[10-Q] Freight Technologies, Inc. Quarterly Earnings Report
Freight Technologies, Inc. (FRGT) reported continued operating losses and relied on financing and equity transactions to bolster liquidity. For the six months ended June 30, 2025 the company recorded an operating loss of $(2,935,072) and negative operating cash flow of $(5,039,217), compared with losses of $(3,788,697) and negative cash flow of $(4,857,126) for the same period in 2024. The balance sheet shows shareholders' equity of $8,783,380, net working capital of $(179,851), short-term debt of $4,961,684 and $586,658 of unrestricted cash.
The company completed several financing and equity transactions in Q2 including Series A4 preferred issuances (e.g., 2,311,248 Series A4 preferred for approximately $5.2 million payable in FET tokens and a prior $3.0 million Series A4 offering) and conversions of convertible notes leaving $500,000 of convertible notes outstanding as of June 30, 2025. Short-term borrowings totaled $4,851,762. The company holds cryptocurrency assets (including 45,680 Official Trump coins and FET tokens classified as Level 1 fair value); it purchased 414,721 FET tokens for approximately $300,000. Net cash provided by financing activities was $6,407,563 and net increase in cash was $383,515.
Freight Technologies, Inc. (FRGT) ha continuato a registrare perdite operative e ha fatto affidamento su finanziamenti e operazioni in equity per rafforzare la liquidità. Per i sei mesi terminati il 30 giugno 2025 la società ha riportato una perdita operativa di $(2.935.072) e un flusso di cassa operativo negativo di $(5.039.217), rispetto a perdite per $(3.788.697) e flusso di cassa negativo di $(4.857.126) nello stesso periodo del 2024. Lo stato patrimoniale evidenzia capitale netto degli azionisti pari a $8.783.380, capitale circolante netto di $(179.851), debiti a breve termine per $4.961.684 e $586.658 di liquidità non vincolata.
La società ha completato diverse operazioni di finanziamento e equity nel secondo trimestre, incluse emissioni di azioni privilegiate Serie A4 (per esempio 2.311.248 azioni Serie A4 per circa $5,2 milioni da corrispondere in token FET e una precedente offerta Serie A4 da $3,0 milioni) e conversioni di note convertibili, lasciando $500.000 di note convertibili in essere al 30 giugno 2025. Gli indebitamenti a breve termine ammontavano a $4.851.762. La società detiene attività in criptovaluta (inclusi 45.680 Official Trump coins e token FET valutati al fair value di livello 1); ha acquistato 414.721 token FET per circa $300.000. Il flusso di cassa netto derivante da attività di finanziamento è stato di $6.407.563 e l'aumento netto di cassa è stato di $383.515.
Freight Technologies, Inc. (FRGT) siguió registrando pérdidas operativas y dependió de financiamientos y transacciones de capital para reforzar su liquidez. Para los seis meses terminados el 30 de junio de 2025, la compañía registró una pérdida operativa de $(2,935,072) y flujo de efectivo operativo negativo de $(5,039,217), frente a pérdidas de $(3,788,697) y flujo negativo de $(4,857,126) en el mismo periodo de 2024. El balance muestra patrimonio neto de los accionistas de $8,783,380, capital de trabajo neto de $(179,851), deuda a corto plazo de $4,961,684 y $586,658 en efectivo no restringido.
La compañía completó varias transacciones de financiamiento y capital en el segundo trimestre, incluidas emisiones de preferentes Serie A4 (por ejemplo, 2,311,248 Series A4 por aproximadamente $5.2 millones pagaderos en tokens FET y una oferta Serie A4 previa de $3.0 millones) y conversiones de pagarés convertibles, quedando $500,000 de pagarés convertibles pendientes al 30 de junio de 2025. Los préstamos a corto plazo totalizaron $4,851,762. La compañía posee activos en criptomonedas (incluidos 45,680 Official Trump coins y tokens FET clasificados a valor razonable Nivel 1); compró 414,721 tokens FET por aproximadamente $300,000. El efectivo neto proveniente de actividades de financiamiento fue de $6,407,563 y el incremento neto de efectivo fue de $383,515.
Freight Technologies, Inc. (FRGT)는 계속된 영업손실을 기록했으며 유동성 제고를 위해 자금조달 및 주식 거래에 의존했습니다. 2025년 6월 30일로 끝나는 6개월 동안 회사는 $(2,935,072)의 영업손실과 $(5,039,217)의 영업활동 현금흐름 마이너스를 기록했으며, 이는 2024년 동기 손실 $(3,788,697) 및 영업현금흐름 마이너스 $(4,857,126)와 비교됩니다. 대차대조표상 주주지분 $8,783,380, 순운전자본 $(179,851), 단기부채 $4,961,684, 그리고 $586,658의 제한 없는 현금이 표시되어 있습니다.
회사는 2분기에 시리즈 A4 우선주 발행(예: 약 $520만 상당의 FET 토큰으로 지급되는 2,311,248 시리즈 A4 우선주 및 이전의 $300만 시리즈 A4 공모)과 전환사채의 전환을 포함한 여러 자금조달 및 주식 거래를 완료했으며, 2025년 6월 30일 현재 $500,000의 전환사채가 남아 있습니다. 단기 차입금은 총 $4,851,762였습니다. 회사는 암호화폐 자산(예: 45,680 Official Trump coins 및 레벨 1 공정가치로 분류된 FET 토큰)을 보유하고 있으며, 약 $300,000에 414,721 FET 토큰을 매수했습니다. 재무활동으로 인한 순현금 유입은 $6,407,563이며 현금의 순증가는 $383,515였습니다.
Freight Technologies, Inc. (FRGT) a continué d'afficher des pertes d'exploitation et a eu recours à des financements et à des opérations sur capitaux propres pour renforcer sa liquidité. Pour les six mois clos le 30 juin 2025, la société a enregistré une perte d'exploitation de $(2 935 072) et un flux de trésorerie d'exploitation négatif de $(5 039 217), contre des pertes de $(3 788 697) et un flux négatif de $(4 857 126) sur la même période en 2024. Le bilan présente des capitaux propres de $8 783 380, un fonds de roulement net de $(179 851), une dette à court terme de $4 961 684 et $586 658 de trésorerie non restreinte.
La société a réalisé plusieurs opérations de financement et de capitaux propres au T2, notamment des émissions d'actions privilégiées Série A4 (par ex. 2 311 248 actions Série A4 pour environ $5,2 M payables en tokens FET et une offre Série A4 antérieure de $3,0 M) et des conversions de billets convertibles, laissant $500 000 de billets convertibles en circulation au 30 juin 2025. Les emprunts à court terme s'élevaient à $4 851 762. La société détient des actifs en cryptomonnaies (y compris 45 680 Official Trump coins et des tokens FET classés en juste valeur de niveau 1) ; elle a acquis 414 721 tokens FET pour environ $300 000. Les encaissements nets provenant des activités de financement se sont élevés à $6 407 563 et l'augmentation nette de trésorerie à $383 515.
Freight Technologies, Inc. (FRGT) meldete weiterhin operative Verluste und stützte seine Liquidität durch Finanzierungs- und Eigenkapitaltransaktionen. Für die sechs Monate zum 30. Juni 2025 verzeichnete das Unternehmen einen operativen Verlust von $(2.935.072) und negative operative Cashflows von $(5.039.217), im Vergleich zu Verlusten von $(3.788.697) und negativen Cashflows von $(4.857.126) im gleichen Zeitraum 2024. Die Bilanz weist Eigenkapital der Aktionäre in Höhe von $8.783.380, Nettoumlaufvermögen von $(179.851), kurzfristige Verbindlichkeiten von $4.961.684 und $586.658 an uneingeschränkten Zahlungsmitteln aus.
Das Unternehmen schloss im zweiten Quartal mehrere Finanzierungs- und Eigenkapitaltransaktionen ab, darunter Begebungen von Vorzugsaktien Serie A4 (z. B. 2.311.248 Serie-A4-Aktien für ca. $5,2 Mio., zahlbar in FET-Token, sowie eine frühere Serie-A4-Emission über $3,0 Mio.) und die Umwandlung von Wandelanleihen; zum 30. Juni 2025 verbleiben $500.000 an Wandelanleihen. Kurzfristige Kreditaufnahmen beliefen sich auf $4.851.762. Das Unternehmen hält Krypto-Vermögenswerte (einschließlich 45.680 Official Trump coins und FET-Token, bewertet zum beizulegenden Zeitwert Level 1); es kaufte 414.721 FET-Token für etwa $300.000. Der Nettozufluss aus Finanzierungstätigkeiten betrug $6.407.563 und die Nettozunahme der liquiden Mittel betrug $383.515.
- The company raised financing with net proceeds of approximately $2.9M from a Series A4 offering and recorded $6,407,563 net cash provided by financing activities for the period
- Some preferred issuances were settled or converted reducing convertible note exposure, leaving only $500,000 of convertible notes outstanding as of June 30, 2025
- Cryptocurrency holdings (including FET tokens) are measured at Level 1 fair value, enabling quoted-market valuation for those assets
- Operating loss of $(2,935,072) for the six months ended June 30, 2025 and negative operating cash flow of $(5,039,217) indicate ongoing cash burn
- Tight near-term liquidity with $586,658 of unrestricted cash, short-term debt of $4,961,684, and net working capital of $(179,851)
- Concentration risk: one customer accounted for 69% of accounts receivable (and as of Dec 31, 2024 one customer accounted for 88% of accounts receivable); a single customer accounted for 48% of revenues in a reported period
- Extensive equity restructurings, reverse splits and preferred-share conversions could materially dilute ordinary shareholders and complicate capital structure
Insights
TL;DR: FRGT shows ongoing operating losses, tight liquidity, and reliance on equity/crypto-related financings to fund operations.
The company's six-month operating loss of $(2.94M) and negative operating cash flow of $(5.04M) indicate operating cash burn. Short-term debt of $4.96M and only $586.7k of unrestricted cash create near-term liquidity pressure, partially offset by $6.41M of financing proceeds in the period. Convertible notes were largely converted, leaving $500k outstanding, and Series A4 preferred issuances produced cash and crypto-settled consideration. Material concentration risk is present in receivables and revenue metrics disclosed. The data suggests the business is dependent on continued financing and convertible/preferred conversions to meet working capital needs.
TL;DR: Multiple equity restructurings, reverse splits and preferred conversions materially altered capital structure and shareholder composition.
The filing documents repeated reverse stock splits (1:10, 1:25, 1:4) and extensive issuance and conversion of preferred shares (Series A1A, A2, A4 and Series B) including crypto-settled purchases and conversions of notes into preferred shares. These actions significantly changed issued and outstanding ordinary shares and preferred holdings. Such activity can dilute existing ordinary shareholders and creates complexity in governance and conversion mechanics; careful review of the Amended and Restated M&A conversion provisions is warranted to understand dilution and conversion price mechanics.
