# ContextLogic Holdings Inc.: Form 10-Q for the period ended Jun 30, 2025

- Company: [ContextLogic Holdings Inc.](/companies/logc.md) (CIK 2064307)
- Form: 10-Q
- Filed: 2025-08-07
- Accepted by EDGAR: Aug 7, 2025, 21:01 ET
- Period: 2025-06-30
- Accession: 0002064307-25-000009
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/2064307/000206430725000009/logc-20250630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/2064307/000206430725000009/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Operating income | 3 months, 2025-04-01 to 2025-06-30 | −$7.0m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2025-01-01 to 2025-06-30 | −$13.0m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-04-01 to 2025-06-30 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2025-01-01 to 2025-06-30 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | −$5.0m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2025-01-01 to 2025-06-30 | −$9.0m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | −$0.23 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2025-01-01 to 2025-06-30 | −$0.49 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | −$0.23 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2025-01-01 to 2025-06-30 | −$0.49 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 26,603,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2025-01-01 to 2025-06-30 | 26,456,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2025-01-01 to 2025-06-30 | −$10.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2025-06-30 | $27.0m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-06-30 | $221.0m | us-gaap:AssetsCurrent |
| Total assets | at 2025-06-30 | $221.0m | us-gaap:Assets |
| Current liabilities | at 2025-06-30 | $3.0m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-06-30 | $3.0m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-06-30 | $142.0m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 20,841 characters.

*The following discussion and analysis of our financial condition, results of operations and cash flows should be read in conjunction with (1) the unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q, and (2) the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2024 included in our Annual Report on Form 10-K for the year ended December 31, 2024, as amended by Amendment No. 1 to Annual Report on Form 10-K/A (as amended, the "2024 Form 10-K"). Unless otherwise indicated, all results presented are prepared in a manner that complies, in all material respects, with U.S. GAAP. Additionally, unless otherwise indicated, all changes identified for the current-period results represent comparisons to results for the prior corresponding fiscal period. Our discussion and analysis may contain forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q, the Special Note Regarding Forward-Looking Statements in this Quarterly Report on Form 10-Q, and elsewhere in this Quarterly Report on Form 10-Q. All references to "we", "us", "our", or "ContextLogic" or the "Company" refer to ContextLogic Inc. prior to the Reorganization and to ContextLogic Holdings Inc. subsequent to the Reorganization.*

### Company Reorganization

On July 24, 2025, subsequent to the quarter-end, our stockholders approved, and, on August 7, 2025, we completed, a reorganization under Section 251 of the Delaware General Corporation Law (the "Reorganization"). Under the Reorganization, ContextLogic Inc. became a wholly owned subsidiary of ContextLogic and (i) each outstanding share of Class A common stock of ContextLogic Inc. was exchanged for one share of common stock of ContextLogic, (ii) each option to purchase shares of common stock of ContextLogic Inc. was assumed by ContextLogic and became exercisable for an equivalent number of shares of common stock of ContextLogic and (iii) each restricted stock unit to be settled in shares of common stock of ContextLogic Inc. was assumed by ContextLogic 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. Each share of common stock of ContextLogic is subject to certain transfer restrictions that prohibit transfers having the effect of increasing the ownership of ContextLogic 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 ContextLogic stock. In conjunction with the Reorganization, ContextLogic Inc. was converted into a Delaware limited liability company (“ContextLogic LLC”). ContextLogic succeeds as the reporting entity under Exchange Act Rule 12g-3(a) and is trading under the OTCQB Venture Market with the ticker “LOGC.”

### Delisting from Nasdaq

On May 30, 2025, the Company announced our intent to voluntarily delist the Company's Class A common stock from The Nasdaq Global Market and transition to the OTCQB Venture Market ("OTCQB"). Trading on the OTCQB under the symbol “LOGC” began June 3, 2025. Delisting expenses were insignificant and were recorded in general and administrative expenses for the quarter ended June 30, 2025. The move to OTCQB does not change SEC reporting requirements.

