LOGC 8-K/A
ContextLogic Holdings Inc. (LOGC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Amendment No. 2)
CURRENT REPORT
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Explanatory Note
As previously disclosed in the Current Report on Form 8-K (the “Initial Report”) filed with the Securities and Exchange Commission (the “SEC”) on February 26, 2026, ContextLogic Holdings Inc. (the “Company”) consummated the previously announced acquisition (the “US Salt Acquisition”) of US Salt Parent Holdings, LLC, a Delaware limited liability company (“US Salt”) pursuant to the terms of the Purchase Agreement entered into on December 8, 2025, as amended (the “Purchase Agreement”). On March 5, 2026, the Company filed Amendment No. 1 on Form 8-K/A (“Amendment No. 1”) providing supplemental disclosure to the Initial Report, including audited consolidated financial statements and the related notes of US Salt Parent Holdings, LLC and its subsidiaries as of the years ended December 31, 2025 and 2024, which were audited in accordance with the standards set forth by the American Institute of Certified Public Accountants.
This Amendment No. 2 on Form 8-K/A (“Amendment No. 2”) is being filed by the Company to amend the Initial Report, as amended by Amendment No. 1, solely to disclose the audited consolidated financial statements and the related notes of US Salt Parent Holdings, LLC and its subsidiaries as of the years ended December 31, 2025 and 2024, as audited in accordance with the standards set forth by the Public Company Accounting Oversight Board. Except as otherwise provided herein, the disclosures made in the Initial Report and Amendment No. 1 remain unchanged. This Amendment No. 2 should be read in conjunction with the Initial Report and Amendment No. 1, which provide a more complete description of the US Salt Acquisition.
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Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Businesses or Funds Acquired.
The audited consolidated financial statements of US Salt Parent Holdings, LLC as of and for the years ended December 31, 2025 and 2024 are attached as Exhibit 99.1 hereto and incorporated herein by reference.
(d) Exhibits.
| Exhibit No. | Description | |
| 23.1 | Consent of Deloitte & Touche LLP | |
| 99.1 | Audited consolidated financial statements of US Salt Parent Holdings, LLC as of and for the years ended December 31, 2025 and 2024. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ContextLogic Holdings Inc. | ||
| Date: July 21, 2026 | By: | /s/ Mark Ward |
| Mark Ward President Principal Executive Officer |
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Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement Nos. 333- 285746, 333-277676, 333-270074, 333-264625, 333-263538, 333-262433, 333- 251374 and 333-294057 on Form S-8 of ContextLogic Holdings Inc. of our report dated July 21, 2026, relating to the financial statements of US Salt Parent Holdings, LLC appearing in this Current Report on Form 8-K/A dated July 21, 2026.
/s/ Deloitte & Touche LLP
New York, New York
July 21, 2026
Exhibit 99.1
US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
As of and for the years ended December 31, 2025 and 2024
US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
CONTENTS
| Report of Independent Registered Public Accounting Firm | 1 | |
| Consolidated Financial Statements as of and for the years ended December 31, 2025 and 2024 | ||
| Consolidated Balance Sheets | 3 | |
| Consolidated Income Statements | 4 | |
| Consolidated Statements of Changes in Members’ Equity | 5 | |
| Consolidated Statements of Cash Flows | 6 | |
| Notes to Consolidated Financial Statements | 7 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of US Salt Parent Holdings, LLC and Subsidiaries
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of US Salt Parent Holdings, LLC and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, stockholders' equity, and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024 and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America (GAAP).
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.
Revenue Recognition — Refer to Note 2 to the financial statements
Critical Audit Matter Description
The Company manufactures and sells a range of branded and private label evaporated salt products to nationwide retailers, pharmaceutical companies, food service operators, and independent distributors. The Company recognizes revenue at the point in time when control is transferred to the customer, generally when the product is shipped or delivered to the customer based on the applicable shipping terms. The Company’s revenue is measured as the determinable transaction price, net of any variable consideration, such as discounts, sales incentives, rights to return product, and taxes collected from customers and remitted to governmental authorities.
We identified revenue recognition as a critical audit matter because auditing revenue required extensive audit effort and auditor judgment. In particular, judgment was necessary to assess whether revenue was recognized in the appropriate period based on the applicable contractual arrangements, purchase orders and related shipping terms and whether revenue was recorded at the appropriate amount, net of variable consideration.
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How the Critical Audit Matter Was Addressed in the Audit
| ● | We evaluated the accounting policies established by management against ASC 606, Revenue from Contracts with Customers. |
| ● | We sampled revenue transactions and read the terms of the respective master service agreement or purchase order, as well as the applicable proof of delivery or bill of lading to evaluate the correct timing of control transfer and variable consideration, as applicable. |
| ● | We selected a sample of revenue transactions recorded near the fiscal year-end, as well as immediately following the year-end, and inspected bills of lading or proof of delivery to evaluate whether revenue was recognized in the correct period based on the specific shipping terms. |
/s/ DELOITTE & TOUCHE LLP
New York, New York
July 21, 2026
We have served as the Company's auditor since 2023.
