Company: NEGG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036055
Chunk: 6

Company: Newegg Commerce, Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 6
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 several factors, including:

  decreased demand for IT/CE products, particularly computer components and parts that have historically generated a significant portion of our net sales;  

  poor economic conditions and any related decline in customers’ demand for the products we and our Marketplace sellers offer;  

  increased price competition from our competitors; or  
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  technological obsolescence of the products that we and our Marketplace sellers offer.  

Additionally, it is expected that some of our
future growth should be driven by product releases or upgrades that may occur in the future. If such product releases do not occur or
do not drive sales of IT/CE products to the extent expected, our future sales may be less than predicted, negatively impacting our net
sales and net income.

Newegg’s reputation and business may
be harmed if Newegg or the Newegg Marketplace sellers sell pirated, counterfeit, illegal or “gray market” items.

We receive from time to time, and may receive
in the future, communications alleging that Newegg or the Newegg Marketplace sellers sold pirated, counterfeit, illegal or “gray
market” items. These and future claims could increase our cost of doing business as a result of legal expenses, adverse judgments
or settlements, and reputational harm, and could require us to change our business practices in a way that would be less efficient and
more costly. In addition, key manufacturers and vendors, for instance, may be less likely to offer us favorable terms or authorization
to carry their products if we sell products of theirs purchased on the “gray market.” We currently do not have any insurance
to cover the types of claims that could be asserted in such litigation or in legal or administrative actions initiated by customers of
such products, or by government agencies. If a claim were brought against us successfully, it could expose us to significant liability,
which could have a material adverse effect on our business and operations.

If we are unable to provide a satisfactory
customer experience, our reputation would be harmed and we could lose customers.

The success of our business depends largely on
our ability to provide a superior customer experience to maintain and grow our customer base and keep our customers highly engaged on
our online platforms, which in turn depends on a variety of factors. These include our ability to continue to maintain a wide range of
product offerings with attractive pricing, provide timely and reliable order fulfillment and provide high-quality customer support and
service. If our customers are not satisfied with our platforms,