Company: NEGG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036055
Chunk: 193

Company: Newegg Commerce, Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 18
Chunk 193
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  Lease liabilities                                       16,669        18,684  
  Section 174 Costs                                        4,149         3,138  
  Credits and other                                        1,409         2,834  
  Net operating losses                                    17,041        13,191  
  Gross deferred tax assets                               47,719        46,672  
  Valuation allowance                                   ( 28,410      ( 25,670  
  Total deferred tax assets, net                          19,309        21,002  
  Deferred tax liabilities:                                                     
  Prepaid expenses                                       ( 1,465       ( 1,606  
  Other                                                  ( 1,594         ( 233  
  Right of Use of Asset                                 ( 15,336      ( 17,556  
  Total deferred tax liabilities                        ( 18,395      ( 19,395  
  Net deferred tax assets             $                      914         1,607  

In accordance with ASC 740, Income
Taxes, the Company evaluates whether a valuation allowance should be established against the net deferred tax assets based upon the
consideration of all available evidence and using a “more-likely than-not” standard. Significant weight is given to evidence
that can be objectively verified. The determination to record a valuation allowance is based on the recent history of cumulative losses
and losses expected in the near future.

The Company’s U. S. federal
consolidated filing group includes certain international entities. Based upon results of operations for the years ended December 31,
2024, 2023 and 2022, it is determined that it is not more likely than not that the Company will realize the benefit from the U. S. federal,
consolidated filing state, Newegg separate filing state, and Magnell separate filing state net deferred tax assets. As a result, the Company
has recorded a valuation allowance against those net deferred tax assets for the year ended December 31, 2024. The Company maintains valuation
allowances against certain non-US loss corporations. Total valuation allowance against U. S. and non-U. S. deferred tax assets was $28.4million
and $25.7million as of December 31, 2024 and 2023, respectively.

F-21

At December 31, 2024, the Company
has federal net operating losses (“ NOL”) carryforward of $51.6million and $60.5million of