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US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 2025 and 2024
| 2025 | 2024 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Inventories | ||||||||
| Prepaid expenses | ||||||||
| Total Current Assets | ||||||||
| Non-current Assets | ||||||||
| Plant, property and equipment, net | ||||||||
| Goodwill | ||||||||
| Intangibles, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Finance lease right-of-use assets | ||||||||
| Other inventories | ||||||||
| Total Non-current Assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND MEMBERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Current maturities of long- term debt | ||||||||
| Current portion of operating lease liability | ||||||||
| Current portion of finance lease liability | ||||||||
| Total Current liabilities | ||||||||
| Non-current Liabilities | ||||||||
| Long- term debt, net of current maturities | ||||||||
| Long- term portion of operating lease liability | ||||||||
| Long- term portion of finance lease liability | ||||||||
| Asset retirement obligations | ||||||||
| Total Liabilities | ||||||||
| Members’ Equity | ||||||||
| Members’ units, Class A | ||||||||
| Members’ units, Class B | ||||||||
| Subscription note receivable | ( | ) | ( | ) | ||||
| Retained earnings (accumulated deficit) | ( | ) | ||||||
| Noncontrolling parent interest | ||||||||
| Total Members’ Equity | ||||||||
| Total Liabilities and Members’ Equity | $ | $ | ||||||
See Notes to Consolidated Financial Statements
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US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
Consolidated Income Statements
December 31, 2025 and 2024
| 2025 | 2024 | |||||||
| Revenue | $ | $ | ||||||
| Cost of Revenue | ||||||||
| Gross Profit | ||||||||
| Selling, general and administrative expenses | ||||||||
| Loss on disposal of property, plant and equipment | ||||||||
| Operating Income | ||||||||
| Other Income (Expenses) | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Foreign currency income (loss) | ( | ) | ||||||
| Net Income | ||||||||
| Net income attributable to noncontrolling parent interest | ||||||||
| Net income attributable to Parent Holdings Class A unitholders | $ | $ | ||||||
| Basic and diluted weighted average Class A units outstanding | ||||||||
| Earnings per unit attributable to Class A unit, basic and diluted | $ | $ | ||||||
See Notes to Consolidated Financial Statements
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US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
Consolidated Statements of Changes in Members’ Equity
December 31, 2025 and 2024
| Class A Member Units | Class B Member Units | Subscription Note | Retained Earnings (Accumulated | Noncontrolling Parent | Total Members’ | |||||||||||||||||||||||||||
| Units | Amount | Units | Amount | Receivable | Deficit) | Interest | Equity | |||||||||||||||||||||||||
| Balances, January 1, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||||||
| Members’ contributions | ||||||||||||||||||||||||||||||||
| Members’ distributions | - | ( | ) | - | ( | ) | ( | ) | ||||||||||||||||||||||||
| Collection of subscription note receivable | - | - | ||||||||||||||||||||||||||||||
| Unit-based compensation expense | ||||||||||||||||||||||||||||||||
| Repurchase of units | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Cancellation of units purchased and corresponding subscription note receivable | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||||||
| Balances, December 31, 2024 | ( | ) | ( | ) | $ | |||||||||||||||||||||||||||
| Members’ contributions | ||||||||||||||||||||||||||||||||
| Members’ distributions | - | ( | ) | - | ( | ) | ( | ) | ||||||||||||||||||||||||
| Collection of subscription note receivable | - | - | ||||||||||||||||||||||||||||||
| Unit-based compensation expense | ||||||||||||||||||||||||||||||||
| Repurchase of units | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Net income | - | - | ||||||||||||||||||||||||||||||
| Balances, December 31, 2025 | $ | $ | $ | ( | ) | $ | $ | $ | ||||||||||||||||||||||||
See Notes to Consolidated Financial Statements
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US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
Consolidated Statements of Cash Flows
December 31, 2025 and 2024
| 2025 | 2024 | |||||||
| Cash Flow from Operating Activities | ||||||||
| Net income | $ | $ | ||||||
| Adjustments to reconcile net income to net cash from operating activities: | ||||||||
| Depreciation, depletion, and amortization | ||||||||
| Loss due to casualty | ||||||||
| Gain from insurance recovery | ( | ) | ||||||
| Amortization of debt issuance cost | ||||||||
| Bad debt expense | ||||||||
| Unit-based compensation expense | ||||||||
| Loss on disposals | ||||||||
| Non-cash lease expense | ||||||||
| Amortization of finance right-of-use assets | ||||||||
| Interest on finance leases | ||||||||
| Accretion of asset retirement obligation | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Inventory | ( | ) | ( | ) | ||||
| Prepaid expenses | ||||||||
| Other inventories | ( | ) | ||||||
| Accounts payable | ( | ) | ||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Accrued liabilities | ( | ) | ||||||
| Net Cash Provided by Operating Activities | ||||||||
| Cash Flow from Investing Activities | ||||||||
| Purchases of plant, property, and equipment | ( | ) | ( | ) | ||||
| Net cash Used in Investing activities | ( | ) | ( | ) | ||||
| Cash Flow from Financing Activities | ||||||||
| Repayment of principal on term loan | ( | ) | ( | ) | ||||
| Repayment of principal of finance leases obligations | ( | ) | ( | ) | ||||
| Members’ contributions | ||||||||
| Members’ distributions | ( | ) | ( | ) | ||||
| Distribution to noncontrolling parent interest | ( | ) | ( | ) | ||||
| Proceeds from collection of subscription note receivable | ||||||||
| Repurchase of units | ( | ) | ( | ) | ||||
| Net Cash Used in Financing Activities | ( | ) | ( | ) | ||||
| Net Change in Cash and Cash Equivalents | ( | ) | ||||||
| Cash and Cash Equivalents, Beginning of Year | ||||||||
| Cash and Cash Equivalents, End of Year | $ | $ | ||||||
| Supplemental cash flow information | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Supplemental non-cash investing and financing information: | ||||||||
| Repayment of subscription receivable from proceeds of units repurchase | $ | $ | ||||||
| Property, plant and equipment in accounts payable | $ | $ | ||||||
| Additions and changes in asset retirement obligations | $ | $ | ( | ) | ||||
See Notes to Consolidated Financial Statements
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US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
| Note 1. | Nature of operations and basis of presentation |
Nature of Business - On June 3, 2021, US
Salt Parent Holdings, LLC (“Parent Holdings”) was formed and incorporated in Delaware as a limited liability company, which
owns
US Salt Parent Holdings, LLC and subsidiaries (the “Company”, we”, “us”, “our”) operate a single solution mining facility located in Watkins Glen, New York. The Company mines, processes, packages and sells a range of evaporated salt products used for food and food processing, pharmaceutical, water softening and industrial applications mainly in the U.S. and Canada, and other countries in North America. The Company’s primary products include round cans of salt, packaged pellets, packaged granulated salt, and medical grade salt. The Company’s customers primarily include national retail chains, pharmaceutical companies, food service operators, and independent distributors.
Merger Agreement - On December 8, 2025, ContextLogic Holdings Inc. (“ContextLogic”), incorporated in the state of Delaware and traded on the OTC (Over-the-Counter) market under the trade symbol LOGC, entered into a Purchase Agreement (the “Purchase Agreement”, or the “Transaction”) with the various parties to acquire Parent Holdings and its subsidiaries. The board of directors of both ContextLogic and Parent Holdings have approved the proposed Purchase Agreement. The Transaction closed on February 26, 2026. Refer to Note 19, Subsequent Events.
Basis of Presentation - The accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The accompanying consolidated financial statements include the Company, and all our majority or wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
| Note 2. | Significant accounting policies |
The following is a summary of the significant accounting policies and principles used in the preparation of the consolidated financial statements:
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US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Use of Estimates
The preparation of our consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as contingent assets and liabilities, as of the date of the consolidated financial statements and the reported amounts of revenue and expenses for the reporting periods then ended. Actual results could vary from the estimates and assumptions that were used. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, and makes adjustments when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ significantly from those estimates and assumptions. Significant changes, if any, in those estimates and assumptions will be reflected in the consolidated financial statements in future periods.
Significant estimates embedded in the consolidated financial statements include, but not limited to, revenue recognition, impairment analysis of goodwill, depletion of salt reserves, and impairment of long-lived assets and finite-lived intangible assets.
