Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements including statements that involve expectations, plans or intentions (such as those relating to future business, future results of operations or financial condition, new or planned features or services, management strategies or timing and other expectations regarding our business). You can identify these forward-looking statements by words such as "may," "will," "would," "should," "could," "expect," "anticipate," "believe," "estimate," "intend," "plan" and other similar expressions. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include, among others, those discussed in "Item 1A: Risk Factors" of this Annual Report on Form 10-K, as well as in our consolidated financial statements, related notes, and the other information appearing elsewhere in this report and our other filings with the SEC. We do not intend, and undertake no obligation, to update any of our forward-looking statements after the date of this report to reflect actual results or future events or circumstances. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. You should read the following Management's Discussion and Analysis of Financial Condition and Results of Operations in conjunction with the special note regarding forward-looking statements, consolidated financial statements and the related notes included in this report.

Financial Results for the Year Ended December 31, 2025

As of December 31, 2025, we had an accumulated deficit of $3.4 billion. We expect to start earning operating profits following the completion of the US Salt Acquisition.

US Salt Acquisition

We have been searching for bolt-on acquisitions of assets or businesses complementary to our operation in order to support our publicly-traded business ownership platform established to own a collection of niche, competitively advantaged, long-duration businesses.

On December 8, 2025, we entered into a Purchase Agreement, as amended from time to time, with CLI LLC, Holdings, the Management Aggregator, the Seller Parties and the Sellers Representative.

Pursuant to the US Salt Acquisition, we agreed to commence our Rights Offering to distribute to the holders of ContextLogic common stock subscription rights to purchase up to an aggregate of 14,375 thousand shares of ContextLogic common stock. Each subscription right entitled the holder to purchase 0.53486 shares of ContextLogic common stock at an exercise price of $8.00 per share. The Rights Offering was conducted in connection with the US Salt Acquisition to assist the Company in financing a portion of the cash purchase price for the US Salt Acquisition The subscription rights expired at 5:00 p.m. in New York City on February 20, 2026 and the Rights Offering closed on February 25, 2026.

Subscribers in the Rights Offering exercised rights to purchase an aggregate of 429 thousand shares of ContextLogic common stock, and the gross proceeds we received from subscribers in the Rights Offering was approximately $3 million.

Simultaneously with entering into and as contemplated by the Purchase Agreement, and in order to facilitate the US Salt Acquisition, given the Rights Offering was not fully subscribed at the expiration of the Rights Offering period, (i) BCP purchased approximately 11,156 thousand Preferred Unit from Holdings at a price of $8.00 per Preferred Unit for an aggregate amount of $89 million and (ii) each of ACP I and ACP II purchased approximately 190 thousand and 2,599 thousand shares of ContextLogic common stock, respectively, from us at a price of $8.00 per share of ContextLogic common stock, for aggregate amounts of (a) $2 million for ACP I and (b) $21 million for ACP II.

The gross proceeds received by us from the Backstop Agreements were approximately $112 million. The total expected proceeds from the Rights Offering and the Backstop Agreements was $115 million. All securities issued in satisfaction of the Backstop Agreements were issued in a transaction pursuant to Section 4(a)(2) of the Securities Act.

Additionally, pursuant to the Purchase Agreement, we entered into the Credit Agreement, providing for the Initial Term Loan of $215 million and the Revolving Loans of $25 million.

Upon consummation of the Transactions on the Closing Date, we acquired US Salt and its subsidiaries, including US Salt's salt production and manufacturing business, and we hold substantially all of the assets and business of US Salt.

We and Holdings acquired US Salt for a purchase price of approximately $908 million subject to customary adjustments, including for cash, debt, and net working capital, which was comprised of approximately $583 million in cash consideration (including, among other sources, the use of approximately $213 million in net borrowing proceeds from the Initial Term Loans and approximately $115 million in proceeds from the Rights Offering and Backstop Agreements) and approximately $325 million in equity rollover consideration. At the closing, $3 million was placed into the Escrow Fund to satisfy the escrow obligations set forth under the Purchase Agreement and the Escrow Agreement.

