Sam Lai
About Sam Lai
Sam Lai, age 43, is Chairman of the Board, Chief Executive Officer, and Interim Chief Financial Officer of Hour Loop; he has served as CEO and director since June 2013, became Chairman in April 2021, and has been Interim CFO since March 29, 2022 . He holds a BS in Computer Science from University of Texas at Austin (2003) and an MS in Computer Science from University of California, San Diego (2004) . Under his leadership, 2024 net revenues grew 4.6% year over year to $138.3 million and net income improved to $0.66 million from a $2.43 million loss in 2023, with 2025 guidance forecasting $145–$160 million in revenue and $0.5–$2.0 million in net income . He is a seasoned software engineer who has designed and built software at Hour Loop, Amazon.com, UnifiedEdge, Kits, and Applied Research Labs .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Applied Research Labs | Research Engineer Scientist Assistant | 2003–2004 | Early engineering experience |
| Amazon.com | Software Development Engineer | 2005–2007 | Software development foundation |
| Kits | Senior Java Developer | 2007–2009 | Senior development role |
| UnifiedEdge | Senior Java Developer | 2009 | Senior development role |
| Amazon.com | Software Development Engineer | 2009–2017 | Engineering at scale |
| Hour Loop | Chief Executive Officer; Director | 2013–present | Led growth and operations |
External Roles
- No public company directorships disclosed .
Fixed Compensation
| Year | Base salary ($) | Guaranteed bonus ($) | Actual bonus paid ($) | All other comp ($) |
|---|---|---|---|---|
| 2022 | 500,000 | 100,000 (12/31/2022 per agreement) | 100,000 | 14,678 |
| 2023 | 500,000 | — | 100,000 | 24,884 |
| 2024 | 500,000 | 100,000 (12/27/2024, Addendum No. 3) | 600,000 | 15,546 |
Notes:
- Agreements provide quarterly stock issuances valued at $3,000 FMV per quarter to executives, pro‑rated for partial quarters .
Performance Compensation
| Year | Metric | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| 2023 | Net profit (ex taxes) with ≥20% revenue growth | 50% of base at ≥$1.5M; 100% at ≥$5.0M | Not met | $100,000 | Cash bonus (no equity vest specified) |
| 2024 | Net profit (ex taxes): breakeven for 50%; ≥$500k for 100% + $100k guaranteed | 50% or 100% of base + $100k guarantee | Net income $657,447; breakeven exceeded | $600,000 | Cash bonus (no equity vest specified) |
| 2025 | Net profit (ex taxes and exec bonuses) | 50% of base at ≥$500k; 100% at ≥$1.0M; $100k guaranteed (12/22/2025) | TBD (year-end determination) | TBD | Cash bonus (no equity vest specified) |
Compensation determination process: As a controlled company without a compensation committee, the Board determines executive compensation and has referenced external ranges (salary.com) when setting bonuses, noting Seattle CEO ranges and COO ranges as context . The company adopted a clawback policy tied to accounting restatements in November 2023 ; the 2021 Plan also provides clawback applicability .
Equity Awards and Vesting
Stock Awards (executive compensation issuances)
| Grant date | Shares | Fair value per share ($) | Recipient |
|---|---|---|---|
| 2023-01-04 | 1,001 | 2.9985 | Sam Lai |
| 2023-04-03 | 1,365 | 2.1985 | Sam Lai |
| 2023-06-30 | 1,752 | 1.7125 | Sam Lai |
| 2023-10-02 | 1,948 | 1.54 | Sam Lai |
| 2024-01-02 | 2,139 | 1.4025 | Sam Lai |
| 2024-03-29 | 2,251 | 1.3330 | Sam Lai |
| 2024-07-01 | 2,946 | 1.0185 | Sam Lai |
| 2024-10-01 | 2,196 | 1.3660 | Sam Lai |
| 2025-04-01 | 1,750 | 1.714 | Sam Lai |
Notes:
- Executives receive quarterly common stock issuances valued at $3,000 per quarter per employment agreements .
Option Awards
| Grant date | Options (#) | Strike ($/share) | Vesting | Expiration |
|---|---|---|---|---|
| 2022-01-06 | 25,000 | $4.00 (IPO price) | 25% annually; first vest on 1st anniversary | Term not specified in grant; plan allows up to 10 years |
Equity Ownership & Alignment
| As-of date | Beneficial shares | % of outstanding | Notes |
|---|---|---|---|
| 2024-09-30 (Record Date) | 33,336,378 (Sam Lai: 16,668,189 direct; spousal attribution) | 94.89% | Controlled company with combined ownership by Sam Lai and Maggie Yu |
| 2025-07-01 (Record Date) | 33,347,462 (Sam Lai: 16,673,731 direct; spousal attribution) | 94.84% | Controlled company status maintained |
- Ownership guidelines, pledging, hedging policies: Not disclosed .