Freight Technologies, Inc. (FRGT) ha continuato a registrare perdite operative e ha fatto affidamento su finanziamenti e operazioni in equity per rafforzare la liquidità. Per i sei mesi terminati il 30 giugno 2025 la società ha riportato una perdita operativa di $(2.935.072) e un flusso di cassa operativo negativo di $(5.039.217), rispetto a perdite per $(3.788.697) e flusso di cassa negativo di $(4.857.126) nello stesso periodo del 2024. Lo stato patrimoniale evidenzia capitale netto degli azionisti pari a $8.783.380, capitale circolante netto di $(179.851), debiti a breve termine per $4.961.684 e $586.658 di liquidità non vincolata.
La società ha completato diverse operazioni di finanziamento e equity nel secondo trimestre, incluse emissioni di azioni privilegiate Serie A4 (per esempio 2.311.248 azioni Serie A4 per circa $5,2 milioni da corrispondere in token FET e una precedente offerta Serie A4 da $3,0 milioni) e conversioni di note convertibili, lasciando $500.000 di note convertibili in essere al 30 giugno 2025. Gli indebitamenti a breve termine ammontavano a $4.851.762. La società detiene attività in criptovaluta (inclusi 45.680 Official Trump coins e token FET valutati al fair value di livello 1); ha acquistato 414.721 token FET per circa $300.000. Il flusso di cassa netto derivante da attività di finanziamento è stato di $6.407.563 e l'aumento netto di cassa è stato di $383.515.
Freight Technologies, Inc. (FRGT) siguió registrando pérdidas operativas y dependió de financiamientos y transacciones de capital para reforzar su liquidez. Para los seis meses terminados el 30 de junio de 2025, la compañía registró una pérdida operativa de $(2,935,072) y flujo de efectivo operativo negativo de $(5,039,217), frente a pérdidas de $(3,788,697) y flujo negativo de $(4,857,126) en el mismo periodo de 2024. El balance muestra patrimonio neto de los accionistas de $8,783,380, capital de trabajo neto de $(179,851), deuda a corto plazo de $4,961,684 y $586,658 en efectivo no restringido.
La compañía completó varias transacciones de financiamiento y capital en el segundo trimestre, incluidas emisiones de preferentes Serie A4 (por ejemplo, 2,311,248 Series A4 por aproximadamente $5.2 millones pagaderos en tokens FET y una oferta Serie A4 previa de $3.0 millones) y conversiones de pagarés convertibles, quedando $500,000 de pagarés convertibles pendientes al 30 de junio de 2025. Los préstamos a corto plazo totalizaron $4,851,762. La compañía posee activos en criptomonedas (incluidos 45,680 Official Trump coins y tokens FET clasificados a valor razonable Nivel 1); compró 414,721 tokens FET por aproximadamente $300,000. El efectivo neto proveniente de actividades de financiamiento fue de $6,407,563 y el incremento neto de efectivo fue de $383,515.
Freight Technologies, Inc. (FRGT)는 계속된 영업손실을 기록했으며 유동성 제고를 위해 자금조달 및 주식 거래에 의존했습니다. 2025년 6월 30일로 끝나는 6개월 동안 회사는 $(2,935,072)의 영업손실과 $(5,039,217)의 영업활동 현금흐름 마이너스를 기록했으며, 이는 2024년 동기 손실 $(3,788,697) 및 영업현금흐름 마이너스 $(4,857,126)와 비교됩니다. 대차대조표상 주주지분 $8,783,380, 순운전자본 $(179,851), 단기부채 $4,961,684, 그리고 $586,658의 제한 없는 현금이 표시되어 있습니다.
회사는 2분기에 시리즈 A4 우선주 발행(예: 약 $520만 상당의 FET 토큰으로 지급되는 2,311,248 시리즈 A4 우선주 및 이전의 $300만 시리즈 A4 공모)과 전환사채의 전환을 포함한 여러 자금조달 및 주식 거래를 완료했으며, 2025년 6월 30일 현재 $500,000의 전환사채가 남아 있습니다. 단기 차입금은 총 $4,851,762였습니다. 회사는 암호화폐 자산(예: 45,680 Official Trump coins 및 레벨 1 공정가치로 분류된 FET 토큰)을 보유하고 있으며, 약 $300,000에 414,721 FET 토큰을 매수했습니다. 재무활동으로 인한 순현금 유입은 $6,407,563이며 현금의 순증가는 $383,515였습니다.
Freight Technologies, Inc. (FRGT) a continué d'afficher des pertes d'exploitation et a eu recours à des financements et à des opérations sur capitaux propres pour renforcer sa liquidité. Pour les six mois clos le 30 juin 2025, la société a enregistré une perte d'exploitation de $(2 935 072) et un flux de trésorerie d'exploitation négatif de $(5 039 217), contre des pertes de $(3 788 697) et un flux négatif de $(4 857 126) sur la même période en 2024. Le bilan présente des capitaux propres de $8 783 380, un fonds de roulement net de $(179 851), une dette à court terme de $4 961 684 et $586 658 de trésorerie non restreinte.
La société a réalisé plusieurs opérations de financement et de capitaux propres au T2, notamment des émissions d'actions privilégiées Série A4 (par ex. 2 311 248 actions Série A4 pour environ $5,2 M payables en tokens FET et une offre Série A4 antérieure de $3,0 M) et des conversions de billets convertibles, laissant $500 000 de billets convertibles en circulation au 30 juin 2025. Les emprunts à court terme s'élevaient à $4 851 762. La société détient des actifs en cryptomonnaies (y compris 45 680 Official Trump coins et des tokens FET classés en juste valeur de niveau 1) ; elle a acquis 414 721 tokens FET pour environ $300 000. Les encaissements nets provenant des activités de financement se sont élevés à $6 407 563 et l'augmentation nette de trésorerie à $383 515.
Freight Technologies, Inc. (FRGT) meldete weiterhin operative Verluste und stützte seine Liquidität durch Finanzierungs- und Eigenkapitaltransaktionen. Für die sechs Monate zum 30. Juni 2025 verzeichnete das Unternehmen einen operativen Verlust von $(2.935.072) und negative operative Cashflows von $(5.039.217), im Vergleich zu Verlusten von $(3.788.697) und negativen Cashflows von $(4.857.126) im gleichen Zeitraum 2024. Die Bilanz weist Eigenkapital der Aktionäre in Höhe von $8.783.380, Nettoumlaufvermögen von $(179.851), kurzfristige Verbindlichkeiten von $4.961.684 und $586.658 an uneingeschränkten Zahlungsmitteln aus.
Das Unternehmen schloss im zweiten Quartal mehrere Finanzierungs- und Eigenkapitaltransaktionen ab, darunter Begebungen von Vorzugsaktien Serie A4 (z. B. 2.311.248 Serie-A4-Aktien für ca. $5,2 Mio., zahlbar in FET-Token, sowie eine frühere Serie-A4-Emission über $3,0 Mio.) und die Umwandlung von Wandelanleihen; zum 30. Juni 2025 verbleiben $500.000 an Wandelanleihen. Kurzfristige Kreditaufnahmen beliefen sich auf $4.851.762. Das Unternehmen hält Krypto-Vermögenswerte (einschließlich 45.680 Official Trump coins und FET-Token, bewertet zum beizulegenden Zeitwert Level 1); es kaufte 414.721 FET-Token für etwa $300.000. Der Nettozufluss aus Finanzierungstätigkeiten betrug $6.407.563 und die Nettozunahme der liquiden Mittel betrug $383.515.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For
the quarterly period ended:
For the transition period from ____________ to _____________
Commission
File No.
| (Exact name of registrant as specified in its charter) |
| (State
or other jurisdiction of incorporation or organization) |
(I.R.S.
Employer Identification No.) |
|
||
| (Address of principal executive offices) | (Zip Code) |
| (Registrant’s telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The
|
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Smaller
reporting company | ||
| Emerging
growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No
As
of August 15, 2025, there were a total of
DOCUMENTS INCORPORATED BY REFERENCE
None.
FREIGHT TECHNOLOGIES, INC.
Quarterly Report on Form 10-Q
Period Ended June 30, 2025
TABLE OF CONTENTS
| PART I | ||||
| FINANCIAL INFORMATION | ||||
| Item 1. | Financial Statements | 3 | ||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 23 | ||
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 29 | ||
| Item 4. | Controls and Procedures | 29 | ||
| PART II | ||||
| OTHER INFORMATION | ||||
| Item 1. | Legal Proceedings | 30 | ||
| Item 1A. | Risk Factors | 30 | ||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 30 | ||
| Item 3. | Defaults Upon Senior Securities | 30 | ||
| Item 4. | Mine Safety Disclosures | 30 | ||
| Item 5. | Other Information | 30 | ||
| Item 6. | Exhibits | 31 | ||
| Signatures | 32 |
| 2 |
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FREIGHT TECHNOLOGIES, INC.
UNAUDITED FINANCIAL STATEMENTS
| Page | ||
| Condensed Consolidated Balance Sheets as of June 30, 2025 (unaudited) and December 31, 2024 | 4 | |
| Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) | 5 | |
| Unaudited Condensed Consolidated Statements of Stockholders’ Equity (Deficit) | 6 | |
| Unaudited Condensed Consolidated Statements of Cash Flows | 7 | |
| Notes to Unaudited Financial Statements | 8 |
| 3 |
FREIGHT TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 2025
(unaudited) | December 31, 2024
(audited) | |||||||
| ASSETS: | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Unbilled receivables | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Capitalized software, net | ||||||||
| Property and equipment, net | ||||||||
| Other long-term assets | - | |||||||
| Security deposits | ||||||||
| Cryptocurrencies | - | |||||||
| Other intangible assets, net | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT): | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Short-term borrowings | ||||||||
| Convertible debt | - | |||||||
| Income tax payable | ||||||||
| Insurance financing payable | - | |||||||
| Total current liabilities | ||||||||
| Total liabilities | ||||||||
| COMMITMENTS AND CONTINGENCIES | - | - | ||||||
| STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Series A preferred stock, $ | ||||||||
| Series B preferred stock, $ | ||||||||
| Series seed preferred stock, $ | - | - | ||||||
| Preferred stock, value | - | - | ||||||
| Ordinary shares, | - | - | ||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total stockholders’ equity (deficit) | ( | ) | ||||||
| Total liabilities and stockholders’ equity (deficit) | $ | $ | ||||||
| (*) | List of authorized shares for Series A preferred |
| a. | Series
A1A preferred shares: |
| b. | Series
A2 preferred shares: |
| c. | Series A4 preferred shares: unlimited authorized shares |
| (**) |
The accompanying notes are an integral part of these consolidated financial statements.
