations ~~the timing~~ of ~~revenue~~the ~~recognition~~relative ascredit astanding ~~result~~of all of the ~~adoption~~aforementioned institutions.

~~The Company recognizes revenue in accordance with ASC Topic 606, which provided a five-step model for recognizing revenue from contracts with customers as follows:~~41

●We ~~Identify~~maintain ~~the~~reserves ~~contract~~for ~~with~~potential acredit losses on customer accounts when deemed necessary. ●Significant ~~Identify~~customers ~~the~~are ~~performance~~those ~~obligations~~which inrepresent ~~the~~more ~~contract.~~than ●10% ~~Determine~~of ~~the~~our ~~transaction~~total ~~price.~~net ●revenue ~~Allocate~~or ~~the~~gross ~~transaction~~accounts ~~price~~receivable balance toat the ~~performance~~balance ~~obligations~~sheet indate. For the ~~contract.~~years ●ended ~~Recognize~~December ~~revenue~~31, ~~when~~2025 and 2024, we had no customer that accounted for 10% or more of total net revenues. In addition, as ~~performance~~of ~~obligations~~December 31, 2025 and 2024, we had no customer that accounted for 10% or more of gross accounts receivable. As of December 31, 2025 and 2024, all of our accounts receivable were held by our sales platform agent, Amazon, which collects money on our behalf from our customers. Therefore, our accounts receivable are ~~satisfied~~comprised of receivables due from Amazon and the reimbursement from Amazon to the Company usually takes less than seven days.

~~The Company evaluated principal versus agent considerations~~Our tobusiness ~~determine whether it~~ is ~~appropriate~~reliant toon ~~record~~one ~~platform~~key ~~fees~~vendor ~~paid~~which tocurrently ~~Amazon~~provides asus anwith ~~expense~~our orsales asplatform, alogistics ~~reduction~~and offulfillment ~~revenue.~~operations, ~~Platform fees~~including ~~are~~certain ~~recorded~~warehousing asfor ~~sales~~our ~~and~~net ~~distribution~~goods, ~~expenses~~ and ~~are~~invoicing ~~not~~and ~~recorded~~collection ~~as a reduction~~ of its revenue ~~because~~from ~~the~~our ~~Company~~end ascustomers. ~~principal~~During ~~owns and controls all~~ the ~~goods~~years ~~before~~ended ~~they are transferred to the customer. The Company can, at any time, direct Amazon, similarly, other third-party~~December ~~logistics providers (“Logistics Providers”)~~31, to2025 ~~return the Company’s inventories to any location specified by the Company. It is the Company’s responsibility to make any returns made by customers directly to Logistics Providers~~ and ~~the Company retains the back-end inventory risk. Further~~2024, ~~the~~approximately ~~Company~~98% isand ~~subject to credit risk (i.e.~~99%, ~~credit card chargebacks)~~respectively, ~~establishes prices~~ of ~~its products,~~our ~~can~~revenue ~~determine~~was ~~who~~through ~~fulfills~~or ~~the~~with ~~goods to~~ the ~~customer (~~Amazon orsales ~~the Company) and can limit quantities or stop selling the goods at any time~~platform. ~~Based on these considerations, the Company is the principal in this arrangement.~~

~~The Company derives its revenue from the sale~~Foreign ofCurrency ~~consumer~~Exchange ~~products.~~Risk ~~The~~- ~~Company~~We ~~sells~~are ~~its~~exposed ~~products directly~~ to ~~consumers~~foreign ~~through~~currency ~~online~~exchange ~~retail~~risk ~~channels.~~through ~~The~~our ~~Company~~foreign ~~considers~~subsidiary ~~customer order~~in ~~confirmations to be a contract with the customer~~Taiwan. ~~For~~We ~~each~~do ~~contract,~~not ~~the promise to transfer products is identified as the sole~~hedge ~~performance~~foreign ~~obligation.~~currency ~~Transaction~~translation ~~prices~~risk ~~are~~in ~~evaluated for potential refunds or adjustments, determining~~ the net ~~consideration~~assets ~~expected. Revenues for the years ended December 31, 2024~~ and ~~2023~~income ~~were~~reported 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~~these ~~customer in accounts receivable~~sources.

49Advertising and Promotion Expenses – Our policy is to recognize advertising costs as they are incurred. Advertising and promotion expenses were $5,777,969 and $5,323,886 for the years ended December 31, 2025 and 2024, respectively.

~~The~~Commitments and ~~customer~~Contingencies ~~can~~- ~~return~~Liabilities ~~the~~for ~~products~~loss ~~within~~contingencies ~~30 days~~arising ~~after~~from ~~the~~claims, ~~products~~assessments, ~~are~~litigation, ~~delivered~~fines, penalties, and ~~estimated~~other sources ~~sales~~are ~~returns~~recorded ~~are~~when ~~calculated~~it ~~based~~is onprobable ~~the~~that ~~expected~~a ~~returns.~~liability ~~The~~has ~~rates~~been ofincurred ~~sales~~and ~~returns were~~the ~~7.19%~~amount ~~and~~can ~~6.45%~~be ofreasonably ~~gross~~estimated. ~~sales~~Legal ~~for~~costs ~~the~~incurred in ~~years~~connection ~~ended~~with ~~December~~loss ~~31,~~contingencies ~~2024~~are ~~and~~expensed ~~2023,~~as ~~respectively~~incurred.

~~From~~Related Parties ~~time~~- toWe ~~time,~~account ~~the~~for ~~Company~~related ~~offers~~party ~~price~~transactions ~~discounts~~in accordance with FASB ASC Topic 850 (Related Party Disclosures). A party is onconsidered ~~certain~~to ~~selected~~be ~~items~~related to ~~stimulate~~us if the ~~sales~~party ofdirectly ~~those~~or ~~items.~~indirectly ~~Revenue~~or through one or more intermediaries, controls, is ~~measured~~controlled asby, or is under common control with the ~~amount~~Company. Related parties also include our principal owners, our management, members of ~~consideration~~the ~~for~~immediate families of our principal owners and our management and other parties with which ~~the~~we ~~Company~~may deal if one party controls or can significantly ~~expects~~influence the management or operating policies of the other to an extent that one of the transacting parties might be ~~entitled~~prevented infrom fully ~~exchange~~pursuing ~~for~~its ~~transferring~~own ~~goods~~separate interests. ~~Consistent~~A ~~with~~party ~~this~~which ~~policy,~~can significantly influence the ~~Company~~management ~~reduces~~or ~~the~~operating ~~amount~~policies of ~~these~~the ~~discounts~~transacting ~~from~~parties ~~the~~or ~~gross~~if ~~revenue~~it tohas ~~calculate~~an ownership interest in one of the ~~net~~transacting ~~revenue~~parties ~~recorded~~and oncan significantly influence the ~~statement~~other to an extent that one or more of ~~operations~~the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.

AEarnings per ~~performance~~Share ~~obligation,~~- ~~defined~~We ascompute basic earnings per common share using the ~~promise to~~weighted-average ~~transfer~~number aof ~~distinct~~shares ~~good,~~of iscommon stock outstanding during the ~~unit~~period. ofFor ~~account~~the period in ~~ASC~~which ~~Topic~~we ~~606.~~report ~~The~~net ~~Company~~losses, ~~treats~~diluted ~~shipping~~net ~~and~~loss ~~handling~~per share attributable to stockholders is the same as ~~fulfillment~~basic net ~~activities~~loss per share attributable to stockholders, because potentially dilutive common shares are not ~~separate~~assumed ~~performance~~to ~~obligations.~~have ~~Costs~~been ~~for~~issued ~~shipping~~if ~~and~~their effect ~~handling~~is anti-dilutive. There were ~~$31,480,104~~no ~~and~~dilutive ~~$31,187,009~~securities or other items that would affect earnings per share for the years ended December 31, ~~2024~~ 2025 and ~~2023,~~2024. ~~respectively~~Therefore, ~~recorded~~the diluted earnings per share is the same as ~~selling~~the ~~and~~basic ~~marketing~~earnings ~~expenses~~per share.