Reorganization

On July 24, 2025, our stockholders approved, and, on August 7, 2025, we completed, a reorganization under Section 251 of the Delaware General Corporation Law. Under the Reorganization, ContextLogic Inc. became a wholly owned subsidiary of ContextLogic Holdings Inc. and (i) each outstanding share of Class A common stock of ContextLogic Inc. was exchanged for one share of common stock of ContextLogic Holdings Inc., (ii) each option to purchase shares of common stock of ContextLogic Inc. was assumed by ContextLogic Holdings Inc. and became exercisable for an equivalent number of shares of common stock of ContextLogic Holdings Inc. and (iii) each restricted stock unit to be settled in shares of common stock of ContextLogic Inc. was assumed by ContextLogic Holdings Inc. and remains subject to the same terms and conditions as were applicable to such restricted stock unit award, but was converted into an award with respect to the same number of shares of common stock of ContextLogic Holdings Inc. Each of our shares of common stock is subject to certain transfer restrictions that prohibit transfers having the effect of increasing the ownership of our stock by (i) any person from less than 4.9% to 4.9% or more or (ii) any person owning or deemed to own 4.9% or more of our stock. In conjunction with the Reorganization, ContextLogic Inc. was converted into a Delaware limited liability company named ContextLogic LLC. ContextLogic Holdings Inc. succeeds as the reporting entity under Exchange Act Rule 12g-3(a) and is trading under the OTCQB Venture Market with the ticker "LOGC."

The Reorganization was accounted for as a common-control transaction under Accounting Standards Codification 805-50, and historical carrying amounts were maintained in the consolidated financial statements. The Reorganization will preserve our approximately $2.9 billion in NOLs by implementing transfer restrictions at the holding-company level to prevent an "ownership change" under Internal Revenue Code Section 382, while enhancing structural flexibility for future acquisitions. Transaction costs of approximately $2 million were expensed as incurred.

Asset Purchase Agreement with Qoo10

Our Board initiated a process to explore a range of strategic alternatives to maximize value for Company's shareholders starting in the fourth quarter of 2023.

On February 10, 2024, we entered into the Asset Purchase Agreement with Qoo10 pursuant to which we agreed to sell substantially all of our assets to Qoo10, other than (i) our NOLs and certain other tax attributes, (ii) our marketable securities and (iii) certain of our cash and cash equivalents. As consideration for the Asset Sale, Qoo10 agreed to acquire those assets and assume substantially all of our liabilities as specified in the Asset Purchase Agreement.

On April 18, 2024, the holders of a majority of the outstanding shares of our common stock voted to approve the Asset Sale. Pursuant to such vote and satisfaction of other customary closing conditions, the Asset Sale closed on April 19, 2024. Prior to the Asset Sale, we owned and operated the Wish platform. The Wish platform generated revenue for us from the marketplace and logistics services provided to merchants. As a result of the Asset Sale, the Wish platform and all related operating assets were sold to the Buyer.

The financial results presented in this Annual Report on Form 10-K reflect the Asset Sale as it was completed on April 19, 2024. Accordingly, the consolidated financial statements and the narrative description of the Company's business, assets, liabilities and risks contained in this Management's Discussion and Analysis of Financial Condition and Results of Operations reflect the pre-Asset Sale operations up to April 19, 2024, the results of the Asset Sale, and the post-Asset Sale activities since April 19, 2024. See Part I, Item 1. "Business-Asset Sale" for further discussion of the Asset Purchase Agreement.

Key Financial Metrics

Components of Results of Operations

Since the consummation of the Asset Sale on April 19, 2024, we no longer earn operating revenue or incur related cost associated with the prior marketplace and logistics operations. We incurred administrative costs in the course of overseeing and curating the remaining assets and preparing for the US Salt Acquisition.

Revenue (Prior to Asset Sale)

Prior to the Asset Sale, our revenue consisted of marketplace and logistics revenue.

Marketplace revenue

We provided a mix of marketplace services to our customers. We provided merchants access to our marketplace where merchants display and sell their products to users. We also provided ProductBoost services to help merchants promote their products within our marketplace.

Marketplace revenue included commission fees collected in connection with user purchases of the merchants' products. The commission fees varied depending on factors such as geography, product category, Wish Standards' tier and item value. We recognized revenue when a user's order was processed and the related order information was made available to the merchant. Commission fees were recognized net of estimated refunds and chargebacks. Marketplace revenue also included ProductBoost revenue generated by increasing exposure for a merchant's relevant products within our marketplace. We recognized ProductBoost revenue based on the number of impressions delivered, or clicks by users.

