Company: NEGG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036055
Chunk: 38

Company: Newegg Commerce, Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 38
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 E. Taxation” for additional detail.

Risks Related to our Common Shares

A majority of Newegg’s Common Shares
are pledged as collateral to support delinquent indebtedness of our two largest shareholders and could be sold to satisfy that indebtedness
or for other reasons.

Our common shares (“ Newegg Common Shares”)
owned by Digital Grid have been pledged to Bank of China Limited Zhejiang Branch (“ BOC”) as collateral to support working
capital loans and letters of credit provided by BOC to Hangzhou Lianluo. The loans have been guaranteed jointly and severally by Beijing
Digital Grid Technology Co., Ltd., a subsidiary of Hangzhou Lianluo, and by Mr. Zhitao He. Hangzhou Lianluo has informed us that the total
principal amount owed under these loans as of March 31, 2025 was RMB147 million in RMB-denominated loans plus USD$66.5 million in U. S.
dollar-denominated loans. In May 2020, BOC filed several lawsuits against Hangzhou Lianluo, Digital Grid, Beijing Digital Grid Technology
Co., Ltd. and Mr. Zhitao He in the Hangzhou Intermediate People’s Court in China (the “ Hangzhou Court”) alleging that
Hangzhou Lianluo has failed to repay the loans when due and is in breach of the loan agreements. The Hangzhou Court has ruled that the
loans are in default in a final, non-appealable judgment.

In addition, on April 11, 2023, the Industrial
and Commercial Bank of China (“ ICBC”) filed a lawsuit against Hangzhou Lianluo in the Hangzhou Court alleging that Hangzhou
Lianluo failed to repay when due three separate loans, provided by ICBC to Hangzhou Lianluo, and was in breach of the related loan agreements.
Hangzhou Lianluo has informed us that the estimated total amount owed under the loans, including interest, fees, expenses and penalties,
as of March 31, 2025, was approximately RMB448 million. Hangzhou Lianluo did not pledge any Newegg Common Shares owned by it or Digital
Grid as collateral to support the ICBC loans. As disclosed by Hangzhou Lianluo on February 26, 2024, the Hangzhou Court has ruled that
Hangzhou Lianluo owed ICBC RMB332 million (including interest) under one of