~~Segment~~Shares Issued ~~Information~~for Services – ~~The~~Stock-based ~~Company has~~compensation ~~only~~cost ~~one~~for ~~segment,~~all ~~which~~equity-classified stock awards expected to vest is ~~online~~measured ~~retail~~at fair ~~(e-commerce)~~value on the date of grant and recognized over the service period.

~~The Company uses the “management approach”~~ITEM ~~in determining reportable operating segments~~7A. ~~The~~QUANTITATIVE ~~management~~AND ~~approach~~QUALITATIVE ~~considers~~DISCLOSURES ~~the~~ABOUT ~~internal~~MARKET 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.RISK

~~Income Taxes - Income tax expense includes~~Not Uapplicable.~~S. (federal and state) and foreign income taxes.~~

~~The Company also complied with state tax codes~~ITEM ~~and regulations, including with respect to California franchise taxes~~8. ~~Management~~FINANCIAL ~~has~~STATEMENTS ~~evaluated~~AND ~~its~~SUPPLEMENTARY tax positions and has concluded that the Company had taken no uncertain tax positions that could require adjustment or disclosure in the financial statements to comply with provisions set forth in ASC section 740, Income Taxes.DATA

~~Deferred~~Reference is ~~tax~~made ~~assets represent amounts available~~ to ~~reduce~~pages ~~income~~F-1 ~~taxes~~through ~~payable~~F-18 incomprising ~~future periods. Deferred tax assets are evaluated for future realization and reduced by~~ a ~~valuation allowance~~portion ~~to the extent we believe they will not be realized. We consider many factors when assessing the likelihood~~ of ~~future~~this ~~realization of~~annual ~~our~~report ~~deferred~~on ~~tax~~Form ~~assets, including recent cumulative loss experience and expectations of future earnings, capital gains and investment in such jurisdiction, the carry~~10-~~forward periods available to us for tax reporting purposes, and other relevant factors~~K.

~~Presentation of Sales Taxes - Governmental~~ITEM ~~authorities impose sales tax on all of the Company’s sales to nonexempt customers~~9. ~~The~~CHANGES ~~Company~~IN ~~collects~~AND ~~sales~~DISAGREEMENTS ~~tax~~WITH ~~from~~ACCOUNTANTS ~~customers and~~ON ~~remits~~ACCOUNTING ~~the~~AND ~~entire~~FINANCIAL ~~amount to the governmental authorities. The Company’s accounting policy is to exclude the tax collected and remitted from revenues and cost of revenues.~~DISCLOSURE

~~The Company assesses sales tax payable including~~Not ~~any related interest and penalties and accrues these estimates on its financial statements~~applicable. Pursuant to the Wayfair decision, each state enforces sales tax collection at different dates. The Company collects and remits sales tax in accordance with state regulations. The Company estimates that as of December 31, 2024 and 2023, it owed $-0- and $288,466, respectively, in sales taxes along with penalties and interest resulting from late filings.

5042

~~Concentration of Credit Risks - Financial~~ITEM ~~instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable~~9A. ~~The~~CONTROLS ~~Company~~AND maintains cash and cash equivalents with various domestic and foreign financial institutions of high credit quality. The Company performs periodic evaluations of the relative credit standing of all of the aforementioned institutions.PROCEDURES

~~The~~Evaluation ~~Company maintains reserves for potential credit losses on customer accounts when deemed necessary. Significant customers are those which represent more than 10%~~ of ~~the~~Disclosure ~~Company’s~~Controls ~~total net revenue or gross accounts receivable balance at the balance sheet date. During the years ended December 31, 2024~~ and 2023, the Company had no customer that accounted for 10% or more of total net revenues. In addition, as of December 31, 2024 and 2023, the Company had no customer that accounted for 10% or more of gross accounts receivable. As of December 31, 2024 and 2023, 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 7 days.Procedures

~~The~~Disclosure ~~Company’s~~controls ~~business~~are isprocedures ~~reliant~~that onare ~~one~~designed with the objective ~~key~~of ~~vendor~~ensuring ~~which~~that ~~currently~~information ~~provides~~required ~~the~~to ~~Company~~be ~~with~~disclosed ~~its~~in ~~sales~~our ~~platform,~~reports ~~logistics~~filed ~~and~~under ~~fulfillment~~the ~~operations~~Exchange Act, ~~including~~such ~~certain~~as ~~warehousing for~~this ~~the~~annual ~~Company’s~~report, ~~net~~is ~~goods~~recorded, processed, summarized, and ~~invoicing~~reported ~~and~~within ~~collection~~the oftime ~~its~~period ~~revenue~~specified ~~from~~in the ~~Company~~SEC’s ~~end~~rules ~~customers~~and forms. ~~During~~Disclosure ~~the~~controls ~~years~~are also ~~ended~~designed ~~December~~with ~~31,~~the ~~2024~~objective of ensuring that such information is accumulated and ~~2023~~communicated to our management, ~~approximately~~including ~~99%~~the chief executive officer and ~~99%~~chief financial officer, ~~respectively~~as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our chief executive officer and chief financial officer (our “Certifying Officers”), the ~~Company’s~~effectiveness of ~~revenue~~our ~~was~~disclosure ~~through~~controls orand ~~with~~procedures as of December 31, 2025, pursuant to Rule 13a-15(b) under the ~~Amazon~~Exchange Act. Based upon that ~~sales~~evaluation, ~~platform~~our Certifying Officers concluded that, as of December 31, 2025, our disclosure controls and procedures were effective.

~~Foreign~~We do ~~Currency~~not ~~Exchange~~expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and ~~Risk~~procedures, -no ~~The~~matter ~~Company~~how iswell ~~exposed~~conceived toand ~~foreign~~operated, ~~currency~~can ~~exchange~~provide ~~risk~~only ~~through~~reasonable, ~~its~~not ~~foreign~~absolute, ~~subsidiary~~assurance inthat ~~Taiwan~~the objectives of the disclosure controls and procedures are met. ~~The~~Further, ~~Company~~the ~~does~~design ~~not~~of ~~hedge~~disclosure controls and procedures must reflect the fact that there ~~foreign~~are ~~currency~~resource ~~translation~~constraints, ~~risk~~and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the ~~net~~likelihood ~~assets~~of future events, and ~~income~~there ~~reported~~can ~~from~~be ~~these~~no ~~sources~~assurance that any design will succeed in achieving its stated goals under all potential future conditions.

~~Advertising and Promotion Expenses –~~Management’s ~~Our~~Report ~~policy~~on isInternal toControl ~~recognize~~Over ~~advertising~~Financial ~~costs as they are incurred. Advertising and promotion expenses were $5,323,886 and $4,605,629 for the years ended December 31, 2024 and 2023, respectively.~~Reporting

~~Commitments~~Our management ~~and~~is ~~Contingencies~~responsible ~~- Liabilities~~ for ~~loss~~establishing ~~contingencies~~and ~~arising~~maintaining ~~from~~adequate ~~claims,~~internal ~~assessments,~~control ~~litigation,~~over ~~fines,~~financial ~~penalties~~reporting, as defined under Exchange Act Rules 13a-15(f) and ~~other~~14d-14(f). ~~sources~~Our ~~are~~internal ~~recorded~~control ~~when~~over itfinancial reporting is ~~probable that~~designed ato ~~liability~~provide ~~has~~reasonable ~~been~~assurance ~~incurred~~regarding the reliability of financial reporting and the ~~amount~~preparation ~~can~~of befinancial ~~reasonably~~statements ~~estimated.~~for ~~Legal~~external ~~costs~~purposes ~~incurred~~ in ~~connection~~accordance with ~~loss contingencies~~generally ~~are~~accepted ~~expensed~~accounting ~~as incurred~~principles.

