Company: NEGG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036055
Chunk: 14

Company: Newegg Commerce, Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 14
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 reject
our products and services in the future, deterring data suppliers from supplying us data or customers from uploading their data on our
platform, or changing consumer behaviors and use of our technology. Further, we could be forced to expend significant resources in response
to a security breach, including those expended in notifying individuals and providing mitigating services, repairing system damage, increasing
cybersecurity protection costs by deploying additional personnel and protection technologies, and litigating and resolving legal claims
or governmental inquiries and investigations, all of which could divert the attention of our management and key personnel away from our
business operations. Federal, state and foreign governments continue to consider and implement laws and regulations addressing data privacy,
cybersecurity, and data protection laws, which include provisions relating to breaches. In any event, a significant security breach could
materially harm our business, operating results and financial condition. The integration of AI into our operations increases cybersecurity
and privacy risks (including unauthorized or misuse of AI tools) and could lead to potential unauthorized access, misuse, acquisition,
release, disclosure, alteration or destruction of company and customer data or other confidential or proprietary information and challenge
the stability of our platforms. Further, threat actors may leverage AI to engage in automated, targeted and coordinated attacks of our
systems.

We may not succeed in promoting and strengthening
the Newegg brand, which may materially and adversely affect our business and results of operations.

Brand recognition is a primary competitive factor
in the e-commerce market and will be a key factor in maintaining and expanding our customer base, market position and bargaining power
with vendors. Any loss of trust in our brand could harm our reputation and result in consumers, sellers, brands, vendors and other participants
reducing their activity level in our business, which could materially reduce our profitability.

If we do not, or are unable to continue to, promote
and strengthen the Newegg brand, or if the brand fails to continue to be viewed favorably, we may not be successful in attracting new
customers and Marketplace sellers, which could have a material adverse effect on our financial condition and results of operations. Additionally,
we compete not only for customers and Marketplace sellers, but also for favorable product allocations and cooperative advertising support
from our vendors. If we fail to maintain favorable recognition of our brand, we may not be successful in maintaining and strengthening
our relationships with vendors in existing and new product categories or in maintaining existing offerings and sourcing new products at
competitive prices and with adequate levels of inventory.

Adverse publicity about