ContextLogic (LOGC) FY 2025 Annual General Meeting July 10, 2025 01:00 PM ET Speaker0Good morning, and welcome to ContextLogic's twenty twenty five Annual Meeting of Stockholders. Please note this event is being webcast. Now I'd like to introduce Mary Anne Lewis, the company's Senior Corporate Counsel and Corporate Secretary and chairperson of this meeting.Speaker1Welcome, everyone, and thank you for joining our annual meeting of stockholders. It is now 10AM, and the meeting will please come to order. We wi ...

Core Points - Approximately 99% of the shares voted have been in favor of the Reorganization Proposal, but additional shares are needed to secure the necessary approval [1][2] - The Annual Meeting will reconvene on July 24, 2025, to continue discussions regarding the Reorganization and other matters [1][2] - The Board of Directors emphasizes the importance of voting "FOR" the Reorganization to protect the value of stockholders' investments [4][5] Voting Information - Stockholders who have already voted do not need to take further action, and their previous proxy cards remain valid [3] - The new electronic voting deadline is set for 11:59 p.m. Eastern Time on July 23, 2025 [6] - Stockholders can vote online or by telephone using the instructions provided in the previously distributed proxy materials [6] Company Overview - ContextLogic Inc. is focused on developing a new business model and financing potential acquisitions that complement its operations [8]

Core Viewpoint - ContextLogic Inc. has appointed Michael Scarola as Chief Financial Officer, effective June 30, 2025, as part of its strategy to streamline operations and pursue growth through organic means and acquisitions [1][2]. Group 1: Appointment Details - Michael Scarola brings 17 years of experience, currently serving as CFO, COO, and Chief Compliance Officer at Altai Capital, where he oversees non-investment functions [3]. - Scarola has a strong background in fund accounting, compliance, operations, legal, IT, and investor relations [3]. - He has previously worked at KPMG in the Financial Services Taxation practice and holds a Bachelor of Science in Commerce with concentrations in Accounting and Finance from the University of Virginia [5]. Group 2: Management Insights - CEO Rishi Bajaj expressed enthusiasm about Scarola's appointment, highlighting its alignment with the company's strategy for value maximization [2]. - Scarola emphasized his long-standing working relationship with Bajaj and his commitment to ensuring smooth operations during the company's transformation [4]. Group 3: Company Overview - ContextLogic Inc. is focused on developing a new business model and exploring potential acquisitions that complement its operations [6].

Core Viewpoint - ContextLogic Inc. intends to voluntarily delist from The Nasdaq Global Market and begin trading on the OTCQB® Venture Market starting June 3, 2025 [1][2][3] Group 1: Delisting and Listing Details - The Company has been accepted for listing on the OTCQB® Venture Market, with its Class A Common Stock commencing trading under the ticker symbol "LOGC" on June 3, 2025 [2] - The Company plans to file a Form 25 with the U.S. Securities and Exchange Commission (SEC) around June 9, 2025, to initiate the delisting process from Nasdaq [3] - The delisting from Nasdaq is expected to become effective 10 days after the filing, unless directed otherwise by Nasdaq [3] Group 2: Background and Rationale - The Company was notified by Nasdaq's Listing Qualifications Department that it was considered a "public shell," which could lead to delisting unless a hearing was requested [4] - A hearing was held on May 8, 2025, where the Company presented its business overview and efforts to maximize asset value [5] - The Board of Directors unanimously determined that delisting from Nasdaq is in the best interests of the Company, considering regulatory requirements, compliance costs, and time management [6][7] Group 3: Future Strategy - The transition to the OTC Markets is expected to save expenses and maintain an orderly trading market for the Company's Common Stock [7] - The Company's strategy and operations will remain unchanged despite the listing transfer [7] - ContextLogic is focused on developing a new business and financing potential acquisitions that complement its operations [8]

