Company: NEGG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036055
Chunk: 172

Company: Newegg Commerce, Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 18
Chunk 172
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 areas:
(1) providing a differentiated and superior online shopping experience, (2) offering reliable and timely product fulfillment,
and (3) delivering superior customer service.

On April 7, 2025, the Company effected
a share combination of the Company’s outstanding common shares, par value $0.021848per share, at a ratio of twenty-to-one (the
“ Share Combination”). The common shares listed on The Nasdaq Capital Market commenced trading on The Nasdaq Capital Market
on a post-Share Combination adjusted basis at the open of business on April 7, 2025. As a result of the Share Combination, the number
of issued and outstanding common shares immediately prior to Share Combination was reduced such that every twenty shares of common shares
held by a shareholder immediately prior to the Share Combination were combined and reclassified into one common share, par value $0.43696per share. Fractional shares resulting from the Share Combination were settled by cash payment.

Options, and other like awards, to
purchase the Company’s common shares were also proportionately adjusted in accordance with their terms to reflect the Share Combination.

All common share amounts and per share
numbers discussed herein have been retroactively adjusted for the Share Combination.

  Basis of Presentation  

The consolidated financial statements
include the accounts of Newegg Commerce, Inc. and its consolidated subsidiaries. All intercompany balances and transactions are eliminated
upon consolidation.

  Summary of Significant Accounting Policies  

a. Principles of Consolidation

The accompanying consolidated financial
statements are prepared in accordance with U. S. GAAP and include the accounts of all consolidated subsidiaries. All intercompany balances
and transactions have been eliminated in consolidation.

b. Use of Estimates

The preparation of the Company’s
consolidated financial statements in conformity with U. S. GAAP requires management to make estimates and assumptions that affect
amounts reported in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, revenue
recognition, incentives earned from vendors, allowance for credit losses, investment valuation, valuation allowance for deferred tax assets,
and stock-based compensation. Actual results could differ from such estimates.

c. Reclassifications

Certain prior period amounts have been
reclassified to conform to the current period presentation. The reclassifications did not have any impact on net operations and/or cash
flows.

F-8

d. Cash and Cash Equivalents

Cash and cash equivalents consist primarily
of cash on deposit, certificates of deposit, and money market accounts