Company: NEGG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036055
Chunk: 4

Company: Newegg Commerce, Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 4
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 economy, armed hostilities, foreign currency exchange rate fluctuations, conditions affecting the retail environment for products
we sell, and other matters that influence consumer spending and preferences.

In addition, consumer confidence and spending
can be materially adversely affected in response to financial market volatility, negative financial news, conditions in the real estate
and mortgage markets, including home equity loans and consumer credit, changes in net worth based on market changes and uncertainty, energy
shortages and cost increases, labor and healthcare costs, government actions and general uncertainty regarding the overall future economic
environment. Some consumers view a substantial portion of the products we offer as discretionary items rather than necessities. As a result,
our operating results are sensitive to changes in macroeconomic conditions that impact consumer spending, including discretionary spending. Declines
in consumer spending have resulted, and in the future may result, in decreased demand for our products and services which may have an
adverse effect on our results of operations.

A downturn in the economic environment can also
lead to financial instability; increased credit and collectability risk on our receivables; the failure of important partners, including
suppliers, logistics providers, and financial institutions; limitations on our ability to issue new debt; reduced liquidity and declines
in the fair value of our financial instruments. These and other economic factors can materially adversely affect our business, results
of operations, financial condition and stock price.

Our business faces intense domestic and
international competition.

The e-commerce market is intensely competitive
with limited barriers to entry. Our current and potential competitors include retailers, manufacturers and distributors that offer a wide
range of similar product categories and companies that provide Direct-to-Consumer (“ D2C”) platform services, fulfillment and
logistics services and other e-commerce related services. It is expected that the competition in this market will intensify in the future
as companies develop new business models and enhanced technologies, new competitors enter the market, competitors forge new business combinations
or alliances, and established companies in other market segments expand to become competitive with our business.

Many of our current and potential online and brick-and-mortar
competitors have larger bases of customers or third-party sellers, better brand recognition and greater financial, marketing, technical,
management and other resources than we do. In addition, some of our competitors have used and may continue to use aggressive pricing or
promotional strategies, may have stronger supplier relationships with more favorable terms and inventory allocation and may devote substantially
greater resources to their online platforms and system development than we do. Increased competition may result