Financial Data and Key Metrics Changes - In Q1 2025, the company raised $75 million in cash from BC Partners through an investment in a subsidiary, with an option for an additional $75 million for future acquisitions [5] - General and administrative expenses totaled $6 million, including $2 million related to evaluating potential transactions and $3 million in stock issuance costs directly tied to the BC Partners investment [5] - The company closed the quarter with $222 million in cash, cash equivalents, and marketable securities, up from $149 million at the end of fiscal year 2024 [6] Business Line Data and Key Metrics Changes - The company incurred approximately $5 million in cash on transaction-related costs during the quarter, which was offset by interest income of approximately $2 million [6] Market Data and Key Metrics Changes - No specific market data or key metrics changes were provided in the call [9] Company Strategy and Development Direction - The company is focused on maintaining low cash expenses to maximize available cash for organic growth and acquisitions, aiming to build a strong and durable business [6] - Following the strategic investment from BC Partners, the company is actively identifying growth and acquisition opportunities, with BC Partners enhancing the pipeline of opportunities [7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the receptiveness of potential partners and the quality of inbound outreach, indicating a positive outlook for future growth [7] Other Important Information - The company emphasized its commitment to keeping cash expenses low and highlighted the collaborative efforts with BC Partners to explore growth opportunities [6][7] Summary of Q&A Session - There was no question and answer session at the conclusion of the call [9]

Financial Data and Key Metrics Changes - In Q1 2025, the company raised $75 million in cash from BC Partners through an investment in a subsidiary, with an option for an additional $75 million for future acquisitions [5] - The company incurred $6 million in general and administrative expenses, including $2 million related to evaluating potential transactions and $3 million in stock issuance costs related to the BC Partners investment [5] - The company closed the quarter with $222 million in cash, cash equivalents, and marketable securities, up from $149 million at the end of fiscal year 2024 [6] Business Line Data and Key Metrics Changes - The company has focused on keeping cash expenses low to maintain liquidity for growth and acquisitions, indicating a strategic emphasis on operational efficiency [6] Market Data and Key Metrics Changes - The company has seen an increase in interest from potential partners and inbound outreach, suggesting a positive market reception for its growth strategy [7] Company Strategy and Development Direction - The company is committed to identifying growth and acquisition opportunities, with BC Partners actively involved in expanding the pipeline of opportunities [6][7] - The management expressed optimism about the quality of potential partnerships and the overall growth strategy moving forward [7] Management Comments on Operating Environment and Future Outlook - Management highlighted the importance of maintaining low cash burn to support future growth and acquisitions, reflecting a cautious yet optimistic outlook on the business environment [6] - The collaboration with BC Partners is expected to enhance the company's capabilities and growth prospects [7] Other Important Information - The company has incurred approximately $5 million in cash on transaction-related costs during the quarter, which reflects its proactive approach to strategic investments [5] Summary of Q&A Session - There was no question and answer session at the conclusion of the call, as indicated by the operator [9]

Financial Data and Key Metrics Changes - In Q1 2025, the company raised $75 million in cash from BC Partners, with an additional option for $75 million to fund future acquisitions [5] - The company incurred $6 million in general and administrative expenses, including $2 million related to evaluating potential transactions [5] - Cash expenses were offset by approximately $2 million in interest income, resulting in a closing cash balance of $222 million, up from $149 million at the end of fiscal year 2024 [6] Business Line Data and Key Metrics Changes - The company has focused on maintaining low cash burn to maximize available cash for growth and acquisitions, indicating a strategic shift towards a more sustainable business model [6] Market Data and Key Metrics Changes - The strategic investment from BC Partners has expanded the company's pipeline of opportunities and enhanced its capabilities, reflecting a positive market reception [7] Company Strategy and Development Direction - The company is committed to organic growth and acquisitions, with a strong emphasis on identifying growth opportunities in collaboration with BC Partners [6][7] - Management expressed optimism about the quality of inbound outreach and potential partnerships, indicating a proactive approach to market expansion [7] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of keeping cash expenses low to support future growth and acquisitions, demonstrating a cautious yet optimistic outlook for the business [6] - The collaboration with BC Partners is expected to yield significant opportunities, with management looking forward to sharing progress in upcoming quarters [7] Other Important Information - The company incurred $3 million in costs directly related to the BC Partners investment, recorded as stock issuance costs, indicating a strategic investment in future growth [5] Summary of Q&A Session - There was no question and answer session at the conclusion of the call, as indicated in the opening remarks [4]

