0001493152-23-016503 | 10-Q | XBRL Viewer

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Cover - shares	3 Months Ended
Cover - shares	Mar. 31, 2023	May 12, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2023
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	001-41204
Entity Registrant Name	Hour Loop, Inc.
Entity Central Index Key	0001874875
Entity Tax Identification Number	47-2869399
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	8201 164th Ave. NE
Entity Address, City or Town	Redmond
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	98052-7615
City Area Code	(206)
Local Phone Number	385-0488
Title of 12(b) Security	Common Stock
Trading Symbol	HOUR
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		35,060,264

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 1,274,791	$ 4,562,589
Accounts receivable, net	343,288	352,379
Inventory, net	13,570,879	18,801,529
Prepaid expenses and other current assets	833,848	741,243
Total current assets	16,022,806	24,457,740
Property and equipment, net	245,148	274,195
Deferred tax assets	974,276	549,320
Right-of-use lease assets	394,301	450,721
TOTAL ASSETS	17,636,531	25,731,976
Current liabilities
Short-term loan	657,895	652,316
Accounts payable	6,024,606	11,883,253
Accrued expenses and other current liabilities	724,123	1,583,930
Operating lease liabilities-current	340,677	385,216
Total current liabilities	7,747,301	14,504,715
Non-current liabilities
Operating lease liabilities-non-current	46,951	64,945
Due to related parties	$ 4,226,996	$ 4,329,460
Other Liability, Noncurrent, Related and Nonrelated Party Status [Extensible Enumeration]	us-gaap:RelatedPartyMember	us-gaap:RelatedPartyMember
Total non-current liabilities	$ 4,273,947	$ 4,394,405
Total liabilities	12,021,248	18,899,120
Commitments and contingencies
Stockholders’ equity
Preferred stock: $0.0001 par value, 10,000,000 shares authorized, none issued and outstanding as of March 31, 2023 and December 31, 2022
Common stock: $0.0001 par value, 300,000,000 shares authorized, 35,052,833 and 35,047,828 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively	3,506	3,506
Additional paid-in capital	5,691,652	5,675,320
Retained earnings	(58,172)	1,177,072
Accumulated other comprehensive loss	(21,703)	(23,042)
Total stockholders’ equity	5,615,283	6,832,856
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 17,636,531	$ 25,731,976

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	35,052,833	35,047,828
Common stock, shares outstanding	35,052,833	35,047,828

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement [Abstract]
Revenues, net	$ 21,067,609	$ 12,353,983
Cost of revenues	(11,451,907)	(5,897,269)
Gross profit	9,615,702	6,456,714
Operating expenses
Selling and marketing	9,506,971	5,526,102
General and administrative	1,713,186	1,675,964
Total operating expenses	11,220,157	7,202,066
Loss from operations	(1,604,455)	(745,352)
Other (expenses) income
Other expense	(12,279)	(5,450)
Interest expense	(61,096)	(83,558)
Other income	17,630	6,939
Total other expenses, net	(55,745)	(82,069)
Loss before income taxes	(1,660,200)	(827,421)
Income tax benefit	424,956	182,533
Net loss	(1,235,244)	(644,888)
Other comprehensive (income) loss
Foreign currency translation adjustments	1,339	(2,416)
Total comprehensive loss	$ (1,233,905)	$ (647,304)
Basic and diluted loss per common share	$ (0.04)	$ (0.02)
Weighted-average number of common shares outstanding	35,052,666	35,032,753

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Total
Beginning balance, value at Dec. 31, 2021	$ 3,330	$ 4,291	$ 2,654,695	$ (7,871)	$ 2,654,445
Beginning balance, shares at Dec. 31, 2021	33,300,000
Issuance of shares	$ 172	5,580,020			5,580,192
Issuance of shares, shares	1,725,000
Stock-based compensation	$ 1	31,011			31,012
Stock-based compensation, shares	7,753
Currency translation adjustments				(2,416)	(2,416)
Net loss			(644,888)		(644,888)
Ending balance, value at Mar. 31, 2022	$ 3,504	5,615,321	2,009,807	(10,287)	7,618,345
Ending balance, shares at Mar. 31, 2022	35,032,753
Beginning balance, value at Dec. 31, 2022	$ 3,506	5,675,320	1,177,072	(23,042)	6,832,856
Beginning balance, shares at Dec. 31, 2022	35,047,828
Stock-based compensation		16,332			16,332
Stock-based compensation, shares	5,005
Currency translation adjustments				1,339	1,339
Net loss			(1,235,244)		(1,235,244)
Ending balance, value at Mar. 31, 2023	$ 3,506	$ 5,691,652	$ (58,172)	$ (21,703)	$ 5,615,283
Ending balance, shares at Mar. 31, 2023	35,052,833

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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- Definition

Equity impact of the value of new stock issued during the period. Includes shares issued in an initial public offering or a secondary public offering.

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- Definition

Amount of equity (deficit) attributable to parent. Excludes temporary equity and equity attributable to noncontrolling interest.

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+ Details

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Cash flows from operating activities
Net loss	$ (1,235,244)	$ (644,888)
Adjustments to reconcile of net loss to net cash used in operating activities:
Depreciation expenses	34,662	8,396
Amortization of right-of-use lease assets	95,635	57,186
Deferred tax assets	(424,956)	(182,533)
Inventory allowance reversal	(200,118)	(21,404)
Stock-based compensation	16,332	31,012
Interest expense -due to related party	$ 56,578	$ 83,558
Interest Expense, Related and Nonrelated Party Status [Extensible Enumeration]	us-gaap:RelatedPartyMember	us-gaap:RelatedPartyMember
Changes in operating assets and liabilities:
Accounts receivable	$ 9,091	$ 3,456
Inventory	5,430,768	(4,703,465)
Prepaid expenses and other current assets	(92,605)	(375,935)
Accounts payable	(5,858,647)	(1,930,917)
Accrued expenses and other current liabilities	(859,807)	(218,344)
Operating lease liabilities	(101,723)	(30,593)
Net cash used in operating activities	(3,130,034)	(7,924,471)
Cash flows from investing activities:
Purchases of property and equipment	(3,379)	(125,468)	$ (339,518)
Net cash used in investing activities	(3,379)	(125,468)
Cash flows from financing activities:
Repayments from related parties	(159,042)	(1,024,188)
Prepaid expenses and other current assets		576,168
Proceeds from issuance of shares		5,580,192
Net cash (used in) provided by financing activities	(159,042)	5,132,172
Effect of changes in foreign currency exchange rates	4,657	(10,710)
Net decrease in cash and cash equivalents	(3,287,798)	(2,928,477)
Cash and cash equivalents at beginning of the period	4,562,589	10,592,572	10,592,572
Cash and cash equivalents at end of the period	1,274,791	7,664,095	$ 4,562,589
Supplemental disclosures of cash flow information:
Cash paid for interest	161,798
Cash paid for income tax
Non-cash investing and financing activities:
Right-of-use of assets and operating lease liabilities recognized	$ 28,652	$ 503,577

Nature of Operations and Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Nature of Operations and Summary of Significant Accounting Policies

NOTE 1 - Nature of Operations and Summary of Significant Accounting Policies

Hour Loop, Inc. (“Hour Loop” or the “Company”) is a technology-enabled consumer products company that uses machine learning and data analytics to design, develop, market and sell products. Hour Loop predominantly operates through online retail channels such as Amazon, Walmart, and Hourloop.com. The Company, as an Internet marketplace seller, sells products in multiple categories, including home/garden décor, toys, kitchenware, apparels, and electronics. The Company has only one segment, which is online retail (e-commerce).

The Company was incorporated on January 13, 2015 under the laws of the state of Washington. On April 7, 2021, the Company was converted from a Washington corporation to a Delaware corporation.

In 2019, Hour Loop formed a wholly owned subsidiary, Flywheel Consulting Ltd. (“Flywheel”) located in Taiwan, to provide business operating consulting services exclusively to Hour Loop.

Reorganization - On June 30, 2021, the Company completed a corporate reorganization to convert its status from a S corporation (10,000,000 common shares issued and outstanding) to a C corporation (10,000,000 common shares issued and outstanding) with an effective date of July 27, 2021. The reorganization did not change the ownership of the Company and each of the two stockholders (Sam Lai and Maggie Yu) continued to own 50% of the Company’s outstanding shares following the reorganization. The discussion and presentation of the unaudited consolidated financial statements herein assumes the reorganization had become effective as of the beginning of the first period presented in the accompanying unaudited condensed consolidated financial statements. Consistent with Section 1362 of the Internal Revenue Code of 1986, as amended (the “Code”), the retained earnings as of July 27, 2021 were distributed to the S corporation stockholders. The stockholders and the Company have entered into an agreement for this amount to be loaned to the Company. The amount of this distribution is $4,170,418 and the annual interest rate is 2%. The loan was due on December 31, 2022. On December 28, 2022, the Company, Mr. Lai and Ms. Yu agreed to extend the term of the loan, with the new maturity date of December 31, 2024. As amended, the annual interest rate on the loan is 5.5%.

