Company: NEGG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036055
Chunk: 177

Company: Newegg Commerce, Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 18
Chunk 177
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 the customer or when service is provided. The Company fulfills orders with its owned inventory or with inventory sourced through its
suppliers. The vast majority of the Company’s product sales are fulfilled from its owned inventory. The amount recognized in revenue
represents the expected consideration to be received in exchange for such goods or services. For orders fulfilled with inventory sourced
through the Company’s suppliers, and where the products are shipped directly by the Company’s supplier to the Company’s
customer, the Company evaluates the criteria outlined in ASC 606-10-55, Principal versus Agent Considerations 91

The Company generally requires payment
by credit card upon placement of an order, and to a limited extent, grants credit to business customers, typically on 30-day to 60-day
terms. Shipping and handling is considered a fulfillment activity, as it takes place before the customer obtains controls of the good.
Amounts billed to customers for shipping and handling are included in net sales upon completion of the performance obligation.

F-11

The Company’s product sales contracts
include terms that could cause variability in the transaction price such as sales returns and credit card chargebacks. As such, the transaction
price for product sales includes estimates of variable consideration to the extent it is probable that a significant reversal of revenue
recognized will not occur. Sales are reported net of estimated returns and allowances and credit card chargebacks, based on historical
experience.

The Company also earns fees for facilitating
marketplace transactions and extended warranty sales on its platforms. For marketplace transactions, the Company’s websites host
third-party sellers and the Company also provides the payment processing function. The Company recognizes revenue upon sale of products
made available through its marketplace store. The Company is not the principal in this arrangement and does not control the specific goods
sold to the customer. The Company reports the net amount earned as commissions, which are determined using a fixed percentage of the sales
price or fixed reimbursement amount. The Company also offers extended warranty programs for various products on behalf of an unrelated
third party. The Company reports the net amount earned as revenue at the time of sale, as it is not the principal in this arrangement
and does not control the specific goods sold to the customer.

The Company offers its customers the
opportunity to purchase goods and services on its websites using deferred financing promotional programs provided by a third-party financing
company. These programs include an option to make no payments for a period of six, twelve, eighteen or twenty-four months. The third-party
financing company makes