Company: NEGG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036055
Chunk: 181

Company: Newegg Commerce, Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 18
Chunk 181
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 $12.7million and $14.7million, respectively.

F-13

t. Stock-Based Compensation

The measurement and recognition of compensation
expense for all stock-based payment awards made to employees and directors, including employee stock options and restricted stock, is
based on estimated fair value of the awards on the date of grant. The value of awards that are ultimately expected to vest is recognized
as expense on a straight-line basis over the requisite service periods in the consolidated statements of operations. Forfeitures are accounted
for as they occur. See Note 13 - Stock-Based Compensation for further information about the Company’s stock compensation
plans.

u. Income Taxes

The Company is subject to federal and
state income taxes in the United States and taxes in foreign jurisdictions. In accordance with ASC Topic 740, the Company uses
the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred taxes are determined based
on the temporary differences between the financial statement and tax bases of assets and liabilities, using tax rates expected to be in
effect during the years in which the bases differences are expected to reverse. A valuation allowance is established against deferred
tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company recognizes the tax benefit
from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the taxing
authorities based on the technical merits of the position. The Company measures the recognized tax benefit as the largest amount of tax
benefit that has greater than a50% likelihood of being realized upon the ultimate settlement with a taxing authority. The Company reverses
a previously recognized tax benefit if it determines that the tax position no longer meets the more-likely-than-not threshold of being
sustained. The Company accrues interest and penalties related to unrecognized tax benefits in income tax expense.

v. Concentration of Credit Risk
and Significant Customers and Vendors

The Company maintains its cash and cash
equivalents in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses
in such accounts and does not believe it is exposed to any significant credit risk from cash and cash equivalents.

For the years ended December 31,
2024, 2023 and 2022, the Company had no individual customers that accounted for greater than 10% of net sales.

The Company purchases its products on
credit terms from vendors