References to the "Company," "Logistics Innovation Technologies Corp.," "our,"
"us" or "we" refer to Logistics Innovation Technologies Corp. The following
discussion and analysis of the Company's financial condition and results of
operations should be read in conjunction with the annual financial statements
and the notes thereto contained elsewhere in this report. Certain information
contained in the discussion and analysis set forth below includes
forward-looking statements that involve risks and uncertainties.
Cautionary Note Regarding Forward-Looking Statements
This Annual Report on Form 10-K includes forward-looking statements within the
meaning of Section 27A of the Securities Act, and Section 21E of the Exchange
Act. We have based these forward-looking statements on our current expectations
and projections about future events. These forward looking statements are
subject to known and unknown risks, uncertainties and assumptions about us that
may cause our actual results, levels of activity, performance or achievements to
be materially different from any future results, levels of activity, performance
or achievements expressed or implied by such forward-looking statements. In some
cases, you can identify forward-looking statements by terminology such as "may,"
"should," "could," "would," "expect," "plan," "anticipate," "believe,"
"estimate," "continue," or the negative of such terms or other similar
expressions. Factors that might cause or contribute to such a discrepancy
include, but are not limited to, those described in our other SEC filings.
Overview
We are a blank check company incorporated on February 18, 2021 as a Delaware
corporation for the purpose of effecting a merger, capital stock exchange, asset
acquisition, stock purchase, reorganization or similar business combination with
one or more businesses. We are an emerging growth company and, as such, we are
subject to all of the risks associated with emerging growth companies.
Our Sponsors are AG LIT Holdings, LLC, a Delaware limited liability company, and
1P Management LLC, a Delaware limited liability company. The registration
statement for our IPO was declared effective on June 10, 2021. On June 15, 2021,
we consummated the IPO of 34,089,611 Units (see below), including the issuance
of 4,089,611 Units as a result of the underwriters' exercise in part of their
option to purchase additional Units, at $10.00 per Unit, generating gross
proceeds of $340,896,110, and incurring offering costs of $18,860,728, inclusive
of $11,931,364 in deferred underwriting commissions.
Each Unit consists of one share of Class A common stock, par value $0.0001 per
share, and one-third of one redeemable warrant of the Company ("Public
Warrant"). Each whole Public Warrant is exercisable into one share of Class A
common stock at an exercise price of $11.50 per share.
Simultaneously with the closing of the IPO, we consummated the Private Placement
of 5,945,281 Private Placement Warrants at a price of $1.50 per Private
Placement Warrants to the Sponsors, generating gross proceeds of $8,917,922.
Upon the closing of the IPO and the Private Placement in June 2021, $340,896,110
($10.00 per Unit) of the net proceeds of the IPO and certain of the proceeds of
the Private Placement were placed in a Trust Account located in the United
States at JP Morgan Chase Bank, N.A. with Continental Stock Transfer & Trust
Company acting as trustee, and was invested only in U.S. "government securities"
within the meaning of Section 2(a)(16) of the Investment Company Act having a
maturity of 185 days or less or in money market funds meeting certain conditions
under Rule 2a-7 promulgated under the Investment Company Act which invest only
in direct U.S. government treasury obligations, as determined by us, until the
earlier of: (i) the completion of an initial business combination and (ii) the
distribution of the Trust Account as described below.
Our management has broad discretion with respect to the specific application of
the net proceeds of the IPO and the sale of Private Placement Warrants, although
substantially all of the net proceeds are intended to be applied generally
toward consummating an initial business combination.
If we are unable to complete an initial business combination within 24 months
from the closing of the IPO, or June 15, 2023, we will (i) cease all operations
except for the purpose of winding up, (ii) as promptly as reasonably possible
but not more than ten business days thereafter, redeem the Public Shares, at a
per-share price, payable in cash, equal to the aggregate amount then on deposit
in the Trust Account, including interest earned on the funds held in the Trust
Account and not previously released to us to pay its taxes (less up to $100,000
of interest to pay dissolution expenses), divided by the number of then
outstanding Public Shares, which redemption will completely extinguish Public
Stockholders' rights as stockholders (including the right to receive further
liquidating distributions, if any), and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of the remaining stockholders
and the board of directors, liquidate and dissolve, subject, in each case, to
our obligations under Delaware law to provide for claims of creditors and the
requirements of other applicable law.
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Liquidity, Capital Resources and Going Concern
At December 31, 2022, we had cash outside the Trust Account of $474,947 and a
working capital deficit of $134,556. Excluding Delaware franchise and income
taxes payable, all remaining investments held in the Trust Account are generally
unavailable for our use prior to an initial business combination and is
restricted for use either in a Business Combination or to redeem common stock.
