July 14, 2021 – Los Angeles, CA – On July 14, 2021, Hangzhou Lianluo Interactive Information Technology Co., Ltd (“Hangzhou Lianluo”) issued a statement via a public filing in China stating that it believes that the gross merchandise value (“GMV”), net sales and net income of Newegg Commerce, Inc. (the “Company,” “us,” “our,” or “we”) for the six months ended June 30, 2021 are expected to increase over the GMV, net sales and net income for the same period in 2020. Hangzhou Lianluo is the controlling stockholder of the Company and is publicly traded on the Shenzhen stock exchange. Hangzhou Lianluo made this filing in order to comply with the rules and regulations of the Shenzhen stock exchange. The Company is correspondingly furnishing this information in accordance with the rules and regulations applicable to the Company and to ensure broad dissemination of the disclosures made by Hangzhou Lianluo relating to the Company.
Note Regarding Preliminary Estimated Financial Results
The preliminary estimates of the Company’s financial performance included in this press release are based solely on information available to the Company as of the date hereof and are inherently uncertain and subject to change. The Company has not yet completed its financial accounting closing procedures for the first half of 2021. The preliminary estimates contained in this press release are forward-looking statements. The Company’s actual results remain subject to the completion of management’s final review, the Company’s other closing procedures and review procedures performed by the Company’s independent registered accounting firm. Accordingly, you should not place undue reliance on the preliminary estimated financial data, which may differ materially from the actual results for the first half of 2021.
These preliminary estimates are not a comprehensive statement of the Company’s consolidated financial results for the first half of 2021 and should not be viewed as a substitute for full financial statements prepared in accordance with GAAP (as defined below). In addition, these preliminary estimates for the first half of 2021 are not necessarily indicative of the results to be achieved in any future period. The Company’s actual financial results for the first half of 2021 may differ from these preliminary estimates due to the completion of its financial closing procedures, final adjustments and other developments that may arise between the date hereof and the time that financial information for the first half of 2021 is finalized.
The preliminary estimated financial data included in this press release have been prepared by, and are the responsibility of, the Company’s management. The Company’s independent registered public accounting firm has not audited, reviewed, examined, compiled nor applied agreed-upon procedures with respect to this preliminary estimated financial data, nor has it expressed any opinion or any other form of assurance with respect thereto.
Note Regarding Stock Volatility
The Company’s share price may incur rapid and substantial increases or decreases in the foreseeable future that may not coincide in timing with the disclosure of news or developments by or affecting us. Accordingly, the market price of our shares of common stock may fluctuate dramatically, and may increase or decrease rapidly, regardless of any developments in our business. Overall, there are various factors, many of which are beyond our control, that could negatively affect the market price of our common shares or result in fluctuations in the price or trading volume of our common shares, including:
- the ongoing impacts and developments relating to the COVID-19 pandemic;
- actual or anticipated variations in our results of operations, including any earnings estimates and whether we meet market expectations with regard to our earnings;
- our current intent not to pay dividends or other distributions;
- publication of research reports by analysts, the press, our shareholders and other market observers about us or the e-commerce industry or IT/CE segments, which may be unfavorable, inaccurate, inconsistent or not disseminated on a regular basis;
- changes in market interest rates that may cause purchasers of our shares to demand a different yield;
- changes in market valuations of similar companies;
- market reaction to any additional equity, debt or other securities that we may issue in the future, and which may or may not dilute the holdings of our existing stockholders;
- additions or departures of key personnel;
- actions by institutional or significant stockholders;
- short interest in our stock and the market response to such short interest;
- the dramatic increase in the number of individual holders of our stock and their participation in social media platforms targeted at speculative investing;
- speculation in the press or investment community about our company or industry;
- strategic actions by us or our competitors, such as acquisitions or other investments;
- legislative, administrative, regulatory or other actions affecting our business, our industry, including positions taken by the Internal Revenue Service;
- investigations, proceedings, or litigation that involve or affect us;
- the occurrence of any of the other risk factors discussed on our Registration Statement on Form F-1 and Form 20-F; and
- general market and economic conditions.
About Newegg Commerce, Inc.
Newegg Commerce, Inc. (NASDAQ: NEGG), headquartered in the City of Industry, California, is a leading tech-focused e-retailer in North America and serves a global customer base throughout Europe, Asia Pacific, Latin America and the Middle East. Founded in 2001, the company offers direct sales and an online marketplace platform for PC and IT hardware, consumer electronics, automotive, gaming products and finished goods. Newegg also offers an extensive portfolio of technology, marketing, logistics and other partner services to help companies grow their business. For more information, please visit https://www.newegg.com/.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This communication contains “forward-looking statements” that involve risks and uncertainties. These statements can be identified by the fact that they do not relate strictly to historical or current facts, but rather are based on current expectations, estimates, assumptions and projections about the Company’s industry, business, strategy, acquisitions and strategic investments, dividend policy, financial results and financial condition as well as anticipated impacts from, and the Company’s responses to, the COVID-19 pandemic. Forward-looking statements often include words such as “will,” “should,” “anticipates,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes” and words and terms of similar substance in connection with discussions of future operating or financial performance. As with any projection or forecast, forward-looking statements are inherently susceptible to uncertainty and changes in circumstances. The Company’s actual results may vary materially from those expressed or implied in its forward-looking statements. Accordingly, undue reliance should not be placed on any forward-looking statement made by the Company or on its behalf. Important factors that could cause the Company’s actual results to differ materially from those in its forward-looking statements include government regulation, economic, strategic, political and social conditions and the following factors, which are discussed in the Company’s latest Annual Report on Form 20-F as filed with the Securities and Exchange Commission (the “SEC”):
- the duration and severity of the COVID-19 pandemic and its effects on the Company’s business, financial condition, results of operations and cash flows;
- rising levels of competition from historical and new entrants in the Company’s markets;
- recent and future changes in technology;
- the Company’s ability to continue to grow its business;
- the Company’s ability to obtain hardware, software and operational support from vendors;
- the integrity and security of the Company’s network and information systems;
- the impact of possible security breaches and other disruptions, including cyber-attacks;
- the Company’s failure to obtain necessary intellectual and proprietary rights to operate its business and the risk of intellectual property claims and litigation against the Company;
- legislative or regulatory efforts to impose new requirements on the Company’s operations and the products and services we offer;
- provisions in the Company’s charter, by-laws and British Virgin Islands law that could discourage takeovers and limit the judicial forum for certain disputes;
- adverse economic conditions;
- fluctuations in the Company’s stock price;
- dilution from equity awards, convertible debt and potential future convertible note and stock issuances;
- damage to the Company’s reputation or brand image;
- the Company’s ability to retain key employees;
- the Company’s ability to incur future indebtedness;
- provisions in the Company’s charter that could limit the liabilities for directors; and
- the other risks and uncertainties detailed from time to time in the Company’s filings with the SEC, including but not limited to the Company’s latest Annual Report on Form 20-Fas filed with the SEC.
Any forward-looking statements made by the Company in this communication speak only as of the date on which they are made. The Company is under no obligation, and expressly disclaims any obligation, except as required by law, to update or alter its forward-looking statements, whether as a result of new information, subsequent events or otherwise.