Employment Terms
| Provision | Key terms |
|---|---|
| Term and renewal | Three-year term from May 27, 2021; auto-renews for one-year terms unless notice; employment is at will . |
| Base salary | $500,000 for Sam Lai; subject to Board adjustments . |
| Quarterly equity | Issuance of common shares with FMV of $3,000 per quarter; FMV defined via trading market or Board good-faith if not listed . |
| Severance (no cause or good reason) | Lump sum equal to base salary for remainder of initial term or current renewal term; unvested equity becomes automatically vested . |
| Termination (cause or no good reason) | Pay accrued salary/benefits/expenses and accrued quarterly equity; unvested equity forfeited . |
| Death/disability | Accrued salary/benefits/expenses plus pro‑rata bonus for year of termination; unvested equity forfeited . |
| Non-solicit | Three years post‑term; no solicitation or hiring of Company employees, with general ad exception . |
| Change in control (2021 Plan) | Awards may be assumed/substituted; if not, full vesting and lapse of restrictions; performance awards deemed achieved at 100% of target unless otherwise specified . |
| Clawback | Clawback policy adopted Nov 15, 2023 for erroneously awarded incentive-based compensation; plan-level clawback language present . |
| Tax gross‑up | Company will gross up for 280G excise taxes; mechanisms for over/underpayment reconciliations detailed . |
| Guaranteed bonuses | $100,000 guaranteed on 12/27/2024 and 12/22/2025 per addenda . |
Board Governance and Service
- Board roles: Sam Lai is Chairman since April 2021 and CEO since June 2013; also Interim CFO since March 29, 2022 . Dual role (Chairman + CEO) structure is retained; Board cites focused leadership benefits and independent director oversight; no lead independent director disclosed .
- Controlled company: Hour Loop is a Nasdaq “controlled company” due to combined ownership of ~95% by Sam Lai and Maggie Yu; it avails itself of exemptions and does not have compensation or nominating committees; a majority of directors are not required to be independent under the exemption .
- Committees: Audit Committee comprises three independent directors (Bui, Gao, Lenner); Bui is chair and an audit committee financial expert; the audit committee did not hold formal meetings in FY2024 and acted per charter; Board held four meetings in FY2024 with all directors attending ≥75% .
- Independence: Sam Lai and Maggie Yu are non‑independent directors; three directors are independent .
- Director agreements: Quarterly stock grants valued at $3,000; per diem for trade shows ($1,000 full day/$500 half day); reimbursement of reasonable out‑of‑pocket expenses .
Director Compensation (Board)
| Item | Amount/terms |
|---|---|
| Equity retainer | Quarterly grants of common stock valued at $3,000 per director . |
| Meeting fees | Not disclosed. |
| Committee fees | Not disclosed. |
| Chair premiums | Not disclosed. |
| Per diem (events) | $1,000 full day; $500 half day when requested by Company . |
Related Party Transactions and Alignment Considerations
- Affiliated loans: December 2020 loan of $1,041,353 (2% interest retroactively; repaid 2022/2023) . July 2021 loan of retained earnings ~$4,170,418 at 5.5% interest (extended to Dec 31, 2025); outstanding principal $3,499,418 at Dec 31, 2024 and $3,160,418 at March 27, 2025 . Balance sheet shows $4,192,995 due to related parties as current liabilities at Dec 31, 2024 following reclassification .
- Quarterly equity issuances to executives and directors per agreements across 2023–2025 .
Performance & Track Record
- 2024 results: Revenues $138.3M (+4.6% YoY); net income $0.66M; gross margin 52.1% (up 1.8%); operating expenses 51.6% of revenues (down 1%) .
- 2025 outlook: Revenues $145–$160M (+5–15% YoY); net income $0.5–$2.0M .
Say-on-Pay, Peer Group, and Shareholder Feedback
- Compensation benchmarking: Board referenced salary.com ranges for CEO/COO in Seattle area when setting bonuses; no formal compensation peer group disclosed .
- Say-on-Pay history: Not disclosed .
- Section 16 compliance: Several late Form 4 filings noted among insiders in prior periods .
Risk Indicators & Red Flags
- Controlled company governance: Absence of compensation and nominating committees; majority control by CEO and spouse .
- Dual roles: CEO also Chairman and Interim CFO; concentration of power and potential independence concerns .
- Tax gross‑ups: Golden parachute excise tax gross‑up provisions present—shareholder-unfriendly and uncommon in current governance norms .
- Related party debt: Significant loans from CEO and spouse; current liability classification and interest costs may affect cash flows and raise governance scrutiny .
- Guaranteed bonuses: Guaranteed $100k annual bonuses irrespective of performance outcomes reduce at‑risk pay mix .
- Late insider filings: Late Section 16 forms among multiple insiders .
Investment Implications
- Alignment: Extremely high insider ownership (~95% voting power by Sam Lai and Maggie Yu) aligns long‑term interests but reduces minority shareholder influence and enhances entrenchment risk .
- Incentive design: 2024 payout mechanics were directly tied to net profit thresholds and matched reported net income, but the presence of guaranteed bonuses and Board‑determined discretionary bonuses indicates limited pay‑for‑performance rigor relative to best practices .
- Governance risk premium: Controlled company exemptions, dual roles (CEO/Chair/Interim CFO), spousal board relationship, and excise tax gross‑ups may justify a governance discount; monitor any transition to full committee structures if control wanes .
- Trading signals: Quarterly equity grants add modest supply; no Form 4 sale/purchase details were found via document search; monitor insider trading filings and related‑party loan repayments given 2025 liabilities due .