Company: NEGG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036055
Chunk: 175

Company: Newegg Commerce, Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 18
Chunk 175
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. Leases

The Company defines lease agreements
at their inception as either operating or finance leases depending on certain defined criteria. Certain lease agreements may entitle the
Company to receive rent holidays, other incentives, or periodic payment increases over the lease term. Accordingly, rent expense under
operating leases is recognized on the straight-line basis over the original lease term, inclusive of predetermined minimum rent escalations
or modifications and rent holidays.

j. Impairment of Long-Lived Assets

The Company evaluates the recoverability
of long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. The impairment test consists of two steps. The first step compares the carrying amount of the asset to the sum of expected
undiscounted future cash flows. If the sum of expected undiscounted future cash flows exceeds the carrying amount of the asset, no impairment
is taken. If the sum of expected undiscounted future cash flows is less than the carrying amount of the asset, a second step is warranted
and an impairment loss is measured as the amount by which the carrying amount of the asset exceeds its fair value calculated using the
present value of estimated net future cash flows. There have beennoimpairment losses recognized by the Company for the years ended December 31,
2024, 2023 and 2022.

k. Investments

Investments are accounted for using
the equity method if the investment provides the Company the ability to exercise significant influence, but not control, over an investee.
Significant influence is generally deemed to exist if the Company has an ownership interest in the voting stock of the investee between20% and50%, although other factors are considered in determining whether the equity method is appropriate. Also, investments in limited
partnerships of more than3% to5% are generally viewed as more than minor and are accounted for using the equity method.

The investments for which the Company
is not able to exercise significant influence over the investee and which do not have readily determinable fair values were accounted
for under the cost method prior to the adoption of ASU 2016-01 Financial Instruments-Overall (Subtopic 825-10): Recognition
and Measurement of Financial Assets and Financial Liabilities. Subsequent to the adoption of this standard as of January 1, 2018,
the Company has elected the measurement alternative to measure such investments at cost, less any impairment, plus or minus changes resulting
from observable price changes in orderly