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

Company: Newegg Commerce, Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 25
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We incurred net losses of $43.3 million, $59.0
million, and $57.4 million in 2024, 2023, and 2022, respectively, and reported net income of $36.3 million in 2021. We cannot assure you
that we will be able to generate net profits or positive cash flow from operating activities in the future. Our ability to achieve and
maintain profitability will depend in large part on our ability to, among other things, source and sell higher margin products, grow and
diversify our supplier base, and optimize our cost structure. We may not be able to achieve any of the above. If we grow and expand our
business, our operating expenses may increase further. As a result of the foregoing, we may incur net losses in the future.

If we fail to adopt new technologies or
adapt our websites, mobile apps and systems to changing customer requirements or emerging industry standards, our business may be materially
and adversely affected.

To remain competitive, we must continue to enhance
and improve the responsiveness, functionality and features of our online platforms, including our websites and mobile apps. The internet
and the e-commerce industry are characterized by rapid technological evolution, such as emerging artificial intelligence (“ AI”)
and machine learning technologies, frequent introductions of new products and services embodying new technologies and the emergence of
new industry standards and practices, and changes in customer requirements and preferences, any of which could render our existing technologies
and systems obsolete. We may be required to devote substantial resources to developing proprietary technologies or license technologies,
enhancing our existing websites and mobile apps, developing new services and technology such as AI and machine learning that address the
increasingly sophisticated and varied needs of our current and prospective customers and adapting to technological advances and emerging
industry and regulatory standards and practices in a cost-effective and timely manner. The development of proprietary technology entails
significant technical and business risks. There can be no assurance that our efforts to develop proprietary technologies will succeed
or that any technology licenses will be available on commercially reasonable terms. Substantial investments will be required to remain
technologically competitive, and our failure to do so may harm our business and results of operations. Furthermore, the legal regulatory
regime relating to AI is developing in many jurisdictions, and new rules and regulations could significantly increase our compliance costs,
require us to modify our technologies and business practices, prevent or limit our use of AI in certain circumstances or result in regulatory
investigations,