On September 27, 2021, the Company completed a stock split such that each outstanding stock was sub-divided and converted into 4.44 shares of common stock. As result of the stock split, the total number of shares outstanding became 44,400,000.

On December 3, 2021, the Company completed a reverse stock split such that each outstanding stock was sub-divided and converted into 0.75 shares of common stock. As a result of the reverse stock split, the total number of shares outstanding became 33,300,000. These shares were retrospectively adjusted for prior periods.

Basis of Presentation - The unaudited condensed consolidated financial statements and accompanying notes of the Company have been prepared in accordance with the accounting principles generally accepted in the United States of America (“US GAAP”).

Principles of Consolidation - The unaudited condensed consolidated financial statements include the accounts of Hour Loop and Flywheel. All material inter-company accounts and transactions were eliminated in consolidation.

Unaudited Interim Financial Information - We have prepared the accompanying condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. These consolidated financial statements are unaudited and, in our opinion, include all adjustments, consisting of normal recurring adjustments and accruals necessary for a fair presentation of our consolidated cash flows, operating results, and balance sheets for the periods presented. Operating results for the periods presented are not necessarily indicative of the results that may be expected for 2023 due to seasonal and other factors.

Foreign Currency and Currency Translation - The assets and liabilities of Flywheel, having a functional currency other than the U.S. dollar, are translated into U.S. dollars at exchange rates in effect at period-end, with resulting translation gains or losses included within other comprehensive income or loss. Revenues and expenses are translated into U.S. dollars at average monthly rates of exchange in effect during each period. All of the Company’s foreign operations use their local currency as their functional currency. Currency gains or losses resulting from transactions executed in currencies other than the functional currency are included in other income (expense) in the condensed consolidated statement of operations and other comprehensive income.

The Company is exposed to foreign currency exchange risk through its foreign subsidiary in Taiwan, which reports its earnings in Taiwan dollars. The Company translates the foreign assets and liabilities at exchange rates in effect at the consolidated balance sheet date and translates the revenues and expenses using average rates during the year. The resulting foreign currency translation adjustments are recorded as a separate component of accumulated other comprehensive income or loss in the accompanying consolidated balance sheet and the consolidated statements of operations. The Company does not hedge foreign currency translation risk in the net assets and income reported from these sources.

The relevant exchange rates are listed below:

	March 31,		December 31,		March 31,
	2023		2022		2022

Period NTD: USD exchange rate	$	30.400	$	30.660	$	28.575
Period Average NTD: USD exchange rate	$	30.507	$	30.618	$	28.388

HOUR LOOP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Going Concern Consideration

As of March 31, 2023, the Company had negative cash flow from operating activities of $3,130,034, and net loss of $1,235,244. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Therefore, the Company may be unable to realize its assets and discharge its liabilities in the normal course of business.

Most of the borrowings of the Company as of March 31, 2023 were from the related parties, which will not be repayable within the next 12 months and are subject to renewal. Management is confident that these borrowings can be renewed upon expiration.

In order to strengthen the Company’s liquidity in the foreseeable future, the Company has taken the following measures:

	i.	Taking various cost control measures to tighten the costs of operations; and
	ii.	Implementing various strategies to enhance sales and profitability.

Management represents that there is sufficient working capital to sustain operations longer than twelve months, and the majority shareholders are committed to provide the additional funding if needed.

Use of Estimates - The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Significant estimates, including but not limited to, estimates associated with the collectability of allowance for accounts receivable, accounts receivable, useful life of property and equipment, impairment long lived assets, valuation allowance for deferred tax assets and inventory valuation.

Reclassification - Certain amounts in the consolidated financial statements for the prior financials have been reclassified to conform to the current interim review presentation. These reclassifications had no impact on consolidated net earnings, consolidated financial position, or consolidated cash flows.

Cash and Cash Equivalents - The Company considers all highly liquid financial instruments purchased with original maturities of three months or less to be cash and cash equivalents. The carrying amount of cash and cash equivalents approximates fair value. Our cash and cash equivalents are held in the bank and covered by the Federal Deposit Insurance Corporation (“FDIC”), which are subject to applicable limits. Deposits are insured up to $250,000 per depositor, per FDIC-insured bank, per ownership category.

Accounts Receivable and Allowance for Doubtful Accounts - Accounts receivable are stated at historical cost less allowance for doubtful accounts. On a periodic basis, management evaluates its accounts receivable and determines whether to provide an allowance or if any accounts should be written off based on a past history of write-offs, collections and current credit conditions. A receivable is considered past due if the Company has not received payments based on agreed-upon terms. The Company generally does not require any security or collateral to support its receivables. The collection is primarily through Amazon and the collection period is usually less than 7 days. The Company performs on-going evaluations of its customers and maintains an allowance for bad debt and doubtful receivables as the Company deems necessary or appropriate. As of March 31, 2023 and December 31, 2022, the Company did not deem it necessary to have an allowance for bad debt or doubtful accounts.

HOUR LOOP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Inventory and Cost of Goods Sold - The Company’s 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. The Company’s costs include the amounts it pays 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 the receiving dock of the Company. Management continually evaluates its estimates and judgments including those related to merchandise inventory.

The “Cost of revenues” line item in the unaudited condensed consolidated statements of operations is principally inventory sold to customers during the reporting period. The Company had inventory allowance balances of $642,145 and $842,263 as of March 31, 2023 and December 31, 2022, respectively. Full inventory allowance is recorded for the inventory SKU not sold for more than one year.

Rules for inventory allowance:

Inventories, consisting of products available for sale, are primarily accounted for using the first-in, first-out method, and are valued at the lower of cost and net realizable value. This valuation requires us to make judgments based on currently available information about the likely method of disposition, such as through sales to individual customers, returns to product vendors, or liquidations, and expected recoverable values of each disposition category.

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. The Company elected to expense any individual property and equipment items under $2,500.

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

Leases - 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.

For a lessee, a lease is recognized as a right-of-use asset with a corresponding 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 right-of-use asset is calculated as the lease liability, increased by any initial direct costs, and prepaid lease payments, reduced by any lease incentives received before lease commencement. The right-of-use asset itself is amortized on a straight-line basis unless another systematic method better reflects how the underlying asset will be used by and benefits the lessee over the lease term.

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842), and has since issued amendments thereto, related to the accounting for leases (collectively referred to as “ASC 842”). ASC 842 establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. As of January 1, 2019, the Company adopted ASC 842, which allows the Company to apply the transition provision at the Company’s adoption date instead of at the earliest comparative period presented in the financial statements. Therefore, the Company recognized and measured leases existing at January 1, 2019 but without retrospective application. In addition, the Company elected the optional practical expedient permitted under the transition guidance which allows the Company to carry forward the historical accounting treatment for existing leases upon adoption. No impact was recorded to the beginning retained earnings for ASC 842. The Company’s accounting policy is to recognize lease payments as lease expense for short-term leases of less than 12 months.

HOUR LOOP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Fair 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 approximate fair value because of the immediate or short-term maturity of these financial instruments.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

	i.	Level 1 — Valuations based on 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, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.
	iii.	Level 3 — Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

Revenue Recognition - The Company accounts for revenue in accordance with FASB Accounting Standard Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”). The Company adopted ASC Topic 606 as of January 1, 2019. The standard did not affect the Company’s consolidated financial position, or cash flows. There were no changes to the timing of revenue recognition as a result of the adoption.

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

	●	Identify the contract with a customer.
	●	Identify the performance obligations in the contract.
	●	Determine the transaction price.
	●	Allocate the transaction price to the performance obligations in the contract.
	●	Recognize revenue when or as performance obligations are satisfied.

The Company derives its revenue from the sale of consumer products. The Company sells its products directly to consumers through online retail channels. The Company considers customer order confirmations to be a contract with the customer. Customer confirmations are executed at the time an order is placed through third-party online channels. For all of the Company’s sales and distribution channels, revenue is recognized when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied), which typically occurs at shipment date. As a result, the Company has a present and unconditional right to payment and record the amount due from the customer in accounts receivable.

The Company evaluated principal versus agent considerations to 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 as sales and distribution expenses and are not recorded as a reduction of revenue because the Company as principal owns and controls all the goods before they are transferred to the customer. The Company can, at any time, direct Amazon, similarly, other third-party logistics providers (“Logistics Providers”), to 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, the Company is 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.

HOUR LOOP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The customer can return the products within 30 days after the products are delivered and estimated sales returns are calculated based on the expected returns. The rates of sales returns were 7.25% and 7.26% of gross sales for the periods ended March 31, 2023 and 2022, respectively.

