Company: NEGG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036055
Chunk: 29

Company: Newegg Commerce, Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 29
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 or to execute
business strategies in the means or manner desired. In addition, complying with these covenants may make it more difficult to successfully
execute our business strategy, invest in our growth strategy and compete against companies who are not subject to such restrictions. The
credit agreement also contains financial covenants that require us to maintain certain minimum financial ratios and maintain an operating
banking relationship with the financial institutions. Although we are currently in compliance with the financial covenants, we cannot
guarantee that we will continue to be able to generate sufficient cash flow or sales to meet the financial covenants or pay the principal
or interest under the credit agreements.

If we are unable to comply with our payment requirements,
the financial institutions may accelerate our obligations under the credit agreement and foreclose upon the collateral, or we may be forced
to sell assets, restructure our indebtedness or seek additional equity capital, which would dilute shareholders’ interests. If we
fail to comply with any covenant it could result in an event of default under the agreement and the lenders could make the entire debt
immediately due and payable. If this occurs, we might not be able to repay the debt or borrow sufficient funds to refinance it. Even if
new financing is available, it may not be on terms that are acceptable to us. See “ Note 8 - Line of Credit” to our consolidated
financial statements for more information.

Our international sales and operations require
access to international markets and are subject to applicable laws relating to trade, export and import controls and economic sanctions,
the violation of which could adversely affect our operations.

Newegg must comply with all applicable U. S. export
and import laws and regulations. Such laws and regulations include, but are not limited to, the Export Administration Act and the Export
Administration Regulations. Newegg must also comply with U. S. sanctions laws and regulations, which are primarily administered by the
U. S. Department of Treasury’s Office of Foreign Assets Control, as well as other U. S. government agencies. U. S. sanctions generally
prohibit transactions by U. S. persons, including us, involving sanctioned countries, entities and persons, without U. S. government authorization
(which will rarely be granted). Non-U. S. subsidiaries of U. S. companies are required to comply with U. S. sanctions against Cuba and Iran.

Violations of U. S. laws and regulations relating
to trade, export and import controls and economic sanctions could result