Revenue Recognition
Nature of Revenue Source - The Company manufactures and sells a range of branded and private label evaporated salt products to nationwide retailers, pharmaceutical companies, foodservice operators, and independent distributors. When the Company enters into a sale arrangement with a customer, it believes it is probable that it will collect substantially all the consideration to which it will be entitled in exchange for the goods that will be transferred to the customer. The Company’s customer contracts identify the product, quantity, price, payment terms, and final delivery terms. Payment terms sometimes include early-pay discounts. Although some payment terms may be extended, no terms beyond one year are granted at contract inception.
The Company determines revenue recognition through the following steps:
| ● | Identification of the contract, or contracts, with a customer |
| ● | Identification of the performance obligations in the contract |
| ● | Determination of the transaction price |
| ● | Allocation of the transaction price to the performance obligations in the contract |
| ● | Recognition of revenue when, or as, the Company satisfies a performance obligation. |
Revenue Recognition - Revenue is recognized at the point in time when control is transferred to the customer. In general, control transfers to a customer when the product is shipped or delivered to the customer based upon applicable shipping terms, as the customer can direct the use and obtain substantially all the remaining benefits from the product at this point in time. The Company’s revenue is reported as net revenue and is measured as the determinable transaction price, net of any variable consideration such as discounts, sales incentives, rights to return product, and any taxes collected from customers and remitted to governmental authorities.
Performance Obligations - A performance
obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in Financial Accounting
Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers.
The contract’s transaction price is allocated to the performance obligations and recognized as revenue when the performance obligations
are satisfied. Substantially all our contracts are of a short-term nature and contain a single performance obligation. Shipping and handling
costs associated with outbound freight, including shipping and handling costs after control over a product is transferred to a customer
are accounted for as a fulfillment cost as incurred and are not considered to be a separate performance obligation. Shipping and handling
costs recorded as a component of cost of revenues were approximately $
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US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Contract Estimates - Most contracts include some form of variable consideration. The most common forms of variable consideration include discounts, rebates, and sales returns and allowances. Variable consideration is treated as a reduction in revenue when product revenue is recognized. The Company uses the most likely amount method to determine the variable consideration. The Company believes there will not be significant changes to estimates of variable consideration when any related uncertainties are resolved with customers. The Company reviews and updates its estimates and related accruals of variable consideration each reporting period based on the terms of the agreements, historical experience, and any recent changes in the market. Any uncertainties in the ultimate resolution of variable consideration due to factors outside of the Company’s influence are typically resolved within a short timeframe therefore not requiring any additional constraint on the variable consideration.
Approximately
Cost of Revenue
Cost of revenue reflects the costs to produce our products, which primarily consists of labor, employee benefits, materials, depreciation and depletion, shipping and handling, and overhead. Cost of revenue is capitalized in inventory and expensed when control is transferred to the customer.
Accounts Receivable, net and Allowance for Expected Credit Losses
Accounts receivable, net of allowance are uncollateralized customer obligations billed under contract terms. Accounts receivables are stated at their net realizable value. The Company estimates an allowance for credit losses based upon the evaluation of several factors including related ages of past due receivables, customer type, customer credit worthiness, knowledge of a customer’s financial conditions, historical collection experience, current economic factors, and other factors relevant to assessing the expected credit losses. The Company records uncollectible amounts against the allowance for credit losses once management determines the amount to be uncollectible.
Cash and Cash Equivalents
The Company considers cash on deposit and all highly liquid investments and securities with maturities of three months or less at the time of purchase to be considered cash equivalents. The Company maintains its cash and cash equivalents in accounts in various banks and financial institutions.
Concentration of Credit and Customer Risk
The Company’s financial instruments that are exposed to concentrations of credit risk consist of cash and accounts receivable.
Cash balances at various times during the year may exceed the amount insured by the Federal Deposit Insurance Corporation. The Company monitors the credit ratings of financial institutions where its cash deposits are held, and has not incurred any losses related to such deposits.
The Company can, at times, be subject to a concentration
of credit risk with respect to outstanding accounts receivable. The Company’s customers are located throughout the United States
through various channels including national retail chains, pharmaceutical companies, food service operators, and independent distributors.
Although the Company generally grants credit without collateral, management believes that its contract acceptance, billing and collection
policies are adequate to minimize material credit risk. The Company has
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US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Inventories and Other Inventories
Salt is reported as inventory at the point in time it is extracted from the brine well. Salt inventories, packaging, supplies, and maintenance materials are valued at the lower of cost or net realizable value, with cost determined on standard costing method. Substantially all costs associated with the production of finished goods, such as labor, supplies, equipment cost, inbound freight and overhead (including depletion of salt reserves), are captured as inventory costs.
Maintenance materials are expensed as consumed or capitalized into plant, property and equipment if it meets the criteria of a capital expenditure. Additionally, maintenance materials that are not expected to be used in the next twelve months from the balance sheet date are recorded as other inventories in the Consolidated Balance Sheets.
Management monitors inventory levels and adjusts valuation for slow-moving, shrinkage, obsolescence, and markdowns. The Company accounts for slow-moving or obsolete inventory that is established based on management’s estimates of the net realizable value of the related products at the end of each reporting period.
Plant, Property and Equipment, Net
Property and equipment is stated at cost less
accumulated depreciation and depletion. Expenditures for renewals and improvements that significantly add to the productive capacity or
extend the useful life of an asset are capitalized. Expenditures for maintenance and repairs are charged to expense. When depreciable
properties are retired or sold, the cost and related accumulated depreciation is eliminated from the accounts and any resulting gain or
loss is reflected in the Company’s Consolidated Income Statements. Depreciation is provided using the straight- line method, based
on the useful lives of assets which range from
Plant, property and equipment also includes salt reserves, which consist of brine fields and underground salt bed owned by the Company. Salt reserves are depleted on a units-of-production basis based on the estimated annual consumption as extraction of reserves takes place.
The following table summarizes the estimated useful lives of the Company’s different classes of plant, property and equipment:
| Years | |
| Buildings and improvements | |
| Machinery and equipment |
Construction in Process (CIP) represents the accumulated
costs of construction and development for assets that are not yet completed and ready for their intended use. CIP is recorded as plant,
property and equipment in the consolidated financial statements and is not depreciated until the asset is placed into service. Borrowing
costs are recognized, as an expense, in the period in which they are incurred, except to the extent that they are capitalized. Borrowing
costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the
cost of that asset when it is probable that they will result in future economic benefits to the entity and that the costs can be measured
reliably. The Company capitalized interest cost of $
Leases
The Company determines if an arrangement is a lease at its inception. In certain of the Company’s lease arrangements, judgment is required in determining if a contract contains a lease. For these arrangements, there is judgment in evaluating if the arrangement involves an identified asset that is physically distinct or whether the Company has the right to substantially all of the capacity of an identified asset that is not physically distinct. In arrangements that involve an identified asset, there is also judgment in evaluating if the Company has the right to direct the use of that asset.