| 4 |
FREIGHT TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost and expenses | ||||||||||||||||
| Cost of revenue | ||||||||||||||||
| Compensation and employee benefits | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Sales and marketing | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Total cost and expenses | ||||||||||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income and expenses | ||||||||||||||||
| Interest expense, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Change in fair value of convertible note | - | - | ||||||||||||||
| Realized gain (loss) in value of sold cryptocurrency | ( | ) | - | ( | ) | - | ||||||||||
| Unrealized gain (loss) in fair value of cryptocurrency | - | - | ||||||||||||||
| Income (loss) before provision for income taxes | ( | ) | ( | ) | ( | ) | ||||||||||
| Income tax expense | ||||||||||||||||
| Net Income (Loss) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Basic net income (loss) per share attributable to ordinary shareholders | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Basic weighted average shares outstanding | ||||||||||||||||
| Diluted net income (loss) per share attributable to ordinary shareholders, | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Diluted weighted average shares outstanding | ||||||||||||||||
| Net income (loss) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Other comprehensive gain (loss) net of tax | ||||||||||||||||
| Foreign currency translation gain (loss) | ( | ) | ( | ) | ||||||||||||
| Comprehensive income (loss) | $ | $ | ( | ) | ( | ) | $ | ( | ) | |||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 5 |
FREIGHT TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)
(UNAUDITED)
| Series A Shares | Amount | Series B Shares | Amount | Seed Shares | Amount | Ordinary Shares | Amount (*) | Paid-In Capital | Accumulated Deficit | Income (Loss) | Equity (Deficit) | |||||||||||||||||||||||||||||||||||||
| Preferred Stock | Series | Ordinary Shares (*) | Additional | Accumulated Other | Total Shareholders’ | |||||||||||||||||||||||||||||||||||||||||||
| Series A Shares | Amount | Series B Shares | Amount | Seed Shares | Amount | Ordinary Shares | Amount | Paid-In Capital | Accumulated Deficit | Income (Loss) | Equity (Deficit) | |||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2024 | $ | $ | - | - | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Issuance of ordinary shares from conversion of preferred stock | ( | ) | ( | ) | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Issuance of ordinary shares from exercise of warrants | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Issuance of ordinary shares for cash, net of costs | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
| Shared based compensation for equity-based awards | - | - | - | - | - | - | ( | ) | - | - | - | |||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||
| Net Loss | - | - | - | - | - | - | - | - | - | ( | ) | - | ( | ) | ||||||||||||||||||||||||||||||||||
| Balance June 30, 2024 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| Balance March 30, 2025 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| Issuance of preferred stock for note conversion | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Issuance of ordinary shares from exercise of warrants | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Share based compensation for equity-based awards | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
| Net Loss | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
| Balance June 30 2025 | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | - | - | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||||||||||||||
| Issuance of ordinary shares from conversion of preferred stock | ( | ) | ( | ) | - | - | - | - | - | - | - | ( | ) | |||||||||||||||||||||||||||||||||||
| Issuance of ordinary shares for exercise of warrants | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Issuance of common stock for cash net of issuance costo | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||||
| Issuance of stock upon vesting restricted stock | - | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
| Share based compensation for equity based awards | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
| Transaction costs related to note payable | - | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | - | - | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | - | ( | ) | - | ( | ) | ||||||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | - | $ | - | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | - | $ | - | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||
| Balance | $ | $ | $ | - | $ | - | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||
| Issuance of ordinary shares from conversion of preferred stock | - | - | - | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||||||||||
| Issuance of ordinary shares for exercise of warrants | - | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||
| Issuance of preferred stock for cash | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Issuance of preferred stock for cryptocurrency | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||
| Issuance of series A4 preferred shares for note | ||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
| Transaction cost incurred | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | - | - | ( | ) | - | ( | ) | ||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | - | $ | - | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||
| Balance | $ | $ | $ | - | $ | - | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||||||||||||||||
| (*) | Reflects
|
The accompanying notes are an integral part of these consolidated financial statements.
| 6 |
FREIGHT TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Share-based compensation | ||||||||
| Non-cash interest | ||||||||
| Loss on the sale cryptocurrencies | - | |||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Unbilled receivables | ( | ) | ||||||
| Change in convertible note fair value | - | ( | ) | |||||
| Change in fair value of cryptocurrency | ( | ) | - | |||||
| Prepaid expense and other assets | ||||||||
| Accounts payable | ( | ) | ( | ) | ||||
| Accrued expenses | ( | ) | ( | ) | ||||
| Income tax payable | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of cryptocurrencies | ( | ) | - | |||||
| Sale of cryptocurrencies | - | |||||||
| Capitalization of software development costs | ( | ) | ( | ) | ||||
| Purchase of property and equipment | - | ( | ) | |||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from notes payable, net of discounts | ||||||||
| Repayment of insurance financing payable | ( | ) | ( | ) | ||||
| Repayment of short-term borrowings | ( | ) | ( | ) | ||||
| Proceeds from short-term borrowings | ||||||||
| Proceeds from the issuance of Series A4 Shares | - | |||||||
| Net proceeds from the issuance of Ordinary Shares | - | |||||||
| Net cash provided by financing activities | ||||||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at beginning of the period | ||||||||
| Cash, cash equivalents and restricted cash at end of the period | $ | $ | ||||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Supplemental disclosure of non-cash activity | ||||||||
| Financing of insurance premiums | $ | $ | ||||||
| Reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheet | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 7 |
NOTE 1 – DESCRIPTION OF BUSINESS
Freight App, Inc. (“Fr8App”) (formerly known as “Freighthub, Inc.”), a Delaware corporation, was incorporated on October 26, 2015. On January 18, 2019, Freight App Mexico S.A De C.V. (“Fr8App Mexico”) (formerly known as “Freight Hub Mexico S.A. De C.V.”), a wholly owned subsidiary of Fr8App, was formed. On July 29, 2021, both companies filed their name change to Fr8App and Fr8App Mexico. On February 14, 2022, the Company merged with Hudson Capital Inc. (the “Merger”), and Fr8App Inc. was the surviving entity and then became listed on the Nasdaq stock exchange. Fr8App continued its operations under the name Freight Technologies Inc. (“Fr8Tech”).
Fr8Tech is a technology company offering a diverse portfolio of proprietary platform solutions powered by AI and machine learning to optimize and automate the supply chain process. Focused on addressing the distinct challenges within the supply chain ecosystem, the Company’s portfolio of solutions includes: the Fr8App platform for over-the-road (OTR) B2B cross-border shipping across the USMCA region; Fr8Fleet, a dedicated capacity service for enterprise clients in Mexico; Waavely, a digital platform for efficient ocean freight booking and management of container shipments between North America and ports worldwide; Fr8Now, a specialized service for less-than-truckload (LTL) shipping; and, Fleet Rocket a nimble, scalable and cost-effective Transportation Management System (TMS) for brokers, shippers, and other logistics operators. Each product is interconnected within a unified platform to connect carriers and shippers and significantly improve matching and operation efficiency via innovative technologies such as live pricing, real-time tracking, digitization of critical documentation, brokerage support, transportation management, fleet management, and committed capacity solutions.
NOTE 2 – LIQUIDITY AND GOING CONCERN
Since
inception, the Company has met its cash needs through proceeds from issuing convertible notes, loans, and issuance of shares. As
shown in the accompanying consolidated financial statements as of and for the three months ended June 30, 2025, the Company has an
accumulated deficit of $(
The Company currently projects that it will need to draw additional funds on its existing facilities and need additional capital to fund its current operations and capital investment requirements until the Company scales to a revenue level that permits cash self-sufficiency. As a result, the Company may need to raise additional capital or secure debt funding to support on-going operations until such time. This projection is based on the Company’s current expectations regarding revenues, expenditures, cash burn rate and other operating assumptions. The sources of this capital are anticipated to be from drawing on existing facilities, and/or the sale of equity, any of which may not be achievable on favorable terms, or at all. Additionally, any debt or equity transactions may cause significant dilution to existing stockholders.
If the Company is unable to raise additional capital moving forward, its ability to operate in the normal course and continue to invest in its product portfolio may be materially and adversely impacted and the Company may be forced to scale back operations or divest some or all of its assets.
As a result of the above, in connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s (“FASB”) Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that the Company’s liquidity condition raises substantial doubt about the Company’s ability to continue as a going concern through twelve months from the date these consolidated financial statements are available to be issued. These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.
| 8 |
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
These consolidated financial statements and related notes are presented in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), expressed in U.S. dollars. The accompanying consolidated financial statements reflect all adjustments including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations, and cash flows for the periods presented in accordance with GAAP. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of the consolidated 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 contingencies at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates include, but are not limited to, allowance for credit losses, valuation of share-based compensation and warrants, accounting for warrants, useful lives of internally developed software and property and equipment, fair value of convertible notes, impairment of long lived assets, whether an arrangement is or contains a lease, income tax accruals, the valuation allowance for deferred income taxes, and contingent liabilities.
The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that it believes are reasonable under the circumstances, including assumptions as to future events. Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash consists of funds held in bank accounts. Cash equivalents consist of short-term, highly liquid investments with original maturities of 90 days or less at the time of purchase and generally include money market accounts.
Concentrations of Credit Risk
The
Company maintains cash accounts with various financial institutions. At times, balances in these accounts may exceed federally insured
limits. Accounts at each institution within the United States (“US”) are insured by the Federal Deposit Insurance Corporation
(“FDIC”) up to $
The
financial assets that potentially subject the Company to concentration of credit risk is accounts receivable and unbilled receivables.
At June 30, 2025, one customer accounted for
For
the six months ended June 30, 2025, one customer accounted for
| 9 |
Fair Value Measurements
The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), establishes a hierarchy of inputs used when available. Observable inputs are what market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are those that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances.
The three levels of the fair value hierarchy are described below:
Level 1— Inputs based on unadjusted quoted market prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
Level 2— Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in markets that are not active or for which all significant inputs are observable or can be corroborated by observable market data.
Level 3— Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are both unobservable for the asset and liability in the market and significant to the overall fair value measurement.
Fair Value of Financial Instruments
The carrying amounts of the Company’s financial instruments, which include trade accounts receivable, unbilled receivables, intangible assets, accounts payable, accrued expenses, and debt at variable interest rates, approximate their fair values at June 30, 2025 and December 31, 2024, respectively, principally due to the short-term nature, maturities, or nature of interest rates of the above listed items.