The Company also offers price discounts. From time to time, the Company offers price discounts on certain selected items to stimulate the sales of those items. Revenue is measured as the amount of consideration for which the Company expects to be entitled in exchange for transferring goods. Consistent with this policy, the Company reduces the amount of these discounts from the gross revenue to calculate the net revenue recorded on the statement of operations.

A performance obligation is a promise in a contract to transfer a distinct good to the customer and is the unit of account in ASC Topic 606. A contract’s transaction price is recognized as revenue when the performance obligation is satisfied. Each of the Company’s contracts has a single distinct performance obligation, which is the promise to transfer individual goods. For consumer product sales, the Company has elected to treat shipping and handling as fulfillment activities, and not a separate performance obligation. The Company had shipping and handling costs of $5,037,251 and $2,653,614 for the periods ended March 31, 2023 and 2022, respectively, which were recorded in selling, advertising and marketing expenses. Accordingly, the Company recognizes revenue for its single performance obligation related to product sales at the time control of the merchandise passes to the customer, which is generally at the time of shipment. The Company bills customers for charges for shipping and handling on certain sales and such charges are recorded as part of net revenue.

For each contract, the Company considers the promise to transfer products to be the only identified performance obligation. In determining the transaction price, the Company evaluates whether the price is subject to refund or adjustment to determine the net consideration to which the Company expects to be entitled. The Company’s revenues for the periods ended March 31, 2023 and 2022 are recognized at a point in time.

Income Taxes - Prior to 2021, the Company, with the stockholders’ consent, elected to be taxed as an “S corporation” under the provisions of the Code and comparable state income tax law. As an S corporation, the Company was generally not subject to corporate income taxes, and the Company’s net income or loss is reported on the individual tax return of the stockholders of the Company. On July 27, 2021, the Company’s tax status changed to a C corporation. Per ASC 740-10-45-19, when deferred tax accounts are recognized or derecognized as required by paragraphs 740-10-25-32 and 740-10-40-6 due to a change in tax status, the effect of recognizing or derecognizing the deferred tax liability of asset shall be included in income from continuing operations.

The Company also complied with state tax codes and regulations, including with respect to California franchise taxes. Management has evaluated its 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.

Deferred 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.

Presentation of Sales Taxes - Governmental authorities impose sales tax on all of the Company’s sales to nonexempt customers. The Company collects sales tax from customers and remits the entire amount to the governmental authorities. The Company’s accounting policy is to exclude the tax collected and remitted from revenues and cost of revenues.

The Company makes an assessment of sales tax payable including any related interest and penalties and accrues these estimates on its financial statements. 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 March 31, 2023 and December 31, 2022, it owed $288,477 and $288,466, respectively, in sales taxes along with penalties and interest resulting from late filings.

HOUR LOOP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Concentrations of Risks - Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and accounts receivable. The Company maintains cash 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.

The Company’s accounts receivable are derived from sales contracts with a large number of customers. The Company maintains reserves for potential credit losses on customer accounts when deemed necessary. Significant customers are those which represent more than 10% of the Company’s total net revenue or gross accounts receivable balance at the balance sheet date. During the three months ended March 31, 2023 and 2022, the Company had no customer that accounted for 10% or more of total net revenues. In addition, as of March 31, 2023 and 2022, the Company had no customer that accounted for 10% or more of gross accounts receivable. As of March 31, 2023 and December 31, 2022, 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 15 to 20 days.

The Company’s business is reliant on one key vendor which currently provides the Company with its sales platform, logistics and fulfillment operations, including certain warehousing for the Company’s net goods, and invoicing and collection of its revenue from the Company’s end customers. During the periods ended March 31, 2023 and 2022, approximately 100% of the Company’s revenue was through or with the Amazon sales platform.

Selling and Marketing – Selling, advertising and marketing costs are expensed as incurred in accordance with ASC 720-35. Among these, advertising and promotion expenses were $784,266 and $401,499 for the periods ended March 31, 2023 and 2022, respectively.

General and Administrative - General and administrative expenses are expensed as incurred in accordance with ASC 720-35.

Commitments and Contingencies - Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred.

Related Parties - The Company accounts for related party transactions in accordance with FASB ASC Topic 850 (Related Party Disclosures). A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be 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 one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.

Earnings per Share - The Company computes basic earnings per common share using the weighted-average number of shares of common stock outstanding during the period. For the period in which the Company reports net losses, diluted net loss per share attributable to stockholders is the same as basic net loss per share attributable to stockholders, because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. There were no dilutive securities or other items that would affect earnings per share for the periods ended March 31, 2023 and 2022. Therefore, the diluted earnings per share is the same as basic earnings per share.

HOUR LOOP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Share issuances for stock compensation - Compensation cost for all equity-classified stock awards expected to vest is measured at fair value on the date of grant and recognized over the service period.

Long lived assets- In accordance with ASC 360-10-35-17, if the carrying amount of an asset or asset group (in use or under development) is evaluated and found not to be fully recoverable (the carrying amount exceeds the estimated gross, undiscounted cash flows from use and disposition), then an impairment loss must be recognized. The impairment loss is measured as the excess of the carrying amount over the asset’s (or asset group’s) fair value. The Company did not record any impairment charges for the periods ended March 31, 2023 and 2022.

Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2023

Accounting Changes and Error Corrections [Abstract]

Recent Accounting Pronouncements

NOTE 2 - Recent Accounting Pronouncements

The FASB issues Accounting Standards Updates (each, an “ASU”) to amend the authoritative literature in the ASC. There have been several ASUs to date that amend the original text of the ASCs. The Company believes those ASUs issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to the Company or (iv) are not expected to have a significant impact on the Company.

- Definition

The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147482615/740-10-65-8

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 65
-Paragraph 8
-Subparagraph (e)(3)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482615/740-10-65-8

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Topic 825
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-Section 65
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-Publisher FASB
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Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Topic 825
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-Name Accounting Standards Codification
-Section 65
-Paragraph 6
-Subparagraph (e)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482833/825-10-65-6

Reference 22: http://www.xbrl.org/2003/role/disclosureRef
-Topic 825
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-Name Accounting Standards Codification
-Section 65
-Paragraph 6
-Subparagraph (e)(3)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482833/825-10-65-6

Reference 23: http://www.xbrl.org/2003/role/disclosureRef
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-SubTopic 10
-Name Accounting Standards Codification
-Section 65
-Paragraph 4
-Subparagraph (e)(1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479654/326-10-65-4

Reference 24: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Section 65
-Paragraph 4
-Subparagraph (e)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479654/326-10-65-4

Reference 25: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Section 65
-Paragraph 2
-Subparagraph (f)(1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483194/926-20-65-2

Reference 26: http://www.xbrl.org/2003/role/disclosureRef
-Topic 926
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-Section 65
-Paragraph 2
-Subparagraph (f)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483194/926-20-65-2

Reference 27: http://www.xbrl.org/2003/role/disclosureRef
-Topic 926
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-Name Accounting Standards Codification
-Section 65
-Paragraph 2
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483194/926-20-65-2

Reference 28: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480530/250-10-S99-6

Reference 29: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (c)(1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-1

Reference 30: http://www.xbrl.org/2003/role/disclosureRef
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Reference 31: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
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-Publisher FASB
-URI https://asc.fasb.org//250/tableOfContent

Reference 32: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 40
-Name Accounting Standards Codification
-Section 65
-Paragraph 1
-Subparagraph (e)(1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480175/815-40-65-1

Reference 33: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Section 65
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Reference 34: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481925/310-20-65-2

+ Details

Cash and Cash Equivalents

3 Months Ended

Mar. 31, 2023

Cash and Cash Equivalents [Abstract]

Cash and Cash Equivalents

NOTE 3 - Cash and Cash Equivalents

Cash and cash equivalents was comprised of the following as of March 31, 2023 and December 31, 2022:

Schedule of Cash and Cash Equivalents

	March 31,		December 31,
	2023		2022

Checking account	$	136,657	$	939,323
Savings account and cash		1,138,134		3,623,266
Total	$	1,274,791	$	4,562,589

Inventory

3 Months Ended

Mar. 31, 2023

Inventory Disclosure [Abstract]

Inventory

NOTE 4 - Inventory

Inventory was comprised of the following as of March 31, 2023 and December 31, 2022:

Schedule of Inventory

	2023			2022
	March 31,			December 31,
	2023			2022

Inventory	$	12,446,263		$	14,911,735
Inventory-in-transit		1,766,761			4,732,057
Allowance		(642,145	)		(842,263	)
Total	$	13,570,879		$	18,801,529

For the fiscal periods ended March 31, 2023 and December 31, 2022, the Company recorded inventory provision as follows:

Schedule of Inventory Provision

	March 31,			December 31,
	2023			2022
Allowance of inventory
Beginning balance	$	842,263		$	184,720
Allowance		-			665,356
Inventory allowance reversal		(200,118	)		(7,813	)
Ending balance	$	642,145		$	842,263

The allowance of inventory is recorded under cost of goods sold in the income statement.

