Company: NEGG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036055
Chunk: 36

Company: Newegg Commerce, Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 36
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, although such
licenses may not be available on reasonable terms or at all, which may result in substantial payments and royalties and significantly
increase our operating expenses. If we cannot develop non-infringing technology or license the appropriate technology at commercially
reasonable rates, an intellectual property claim successfully asserted against us could cause significant business interruptions in our
operations, which could restrict our ability to compete effectively and have a material adverse effect on our financial condition and
results of operations.

Newegg may be subject to product liability
claims, which could be costly and time-consuming to defend.

The majority of the products sold on our online
platforms are manufactured by third parties, and some of them may be defectively designed or manufactured. If any product we sell were
to cause physical injury or injury to property, an injured party could bring claims against us as the retailer of the product. Furthermore,
we also offer computer systems, IT components, peripherals, household appliances and other goods under our private labels, Rosewill and
ABS, on our platforms or through other e-commerce platforms, such as eBay, which could potentially create more exposure for Newegg with
respect to product liability than if we had simply acted as a retailer of third-party products. Our insurance coverage may not be adequate
against such product liability claims. If a successful claim were brought against Newegg in excess of our insurance coverage, it could
adversely affect our financial condition and results of operations. Even unsuccessful claims could result in the expenditure of significant
funds and management time in defending them and could have a negative impact on our reputation and business.

We may incur additional costs due to tax
assessments resulting from ongoing and future audits by tax authorities.

In the ordinary course of business, Newegg is
subject to tax examinations by various governmental tax authorities. The global and diverse nature of our business means that there could
be additional examinations by governmental tax authorities and the resolution of ongoing and other probable audits which could impose
a future risk to the results of our business. While our past tax controversies have not had a material impact to date, any similar future
tax matters that are not resolved in our favor could have a material impact on our consolidated financial position, cash flows, and results
of operations.

Employment laws in some of the countries
in which we operate are relatively stringent.

As of December 31, 2024, we had 762 full-time
employees, of whom approximately 65% were located in the United States, 30% in China,