Accounts Receivable and Allowance for Credit Losses
Accounts
receivable are recorded at the net invoiced amount, net of allowances for credit losses, and do not bear interest. Unbilled receivables,
which are reflected separately on the accompanying consolidated balance sheets, include unbilled amounts for services rendered in the
respective period but not yet billed to the customer until a future date, which typically occurs within one month. The allowance for
credit losses is the Company’s best estimate of the amount of probable credit losses in existing accounts receivable. In accordance
with ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”,
the Company also considers reasonable and supportable forecasts of future economic conditions and their expected impact on customer collections
in determining the allowance for credit losses. The Company determines expected credit losses based on historical write-off experience,
an analysis of the aging of outstanding receivables, customer payment patterns, and our expectations of changes in macro-economic conditions,
that may impact the collectability of outstanding receivables. Balances are considered past due based on invoiced terms. Account balances
are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered
remote. As of June 30, 2025 and December 31, 2024, the allowance for credit losses was $
Long-Lived Assets
The Company reviews its long-lived assets for impairment whenever events or circumstances exist that indicate the carrying amount of an asset or asset group may not be recoverable. Recoverability of assets is measured by comparing the carrying amounts of the assets to the future undiscounted cash flows expected to be generated by the assets. If the asset or asset group is considered to be impaired, an impairment loss would be recorded to adjust the carrying amounts to the estimated fair value. Management has determined that no impairment of long-lived assets exists, and accordingly, no adjustments to the carrying amounts of the Company’s long-lived assets have been made for the six months ended June 30, 2025 and 2024.
Property and Equipment
Property and equipment consisting of office and computer equipment, furniture and leasehold improvements are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives, ranging between three to seven years.
SCHEDULE OF ESTIMATED USEFUL LIVES OF PROPERTY AND EQUIPMENT
| Useful Lives | ||
| Equipment | ||
| Furniture | ||
| Leasehold improvements | Shorter of useful life of asset or lease term |
| 10 |
Capitalized Software
The Company complies with the guidance of ASC Topic 350-40, Intangibles—Goodwill and Other—Internal Use Software, in accounting for of its internally developed system projects that it utilizes to provide its services to customers. These system projects generally relate to software of the Company that is not intended for sale or otherwise marketed. Internal and external costs incurred during the preliminary project stage are expensed as they are incurred. Once a project has reached the development stage, the Company capitalizes direct internal and external costs until the software is substantially complete and ready for its intended use. Costs for upgrades and enhancements are capitalized, whereas, costs incurred for maintenance are expensed as incurred. These capitalized software costs are amortized on a project-by- project basis over the expected economic life of the underlying software on a straight-line basis, which is generally three years. Amortization commences when the software is available for its intended use.
Warrants
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC Topic 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
Warrants classified as liabilities are recorded at fair value and are remeasured at each reporting date until settlement. Changes in fair value are recognized as a component of change in fair value of warrant liability in the consolidated statements of operations. The fair value of the warrant liabilities is estimated using a Black-Scholes option pricing formula. The warrant volatility assumption within the Black-Scholes model represents a Level 3 measurement within the fair value measurement hierarchy. Warrants classified as equity instruments are initially recognized at fair value and are not subsequently remeasured.
The proceeds received from the sale of equity classified warrants and convertible notes in a bundled transaction are allocated based on the relative fair values of warrants and convertible notes with no changes in fair value of warrants recognized after the issuance date and were recorded at the issuance date using a relative fair value allocation method. Equity classified warrants, which are issued as an inducement to the holder of convertible note to covert the note, are recognized as an expense equal to the fair value of the warrant in accordance with ASC 470-20, Debt with Conversion and Other Options.
When equity classified warrants are issued to the convertible note holder as an additional consideration for the holder to provide additional funding under the existing convertible note agreement, the additional funding is allocated based on the residual fair value allocation method in which the fair value of the additional funding is first allocated to the convertible note and the remaining proceeds are allocated to the equity classified warrant.
Advertising
Advertising
costs are expensed as incurred and totaled $
Income Taxes
The Company accounts for income taxes using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax basis, net operating losses, tax credit and other carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates when the assets and liabilities are expected to be realized or settled. The Company regularly reviews deferred tax assets for realizability and establishes valuation allowances based on available evidence including historical operating losses, projected future taxable income, expected timing of the reversals of existing temporary differences, and appropriate tax planning strategies. If the Company’s assessment of the realizability of a deferred tax asset changes, an increase to a valuation allowance will result in a reduction of net earnings at that time, while the reduction of a valuation allowance will result in an increase of net earnings at that time.
| 11 |
The
Company follows ASC 740-10-65-1 in accounting for uncertainty in income taxes by prescribing rules for recognition, measurement and classification
in financial statements of tax positions taken or expected to be in a tax return. This prescribes a two-step process for the financial
statement measurement and recognition of a tax position. The first step involves the determination of whether it is more likely than
not (greater than 50 percent likelihood) that a tax position will be sustained upon examination, based on the technical merits of the
position. The second step requires that any tax position that meets the more likely than not recognition threshold be measured and recognized
in the financial statements at the largest amount of benefit that is a greater than 50 percent likelihood of being realized upon ultimate
settlement. This topic also provides guidance on the accounting for related interest and penalties, financial statement classification
and disclosure. The Company’s policy is that any interest or penalties related to uncertain tax positions are recognized in income
tax expense when incurred. The Company has
Foreign Currency Translation
The financial statements of the Company’s subsidiary operating in Mexico are prepared to conform to U.S. GAAP and translated into U.S. Dollars by applying a current exchange rate. The local currency has been determined to be the functional currency. Assets and liabilities of non-U.S. operations are translated at period-end exchange rates. Items appearing in the consolidated statements of operations are translated using average exchange rates during each period. Translation gains and losses are reported in accumulated other comprehensive income (loss) as a component of stockholders’ equity (deficit).
Intangible Assets
Intangible assets include the Company’s domain name and are accounted for based on ASC Topic 350, Intangibles – Goodwill and Other. The Company’s intangible assets that have finite lives, consisting of intellectual property, are amortized over their useful lives and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If any indicators were present, the Company would test for recoverability by comparing the carrying amount of the asset to the net undiscounted cash flows expected to be generated from the asset. If those net undiscounted cash flows do not exceed the carrying amount (i.e., the asset is not recoverable), the Company will perform the next step, which is to determine the fair value of the asset and record an impairment loss, if any. The Company evaluates the useful lives for these intangible assets each reporting period to determine whether events and circumstances warrant a revision in their remaining useful lives.
Foreign Operations
Operations outside the United States include a wholly-owned subsidiary in Mexico. Foreign operations are subject to risks inherent in operating under different legal systems and various political and economic environments. Among the risks are changes in existing tax laws, possible limitations on foreign investment and income repatriation, government price or foreign exchange controls, and restrictions on currency exchange.
| 12 |
Revenue Recognition
The Company’s revenues are accounted for under FASB ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). The Company generates revenues primarily from shipments executed by the Company’s freight transportation brokerage services or dedicated capacity to shippers through the Company’s freight marketplace.
Freight Transportation Brokerage Services
The Company’s freight transportation brokerage services include Fr8App Full Truckload (“FTL”), providing a single customer the use of an entire truckload; Waavely, providing ocean container shipments through Mexican ports; and Fr8Now Less Than Truckload (“LTL”), providing multiple customers the use of a partial truckload in each truck. Shippers contract with the Company to utilize the Company’s network of independent freight Carriers to transport freight. Those shipments are the Company’s single performance obligations, arising under contracts the Company has entered into with customers that define the price for performance obligation and payment terms. The Company’s acceptance of the shipment request establishes enforceable rights and obligations for each contract. By accepting the shipper’s order, the Company has responsibility for transportation of the shipment from origin to destination. Under such contracts, revenue is recognized when performance obligations are satisfied, which generally represents the transit period from origin to destination by a third-party carrier which can vary based on origin and destination, or the capacity used. This is appropriate as the customer simultaneously receives and consumes the benefits as the Company performs its obligation. The Company determines revenue in-transit using the output method based on shipping milestones. Measure of revenue in-transit requires the application of judgment. Revenue is measured as the amount of consideration the Company expects to receive in exchange for providing services. Accessorial charges for fuel surcharge, loading and unloading, stop charges, and other immaterial charges are part of the consideration received for the single performance obligation of delivering shipments.
Dedicated Capacity Services
The Company provides customers with dedicated shipment capacity for a specific period of time under Fr8Fleet. The current arrangements under Fr8Fleet include an obligation to provide weekly shipping capacity. The Company’s performance obligation in this arrangement is to provide the shipping capacity and the transaction price is fixed. Under such contracts, revenue is recognized when performance obligations are satisfied, which generally represents when trucks are provided to the shipper over the term of the agreement. The Company utilizes the output method for revenue recognition based on direct measurements of the value transferred to the customer, which is the number of trucks provided to the customer per day. Revenue is measured as the amount of consideration the Company expects to receive in exchange for providing services.
Payment for the Company’s services is generally due within 30 to 45 days upon delivery of the shipment. Contracts entered into with customers do not contain material financing components. The Company’s contracts with customers typically have a duration of one year or less and do not require any significant start-up costs, and as such, costs incurred to obtain contracts associated with these contracts are expensed as incurred.
Through the Company’s freight brokerage services and dedicated capacity, the Company is responsible for identifying and directing independent freight Carriers to transport the shipper’s goods. The transportation of the loads is outsourced to third-party Carriers. The Company is a principal in these arrangements, and therefore records revenue associated with these contracts on a gross basis. The Company controls the service and has primary responsibility to meet the customer’s requirements. The Company invoices and collects from its customers, maintains discretion over pricing and is responsible for resolving customer claims.
Additionally, the Company is responsible for selection of third-party transportation providers to the extent used to satisfy customer freight requirements. At times, billing occurs subsequent to revenue recognition, resulting in an unbilled receivable which represents a contract asset. This contract asset is recorded as an unbilled receivable and presented on the consolidated balance sheets. The Company receives the unconditional right to bill when shipments are delivered to their destination.
A summary of the Company’s revenue by major service lines is as follows:
SUMMARY OF COMPANY REVENUE BY MAJOR SERVICE LINE
| 2025 | 2024 | 2025* | 2024 | |||||||||||||
| 3 Months Ended June 30 | 6 Months Ended June 30 | |||||||||||||||
| 2025 | 2024 | 2025* | 2024 | |||||||||||||
| Freight Transportation Brokerage | $ | $ | $ | $ | ||||||||||||
| Dedicated Capacity | ||||||||||||||||
| Total Revenue | $ | $ | $ | $ | ||||||||||||
| * |
| 13 |
Share-Based Compensation
The Company accounts for share-based awards, including stock options and restricted stock awards, issued to employees in accordance with ASC Topic 718, Compensation—Stock Compensation. In addition, the Company issues stock options to non-employees in exchange for consulting services and accounts for these in accordance with the provisions of ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting. Compensation expense is measured at the grant, based on the calculated fair value of the award, and recognized as an expense over the requisite service period, which is generally the vesting period of the award.
For modification of stock compensation awards, the Company records the incremental fair value of the modified award as share-based compensation on the date of modification for vested awards or over the remaining vesting period for unvested awards. The incremental compensation is the excess of the fair value of the modified award on the date of modification over the fair value of the original award immediately before the modification. In addition, the Company records the remaining unrecognized compensation cost for the original cost for the original award on the modification date over the remaining vesting period for unvested awards.
