Company: NEGG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036055
Chunk: 47

Company: Newegg Commerce, Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 47
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 suits against the company following periods of instability in the market price of that company’s securities. If we
were involved in a class action suit, it could divert a significant amount of our management’s attention and other resources from
our business and operations, which could harm our results of operations and require us to incur significant expenses to defend the suit.
Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future.
In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse
effect on our financial condition and results of operations.

If securities or industry analysts do not
publish research or reports about our business, or if they adversely change their recommendations regarding the common shares, the market
price for the common shares and trading volume could decline.

The trading market for the common shares could
be influenced by research or reports that industry or securities analysts may publish about our business in the future. Currently we have
one security analyst covering our company. If any additional analysts cover us in the future and downgrade the common shares, the market
price for the common shares would likely decline. If no additional analysts initiate coverage of us or fail to regularly publish reports
on us, we could lose visibility in the financial markets, which in turn could cause the market price or trading volume for the common
shares to decline.

Techniques employed by short sellers may
drive down the market price of our common shares.

Short selling is the practice of selling securities
that the seller does not own but rather has borrowed from a third party with the intention of buying identical securities back at a later
date to return to the lender. The short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed
securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the
sale. As it is in the short seller’s interest for the price of the security to decline, many short sellers publish, or arrange for
the publication of, negative opinions and allegations regarding the relevant issuer and its business prospects in order to create negative
market momentum and generate profits for themselves after selling a security short. These short attacks appear to have, in the past, led
to selling of our shares in the market. If we were to become the subject of any unfavorable allegations, whether such allegations are
proven to be true or untrue, we could have to