textLogic (US:WISH)2024-08-08 20:18Financial Performance - The company reported revenue of $7 million for the three months ended June 30, 2024, a decrease of 91% compared to $78 million for the same period in 2023[14]. - Gross profit for the same period was $1 million, down from $16 million year-over-year, indicating a significant decline in profitability[14]. - The net loss for the three months ended June 30, 2024, was $13 million, compared to a net loss of $80 million for the same period in 2023[14]. - The company reported a net loss of $72 million for the three months ended June 30, 2024, compared to a net loss of $169 million for the same period in 2023[25]. - The company incurred stock-based compensation expenses of $12 million for the three months ended June 30, 2024, down from $41 million in the same period of 2023[25]. - The total stock-based compensation expense for the three months ended June 30, 2024, was $3 million, compared to $15 million for the same period in 2023[97]. - The provision for income taxes was $0 million for the three months ended June 30, 2024, compared to $3 million for the same period in 2023[99]. Operating Expenses and Liabilities - Operating expenses totaled $20 million for the three months ended June 30, 2024, compared to $99 million in the prior year, reflecting an 80% reduction[14]. - Total current liabilities were reported at $5 million, significantly reduced from $196 million as of December 31, 2023[13]. - Total accrued liabilities decreased by 94% to $5 million as of June 30, 2024, primarily due to the Asset Sale on April 19, 2024[71]. - Other accrued liabilities decreased by 83% to $5 million, with $3 million related to payables to Qoo10 for restricted cash[71]. Cash and Cash Equivalents - Cash and cash equivalents decreased to $103 million as of June 30, 2024, down from $238 million at the end of 2023[13]. - Cash, cash equivalents, and restricted cash decreased to $110 million as of June 30, 2024, down from $325 million at the end of the previous year[25]. - As of June 30, 2024, total cash equivalents were $100 million, including $97 million in money market funds and $3 million in U.S. Treasury bills[61]. - Total marketable securities as of June 30, 2024, were $47 million, all in U.S. Treasury bills[62]. Asset Sale and Financial Impact - The company completed an asset sale, resulting in a gain of $4 million recognized in the financial statements[14]. - The company completed an asset sale on April 19, 2024, receiving $162 million in cash and marketable securities post-closing[28]. - The company recognized a gain of $4 million on the asset sale after accounting for net proceeds of $45 million and net assets sold of $41 million[69]. - Following the asset sale, the company no longer has marketplace and logistics operations, resulting in zero revenues[59]. - The Asset Sale to Qoo10 was approved by stockholders on April 18, 2024, and met the criteria for being classified as held for sale[42]. Tax Benefits and Legal Matters - The company has entered into a Tax Benefits Preservation Plan to protect its net operating losses, which were retained post-asset sale[33]. - The Company adopted a Tax Benefits Preservation Plan to protect its ability to utilize Net Operating Losses (NOLs) and other tax attributes, which are valuable assets[35]. - The Rights under the Tax Benefits Preservation Plan become exercisable upon the "Distribution Time," which occurs 10 days after a person or group becomes an "Acquiring Person" owning 4.9% or more of the Company's stock[36]. - The Rights will expire on February 10, 2027, or upon certain conditions such as redemption or merger approval by the Board of Directors[37]. - Legal contingencies include ongoing class action lawsuits, with no estimated range of potential losses available at this time[88][89]. - The Company believes there are no other legal contingency matters that would materially affect its financial position as of June 30, 2024[90]. Stock and Employee Matters - The company executed a 1-for-30 reverse stock split effective April 11, 2023, which did not change the number of authorized shares[31]. - As of June 30, 2024, the company had 366 thousand options outstanding with a weighted average exercise price of $18.00 and 200 thousand RSUs remaining[9]. - The company incurred approximately $13 million in severance and personnel reduction costs related to workforce reductions in January and August 2023, affecting about 405 employees[105]. - Following the Asset Sale, the company terminated its Employee Stock Purchase Plan[98]. Control Environment and IT Infrastructure - A new control environment has been developed with new systems, processes, and controls to support ongoing business operations following the asset sale[144]. - The implementation of a new IT infrastructure includes a General Ledger and Human Resources/Payroll system to enhance internal controls over financial reporting[144]. - Management acknowledges inherent limitations in disclosure controls and procedures, indicating that not all errors and fraud can be prevented[145]. - The design of the control system is subject to resource constraints and may not provide absolute assurance against misstatements due to error or fraud[145].