~~Related~~All internal ~~Parties~~control -systems, ~~The~~no ~~Company~~matter ~~accounts for~~how ~~related~~well ~~party~~designed, ~~transactions~~have ininherent ~~accordance~~limitations ~~with~~and ~~FASB~~may ~~ASC~~not ~~Topic~~prevent ~~850~~or ~~(Related~~detect ~~Party Disclosures)~~misstatements. ATherefore, even ~~party~~those issystems ~~considered~~determined to be ~~related to~~effective ~~the~~can ~~Company~~only ifprovide ~~the~~reasonable ~~party~~assurance ~~directly~~with orrespect ~~indirectly~~to orfinancial ~~through~~reporting ~~one~~reliability ~~or more intermediaries, controls, is controlled by, or is under common~~and ~~control~~financial ~~with~~statement ~~the~~preparation ~~Company~~and presentation. ~~Related~~In ~~parties also include principal owners of the Company~~addition, ~~its~~projections ~~management, members~~ of ~~the~~any ~~immediate~~evaluation ~~families~~ of ~~principal~~effectiveness ~~owners~~to offuture ~~the~~periods ~~Company~~are ~~and~~subject to ~~its~~risk ~~management~~that ~~and other parties with which the Company may deal if one party~~ controls orbecome ~~can~~inadequate ~~significantly influence~~because ~~the management or operating policies~~ of ~~the~~changes ~~other~~in toconditions anand ~~extent~~ that ~~one of~~ the ~~transacting~~degree ~~parties~~of ~~might~~compliance bewith ~~prevented from fully pursuing its own separate interests. A party which can significantly influence~~ the ~~management or operating~~ policies ~~of the transacting parties~~ or ~~if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that~~procedures ~~one~~may ~~or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party~~deteriorate.

~~Earnings per Share - The Company computes~~Management ~~basic~~assessed ~~earnings per common share using~~ the ~~weighted-average~~effectiveness ~~number~~ of ~~shares of common stock outstanding during~~ the ~~period.~~Company’s ~~For~~internal ~~the~~control ~~period in~~over ~~which~~financial ~~the~~reporting ~~Company~~as ~~reports~~of ~~net~~December ~~losses~~31, ~~diluted~~2025. ~~net~~In ~~loss~~making ~~per share attributable to stockholders is~~ the ~~same as basic net loss per share~~assessment, ~~attributable~~management toused ~~stockholders,~~the ~~because~~criteria ~~potentially~~issued ~~dilutive~~by ~~common~~the ~~shares~~Committee ~~are~~of ~~not~~Sponsoring ~~assumed~~Organizations toof ~~have~~the ~~been~~Treadway ~~issued~~Commission if(COSO ~~their~~– ~~effect~~2013) isin ~~anti~~Internal Control-~~dilutive~~Integrated Framework. ~~There~~ ~~were~~Based noon ~~dilutive~~its ~~securities~~assessment, ormanagement ~~other~~concluded ~~items~~ that, ~~would~~as ~~affect~~of ~~earnings per share for the years ended~~ December 31, ~~2024~~2025, ~~and~~our ~~2023.~~Company’s ~~Therefore,~~internal ~~the~~control ~~diluted~~over ~~earnings~~financial ~~per~~reporting ~~share~~was isadequate ~~the~~in ~~same~~material ~~as the basic earnings per share~~aspects.

~~Shares Issued for Services – Stock-based~~Changes ~~compensation~~in ~~cost~~Internal ~~for~~Control ~~all equity-classified stock awards expected to vest is measured at fair value on the date of grant and recognized~~ over ~~the~~Financial ~~service period.~~Reporting

51There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 7A 9B. ~~QUANTITATIVE~~OTHER ~~AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~INFORMATION

~~Not applicable~~None.

ITEM 8 9C. ~~FINANCIAL~~DISCLOSURE ~~STATEMENTS~~REGARDING ~~AND~~FOREIGN ~~SUPPLEMENTARY~~JURISDICTIONS ~~DATA~~THAT PREVENT INSPECTIONS

~~Reference is made to pages~~Not ~~F-1 through F-24 comprising a portion of this annual report on Form 10-K~~applicable.

~~ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE~~43

~~Not applicable.~~PART III

ITEM 9A 10. ~~CONTROLS~~DIRECTORS, EXECUTIVE OFFICERS AND ~~PROCEDURES~~CORPORATE GOVERNANCE

~~Evaluation of Disclosure Controls~~ Officers and ~~Procedures~~Directors

~~Disclosure controls are procedures~~The ~~that~~following ~~are~~table ~~designed~~sets ~~with~~forth the ~~objective~~names ~~of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this annual report, is recorded, processed, summarized,~~ and ~~reported~~ages ~~within~~of the ~~time~~members ~~period~~of ~~specified~~our inBoard ~~the SEC’s rules and forms. Disclosure controls are also designed with the objective~~ of ~~ensuring~~Directors ~~that such information is accumulated~~ and ~~communicated to~~ our ~~management, including the chief~~ executive ~~officer~~officers and ~~chief~~the ~~financial~~positions ~~officer, as appropriate to allow timely decisions regarding~~held ~~required~~by ~~disclosure~~each. ~~Our~~Each ~~management~~director’s ~~evaluated,~~term ~~with~~continues ~~the~~until ~~participation~~his ofor ~~our~~her ~~current~~successor ~~chief~~is ~~executive~~elected ~~officer~~or ~~and~~qualified ~~chief~~at ~~financial officer (our “Certifying Officers”),~~ the ~~effectiveness~~next ofannual ~~our disclosure controls and procedures as of December 31~~meeting, ~~2024,~~unless ~~pursuant~~such todirector ~~Rule~~earlier ~~13a-15(b)~~resigns ~~under~~or ~~the~~is ~~Exchange Act~~removed. ~~Based upon that evaluation, our Certifying Officers concluded that, as of December 31, 2024, our disclosure controls and procedures were effective.~~

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Name	Age	Position
Sam Lai	44	Chairman of the Board, Chief Executive Officer and Interim Chief Financial Officer
Sau Kuen (Maggie) Yu	49	Senior Vice President and Director
Michael Lenner	48	Independent Director
Minghui (Alan) Gao	53	Independent Director
Hilary (Hui-Chong) Bui	41	Independent Director

52Biographical information concerning our directors and executive officers listed above is set forth below.

~~Management’s~~Sam Lai. ~~Report~~Mr. onLai ~~Internal~~has ~~Control~~served as our Chief Executive Officer and been a member of our Board of Directors since June 2013 and our Chairman ~~Over~~of Board since April 2021. He has served as our Interim Chief Financial ~~Reporting~~Officer since March 29, 2022. He is a seasoned software engineer who has designed and built software and code from the ground up at Hour Loop, Inc., Amazon.com, Inc., UnifiedEdge, Inc., Kits, and Applied Research Labs for the past 18 years. From December 2009 through June 2017, Mr. Lai served as a Software Development Engineer for Amazon.com, Inc. From March 2009 through December 2009, he served as a Senior Java Developer at UnifiedEdge, Inc. From February 2007 through March 2009, Mr. Lai served as a Senior Java Developer at Kits. From September 2005 through February 2007, he served as a Software Development Engineer for Amazon.com, Inc. From March 2003 through January 2004, Mr. Lai served as a Research Engineer Scientist Assistant at Applied Research Labs. Mr. Lai graduated with a Bachelor Degree in Computer Science from University of Texas at Austin in 2003 and a Masters Degree in Computer Science from University of California, San Diego in 2004. Mr. Lai does not hold, and has not previously held, any directorships in any other reporting companies.