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US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
The Company determines whether an arrangement
is or contains a lease, its classification, and its term at the lease commencement date. The Company leases office space, warehouses,
and equipment under non-cancelable operating and finance leases. A lease is classified as a finance lease if it transfers ownership, includes
a purchase option reasonably certain to be exercised, covers a major portion of the asset’s economic life, has payments that approximate
substantially all of the asset’s fair value, or involves an asset of specialized nature. Leases with a term greater than one year
will be recognized on the Consolidated Balance Sheets as right-of-use (ROU) assets, current lease liabilities, and if applicable, long-term
lease liabilities. The Company includes renewal options to extend the lease term where it is reasonably certain that it will exercise
these options. Lease liabilities and the corresponding ROU assets are recorded based on the present values of lease payments over the
lease term. The interest rate implicit in the Company’s leases are not readily determinable. As such, the Company uses its incremental
borrowing rate as the discount rate, which approximates the interest rate at which the Company could borrow on a collateralized basis
with similar terms and payments and in similar economic environments. The Company’s leases have remaining terms ranging from
Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company accounts for lease and non-lease components, principally common area maintenance for its facilities leases, as a single lease component for its facilities leases. Variable lease costs represent additional expenses incurred by the Company that are not included in the lease payment. Variable lease costs include maintenance charges, taxes, insurance, and other similar costs, and are recorded within cost of revenue and selling, general and administrative expense on the Consolidated Income Statements for the years ended December 31, 2025 and 2024.
Debt Issuance Costs
Debt issuance costs are amortized using the effective interest method over the term of the related borrowing agreement and the amortization is included in interest expense within the Consolidated Income Statements. The unamortized portion of deferred financing fees associated with long-term borrowings are shown netted against the Company’s outstanding long-term debt.
Environmental Cost
Environmental costs, other than those of a capital nature, are accrued at the time when exposure becomes known, and costs can be reasonably estimated. Costs are accrued based upon management’s estimates of all direct costs. Amounts accrued for environmental matters were not material as of December 31, 2025 and 2024.
Asset Retirement Obligations
Legal obligations associated with the retirement of long-lived assets are reflected at their estimated fair value, with a corresponding charge to cost of goods sold, at the time they are incurred. Asset retirement obligations (ARO) primarily consist of spending estimates related to capping brine wells and support facilities in accordance with federal and state reclamation laws as defined by each mining permit. The Company estimates and records the fair value of a liability for an asset retirement obligation in the period in which it is incurred and a corresponding increase in the carrying amount of the related long- lived asset. The liability is accreted to its present value each period and the capitalized cost is amortized using the units-of-production method over estimated recoverable reserves upon commencement of salt extraction. The amortized cost is included in the cost of revenue in the Consolidated Income Statements.
Finite-lived Intangible Assets and Long-lived Assets
Finite-lived intangible assets acquired by the
Company are initially recorded at fair value and amortized using the straight-line method to distribute the initial value of the assets
over the estimated useful lives, which management has determined to be
11
US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
The Company reviews long-lived assets including right-of-use assets and finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable. Recoverability of assets held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the use and eventual disposition of the asset. If such assets are considered impaired, the impairment recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value.
There were
Goodwill
Goodwill consists of the excess cost of an acquired business over the fair market value of the underlying net assets. We review goodwill annually for impairment, or more frequently if impairment indicators arise. We do not amortize such assets.
The Company performs an annual impairment test as of October 1 of each year or more frequently if events or changes in circumstances indicate that the asset may be impaired. As our business is highly integrated and its components have similar economic characteristics, we have concluded we operate as one reporting unit at the entity level. We evaluate goodwill for potential impairment on an annual basis or when if indicators of impairment exist during the year. When we evaluate goodwill for potential impairment, generally, we first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. A qualitative assessment may include, but is not limited to, reviewing factors such as macroeconomic conditions, industry and market considerations, cost factors, financial performance and other entity or reporting unit specific events. If we determine qualitatively that it is more likely than not that the fair value of a reporting unit is less than its carrying value, or if we decide to bypass the qualitative assessment, we perform a quantitative analysis. The quantitative analysis is used to identify both the existence of impairment and the amount of impairment loss by comparing the estimated fair value of a reporting unit to its carrying value. The estimated fair value is based on forward-looking estimates of performance and cash flows of our reporting unit, which are based on historical operating results, adjusted for current and expected future market conditions, as well as various internal projections and external sources. If the carrying value of the reporting unit exceeds its estimated fair value, an impairment loss would be recognized in our Consolidated Income Statements in an amount equal to the excess of the carrying value over the estimated fair value, limited to the total amount of goodwill allocated to that reporting unit.
We performed our annual impairment analysis for the years ended December 31, 2025 and 2024 and did not identify any indicators of impairment.
Advertising Costs
Advertising costs are expensed as incurred. Advertising
costs amounted to $
Unit-based Compensation
The Company accounts for unit-based compensation by recording expenses using the fair value of Class B unit awards at the time of grant. In estimating the fair value of the Class B units granted, the Company utilized the option pricing model (“OPM”), in the form of a single stochastic valuation process applying the Black-Scholes Pricing Model (“BSPM”), along with the Monte-Carlo simulation model (“MCSM”). The BSPM and MCSM provide the ability to analyze financial instruments within a complex capital structure and whose values derived from variable significant inputs and assumptions along with future financial outcomes upon future events such as change of control or capital raise (such as an IPO). The application of the valuation method involves inputs and assumptions that are judgmental and highly sensitive.
12
US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
The Company recognizes expenses associated with such Class B unit awards over the service period when the grant is service based. The unit-based compensation expense for performance-based Class B units is recognized when management determines that it is probable that the performance criteria is met and if and only if participant has been continuously employed by or continuously providing services to the Company from the vesting start date through the date of which the performance criteria is met. The Company’s accounting policy is to recognize forfeitures as they occur. The Company may make cash payments to repurchase vested Class B units and forfeit the unvested Class B units due to termination or departure of an employee or member of the Board of Directors. Upon the repurchase, the Company records the repurchase price (which under the terms of the grant agreements will be at fair value) as a reduction of equity, and the previously recognized compensation expenses for unvested Class B units are reversed.
Subscription Note Receivable
The Company may issue Class A units to employees and receive subscription notes receivable. The subscription notes receivable is repaid through cash upon receipt of annual bonus. The notes may also be voluntarily prepaid at any time without penalty. In addition, the notes require mandatory prepayment, without premium or penalty, upon the purchaser’s receipt of any cash proceeds related to the securities, including cash distributions (other than tax distributions) or transfers of such securities, in an amount equal to the proceeds received. Subscription notes receivable is classified as a deduction from Member’s equity within the Statement of Changes in Members’ Equity.
