Company: NEGG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036055
Chunk: 27

Company: Newegg Commerce, Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 27
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 categories, changing price points and product
replacement and upgrade cycles.

This rapid pace of change can be hard to predict
and manage, and there is no guarantee we can effectively do so all the time. If we fail to interpret, predict and react to these changes
in a timely and effective manner, the consequences can include: failure to offer the products and services that our customers want; excess
inventory, which may require heavy discounting or liquidation; inability to secure adequate access to brands or products for which consumer
demand exceeds supply; delays in adapting our merchandising, marketing or supply chain capabilities to accommodate changes in product
trends; and damage to our brand and reputation. These and other similar factors could have a material adverse impact on our revenue and
profitability.

The successful operation of our business
depends upon the performance, reliability and security of the internet infrastructure in the countries where we operate.

Our business depends on the performance, reliability
and security of the telecommunications and internet infrastructure in the countries where we operate. We have several servers located
in China that provide development, testing and quality control services. Almost all access to the internet in China is maintained through
state-owned telecommunication operators under the administrative control and regulatory supervision of the Ministry of Industry and Information
Technology of the People’s Republic of China (“ PRC”). In addition, the national networks in China are connected to the
internet through state-owned international gateways, which are the only channels through which a domestic user can connect to the internet
outside China. We may face similar or other limitations in other countries in which we operate. We may not have access to alternative
networks in the event of disruptions, failures or other problems with the internet infrastructure in China or elsewhere. In addition,
the internet infrastructure in the countries in which we operate may not support the demands associated with continued growth in internet
usage.

The failure of telecommunications network operators
to provide Newegg with the requisite bandwidth could also interfere with the speed and availability of our websites and mobile apps. If
the prices that we pay for telecommunications and internet services rise significantly, our net income could be adversely affected. In
addition, if internet access fees or other charges to internet users increase, our user traffic may decrease, which in turn may significantly
decrease our revenues.

If we are unable to manage our growth or
execute our strategies effectively, our business and prospects may be materially and adversely affected.

Our success depends upon our ability to manage
the growth of our operations effectively. Any planned