~~Our~~Sau Kuen ~~management~~(Maggie) isYu. ~~responsible for~~Ms. ~~establishing~~Yu ~~and~~has ~~maintaining~~served ~~adequate~~as ~~internal~~our ~~control~~Senior ~~over~~Vice ~~financial~~President ~~reporting,~~and ashas ~~defined~~been ~~under~~a ~~Exchange~~member ~~Act~~of ~~Rules~~our ~~13a-15(f)~~Board ~~and 14d-14(f)~~of Directors since June 2013. Since ~~Our~~graduating ~~internal~~from ~~control~~University ~~over~~of ~~financial~~California, ~~reporting~~San isDiego ~~designed~~until toJune ~~provide~~2013, ~~reasonable~~Ms. ~~assurance~~Yu ~~regarding~~has ~~the~~no ~~reliability~~employment ofhistory. ~~financial~~Ms. Yu graduated with a Bachelor ~~reporting~~Degree ~~and~~in ~~the~~Computer ~~preparation~~Science offrom ~~financial~~University ~~statements~~of ~~for~~California, ~~external~~San ~~purposes~~Diego in ~~accordance~~2004. ~~with~~Ms. ~~generally~~Yu ~~accepted~~does ~~accounting~~not ~~principles~~hold, and has not previously held, any directorships in any other reporting companies.

~~All~~Michael Lenner. ~~internal~~Mr. ~~control~~Lenner ~~systems~~has been an independent member of our Board of Directors since June 1, no ~~matter~~2021. ~~how~~Since ~~well~~May ~~designed~~2018, ~~have~~Mr. ~~inherent~~Lenner ~~limitations~~has served ~~and~~as ~~may~~Vice ~~not~~President, ~~prevent~~Software orEngineering, ~~detect~~Disney ~~misstatements~~Streaming Services at The Walt Disney Company. ~~Therefore,~~From ~~even~~August ~~those~~2017 ~~systems~~through ~~determined~~May 2018, tohe beserved ~~effective~~as ~~can~~Vice ~~only~~President, ~~provide~~Software ~~reasonable~~Engineering ~~assurance~~at ~~with~~BAMTECH ~~respect~~Media. toFrom ~~financial~~July ~~reporting~~2014 ~~reliability~~through ~~and~~August ~~financial~~2017, ~~statement~~Mr. ~~preparation~~Lenner served as Vice President, Software Engineering and ~~presentation~~Senior Director, Software Engineering at Major League Baseball Advanced Media. InFrom ~~addition~~February 2011 through June 2014, ~~projections~~he ofserved ~~any~~as ~~evaluation~~the ofVice ~~effectiveness~~President, toEngineering ~~future~~at ~~periods~~H. ~~are~~Bloom. ~~subject~~Mr. toLenner ~~risk~~graduated ~~that~~with ~~controls~~a ~~become~~Bachelor of Arts Degree in Physics from Binghamton ~~inadequate~~University ~~because~~and a Masters of ~~changes~~Science Degree in ~~conditions~~Computer ~~and~~Science ~~that~~from ~~the~~Columbia ~~degree~~University. ofMr. ~~compliance~~Lenner ~~with~~does ~~the~~not ~~policies~~hold, orand ~~procedures~~has ~~may~~not ~~deteriorate~~previously held, any directorships in any other reporting companies.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024. In making the assessment, management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO – 2013) in Internal Control-Integrated Framework. Based on its assessment, management concluded that, as of December 31, 2024, our Company’s internal control over financial reporting was adequate in material aspects.44

~~Changes~~Minghui (Alan) Gao. Mr. Gao has been an independent member of our Board of Directors since October 6, 2021. Since October 2021, Mr. Gao has served as the Chief Technology Officer of Cue Health, Inc. From January 2018 to October 2021, he served as the Chief Technology Officer of PillPack (which was acquired by Amazon Pharmacy). From October 2016 to January 2018, Mr. Gao served as the Director of Prime Video at Amazon.com. From September 2013 to October 2016, he served as Engineering Director of Seller Services at Amazon.com. From September 2011 to September 2013, Mr. Gao served as the Chief Technology Officer and Senior Vice President of Product and Engineering at Xiu.com, an e-commerce company in ~~Internal~~China. ~~Control~~From ~~over~~November ~~Financial~~2008 through June 2011, he served as Engineering Director at Amazon.cn in China. From October ~~Reporting~~2007 to November 2008, Mr. Gao served as Senior Manager, Software Development at Amazon.com. From November 2006 to October 2007, he served as a Software Development Manager at Amazon.com. From April 2001 to November 2006, Mr. Gao served as Software Design Engineer and Development Lead. Mr. Gao graduated with a Masters Degree in Computer Science from Baylor university in 1999. Mr. Gao does not hold, and has not previously held, any directorships in any other reporting companies.

~~There~~Hilary (Hui-Chong) ~~were~~Bui. noMs. ~~changes~~Bui inhas been an independent member of our ~~internal~~ ~~control~~Board ~~over~~of ~~financial~~Directors ~~reporting~~since (February 20, 2023. Since November 2022, Ms. Bui has served as ~~such~~the ~~term~~Senior isFinance ~~defined~~Manager–North America and US Retail FP&A of Starbucks Corporation. She joined Starbucks Corporation in ~~Rules~~2015 ~~13a-15(f)~~and has served various positions including Finance Manager and ~~15d-15(f)~~Business Analysis Manager of ~~the~~different ~~Exchange~~divisions ~~Act)~~before being ~~during~~promoted to the ~~most~~current position. From 2011 to 2015, Ms. Bui served as Senior Finance Analyst and Finance Analyst in different ~~recent~~divisions ~~fiscal~~of ~~quarter~~General ~~that~~Mills, ~~have~~Inc. ~~materially~~From ~~affected~~2007 to 2011, orMs. ~~are~~Bui ~~reasonably~~served ~~likely~~as toSenior ~~materially~~Assurance ~~affect~~Associate of PricewaterhouseCoopers, ~~our~~LLP. ~~internal~~Ms. Bui ~~control~~graduated ~~over~~with ~~financial~~a bachelor’s degree of Accounting from the University of Minnesota in 2007. Ms. Bui does not hold, and has not previously held, any directorships in any other reporting companies.

~~ITEM 9B. OTHER INFORMATION~~Family Relationships

~~None~~Sam Lai, our Chairman of the Board, Chief Executive Officer and Interim Chief Financial Officer, and Maggie Yu, our Senior Vice President and member of our Board of Directors, are married.

~~ITEM~~Involvement in ~~9C.~~Certain ~~DISCLOSURE~~Legal ~~REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS~~Proceedings

~~Not~~No executive ~~applicable~~officer, member of the board of directors or control person of our Company has been involved in any legal proceeding listed in Item 401(f) of Regulation S-K in the past 10 years.

~~PART~~Board Committees ~~III~~and Director Independence

~~ITEM~~As a ~~10.~~Nasdaq-listed ~~DIRECTORS~~company, ~~EXECUTIVE~~we ~~OFFICERS~~are ~~AND~~required ~~CORPORATE~~to ~~GOVERNANCE~~comply with Nasdaq’s continued listing standards.