Noncontrolling Parent Interest
Emerald Lake together with Emerald Lake Pearl
Acquisition, LP, Emerald Lake Pearl Acquisition-A, LP, and Emerald Lake Pearl Holding LLC owns approximately
Earnings per Unit (EPU)
As of December 31, 2025 and 2024, the Company has outstanding subscription notes receivable from members when certain Class A units were issued. The Company concluded that it 1) can cancel the Class A units if the member defaults on the subscription notes receivable and (2) intends to exercise this cancellation right. For EPU calculation purposes, the Company treats the unpaid Class A units that are issued and legally outstanding in the same manner as an option. The unpaid Class A units are issued and legally outstanding, and have the same distribution and participation rights as the paid Class A units. Basic earnings per unit for the years ended December 31, 2025 and 2024 are calculated using the two-class method. The two-class method requires an allocation of earnings to all securities (Class A and Class B units) that participate in earnings to the extent that each such security may share in the Company’s earnings. Basic earnings per unit are calculated by dividing net income attributable to Parent Holdings Class A members by the weighted average number of Class A units.
Diluted earnings per unit for the years ended December 31, 2025 and 2024 are calculated by applying the two-class method for participating securities and then incorporating the dilutive effects of other potential Class A units, determined using the treasury stock method, to arrive at the most dilutive EPU. The two-class method uses net income available to Class A members and assumes conversion of all potential units other than the participating securities. There were no dilutive securities outstanding as of December 31, 2025 and 2024.
Income Taxes
The Company is a limited liability company formed under state statutes and taxed for federal and state purposes as a partnership. Therefore, Intermediate Holdings, the direct sole member of the Company, reports the Company’s taxable income or loss on the Intermediate Holdings’ respective tax return. Accordingly, no provision for income taxes has been made in the accompanying consolidated financial statements for federal and state income taxes.
13
US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
The Company accounts for uncertain tax positions
using a “more-likely-than-not” threshold. A tax benefit from an uncertain tax position is recognized if it is more-likely-than-not
that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position, or the
statute of limitations concerning such issues lapses. The Company determined there were
Foreign Currency Transactions
Transactions in foreign currencies are translated into the functional currency (USD) using exchange rates prevailing at the dates of the transactions. Gains and losses on foreign currency transactions are recognized in Consolidated Income Statements.
Segment
The Company operates in
Recent Accounting Pronouncements
Accounting guidance recently adopted
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires all public entities, including public entities with a single reportable segment, to provide, in interim and annual periods, one or more measures of segment profit or loss used by the chief operating decision maker to allocate resources and assess performance. Additionally, the standard requires disclosures of significant segment expenses and other segment items as well as incremental qualitative disclosures.
The Company adopted ASU 2023-07 effective December 31, 2024, on a retrospective basis. The adoption of 2023-07 did not change the way that the Company identifies its reportable segments and, as a result, did not have a material impact on the Company’s segment-related disclosures. Refer to Note 18 Segment Information for further information on the Company’s reportable segment.
Accounting guidance not yet adopted
In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”) and in January 2025, the FASB issued ASU No. 2025-01, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, which clarified the effective date of ASU 2024-03. ASU 2024-03 will require us to disclose the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization, as applicable, included in certain expense captions in the Consolidated Income Statements, as well as qualitatively describe remaining amounts included in those captions. ASU 2024-03 will also require us to disclose both the amount and the Company’s definition of selling expenses. ASU 2024-03 is effective for public business entities for annual periods beginning after December 15, 2026. We will adopt ASU 2024-03 in our consolidated financial statements as of and for the year ending December 31, 2027 using a prospective transition method. The Company does not expect the adoption to materially affect its consolidated financial position, results of operations, or cash flows, however anticipates incremental disclosures in our consolidated financial statements to provide greater transparency into the composition of expense line items.
In July 2025, the FASB issued ASU 2025-05, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets” (“ASU 2025-05”). ASU 2025 amends the guidance in ASC 326 to simplify the estimation of credit losses on current accounts receivable and current contract assets arising from transactions accounted for under ASC 606. The amendments allow all entities to elect a practical expedient to assume that the current conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when developing a reasonable and supportable forecast as part of estimating expected credit losses on these assets. Entities are required to disclose their practical expedient and accounting policy elections. The amendments are effective for fiscal years beginning after December 15, 2025, and interim periods within those fiscal years. We will adopt ASU 2025-5 in our consolidated financial statements as of and for the year ending December 31, 2026. We do not anticipate significant impact in adopting this standard.
14
US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”), which is intended to improve the navigability of the guidance in ASC 270 and clarify when it applies. The ASU 2025-11 also addresses the form and content of such interim financial statements, adds lists to ASC 270 of the interim disclosures required by all other Codification topics, and establishes a principle under which an entity must “disclose events since the end of the last annual reporting period that have a material impact on the entity. Key improvements for the amendments include clarifying the interaction between interim reporting requirements and annual disclosure requirements; improving consistency in terminology and structure within Topic 270; correcting outdated references and aligning interim disclosure guidance with related topics across the Codification; and enhancing clarity around interim period measurement principles to reduce diversity in practice. The amendments are effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2025-11, but does not expect the adoption to have a material effect on its consolidated financial statements.
In December 2025, the FASB issued ASU 2025-12, Codification Improvements (“ASU 2025-12”). The ASU 2025-12 addresses 33 specific issues within the FASB Accounting Standards Codification to enhance clarity, correct errors, and improve consistency and usability for all reporting entities. The amendments are effective for annual periods beginning after December 15, 2026. Early adoption is allowed on an issue-by-issue basis. We will adopt ASU 2025-12 in our consolidated financial statements as of and for the year ending December 31, 2027, but do not expect the adoption to have a material effect on our consolidated financial statements.
The Company continues to monitor new accounting pronouncements issued by the FASB and does not believe any accounting pronouncements issued through the date of this report will have a material impact on the Company’s consolidated financial statements.