The Company estimates the expected term of stock options granted to employees using the simplified method, whereby the expected term equals the average of the vesting term and the original contractual term of the option. The Company utilizes this method as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. For stock options granted to non-employees, the contractual term of the option is utilized as the basis for the expected term assumption. All other assumptions used to calculate the grant date fair value are generally consistent with the assumptions used for options granted to employees. For purposes of calculating share-based compensation, the Company estimates the fair value of stock options using a Black-Scholes option-pricing model. The determination of the fair value of share-based payment awards utilizing the Black-Scholes model is affected by the Company’s stock price and a number of assumptions, including expected volatility, expected life, risk-free interest rate and expected dividends. The expected volatility is primarily based on the historical volatility of peer company data while the expected life of the stock options is based on historical and other economic data trended into the future. The risk-free interest rate is based on U.S. Treasury yield curve in effect at the time of grant for periods corresponding to the expected option term. The dividend yield assumption is based on the Company’s history and expectation of no dividend payouts.
If factors change and the Company employs different assumptions, share-based compensation expense may differ significantly from what has been recorded in the past. If there is a difference between the assumptions used in determining share-based compensation expense and the actual factors which become known over time, specifically with respect to anticipated forfeitures, the Company may change the input factors used in determining share-based compensation costs for future grants. These changes, if any, may materially impact the Company’s results of operations in the period such changes are made. Incremental compensation costs arising from subsequent modifications of awards after the grant date are recognized when incurred. In addition, the Company accounts for forfeitures of awards as they occur. For share-based awards that vest based on performance conditions, expense is recognized when it is probable that the conditions will be met.
| 14 |
Earnings Per Share
Basic
earnings (loss) per share is computed by dividing net income (loss) available to ordinary shareholders by the weighted average number
of outstanding ordinary shares for the period, considering the effect of the securities series A and B preferred stock and series seed
preferred stock. Diluted earnings (loss) per share is calculated by dividing net earnings (loss) by the weighted average number of ordinary
shares and dilutive ordinary shares equivalents outstanding. During the periods when they are anti-dilutive, ordinary share equivalents
including those from warrants and convertible notes, if any, are not considered in the computation. At June 30, 2025 and December 31,
2024, there were
Segments
Operating
segments are defined as components of an entity for which separate financial information is available. The Chief Operating Decision Maker
(“CODM”), CEO Javier Selgas, reviews financial information presented on a consolidated basis for the purposes of making operating
decisions, allocating resources, and evaluating financial performance. As such, the Company has determined that it operates in
Reclassifications
Financial statements presented for prior periods include reclassifications that were made to conform to the current year presentation. There was no material impact to the consolidated financial statements for these changes.
Recently Issued Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to reportable Segment Disclosures (ASU 2023-07), which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and by extending the disclosure requirements to entities with a single reportable segment. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. ASU 2023-07 is to be applied retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. The adoption of ASU 2023-07 has not had a material impact on our financial statements, see “Segments” section of Note 3, Summary of Significant Accounting Policies.
On December 13, 2023, the FASB issued ASU 2023-08, which addresses the accounting and disclosure requirements for certain crypto assets. The new guidance requires entities to subsequently measure certain crypto assets at fair value, with changes in fair value recorded in net income in each reporting period. In addition, entities are required to provide additional disclosures about the holdings of certain crypto assets. For all entities, the ASU’s amendments are effective for fiscal years beginning after December 15, 2024, including interim periods within those years. The Company adopted ASU 2023-08 for the period ending March 31, 2025.
Accounting Standards Issued But Not Adopted as of June 30, 2025
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, an update that improves income statement expense disclosure requirements. Under ASU 2024-03 issuers will be required to incorporate new tabular disclosures disaggregating prescribed expense categories within relevant income statement captions in the notes to their financial statements. These categories include purchases of inventory, employee compensation, depreciation and intangible asset amortization. The amendments are effective for fiscal years beginning after December 15, 2026, and should be applied prospectively. The adoption of ASU 2024-03 will require us to provide additional disclosures related to certain income statement expenses but otherwise will not materially impact our financial statements.
| 15 |
All other new accounting pronouncements that have been issued, but not yet effective are currently being evaluated and at this time are not expected to have a material impact on our consolidated financial statements.
NOTE 4 – CAPITALIZED SOFTWARE
Capitalized software consists of the following at:
SCHEDULE OF CAPITALIZED SOFTWARE
June 30,
2025 | December 31, 2024 | |||||||
| Capitalized software | $ | $ | ||||||
| Accumulated amortization | ( | ) | ( | ) | ||||
| Capitalized software, net | $ | $ | ||||||
Amortization
expense for the six months ended June 30, 2025 and 2024 was $
Estimated amortization for capitalized software for future periods is as follows:
SCHEDULE OF ESTIMATED AMORTIZATION CAPITALIZED SOFTWARE
| 2025 (July 1 – December 31) | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| Total | $ |
NOTE 5 – PROPERTY AND EQUIPMENT
Property and equipment consist of the following at:
SCHEDULE OF PROPERTY AND EQUIPMENT, NET
June 30,
2025 | December 31, 2024 | |||||||
| Equipment | $ | $ | ||||||
| Furniture and fixtures | ||||||||
| Total cost | ||||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Property and equipment, net | $ | $ | ||||||
Depreciation
expense for the six months ended June 30, 2025 and 2024 was $
NOTE 6 – CRYPTOCURRENCIES
As of June 30, 2025, the Company held the following cryptocurrencies:
SCHEDULE OF CRYPTOCURRENCIES
| Cryptocurrency | Units | $ / Unit | Fair Market Value ($ USD) | |||||||||
| FET | $ | $ | ||||||||||
| Official Trump | ||||||||||||
| Ethereum | ||||||||||||
| Solana | ||||||||||||
| Total | $ | |||||||||||
| 16 |
On
March 31, 2025, the Company entered into a Securities Purchase Agreement with Fetch Compute, Inc. wherein the Company sold and the Purchaser
purchased
FET
tokens are the utility token and the key medium of exchange on the Fetch.ai network. These tokens meet the definition of a crypto asset
under ASC 350-60 and are accounted for as intangible assets measured at fair value, with changes in fair value recognized in net income
each reporting period. For the three months ending June 30, 2025, the unrealized gain in the fair value of the FET tokens was $
On
April 29, 2025, the Company entered into a Securities Purchase Agreement with certain accredited investors wherein the Company agreed
to sell and the buyers agreed to purchase senior $
Pursuant
to this agreement the Company purchases
Cryptocurrencies are subject to significant risks, including market volatility, liquidity constraints, and regulatory uncertainty. The Company does not currently hedge its exposure to crypto asset price fluctuations and may be subject to gains or losses in future reporting periods
NOTE 7 – ACCRUED EXPENSES
Accrued expenses consist of the following at:
SCHEDULE OF ACCRUED EXPENSES
June 30,
2025 | December 31, 2024 | |||||||
| Accrued freight costs | $ | $ | ||||||
| Accrued payroll | ||||||||
| Accrued interest on convertible note | - | |||||||
| Accrued professional services | ||||||||
| Other accrued liabilities | ||||||||
| Total accrued expenses | $ | $ | ||||||
NOTE 8 – SHARE-BASED COMPENSATION
The
Company has an Equity Incentive Plan (the “Plan”) under which the Company may grant restricted stock awards and stock options
for up to
NOTE 9 – SHORT-TERM BORROWINGS AND NOTES PAYABLE
Short-Term Borrowings
On
March 7, 2019, the Company entered into a short-term promissory note (“2019 Note”) with a lender (the “2019 Note Lender”)
which provides the Company a revolving line of credit. On July 12, 2022, the note was amended to increase the maximum principal amount
that could be advanced withdrawn under the line of credit to $
The
borrowing base of the revolving line of credit is limited to stated percentages for different categories of eligible accounts receivable.
Under the revolving line of credit, if the aggregate principal amount of the outstanding advances exceeds the applicable borrowing base,
the Company must repay the lender an amount equal to the difference between the outstanding principal balance of the revolving line of
credit and the borrowing base. The note requires monthly payments of interest.
The
outstanding principal amount on short-term borrowings is $
| 17 |
Notes Payable
On
March 11, 2024, the Company entered into a Term Note Purchase Agreement with Freight Opportunities LLC to secure a term loan of $
On
June 4, 2024, the Company executed another Term Note Purchase Agreement with Freight Opportunities LLC, resulting in an additional term
loan of $
The Company has the option to prepay the term loans, in whole or in part, without incurring any penalties.
On
September 3, 2024, the Company entered into a Cancellation Agreement with Freight Opportunities, LLC to cancel the principal and interest
outstanding under the Term Note Purchase Agreement of $
NOTE 10 – CONVERTIBLE DEBT
On
January 3, 2023, the Company and Freight Opportunities LLC (the “Noteholder”) entered into a Securities Purchase Agreement
pursuant to which the Company issued to the Noteholder a convertible promissory note in the principal amount of up to $
On
September 3, 2024, the Company entered into a Cancellation Agreement with Freight Opportunities, LLC to cancel the fair value of $
The
Company recorded interest expense pursuant to the stated interest rates on the Note in the amounts of $
On
April 29, 2025, the Company entered into a Securities Purchase Agreement with certain accredited investors wherein the Company agreed
to sell and the buyers agreed to purchase senior $
NOTE 11 – INCOME TAXES
Income
tax provisions for interim periods are generally based on an estimated annual effective income tax rate calculated separately from the
effect of significant, infrequent, or unusual items related specifically to interim periods. Income tax expense of $
NOTE 12 – LEASES
In
November 2022, Fr8App entered into a lease agreement for 31 workstations in Monterrey, Mexico for a
The Company entered into a lease agreement for office space in Mexico City to accommodate three to five employees on February 1, 2024. That lease was renewed on February 1, 2025. In October 2020, the Company entered into a work-suites arrangement for a workspace in an office located in The Woodlands, Texas, on a month-to-month basis, which continues in effect.