Logistics revenue

Our logistics offering for merchants was designed for direct end-to-end single order shipment from a merchant's location to the user. Logistics services included transportation and delivery of the merchant's products to the user. Merchants were required to prepay for logistics services on a per order basis.

We recognized revenue over time as the merchant simultaneously received and consumed the logistics services benefit as the logistics services were performed. We used an output method of progress based on days in transit as it best depicted the Company's progress toward complete satisfaction of the performance obligation.

Cost of Revenue and Operating Expenses (Prior to Asset Sale)

Cost of revenue

Prior to the Asset Sale, cost of revenue included colocation and data center charges, interchange and other fees for credit card processing services, fraud and chargeback prevention service charges, costs of refunds and chargebacks made to our users that we were not able to collect from our merchants, depreciation and amortization of property and equipment, shipping charges, tracking and logistics costs, warehouse fees, and employee-related costs, including salaries, benefits, and stock-based compensation expense for our infrastructure, merchant support, and logistics personnel. Cost of revenue also included an allocation of general IT and facilities overhead expenses.

Sales and marketing

Prior to the Asset Sale, our sales and marketing expenses were primarily driven by the cost of acquiring and engaging users by targeting social media and search engine digital advertisements, outsourced user support services, sponsorships and local marketing campaigns. Other drivers consisted of employee-related costs, including salaries, benefits, and stock-based compensation, for our employees involved in marketing, user support, and business development functions. Sales and marketing spend also included an allocation of general IT and facilities overhead expenses as well as business development expenses for attracting merchants and conducting ongoing merchant education.

Product development

Prior to the Asset Sale, our product development expenses consisted primarily of employee-related costs, including salaries, benefits, and stock-based compensation for our engineers and other employees involved in product development activities. Product development costs were expensed as incurred. Product development costs also included the cost of IT and outside services used by the product development team as well as an allocation of general IT and facilities overhead expenses.

Operating Expenses

General and administrative

Our general and administrative expenses consist primarily of employee-related costs, including salaries, benefits, and stock-based compensation, and expenses incurred for the evaluation and pursuit of strategic alternatives such as the Reorganization and Acquisition. General and administrative expenses also include outside consulting, legal, tax, and accounting services, and facilities and other supporting overhead costs.

Interest and Other Income, net

Interest and other income, net consists primarily of interest income earned on our cash and cash equivalents and marketable securities.

Income Tax

Prior to the Asset Sale, income taxes consist primarily of income taxes in certain foreign jurisdictions in which we conduct business.

Results of Operations

The following tables show our results of operations for the periods presented and express the relationship of certain line items as a percentage of revenue for those periods. The period-to-period comparison of financial results is not necessarily indicative of future results.

(1) Includes stock-based compensation expense as follows:

Comparison of the Years Ended December 31, 2025 and 2024

Revenue

Revenue decreased $43 million, or 100%, to zero for the year ended December 31, 2025 as compared to $43 million for the year ended December 31, 2024. This decrease was attributable to the consummation of the Asset Sale in the prior year. As such, the comparable periods for the year ended December 31, 2025 have none of the previous marketplace and logistics operations.

Cost of Revenue and Gross Margin

Cost of revenue decreased $36 million, or 100%, to zero for the year ended December 31, 2025, as compared to $36 million for the year ended December 31, 2024. This decrease was attributable to the consummation of the Asset Sale in the prior year. As such, the comparable periods for the year ended December 31, 2025 have none of the previous marketplace and logistics operations.

Sales and Marketing

Sales and marketing expenses decreased $18 million, or 100%, to zero for the year ended December 31, 2025, as compared to $18 million for the year ended December 31, 2024. This decrease was attributable to the consummation of the Asset Sale in the prior year. As such, the comparable periods for the year ended December 31, 2025 have none of the previous marketplace and logistics operations.

Product Development

Product development expense decreased $26 million, or 100%, to zero for the year ended December 31, 2025, as compared to $26 million for the year ended December 31, 2024. This decrease was attributable to the consummation of the Asset Sale in the prior year. As such, the comparable periods for the year ended December 31, 2025 have none of the previous marketplace and logistics operations.