In order to finance transaction costs in connection with a Business Combination
or any extension of the deadline by which we must consummate our initial
business combination or liquidate, the Sponsors or an affiliate of the Sponsors
or certain of our officers and directors may, but are not obligated to, loan us
funds as may be required (the "Working Capital Loans"). If we complete an
initial Business Combination, we would repay such loaned amounts out of the
proceeds of the Trust Account released to us. Otherwise, such loans would be
repaid only out of funds held outside the Trust Account. In the event that the
initial Business Combination does not close, we may use a portion of the working
capital held outside the Trust Account to repay such loaned amounts but no
proceeds from the Trust Account would be used to repay such loaned amounts. Up
to $1,500,000 of such loans may be convertible into warrants, at a price of
$1.50 per warrant at the option of the lender. The warrants would be identical
to the Private Placement Warrants, including as to exercise price,
exercisability and exercise period. As of December 31, 2022 and 2021, no Working
Capital Loans were outstanding.
We have incurred and expect to continue to incur significant costs in pursuit of
its financing and acquisition plans. We may need to raise additional capital
through loans or additional investments from our Sponsors, stockholders,
officers, directors, or third parties. Our officers, directors and Sponsors may,
but are not obligated to, loan us funds, from time to time or at any time, in
whatever amount they deem reasonable in their sole discretion, to meet our
working capital needs. Accordingly, we may not be able to obtain additional
financing. If we are unable to raise additional capital, it may be required to
take additional measures to conserve liquidity, which could include, but not
necessarily be limited to, curtailing operations, suspending the pursuit of a
potential transaction, and reducing overhead expenses. We cannot provide any
assurance that new financing will be available to us on commercially acceptable
terms, if at all. These conditions raise substantial doubt about our ability to
continue as a going concern one year from the date these financial statements
are issued.
On February 24, 2022, the Russian Federation launched an invasion of Ukraine
that has continued to escalate without any resolution of the invasion
foreseeable in the near future with the short and long-term impact on financial
and business conditions remaining uncertain. The United States, the European
Union, Canada and other countries have imposed sanctions against the Russian
Federation contributing to higher inflation and disruptions to supply and
distribution chains. The impact of the sanctions also includes disruptions to
financial markets, an inability to complete financial or banking transactions,
restrictions on travel and an inability to service existing or new customers in
a timely manner in the affected areas of Europe. The circumstances related to
the Russian Federation's invasion of Ukraine could have a material and adverse
effect on the business and the cost and availability of capital. The number of
attractive targets for the Company's Business Combination could be reduced, the
cost of a Business Combination may be increased, and the Company could
experience a delay of, or inability to complete a Business Combination. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Results of Operations
We have neither engaged in any operations nor generated any revenues to date.
Our only activities since inception have been organizational activities, those
necessary to prepare for our IPO and identifying a target company for our
initial Business Combination. We do not expect to generate any operating
revenues until after completion of our initial Business Combination. We generate
non-operating income in the form of earnings and gains on marketable securities
held in the Trust Account. We incur expenses as a result of being a public
company (for legal, financial reporting, accounting and auditing compliance), as
well as expenses as we conduct due diligence on prospective Business Combination
candidates.
For the year ended December 31, 2022, we had a net income of $16,588,089, which
consisted of a change in the fair value of the warrants of $14,193,686, bank
interest income of $4,773 and earnings and gains on marketable securities held
in the Trust Account of $4,912,741, partially offset by a loss from operations
of $1,539,748 and income tax expense of $983,363.
46
For the period from February 18, 2021 (inception) through December 31, 2021, we
had a net loss of $827,602, which consisted of a loss from operations of
$624,582 and Public Warrant transaction costs of $561,610, partially offset by a
change in the fair value of the warrants of $346,230, bank interest income of
$55 and earnings and gains on marketable securities held in the Trust Account of
$12,305.
Contractual Obligations
Registration Rights
The holders of Founder Shares, Private Placement Warrants and warrants that may
be issued upon conversion of Working Capital Loans, if any, (and any shares of
Class A common stock issuable upon the exercise of the Private Placement
Warrants and warrants that may be issued upon conversion of Working Capital
Loans and upon conversion of the Founder Shares) are entitled to registration
rights pursuant to a registration rights agreement. These holders will be
entitled to certain demand and "piggyback" registration rights. We will bear the
expenses incurred in connection with the filing of any such registration
statements.
Underwriting Agreement
We granted the underwriters a 45-day option from the final prospectus relating
to the IPO to purchase up to 4,500,000 additional Units to cover
over-allotments, if any, at the IPO price less the underwriting commissions. The
underwriters partially exercised their over-allotment option on June 15, 2021
with the purchase of 4,089,611 units.
The underwriters were paid a cash underwriting commission of $0.20 per Public
Share, or $6,817,922 in the aggregate. Additionally, the underwriters reimbursed
us $500,000 for offering costs. In addition, $0.35 per Public Share, or
$11,931,364 in the aggregate will be payable to the underwriters for deferred
underwriting commissions. The deferred fee will become payable to the
underwriters from the amounts held in the Trust Account solely in the event that
we complete a Business Combination, subject to the terms of the underwriting
agreement.
Critical Accounting Estimates
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of expenses during
the reporting period. Actual results could differ from those estimates. We have
not identified any critical accounting estimates.
Recent Accounting Pronouncements
See Note 2 to the financial statements required by Item 15 of this Annual Report
on Form 10-K.
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