Newegg Commerce (NEGG) SC 13D/ANewegg Commerce / TEKHILL USA ownership change

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D/A

Under the Securities Exchange Act of 1934

(AMENDMENT NO. 1)

Common Stock, par value $0.021848

(Title of Class of Securities)

G6483G100

(CUSIP Number)

Fred Chang

21688 Gateway Center Dr., Suite 300,

Diamond Bar, California 91748

(562) 884-8829

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

with a copy to:

Lee Cheng

Buchalter

18400 Von Karman Avenue, Suite 800

Irvine, California 92612

(949) 760-1121

November 1, 2024

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ☐

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are sent. 

The information required in the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

SCHEDULE 13D

SCHEDULE 13D

SCHEDULE 13D

SCHEDULE 13D

SCHEDULE 13D

SCHEDULE 13D

SCHEDULE 13D

SCHEDULE 13D

SCHEDULE 13D

SCHEDULE 13D

Introduction

This Amendment No. 1 to Schedule 13D (this “Amendment No. 1”), dated December 17, 2024, amends and supplements the statements on Schedule 13D filed on July 20, 2021 (the “Initial Statement”, and together with this Amendment No.1, the “Schedule 13D”) by the Reporting Persons (as defined in the Initial Statement) and relates to the common shares, par value $0.021848 per share (the “Common Shares”), of Newegg Commerce, Inc., a company incorporated with limited liability under the laws of the British Virgin Islands (the “Issuer”) in order to reflect certain changes in ownership of Common Shares since the Initial Statement. The principal executive office of the Issuer is located at 21688 Gateway Center Dr. Suite 300, Diamond Bar, CA 91765. The Issuer’s Common Shares are listed on the NASDAQ Capital Market under the symbol “NEGG.” Except as otherwise provided herein, each item of the Initial Statement remains unchanged. Terms used herein but not otherwise defined shall have the meanings set forth in the Initial Statement.

Item 2.

Item 2 of the Initial Statement is hereby amended and supplemented as follows:

Item 4. Purpose of Transaction 

Item 4 of the Initial Statement is hereby amended and supplemented as follows:

On July 25, 2023, Tekhill adopted a plan for the disposition of its shares on Rule 10b5-1 (“2023 10b5-1 Plan”), which expired on October 31, 2024.  The 2023 10b5-1 Plan provided for the sale of a fixed number of shares on each trading day.  Since adoption, Tekhill has sold approximately 5,566.000 shares pursuant to the 2023 10b5-1 plan.  Upon expiration of the 2023 10b5-1 Plan, Tekhill adopted a new 10b5-1 Plan (“2024 10b5-1 Plan”) effective on January 1, 2025.  The 2024 10b5-1 Plan also provides for the sale of a fixed number of shares on each trading day. Tekhill also had previously adopted a 10b5-1 Plan on September 29, 2022. 

SCHEDULE 13D

In addition, the Reporting Persons may determine, from time to time in the future, based on market and general economic conditions, the business affairs and financial conditions of the Issuer, the capital requirements of the Company (or other Reporting Persons), the availability of securities at favorable prices and other alternative investment opportunities available to the Reporting Persons, and other factors that the Reporting Persons may deem relevant, to sell some or all of the securities it now holds or hereafter acquires in the open market, in privately negotiated transactions, or otherwise.  The Reporting Persons may from time to time engage advisors, including broker-dealers, to assist the Reporting Persons in assessing the foregoing considerations.

Subject to the foregoing, none of the Reporting Persons have any current plans or proposals that relate to or would result in any of the actions set forth in clauses (a) through (j) of Item 4 of Schedule 13D.

Item 5. Interest in Securities of Issuer 

Item 5 of the Initial Statement is hereby amended and supplemented as follows:

(a) As of November 1, 2024, Mr. Chang beneficially owns 121,070,201 shares of the Issuer’s stock, which represents approximately 31.2 % of the 387,928,000 common shares outstanding as of June 30, 2024 as reported in Exhibit 99.2 of the Issuer’s Form 6-K filed with the Commission on August 29, 2024. Of the total shares beneficially owned, (i) 73,112,406  shares are owned by Tekhill USA LLC; (ii) 23,624,115 shares are owned by the Fred Chang Partners Trust; (iii) 9,158,558 shares are owned by Nabal Spring, LLC; (iv)  5,435,754 shares are owned by the Chang Trust 2008; (v) 797,625 shares are owned by the Chang 2009 Annuity Trust No. 1; (vii) 332,340 shares are owned by the Chang 2009 Annuity Trust No. 2; (vi) 664,691 shares are owned by the Chang 2009 Annuity Trust No. 3; (viii) vested stock options exercisable for 7,944,712 Common Shares at an exercise price of $1.19 per share held by Fred Chang.