~~Officers~~Controlled Company and ~~Directors~~Director Independence

The “controlled ~~following~~company” ~~table~~exception ~~sets~~to ~~forth~~ the ~~names~~Nasdaq ~~and~~rules ~~ages~~provides that a company of which more than 50% of the ~~members~~voting power is held by an individual, group or another company, a “controlled company,” need not comply with certain requirements of ~~our~~the Nasdaq corporate governance rules. As stated above, Sam Lai, the Chairman of the Board, Chief Executive Officer and Interim Chief Financial Officer of ~~Directors~~the Company, and ~~our~~Maggie ~~executive~~Yu, ~~officers~~Senior Vice President of the Company and a member of the ~~positions~~Board, ~~held~~who byare ~~each~~husband and wife, together beneficially own 33,394,442 shares of the Company’s common stock, representing approximately 94.8% ~~Each~~of ~~director~~the voting power of the Company’s ~~term~~outstanding ~~continues~~common ~~until~~stock. As ~~his~~a orresult, ~~her~~we ~~successor~~are isa ~~elected~~“controlled orcompany” ~~qualified~~under at the ~~next~~Nasdaq ~~annual~~corporate ~~meeting~~governance standards. As a controlled company, ~~unless~~we ~~such~~do ~~director~~not ~~earlier~~have ~~resigns~~to ~~or is~~comply ~~removed.~~with certain corporate governance requirements under the Nasdaq rules, including the following:

Name	Age	Position
Sam Lai	43	Chairman of the Board, Chief Executive Officer and Interim Chief Financial Officer
Sau Kuen (Maggie) Yu	48	Senior Vice President and Director
Michael Lenner	47	Independent Director
Minghui (Alan) Gao	52	Independent Director
Hilary (Hui-Chong) Bui	40	Independent Director

	●	A majority of our Board of Directors to consist of “independent directors” as defined by the applicable Nasdaq rules and regulations;

	●	The compensation of our executive officers to be determined, or recommended to the Board of Directors for determination, by independent directors constituting a majority of the independent directors of the Board in a vote in which only independent directors participate or by a Compensation Committee comprised solely of independent directors; and

	●	That director nominees to be selected, or recommended to the Board of Directors for selection, by independent directors constituting a majority of the independent directors of the Board in a vote in which only independent directors participate or by a nomination committee comprised solely of independent directors.

5345

~~Biographical~~We intend ~~information~~to ~~concerning~~ avail itself of each of these exemptions. More specifically, a majority of our Board of Directors will not consist of independent directors and ~~executive~~we ~~officers~~will ~~listed~~not ~~above~~have isa ~~set~~compensation ~~forth~~committee ~~below~~or a nominating and corporate governance committee. Therefore, for as long as we remain a “controlled company,” we will not have the same protections afforded to stockholders of companies that are subject to all of these corporate governance requirements. If at any time we cease to be a “controlled company” under the Nasdaq rules, our Board of Directors will take all action necessary to comply with the Nasdaq corporate governance rules, including establishing certain committees composed entirely of independent directors, subject to a permitted “phase-in” period.

~~Sam~~Notwithstanding ~~Lai.~~our ~~Mr.~~status ~~Lai has served~~ as ~~our~~a ~~Chief~~controlled ~~Executive~~company, ~~Officer~~we ~~and~~will ~~been~~remain asubject ~~member~~to ofthe ~~our~~Nasdaq ~~Board~~corporate ofgovernance ~~Directors~~standard ~~since~~that ~~June~~requires ~~2013~~us ~~and~~to ~~our~~have ~~Chairman~~an audit ofcommittee ~~Board~~with ~~since~~at ~~April~~least ~~2021.~~three Heindependent ~~has~~directors ~~served~~ as ~~our~~well ~~Interim~~as ~~Chief~~composed ~~Financial~~entirely ~~Officer~~of ~~since~~independent ~~March 29, 2022~~directors. HeAs is a ~~seasoned software engineer who has designed and built software and code from the ground up at Hour Loop~~result, ~~Inc.,~~we ~~Amazon.com,~~were ~~Inc.~~required, ~~UnifiedEdge, Inc., Kits, and Applied~~ ~~Research~~at ~~Labs for~~ the ~~past~~time 18of ~~years.~~listing ~~From~~on ~~December 2009 through June 2017~~Nasdaq, ~~Mr.~~to ~~Lai~~have ~~served~~at asleast aone ~~Software~~independent ~~Development~~director ~~Engineer~~on ~~for~~our ~~Amazon.com, Inc.~~audit ~~From March 2009 through December 2009~~committee, ~~he served as a Senior Java Developer~~ at ~~UnifiedEdge,~~least ~~Inc.~~two ~~From~~independent ~~February 2007 through March~~directors ~~2009,~~within ~~Mr.~~90 ~~Lai~~days ~~served~~of aslisting aon ~~Senior~~Nasdaq, ~~Java~~and ~~Developer~~ at ~~Kits.~~least ~~From~~three ~~September~~independent ~~2005~~directors ~~through~~within ~~February~~one ~~2007,~~year heof ~~served~~listing ason ~~a Software Development Engineer for Amazon.com~~Nasdaq, ~~Inc.~~where ~~From~~at ~~March~~least ~~2003~~one of ~~through~~the ~~January~~independent ~~2004,~~directors ~~Mr.~~qualifies ~~Lai served~~ as aan ~~Research~~audit ~~Engineer~~committee ~~Scientist~~financial ~~Assistant~~expert atunder ~~Applied Research~~SEC ~~Labs.~~rules ~~Mr.~~and ~~Lai~~as ~~graduated with~~ a ~~Bachelor~~financially ~~Degree~~sophisticated ~~in Computer Science from University of Texas at Austin in 2003 and a Masters Degree~~audit incommittee ~~Computer~~member ~~Science~~under ~~from~~the ~~University~~Nasdaq ~~of California, San Diego in 2004~~rules. ~~Mr. Lai does not hold, and has not previously held, any directorships in any reporting companies.~~

~~Sau~~Our ~~Kuen~~Board ~~(Maggie)~~of ~~Yu.~~Directors ~~Ms.~~has Yuaffirmatively ~~has~~determined ~~served~~that astwo of our ~~Senior~~five ~~Vice~~directors ~~President~~(Sam Lai and ~~has~~Maggie ~~been~~Yu) aare ~~member~~non-independent directors and three of our ~~Board~~five ofdirectors ~~Directors~~(Michael ~~since~~Lenner, ~~June~~Minghui ~~2013~~(Alan) Gao, and Hilary (Hui-Chong) Bui) are independent directors. ~~Since~~ ~~graduating~~Our ~~from~~audit committee ~~University~~consists of ~~California,~~the ~~San~~three ~~Diego~~independent ~~until~~directors: ~~June~~Mr. ~~2013~~Lenner, MsMr. YuGao, ~~has~~and noMs. ~~employment history~~Bui. Ms. YuBui ~~graduated~~is ~~with~~the achair ~~Bachelor Degree~~of inthe ~~Computer~~audit ~~Science~~committee and ~~from~~qualifies ~~University~~as ofan ~~California,~~audit ~~San~~committee ~~Diego~~financial inexpert ~~2004.~~under ~~Ms.~~SEC Yurules ~~does~~and ~~not~~as ~~hold,~~a ~~and~~financially ~~has~~sophisticated ~~not~~audit ~~previously~~committee ~~held,~~member ~~any directorships~~under inthe ~~any~~Nasdaq ~~reporting companies~~rules.

