Company: NEGG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001213900-25-036055
Chunk: 141

Company: Newegg Commerce, Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 10
Chunk 141
---
and provided certain holding period requirements are met, dividends we pay to a non-corporate U. S. holder may constitute “qualified
dividend income” that will be subject to tax at the applicable tax rate accorded to long-term capital gains. If the holding period
requirements are not satisfied, then a corporation may not be able to qualify for the dividends received deduction and would have taxable
income equal to the entire dividend amount, and non-corporate holders may be subject to tax on such dividend at regular ordinary income
tax rates instead of the preferential rate that applies to qualified dividend income.

Sale, Taxable Exchange or Other Taxable Disposition
of Our Common Shares

Subject to the discussion below under “ U. S.
Holders - Redemption of Our Common Shares,” upon a sale, taxable exchange or other taxable disposition of our common shares,
a U. S. holder generally will recognize capital gain or loss in an amount equal to the difference between the amount realized and the U. S.
holder’s adjusted tax basis in such common shares. Any such capital gain or loss generally will be long-term capital gain or loss
if the U. S. holder’s holding period for the common shares so disposed of exceeds one year. Long-term capital gains recognized by
non-corporate U. S. holders currently will be eligible to be taxed at reduced rates. The deductibility of capital losses is subject to
limitations.

Redemption of Our Common Shares

In the event that a U. S. holder’s common
shares is redeemed or if we purchase a U. S. holder’s common shares in an open market transaction (such open market purchase of common
shares by us is referred to as a “redemption” for the remainder of this discussion), the treatment of the transaction for
U. S. federal income tax purposes will depend on whether the redemption qualifies as a sale of the common shares under Section 302 of the
Code. Under these rules, the redemption generally will be treated as a sale of the common shares (rather than as a distribution) if the
redemption (i) is “substantially disproportionate” with respect to the U. S. holder, (ii) results in a “complete termination”
of the U. S. holder’s interest in us or (iii) is “not essentially equivalent to a dividend” with respect to the U. S.
holder. In determining whether any of these tests have been met, shares considered to be owned by the U. S. holder