### Asset Sale

On February 10, 2024, we entered into an asset purchase agreement (the “Asset Purchase Agreement”) with Qoo10 Inc., a Delaware corporation (“Qoo10 Delaware”), and, for certain specified purposes, Qoo10 Pte. Ltd., a Singapore private limited company and Qoo10 Delaware’s parent company (“Qoo10”), pursuant to which (i) we agreed to sell substantially all of our assets to Qoo10 Delaware or an affiliate designated by Qoo10 Delaware (such designated affiliate, the “Buyer”), other than (A) our net operating losses (“NOLs”) and certain other tax attributes, (B) our marketable securities and (C) certain of our cash and cash equivalents, and (ii) Qoo10 agreed to acquire those assets and assume substantially all of our liabilities as specified in the Asset Purchase Agreement (the “Asset Sale”). 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, and immediately following the closing of the Asset Sale, we received/retained approximately $162 million in cash, cash equivalents and marketable securities (consisting of government securities)(the "Post-Closing Cash"), as well as the NOLs and other tax attributes described herein.

Following the completion of the Asset Sale, we have exited the operation of our marketplace and logistics business and other historical operations. However, we do not currently intend to liquidate. We are actively developing processes and procedures for evaluating strategic alternatives for the use of our Post-Closing Cash and reviewing, identifying and executing those strategic opportunities for the benefit of ContextLogic and its stockholders. Those alternatives are currently expected to include using the Post-Closing Cash to fund, at least in part, the acquisition of assets or a business that will potentially allow us to utilize and derive benefits from our NOLs and certain other tax attributes.

### Overview

Prior to the completion of the Asset Sale, we were a marketplace and logistics business that connected merchants and consumers from around the world. Since the Asset Sale was consummated, as we pursue strategic opportunities, our primary source of income is interest earned on our marketable securities and cash and cash equivalents. Although our Board of Directors is evaluating various strategic alternatives regarding the use of the proceeds from the Asset Sale with a goal to maximize stockholder value, we have not yet identified any particular acquisitions or investments or committed to making any such decision by a particular date. We can provide no assurance that our Board of Directors and management will be able to attract the businesses we identify as viable for our objectives, due to competitive forces in the marketplace beyond our control, or consummate strategic transactions, including the acquisition of assets or a business, on terms and conditions that we believe will be in the best interests of ContextLogic and its stockholders. The Company is not registered under the Investment Company Act of 1940, as amended (“ICA”), and is not required to register as an investment company under the ICA.

### Results of Operations

The following table shows our results of operations for the periods presented. The period-to-period comparison of financial results reflects business that we no longer operate and is not indicative of future results.

*(in millions)*

|  | Three Months Ended June 30, 2025 | 2024 | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Revenue | $— | $7 | $— | $43 |
| Cost of revenue | — | 6 | — | 36 |
| Gross profit | — | 1 | — | 7 |
| Operating expenses: |  |  |  |  |
| Sales and marketing | — | 3 | — | 18 |
| Product development | — | 4 | — | 26 |
| General and administrative | 7 | 13 | 13 | 35 |
| Total operating expenses | 7 | 20 | 13 | 79 |
| Loss from operations | (7) | (19) | (13) | (72) |
| Other income, net |  |  |  |  |
| Interest and other income, net | 2 | 2 | 4 | 2 |
| Gain on Asset Sale | — | 4 | — | 4 |
| Loss before provision for income taxes | (5) | (13) | (9) | (66) |
| Provision for income taxes | — | — | — | 6 |
| Net loss | (5) | (13) | (9) | (72) |
| Adjustment attributable to redeemable non-controlling interest | (1) | — | (4) | — |
| Net loss attributable to redeemable non-controlling interest | — | — | — | — |
| Net loss attributable to common stockholders | $(6) | $(13) | $(13) | $(72) |

25

### Comparison of the Three and Six Months Ended June 30, 2025 and 2024

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 expect to incur general and administrative costs associated with evaluation of business opportunities and in the course of overseeing and curating the remaining assets.