~~Michael Lenner. Mr. Lenner has been an independent member of our~~ Board ~~of Directors since June 1, 2021. Since May 2018, Mr. Lenner has~~ ~~served~~Leadership asStructure Vice President, Software Engineering, Disney Streaming Services at The Walt Disney Company. From August 2017 through May 2018, he served as Vice President, Software Engineering at BAMTECH Media. From July 2014 through August 2017, Mr. Lenner served as Vice President, Software Engineering and ~~Senior~~Board’s ~~Director,~~Role Software Engineering at Major League Baseball Advanced Media. From February 2011 through June 2014, he served as the Vice President, Engineering at H. Bloom. Mr. Lenner graduated with a Bachelor of Arts Degree in ~~Physics~~Risk from Binghamton University and a Masters of Science Degree in Computer Science from Columbia University. Mr. Lenner does not hold, and has not previously held, any directorships in any reporting companies.Oversight

~~Minghui (Alan) Gao.~~We ~~Mr.~~have ~~Gao~~not ~~has~~separated ~~been~~the anpositions ~~independent~~of ~~member~~Chairman of ~~our~~the Board ofand ~~Directors~~Chief ~~since~~Executive ~~October 6, 2021~~Officer. ~~Since October 2021,~~ Mr. ~~Gao~~Lai has served as ~~the Chief~~our ~~Technology~~Chairman ~~Officer~~ of ~~Cue~~the ~~Health,~~Board of ~~Inc.~~Directors ~~From~~since ~~January~~April ~~2018 to October~~ 2021, heand ~~served as the~~ Chief ~~Technology~~Executive Officer ofsince ~~PillPack (which~~June ~~was acquired by Amazon Pharmacy)~~2013. ~~From~~We ~~October~~believe ~~2016~~that tocombining ~~January 2018, Mr. Gao served as~~ the ~~Director~~positions of ~~Prime~~Chairman ~~Video~~and ~~at Amazon.com.~~Chief ~~From~~Executive ~~September~~Officer ~~2013~~allows tofor ~~October~~focused ~~2016,~~leadership heof ~~served~~our asorganization ~~Engineering~~which ~~Director~~benefits ofus ~~Seller~~in ~~Services~~our atrelationships ~~Amazon.com.~~with ~~From~~investors, ~~September 2011 to September~~customers, ~~2013~~suppliers, ~~Mr.~~employees ~~Gao~~and ~~served~~other asconstituencies. ~~the~~We ~~Chief~~believe ~~Technology~~that ~~Officer~~consolidating ~~and~~our ~~Senior~~leadership ~~Vice~~under ~~President~~Mr. ofLai ~~Product~~is ~~and~~the ~~Engineering~~appropriate ~~at Xiu.com, an e-commerce company~~leadership instructure ~~China.~~for ~~From~~our ~~November~~Company ~~2008~~and ~~through~~that ~~June~~any ~~2011,~~risks heinherent ~~served~~in asthat ~~Engineering~~structure ~~Director~~are atbalanced ~~Amazon.cn~~by inthe ~~China.~~oversight ~~From~~of ~~October~~the ~~2007~~independent todirectors ~~November~~on ~~2008,~~our MrBoard. ~~Gao served as Senior Manager~~However, ~~Software~~no ~~Development~~single atleadership ~~Amazon.com.~~model ~~From~~is ~~November~~right ~~2006~~for toall ~~October~~companies ~~2007,~~and heat ~~served~~all astimes. aThe ~~Software Development~~Board ~~Manager~~recognizes atthat ~~Amazon.com.~~depending ~~From~~on ~~April~~the circumstances, ~~2001~~other toleadership ~~November 2006~~models, ~~Mr.~~such ~~Gao served~~ as ~~Software~~the ~~Design~~appointment ~~Engineer~~of ~~and~~a ~~Development~~lead ~~Lead. Mr.~~independent ~~Gao~~director, ~~graduated~~might ~~with~~be aappropriate. ~~Masters~~Accordingly, ~~Degree~~the Board inmay ~~Computer~~periodically ~~Science~~review ~~from~~its ~~Baylor~~leadership ~~university in 1999~~structure. ~~Mr.~~In ~~Gao does not hold~~addition, ~~and~~the ~~has~~Board ~~not~~holds ~~previously held,~~executive ~~any~~sessions ~~directorships~~ in ~~any~~which ~~reporting~~only ~~companies~~independent directors are present.

54Our Board is generally responsible for the oversight of corporate risk in its review and deliberations relating to our activities. Our principal source of risk falls into two categories, financial and product commercialization. The audit committee oversees management of financial risks; our Board regularly reviews information regarding our cash position, liquidity and operations, as well as the risks associated with each. The Board regularly reviews plans, results and potential risks related to our business. The Board is also expected to oversee risk management as it relates to our compensation plans, policies and practices for all employees including executives and directors, particularly whether our compensation programs may create incentives for our employees to take excessive or inappropriate risks which could have a material adverse effect on the Company.

Hilary (Hui-Chong) Bui. Ms. Bui has been an independent member of our Board of Directors since February 20, 2023. Since November 2022, Ms. Bui has served as the Senior Finance Manager–North America and US Retail FP&A of Starbucks Corporation. She joined Starbucks Corporation in 2015 and has served various positions including Finance Manager and Business Analysis Manager of different divisions before being promoted to the current position. From 2011 to 2015, Ms. Bui served as Senior Finance Analyst and Finance Analyst in different divisions of General Mills, Inc. From 2007 to 2011, Ms. Bui served as Senior Assurance Associate of PricewaterhouseCoopers, LLP. Ms. Bui graduated with a bachelor’s degree of Accounting from the University of Minnesota in 2007. Ms. Bui does not hold, and has not previously held, any directorships in any reporting companies.46

~~Family~~Committees of ~~Relationships~~the Board of Directors

~~Sam Lai, our Chairman of the~~Audit ~~Board, Chief Executive Officer and Interim Chief Financial Officer, and Maggie Yu, our Senior Vice President and member of our Board of Directors, are married.~~Committee

~~Involvement~~We have inestablished ~~Certain~~an ~~Legal~~audit ~~Proceedings~~committee which consists of three independent directors: Mr. Lenner, Mr. Gao, and Ms. Bui. Ms. Bui is the chair of the audit committee. and qualifies as an “audit committee financial expert.” Our audit committee adopted a written charter, a copy of which is posted on the Corporate Governance section of our website, at https://ir.hourloop.com/corporate-governance/documents-charters.

~~No executive officer, member~~Our ofaudit ~~the~~committee ~~board~~is ofauthorized ~~directors or control person of our Company has been involved in any legal proceeding listed in Item 401(f) of Regulation S-K in the past 10 years.~~to:

~~Board~~● ~~Committees~~approve and ~~Director~~retain ~~Independence~~the independent auditors to conduct the annual audit of our financial statements; ● review the proposed scope and results of the audit; ● review and pre-approve audit and non-audit fees and services; ● review accounting and financial controls with the independent auditors and our financial and accounting staff; ● review and approve transactions between us and our directors, officers and affiliates; ● recognize and prevent prohibited non-audit services; ● establish procedures for complaints received by us regarding accounting matters; and ● oversee internal audit functions, if any.

~~As a Nasdaq-listed company,~~Compensation ~~we are required to comply with Nasdaq’s continued listing standards.~~Committee

~~Controlled~~Because we ~~Company~~are a “controlled company” within the meaning of the Nasdaq corporate governance standards, we are not required to have, and ~~Director~~do ~~Independence~~not currently have, a compensation committee.

~~The “controlled company”~~If ~~exception~~and towhen ~~the~~we ~~Nasdaq~~are ~~rules~~no ~~provides~~longer ~~that~~ a ~~company of which more than 50% of the voting power is held by an individual, group or another company, a~~ “controlled company,” ~~need~~within ~~not~~the ~~comply~~meaning ~~with certain requirements~~ of the Nasdaq corporate governance ~~rules. As stated above~~standards, ~~Sam~~we ~~Lai, the Chairman of the Board, Chief Executive Officer and Interim Chief Financial Officer of the Company, and Maggie Yu,~~will ~~Senior~~be ~~Vice~~required ~~President~~to ofestablish ~~the Company and~~ a ~~member~~compensation ofcommittee. ~~the~~We ~~Board,~~anticipate ~~who~~that ~~are~~such ~~husband~~a ~~and~~compensation ~~wife,~~committee ~~together~~would ~~beneficially~~consist ~~own 33,381,462 shares~~ of ~~the~~three ~~Company’s common stock, representing approximately 94.9% of the voting power of the Company’s outstanding common stock.~~directors Aswho awill ~~result,~~be ~~the Company is a~~ “~~controlled company~~independent” under the ~~Nasdaq~~rules ~~corporate~~of ~~governance~~the ~~standards. As a controlled company~~SEC, we dosubject ~~not have~~ to ~~comply~~the ~~with~~permitted ~~certain~~“phase-in” ~~corporate~~period ~~governance~~pursuant ~~requirements under the~~ to Nasdaq rules~~, including the following:~~.