General and Administrative

General and administrative expenses decreased $11 million, or 26%, to $31 million for the year ended December 31, 2025, as compared to $42 million for the year ended December 31, 2024. This decrease was primarily driven by the $27 million of eCommerce operations expenses incurred prior to the consummation of the Asset Sale in the prior year, partially offset by higher costs related to stock-based compensation and expenses related to the evaluation and pursuit of strategic alternatives in 2025.

Interest and Other Income, net

Interest and other income, net increased $2 million, or 33%, to $8 million for the year ended December 31, 2025, as compared to $6 million for the year ended December 31, 2024. The increase was driven by the lack of foreign exchange losses in 2025, which had previously offset $2 million of interest income earned in 2024.

Gain on Asset Sale

Gain on Asset Sale decreased $4 million, or 100%, to zero for the year ended December 31, 2025. The decrease was due to a gain associated with the Asset Sale completed in the year 2024.

Provision for Income Taxes

Provision for income taxes decreased $6 million, or 100%, to zero for the year ended December 31, 2025, as compared to $6 million for the year ended December 31, 2024. The 2024 provision was primarily related to withholding taxes accrued on certain intercompany dividends in the first quarter of fiscal 2024.

Liquidity and Capital Resources

As of December 31, 2025, we had cash and cash equivalents of $77 million, a majority of which were held in cash deposits and U.S. Treasury bills, and marketable securities of $141 million, which funds were held for working capital purposes. We believe that our existing cash, cash equivalents and marketable securities will be sufficient to meet our anticipated cash needs for at least the next 12 months, though we may require additional financing or capital resources in the future.

We incurred net operating cash outflows of $16 million and $94 million in the years ended December 31, 2025 and 2024, respectively. Our material cash requirements outside our normal operating costs include $7 million in total liabilities.

Sources of Liquidity

As of December 31, 2025, we had cash and cash equivalents of $77 million and marketable securities of $141 million (consisting of government securities).

Since the consummation of the Asset Sale, we: (i) earn interest income on cash and marketable securities; (ii) have no other sources of revenue and related costs; and (iii) incur administrative costs and costs related to evaluating and pursuing strategic alternatives.

Cash Flows

Net Cash Used in Operating Activities

Our cash flows from operations are largely dependent on the amount of revenue we generate. Net cash provided by operating activities in each period presented has been influenced by changes in funds receivable, prepaid expenses, and other current and noncurrent assets, accounts payable, merchants payable, accrued and refund liabilities, lease liabilities, and other current and noncurrent liabilities.

Net cash used in our operating activities for the year ended December 31, 2025 was $16 million. This was primarily driven by our net loss of $23 million which was partially offset by net non-cash expenses of $5 million, consisting of $11 million in stock-based compensation expense partially offset by $6 million in net accretion on marketable securities, and $2 million of favorable changes in our operating assets and liabilities, driven by increases in accounts payable.

Net cash used in our operating activities for the year ended December 31, 2024 was $94 million. This was primarily driven by our net loss of $75 million and $25 million of unfavorable changes in our operating assets and liabilities, which was partially offset by net non-cash expenses of $6 million, consisting of $12 million in stock-based compensation expense, $4 million in net accretion on marketable securities, and a $4 million gain on Asset Sale. Unfavorable working capital movement was mainly driven by reductions in accounts payable, merchants payable and accrued and refund liabilities. Accounts payable, merchants payable, and accrued and refund liabilities decreased significantly due to the Asset Sale.

Net Cash Used in Investing Activities

Our primary investing activities have consisted of investing excess cash balances in marketable securities.

Net cash used in investing activities was $52 million for the year ended December 31, 2025. This was primarily due to $331 million in purchases of marketable securities, partially offset by $279 million in maturities of marketable securities.

Net cash used in investing activities was $68 million for the year ended December 31, 2024. This was primarily due to $168 million in purchases of marketable securities and $133 million net cash disposed from the Asset Sale, partially offset by $233 million in maturities and sales of marketable securities.

Net Cash Provided by (Used in) Financing Activities

Net cash provided by our financing activities was $72 million for the year ended December 31, 2025, due to net proceeds from the issuance of redeemable convertible Preferred Units.

Net cash used in our financing activities was $1 million for the year ended December 31, 2024. This was due to $1 million in payments of taxes related to employee restricted stock unit ("RSU") settlements and cashless exercises of stock options.