### Revenue

*($ in millions, except percentages)*

|  | Three Months Ended June 30, 2025 | 2024 | Change $% |  | Six Months Ended June 30, 2025 | 2024 | Change $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Core marketplace revenue | $— | $2 | $(2) | (100)% | $— | $13 | $(13) | (100)% |
| ProductBoost revenue | — | 1 | (1) | (100)% | — | 4 | (4) | (100)% |
| Marketplace revenue | — | 3 | (3) | (100)% | — | 17 | (17) | (100)% |
| Logistics revenue | — | 4 | (4) | (100)% | — | 26 | (26) | (100)% |
| Revenue | $— | $7 | $(7) | (100)% | $— | $43 | $(43) | (100)% |

Revenue decreased $7 million, or 100%, to zero for the three months ended June 30, 2025 as compared to $7 million for the three months ended June 30, 2024. Revenue decreased $43 million, or 100%, to zero for the six months ended June 30, 2025 as compared to $43 million for the six months ended June 30, 2024. The decrease was attributable to the consummation of the Asset Sale in the prior year. As such, the comparable periods for the three and six months ended June 30, 2025 have none of the previous marketplace and logistics operations.

### Cost of Revenue and Gross Margin

*($ in millions, except percentages)*

|  | Three Months Ended June 30, 2025 | 2024 | Change $% |  | Six Months Ended June 30, 2025 | 2024 | Change $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Cost of revenue | $— | $6 | $(6) | (100)% | $— | $36 | $(36) | (100)% |
| Gross Margin | — | 14% |  |  | — | 16% |  |  |

Cost of revenue decreased $6 million, or 100%, to zero for the three months ended June 30, 2025 as compared to $6 million for the three months ended June 30, 2024. Cost of revenue decreased $36 million, or 100%, to zero for the six months ended June 30, 2025 as compared to $36 million for the six months ended June 30, 2024. This decrease was due to the consummation of the Asset Sale in the prior year. As such, the comparable periods for the three and six months ended June 30, 2025 have none of the previous marketplace and logistics operations.

### Sales and Marketing

*($ in millions, except percentages)*

|  | Three Months Ended June 30, 2025 | 2024 | Change $% |  | Six Months Ended June 30, 2025 | 2024 | Change $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Sales and marketing | $— | $3 | $(3) | (100)% | $— | $18 | $(18) | (100)% |

Sales and marketing expense decreased $3 million, or 100%, to zero for the three months ended June 30, 2025, compared to $3 million for the three months ended June 30, 2024. Sales and marketing expense decreased $18 million, or 100%, to zero for the six months ended June 30, 2025, compared to $18 million for the six months ended June 30, 2024. This decrease was due to the consummation of the Asset Sale in the prior year. As such, the comparable periods for the three and six months ended June 30, 2025 have none of the previous marketplace and logistics operations.

### Product Development

*($ in millions, except percentages)*

|  | Three Months Ended June 30, 2025 | 2024 | Change $% |  | Six Months Ended June 30, 2025 | 2024 | Change $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Product development | $— | $4 | $(4) | (100)% | $— | $26 | $(26) | (100)% |

Product development expense decreased $4 million, or 100%, to zero for the three months ended June 30, 2025, compared to $4 million for the three months ended June 30, 2024. Product development expense decreased $26 million, or 100%, to zero for the six months ended June 30, 2025, compared to $26 million for the six months ended June 30, 2024. This decrease was due to the consummation of the Asset Sale in the prior year. As such, the comparable periods for the three and six months ended June 30, 2025 have none of the previous marketplace and logistics operations.

### General and Administrative

*($ in millions, except percentages)*

|  | Three Months Ended June 30, 2025 | 2024 | Change $% |  | Six Months Ended June 30, 2025 | 2024 | Change $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| General and administrative | $7 | $13 | $(6) | (46)% | $13 | $35 | $(22) | (63)% |

General and administrative expense decreased $6 million, or 46%, to $7 million for the three months ended June 30, 2025, compared to $13 million for the three months ended June 30, 2024. This decrease was primarily due to the consummation of the Asset Sale in the prior year as pre-Asset Sale operations contributed $4 million of expenses and the Company incurred an additional $2 million of severance expense related to the Asset Sale.