[Part I. Financial Information](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section details the company's financial statements and management's analysis following its strategic transformation and asset sale [Condensed Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The company's Q1 2025 financials reflect a complete transformation post-asset sale, with no operating revenue, minimal expenses, and a balance sheet dominated by cash and marketable securities, bolstered by a $75 million preferred unit issuance for future acquisitions [Financial Position (Balance Sheet)](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $223 million by March 31, 2025, driven by marketable securities and a new $75 million redeemable non-controlling interest, with current assets primarily cash and marketable securities Condensed Consolidated Balance Sheet Highlights (in millions USD) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $64 | $66 | | Marketable securities | $158 | $83 | | **Total Assets** | **$223** | **$156** | | **Liabilities & Equity** | | | | Total liabilities | $3 | $5 | | Redeemable non-controlling interest | $75 | $0 | | Total stockholders' equity | $145 | $151 | | **Total Liabilities & Equity** | **$223** | **$156** | [Results of Operations (Income Statement)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 saw zero revenue due to the asset sale, with net loss narrowing significantly to $7 million from $59 million year-over-year, primarily driven by reduced operating expenses Q1 2025 vs Q1 2024 Statement of Operations (in millions USD) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $0 | $36 | | Gross Profit | $0 | $6 | | Total operating expenses | $6 | $59 | | Loss from operations | ($6) | ($53) | | Interest and other income, net | $2 | $0 | | Net loss | ($4) | ($59) | | Net loss attributable to common stockholders | ($7) | ($59) | | Net loss per share | ($0.27) | ($2.43) | [Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 saw minimal cash used in operations ($5 million), $75 million used in investing for marketable securities, and $72 million provided by financing from preferred unit issuance Q1 2025 vs Q1 2024 Cash Flow Summary (in millions USD) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($5) | ($75) | | Net cash (used in) provided by investing activities | ($75) | $90 | | Net cash provided by (used in) financing activities | $72 | ($1) | [Key Developments (Notes to Financials)](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Key notes detail the company's strategic transformation, including the April 2024 asset sale, a $75 million preferred unit investment in March 2025 for future acquisitions, and the appointment of a new CEO - On April 19, 2024, the company completed the sale of substantially all its assets (the Wish platform) to Qoo10 Inc. The company retained its NOLs, marketable securities, and certain cash, and no longer generates revenue from operations[29](index=29&type=chunk)[30](index=30&type=chunk)[42](index=42&type=chunk) - In March 2025, the company's subsidiary, Holdings, issued **75,000 Preferred Units** to an investor for **$75 million**. This is part of a potential **$150 million investment transaction** intended to fund a future acquisition. These units are classified as redeemable non-controlling interest on the balance sheet[35](index=35&type=chunk)[63](index=63&type=chunk)[67](index=67&type=chunk) - A new CEO, Rishi Bajaj, was appointed in March 2025 and awarded **2,372 thousand Class P units** in the subsidiary, Holdings. This compensation includes time-based and performance-based vesting tied to the company's new strategic direction[71](index=71&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management confirms the company's exit from its historical business, focusing on leveraging post-sale cash, NOLs, and new capital for future acquisitions, with current liquidity deemed sufficient for the next 12 months [Business Overview and Strategy](index=25&type=section&id=Overview) Post-asset sale, ContextLogic ceased e-commerce operations, now focusing on strategic acquisitions to leverage cash reserves and NOLs, with interest income as its primary revenue source - The company completed the sale of its operating assets to Qoo10 on April 19, 2024, retaining approximately **$162 million in cash**, cash equivalents, and marketable securities, as well as its NOLs[97](index=97&type=chunk) - The company is actively evaluating strategic alternatives, which are expected to include acquiring a business that would allow it to utilize its NOLs and other tax attributes[98](index=98&type=chunk) [Results of Operations Analysis](index=26&type=section&id=Results%20of%20Operations) Q1 2025 operating results show a 100% decrease in revenue and related costs due to the asset sale, with general and administrative expenses falling 73% to $6 million, and interest income increasing to $2 million Change in Operating Results (Q1 2025 vs Q1 2024, in millions USD) | Account | Q1 2025 | Q1 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $0 | $36 | ($36) | (100)% | | Cost of revenue | $0 | $30 | ($30) | (100)% | | Sales and marketing | $0 | $15 | ($15) | (100)% | | Product development | $0 | $22 | ($22) | (100)% | | General and administrative | $6 | $22 | ($16) | (73)% | [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company held $64 million in cash and $158 million in marketable securities, with liquidity bolstered by $72 million from preferred unit issuance, deemed sufficient for the next 12 months - The company's primary sources of liquidity are its existing cash and marketable securities, interest income, and the recent financing from the Preferred Unit issuance[113](index=113&type=chunk)[116](index=116&type=chunk) - Net cash from financing activities was **$72 million** in Q1 2025, a direct result of the new investment transaction, compared to a **$1 million use of cash** in Q1 2024[122](index=122&type=chunk) [Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[129](index=129&type=chunk) - No changes in internal controls over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[130](index=130&type=chunk) [Part II. Other Information](index=33&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section outlines the company's legal proceedings and significant risk factors [Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company is defending a consolidated class action lawsuit related to its IPO and a shareholder derivative action, both believed to be without merit, with no estimable potential loss - The company is defending a consolidated class action lawsuit alleging securities law violations in its IPO registration statement. A motion to dismiss was granted, but plaintiffs filed a notice of appeal in March 2025[60](index=60&type=chunk) - A shareholder derivative action filed in August 2021, alleging false and misleading statements, is currently stayed. The company believes this lawsuit is also without merit[61](index=61&type=chunk) [Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including potential Nasdaq delisting due to a "public shell" determination and counterparty risk related to a shared lease obligation with Qoo10 - A primary risk is the potential delisting from Nasdaq. The Nasdaq Staff has determined the company is a "public shell," and the company appealed this decision at a hearing on May 8, 2025. There is no assurance the appeal will be successful[136](index=136&type=chunk)[137](index=137&type=chunk) - The company faces counterparty risk related to the lease for its former headquarters. Although the lease was transferred to the Buyer (Qoo10), ContextLogic remains partially responsible for a letter of credit until the Buyer secures a replacement, exposing it to potential losses if the Buyer fails to meet lease obligations[134](index=134&type=chunk)[135](index=135&type=chunk)

