Company: NEGG
Filing Date: 2025-07-15
Form Type: 424B5
Source: 0001213900-25-063944
Chunk: 8

Company: Newegg Commerce, Inc.
Filing Date: 2025-07-15
Form: 424B5
Chunk 8
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 (Hong Kong) Technology Co., Limited (“Digital Grid”) is the record owner of 11,141,079 of our
Common Shares, which comprise 57.1% of our outstanding Common Shares. All of these shares have been pledged to BOC as collateral to
support working capital loans and letters of credit provided by BOC to Hangzhou Lianluo. Hangzhou Lianluo has informed us that the
total principal amount owed under these loans as of June 30, 2025 was RMB147 million in RMB-denominated loans plus $66.5 million in
U.S. dollar-denominated loans. The Hangzhou Intermediate People’s Court in China (the “Hangzhou Court”) has ruled
that these loans are in default in a final, non-appealable judgment.

In addition, we are aware of several other indications
that Hangzhou Lianluo is under significant financial distress. For example, the Hangzhou Court has ruled that Hangzhou Lianluo owes other
creditors at least RMB332 million under loans which are unrelated to Newegg or our Common Shares. There are also public notices for an
auction of Hangzhou Lianluo’s Beijing offices to satisfy a delinquent loan of RMB220 million owed by Hangzhou Lianluo to another
lender.

On August 16, 2024, the Shenzhen Stock Exchange
delisted the common shares of Hangzhou Lianluo, which could cause its creditors and shareholders to seek liquidity, including by seeking
the sale of Common Shares held by Hangzhou Lianluo. Hangzhou Lianluo’s
Newegg Common Shares could be sold at anytime to help meet Hangzhou Lianluo’s liquidity needs.

In recent years, Hanzhou Lianluo’s chairman
and CEO, Mr. Zhitao He, and his affiliates have been liquidating some of their holdings in Hangzhou Lianluo to pay down their personal
loans secured by Hangzhou Lianluo’s common shares. From December 20, 2021 to June 30, 2025, we estimate that Mr. He sold approximately
410,369,448 common shares of Hangzhou Lianluo (constituting approximately 18.85% of its total share capital) to various creditors to pay
down the loans secured by Hangzhou Lianluo’s common shares. The continued sale of these shares could result in the