HOUR LOOP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Property and Equipment

3 Months Ended

Mar. 31, 2023

Property, Plant and Equipment [Abstract]

Property and Equipment

NOTE 5 - Property and Equipment

Property and equipment was comprised of the following as of March 31, 2023 and December 31, 2022:

Schedule of Property and Equipment

	2023			2022
	March 31,			December 31,
	2023			2022

Property and equipment	$	359,990		$	353,574
Accumulated depreciation and amortization		(114,842	)		(79,379	)
Total property and equipment, net	$	245,148		$	274,195

For the periods ended March 31, 2023 and December 31, 2022, the Company purchased $3,379 and $339,518, for fixtures, and equipment, respectively.

For the periods ended March 31, 2023 and December 31, 2022, the Company had $34,662 and $79,084, for depreciation, respectively.

For the periods ended March 31, 2023 and December 31, 2022, the Company had no disposal or pledge, respectively.

Prepaid Expenses and Other Current Assets

3 Months Ended

Mar. 31, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepaid Expenses and Other Current Assets

NOTE 6 - Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets was comprised of the following as of March 31, 2023 and December 31, 2022:

	2023		2022
	March 31,		December 31,
	2023		2022

Advance to suppliers	$	117,355	$	182,105
Prepaid expenses-insurance		124,841		-
Prepaid expenses-other		82,242		55,731
Lease refundable deposit		77,931		80,235
Tax receivable		419,349		413,895
Other current assets		12,130		9,277
Total	$	833,848	$	741,243

As of March 31, 2023 and December 31, 2022, there was a tax receivable of $419,349 and $413,895 due to prepaid income taxes, respectively.

Accrued Expenses and Other Current Liabilities

3 Months Ended

Mar. 31, 2023

Payables and Accruals [Abstract]

Accrued Expenses and Other Current Liabilities

NOTE 7 - Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities were comprised of the following as of March 31, 2023 and December 31, 2022:

	March 31,		December 31,
	2023		2022

Sales tax payable	$	288,477	$	288,466
Accrued payroll		254,591		295,673
Accrued bonus		-		468,209
Accrued expenses		127,068		182,294
Other payables		53,987		349,288
Total	$	724,123	$	1,583,930

HOUR LOOP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company made an assessment of sales tax payable including any related interest and penalties and accrued those estimates on the financial statements. Among which, $78,947 and $78,947 are related interest and penalties as of March 31, 2023 and December 31, 2022, respectively.

A bonus expense is accrued on annual basis, when the Company’s financial or operational performance meets the required performance level. The Company has $468,209 accrued for bonus as of December 31, 2022.

Short-Term Loan

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Short-Term Loan

NOTE 8 - Short-Term Loan

Line of Credit

On June 19, 2019, the Company signed a line of credit agreement in the amount of $785,000 with Bank of America. The line of credit matures on June 18, 2024 and bears interest at a rate of 8.11% per annum.

As of March 31, 2023 and December 31, 2022, the outstanding balance under the Bank of America line of credit was $-0- and $-0-, respectively. Also, the Company had accrued interest expense of $27,996 as of March 31, 2023 that is due on June 18, 2024. Accrued interest expense has been recorded in the accrued expenses on the balance sheet.

On August 18, 2022, Flywheel signed a line of credit agreement in the amount of $6,940,063 with Taishin International Bank. The line of credit matures on August 30, 2023 and bears interest at a rate of 3.2% per annum.

As of March 31, 2023, the outstanding balance under the Taishin International Bank line of credit was $657,895. Also, Flywheel has accrued interest expense of $1,788 as of March 31, 2023 that has not been paid. Accrued interest expense has been recorded in the accrued expenses on the balance sheet.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

Related Party Balances and Transactions

3 Months Ended

Mar. 31, 2023

Related Party Balances and Transactions

NOTE 9 - Related Party Balances and Transactions

From time to time, the Company receives loans and advances from its stockholders to fund its operations. Stockholder loans and advances are non-interest bearing and payable on demand. As of March 31, 2023 and December 31, 2022, the Company had $4,226,996 and $4,329,460 due to related parties (Sam Lai, the Company’s Chairman of the Board, Chief Executive Officer and Interim Chief Financial Officer and a significant stockholder of the Company; and Maggie Yu, the Company’s Senior Vice President, a member of the Company’s Board of Directors and a significant stockholder of the Company), respectively.

On December 30, 2020, the Company and its then-sole stockholders (Sam Lai and Maggie Yu) entered into a loan agreement of $1,041,353 and later modified on September 16, 2021, converted it into a interest-bearing (2%) loan with a repayment date of December 31, 2021. On January 18, 2022, the Company repaid the loan principal in full.

Additionally, the Company had $4,170,418 in loan from related parties. The loan is memorialized in a Loan Agreement dated October 15, 2021. The annual interest rate is 2% and the repayment date is December 31, 2022.

On December 28, 2022, the Company, Mr. Lai and Ms. Yu agreed to extend the term of the loan for another 2 years, with a revised maturity date of December 31, 2024. The annual interest rate is 5.5%. The Company had accrued interest of $56,578 as of March 31, 2023.

For the periods ended on March 31, 2023 and 2022, the Company had repayments from related parties of $159,042 and $1,024,188, respectively.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-6

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(g)(3))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(e))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//850/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-6

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

+ Details

Leases

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Leases

NOTE 10 - Leases

The Company had four operating leases (Flywheel’s office leases in Taiwan) as of March 31, 2023. The leased assets in Flywheel are presented as right-of-use assets.

HOUR LOOP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The table below reconciles the fixed component of the undiscounted cash flows for each of the first five years and the total remaining years to the operating lease liabilities recorded in the statements of financial position as of March 31, 2023:

Schedule of Operating Leases Cost

	Flywheel			Flywheel			Flywheel			Flywheel
	January 2022 to			June 2022			August 2022			February 2023
Initial lease term	December 2023			to May 2024			to July 2024			to March 2025

Initial recognition of right-of-use assets	$	488,262		$	105,632		$	147,547		$	28,652
Weighted-average remaining lease term at
March 31, 2023		0.8			1.17			1.33			1.92
Weighted-average discount rate at
March 31, 2023		8.11	%		8.11	%		2.50	%		3.20	%

Operating lease liabilities-current as of March 31, 2023 and December 31, 2022 were $340,677 and $385,216, respectively. Operating lease liabilities-non-current as of March 31, 2023 and December 31, 2022 were $46,951 and $64,945, respectively. The right-of-use assets balance as of March 31, 2023 and December 31, 2022, were $394,301 and $450,721, respectively.

As of March 31, 2023 and 2022, the amortization of the right-of-use asset was $95,635 and $57,186, respectively, and was recorded in the general and administrative expenses. Additionally, the Company made lease payments of $101,723 and $30,593 as of March 31, 2023 and 2022, respectively, which were included in the operating cash flows statement.

The future minimum lease payment schedule for all operating leases as of March 31, 2023, is as disclosed below.

Schedule of Operating Lease Liabilities

March 31,	Amount
For the Year Ending
March 31,	Amount

2023	$	313,653
2024		84,057
2025		2,470
2026		-
2027 and thereafter		-
Total minimum lease payments		400,180
Less: effect of discounting		(12,552	)
Present value of the future minimum lease payment		387,628
Less: operating lease liabilities-current		(340,677	)
Total operating lease liabilities-non-current	$	46,951

For the periods ended March 31, 2023 and 2022, the Company had $95,635 and $57,186, for lease expenses, respectively.

Income Tax

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Income Tax

NOTE 11 - Income Tax

The components of income taxes provision (benefit) are as follows:

	March 31,			December 31,
	2023			2022
Federal rate		21.98	%		21.00	%
Blended state tax rate		3.85	%		3.83	%
Effective tax rate		25.83	%		24.83	%

HOUR LOOP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	Current		Deferred			Total
	Income Tax		Income Tax			Income Tax
Tax Expense Summary	Expense		Benefit			Benefit
Federal	$	-	$	(361,568	)	$	(361,568	)
State		-		(63,388	)		(63,388	)
Total tax expense (benefit)	$	-	$	(424,956	)	$	(424,956	)

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets at March 31, 2023:


	Deferred Tax		Deferred Tax
	Assets		Assets
Deferred Tax Assets summary	March 31, 2023		December 31, 2022
Federal	$	826,162	$	464,594
State		148,115		84,726
Total	$	974,276	$	549,320


	Deferred Tax			Deferred Tax
	Assets			Assets
Deferred Tax Assets summary	March 31, 2023			December 31, 2022
Right of use lease assets	$	(1,723	)	$	(139	)
Inventories allowance		165,854			209,131
Net loss carry forward		810,145			340,328
Total	$	974,276		$	549,320

The Company files income tax return in the U.S. federal jurisdiction and Washington state jurisdictions. Based on management’s evaluation, there is no provision necessary for material uncertain tax position for the Company at March 31, 2023 and December 31, 2022.

