Company: NEGG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036055
Chunk: 7

Company: Newegg Commerce, Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 7
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 products or services, or our online platforms are severely interrupted
or otherwise fail to meet our customers’ requests, our reputation could be adversely affected.

As an e-commerce company, we have limited ability
to allow buyers to touch, test and feel products, personally interact with sales and customer service representatives, and receive or
return products without waiting or paying for the products to be shipped, like brick-and-mortar retailers or online retailers that have
brick-and-mortar operations do. Therefore, it is important that we continue to improve our online platforms, including efforts to encourage
the creation of more high-quality and useful user-generated content, such as reviews and commentary, on the products we and our Marketplace
sellers offer. If we do not continue to make investments in the development of our online platforms and customer service operations and,
as a result, or due to other reasons, fail to provide a high-quality customer experience, we may lose customers, which could adversely
impact our operating results.

We currently operate customer service centers
in California, Texas and Asia, focusing on serving North American buyers. Any material disruption or slowdown in our customer support
services resulting from telephone or internet failures, power or service outages, natural disasters, labor disputes or other events could
make it difficult or impossible for us to provide adequate customer support. In addition, the future volume of customer complaints and
inquiries may exceed our present system capacities. If this occurs, we could experience delays in responding to customer inquiries and
addressing customer complaints and concerns. Our current level of customer support may also fail to meet the expectations of customers.
Failure to provide satisfactory levels of customer service may harm our reputation, causing potential loss of existing customers and difficulty
in acquiring new customers.

Some of our software and systems contain
open source software, which may pose particular risks to our proprietary software and solutions.

We have incorporated open source software code
into some of our internal software and systems and expect to continue to use this open source software in the future. The licenses applicable
to open source software typically require that the source code subject to the license be made available to the public and that any modifications
or derivative works to open source software continue to be licensed under open source licenses. From time to time, we may face intellectual
property infringement claims from third parties, demands for the release or license of the open source software or derivative works that
we developed using such software (which could include our proprietary source code) or claims that otherwise seek to enforce the terms
of the applicable open