Hour Loop, Inc — Regulatory Filings 2021

Oct 28, 2021

CORRESP 1 filename1.htm

ANTHONY L.G., PLLC

| laura
aNTHONy, esq | www.ANTHONYPLLC.com |
| --- | --- |
| GEOFFREY
ASHBURNE, ESQ | WWW.SECURITIESLAWBLOG.COM |
| JOHN
CACOMANOLIS, ESQ | WWW.LAWCAST.COM |
| CHAD
FRIEND, ESQ, LLM | |
| SVETLANA
ROVENSKAYA, ESQ | |
| OF
COUNSEL: | DIRECT
E-MAIL: LANTHONY@ANTHONYPLLC.COM |
| MICHAEL
R. GEROE, ESQ, CIPP/US | |
| CRAIG
D. LINDER, ESQ | |
| PETER
P. LINDLEY, ESQ, CPA, MBA | |
| john
lowy, esq.*** | |
| STUART
REED, ESQ | |
| MARC
S. WOOLF, ESQ | |

*licensed in CA

**licensed in FL and NY

***licensed in NY and NJ

****licensed in CA, DC, MO and NY

*licensed in CA, FL and NY

**licensed in NY and NJ

October 27, 2021

VIA ELECTRONIC EDGAR FILING

Office of Trade & Services

Division of Corporation Finance

Securities and Exchange Commission

100 F. Street, N.E.

Washington, D.C. 20549

Re: Hour Loop, Inc. – CIK No. 0001874875 Draft Registration Statement on Form S-1 (DRS), submitted July 29, 2021 Registration Statement on Form S-1, filed October 27, 2021

Dear Sir or Madam:

This letter responds to the correspondence from the Staff of the Securities and Exchange Commission (the “SEC”) dated August 27, 2021 providing comments on the above-referenced Draft Registration Statement on Form S-1 (DRS), submitted July 29, 2021 by the Company (the “ Prior Filing ”).

The Company today filed via EDGAR its non-confidential Registration Statement on Form S-1 (the “ New Filing ”). We will separately provide you with a courtesy copy of the New Filing that is redlined against the Prior Filing. The remainder of this letter responds to the Staff’s comments on the Prior Filing, which are set forth below along with our responses on behalf of the Company. We trust you shall deem the contents of this transmittal letter responsive to your comment letter.

Draft Registration Statement on Form S-1

Cover Page

| 1. |
| --- |
| Response: In response to the Staff’s comment, the Company has revised the cover page of the New Filing to clearly reflect that the
Company is seeking to register the offering of Representative’s Warrants (including the underlying common stock shares), in
addition to the firm commitment public offering of the Company’s common stock. |

Field: Page; Sequence: 1

Field: /Page

Prospectus Summary

Overview

Our Business, page 1

| 2. |
| --- |
| Response: In response to the Staff’s comment, the Company has expanded the disclosure in the New Filing to clarify the nature of
the Company’s third-party seller relationship with Amazon and Walmart and has also made corresponding revisions to the risk
factor titled “Our revenue is dependent upon maintaining our relationship with Amazon” at page 21 of the New Filing. |

Continuous Process Optimization, page 5

3.
Response: In response to the Staff’s Comment, the Company has expanded the disclosure in the New Filing to explain the Company’s
continuous process optimization and how the Company implements the same in its operations.

Improving Sales of Popular Items and Securing the Inventories Without Paying Higher Storage

Fees by Partnering with Third Party Warehouses, page 9

| 4. |
| --- |
| Response: In response to the Staff’s Comment, the Company has expanded the disclosure in the New Filing on page 9 as well as page
47 to clarify that the Company has initiated the process of establishing relationships with third-party warehouses and the current
status of such process. |

Risk Factors

By purchasing common stock in this offering, you are bound by the fee-shifting provision...,

page 26

1. Comment : Please revise your disclosure here and on page 90 to disclose the scope of the feeshifting provision included in your bylaws, including the level of recovery required by the plaintiff to avoid payment. Disclose who is subject to the provision (e.g., former and current shareholders, legal counsel, expert witnesses) and who would be allowed to recover (e.g., company, directors, officers, affiliates). In addition, please include risk factor disclosure that the provision could discourage shareholder lawsuits that might otherwise benefit the company and its shareholders.

Field: Page; Sequence: 2

Field: /Page

Response : In response to the Staff’s Comment, the Company has revised the New Filing on page 26 and page 90 to (i) disclose the scope of the fee shifting provision included in the Company’s bylaws, including the level of recovery required by the plaintiff to avoid payment, (ii) disclose who is subject to the provision and who would be allowed to recover and (iii) include risk factor disclosure that the provision could discourage shareholder lawsuits that might otherwise benefit the Company and its shareholders.

Use of Proceeds, page 36

| 6. |
| --- |
| Response: In response to the Staff’s Comment, the Company has revised the New Filing on page 35 and 36 to state with more specificity
the approximate amount of proceeds to be used for each identified purpose and explain the reference to the “pace of progress
of our research and development.” There was a typographical error in the reference to “complementary compounds.”
The referenced language should have read as “complementary companies.” However, since the Company
no longer intends to use a portion of the net proceeds to acquire complementary companies, the Company has deleted the reference
altogether on pages 35 and 36 of the New Filing. Therefore, this portion of the SEC comment is now inapplicable. |

7.
Response: In response to the Staff’s Comment, the Company has revised the disclosure in the New Filing to state with more specificity
the approximate amount of proceeds to be used for each identified purpose on page 35 and 36 of the New Filing.