As of March 31, 2023 and December 31, 2022, the Company reported net operating losses of $1,660,200 and $827,421, respectively. The net operating loss carryforward is not subject to any expiration period under federal regulations, while at the state level, the expiration period usually ranges from 10 to 20 years, or there may be no expiration period at all.

The Company expects to generate sufficient taxable income in future periods against which the deferred tax assets can be utilized. Accordingly, a valuation allowance may not be needed.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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-Name Accounting Standards Codification
-Section S99
-Paragraph 1
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Paragraph 14
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

Revenue

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue

NOTE 12 - Revenue

Revenue was comprised of the following for the periods ended March 31, 2023 and 2022:

Schedule of Revenue

	Three Months Ended			Three Months Ended
	March 31, 2023			March 31, 2022

Revenue	$	23,062,094		$	13,496,210
Sales returns		(1,672,322	)		(980,254	)
Discounts		(322,163	)		(161,973	)
Total	$	21,067,609		$	12,353,983

HOUR LOOP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-15

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-SubTopic 10
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-Section 50
-Paragraph 12
-Subparagraph (a)
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-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Section 50
-Paragraph 12
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 12
-Subparagraph (c)
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
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-URI https://asc.fasb.org//1943274/2147479806/606-10-50-13

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org//606/tableOfContent

+ Details

General and Administrative Expenses

3 Months Ended

Mar. 31, 2023

General And Administrative Expenses

General and Administrative Expenses

NOTE 13 - General and Administrative Expenses

General and administrative expenses were comprised of the following for the periods ended March 31, 2023 and 2022:

	Three Months Ended		Three Months Ended
	March 31, 2023		March 31, 2022

Payroll	$	1,077,037	$	842,544
Legal and professional fees		105,605		250,797
Insurance expense		137,381		142,887
Storage & rental fees		113,242		85,266
Sales taxes		10,346		81,015
Outside services		35,940		70,667
Annual franchise tax		50,194		49,870
Pension		45,143		37,305
Office expense		1,783		34,287
Software subscriptions expense		41,925		17,843
Manpower recruitment advertising expense		-		16,678
Meals and entertainment expense		388		4,542
Other general and administrative expenses		94,202		42,263
Total	$	1,713,186	$	1,675,964

For the periods ended March 31, 2023 and 2022, the Company had $45,143 and $37,305, respectively, for pension expenses, which is a retirement benefit required by the Labor Standards Act in Taiwan, which mandates employers to provide retirement benefits to their employees.

Stockholders’ Equity

3 Months Ended

Mar. 31, 2023

Equity [Abstract]

Stockholders’ Equity

NOTE 14 - Stockholders’ Equity

Preferred Stock

As of March 31, 2023 and December 31, 2022, the Company had 10,000,000 shares of preferred stock, $0.0001 par value per share, authorized. The Company did not have any preferred shares issued and outstanding as of March 31, 2023 and December 31, 2022. The holders of the preferred stock in preference, are entitled to receive dividends, if and when declared by the Board of Directors.

HOUR LOOP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Common Stock

As of March 31, 2023 and December 31, 2022, the Company had 300,000,000 shares of common stock, $0.0001 par value per share, authorized. As of March 31, 2023 and December 31, 2022, there were 35,052,833 and 35,047,828 shares of common stock issued and outstanding, respectively.

Share Issuances for Stock Compensation

On February 1, 2022, the Company issued 1,772 shares of Company common stock to each of Sam Lai, our Chief Executive Officer, and Maggie Yu, our Senior Vice President, with a fair market value of $4.00 per share as compensation for the past services to the Company pursuant to the terms of their Executive Employment Agreements with the Company.

On February 1, 2022, the Company issued 1,750, 1,750, and 709 shares of Company common stock to Michael Lenner, Douglas Branch, and Alan Gao, respectively, with a fair market value of $4.00 per share as compensation for the past services as directors to the Company pursuant to the terms of their Director Agreements with the Company.

On May 20, 2022, the Company issued 916 shares of Company common stock to each of Sam Lai, Maggie Yu, Michael Lenner, Douglas Branch, and Alan Gao, with a fair market value of $3.2745 per share as compensation for the past services as executives or directors to the Company pursuant to the terms of their respective Executive Employment Agreements or Director Agreements with the Company.

On June 30, 2022, the Company issued 1,049 shares of Company common stock to each of Sam Lai, Maggie Yu, Michael Lenner, Douglas Branch, and Alan Gao, with a fair market value of $2.8605 per share as compensation for the past services as executives or directors to the Company pursuant to the terms of their respective Executive Employment Agreements or Director Agreements with the Company.

On September 30, 2022, the Company issued 1,050 shares of Company common stock to each of Sam Lai, Maggie Yu, Michael Lenner, Douglas Branch, and Alan Gao, with a fair market value of $2.8565 per share as compensation for the past services as executives or directors to the Company pursuant to the terms of their respective Executive Employment Agreements or Director Agreements with the Company.

On January 4, 2023, the Company issued 1,001 shares of Company 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 past services as executives or directors to the Company pursuant to the terms of their respective Executive Employment Agreements or Director Agreements with the Company.

IPO Proceeds

On January 11, 2022, we closed our initial public offering (the “IPO”) of 1,725,000 shares of common stock, which included the full exercise of the underwriter’s over-allotment option, at a public offering price of $4.00 per share, for aggregate gross proceeds of $6,900,000, prior to deducting underwriting discounts, commissions, and other offering expenses. Our common stock began trading on The Nasdaq Capital Market on January 7, 2022, under the symbol “HOUR”. EF Hutton, division of Benchmark Investments, LLC, acted as sole book-running manager for the offering. The net proceeds of the offering, after deducting expenses of $743,640, were $6,156,360. Meanwhile, other costs incurred in the IPO totaled $576,168, the main nature of which was professional fees. As a result, common stock increased by $173, and additional paid-in capital increased by $5,580,020.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-14

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 505
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481004/946-505-50-6

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (a)
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-URI https://asc.fasb.org//1943274/2147480237/815-40-50-6

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480008/505-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e)(1))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 505
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//505/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-13

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-14

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 16
-Subparagraph (b)
-Publisher FASB
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Section 50
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-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 18
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 18
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481112/505-10-50-18

+ Details

Commitments and Contingencies

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 15 - Commitments and Contingencies

As of March 31, 2023 and 2022, the Company had no material or significant commitments outstanding.

From time-to-time, the Company is subject to various litigation and other claims in the normal course of business. The Company establishes liabilities in connection with legal actions that management deems to be probable and estimable. As of March 31, 2023 and 2022, the Company had no pending legal proceedings. No amounts have been accrued in the unaudited condensed consolidated financial statements with respect to any such matters.

Subsequent Events

3 Months Ended

Mar. 31, 2023

Subsequent Events [Abstract]

Subsequent Events

NOTE 16 - Subsequent Events

The Company’s management has performed subsequent events procedures through the date the financial statements were available to be issued. Except as disclosed below, there were no subsequent events requiring adjustment to or disclosure in the financial statements.

On April 3, 2023, the Company issued 1,365, 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 $2.1985 per share as compensation for the past services as executives or directors of the Company pursuant to the terms of their respective Executive Employment Agreements or Director Agreements with the Company.

Nature of Operations and Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Reorganization

Basis of Presentation

Principles of Consolidation

Foreign Currency and Currency Translation

The relevant exchange rates are listed below:

	March 31,		December 31,		March 31,
	2023		2022		2022

Period NTD: USD exchange rate	$	30.400	$	30.660	$	28.575
Period Average NTD: USD exchange rate	$	30.507	$	30.618	$	28.388

HOUR LOOP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Going Concern Consideration

Going Concern Consideration

In order to strengthen the Company’s liquidity in the foreseeable future, the Company has taken the following measures:

	i.	Taking various cost control measures to tighten the costs of operations; and
	ii.	Implementing various strategies to enhance sales and profitability.

Use of Estimates

Reclassification

Cash and Cash Equivalents

Accounts Receivable and Allowance for Doubtful Accounts

HOUR LOOP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Inventory and Cost of Goods Sold

Rules for inventory allowance:

Property and Equipment

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

Leases

HOUR LOOP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Fair Value Measurement

	i.	Level 1 — Valuations based on 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, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.
	iii.	Level 3 — Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

Revenue Recognition

	●	Identify the contract with a customer.
	●	Identify the performance obligations in the contract.
	●	Determine the transaction price.
	●	Allocate the transaction price to the performance obligations in the contract.
	●	Recognize revenue when or as performance obligations are satisfied.

