Company: NEGG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036055
Chunk: 174

Company: Newegg Commerce, Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 18
Chunk 174
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 for credit losses based on historical
experience, current conditions, and reasonable and supportable forecasts. Accounts receivables are written off when deemed uncollectible.
Recoveries of accounts receivable previously written off are recorded when received. Amounts receivable from business customers were $10.7million and $20.7million, net of allowances of $0.5million and $0.2million, at December 31, 2024 and 2023, respectively. See further
discussion of amounts receivable related to vendor incentive programs under Incentives Earned from Vendors below.

g. Inventories

Inventories, consisting of products
available for sale, are accounted for using the first-in, first-out (FIFO) method and are valued at the lower of cost and net realizable
value. In-bound freight-related costs are included as part of the cost of merchandise held for resale. In addition, certain vendor payments
are deducted from the cost of merchandise held for resale. The Company records an inventory provision for refurbished, slow-moving, or
obsolete inventories based on historical experience and assumptions of future demand for product. Amounts of inventory allowances were
$2.7million and $3.9million, as of December 31, 2024 and 2023, respectively.

F-9

h. Property and Equipment

Property and equipment are stated at
cost, less accumulated amortization and depreciation computed using the straight-line method over the estimated useful life of each asset.
Leasehold improvements are amortized over the lesser of the remaining lease term or the estimated useful life of the assets. Expenditures
for repair and maintenance costs are expensed as incurred, and expenditures for major renewals and improvements are capitalized. Costs
incurred during the application development stage of internal-use software and website development are capitalized and included in property
and equipment. When assets are retired or otherwise disposed of, the cost and accumulated depreciation or amortization are removed from
the accounts, and any gain or loss is reflected in the Company’s consolidated statements of operations. The useful lives for depreciable
assets are as follows:

  Buildings                    20 – 39 years                     
  Machinery and equipment      3 – 7 years                       
  Computer and software        3 – 5 years                       
  Leasehold improvements       Lesser of lease term or 10 years  
  Capitalized software         3 – 5 years                       
  Furniture and fixtures       5 – 7 years                       

i