Capitalization, page 37

8.
Response: In response to the Staff’s Comment, the Company has revised the capitalization table on page 37 in the New Filing to also
disclose the accumulated other comprehensive loss.

Description of Business, page 39

| 9. |
| --- |
| Response: In response to the Staff’s Comment, the Company has revised the disclosure in the New Filing to (i) disclose in further
detail how and where the Company advertises its products, (ii) explain how the Company’s advertising and the other listed areas
of specialization provide the Company with a competitive advantage over its competition, including Amazon Retail and (iii) explain
the Company’s strategy for competing against a larger entity which sells the same products at a loss. |

Field: Page; Sequence: 3

Field: /Page

| 10. |
| --- |
| Response: In response to the Staff’s Comment, the Company has revised the disclosure in the New Filing to clarify when Mr. Lai and
Ms. Yu advanced these loans to the Company and has filed the related agreements to the extent that they are written as exhibits to
the New Filing. Please note that the aggregate principal amount of the loans disclosed in the Prior Filing to be $1.2 million was
wrong and corrected to be $1,041,353 in the New Filing. As of October 27, 2021, the outstanding principal balance of such
loan was $987,868 and accrued interest was $17,039. |

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations, page 52

| 11. |
| --- |
| Response: In response to the Staff’s Comment, the Company has revised the disclosure in the
New Filing to (i) discuss in greater detail the basis for the changes in the revenue and
cost of goods sold between periods, quantifying each underlying factor identified, (ii) provide
corresponding disclosure for the Company’s net cash from operating activities and (iii)
quantify the specific impacts the Company has experienced to its results of operations and
relevant metrics resulting from the COVID19 pandemic. |

Management, page 60

12.
Response: In response to the Staff’s Comment, the Company has revised the disclosure in the New Filing to disclose Mr. Lenner’s
age.

Executive Compensation, page 67

| 13. |
| --- |
| Response: In response to the Staff’s Comment, the Company has revised the disclosure in the New Filing to include a narrative description
of the bonuses paid to the Company’s Chief Executive Officer and Senior Vice President, including an explanation of how the
amounts were determined. Additionally, the Company has expanded the description of the Company’s employment agreements to disclose
the guaranteed bonuses to its executive officers in 2022 in the New Filing. |

Field: Page; Sequence: 4

Field: /Page

Since the Prior Filing, a new third independent director (Minghui (Alan) Gao) has been appointed to the board of directors of the Company. Since the board of directors now has five directors (including three independent directors), there is no longer a risk of deadlock amongst the directors if the couple votes the opposite way of the other three independent directors when determining whether the listed milestones with respect to bonuses have been met as determined by the board. This portion of the SEC comment is now inapplicable.

Security Ownership of Certain Beneficial Owners and Management, page 77

| 14. |
| --- |
| Response: In response to the Staff’s Comment, the Company has revised the beneficial ownership table on page 77 in the new Filing
to list each Sam Lai and Maggie Yu as owners of all 44,400,000 shares (as each of them beneficially owns the other’s shares
as husband and wife), and added a footnote explaining the tabular presentation. Since the Prior Filing, the Company conducted
a forward stock split on September 27, 2021 in the ratio of 4.44-for-1 which resulted in an increase in the number of shares beneficially
owned by Mr. Lai and Ms. Yu from 10,000,000 shares to 44,400,000 shares. |

Hour Loop, Inc. Consolidated Financial Statements

Notes to Consolidated Financial Statements

Note 1 – Nature of Operations and Summary of Significant Accounting Policies

Reorganization, page F-7

| 15. |
| --- |
| Response: In response to the Staff’s Comment, the Company has revised the disclosure in its financial statements and notes thereto
in accordance with the Staff’s Comment No. 15 as well as revised the capitalization table included on page 37 of the New Filing
to include a separate column showing the pro forma effect of the distribution of retained earnings to the S Corporation shareholders. |

Field: Page; Sequence: 5

Field: /Page

Revenue Recognition, page F-9

16.
Response: In response to the Staff’s Comment, the Company has revised the notes to its financial statements in the New Filing to
explain that these costs have been classified and recorded in Selling and Marketing expenses in the statement of operations.

General

| 17. |
| --- |
| Response: We have not presented (nor have we authorized anyone on our behalf to present) and we
do not expect to present (nor do we expect to authorize anyone on our behalf to present)
any written communications as defined in Rule 405 under the Securities Act to potential investors
in reliance on Section 5(d) of the Securities Act. Therefore, there are no supplemental copies
of written communications to provide to the Staff. |

If the Staff has any further comments regarding the offering statement on Form S-1, or any subsequent amendments to the Company’s offering statement on Form S-1, please feel free to contact the undersigned.

| Anthony
L.G., PLLC | |
| --- | --- |
| By: | /s/
Laura Anthony |
| | Laura
Anthony, Esq. |

cc:
Linda
Cvrkel/U.S. Securities and Exchange Commission
Karina
Dorin/U.S. Securities and Exchange Commission
Timothy
S. Levenberg/U.S. Securities and Exchange Commission
Sam
Lai/Hour Loop, Inc.
Craig
D. Linder, Esq./Anthony L.G., PLLC

625 N. FLAGLER DRIVE, #600 ● WEST PALM BEACH, FLORIDA ● 33401 ● PHONE: 561-514-0936 ● FAX 561-514-0832

Field: Page; Sequence: 6; Options: Last

Field: /Page