HOUR LOOP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Income Taxes

Presentation of Sales Taxes

HOUR LOOP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Concentrations of Risks

Selling and Marketing

General and Administrative

General and Administrative - General and administrative expenses are expensed as incurred in accordance with ASC 720-35.

Commitments and Contingencies

Related Parties

Earnings per Share

HOUR LOOP, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Nature of Operations and Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Schedule of Foreign Currency Exchange Rates

The relevant exchange rates are listed below:

	March 31,		December 31,		March 31,
	2023		2022		2022

Period NTD: USD exchange rate	$	30.400	$	30.660	$	28.575
Period Average NTD: USD exchange rate	$	30.507	$	30.618	$	28.388

Cash and Cash Equivalents (Tables)

3 Months Ended

Mar. 31, 2023

Cash and Cash Equivalents [Abstract]

Schedule of Cash and Cash Equivalents

Cash and cash equivalents was comprised of the following as of March 31, 2023 and December 31, 2022:

Schedule of Cash and Cash Equivalents

	March 31,		December 31,
	2023		2022

Checking account	$	136,657	$	939,323
Savings account and cash		1,138,134		3,623,266
Total	$	1,274,791	$	4,562,589

Inventory (Tables)

3 Months Ended

Mar. 31, 2023

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventory was comprised of the following as of March 31, 2023 and December 31, 2022:

Schedule of Inventory

	2023			2022
	March 31,			December 31,
	2023			2022

Inventory	$	12,446,263		$	14,911,735
Inventory-in-transit		1,766,761			4,732,057
Allowance		(642,145	)		(842,263	)
Total	$	13,570,879		$	18,801,529

Schedule of Inventory Provision

For the fiscal periods ended March 31, 2023 and December 31, 2022, the Company recorded inventory provision as follows:

Schedule of Inventory Provision

	March 31,			December 31,
	2023			2022
Allowance of inventory
Beginning balance	$	842,263		$	184,720
Allowance		-			665,356
Inventory allowance reversal		(200,118	)		(7,813	)
Ending balance	$	642,145		$	842,263

Property and Equipment (Tables)

3 Months Ended

Mar. 31, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment was comprised of the following as of March 31, 2023 and December 31, 2022:

Schedule of Property and Equipment

	2023			2022
	March 31,			December 31,
	2023			2022

Property and equipment	$	359,990		$	353,574
Accumulated depreciation and amortization		(114,842	)		(79,379	)
Total property and equipment, net	$	245,148		$	274,195

Prepaid Expenses and Other Current Assets (Tables)

3 Months Ended

Mar. 31, 2023

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Prepaid Expenses and other Current Assets

Prepaid expenses and other current assets was comprised of the following as of March 31, 2023 and December 31, 2022:

	2023		2022
	March 31,		December 31,
	2023		2022

Advance to suppliers	$	117,355	$	182,105
Prepaid expenses-insurance		124,841		-
Prepaid expenses-other		82,242		55,731
Lease refundable deposit		77,931		80,235
Tax receivable		419,349		413,895
Other current assets		12,130		9,277
Total	$	833,848	$	741,243

Accrued Expenses and Other Current Liabilities (Tables)

3 Months Ended

Mar. 31, 2023

Payables and Accruals [Abstract]

Schedule of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities were comprised of the following as of March 31, 2023 and December 31, 2022:

	March 31,		December 31,
	2023		2022

Sales tax payable	$	288,477	$	288,466
Accrued payroll		254,591		295,673
Accrued bonus		-		468,209
Accrued expenses		127,068		182,294
Other payables		53,987		349,288
Total	$	724,123	$	1,583,930

Leases (Tables)

3 Months Ended

Mar. 31, 2023

Leases [Abstract]

Schedule of Operating Leases Cost

	Flywheel			Flywheel			Flywheel			Flywheel
	January 2022 to			June 2022			August 2022			February 2023
Initial lease term	December 2023			to May 2024			to July 2024			to March 2025

Initial recognition of right-of-use assets	$	488,262		$	105,632		$	147,547		$	28,652
Weighted-average remaining lease term at
March 31, 2023		0.8			1.17			1.33			1.92
Weighted-average discount rate at
March 31, 2023		8.11	%		8.11	%		2.50	%		3.20	%

Schedule of Operating Lease Liabilities

The future minimum lease payment schedule for all operating leases as of March 31, 2023, is as disclosed below.

Schedule of Operating Lease Liabilities

March 31,	Amount
For the Year Ending
March 31,	Amount

2023	$	313,653
2024		84,057
2025		2,470
2026		-
2027 and thereafter		-
Total minimum lease payments		400,180
Less: effect of discounting		(12,552	)
Present value of the future minimum lease payment		387,628
Less: operating lease liabilities-current		(340,677	)
Total operating lease liabilities-non-current	$	46,951

Income Tax (Tables)

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Schedule of Effective Income Tax Rate Reconciliation

The components of income taxes provision (benefit) are as follows:

	March 31,			December 31,
	2023			2022
Federal rate		21.98	%		21.00	%
Blended state tax rate		3.85	%		3.83	%
Effective tax rate		25.83	%		24.83	%

Schedule of Components of Income Tax Provision (Benefit)

	Current		Deferred			Total
	Income Tax		Income Tax			Income Tax
Tax Expense Summary	Expense		Benefit			Benefit
Federal	$	-	$	(361,568	)	$	(361,568	)
State		-		(63,388	)		(63,388	)
Total tax expense (benefit)	$	-	$	(424,956	)	$	(424,956	)

Schedule of Deferred Tax Assets and Liabilities


	Deferred Tax		Deferred Tax
	Assets		Assets
Deferred Tax Assets summary	March 31, 2023		December 31, 2022
Federal	$	826,162	$	464,594
State		148,115		84,726
Total	$	974,276	$	549,320


	Deferred Tax			Deferred Tax
	Assets			Assets
Deferred Tax Assets summary	March 31, 2023			December 31, 2022
Right of use lease assets	$	(1,723	)	$	(139	)
Inventories allowance		165,854			209,131
Net loss carry forward		810,145			340,328
Total	$	974,276		$	549,320

Revenue (Tables)

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Revenue

Revenue was comprised of the following for the periods ended March 31, 2023 and 2022:

Schedule of Revenue

	Three Months Ended			Three Months Ended
	March 31, 2023			March 31, 2022

Revenue	$	23,062,094		$	13,496,210
Sales returns		(1,672,322	)		(980,254	)
Discounts		(322,163	)		(161,973	)
Total	$	21,067,609		$	12,353,983

General and Administrative Expenses (Tables)

3 Months Ended

Mar. 31, 2023

General And Administrative Expenses

Schedule of General and Administrative Expenses

General and administrative expenses were comprised of the following for the periods ended March 31, 2023 and 2022:

	Three Months Ended		Three Months Ended
	March 31, 2023		March 31, 2022

Payroll	$	1,077,037	$	842,544
Legal and professional fees		105,605		250,797
Insurance expense		137,381		142,887
Storage & rental fees		113,242		85,266
Sales taxes		10,346		81,015
Outside services		35,940		70,667
Annual franchise tax		50,194		49,870
Pension		45,143		37,305
Office expense		1,783		34,287
Software subscriptions expense		41,925		17,843
Manpower recruitment advertising expense		-		16,678
Meals and entertainment expense		388		4,542
Other general and administrative expenses		94,202		42,263
Total	$	1,713,186	$	1,675,964

Schedule of Foreign Currency Exchange Rates (Details)	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022
Period NTD: USD Exchange Rate [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Foreign currency exchange rate	30.400	30.660	28.575
Period Average NTD: USD Exchange Rate [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Foreign currency exchange rate	30.507	30.618	28.388

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 35
-Paragraph 1D
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480483/718-10-35-1D

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 35
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480483/718-10-35-3

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)(1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)(3)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(1)(i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(1)(ii)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(1)(iii)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(1)(iv)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(1)(iv)(01)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(1)(iv)(02)
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-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(1)(iv)(03)
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-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(1)(iv)(04)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(2)(i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-Name Accounting Standards Codification
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-Name Accounting Standards Codification
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-Paragraph 2
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Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(2)(iii)(01)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(2)(iii)(02)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(2)(iii)(03)
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Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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-Name Accounting Standards Codification
-Section 50
-Paragraph 2
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-Publisher FASB
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Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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Reference 22: http://www.xbrl.org/2003/role/disclosureRef
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Reference 23: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
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Reference 24: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 25: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(ii)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 26: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(iii)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 27: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(iv)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 28: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(v)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