General and administrative expense decreased $22 million, or 63%, to $13 million for the six months ended June 30, 2025, compared to $35 million for the six months ended June 30, 2024. This decrease was primarily due to the consummation of the Asset Sale in the prior year. As such, the comparable period of the six months ended June 30, 2025 has none of the previous marketplace and logistics operations. The decrease was offset by $6 million of expenses for employees, which includes $3 million of stock based compensation; $3 million of expenses for the evaluation and pursuit of strategic alternatives; and $3 million of expenses for legal and other professional services.

### Interest and Other Income, net

*($ in millions, except percentages)*

|  | Three Months Ended June 30, 2025 | 2024 | Change $% |  | Six Months Ended June 30, 2025 | 2024 | Change $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Interest and other income, net | $2 | $2 | $— | — | $4 | $2 | $2 | 100% |

Interest and other income, net stayed consistent at $2 million for the three months ended June 30, 2025 and June 30, 2024. Interest and other income, net increased $2 million, or 100%, to $4 million for the six months ended June 30, 2025, compared to $2 million for the six months ended June 30, 2024. The increase was driven by the lack of foreign exchange gains or losses in 2025, which had previously offset $2 million interest income earned in the six months ended June 30, 2024.

Since the consummation of the Asset Sale, we expect to earn interest income on marketable securities and cash and cash equivalents that remain following the Asset Sale.

### Gain on Asset Sale

*($ in millions, except percentages)*

|  | Three Months Ended June 30, 2025 | 2024 | Change $% |  | Six Months Ended June 30, 2025 | 2024 | Change $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Gain on Asset Sale | $— | $4 | $(4) | (100)% | $— | $4 | $(4) | (100)% |

Gain on Asset Sale decreased $4 million, or 100%, to zero for the three months and six months ended June 30, 2025. The decrease was due to a gain associated with the Asset Sale completed last year.

### Provision for Income Taxes

*($ in millions, except percentages)*

|  | Three Months Ended March 31, 2025 | 2024 | Change $% |  | Six Months Ended March 31, 2025 | 2024 | Change $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Provision for income taxes | $— | $— | $— | — | $— | $6 | $(6) | (100)% |

There was no provision for income taxes for the three months ended June 30, 2025 and 2024. Provision for income taxes for the six months ended June 30, 2025 decreased $6 million, or 100%, compared to the same period in 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 June 30, 2025, we had cash and cash equivalents of $27 million, which were entirely held in cash deposits, money market funds, and U.S. treasury bills, and marketable securities of $192 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.

Our material cash requirements outside our normal operating costs include $3 million in total liabilities.

While we maintain our cash and short-term investments with large national financial institutions, there can be no assurance that any of our other deposits in excess of the Federal Deposit Insurance Corporation or other comparable insurance limits will be backstopped by the U.S. or that any bank or financial institution with which we do business will be able to obtain needed liquidity from other banks, government institutions or by acquisition in the event of a failure or liquidity crisis.

### Sources of Liquidity

As of June 30, 2025, we had cash and cash equivalents of $27 million and marketable securities of $192 million (consisting of government securities).

We (i) earn interest income on cash and marketable securities; (ii) have no other sources of revenue and related costs; and (iii) incur minimal administrative costs.

### Cash Flows

*(in millions)*

| Net cash provided by (used in): | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: |
| Operating activities | $(10) | $(90) |
| Investing activities | $(107) | $(35) |
| Financing activities | $72 | $(1) |

### Net Cash Used in Operating Activities

Net cash used in our operating activities for the six months ended June 30, 2025 was $10 million. This was driven by our net loss of $9 million.

Net cash used in our operating activities for the six months ended June 30, 2024 was $90 million. This was driven by our net loss of $72 million and $27 million unfavorable changes in our operating assets and liabilities, which was partially offset by non-cash adjustments of $9 million. 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

Net cash used in investing activities was $107 million for the six months ended June 30, 2025. This was due to $190 million in purchases of marketable securities, partially offset by $83 million in maturities of marketable securities.