Off Balance Sheet Arrangements

For the years ended December 31, 2025 and 2024, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Policies and Estimates

Our management's discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with GAAP as set forth in the Financial Accounting Standards Board's Accounting Standards Codification ("ASC"). The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates.

We believe the accounting policies below involve a significant degree of assumptions and estimates, and thus have the greatest potential impact on our consolidated financial statements. For further information on all of our significant accounting policies, refer to our consolidated financial statements in Item 8 of Part II, "Financial Statements and Supplementary Data, Note 2. Summary of Significant Accounting Policies".

Loss Contingencies

We are involved in various lawsuits, claims, investigations, and proceedings that arise in the ordinary course of business. Certain of these matters include speculative claims for substantial or indeterminate amounts of damages. We record a liability when we believe that it is both probable that a loss has been incurred and the amount or range can be reasonably estimated. We disclose material contingencies when we believe that a loss is not probable but reasonably possible. Significant judgment is required to determine both probability and the estimated amount. We review these provisions on an ongoing basis and adjust these provisions accordingly to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and updated information.

The outcome of legal matters and litigation is inherently uncertain. Therefore, if one or more of these legal matters were resolved against us for amounts in excess of management's expectations, our results of operations, and financial condition, including in a particular reporting period, could be materially adversely affected.

Redeemable Non-Controlling Interest

Redeemable non-controlling interest represents the shares of the Preferred Units issued by Holdings to BCP who has a 26.3% ownership of Holdings on an as-converted basis. The Preferred Units are redeemable upon (i) a liquidation, (ii) at BCP's option upon Holdings failing to complete an acquisition on or prior to the second anniversary of the initial closing on March 6, 2025 or (iii) at Holdings' option on or after the fifth anniversary of an acquisition event. If the interest of the minority investors were to be redeemed under this agreement, we would be required to redeem the interest based on a prescribed formula in the A&R Investment Agreement. Holdings is required to seek written consent from BCP prior to the consummation of an acquisition. As such, the redemption of the Preferred Units is outside the control of Holdings and we have classified the Preferred Units as mezzanine equity.

The balance of the redeemable non-controlling interest is reported at the greater of the initial carrying value amount adjusted for the redeemable non-controlling interest's share of earnings or losses or its estimated redemption value. The resulting changes in the estimated redemption amount are recorded with corresponding adjustments against retained earnings or, in the absence of retained earnings, additional paid-in capital. These interests are presented on the consolidated balance sheet outside of stockholders' equity under the caption "Redeemable non-controlling interest." Refer to Note 7 - Redeemable Non-Controlling Interest for additional information.

Stock-Based Compensation

We measure and recognize compensation expense for all stock-based awards, including RSUs, performance-based units ("PSUs"), and stock options, based on the estimated fair value of the awards on the grant date. We use the Black-Scholes option pricing model to estimate the fair value of stock options and the Monte Carlo Simulation model to estimate the fair value of a PSU. The fair value of RSUs is based on the market closing price for our common stock as reported on the OTCQB Venture Markets on the date of grant.

Our use of the Black-Scholes option-pricing and Monte Carlo Simulation models require the input of highly subjective assumptions, including the fair value of the underlying common stock, expected term of the option, expected volatility of the price of our common stock, risk-free interest rates, and the expected dividend yield of our common stock. The assumptions used in these valuation models represent management's best estimates. These estimates involve inherent uncertainties and the application of management's judgment. If factors change and different assumptions are used, our stock-based compensation expense could be materially different in the future.

Income Taxes

We are subject to income taxes in the U.S. and prior to the Asset Sale, in many international jurisdictions. The determination of these tax liabilities requires estimation, significant judgment, and interpretation of each jurisdiction's tax statutes, regulations, and case laws. Additionally, governing tax legislation could change significantly with little or no notice. It is important for us to monitor economic, political, and other conditions in the various countries with operations as changes in a jurisdiction's conditions could impact the amount of deferred tax assets or our ability to utilize deferred tax assets in the future.

We account for income taxes using the asset and liability method, under which deferred tax liabilities and assets are recognized for the expected future tax consequences of temporary differences between consolidated financial statement carrying amounts and the tax basis of assets and liabilities and net operating loss and tax credit carryforwards. Valuation allowances are established when deemed necessary to reduce deferred tax assets to the amount expected to be realized.