| Note 3. | Accounts receivable |
Accounts receivable, net of allowance for expected credit losses, is as follows:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Accounts receivables | $ | $ | ||||||
| Less: allowance for expected credit losses | ( | ) | ( | ) | ||||
| Total | $ | $ | ||||||
A roll forward of the allowance for expected credit losses is presented below:
| Year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Beginning balance | $ | $ | ||||||
| Bad debt expense | ||||||||
| Write-offs | ( | ) | ||||||
| Total | $ | $ | ||||||
15
US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
| Note 4. | Inventories |
Inventories are as follows:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Finished goods | $ | $ | ||||||
| Packaging and supplies | ||||||||
| Maintenance materials | ||||||||
| Total | $ | $ | ||||||
Maintenance materials exclude certain materials
of $
In September 2024, the Company incurred loss due
to fire in one of its leased warehouses. As a result of the incident, the Company wrote off approximately $
| Note 5. | Prepaid expenses |
Prepaid expenses are as follows:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Prepaid insurance | $ | $ | ||||||
| Prepaid real estate taxes | ||||||||
| Prepaid health benefits | ||||||||
| Other prepaid expenses | ||||||||
| Total | $ | $ | ||||||
16
US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
| Note 6. | Plant, property and equipment, net |
Plant, property and equipment, net are as follows:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Land | $ | $ | ||||||
| Buildings and improvements | ||||||||
| Machinery and equipment | ||||||||
| Salt reserves | ||||||||
| Construction in process | ||||||||
| Accumulated depreciation and depletion | ( | ) | ( | ) | ||||
| $ | $ | |||||||
Depreciation and depletion expense are included in the following financial statement line items in the Consolidated Income Statements:
| Year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Cost of revenue | $ | $ | ||||||
| Selling, general and administrative expense | ||||||||
| Total | $ | $ | ||||||
The Company recognized a loss from disposal of $
17
US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
| Note 7. | Goodwill and Intangible assets |
Goodwill
Goodwill as of December 31, 2025 and 2024 amounted to $
Intangible Assets
Intangible assets and related accumulated amortization which are included in intangible assets, net in the Consolidated Balance Sheets are as follows:
| December 31, 2025 | ||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Amount | ||||||||||
| Tradename | $ | $ | ( | ) | $ | |||||||
| Customer relationships | ( | ) | ||||||||||
| $ | $ | ( | ) | $ | ||||||||
| December 31, 2024 | ||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Amount | ||||||||||
| Tradename | $ | $ | ( | ) | $ | |||||||
| Customer relationships | ( | ) | ||||||||||
| $ | $ | ( | ) | $ | ||||||||
Amortization expense of the finite-lived intangible
assets for the years ended December 31, 2025 and 2024 was $
| Note 8. | Accrued liabilities |
Accrued liabilities consisted of the following:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Accrued payroll, bonus and employee benefits | $ | $ | ||||||
| Insurance accruals | ||||||||
| Other accruals | ||||||||
| Total | $ | $ | ||||||
18
US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
| Note 9. | Asset retirement obligations |
The following summarizes the changes in the asset retirement obligation during the period:
| Year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Asset retirement obligation, beginning of year | $ | $ | ||||||
| Liabilities incurred | ||||||||
| Changes in estimated obligations | ( | ) | ||||||
| Accretion of expense | ||||||||
| Asset retirement obligation, end of year | $ | $ | ||||||
In connection with certain contracts, the Company
is required to hold surety bonds. These bonds are supported by a general agreement of indemnity in favor of the sureties. As of December
31, 2025 and 2024, the Company had surety bonds outstanding with an aggregate stated amount of $
The Company’s estimated abandonment costs related to plugging and abandonment of injection wells under these surety bonds are reported as part of asset retirement obligation in the Consolidated Balance Sheets. As of December 31, 2025 and 2024, management has not identified any defaults, and no accrual related to these bonds has been recorded. Bond premiums paid are recorded as prepaid expenses and amortized over the period of benefit.
| Note 10. | Long-term debt |
Long-term debt consists of the following:
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Term loan | $ | $ | ||||||
| Unamortized debt issuance | ( | ) | ( | ) | ||||
| Current portion | ( | ) | ( | ) | ||||
| Long-term portion | $ | $ | ||||||
In July 2021, the Company entered into a credit
agreement with Ares Capital Corporation, as the administrative agent, and other parties thereto. The credit agreement consists of a $
Interest rate for the term loan and revolving
line of credit as of December 31, 2025 was
19
US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
The term loan requires quarterly principal payments
of $
The term loan and the revolving line of credit are secured by substantially all of the assets of the Company and subject to certain financial covenants. The Company was in compliance with all financial covenants as of December 31, 2025 and 2024.
In relation to the credit agreement, the Company
paid debt issuance cost of $
The following table summarizes the annual maturities of the principal amount of total debt due as of December 31:
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| $ |
| Note 11. | Fair value measurement |
U.S. GAAP establishes a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires us to use observable inputs when available and to minimize the use of unobservable inputs when determining fair value. The three tiers are defined as follows:
| ● | Level 1 - Observable inputs based on unadjusted quoted prices in active markets for identical assets or liabilities; |
| ● | Level 2 - Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and |
| ● | Level 3 - Unobservable inputs for which there is little or no market data, and which require us to develop our own estimates and assumptions reflecting those that a market participant would use. |
The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques maximize the use of relevant observable inputs and minimize the use of unobservable inputs. There were no instruments measured at fair value on a recurring basis using significant unobservable inputs during the years ended December 31, 2025 and 2024.
20
US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
The valuation techniques that may be used to measure fair value are as follows:
| ● | Market approach - Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities; |
| ● | Income approach - Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about those future amounts; and |
| ● | Cost approach - Based on the amount that currently would be required to replace the service capacity of an asset (i.e., replacement cost). |
All of our money market funds are classified within Level I of the fair value hierarchy because they were valued using quoted prices in active markets.
Our cash and cash equivalents consisted of the following:
| December 31, 2025 | ||||||||
| Carrying Value | Fair Value | |||||||
| Cash | $ | $ | ||||||
| Money Market funds | ||||||||
| Total cash and cash equivalents | $ | $ | ||||||
| December 31, 2024 | ||||||||
| Carrying Value | Fair Value | |||||||
| Cash | $ | $ | ||||||
| Money Market funds | ||||||||
| Total cash and cash equivalents | ||||||||
Disclosure of Fair Values
The carrying amounts of accounts receivable, accounts payable and accrued expenses approximate their fair value as of December 31, 2025 and 2024 due to the relatively short duration of these instruments. Additionally, the carrying value of our debt associated with the term loan facility approximates fair value because the interest rates are variable and reset on relatively short durations to then-market rates.
| Note 12. | Members’ equity |
Members’ units
The Company is authorized to issue Class A units and Class B units. There is no set number for authorized units and no par value is assigned to Class A and Class B units. The Company may issue additional units, including Class B units as management incentive units as approved by the Board of Directors. Class A units represent capital interests and are entitled to priority distributions and liquidation proceeds until invested capital has been returned. Class B units are generally issued as management incentive (profit) interests and participate in the Company’s residual economics only after applicable participation thresholds and vesting conditions are satisfied.
21
US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Voting rights
The authority to manage the business, make decisions, and act on behalf of the Company resides exclusively with the Board of Directors, except for certain limited matters specifically designated as board of governance exceptions. Holders of Class A or Class B units do not possess voting, consent, or approval rights with respect to the management or governance of the Company, other than with respect to these limited exceptions.