Net cash used in investing activities was $35 million for the six months ended June 30, 2024. This was due to $133 million net cash proceeds from the Asset Sale and $47 million of purchases in marketable securities, partially offset by $145 million in maturities of marketable securities.

### Net Cash Provided By (Used in) Financing Activities

Net cash provided by our financing activities was $72 million for the six months ended June 30, 2025, due to proceeds from the issuance of redeemable convertible Preferred Units.

Net cash used in our financing activities was $1 million for the six months ended June 30, 2024 primarily due to tax payments related to employee RSU settlement.

### Off Balance Sheet Arrangements

For the three and six months ended June 30, 2025, 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.

For the three and six months ended June 30, 2024, we had two unconsolidated entities in the Netherlands remaining from the Asset Sale. These two entities hold and manage a payment license in Europe and were pending approval of transfer to Qoo10 by the Dutch National Bank, which occurred on December 31, 2024. We do not retain any economic benefits from these entities and thus do not consolidate them into our financial statements.

### Critical Accounting Policies

Besides the previously mentioned redeemable non-controlling interest, there have been no material changes to our critical accounting policies and estimates as compared to those described in our 2024 Form 10-K, filed with the SEC on March 12, 2025.

### Recent Accounting Pronouncements

See Note 1 of Part I, Item 1 of this Quarterly Report on Form 10-Q for a full description of recent accounting pronouncements.

## Market risk

As filed, 123 characters.

As a “smaller reporting company,” as defined by Item 10 of Regulation S-K, we are not required to provide this information.

## Controls and procedures

As filed, 3,046 characters.

### Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (“SEC”) and to ensure that information required to be disclosed is accumulated and communicated to management, including our principal executive and financial officers, to allow timely decisions regarding required disclosure.

Our Chief Executive Officer and Chief Financial Officer, with assistance from other members of management, have evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2025, and based on their evaluation, have concluded that our disclosure controls and procedures were effective as of such date at a reasonable assurance level.

### Changes in Internal Control Over Financial Reporting

There were no changes in our internal controls over financial reporting during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

### Inherent Limitations on the Effectiveness of Controls

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Due to inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

## Risk factors

As filed, 12,346 characters.

Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties set forth below, together with all of the other information contained in this Quarterly Report on Form 10-Q, including our condensed consolidated financial statements and related notes, and in our Annual Report on Form 10-K for the year ended December 31, 2024, before making a decision to invest in our common stock. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that affect our business. These risk factors could materially and adversely affect our business, financial condition and results of operations, and the market price of our common stock could decline. These risk factors do not identify all risks that we face – our financial condition and/or operations could also be affected by factors that are not presently known to us or that we currently consider to be immaterial to our financial conditions and/or operations. Due to risks and uncertainties, known and unknown, as well as the completion of the Asset Sale on April 19, 2024, our past financial results will not be a reliable indicator of future performance and historical trends should not be unduly used to anticipate results or trends in future periods. Other than as described below, there have been no additional material changes from the risk factors previously disclosed under the heading "Risk Factors" in Part I, Item 1A of our 2024 Form 10-K.

### Risks Related to the Asset Purchase Agreement

***We have counterparty risk with the Buyer and its affiliates for certain ongoing obligations under the Asset Purchase Agreement and the failure of the Buyer and its affiliates to perform their obligations could cause us to suffer losses.***