+ Details

Nature of Operations and Summary of Significant Accounting Policies (Details Narrative)					3 Months Ended
	Dec. 28, 2022	Dec. 03, 2021 shares	Sep. 27, 2021 shares	Jun. 30, 2021 shares	Mar. 31, 2023 USD ($) Segment shares	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($) shares	Dec. 31, 2021 USD ($)
Product Information [Line Items]
Number of operating segments \| Segment					1
Common stock, shares issued \| shares					35,052,833		35,047,828
Common stock, shares outstanding \| shares					35,052,833		35,047,828
Effective date of reorganization				Jul. 27, 2021
Short-term debt from stockholder					$ 4,170,418
Loan interest rate					2.00%
Loan maturity date					Dec. 31, 2022
Operating activities					$ 3,130,034	$ 7,924,471
Net loss					1,235,244	$ 644,888
FDIC insured amount					250,000
Inventory valuation reserves					642,145		$ 842,263	$ 184,720
Cost of property repairs and maintenance					$ 2,500
Estimated useful life					3 years
Sales return rate					7.25%	7.26%
Shipping and handling costs					$ 5,037,251	$ 2,653,614
Sales and excise tax payable					$ 288,477		$ 288,466
Concentration risk customer					During the three months ended March 31, 2023 and 2022, the Company had no customer that accounted for 10% or more of total net revenues. In addition, as of March 31, 2023 and 2022, the Company had no customer that accounted for 10% or more of gross accounts receivable
Advertising and promotion expenses					$ 784,266	$ 401,499
Customer [Member] \| Revenue Benchmark [Member] \| Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk percentage					100.00%	100.00%
Common Stock [Member]
Product Information [Line Items]
Common stock, shares outstanding \| shares		33,300,000	44,400,000
Stock split description			the Company completed a stock split such that each outstanding stock was sub-divided and converted into 4.44 shares of common stock
Reverse stock split description		the Company completed a reverse stock split such that each outstanding stock was sub-divided and converted into 0.75 shares of common stock
Net loss
Mr.Lai and Ms.Yu [Member]
Product Information [Line Items]
Loan interest rate	5.50%
Loan maturity date	Dec. 31, 2024
Sam Lai and Maggie Yu [Member]
Product Information [Line Items]
Ownership percentage				50.00%
S Corporation [Member]
Product Information [Line Items]
Common stock, shares issued \| shares				10,000,000
Common stock, shares outstanding \| shares				10,000,000
C Corporation [Member]
Product Information [Line Items]
Common stock, shares issued \| shares				10,000,000
Common stock, shares outstanding \| shares				10,000,000

Schedule of Cash and Cash Equivalents (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Cash and Cash Equivalents [Abstract]
Checking account	$ 136,657	$ 939,323
Savings account and cash	1,138,134	3,623,266
Total	$ 1,274,791	$ 4,562,589

Schedule of Inventory (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
Inventory Disclosure [Abstract]
Inventory	$ 12,446,263	$ 14,911,735
Inventory-in-transit	1,766,761	4,732,057
Allowance	(642,145)	(842,263)	$ (184,720)
Total	$ 13,570,879	$ 18,801,529

Schedule of Inventory Provision (Details) - USD ($)	3 Months Ended	12 Months Ended
Schedule of Inventory Provision (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Beginning balance	$ 842,263	$ 184,720
Allowance		665,356
Inventory allowance reversal	(200,118)	(7,813)
Ending balance	$ 642,145	$ 842,263

Schedule of Property and Equipment (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment [Abstract]
Property and equipment	$ 359,990	$ 353,574
Accumulated depreciation and amortization	(114,842)	(79,379)
Total property and equipment, net	$ 245,148	$ 274,195

Property and Equipment (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
Property and Equipment (Details Narrative) - USD ($)	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Property, Plant and Equipment [Abstract]
Payment to acquire property and equipment	$ 3,379	$ 125,468	$ 339,518
Depreciation expense	34,662		79,084
Disposal or pledge	$ 0		$ 0

Schedule of Prepaid Expenses and other Current Assets (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Advance to suppliers	$ 117,355	$ 182,105
Prepaid expenses-insurance	124,841
Prepaid expenses-other	82,242	55,731
Lease refundable deposit	77,931	80,235
Tax receivable	419,349	413,895
Other current assets	12,130	9,277
Total	$ 833,848	$ 741,243

Prepaid Expenses and Other Current Assets (Details Narrative) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Prepaid taxes	$ 419,349	$ 413,895

Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Sales tax payable	$ 288,477	$ 288,466
Accrued payroll	254,591	295,673
Accrued bonus		468,209
Accrued expenses	127,068	182,294
Other payables	53,987	349,288
Total	$ 724,123	$ 1,583,930

Accrued Expenses and Other Current Liabilities (Details Narrative) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Related interest and penalities	$ 78,947	$ 78,947
Accrued bonus		$ 468,209

Short-Term Loan (Details Narrative) - Line of Credit [Member] - USD ($)			3 Months Ended
	Aug. 18, 2022	Jun. 19, 2019	Mar. 31, 2023	Dec. 31, 2022
Bank of America [Member]
Line of Credit Facility [Line Items]
Line of credit		$ 785,000	$ 0	$ 0
Line of credit, maturity date		Jun. 18, 2024	Jun. 18, 2024
Line of credit, interest rate		8.11%
Accrued interest expense			$ 27,996
Taishin International Bank [Member]
Line of Credit Facility [Line Items]
Line of credit	$ 6,940,063		657,895
Line of credit, maturity date	Aug. 30, 2023
Line of credit, interest rate	3.20%
Accrued interest expense			$ 1,788

- Definition

The carrying value as of the balance sheet date of the current and noncurrent portions of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

+ References + Details

Related Party Balances and Transactions (Details Narrative) - USD ($)		3 Months Ended
	Dec. 28, 2022	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Dec. 30, 2020
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Other Liabilities, Current		$ 4,226,996		$ 4,329,460
Other Liability, Current, Related Party, Type [Extensible Enumeration]		us-gaap:RelatedPartyMember		us-gaap:RelatedPartyMember
Loans payable		$ 4,170,418
Loans payable		2.00%
Interest Expense		$ 56,578	$ 83,558
Repayments from related parties		$ 159,042	$ 1,024,188
Loan Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Loans payable					$ 1,041,353
Loans payable	5.50%			2.00%	2.00%
Debt instrument, maturity date, description	the Company, Mr. Lai and Ms. Yu agreed to extend the term of the loan for another 2 years, with a revised maturity date of December 31, 2024.

- Definition

Amount of the cost of borrowed funds accounted for as interest expense.

+ References + Details

Schedule of Operating Leases Cost (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Initial recognition of right-of-use assets	$ 394,301	$ 450,721
Parent Company [Member] \| January 2022 to December 2023 [Member]
Initial recognition of right-of-use assets	$ 488,262
Weighted-average remaining lease term	9 months 18 days
Weighted-average discount rate	8.11%
Subsidiaries [Member] \| June 2022 to May 2024 [Member]
Initial recognition of right-of-use assets	$ 105,632
Weighted-average remaining lease term	1 year 2 months 1 day
Weighted-average discount rate	8.11%
Subsidiaries [Member] \| August 2022 to July 2024 [Member]
Initial recognition of right-of-use assets	$ 147,547
Weighted-average remaining lease term	1 year 3 months 29 days
Weighted-average discount rate	2.50%
Subsidiaries [Member] \| February 2023 to March 2024 [Member]
Initial recognition of right-of-use assets	$ 28,652
Weighted-average remaining lease term	1 year 11 months 1 day
Weighted-average discount rate	3.20%

Schedule of Operating Lease Liabilities (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Leases [Abstract]
2023	$ 313,653
2024	84,057
2025	2,470
2026
2027 and thereafter
Total minimum lease payments	400,180
Less: effect of discounting	(12,552)
Present value of the future minimum lease payment	387,628
Less: operating lease liabilities-current	(340,677)	$ (385,216)
Total operating lease liabilities-non-current	$ 46,951	$ 64,945

Leases (Details Narrative)	3 Months Ended
Leases (Details Narrative)	Mar. 31, 2023 USD ($) Segment	Mar. 31, 2022 USD ($)	Dec. 31, 2022 USD ($)
Number of operating segments \| Segment	1
Operating lease liabilities current	$ 340,677		$ 385,216
Operating lease liabilities non-current	46,951		64,945
Operating lease right-of-use assets	394,301		$ 450,721
Non cash lease expense	95,635	$ 57,186
Operating lease payments	$ 101,723	$ 30,593
Accounting Standards Update 2016-02 [Member]
Number of operating segments \| Segment	4

Schedule of Effective Income Tax Rate Reconciliation (Details)	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Federal rate	21.98%	21.00%
Blended state tax rate	3.85%	3.83%
Effective tax rate	25.83%	24.83%

Schedule of Components of Income Tax Provision (Benefit) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Current federal income tax expense (benefit)
Deferred federal income tax benefit	(361,568)
Total federal income tax benefit	(361,568)
Current state income tax expense (benefit)
Deferred state income tax benefit	(63,388)
Total state income tax benefit	(63,388)
Current income tax expense (benefit)
Deferred income tax benefit	(424,956)
Total Income Tax Benefit	$ (424,956)	$ (182,533)

Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Operating Loss Carryforwards [Line Items]
Total	$ 974,276	$ 549,320
Right of use lease assets	(1,723)	(139)
Inventories allowance	165,854	209,131
Net loss carry forward	810,145	340,328
Total	974,276	549,320
Domestic Tax Authority [Member]
Operating Loss Carryforwards [Line Items]
Total	826,162	464,594
State and Local Jurisdiction [Member]
Operating Loss Carryforwards [Line Items]
Total	$ 148,115	$ 84,726

Income Tax (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
Income Tax (Details Narrative) - USD ($)	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]
Uncertain tax position	$ 0
Net operating lossses	$ 1,660,200	$ 827,421	$ 827,421
Minimum [Member]
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]
Operating loss carry forward term	10 years
Maximum [Member]
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items]
Operating loss carry forward term	20 years

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(11))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483586/944-220-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

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-Topic 942
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-Subparagraph (SX 210.9-05(b)(2))
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-Topic 940
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-URI https://asc.fasb.org//1943274/2147481913/940-20-25-1

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-Topic 220
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-Subparagraph (SX 210.9-04(15))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483589/942-220-S99-1

+ Details

Schedule of Revenue (Details) - USD ($)	3 Months Ended
Schedule of Revenue (Details) - USD ($)	Mar. 31, 2023	Mar. 31, 2022
Revenue from Contract with Customer [Abstract]
Revenue	$ 23,062,094	$ 13,496,210
Sales returns	(1,672,322)	(980,254)
Discounts	(322,163)	(161,973)
Total	$ 21,067,609	$ 12,353,983

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 924
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479941/924-10-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Name Accounting Standards Codification
-Section 50
-Paragraph 30
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-30

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-42

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 22
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
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-Section 50
-Paragraph 4
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-4

+ Details

Schedule of General and Administrative Expenses (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
General And Administrative Expenses
Payroll	$ 1,077,037	$ 842,544
Legal and professional fees	105,605	250,797
Insurance expense	137,381	142,887
Storage & rental fees	113,242	85,266
Sales taxes	10,346	81,015
Outside services	35,940	70,667
Annual franchise tax	50,194	49,870
Pension	45,143	37,305
Office expense	1,783	34,287
Software subscriptions expense	41,925	17,843
Manpower recruitment advertising expense		16,678
Meals and entertainment expense	388	4,542
Other general and administrative expenses	94,202	42,263
Total	$ 1,713,186	$ 1,675,964

General and Administrative Expenses (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
General And Administrative Expenses
PensionExpense	$ 45,143	$ 37,305

Stockholders’ Equity (Details Narrative) - USD ($)							3 Months Ended
Stockholders’ Equity (Details Narrative) - USD ($)	Jan. 04, 2023	Sep. 30, 2022	Jun. 30, 2022	May 20, 2022	Feb. 01, 2022	Jan. 11, 2022	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Dec. 03, 2021	Sep. 27, 2021
Subsidiary, Sale of Stock [Line Items]
Preferred stock, shares authorized							10,000,000		10,000,000
Preferred stock, par value							$ 0.0001		$ 0.0001
Preferred stock, shares outstanding							0		0
Common stock, shares authorized							300,000,000		300,000,000
Common stock, par value							$ 0.0001		$ 0.0001
Common stock, shares outstanding							35,052,833		35,047,828
Other stock issuance cost							$ 12,279	$ 5,450
Increase in additional paid in capital								$ 5,580,192
Common Stock [Member]
Subsidiary, Sale of Stock [Line Items]
Common stock, shares outstanding										33,300,000	44,400,000
Shares issued during initial public offering								1,725,000
Increase in additional paid in capital								$ 172
IPO [Member]
Subsidiary, Sale of Stock [Line Items]
Shares issued price per share						$ 4.00
Shares issued during initial public offering						1,725,000
Gross proceeds from initial public offering						$ 6,900,000
Stock issuance expenses						743,640
Proceeds from initial public offering						6,156,360
Other stock issuance cost						576,168
IPO [Member] \| Common Stock [Member]
Subsidiary, Sale of Stock [Line Items]
Increase in common stock value						173
Increase in additional paid in capital						$ 5,580,020
Sam Lai [Member] \| Executive Employment Agreements [Member]
Subsidiary, Sale of Stock [Line Items]
Number of shares vested, shares					1,772
Shares issued price per share					$ 4.00
Sam Lai [Member] \| Executive Employment Agreements or Director Agreements [Member]
Subsidiary, Sale of Stock [Line Items]
Number of shares vested, shares	1,001	1,050	1,049	916
Shares issued price per share	$ 2.9985	$ 2.8565	$ 2.8605	$ 3.2745
Maggie Yu [Member] \| Executive Employment Agreements [Member]
Subsidiary, Sale of Stock [Line Items]
Number of shares vested, shares					1,772
Shares issued price per share					$ 4.00
Maggie Yu [Member] \| Executive Employment Agreements or Director Agreements [Member]
Subsidiary, Sale of Stock [Line Items]
Number of shares vested, shares	1,001	1,050	1,049	916
Shares issued price per share	$ 2.9985	$ 2.8565	$ 2.8605	$ 3.2745
Michael Lenner [Member] \| Director Agreements [Member]
Subsidiary, Sale of Stock [Line Items]
Number of shares vested, shares					1,750
Shares issued price per share					$ 4.00
Michael Lenner [Member] \| Executive Employment Agreements or Director Agreements [Member]
Subsidiary, Sale of Stock [Line Items]
Number of shares vested, shares	1,001	1,050	1,049	916
Shares issued price per share	$ 2.9985	$ 2.8565	$ 2.8605	$ 3.2745
Douglas Branch [Member] \| Director Agreements [Member]
Subsidiary, Sale of Stock [Line Items]
Number of shares vested, shares					1,750
Shares issued price per share					$ 4.00
Douglas Branch [Member] \| Executive Employment Agreements or Director Agreements [Member]
Subsidiary, Sale of Stock [Line Items]
Number of shares vested, shares	1,001	1,050	1,049	916
Shares issued price per share	$ 2.9985	$ 2.8565	$ 2.8605	$ 3.2745
Alan Gao [Member] \| Director Agreements [Member]
Subsidiary, Sale of Stock [Line Items]
Number of shares vested, shares					709
Shares issued price per share					$ 4.00
Alan Gao [Member] \| Executive Employment Agreements or Director Agreements [Member]
Subsidiary, Sale of Stock [Line Items]
Number of shares vested, shares	1,001	1,050	1,049	916
Shares issued price per share	$ 2.9985	$ 2.8565	$ 2.8605	$ 3.2745

Subsequent Events (Details Narrative) - Executive Employment Agreements or Director Agreements [Member] - $ / shares	Apr. 03, 2023	Jan. 04, 2023	Sep. 30, 2022	Jun. 30, 2022	May 20, 2022
Sam Lai [Member]
Subsequent Event [Line Items]
Shares issued price per share		$ 2.9985	$ 2.8565	$ 2.8605	$ 3.2745
Sam Lai [Member] \| Subsequent Event [Member]
Subsequent Event [Line Items]
Stock issued for stock compensation services, shares	1,365
Shares issued price per share	$ 2.1985
Maggie Yu [Member]
Subsequent Event [Line Items]
Shares issued price per share		2.9985	2.8565	2.8605	3.2745
Maggie Yu [Member] \| Subsequent Event [Member]
Subsequent Event [Line Items]
Stock issued for stock compensation services, shares	1,365
Shares issued price per share	$ 2.1985
Michael Lenner [Member]
Subsequent Event [Line Items]
Shares issued price per share		2.9985	2.8565	2.8605	3.2745
Michael Lenner [Member] \| Subsequent Event [Member]
Subsequent Event [Line Items]
Stock issued for stock compensation services, shares	1,365
Shares issued price per share	$ 2.1985
Douglas Branch [Member]
Subsequent Event [Line Items]
Shares issued price per share		2.9985	2.8565	2.8605	3.2745
Douglas Branch [Member] \| Subsequent Event [Member]
Subsequent Event [Line Items]
Stock issued for stock compensation services, shares	1,365
Shares issued price per share	$ 2.1985
Alan Gao [Member]
Subsequent Event [Line Items]
Shares issued price per share		$ 2.9985	$ 2.8565	$ 2.8605	$ 3.2745
Alan Gao [Member] \| Subsequent Event [Member]
Subsequent Event [Line Items]
Stock issued for stock compensation services, shares	1,365
Shares issued price per share	$ 2.1985
Hillary Bui [Member] \| Subsequent Event [Member]
Subsequent Event [Line Items]
Stock issued for stock compensation services, shares	606
Shares issued price per share	$ 2.1985