The composition of the Company’s Board of Directors includes both Emerald Lake-designated Managers (“ELCM Managers”) and Additional Managers. For any meeting of the Board of Directors or its committees, at least one ELCM Manager must be present to constitute a quorum. Actions of the Board of Directors may be approved by a majority of votes cast at a meeting where a quorum is present. The ELCM Managers collectively hold a number of votes equal to the greater of (i) the number of ELCM Managers present at the meeting or (ii) one plus the number of non-ELCM Managers present. Each ELCM Manager is entitled to cast a proportionate share of these collective ELCM votes. Each Additional Manager holds one vote. If no ELCM Manager remains present during a meeting, the quorum is lost and no further business may be conducted until a quorum is re-established. The authorized number of Managers on the Board of Directors shall be six members or such other number as determined from time to time by the Board.
Distribution and participation rights
Distributions are made at the discretion of the
Board of Directors, subject to the applicable law and the Company’s operating agreement. Distributions, other than tax distributions,
are subject to contractual priority waterfall. Amounts are distributed first to holders of Class A units until the unreturned capital
associated with Class A units has been reduced to zero. Thereafter, remaining distributions are made to holders of Class A units and participating
Class B units on a pro rata basis based on the number of such units outstanding. Certain Class B units are subject to participation thresholds
(as discussed below) and vesting conditions and are not entitled to participate in distributions until such thresholds have been satisfied
and vesting has occurred. As of December 31, 2025 and 2024, the total unreturned capital of Class A unitholders before distributions were
$
Liquidation rights
Upon liquidation, dissolution, or winding up of the Company, the Company’s assets remaining after the settlement of liabilities are distributed in accordance with the same priority framework applicable to non-liquidating distributions. Liquidation proceeds are distributed first to Class A units until the return of unreturned capital, and thereafter to Class A units and participating Class B units on a pro rata basis. Class B units that have not satisfied applicable participation thresholds or vesting requirements do not participate in liquidation proceeds. Neither class has liquidation preference beyond the contractual priority described above.
Repurchase rights
The Company holds the right, at its discretion, to repurchase outstanding units held by unitholders in accordance with the operating or related grant agreements. The Company may settle the repurchase or redemption price either in cash or through the transfer of equity interests issued by one of its subsidiaries. If the subsidiary repurchases or redeems those securities subsequently, the repurchase redemption price shall equal to the amount of cash or notes, if applicable, equal to the aggregate repurchase or redemption price of the Units to be redeemed or repurchased.
Class B units
Based on the terms of Class B unit grant agreements,
Class B units are issued to certain employees and members of the Board of Directors of Parent Holdings. In each of the grant agreements,
22
US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Time-vesting incentive units
Time-vesting incentive units vests over the requisite
service period of
Performance-based incentive units
The performance-based incentive units may vest
upon the consummation of a sale of Parent Holdings, provided the participants have remained continuously employed or provided services
from the vesting start date through the sale date. Vesting occurs in three tranches as follows:
Vested Class B units are subject to a “Participation Threshold” before distribution of profit or distribution of sales proceeds from the sale of Parent Holdings. Unless otherwise determined by the Board of Directors of Parent Holdings, on the date of each grant of Class B units, pursuant to a grant made under a Class B unit grant agreement or similar agreement, the Board of Directors of Parent Holdings shall establish an initial “Participation Threshold” amount in respect of each Class B unit granted on such date. The initial Participation Threshold in respect of a Class B unit shall be equal to or greater than (i) the amount that would be distributed with respect to a Class A unit ratably among Class A unitholders until the aggregate unreturned capital of Class A incentive units has been reduced to zero in a hypothetical transaction in which Parent Holdings sold all of its assets for Fair Market Value and distributed the proceeds therefrom in liquidation of Parent Holdings as determined immediately prior to the issuance of such Class B unit, but taking into account all Capital Contributions, if any, with respect to any Unit issued as part of the issuance of such Class B unit) minus (ii) the total Capital Contributions (if any) made by the holder receiving such Class B unit with respect to all Class B unit received by such holder as part of the same issuance. Parent Holdings may periodically update the initial Participation Threshold from time to time as necessary to reflect any adjustments to the Participation Thresholds of outstanding Class B unit required.
Noncontrolling parent interests
Parent Holdings owns
The noncontrolling parent interest represents
Aggregator’s
23
US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
| Note 13. | Earnings per unit |
The Company uses the two-class method in its computation of EPU. The Company’s paid and unpaid Class A units issued through subscription notes receivable are entitled to receive distributions at the same rate. Under the two-class method, the Company’s net income available to Class A unitholders is allocated between the paid and unpaid Class A units on a fully-distributed basis and reflects residual net income after amounts attributed to noncontrolling interests. In the event of a net loss, the Company determined that both paid and unpaid Class A units share in the Company’s losses, and they share in the losses using the same mechanism as the distributions. The Company also has Class B units whereby vested Class B units are subject to the hurdle of unreturned capital of Class A and a “Participation Threshold” before Class B unitholders receive distribution of profit or distribution of sales proceeds from the sale of Parent Holdings (refer to Note 12, Members’ equity). For the years ended December 31, 2025 and 2024, Class B units are participating securities for EPU calculation purposes because they may participate in undistributed earnings with Class A units. However, because the Class B unit participation is contingent on overcoming the hurdle as described above that is not objectively determinable and/or subject to management discretion, the Company does not allocate undistributed earnings to Class B unless and until the contingency occurs. Class B units are non-dilutive securities as the hurdle of unreturned capital of Class A unitholders was not met as of December 31, 2025 and 2024.
Basic and dilutive net income or loss per unit
is calculated by dividing undistributed earnings allocated to paid and unpaid Class A unitholders by the weighted average member units
outstanding for the respective period.
| Year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Net income attributable to Parent Holdings Class A unitholders | $ | $ | ||||||
| Weighted average Class A units outstanding, basic and diluted | ||||||||
| Earnings per unit attributable to Class A unitholders, basic and diluted | $ | $ | ||||||
| Note 14. | Unit-based compensation |
The Company recognizes compensation expense in its consolidated financial statements because its employees and members of the Board of Directors provide services to the Company and benefit from the Class B units issued to them. The Class B units are issued for no consideration. Refer to Note 12, Members’ equity for Class B units.