In connection with the Asset Sale, under the Asset Purchase Agreement, we agreed with the Buyer to transfer and assign the lease for the facility located at One Sansome Street (the “Lease”) to the Buyer and for the Buyer to assume all obligations under the Lease. The Company relinquished control of the leased facility after the Asset Sale. In order to obtain the landlord’s consent to the transfer of the Lease and effect its assignment, we agreed to maintain a letter of credit for an additional 90 days following the April 19, 2024 closing date during which time (i) the Buyer was obligated to secure a replacement security acceptable to the landlord and (ii) we and the Buyer agreed to provide the landlord with cash collateral in the amount of $7 million funded equally by the parties. As of October 31, 2024, the landlord had consented to the assignment of the Lease to the Buyer. We maintain the letter of credit for the facility, however, in March 2025, the landlord agreed to amend the Lease which lowered the letter of credit amount to $1 million and decreased the cash collateral to approximately $1 million. Until the landlord accepts a replacement security proposed by the Buyer, any event by the landlord to draw on the security will come from the maintained letter of credit. Under the Asset Purchase Agreement, the Buyer agreed to assume all obligations under the Lease since the Asset Sale.

As of June 2025, the letter of credit is expected to expire in the third quarter of 2025. If the Buyer fails to pay the rent under the Lease or comply with other obligations under the Lease, we would be responsible for the remaining obligations under the Lease. While the cash collateral held as restricted cash on our consolidated balance sheet could be utilized to satisfy obligations under the Lease should the Buyer fail to meet them, approximately one-third of the cash collateral has been funded by the Company, and if more than two-thirds of the cash collateral is used to satisfy obligations under the Lease, such funds will not be returned to the Company. While the Buyer would be responsible for such obligations under the terms of the Asset Purchase Agreement, we can provide no assurance that we would be successful in obtaining payment or reimbursement from the Buyer or Qoo10 for such losses.

### Risks Related to Our Common Stock

***We recently transferred the trading of ContextLogic common stock from The Nasdaq Stock Market to the OTCQB. Because the ContextLogic common stock is quoted on the OTC Markets, your ability to sell your shares in the secondary trading market may be limited.***

On May 30, 2025, the Company notified The Nasdaq Stock Market LLC (“Nasdaq”) of its decision to voluntarily withdraw from the hearings process, the result of which resulted in the ContextLogic common stock being delisted from The Nasdaq Global Market. The Company filed a Form 25 with the SEC relating to the delisting of the ContextLogic common stock on June 9, 2025, and the delisting of the ContextLogic common stock from Nasdaq became effective June 19, 2025. On June 3, 2025, the ContextLogic common stock was quoted for trading with the OTCQB Venture Market of OTC Markets. The decision to move ContextLogic common stock from trading on Nasdaq to the OTC Markets was influenced by several factors, including the Company’s evaluation of its ability to continue maximizing the value of its assets while also considering the advantages of remaining listed on Nasdaq versus the regulatory requirements, the time management dedicated to compliance and reporting, and the costs involved in maintaining the listing.

As a result of the transfer of the ContextLogic common stock from Nasdaq to the OTCQB, we anticipate that our stockholders could experience negative consequences related to our securities, including but not limited to: limited availability of market quotations for our securities; a reduced level of trading activity in the secondary trading market for shares of our common stock; a limited amount of analyst coverage; and decreased ability to issue additional securities or obtain additional financing in the future.

Because the ContextLogic common stock is quoted on the OTCQB market, your ability to sell your shares in the secondary trading market may be limited. Since June 3, 2025, the OTCQB is the only liquidity platform for the ContextLogic common stock. We cannot assure our stockholders that the ContextLogic common stock will continue to trade on this liquidity platform, whether broker-dealers will continue to provide public quotes of the ContextLogic common stock on this liquidity platform, whether the trading volume of the ContextLogic common stock will be sufficient to provide for respective efficient liquidity platforms or whether quotes for the ContextLogic common stock will continue on this liquidity platform in the future, which could result in significantly lower trading volumes and reduced liquidity for investors seeking to buy or sell our common stock. As a result, prices for shares of our common stock may be lower than might otherwise prevail if the ContextLogic common stock was listed on a national securities exchange.

