Company: NEGG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036055
Chunk: 23

Company: Newegg Commerce, Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 23
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 manufactured in countries outside the United States. These imported products subject us to the risk of
changes in import duties or quotas, new restrictions on imports, work stoppages, delays in shipment, freight cost increases, product cost
increases due to foreign currency fluctuations or revaluations and economic uncertainties (including the imposition of antidumping or
countervailing duty orders, safeguards, remedies or compensation and retaliation due to illegal foreign trade practices) and instability
in the political and economic environments of the countries in which the manufacturers of these products operate. If any of these or other
factors were to cause a disruption of trade from these countries, we may be unable to obtain sufficient quantities of these imported products
to satisfy our requirements or our cost of obtaining such products may increase. Historically, instability in the political and economic
environments of the countries in which our suppliers operate has not had a material adverse effect on our operations. However, the effect
that future changes in economic or political conditions in the foreign countries where our supplying manufacturers are located may have
on our operations cannot be predicted. Potential disruptions or delays in supply due to economic or political conditions in foreign countries
could adversely affect our results of operations unless and until alternative supply arrangements are made.

We are partially dependent on third parties
to perform a number of our e-commerce functions. If such third parties are unwilling or unable to continue providing these services, our
business could be harmed.

As of December 31, 2024, approximately 8.9% of
our gross merchandise value (“ GMV”) was generated by the sale of products fulfilled through third parties. These third parties
provide various services on our behalf, including inventory maintenance and order processing. We have no effective means to ensure that
these third parties will continue to perform these services to our satisfaction, in a manner satisfactory to our customers or on commercially
reasonable terms. Our customers may become dissatisfied and cancel their orders or decline to make future purchases if these third parties
fail to deliver products on a timely basis. If our customers become dissatisfied with the services provided by these third parties, our
reputation and brand could suffer.

If we fail to manage our inventory effectively,
our financial condition, results of operations and liquidity may be materially and adversely affected.

Our scale and business model require us to manage
a large volume of inventory effectively. If we expand our product offerings and include more SKUs in our inventory, it could make it more
challenging for us to manage our inventory effectively and put more