There were no Class B units granted during the year ended December 31, 2025. The following table presents the key weighted-average assumptions used in determining the fair value for the Class B units granted during the years ended December 31, 2024:
| 2024 | ||||
| Fair value of Class B unit | $ | |||
| Risk-free interest rate | % | |||
| Volatility | % | |||
| Dividend yield | % | |||
| Expected term | ||||
24
US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
The following table summarizes Class B units activity for the years ended December 31, 2025 and 2024:
| Weighted | Weighted Average | |||||||||||
| Number of Units | Average Exercise Price | Remaining Term (In Years) | ||||||||||
| Outstanding, January 1, 2024 | $ | |||||||||||
| Granted | ||||||||||||
| Repurchased | ( | ) | ||||||||||
| Outstanding, December 31, 2024 | ||||||||||||
| Granted | ||||||||||||
| Repurchased | ( | ) | ||||||||||
| Forfeited | ( | ) | ||||||||||
| Outstanding, December 31, 2025 | $ | |||||||||||
| Exercisable, December 31, 2025 | $ | |||||||||||
Under the valuation methodology theory underlying
the option pricing model, the fair value of the Class B units is comprised of intrinsic and extrinsic values. Considering the specific
features and attributes of the Class B units, the entire fair value of the units is comprised of the underlying extrinsic value (i.e.,
the present value of the potential future benefits as of the respective measurement dates) while no value is assigned to the intrinsic
value as of the years ended December 31, 2025 and 2024. The weighted-average grant date fair value of Class B units granted during the
year ended December 31, 2024 was $
As of December 31, 2025, the remaining unrecognized compensation expense for the time-vesting Class B unit for each year until fully vested is as:
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| $ |
| Note 15. | Retirement plan |
25
US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Union Employees - The 401(k) Plan has a profit-sharing
feature that the Company makes an annual contribution of
Non-Union Employees - The Company makes a semi-monthly
Safe Harbor contribution of
The Company’s employer portion of contributions
for the years ended December 31, 2025 and 2024 were $
| Note 16. | Related party transaction |
Management Fees
On July 19, 2021, US Salt entered into a Professional
Services Agreement with Emerald Lake, who will provide financial and management consulting services. Emerald Lake agreed to consult with
the US Salt’s Board of Directors and the oversight of management on business and financial matters including company strategy, budgeting
of future investments, acquisition and divestiture strategies, and debt and equity financings. In consideration of Emerald Lake’s
services, US Salt pays Emerald Lake an annual management fee (the “Management Fee”) the greater of $
Class A and Unit Subscription Receivable
The activities of Class A units and subscription notes receivable from employees and Board of Directors of US Salt Parent Holdings LLC are summarized as follows:
26
US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
| Class A Units | Amount | Subscription Receivable | ||||||||||
| Outstanding, January 1, 2024 | $ | $ | ||||||||||
| Issuance | ||||||||||||
| Repurchase | ( | ) | ( | ) | ||||||||
| Cancellation of units purchased and the corresponding subscription notes receivable | ( | ) | ( | ) | ( | ) | ||||||
| Repayment | ( | ) | ||||||||||
| Outstanding, December 31, 2024 | ||||||||||||
| Issuance | ||||||||||||
| Repurchase | ( | ) | ( | ) | ( | ) | ||||||
| Repayment | ( | ) | ||||||||||
| Outstanding, December 31, 2025 | $ | $ | ||||||||||
| Note 17. | Commitments and Contingencies |
Leases
The Company enters into leases for warehouses,
rail cars, forklifts, office equipment, office space and certain other types of property and equipment. The leases consist of operating
and financing leases expiring in various years through
The elements of the lease costs were as follows:
| Year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Operating lease expense: | ||||||||
| Operating lease expense | $ | $ | ||||||
| Finance lease expense: | ||||||||
| Amortization of lease assets | $ | $ | ||||||
| Interest on lease liabilities | ||||||||
| Total finance lease cost | $ | $ | ||||||
| Short term lease expense | $ | $ | ||||||
| Variable lease expense | ||||||||
| Total lease expense | $ | $ | ||||||
27
US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Lease term and discount rate information related to leases was as follows:
| Year ended December 31, | ||||||||
| Weighted-average remaining lease term (in years): | 2025 | 2024 | ||||||
| Operating leases | ||||||||
| Finance leases | ||||||||
| Weighted-average discount rate: | ||||||||
| Operating leases | % | % | ||||||
| Finance leases | % | % | ||||||
Supplemental cash flow information related to leases was as follows:
| Year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
| Operating cash flows from finance lease (interest payments) | $ | $ | ||||||
| Operating cash flows from operating leases | $ | $ | ||||||
| Financing cash flows from finance lease | $ | $ | ||||||
| Right-of-use assets obtained in exchange for lease liabilities: | ||||||||
| Operating leases | $ | $ | ||||||
| Finance leases | $ | $ | ||||||
Future maturities of lease liabilities are as follows as of December 31, 2025:
| Operating Leases | Finance Lease | |||||||
| 2026 | $ | $ | ||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total future undiscounted lease payments | ||||||||
| Imputed interest | ( | ) | ( | ) | ||||
| Present value of lease payments | ||||||||
| Current portion | ||||||||
| Long-term portion of lease payments | $ | $ | ||||||
Contingencies
The Company is subject to legal proceedings and claims which arise in the ordinary course of business. In the opinion of management, the ultimate outcome of these matters will not be material to the Company’s consolidated financial position, results of operations, or cash flows.
28
US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
Commitments
The Company is not contractually committed to
any planned capital expenditure until actual orders are placed for equipment or services. As of December 31, 2025 and 2024, the Company
had $
| Note 18. | Segment Information |
The Company operates as a segment represented
by our core business of producing evaporated and specialty salts serving consumer, food, pharmaceutical, and industrial customers throughout
North America. Our Chief Operating Decision Maker (“CODM”) neither manages the business nor deliberately allocates resources
by service line, geography, or end market. One customer accounted for
The CODM is our Chief Executive Officer. The CODM assesses performance for the Company and decides how to allocate resources based on significant expense categories that contribute to net income (loss), as outlined below. The CODM uses these varying results to prioritize the reinvestment of profits within the Company. These results are also used in assessing the Company’s performance and determining management’s compensation. The CODM does not review assets in evaluating the results of the Company, and therefore, such information is not presented.
The following tables provide the operating financial results of the Company:
| Year ended December 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenue | $ | $ | ||||||
| Cost of revenue | ||||||||
| Depreciation, amortization and depletion | ||||||||
| Selling expense | ||||||||
| Administrative expense | ||||||||
| Interest expense | ||||||||
| Other segment items | ||||||||
| Net income (loss) | $ | $ | ||||||
| Capital expenditures - purchases of plant, property and equipment | $ | ( | ) | $ | ( | ) | ||
Other segment items include loss due to casualty; foreign currency gain (loss), unit-based compensation expenses, management fees paid to Emeral Lake, and certain non-recurring expenses including severance expense, and retention bonuses, consulting fees paid to Board of Director, and other consulting fees etc.
29
US SALT PARENT HOLDINGS, LLC AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025 and 2024
| Note 19. | Subsequent events |
On January 16, 2026, ContextLogic submitted a
registration statement on Form S-1 to the SEC in connection with a rights offering to existing stockholders to purchase up to
On February 26, 2026, ContextLogic completed the
acquisition of the Company for a purchase price of approximately $
30