### Risks Related to the Reorganization, Transfer Restrictions, and the Future Use of NOLs

### We may not obtain the expected benefits of the Reorganization

We believe our reorganization into a holding company structure will provide us with benefits in the future, however, these expected benefits may not be obtained if we fail to complete acquisitions or if market conditions or other circumstances prevent us from taking advantage of the strategic, business and financing flexibility that it affords us. In addition, the holding company structure may not keep the assets and liabilities of ContextLogic LLC and any new businesses we acquire legally separate. As a result, we may incur the costs of implementing the Reorganization without realizing the possible benefits. These costs include the increased administrative costs and expenses associated with keeping separate records, and in some cases making separate regulatory filings for ContextLogic Holdings Inc. and ContextLogic LLC.

***The imposition of transfer restrictions may cause the market price of our common stock to decline.***

Following the Reorganization, ContextLogic LLC stockholders received shares of our common stock. These shares are subject to transfer restrictions that did not apply to ContextLogic LLC common stock. It is possible that the transfer restrictions will have an adverse effect on the liquidity and market price of our common stock. Because of the implementation of the transfer restrictions, we cannot assure stockholders that the market price of the shares of ContextLogic Holdings Inc. common stock will be comparable to the market price of ContextLogic LLC’s common stock. The transfer restrictions will remain in effect until July 25, 2028, being the third anniversary of the filing and effectiveness of the Second Amended and Restated Certificate of Incorporation of ContextLogic Holdings Inc., or until the Board of Directors determines that (i) an ownership change would not result in a substantial limitation on our ability to use our NOLs, (ii) no significant value attributable to the NOLs would be preserved by continuing the transfer restrictions or (iii) that such restrictions are no longer in our best interests.

***The transfer restrictions may impede or discourage efforts by a third party to acquire us, even if doing so would benefit stockholders.***

Although the transfer restrictions are designed as a protective measure to preserve the NOLs, the transfer restrictions may have the effect of impeding or discouraging a merger, tender offer or proxy contest, even if such a transaction may be favorable to the interests of some or all of our stockholders. This effect might prevent stockholders from realizing an opportunity to sell all or a portion of their shares of common stock at a premium above market prices. In addition, the transfer restrictions may delay the assumption of control by a holder of a large block of our common stock and the removal of incumbent directors and management, even if such removal may be beneficial to some or all of our stockholders.

***The transfer restrictions may not be enforceable, and an ownership change may occur with the result that the ability to use the NOLs could be severely limited.***

The transfer restrictions could be challenged, and a court could refuse to enforce them. It is also possible that the IRS and other tax authorities could take the position that the transfer restrictions were not effective and did not protect ContextLogic LLC from an ownership change for tax purposes.

***Future legislation may result in us being unable to realize the tax benefits of the NOLs.***

It is possible that legislation or regulations will be adopted that would limit our ability to use the tax benefits associated with the NOLs. We are not aware, however, of any proposed changes in the tax laws or regulations that would materially affect our ability to use the NOLs.

***We may not be able to make use of the existing tax benefits of the NOLs because we may not generate taxable income.***

The use of the NOLs is subject to uncertainty because it is dependent upon the amount of taxable income and capital gains generated by us and our consolidated subsidiaries. There can be no assurance that we will have sufficient taxable income or capital gains in future years to use the NOLs.

***The IRS could challenge the amount of the NOLs or claim that ContextLogic LLC or ContextLogic Holdings Inc. experienced an ownership change, which could reduce the amount of NOLs that we can use.***

The amount of the NOLs has not been audited or otherwise validated by the IRS. The IRS could challenge the amount of the NOLs, which could result in an increase our future income tax liability. In addition, calculating whether an ownership change has occurred is subject to uncertainty, both because of the complexity and ambiguity of Section 382 and because of limitations on a publicly traded company’s knowledge as to the ownership of, and transactions in, its securities. Therefore, we cannot assure you that a governmental authority will not claim that the ContextLogic LLC or ContextLogic Holdings Inc. experienced an ownership change and attempt to reduce or eliminate the benefit of the NOLs even though our common stock is subject to the transfer restrictions.

Filed Aug 7, 2025.
Source: SEC EDGAR, the filing index for accession 0002064307-25-000009. Last ingested by Listed: Oct 24, 2026, 15:16 ET. No prices; not investment advice.