~~● A majority of the Company’s Board of Directors to consist of “independent directors” as defined by the applicable Nasdaq rules and regulations; ● The~~ This compensation of the Company’s executive officers to be determined, or recommended to the Board of Directors for determination, by independent directors constituting a majority of the independent directors of the Board in a vote in which only independent directors participate or by a Compensation Committee comprised solely of independent directors; and ● That director nominees to be selected, or recommended to the Board of Directors for selection, by independent directors constituting a majority of the independent directors of the Board in a vote in which only independent directors participate or by a nomination committee ~~comprised solely of independent directors.~~would:

55● review and determine the compensation arrangements for management; ● establish and review general compensation policies with the objective to attract and retain superior talent, to reward individual performance and to achieve our financial goals; ● administer our incentive compensation and benefit plans and purchase plans; ● oversee the evaluation of the Board of Directors and management; and ● review the independence of any compensation advisers.

~~The Company intends to avail~~Upon ~~itself~~formation of ~~each of these exemptions. More specifically,~~ a ~~majority of the Company’s board of directors will not consist of independent directors and the Company will not have a~~ compensation committee ~~or a nominating and corporate governance committee. Therefore~~, ~~for~~we ~~as long~~would asexpect ~~the Company remains a “controlled company,” the Company will not have the same protections afforded~~ to ~~stockholders of~~adopt ~~companies that are subject to all of these corporate governance requirements. If at any time the Company ceases to be~~ a ~~“controlled company”~~compensation ~~under~~committee ~~the~~charter ~~Nasdaq~~defining ~~rules,~~ the ~~Company~~committee’s ~~Board~~primary duties ofin ~~Directors~~a ~~will~~manner ~~take~~consistent ~~all action necessary to comply~~ with the ~~Nasdaq corporate governance~~ rules, ~~including establishing certain committees composed entirely~~ of ~~independent~~the ~~directors,~~SEC ~~subject~~and toNasdaq ~~a permitted “phase-in” period~~standards.

~~Notwithstanding the Company’s~~Nominating status as a controlled company, the Company will remain subject to the Nasdaq corporate governance standard that requires the Company to have an audit committee with at least three independent directors as well as composed entirely of independent directors. As a result, the Company was required, at the time of listing on Nasdaq, to have at least one independent director on our audit committee, at least two independent directors within 90 days of listing on Nasdaq, and atCorporate ~~least~~Governance three independent directors within one year of listing on Nasdaq, where at least one of the independent directors qualifies as an audit committee financial expert under SEC rules and as a financially sophisticated audit committee member under the Nasdaq rules.Committee

~~The Company’s Board~~Because ~~of Directors has affirmatively determined that two of its five directors (Sam Lai and Maggie Yu)~~ are ~~non-independent~~a ~~directors~~“controlled ofcompany” ~~the Company~~within ~~and three of its five directors (Michael Lenner, Minghui (Alan) Gao, and Hilary (Hui-Chong) Bui) are independent directors of~~ the ~~Company.~~meaning ~~The Company’s audit committee consists~~ of the ~~three~~Nasdaq ~~independent~~corporate ~~directors:~~governance ~~Mr. Lenner~~standards, ~~Mr.~~we ~~Gao,~~are ~~and~~not ~~Ms.~~required ~~Bui.~~to ~~Ms. Bui~~have, ~~is the chair of the audit committee~~ and ~~qualifies~~do asnot ancurrently ~~audit~~have, ~~committee~~a ~~financial~~nominating ~~expert under SEC rules~~ and ascorporate agovernance ~~financially sophisticated audit~~ committee ~~member under the Nasdaq rules~~.

~~Board~~If and ~~Leadership~~when ~~Structure~~we are no longer a “controlled company” within the meaning of the corporate governance standards of Nasdaq, we will be required to establish a nominating and ~~Board’s~~corporate governance committee. We anticipate that such a nominating and corporate governance ~~Role~~committee would consist of three directors who will be “independent” under the rules of the SEC, subject to the permitted “phase-in” ~~Risk~~period ~~Oversight~~pursuant to Nasdaq rules.

We have not separated the positions of Chairman of the Board and Chief Executive Officer. Mr. Lai has served as our Chairman of the Board of Directors since April 2021 and Chief Executive Officer since June 2013. We believe that combining the positions of Chairman and Chief Executive Officer allows for focused leadership of our organization which benefits us in our relationships with investors, customers, suppliers, employees and other constituencies. We believe that consolidating the leadership of the Company under Mr. Lai is the appropriate leadership structure for our Company and that any risks inherent in that structure are balanced by the oversight of the independent directors on our Board. However, no single leadership model is right for all companies and at all times. The Board recognizes that depending on the circumstances, other leadership models, such as the appointment of a lead independent director, might be appropriate. Accordingly, the Board may periodically review its leadership structure. In addition, the Board holds executive sessions in which only independent directors are present.47

~~Our Board is generally responsible~~The ~~for~~functions ~~the oversight~~ of ~~corporate~~the ~~risk~~nominating ~~in its review~~ and ~~deliberations~~corporate ~~relating~~governance ~~to our activities. Our principal source of risk falls into two categories, financial and product commercialization. The audit~~ committee ~~oversees management of financial risks; our Board regularly reviews information regarding our cash position~~, ~~liquidity~~among ~~and~~other ~~operations~~things, aswould well as the risks associated with each. The Board regularly reviews plans, results and potential risks related to our business. The Board is also expected to oversee risk management as it relates to our compensation plans, policies and practices for all employees including executives and directors, particularly whether our compensation programs may create incentives for our employees to take excessive or inappropriate risks which could have a material adverse effect on the Company.include:

56● identifying individuals qualified to become board members and recommending director; ● nominees and board members for committee membership; ● developing and recommending to our board corporate governance guidelines; ● review and determine the compensation arrangements for directors; and ● overseeing the evaluation of our board of directors and its committees and management.

~~Committees~~Upon formation of a nominating and corporate governance committee, we would expect to adopt a nominating and corporate governance committee charter defining the ~~Board~~committee’s primary duties in a manner consistent with the rules of ~~Directors~~the SEC and Nasdaq standards.

