Company: NEGG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036055
Chunk: 43

Company: Newegg Commerce, Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 43
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 rule that a majority of our board must be independent directors;  

  an exemption from the rule that the compensation of our chief executive officer must be determined or recommended solely by independent directors; and  
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  an exemption from the rule that our director nominees must be selected or recommended solely by independent directors.  
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As a result, you will not have the same protection
afforded to shareholders of companies that are subject to these corporate governance requirements.

The Amended and Restated Memorandum and Articles
of Association limit your ability to appoint directors and influence corporate matters and could discourage others from pursuing any change
of control transactions that minority holders of common shares may view as beneficial.

Digital Grid and Mr. Fred Chang, who beneficially own approximately
57.3% and 30.9%, respectively, of our total voting power as of December 31, 2024, have the right to appoint four directors and three directors,
respectively, with Mr. Fred Chang acting as a “ Minority Representative” selected by a majority of the Legacy Shareholders
(as defined in the Company’s Amended and Restated Memorandum and Articles of Association), who collectively own approximately 32.6%
of our total voting power as of December 31, 2024. The number of directors that Digital Grid and the Minority Representative are entitled
to appoint will decrease proportionately with the decrease of the respective voting power of Digital Grid and the Legacy Shareholders.
Any director positions which neither Digital Grid nor the Minority Representative is entitled to appoint shall be appointed by the remaining
directors, or by any other means allowed under the Amended and Restated Memorandum and Articles of Association.

The Amended and Restated Memorandum and Articles
of Association limit your ability to appoint or elect persons for service on our board and may discourage proxy contests for the election
of directors and purchases of substantial blocks of shares by making it more difficult for a potential acquirer to gain control of our
board.

Certain provisions of Newegg’s Amended
Shareholders Agreement may delay or prevent us from raising funding in the future and may have an adverse impact on us and the liquidity
and market price of our common shares.

We are party to an amended and restated shareholders
agreement (the “ Amended Shareholders Agreement”) with Digital Grid, Mr. Fred Chang