Total
rent expense for the six months ended June 30, 2025 and 2024, was approximately $
| 18 |
NOTE 13 – SEGMENT INFORMATION
Geographic long-lived asset information presented below is based on the physical location of the assets, and in the case of our cryptocurrencies, the location of the legal entity in which they are held, at the end of the period. Long-lived assets including intangible assets, which includes cryptocurrencies, capitalized software, property and equipment, and security deposits, by geographic region, are as follows at:
SCHEDULE OF SEGMENT LONG-LIVED ASSETS
June 30,
2025 | June 30, 2024 | |||||||
| United States | $ | $ | ||||||
| Mexico | ||||||||
| Total long-lived assets | $ | $ | ||||||
The following table summarizes the Company’s total revenue by geographic area based on the billing address of the customers:
SCHEDULE OF REVENUE BY GEOGRAPHIC AREA OF CUSTOMERS
| 2025 | 2024 | |||||||
| Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| United States | $ | $ | ||||||
| Mexico | ||||||||
| Total revenue | $ | $ | ||||||
NOTE 14 – WARRANTS
The table below summarizes the Company’s warrant activities for the first six months of 2025:
SUMMARY OF WARRANT ACTIVITY
| Number of Ordinary Shares | Number of Series A, B, C, D | Number of
Series Seed | Exercise Price | Weighted Average | ||||||||||||||||
| Warrants | Warrants | Shares | Range | Exercise | ||||||||||||||||
| (*) | (*) | Warrants | Per Share | Price | ||||||||||||||||
| Balance at December 31, 2024 | $ | $ | ||||||||||||||||||
| Granted | - | - | - | |||||||||||||||||
| Forfeited | - | - | - | |||||||||||||||||
| Converted | - | - | - | |||||||||||||||||
| Exercised | ( | ) | - | - | ||||||||||||||||
| Adjustments due to triggering events | - | - | ||||||||||||||||||
| Balance at June 30, 2025 (Unaudited) | $ | $ | ||||||||||||||||||
| (*) |
The
Ordinary shares warrants carry a cashless exercise feature in which if the resale by the holder of the warrant shares issuable upon exercise
of the warrants is not available to be issued to the warrant holder without legend or other restrictions, the warrant holder can elect
to receive upon such exercise the higher of (i)
During
the six months ended June 30, 2025,
| 19 |
Series
A, B, C, and D Warrants conversion ratios are
During
the year ended December 31, 2024,
The
ordinary shares and warrants in these conversions have been adjusted for the February 5, 2024
NOTE 15 - DEFINED CONTRIBUTION PLAN
NOTE 16 – STOCKHOLDERS’ EQUITY
On the date of the Merger, the Company adopted Hudson’s Memorandum and Articles of Association (“MAA”). On March 23, 2023, the MAA was amended by the Company, and further amended on June 30, 2023, February 2, 2024, June 12, 2024, January 24, 2025, January 31, 2025 and on June 27, 2025.
The Company is authorized under the MAA as amended, to issue an unlimited number of shares divided as follows:
SCHEDULE OF PREFERRED AND COMMON STOCK AUTHORIZED
Number of
Shares | Par Value Per Share | |||||||
| Ordinary Shares | ||||||||
| Series Seed Preferred Shares | $ | |||||||
| Series A1A Preferred Shares | $ | |||||||
| Series A2 Preferred Shares | $ | |||||||
| Series A4 Preferred Shares | $ | |||||||
| Series B Preferred Shares | $ | |||||||
| Blank Check Preferred Shares | ||||||||
Holders of Ordinary Shares are entitled to one vote for each share of Ordinary Share held at all meetings of stockholders. The holders of Preferred Shares shall not be entitled to vote on any resolution of shareholders, except in relation to a variation of the rights of the Preferred Shares.
The MAA contained certain restrictions on the Company’s ability to pay dividends on its Ordinary Shares without also simultaneously paying dividends on the Preferred Shares. The holders Preferred Shares shall be entitled to receive dividends equal (on an as-if-converted-to-Ordinary Shares basis) to and in the same form as dividends actually paid on Ordinary Shares when, as and if such dividends are paid on Ordinary Shares.
| 20 |
The Preferred Shares are convertible, at the option of the holder thereof, at any time into such number of fully paid and non-assessable Ordinary Shares at the applicable Conversion Price as detailed in the MAA and subject to certain adjustments such as reorganization, recapitalization, reclassification, consolidation, distributions payable in Ordinary Shares, subdivision or combination of Ordinary Shares.
In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the assets of the Company available for distribution to its stockholders or, in the case of a Deemed Liquidation Event (as defined in the MAA) the consideration or proceeds available for distribution, as the case may be, were to be distributed to the holders of Preferred Shares and the holders of Ordinary Shares, pro rata based on the number of shares held by each shareholder, treating for this purpose all such securities as if they had been converted to Ordinary Shares pursuant to the terms of the MAA immediately prior to such liquidation, dissolution or winding up of the Company.
As long as any of the Preferred Shares are outstanding, the Company shall not do certain actions, including changing certain rights of Preferred Shares without the written consent or affirmative approval of the holders of a majority of the then outstanding of each class of Preferred Shares.
Issuances of Shares During the Year Ended December 31, 2024
The
Company issued a total
Offering of Shares
During
the year ended December 31, 2024, the Company entered into an At The Market (“ATM”) Offering Agreement to offer and sell
shares of our Ordinary Stock having an aggregate offering price of up to $
Restructuring of Par Value
On
June 12, 2024, in connection with the offering of the Shares, the Company effected a restructuring of par value of ordinary shares (the
“Restructuring of Par Value”) and filed an Amended and Restated Memorandum and Articles of Association with the Registrar
of Corporate Affairs in the British Virgin Islands, to decrease the par value of the Company’s ordinary shares outstanding from
$
The different classes of preferred stock issued are set forth below:
SCHEDULE OF PREFERRED STOCK ISSUED
| June 30, 2025 | December 31, 2024 | |||||||
| Series Seed Preferred Shares | ||||||||
| Series A1A Preferred Shares | ||||||||
| Series A2 Preferred Shares | ||||||||
| Series A4 Preferred Shares | ||||||||
| Series B Preferred Shares | ||||||||
| Total | ||||||||
February 5, 2024 Reverse Stock Split
The
Company effected a
September 25, 2024 Reverse Stock Split
The
Company effected a
May 27, 2025 Reverse Stock Split
The
Company effected a
| 21 |
Entry into Material Definitive Agreement
On
February 3, 2025, the Company completed a private placement with certain investors, wherein a total of
In connection with the Offering, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with the investors containing customary representations and warranties. Pursuant to the Purchase Agreement the Company will be required to file a resale registration statement (the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”) to register for resale the Ordinary Shares issuable upon conversion of the Preferred Shares, no later than March 30, 2025, and shall use its commercially reasonable efforts to cause such Registration Statement to become effective at the as soon as possible thereafter, but in any event no later than 90 days of the Closing Date (as defined under the Purchase Agreement). The Company will be obliged to pay certain liquidated damages to the investors if the Company fails to file the Registration Statement when required, fails to file or cause the Registration Statement to be declared effective by the SEC when required, or fails to maintain the effectiveness of the Registration Statement pursuant to the Securities Purchase Agreement. The maximum amount of such liquidated damages payable shall not exceed 20% of the aggregate reference price of the Preferred Shares sold hereunder.
Entry into Material Definitive Agreement
On
March 31, 2025, the Company entered into a Securities Purchase Agreement, dated as of March 31 2025 with Fetch Compute, Inc. wherein
the Company sold and the Purchaser purchased
Entry into Material Definitive Agreement
On
April 29, 2025 the Company entered into an agreement for the issuance of convertible notes through a facility of up to USD $
On
May 27, 2025, the buyers exercised their right to convert $
NOTE 17 – COMMITMENTS AND CONTINGENCIES
Legal
The Company is subject, from time to time, to claims by third parties under various legal disputes. Defending such claims, or any adverse outcome relating to any such claims, could have a material adverse effect on the Company’s liquidity, financial condition, and cash flows. As of June 30, 2025, the Company did not have any pending legal actions.
NOTE 18 - SUBSEQUENT EVENTS
Management has evaluated subsequent events through August 18, 2025 the date that the consolidated financial statements were available for issuance.
On
July 11, 2025, the Company entered into a twelfth amendment to its loan documents with Capital Foundry Funding LLC governing its revolving
line of credit. The amendment reaffirmed a $
On July 18, 2025, Freight Opportunities, LLC exercised
On
August 6, 2025, the Company entered into a securities purchase agreement with an accredited wherein the Company issued an aggregate of
(i)
| 22 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following management’s discussion and analysis of financial condition and results of operations provides information that management believes is relevant to an assessment and understanding of our plans and financial condition. The following financial information is derived from our financial statements and should be read in conjunction with such condensed financial statements and notes thereto set forth elsewhere herein.
Use of Terms
Except as otherwise indicated by the context and for the purposes of this Quarterly Report on Form 10-Q:
| ● | “3PL” refers to third party logistics services, a term used to describe services that help merchants manage their supply chain. Common 3PL services include freight services, warehouse and inventory management, order fulfillment, shipping coordination, retail distribution, exchanges, and returns; | |
| ● | “AI” refers to artificial intelligence; | |
| ● | Amended Memorandum and Articles” refer to the amended and restated memorandum and articles of association in force on the date of this Quarterly Report; | |
| ● | “BVI Act” refers to the BVI Business Companies Act (As Revised); | |
| ● | “China” or “PRC” refers to the People’s Republic of China, and solely for the purpose of this Quarterly Report, excluding Taiwan, Hong Kong and Macau; | |
| ● | “Fr8App” refers to Freight App, Inc., our primary operating subsidiary and where applicable, the brand name of our platform focused on FTL; | |
| ● | “FTL” refers to full truckload freight. FTL freight is used for shipments that require taking up the space available on an entire truck. With FTL, a single shipper’s goods are the only freight moving on an individual truck. FTL can be provided on a variety of trucks depending on the underlying goods being transported, i.e., a dry van, refrigerated, flatbeds and others; | |
| ● | “LTL” refers to less than truckload freight. LTL is used for shipments when multiple shippers’ freight is on the same trailer rather than having a single company’s freight exclusively on an individual trailer. Several LTL shipments are combined into one truck to fill it as near to capacity as possible, the trailer is transported over a longer haul distance and is then unpacked and disaggregated at the destination. LTL is especially appropriate for the needs of small businesses that may require frequent, smaller volume shipments and are not able to economically make use of a full trailer; | |
| ● | “Merger” refers to the consummation of that certain merger agreement, dated December 13, 2021, and as amended on December 29, 2021 (the “Merger Agreement”) by and among Hudson Capital, Inc., Hudson Capital Merger Sub I, Inc., a Delaware corporation and wholly-owned subsidiary of Hudson Capital Inc. (“Merger Sub I”), Fr8App and ATW Master Fund II, L.P., as the representative of the stockholders of Fr8App (the “Stockholders’ Representative”) whereby Merger Sub I merged with and into Fr8App, with Fr8App surviving the Merger and continuing as a direct wholly-owned subsidiary of the Company. The Merger closed on February 14, 2022 and the separate corporate existence of Merger Sub I and its Certificate of Incorporation and by-laws then in effect ceased, and the organizational documents of Fr8App after the Merger is in the form as agreed by the Company and Fr8App; | |
| ● | “shares,” “ordinary shares” or “Ordinary Share” refers to the Company’s ordinary shares with no par value per share. Unless otherwise noted, the share and per share information in this report have been adjusted to give effect to the one-for-ten (1-for-10) reverse stock split of the outstanding ordinary shares which became effective on March 24, 2023, one-for-ten (1-for-10) reverse stock split of the outstanding ordinary shares which became effective on February 24, 2024 and the one-for-twenty-five (1-for-25) reverse stock split of the outstanding common stock which became effective on September 25, 2024. |
| 23 |
| ● | “U.S.” means the United States of America; | |
| ● | “U.S. GAAP” refers to generally accepted accounting principles in the United States; | |
| ● | “we,” “us,” “our,” the “Company,” “Freight Technologies, Inc.,” and “our company” refer to the operations of Freight Technologies, Inc., a British Virgin Islands business company. | |
| ● | “$,” “dollars,” “US$” or “U.S. dollars” refers to the legal currency of the United States; and | |
| ● | all discrepancies in any table between the amounts identified as total amounts and the sum of the amounts listed therein are due to rounding. |
Note Regarding Trademarks, Trade Names and Service Marks
We use various trademarks, trade names and service marks in our business. For convenience, we may not include the ℠, ® or ™ symbols, but such omission is not meant to indicate that we would not protect our intellectual property rights to the fullest extent allowed by law. Any other trademarks, trade names or service marks referred to in this Quarterly Report on Form 10-Q are the property of their respective owners.
