Company: NEGG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036055
Chunk: 8

Company: Newegg Commerce, Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 8
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 source license. These claims could result in litigation and could require us to purchase a costly license, publicly
release the affected portions of our source code, be limited in the licensing of our technologies or cease offering the implicated solutions
unless and until we can re-engineer them to avoid infringement or change the use of the implicated open source software. In addition to
risks related to license requirements, use of certain open source software can lead to greater risks than use of third-party commercial
software, as open source licensors generally do not provide warranties, indemnities or other contractual protections with respect to the
software (for example, non-infringement or functionality). Our use of open source software may also present additional security risks
because the source code for open source software is publicly available, which may make it easier for hackers and other third parties to
determine how to breach our websites, mobile apps and systems that rely on open source software. Any of these risks could be difficult
to eliminate or manage and, if not addressed, could have a material adverse effect on our business, financial condition and results of
operations.

We and our Marketplace sellers’ pricing
strategy may not meet customers’ price expectations or result in profitability.

Demand for our products is generally highly sensitive
to price. Our pricing strategies have had, and may continue to have, a significant impact on our net sales and net income. We often offer
discounted prices, free or discounted shipping or bundled products as a means of attracting customers and encouraging repeat purchases.
Such offers and discounts may reduce our margins. Moreover, our competitors’ pricing and marketing strategies are beyond our control
and can significantly impact the results of our pricing strategies. If we fail to meet our customers’ price expectations in any
given period, or if our competitors decide to engage in aggressive pricing strategies, our business and results of operations would suffer.

In addition, under applicable federal and state
unfair competition laws, including the California Consumer Legal Remedies Act, and U. S. Federal Trade Commission regulations, we are required
to accurately identify product offerings, not make misleading claims on our platforms, and use qualifying disclosures where and when appropriate.
We are particularly subject to the risks associated with our discounting pricing practices as a result of the aggressive judicial interpretations
of deceptive pricing laws, particularly in California, which has led to numerous class action settlements by online and brick-and-mortar
retailers in the past. For example, Newegg was named as the defendant in a putative class action accusing it