ContextLogic Inc

Item 1A. Risk Factors.

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, 20245, 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 20245 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, the Buyer agreed to assume any and all third party claims, liabilities, and obligations disclosed by the Seller except for certain aUS Salt Acquisition, Backstop Agreed upon excluded claims and liabilities including, but not limited to, state and federal tax obligations, liabilities aments, and claims related to international subsidiaries, vendor disputes, etc. However, although the Buyer would be responsible for such liabilities, claims, and obligations under the terms of the Asset Purchase Agreement, we can provide no assurance that we would be successful in obtaining payment or reimbursemeFinancings

Impairment 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 resof US Salts intangible assets could 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 sein significant charges that could adveral factors, including the Companys 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 reporsely impact our future operating, and the costs involved in maintaining the listing results.

As a result of the transfer of the ContextLogic common stock from Nasdaq to the OTCQBUS Salt, we anticipate that our stockholders could experience negatihave consequences related to our securities, including but not limited to: limited availability of market quotations for our securities; a reduced level of trading activitysignificant in the secondary trading market for shares of our common stock; a limited amount of analyst coverage; and decreased ability to issutangible 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 ssets, including goodwill 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 liresulting from acquidity platforms or whether quotes for the ContextLogic common stock will continue on this liquidity platform in the future, which sition accould result in significantly lower tradnting 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.

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Rivaluation of US Salt's asks Related to the Reorganization, Transfer Restrictions, sets 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 coliabilities, which are susceptible to impany structure may not keep the assets and liabilities of ContextLogic LLC and any new businesses we acquire legally separate. Airment charges 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 s a result of changes 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 stockholdevarious factors received shares of ouor 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 nditions. We will have an adverse effect on the liquidity and market price of our common stock. Because of assess 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 potential impairment of ContextLogic LLCs common stock. The transfer restrictions goodwill remainand 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 NOLdefinite-lived intangible assets on an annual basis, as well as would be preserved by continuing the transfer restrictions or (iii) that such restrictions are no longer in our besthenever events or changes interests.

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

Although circumstances indicate that the transfer restrictions are designed as a protective measure to preserve the NOLs, the transfer restrictions carrying value 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 aexceed fair value. We will of our stockholders. This effect might prevent stockholderassess 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 thinite-lived intangible assumption of control by a holder of a large block of our common stock and the removal of incumbent directors and management, eets whenever even if such removal may be beneficial to somets 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 tchanges in circumstances indicate that the transfer restrictions were not effective and did not protect ContextLogic LLC from an ownership change for tax purposes.

Future legislation carrying value 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, howeexceed fair value. Adver, of any proposedse changes in the tax laws or reguloperations that would materially affectof 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 businesses or othe NOLs is subject to uncertainty because it is dependent upon the amount of taxar unforeseeable 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 cfactors could result in an impairment charge in future periods that could result in an increase our future income tax liability. In addition, calculating whether an ownership change has occurred is subject to uncertainty, both becauseadversely impact our results of the complexity and ambiguity of Sectoperation 382 s and because of limitations on a publicly traded companys knowledge as to the ownership of, and transactions in, its securities. Therefore, we cannot assure you that a governmental authority will not claim financial position in that the ContextLogic LLC or ContextLogic 

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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.

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