Special Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to us. All statements other than statements of historical facts are forward-looking statements. These statements relate to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors 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 these forward-looking statements. Forward-looking statements include, but are not limited to, statements about:
| ● | growth strategies; | |
| ● | future business development, results of operations and financial condition; | |
| ● | any statement concerning the attraction and retention of highly qualified personnel; | |
| ● | our ability to attract and retain users and customers and generate revenue and profit from our customers; | |
| ● | any statements concerning Fr8Tech’s financial performance; | |
| ● | any statements regarding expectations concerning Fr8Tech’s relationships and actions with third parties; and | |
| ● | future regulatory, judicial and legislative changes in Fr8Tech’s industry. |
In some cases, you can identify forward-looking statements by terms such as “may,” “could,” “will,” “should,” “would,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “project” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the Securities and Exchange Commission (the “SEC”) on April 14, 2025 (the “2024 Annual Report”), and elsewhere in this Quarterly Report on Form 10-Q. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance.
| 24 |
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events or information as of the date on which the statements are made in this Quarterly Report on Form 10-Q. Except as expressly required by the federal securities laws, there is no undertaking to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.
Overview
Freight Technologies, Inc. (Nasdaq: FRGT) (“Fr8Tech”), through its wholly-owned subsidiary, Fr8App, and Fr8App’s wholly-owned Mexico subsidiary, Freight App de México, S.A De C.V. (“Freight App Mexico”) is a technology company primarily involved in the freight management business. We offer a diverse portfolio of proprietary platform solutions powered by artificial intelligence (“AI”) and machine learning to optimize and automate the supply chain process. Freight logistics operations and our Fr8App marketplace solution, begins with parties connecting their transportation needs (“Shippers”) with those offering freight transportation services (“Carriers”). Within the demand and supply equation, Shippers seeking suitable means of transportation for their goods or products represent demand, and Carriers with freight transportation capabilities represent supply.
Focused on addressing the distinct challenges within the supply chain ecosystem, the Company’s portfolio of solutions includes the Fr8App platform for seamless over-the-road (“OTR”) business-to-business (“B2B”) cross-border shipping across the USMCA region; Fr8Now, a specialized service for LTL shipping; Fr8Fleet, a dedicated capacity service for enterprise clients in Mexico; Waavely, a digital platform for efficient ocean freight booking and management of container shipments between North America and ports worldwide; and, Fleet Rocket a nimble, scalable and cost-effective Transportation Management System (“TMS”) for brokers, Shippers, and other logistics operators. Together, each product is interconnected within a unified platform to connect Carriers and Shippers and significantly improve matching and operation efficiency via innovative technologies such as live pricing and real-time tracking, digital freight marketplace, brokerage support, transportation management, fleet management, and committed capacity solutions. More information on the Company and its service offerings is available on its corporate website, fr8technologies.com.
Our Historical Performance
As of June 30, 2025, the Company had an accumulated deficit of $45,869,587 and cash balance of $586,658. During the six months ended June 30, 2025 and the year ended December 31, 2024, we had a net loss of $952,808 and $5,601,227, respectively. To date, the Company has financed its operations primarily through capital raises and sales of its services. In September 2022, the Company filed the Shelf Registration Statement, which was declared effective by the SEC on September 26, 2022, for potential offerings of up to $15,000,000 in aggregate, subject to the requirement that in no event may we sell shares having a value exceeding more than one-third of our public float in any 12-month period under the Shelf Registration Statement so long as our public float remains below $75,000,000.
In May 2024, the Company entered into the ATM Sales Agreement, and filed a prospectus supplement to the Shelf Registration Statement for the ATM Financing for gross proceeds of up to $2,300,000. In June 2024, the Company filed an additional prospectus supplement to the Shelf Registration Statement to increase the maximum gross proceeds to $4,750,000.
In February 2025, the Company raised $3,000,000 from proceeds from the issuance of Series A4 preferred shares. Based on the Company’s existing cash resources and the cash expected to be received from future planned financings, it is expected that the Company will have sufficient funds to carry out the Company’s planned operations through December 31, 2025 and for at least 12 months beyond that period.
On May 27, 2025, $1.5 million of convertible notes issued under a $20 million facility, which was established on April 29, 2025, exclusively for the purchase of Official Trump tokens, were converted into 387,305 Series A4 preferred shares.
On August 6, 2025, the Company entered into a securities purchase agreement with an accredited wherein the Company issued an aggregate of (i) 12,540,000 series B preferred shares; and (ii) 126,005 series A4 preferred shares for a total purchase price of $500,000. The Offering raised net cash proceeds of approximately $485,000 after deducting the transfer agent and legal fees and expenses.
| 25 |
Key Factors Affecting Our Financial Performance
The demand for our platform and our related services is dependent upon overall economic conditions in North America. General economic factors, including the amount of international trade across North America may affect our Shipper clients’ needs for our services. A slowdown in economic activity, an increase in unemployment, a decline in real personal income, among other economic conditions, may affect individuals’ level of disposable income and the consequent effect on international trade. This may reduce Shippers’ needs to transport goods and their need to use our platform.
Trends
Fr8Tech believes the growing interest in digital freight matching platforms shows that traditional 3PL providers recognize the sweeping technological shifts in the industry. We are offering solutions that significantly improve end-to-end freight procurement transactions to market participants. During the last five years, the industry experienced significant swings in supply, demand and costs due to distortions in both domestic and global markets resulting from the global pandemic caused by the virus known as COVID-19 and its follow-on effects. This substantial supply chain volatility led large and small freight brokers to, among other tactics, pivot toward more abundant and secure sources of freight capacity available in a digital marketplace and facilitated by software portals and platforms. Fr8Tech believes supply chain management will continue to evolve into increasingly digital forms and interactive marketplace platforms. As it does, Fr8Tech believes digital brokers, will play an increasingly integral role in easing capacity constraints, opening up new lanes, and providing a benchmarking tool for Shippers.
While the COVID-19 pandemic is behind us, Fr8Tech believes the pandemic changed the current nature of global commerce and shipping. Putting aside the recently increased import tariffs and threats of other possible restrictive trade policies of the Trump administration, the near-shoring phenomenon continues to point towards more freight crossing over the U.S. border with Mexico and a lesser extent, Canada, as manufacturers and producers seek to move operations closer to customers. Additionally, trucking capacity remains not steadily available in the Mexican domestic and across border markets. Fr8Tech believes that these conditions are creating a market opportunity for digital brokers to facilitate and improve the connections necessary to enable cross-border commerce.
Results of Operations
Select Financial Data
The following table presents the selected consolidated financial information for our Company. All numbers are presented in United States Dollars. The selected consolidated statements of comprehensive income data for the quarters ended June 30, 2025, and 2024, and the consolidated balance sheets data as of June 30, 2025, and December 31, 2024, have been derived from our consolidated financial statements, which are consistent with numbers reported in our prior annual filings.
Our historical results do not necessarily indicate results expected for any future periods. The selected consolidated financial data should be read in conjunction with, and are qualified in their entirety by reference to, our audited consolidated financial statements and related notes and “Item 5. Operating and Financial Review and Prospects” below. Our consolidated financial statements are prepared and presented in accordance with U.S. GAAP.
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenue | $ | 2,989,910 | $ | 3,837,842 | $ | 7,090,550 | $ | 8,125,602 | ||||||||
| Cost and expenses | ||||||||||||||||
| Cost of revenue | 2,534,689 | 3,113,444 | 6,127,989 | 7,170,071 | ||||||||||||
| Compensation and employee benefits | 1,109,141 | 1,363,395 | 2,363,930 | 2,817,736 | ||||||||||||
| General and administrative | 663,272 | 940,390 | 1,260,025 | 1,671,927 | ||||||||||||
| Sales and marketing | 46,844 | 15,525 | 62,889 | 34,319 | ||||||||||||
| Depreciation and amortization | 106,935 | 110,039 | 210,789 | 220,246 | ||||||||||||
| Total cost and expenses | 4,460,881 | 5,542,793 | 10,025,622 | 11,914,299 | ||||||||||||
| Operating loss | (1,470,971 | ) | (1,704,951 | ) | (2,935,071 | ) | (3,788,697 | ) | ||||||||
| Other income and expenses | ||||||||||||||||
| Interest expense, net | (208,245 | ) | (231,828 | ) | (343,109 | ) | (404,532 | ) | ||||||||
| Change in fair value of convertible note | - | 22,602 | - | 22,602 | ||||||||||||
| Change in fair value of cryptocurrency | 2,347,697 | - | 2,347,697 | - | ||||||||||||
| Income (loss) before provision for income taxes | 668,481 | (1,914,177 | ) | (930,484 | ) | (4,170,627 | ) | |||||||||
| Income tax expense | 19,243 | 40,379 | 22,324 | 40,379 | ||||||||||||
| Net loss | $ | 649,238 | $ | (1,954,556 | ) | $ | (952,808 | ) | $ | (4,211,006 | ) | |||||
| 26 |
Revenues
Fr8Tech’s revenues decreased to $7,090,550 for the six months ended June 30, 2025 from $8,125,602 for the six months ended June 30, 2024, a reduction of $1,035,052 or 13% on year-over-year basis. The year-over-year decrease was primarily driven by lower dedicated capacity revenue following the Company’s decision to limit credit exposure with the Company’s largest Fr8Fleet customer, and a stronger US dollar relative to the Mexican peso.
Costs of Revenue
Fr8Tech’s cost of revenue, which represents costs the Company incurs from its partner carriers to complete customer shipments, decreased to $6,127,989 for the six months ended June 30, 2025, from $7,170,071 for the six months ended June 30, 2024, a reduction of $1,042,082 and 15% on a year-over-year basis. Year-over-year cost of revenue decreased primarily due to the decline in revenue, management’s continued focus on higher margin customers and routes, and a stronger US dollar relative to the Mexican peso.