Mr. Chang is the sole member and manager of, and has sole voting, investment and dispositive power with respect to the shares held by, Tekhill USA LLC and Nabal Spring, LLC, as well as his options.

Mr. Chang has shared voting and dispositive power with his wife with respect to the shares held by the Fred Chang Partners Trust and the Chang Trust 2008, and shared ownership of the shares held by the Chang 2009 Annuity Trust No. 1, the Chang 2009 Annuity Trust No. 2, and the Chang 2009 Annuity Trust No. 3.  Mr. Chang is the settlor of the Fred Chang Partners Trust, the Chang Trust 2008, the Chang 2009 Annuity Trust No. 1, the Chang 2009 Annuity Trust No. 2, and the Chang 2009 Annuity Trust No. 3 is settlor of the Fred Chang Partners Trust, the Chang Trust 2008, the Chang 2009 Annuity Trust No. 1, the Chang 2009 Annuity Trust No. 2, and the Chang 2009 Annuity Trust No. 3.

(b) The information contained in Item 5(a) of this Report on Schedule 13D is hereby incorporated by reference herein.

(c) During the period between September 1, 2024 and November 1, 2024, Tekhill sold 22,000 shares of common stock per trading day, for a total of 946,000 shares of common stock, on the Nasdaq Stock Market at available market prices ranging from approximately $0.6056 to $0.8274 pursuant to the 2023 10b5-1 Plan Tekhill entered with UBS Financial Services Inc. (“UBS”) on July 25, 2023. 

Except as described herein, the Reporting Persons have not effected any transaction in the shares of Common Stock during the past 60 days. 

(d) Except as described herein, no person other than the Reporting Persons have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, shares of Common Stock beneficially owned by the Reporting Persons.

(e) Not applicable.

SCHEDULE 13D

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer 

By agreement dated March 22, 2022, the Issuer, Mr. Chang, and other Issuer shareholders entered into an amendment (the “First Amendment”) to the Company’s Amended and Restated Shareholders Agreement dated as of May 19, 2021 (the “Shareholders Agreement”). Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Shareholders Agreement. The First Amendment made the ROFR Right in Section 1.03 apply only to 90% of the shares of the Issuer’s common shares that are subject to such ROFR Right collectively owned by each Principal Shareholder and its Affiliates, calculated as of May 19, 2021.

On March 23, 2022, Tekhill USA LLC (“Borrower”) entered into a Loan and Security Agreement (“East West Loan Agreement”) with East West Bank (“East West Bank”), whereby the Borrower agreed to pledge certain shares of Newegg Commerce, Inc., up to 32 million shares, to East West Bank to obtain credit from East West Bank (“Loan Transaction”).   The East West Loan Agreement was amended on July 12, 2023 (“July 2023 Amendment”) to increase the number of pledged shares to 42 million.  In October 2024, Borrower pledged an additional 1 million shares.  As of the date hereof, an aggregate of 43 million shares owned by Borrower are pledged to East West Bank.

On August 1, 2022, the Issuer, Mr. Chang, and other Issuer shareholders entered into a second amendment (the “Second Amendment”) to the Shareholders Agreement.  The Second Amendment limited the ROFR Right in Section 1.03 to 80% of the shares of the Issuer’s common shares that are subject to such ROFR Right collectively owned by each Principal Shareholder and its Affiliates, calculated as of May 19, 2021.

On or around August 1, 2022, Borrower entered into a Loan and Security Agreement (“Bard Loan Agreement”) with Bard Company Ltd. (“Bard”), whereby the Borrower pledged 27.5 million shares to Bard to obtain credit from the Bard.

In addition, Borrower has pledged 2.5 million shares to Eagle Creek Enterprises Ltd. to secure certain obligations.

The description of the First Amendment and Second Amendment is qualified in its entirety by the actual terms of thereof, which are included as exhibits hereto and incorporated by reference.

SCHEDULE 13D

Item 7. Materials to be Filed as Exhibits 

Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.