Company: NEGG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036055
Chunk: 16

Company: Newegg Commerce, Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 16
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 requires, among other things, that we maintain effective disclosure controls
and procedures and internal control over financial reporting. Effective internal controls are necessary for us to provide reliable financial
reports. Nevertheless, all internal control systems, no matter how well designed, have inherent limitations. Even those systems determined
to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

As described in Item 15 of our Annual Report on
Form 20-F for the year ended December 31, 2022, we previously determined that we had material weaknesses in our internal control over
financial reporting as of December 31, 2022. During the year ended December 31, 2023, we implemented enhanced procedures to remediate
the deficiencies in our internal control over financial reporting that resulted in the material weaknesses. Based on the results of our
remediation plan and assessment, we have concluded that the material weaknesses in internal control over financial reporting previously
identified have been successfully remediated as of December 31, 2023. However, completion of remediation for these material weaknesses
does not provide assurance that our remediated controls will continue to operate properly and as a result, that our financial statements
will be free from material error.

Although currently remediated, previously existing
material weaknesses could recur, or other material weaknesses could arise, and result in material misstatements to our annual or interim
consolidated financial statements that might not be prevented or detected on a timely basis or result in delayed filing of required periodic
reports. If we are unable to conclude that our internal control over financial reporting is effective, investors may lose confidence in
the accuracy and completeness of our financial reports, the market price of our Common Stock could be adversely affected and we could
become subject to additional litigation, investigations or inquiries by Nasdaq, the SEC, or other regulatory authorities, which could
require additional financial and management resources.

We are, or may become, subject to risks
associated with our international operations, which may harm our business.

Newegg began operations on our Canadian retail
website, www. newegg. ca, in October 2008. We also have a physical presence in China and Taiwan. While we may invest in building our business
in other markets, we may not be able to successfully manage the challenges associated with our current and future international operations
due to risks, such as:

  international economic and political conditions (including the relationship between China and the U. S.) or geopolitical events and security issues (including