Compensation and Employee Benefits
Fr8Tech’s compensation and employee benefits expenses were $2,363,930 for the six months ended June 30, 2025 compared to $2,817,736 for the six months ended June 30, 2024, which was a $453,806 or 16% decrease on a year-over-year basis. The decrease was primarily due to lower headcount in 2025 following the elimination of approximately 20 positions across most functions in an effort to streamline operations and reduce costs.
General and Administrative
General and administrative expenses were $1,260,025 for the six months ended June 30, 2025 compared to $1,671,927 for the six months ended June 30, 2024, which was a decrease of $411,902 primarily due to lower spend on outside professional services and insurance, and a stronger US dollar relative to the Mexican peso.
Sales and Marketing
Sales and marketing expenses were $62,889 for the six months ended June 30, 2025, compared to $34,319 for the six months ended June 30, 2024, which was an increase of $28,570 or 83%. The increase in sales and marketing expenses was primarily related to promotional activities in support of the launch of Fleet Rocket.
Depreciation and Amortization
Depreciation and amortization expenses represent the amortization of previously capitalized software development costs, as appropriate, and depreciation expenses related to Fr8App’s fixed assets. This expense decreased $9,457 to $210,789 for the six months ended June 30, 2025, from $220,246 for the six months ended June 30, 2024.
| 27 |
Other income and expenses
Interest expense for the six months ended June 30, 2025, decreased to $343,109 from $404,532 for the six months ended June 30, 2024, or by $61,423 primarily due lower borrowing against the Company’s revolving credit facility.
Other income for the six months ended June 30, 2025, included net unrealized gains of $2,347,697 in the fair value of its cryptocurrency holdings.
Liquidity and Going Concern
Fr8Tech has historically met its cash needs through a combination of cash flows from operating activities, term loans, promissory notes, bonds, convertible notes, private placement offerings and sales of equity. Fr8Tech’s cash requirements are generally for operating activities and debt repayments. Fr8Tech funded its early operations with a combination of debt and equity and we continue to work to position the Company to operate on a go-forward basis with a minimal amount of long-term debt and other borrowings. On January 3, 2023, Fr8Tech closed on a $6.6 million convertible note facility with a private investor, which was increased to $9.9 million in April 2023. The convertible note was mostly converted to equity during 2023. The balance of the convertible note of $219 thousand as of June 30, 2024, was extinguished in September 2024. The Company entered into a $750 thousand 1-year term note purchase agreement with Freight Opportunities, LLC on March 11, 2024, and an additional term note for $125 thousand with Freight Opportunities, LLC on June 4, 2024. Both promissory notes were also extinguished in September 2024.
On February 3, 2025, the Company raised $3.0 million through the issuance of Series A4 preferred shares. On May 27, 2025, $1.5 million of convertible notes issued under a $20 million facility, which was established on April 29, 2025, exclusively for the purchase of Official Trump tokens, were converted into 387,305 Series A4 preferred shares. On August 6, 2025, the Company entered into a securities purchase agreement with an accredited wherein the Company issued series B preferred and series A4 preferred shares for a total purchase price of $0.5 million.
Our combined accounts receivable and unbilled receivable balance of $6.5 million at June 30, 2025, increased by $2.4 million or 60% from $4.1 million at December 31, 2024, primarily due to lower collections compared to the prior year.
As of June 30, 2025, Fr8Tech’s accounts payable, short-term borrowings and accrued expenses increased by $1,302,912 to $7,369,702 compared to December 31, 2024, due mostly to increased borrowing on the revolving credit facility. At June 30, 2025, Fr8Tech had net working capital of negative $179,851.
In March 2019, we secured a revolving line of credit that is used to assist with managing our working capital needs. The maximum principal amount that may be drawn under the line of credit was increased since then to $5 million, which remains in place. As of June 30, 2025, and December 31, 2024, the amount drawn under this facility was $4.9 million $3.3 million, respectively. We continue to incur short-term debt with this facility, which is collateralized by our accounts receivable, and we expect to maintain this debt facility to support ongoing operations.
As shown in the accompanying consolidated financial statements as of June 30, 2025, we had an accumulated deficit of approximately $45,869,587, short-term debt of $4,961,684, unrestricted cash of approximately $586,658 and a working capital of approximately negative $179,851. In addition, for the six months ended June 30, 2025, and for the year ended December 31, 2024, we reported operating losses and negative cash flows from operations.
Most of cash resources of the Company fund operating activities. Through June 30, 2025, we have financed our operations primarily with the proceeds from the sale and issuance of our ordinary and preferred shares, convertible promissory notes, promissory notes and debt.
If we are unable to raise additional capital moving forward, our ability to operate in the normal course and continue to invest in our business may be materially and adversely impacted and we may be forced to scale back operations or divest some or all of our assets.
As a result of the above, in connection with our assessment of going concern considerations in accordance with FASB Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that our liquidity condition raises substantial doubt about our ability to continue as a going concern through twelve months from the date these consolidated financial statements are available to be issued. These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should we be unable to continue as a going concern.
| 28 |
Cash flows
Comparison of the Six Months ended June 30, 2025, and June 30, 2024
The following table summarizes our sources and uses of cash for the six Months ended June 30, 2025, and June 30, 2024.
| (US$) | Six Months Ended
June 30, 2025 | Six Months Ended
June 30, 2024 | ||||||
| Net cash used in operating activities | (5,039,217 | ) | (4,857,126 | ) | ||||
| Net cash used in investing activities | (984,831 | ) | (173,879 | ) | ||||
| Net cash provided by financing activities | 6,407,563 | 3,923,593 | ||||||
| Net effect of exchange rates on cash | (889 | ) | 7,883 | |||||
| Net increase (decrease) in cash and cash equivalents | 383,515 | (1,107,412 | ) | |||||
Cash flows used in Operating Activities
For the six months ended June 30, 2025, net cash used in operating activities was $5,039,217 primarily driven by a net loss of $952,808, the net change in value of cryptocurrencies of $2,427,754 and cash used for working capital of $2,417,671. The change in working capital was mainly due to increased accounts and unbilled receivables of $1,761,635 and $279,313, respectively.
For the six months ended June 30, 2024, net cash used in operating activities was $4,857,126 primarily driven by a net loss of $4,211,006 and cash used for working capital of $1,851,119. The change in working capital was mainly due to decreased accrued expenses and accounts payable of $1,138,213 and $292,155, respectively.
Cash flows used in Investing Activities
For the six months ended June 30, 2025, net cash used in investing activities was $984,831. Net purchases of Official Trump coin and FET token cryptocurrencies were $828,713, and $156,118 was spent on software development efforts for additional functionalities and capabilities of the Fr8App platform and related offerings, as well as ongoing development of Fleet Rocket.
For the six months ended June 30, 2024, net cash used in investing activities was $173,879, mostly for software development efforts for additional functionalities and capabilities of the Fr8App platform and related offerings.
Cash flows provided by Financing Activities
For the six months ended June 30, 2025, net cash provided by financing activities was $6,407,563 attributable to proceeds from the issuance of Series A4 shares and proceeds from short-term borrowings.
For the six months ended June 30, 2024, net cash provided by financing activities was $3,923,593 primarily attributable to proceeds from equity sales of $1,453,589, a net drawdown of $1,697,468 from short-term borrowings, and from the issuance of a $873,000 promissory note.
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
Not applicable.
| ITEM 4. | CONTROLS AND PROCEDURES. |
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, have evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) prior to the filing of this Quarterly Report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were, in design and operation, effective at a reasonable assurance level.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| 29 |
PART II
| ITEM 1. | LEGAL PROCEEDINGS |
During the six months ended June 30, 2025, there were no material pending legal proceedings or material developments in pending legal proceedings, other than ordinary routine litigation incidental to the business, to which the Company is a party or of which any of their property is the subject.
| ITEM 1.A. | RISK FACTORS |
There are no material changes from the risk factors previously disclosed in Item 1A “Risk Factors” of the 2024 Annual Report.
| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. |
Unregistered Sales of Equity Securities
During the six months ended June 30, 2025, we did not sell any equity securities that were not registered under the Securities Act and that were not previously disclosed in a Current Report on Form 8-K.
Purchases of Equity Securities
Other than as previously disclosed in Current Reports on Form 8-K, no repurchases of our ordinary shares were made during the six months ended June 30, 2025.
| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES. |
None.
| ITEM 4. | MINE SAFETY DISCLOSURES. |
Not applicable.
| ITEM 5. | OTHER INFORMATION. |
No information was required to be disclosed in a Current Report on Form 8-K during the six months ended June 30, 2025 but was not reported.
None
of our directors or “officers,” as defined in Rule 16a-1(f) under the Exchange Act,
| 30 |
| ITEM 6. | EXHIBITS. |
Exhibit
Number |
Description | |
| 3.1 | Amended and Restated Memorandum and Articles of Association dated as of June 27, 2025 (incorporated by reference to Exhibit 3.1 to the Form 8-K filed on June 30, 2025) | |
| 10.1 | Securities Purchase Agreement dated April 29, 2025 by and between Freight Technologies, Inc. and the Buyers (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on April 30, 2025). | |
| 10.2 | Security Agreement, dated as of May 2, 2025, by and between Freight Technologies, Inc., and Collateral Agent (incorporated by reference to Exhibit 10.2 to the Form 8-K filed on May 9, 2025). | |
| 10.3 | Amendment and Exchange Agreement dated May 27, 2025, by and between Freight Technologies, Inc. and the Holder (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on May 28, 2025). | |
| 10.4 | Waiver and Amendment of Certain Restrictions in Securities Purchase Agreement dated June 26, 2025, by and between Freight Technologies, Inc. and Fetch Compute, Inc (incorporated by reference to Exhibit 10.1 to the Form 8-K filed on July 2, 2025). | |
| 31.1* | Certification by Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 31.2* | Certification by Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32.1** | Certification by Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 32.2** | Certification by Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101.INS* | Inline XBRL Instance Document | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
| * | Filed herewith |
| ** | Furnished herewith |
| 31 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: August 18, 2025 | FREIGHT TECHNOLOGIES, INC. | |
| /s/ Javier Selgas | ||
| Name: | Javier Selgas | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) | ||
| /s/ Donald Quinby | ||
| Name: | Donald Quinby | |
| Title: | Chief Financial Officer | |
| (Principal Financial and Accounting Officer) | ||
| 32 |
FAQ
What were Freight Technologies' operating results for the six months ended June 30, 2025 (FRGT)?
How much unrestricted cash and short-term debt did FRGT report at June 30, 2025?
What financing and convertible-note activity occurred in Q2 2025 for FRGT?
Does Freight Technologies hold cryptocurrencies and how are they valued?
Are there customer concentration risks disclosed by FRGT?