~~Audit Committee~~Director Nominations

WeOur full ~~have~~Board ~~established~~of anDirectors ~~audit committee~~recommends ~~which~~candidates ~~consists~~for ofnomination ~~three~~for ~~independent~~election ~~directors:~~at ~~Mr.~~the ~~Lenner,~~annual ~~Mr.~~meeting ~~Gao,~~of ~~and~~the Msstockholders. ~~Bui.~~We ~~Ms.~~have ~~Bui~~not isformally established ~~the~~any ~~chair~~specific, ofminimum ~~the~~qualifications ~~audit~~that ~~committee. and~~must ~~qualifies~~be asmet anor ~~“audit~~skills ~~committee~~that ~~financial~~are ~~expert~~necessary for directors to possess.” ~~Our~~In ~~audit~~general, in ~~committee~~identifying ~~adopted~~and aevaluating ~~written~~nominees ~~charter~~for director, athe ~~copy~~Board of ~~which~~Directors ~~is posted~~considers oneducational ~~the~~background, ~~Corporate~~diversity ~~Governance~~of ~~section~~professional experience, knowledge of our ~~website~~business, atintegrity, ~~https://ir~~professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders.~~hourloop.com/corporate-governance/documents-charters.~~

~~Our~~Compensation Committee ~~audit~~Interlocks ~~committee~~and isInsider ~~authorized to:~~Participation

●Because we ~~approve~~are ~~and~~a ~~retain~~“controlled ~~the~~company” ~~independent~~within ~~auditors to conduct~~ the ~~annual~~meaning ~~audit~~ of ~~our~~Nasdaq ~~financial~~corporate ~~statements;~~governance ●standards, ~~review~~we ~~the~~are ~~proposed~~not ~~scope~~required to have, and do ~~results~~not ofcurrently ~~the~~have, ~~audit;~~a ●compensation ~~review~~committee. ~~and~~None ~~pre-approve~~of ~~audit~~our ~~and~~executive ~~non-audit~~officers ~~fees~~serves ~~and~~on ~~services;~~the ●board ~~review~~of ~~accounting~~directors ~~and~~or ~~financial~~compensation ~~controls~~committee of ~~with~~a ~~the~~company ~~independent~~that ~~auditors~~has ~~and~~an ~~our~~executive ~~financial~~officer ~~and~~that ~~accounting~~serves ~~staff;~~on ●our ~~review~~board ~~and~~or ~~approve~~compensation ~~transactions~~committee. ~~between~~No usmember ~~and~~of our ~~directors,~~board ~~officers~~is ~~and~~an ~~affiliates;~~executive officer ●of ~~recognize~~a ~~and~~company ~~prevent~~in ~~prohibited~~which ~~non-audit~~one ~~services;~~of ●our ~~establish~~executive ~~procedures~~officers ~~for~~serves ~~complaints~~as ~~received~~a bymember usof ~~regarding~~the ~~accounting~~board ~~matters;~~of ~~and~~directors ●or ~~oversee~~compensation ~~internal~~committee ~~audit~~of that ~~functions, if any~~company.

~~Compensation~~Code of ~~Committee~~Ethics

~~Because~~We have weadopted ~~are~~ a ~~“controlled company”~~Code ~~within~~of ~~the~~Ethics ~~meaning~~and Business Conduct that applies to all of ~~the~~its ~~Nasdaq~~directors, ~~corporate~~officers ~~governance~~(including ~~standards~~our principal executive officer, weprincipal ~~are~~financial ~~not~~officer, ~~required~~principal toaccounting ~~have~~officer or controller, and doany ~~not~~person ~~currently~~performing ~~have,~~similar functions) and employees. aThe ~~compensation~~Code ~~committee~~of Ethics and Business Conduct is available on our website at https://ir.hourloop.com/corporate-governance/documents-charters.

~~If and when we are no longer~~Limitation aon ~~“controlled~~Liability ~~company”~~and ~~within~~Indemnification ~~the meaning~~ of ~~the~~Officers ~~Nasdaq~~and corporate governance standards, we will be required to establish a compensation committee. We anticipate that such a compensation committee would consist of three directors who will be “independent” under the rules of the SEC, subject to the permitted “phase-in” period pursuant to Nasdaq rules.Directors

~~This~~Our certificate ~~compensation~~of ~~committee~~incorporation provides that our officers and directors will be indemnified by us to the fullest extent authorized by Delaware ~~would:~~law, as it now exists or may in the future be amended. In addition, our certificate of incorporation provides that our directors will not be personally liable for monetary damages to us for breaches of their fiduciary duty as directors, except to the extent such exemption from liability or limitation thereof is not permitted by the Delaware General Corporation Law (“DGCL”).

●Our certificate ~~review~~of ~~and~~incorporation ~~determine~~also ~~the~~permits ~~compensation~~us ~~arrangements~~to ~~for~~maintain ~~management;~~insurance ●on ~~establish~~behalf ~~and~~of ~~review~~any ~~general~~officer, ~~compensation~~director ~~policies~~or ~~with~~employee ~~the~~for ~~objective~~any toliability ~~attract~~arising out ~~and~~of ~~retain~~his ~~superior~~or ~~talent~~her actions, toregardless ~~reward~~of ~~individual~~whether ~~performance~~Delaware ~~and~~law towould ~~achieve~~permit ~~our~~such ~~financial~~indemnification. ~~goals;~~We ●have ~~administer~~purchased ~~our~~a ~~incentive~~policy ~~compensation~~of directors’ and ~~benefit~~officers’ ~~plans~~liability ~~and~~insurance ~~purchase~~that ~~plans;~~insures ●our ~~oversee~~officers and directors against the ~~evaluation~~cost of ~~the~~defense, ~~Board~~settlement or payment of a ~~Directors~~judgment ~~and~~in ~~management;~~some circumstances and ●insures ~~review~~us ~~the~~against ~~independence~~our ofobligations ~~any~~to ~~compensation~~indemnify ~~advisers~~our officers and directors.

~~Upon~~These provisions ~~formation~~may ofdiscourage stockholders from bringing a ~~compensation~~lawsuit against our directors for breach of their fiduciary duty. These provisions ~~committee~~also may have the effect of reducing the likelihood of derivative litigation against officers and directors, weeven ~~would~~though ~~expect~~such toan ~~adopt~~action, if asuccessful, ~~compensation~~might ~~committee~~otherwise ~~charter~~benefit ~~defining~~us ~~the~~and ~~committee~~our stockholders. Furthermore, a stockholder’s ~~primary~~investment ~~duties~~may inbe aadversely ~~manner consistent~~affected ~~with~~to the ~~rules~~extent ofwe pay the ~~SEC~~costs of settlement and ~~Nasdaq~~damage ~~standards~~awards against officers and directors pursuant to these indemnification provisions.

57We believe that these provisions and the insurance are necessary to attract and retain talented and experienced officers and directors.

~~Nominating and Corporate Governance Committee~~48

~~Because are a “controlled~~ITEM ~~company”~~11. ~~within~~EXECUTIVE ~~the meaning of the Nasdaq corporate governance standards, we are not required to have, and do not currently have, a nominating and corporate governance committee.~~COMPENSATION

~~If and when we are no longer~~2025 aSummary ~~“controlled~~Compensation company” within the meaning of the corporate governance standards of Nasdaq, we will be required to establish a nominating and corporate governance committee. We anticipate that such a nominating and corporate governance committee would consist of three directors who will be “independent” under the rules of the SEC, subject to the permitted “phase-in” period pursuant to Nasdaq rules.Table

The following ~~functions~~summary ofcompensation table provides information regarding the ~~nominating~~compensation earned during our fiscal years ended December 31, 2025 and ~~corporate~~2024 ~~governance~~to ~~committee~~certain of our executive officers, ~~among~~who ~~other~~we ~~things~~collectively refer to as our “named executive officers”, ~~would~~or ~~include:~~“NEOs”.

● identifying individuals qualified to become board members and recommending director; ● nominees and board members for committee membership; ● developing and recommending to our board corporate governance guidelines; ● review and determine the compensation arrangements for directors; and ● overseeing the evaluation of our board of directors and its committees and management.

Name and Position	Year		Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non- Equity Incentive Plan Compensation ($)		Non- qualified Deferred Compensation Earnings ($)		All Other Compensation ($)			Total ($)
Sam Lai		2025		500,000		600,000		-		-		-		-		18,218	(1)	$	1,118,218
Chief Executive Officer and Interim Chief Financial Officer		2024		500,000		600,000		-		-		-		-		15,546	(2)		1,115,546

Maggie Yu		2025		450,000		550,000		-		-		-		-		19,774	(3)		1,019,774
Senior Vice President		2024		450,000		550,000		-		-		-		-		16,991	(4)		1,016,991

Upon formation of a nominating and corporate governance committee, we would expect to adopt a nominating and corporate governance committee ch

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