[Financial and Operational Highlights](index=1&type=section&id=First-Quarter%202025%20Financial%20Highlights) The section details ContextLogic's strategic investment from BC Partners, board enhancements, and Q1 2025 financial performance, including a reduced net loss and strong liquidity [Company Outlook and Strategic Update](index=1&type=section&id=Company%20Outlook) In Q1 2025, ContextLogic completed a pivotal strategic investment from BC Partners, which strengthened its board and financial position, now focusing on a new de novo business and value-enhancing acquisitions - Completed a strategic investment from BC Partners to advance its value-maximization strategy through organic growth and acquisitions[4](index=4&type=chunk) - Strengthened its board by naming Ted Goldthorpe as Chairman and adding Mark Ward and Jennifer Chou as directors[5](index=5&type=chunk) - The company's current strategy is to develop a new business and finance potential future acquisitions[10](index=10&type=chunk) [Q1 2025 Financial Performance](index=1&type=section&id=First-Quarter%202025%20Financial%20Highlights) The company reported a significantly reduced net loss of **$4 million** in Q1 2025, holding a strong liquidity position of **$222 million** as of March 31, 2025 Net Loss Comparison | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Loss | $4 million | $59 million | Liquidity Position | Item | Amount (in millions) | | :--- | :--- | | Cash, cash equivalents, and marketable securities | $222 | | Total Liabilities | $3 | - General and administrative expenses for the quarter totaled **$6 million**, which included **$4 million** for employee and professional services and **$2 million** for evaluating strategic transactions[7](index=7&type=chunk) - The company used **$5 million** in cash from operating activities and generated a net **$72 million** from financing activities, primarily from the issuance of redeemable convertible preferred units[8](index=8&type=chunk) [Consolidated Financial Statements](index=3&type=section&id=ContextLogic%20Inc.%20Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's Q1 2025 consolidated balance sheets, statements of operations, and cash flows, reflecting the impact of asset sales and strategic investment [Condensed Consolidated Balance Sheets](index=3&type=section&id=ContextLogic%20Inc.%20Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets increased to **$223 million** from **$156 million** at year-end 2024, driven by marketable securities, while total liabilities decreased to **$3 million** Balance Sheet Summary | Account | March 31, 2025 (in millions) | December 31, 2024 (in millions) | | :--- | :--- | :--- | | **Total Assets** | **$223** | **$156** | | Cash and cash equivalents | $64 | $66 | | Marketable securities | $158 | $83 | | **Total Liabilities** | **$3** | **$5** | | Redeemable non-controlling interest | $75 | $0 | | **Total Stockholders' Equity** | **$145** | **$151** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=ContextLogic%20Inc.%20Condensed%20Consolidated%20Statements%20of%20Operations) For Q1 2025, the company reported zero revenue and gross profit due to asset sales, significantly reducing operating expenses to **$6 million**, resulting in a net loss of **$4 million** Statements of Operations Summary | Metric | Q1 2025 (in millions) | Q1 2024 (in millions) | | :--- | :--- | :--- | | Revenue | $0 | $36 | | Gross Profit | $0 | $6 | | Total Operating Expenses | $6 | $59 | | Loss from Operations | $(6) | $(53) | | **Net Loss** | **$(4)** | **$(59)** | | Net Loss per Share | $(0.27) | $(2.43) | - The company generated **$2 million** in interest and other income in Q1 2025, compared to zero in the same period of 2024[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=ContextLogic%20Inc.%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2025, net cash used in operating activities was **$5 million**, a significant improvement, with financing activities providing a net **$72 million** from preferred unit issuance Cash Flow Summary | Cash Flow Activity | Q1 2025 (in millions) | Q1 2024 (in millions) | | :--- | :--- | :--- | | Net cash used in operating activities | $(5) | $(75) | | Net cash (used in) provided by investing activities | $(75) | $90 | | Net cash provided by (used in) financing activities | $72 | $(1) | | **Net (decrease) increase in cash** | **$(8)** | **$12** | - The company received **$72 million** in net proceeds from the issuance of redeemable convertible Preferred Units[18](index=18&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This section outlines the company's forward-looking statements regarding its financial outlook and strategic plans, emphasizing inherent risks and uncertainties - The report contains forward-looking statements concerning the company's financial outlook, strategic alternatives, and potential acquisitions, which are subject to various risks and uncertainties[12](index=12&type=chunk) - Key risks highlighted include the lack of operating revenues following the April 2024 asset sale, the ability to formulate a viable future business plan, and risks associated with any future acquisitions[12](index=12&type=chunk)

Financial Data and Key Metrics Changes - The company has a significant cash position and net operating losses, which are well-positioned to execute on its value maximization strategy [2][3] Business Line Data and Key Metrics Changes - No specific data on individual business lines was provided in the call [1][5] Market Data and Key Metrics Changes - No specific market data or key metrics were discussed during the call [1][5] Company Strategy and Development Direction and Industry Competition - The strategic investment from BC Partners is viewed as transformative, with the potential to unlock substantial value for shareholders [2] - The company aims to pursue a next phase of transformation, focusing on both organic growth and acquisitions [3] Management's Comments on Operating Environment and Future Outlook - Management expressed excitement about the investment and the opportunities it presents for future growth [3][4] - The management team looks forward to updating shareholders on progress in future calls [3] Other Important Information - The call included a presentation deck available on the company's Investor Relations website, which outlines the strategic investment details [1][2] Summary of Q&A Session - There was no question and answer section at the conclusion of the call [1][5]