ContextLogic Inc.

Recording and transcript will be made available online, and management will make themselves available to the investor community over the coming days and weeks. Before we begin, I would like to note that during this call, we will be referring to a slide deck that is available on ContextLogic's investor relations websites and was published earlier this afternoon. Please refer to slide two for important disclaimers and cautionary statements regarding forward-looking information. Except for historical information, the matters discussed during this call may include forward-looking statements within the meaning of the applicable U.S. securities legislation. Forward-looking statements involve known and unknown risks and uncertainties and other factors that may cause actual financial results, performance, or achievements to be materially different from estimated future results, performance, or achievements. expressed or implied by those forward-looking statements. All forward-looking statements reflect each of the company's current views with respect to future events and are subject to risks and uncertainties and assumptions that have been made in drawing the conclusions included in such forward-looking statements. All statements other than historical facts, including statements regarding the expected timing of the closing of the proposed combination and the expected benefits of the proposed combination are forward-looking statements. Actual results could differ materially and the company undertakes no obligation to update any such forward-looking statements. Please also note that past performance is not a guarantee of future results. During this call, there will be references to certain non-IFRS and non-GAAP financial measures. which should not be considered in isolation from or as a substitute for many measures prepared in accordance with international financial reporting standards or generally accepted accounting principles. As a reminder, all figures, unless otherwise noted, will be in U.S. dollars. I will now turn the call over to your host for today's call, Ted Goldthorpe. Chairman of ContextLogic, and Rishi Bajaj, CEO of ContextLogic. Mr. Goldthorpe, you may begin.

Thank you, and good afternoon, everyone. We're delighted to be here today to discuss our strategic investment in ContextLogic. Slide five of the presentation deck presents a summary of why we believe this is a transformative transaction and investment that has the potential to unlock substantial value for ContextLogic shareholders. The company's significant cash position, net operating losses, and best-in-class team are well-positioned to execute on its value maximization strategy, both organically and through acquisitions. We at BC Partners are here as a long-term strategic partner to ContextLogic and are committed to bringing the full resources of BC Partners to bear for ContextLogic. Let's walk through the details of the transactions. We've agreed to invest up to $150 million of a convertible preferred equity and a partnership subsidiary of ContextLogic with an initial investment of $75 million that closed last week and an additional investment of $75 million that was callable by the company in conjunction with an acquisition. For a format for the full $150 million, funds managed by BC partners will own approximately 41.6% of ContextLogic Holdings LLC with the remainder owned by ContextLogic. The preferred will have an initial dividend rate of 4%, which will step up to an 8% coupon upon the consummation and acquisition. As a sign of our long-term commitment to the business, I have joined the board as chairman, and Mark Ward, a senior member of the BC Partners credit investment team, has also joined as a director. Now, we'd like to give some background on BC Partners and the resources we bring to the partnership with Rishi and the ContextLogic team. Founded in 1986, BC Partners is a leading alternative asset manager focused on private equity, credit, and real estate with deep networks across Europe and North America. In credit, my co-founders, Henry Wong and Matthias Ederer, and I formed BC Partners Credit in 2018. And since then, we've built a platform with a diverse investing capabilities focused on providing partnership to businesses across key segments of the market and a variety of products, all designed to achieve attractive relative value. On page 10 of the slide deck, we illustrate our founding team's shared history of investing across cycles and asset costs, first together as part of the special situations group of GOLF. While we don't know what the macro economy will do over the next few years, we are confident that this was the right team and the combined partnership with Rishi to be able to take advantage of the prevailing investment and capital allocation environment at any given time. As a firm, BC Partners brings a broad and deep acquisition sourcing capabilities, strong sector expertise, a full operating team, and an institutional platform capabilities to ContextLogic. But combined with the existing management talent, significant tax assets, and a strong capital base, we believe the new ContextLogic is well positioned to build a business of significant scale over the near to medium term. I will now turn over the call to Rishi to walk through the evolution of ContextLogic and the foundation from which we built.

Thank you, Ted. We are obviously thrilled to receive this transformative investment from BC Partners. BC Partners performed extensive diligence on ContextLogic, including its cash operations and all its assets, as well as the opportunities that this transaction presents. As Ted described, we are excited to pursue this next phase of our transformation and can't wait to update you on our progress on future calls. Before providing my thoughts on the transaction, I would like to briefly highlight our operating results for the quarter end of December 31st, 2024. In Q4, we incurred $4 million of G&A expense, inclusive of transaction-related expenses, which was offset by interest income of $2 million. We closed the quarter with $149 million of cash, cash equivalents, and marketable securities, compared to $150 million at the end of the third quarter. In other words, despite working throughout Q4 with our advisors and counsel to secure a transformative transaction, we used very little cash. I'm extremely proud of the lean and efficient team we've assembled that was able to accomplish great things over the past year while preserving the assets of the company, especially our cash. I would now like to briefly summarize the journey we took to arrive here, which, as made clear by the timeline on slide 15, we embarked upon and executed with an acute sense of urgency. When I joined the board of directors of ContextLogic Wish in November 2023, Wish was rapidly losing cash as its market share and competitive position continued to erode. I worked with the prior board to rapidly address this worsening situation and helped the board reach the conclusion that the optimal path forward was the sale of the WISH assets to Q10. Selling the assets of WISH required a shareholder vote and I spoke to many of you while pursuing the profoundly challenging goal of achieving shareholder approval, which was necessary for ContestLogic to retain significant tax assets without experiencing a change of control. Upon closing the WISH transaction, the prior board appointed me as CEO, the prior board resigned, and we reconstituted the board with four new board members. Context logic then moved quickly to restructure itself, and with a newly refocused and energized team, we were able to achieve near cash flow break-even several months later. Upon reaching this critical milestone, we hired a transaction advisor and began evaluating transformation strategies with an internal goal of announcing a transaction before April 18th, 2025. We were able to reach that goal ahead of schedule, and I defer my commitment to my CEO in order to help the company through our transformation strategies, in collaboration with BC Partners. Ultimately, we are seeking to create, both organically and through acquisition, a strong, durable business with growing cash earnings per share that will not only harness our existing assets, but also grow into a business that will be valuable to shareholders in its own right. Ted and I, BC Partners, the ContextLogic team, and our newly enhanced board are excited to deliver an outcome to shareholders that we believe will generate enduring value for years to come. And BC Partners, ContactLogic could not have asked for a better partner in order to help us achieve that objective. I'm going to turn it back to Ted.

Thank you for all your time. Yeah. Thank you for all your time and attention today. Rishi, our other colleagues, and I look forward to connecting with any or all existing shareholder base and working together to advance our shared vision. As always, the ContactLogic team looks forward to discussing the transaction with shareholders and the broader investment community. We are truly excited for what is to come for the new context, logic, and shareholders. Thank you very much.

Ladies and gentlemen, this does conclude today's conference call. A replay of the call will be available along with the investor presentation on the company's investor relations website. Again, thank you very much for joining us today. You may all disconnect and have a wonderful day. Goodbye.

Well, I'm 12 board meetings big day.