2009-09-28 (Internet Company Stocks) - Newegg Inc. a leading online computer electronics retailer based out of California has filed Form S-1 with the United States Securities and Exchange Commission (SEC). Newegg a Delaware based corporation has hopes of raising approximately $175 million dollars. Newegg is making an initial public offering of Class A common stock shares for sale.

Brands of Newegg
Some trademarks held by Newegg include Newegg, Newegg Mall, ABS, and Chief Value.

Underwriters for Newegg
In the filing with the SEC, Newegg did not provide the initial public offering price per share. Underwriters that are expected to deliver shares of the Class A common stock to the purchasers includes: Bank of America Merrill Lynch, Citi, J.P. Morgan, William Blair & Company, ThinkEquity LLC., Needham & Company LLC., Cowen & Company, and Raymond James.

Net sales
Newegg had 2008 net sales of approximately $2.1 billion dollars. Net income for 2008 was approximately $21.45 million dollars.

Interesting notes about data backups
Interesting things from the filing is that Newegg states the company "do not presently maintain backup copies of all of our data" and "We do not presently maintain back-up power systems at some of our order processing centers, or OPCs. " Newegg does have two co-located data centers at facilities in Los Angeles, California and Edison, New Jersey. That provide redundancy for data including customer data.

Legal
Newegg states that on November 5, 2007, Soverain Software LLC. filed a patent infringement lawsuit against the company. If an injunction is granted, Newegg could be forced to stop or alter certain aspects of the business. The case according to Newegg, is scheduled for a jury trial in Tyler, Texas in February 2010.

Voting power
The majority of Newegg's voting power will be held by holders of 10 vote per share Class B common stock. The principal shareholder will continue to have substantial control over Newegg after the IPO.

Newegg's use of net proceeds
Newegg states the company plans to use the net proceeds of the offering in the next 12 months, to expand international operations which includes a Asian headquarters, regional warehouse, and improve logistics operations in Canada (about $25 million). Newegg also plans to repay back loans and use the remaining for working capital.

Dividends
Newegg states the company has never declared or paid dividends on any of the companies Common Stock or Preferred Stock. Newegg states the company does not anticipate declaring or pay any cash dividends on any Newegg Common Stock in the foreseeable future.

Physical locations
Newegg has physical presences in the United States, Canada and China. Newegg headquarters are located in and around City of Industry, California. Newegg has order processing centers in Southern California, Tennessee, New Jersey, and in Toronoto (Canada). Newegg also has a presence in Taipei, Taiwan which is used for website development.

Number of employees
Newegg as of June 30, 2009 employed 938 full time employees in the United States, and 1,123 full time employees in Asia.

50 year land use in China
Newegg also had a good amount of land in China. From the SEC filing, Newegg states the company entered into a land use rights grant contract in June 2008, for which Newegg was granted the land use rights for a 492,000 square foot parcel of land for 50 years. The land is located in a new industrial park in the district of Jiading, which is a suburb of Shanghai, China. Newegg paid approximately $3.2 million dollars for it and is being amortized over the 50 year term. Newegg says the company plans a Asia headquarters there, including warehousing operations.

Existing Newegg.com Shareholders
6,639,604 Class B common stock shares (about 12.7%) are held by Insight Venture Partners. 40,516,305 Class B common stock shares (about 77.7%) are held by Fred Chang.