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Freight Technologies, Inc.

Freight Technologies, Inc.FRGTEarnings & Financial Report

Nasdaq · logistics

A freight forwarder or forwarding agent is a person or a company who co-ordinates and organizes the movement of shipments on behalf of a shipper by liaising with carriers. The carriers may use a variety of shipping modes, including ships, airplanes, trucks, and railroads, and often use multiple modes for a single shipment. A freight forwarder does not move the goods but acts as an agent in the logistics network and will carry out freight consolidation, rate negotiations, shipment tracking, cu...

What changed in Freight Technologies, Inc.'s 20-F — 2022 vs 2023

Top changes in Freight Technologies, Inc.'s 2023 20-F

536 paragraphs added · 514 removed · 405 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

120 edited+16 added−16 removed110 unchanged
In particular, Fr8Tech’s business could be affected by levels of political unrest, especially if it affects border traffic, industrial production, consumer spending and retail activity and Fr8Tech could be materially and adversely affected by adverse developments in these and other aspects of the economies in which Fr8Tech operates.
In particular, Fr8Tech’s business could be affected by levels of political unrest, especially if it affects border traffic, industrial production, consumer spending and retail activity. Fr8Tech could be materially and adversely affected by adverse developments in these and other aspects of the economies in which Fr8Tech operates.
Since many Carriers are small companies slow to adapt to new technologies, Fr8Tech may not be able to establish a consistently effective method for marketing its platform and mobile application to such industry participants. Fr8Tech’s plan to commercialize and grow the usage of its platform and service offerings may not succeed as quickly as anticipated, if at all.
Since many Carriers are small companies slow to adapt to new technologies, Fr8Tech may not be able to establish a consistently effective method for marketing its mobile application platform to such industry participants. Fr8Tech’s plan to commercialize and grow the usage of its platform and service offerings may not succeed as quickly as anticipated, if at all.
Fr8Tech’s capital structure has included and may include a number of securities including preferred shares, warrant, options and convertible debt that are exchangeable or convertible into Ordinary shares. The number of shares that is reported on a number of financial web-sites does not include the potential effect from the possible conversion/exchange of these securities for ordinary shares.
Fr8Tech’s capital structure has included and may include a number of securities, including preferred shares, warrant, options and convertible debt that are exchangeable or convertible into ordinary shares. The number of shares that is reported on a number of financial web-sites does not include the potential effect from the possible conversion or exchange of these securities for ordinary shares.
Truck driver or other supply shortages within the transportation value chain could adversely affect Fr8Tech’s ability to secure carrier services at commercially favorable rates, which could, in turn, have a material adverse effect on Fr8Tech’s business and operating results. Fr8Tech currently does not hold any patents or own any registered trademarks.
Truck driver or other supply shortages within the transportation value chain could adversely affect Fr8Tech’s ability to secure carrier services at commercially favorable rates, which could, in turn, have a material adverse effect on Fr8Tech’s business and operating results 8 Fr8Tech currently does not hold any patents or own any registered trademarks.
Taxation — Material United States Federal Income Tax Considerations — Passive Foreign Investment Company.” Although we do not believe we were or will become a PFIC, it is not entirely clear how the contractual arrangements between us and our variable interest entities will be treated for purposes of the PFIC rules.
Taxation — Material United States Federal Income Tax Considerations — Passive Foreign Investment Company.” 18 Although we do not believe we were or will become a PFIC, it is not entirely clear how the contractual arrangements between us and our variable interest entities will be treated for purposes of the PFIC rules.
Fr8Tech cannot assure you that government agencies will not adopt new policies or regulations that could adversely affect its business, results of operations and financial condition. Increased security requirements impose substantial costs on Fr8Tech and it could be the target of an attack or have a security breach, which could materially adversely affect Fr8Tech.
Fr8Tech cannot assure you that government agencies will not adopt new policies or regulations that could adversely affect its business, results of operations and financial condition. 12 Increased security requirements impose substantial costs on Fr8Tech and it could be the target of an attack or have a security breach, which could materially adversely affect Fr8Tech.
If Fr8Tech is unable to implement its business strategies successfully or properly react to changes in market conditions as a result of trade wars or political changes in these countries, its financial condition, results of operations and cash flows could be materially and adversely affected. 7 Fr8Tech’s industry is rapidly evolving.
If Fr8Tech is unable to implement its business strategies successfully or properly react to changes in market conditions as a result of trade wars or political changes in these countries, its financial condition, results of operations and cash flows could be materially and adversely affected. Fr8Tech’s industry is rapidly evolving.
If Fr8Tech raises additional funds through strategic partnerships and alliances, licensing arrangements or monetization transactions with third parties, it may have to relinquish valuable rights to its technologies, or product candidates, or grant licenses on terms unfavorable to Fr8Tech. Adequate additional financing may not be available to Fr8Techon acceptable terms, or at all.
If Fr8Tech raises additional funds through strategic partnerships and alliances, licensing arrangements or monetization transactions with third parties, it may have to relinquish valuable rights to its technologies, or product candidates, or grant licenses on terms unfavorable to Fr8Tech. Adequate additional financing may not be available to Fr8Tech on acceptable terms, or at all.
For the any aforementioned concerns, we may be subject to the additional and more stringent criteria of NASDAQ for our continued listing. 21 Material weaknesses in our internal control over financial reporting may cause us to fail to timely and accurately report our financial results or result in a material misstatement of our consolidated financial statements.
For the any aforementioned concerns, we may be subject to the additional and more stringent criteria of NASDAQ for our continued listing. Material weaknesses in our internal control over financial reporting may cause us to fail to timely and accurately report our financial results or result in a material misstatement of our consolidated financial statements.
Fr8Tech also has a number of its personnel operating in Mexico and it pays an ongoing payroll and key suppliers in Mexico, most of it in Mexican pesos. Unexpected exchange rate fluctuations between the U.S. dollar and the Mexican peso could adversely affect Fr8Tech’s results from operations.
Fr8Tech also has a number of its personnel operating in Mexico and it pays ongoing payroll and key suppliers in Mexico, most of it in Mexican pesos. Unexpected exchange rate fluctuations between the U.S. dollar and the Mexican peso could adversely affect Fr8Tech’s results from operations.
Such intellectual property rights could be awarded to a third party, and Fr8Tech could be required to obtain a license from such third party to commercialize its technology or products. Such a license may not be available on commercially reasonable terms or at all.
Such intellectual property rights could be awarded to a third party, and Fr8Tech could be required to obtain a license from such third parties to commercialize its technology or products. Such a license may not be available on commercially reasonable terms or at all.
These laws and regulations are constantly evolving and may be interpreted, applied, created or amended in a manner that could harm Fr8Tech’s business. 13 Many of these laws and regulations are still evolving and being tested in courts and could be interpreted in ways that could harm Fr8Tech’s business.
These laws and regulations are constantly evolving and may be interpreted, applied, created or amended in a manner that could harm Fr8Tech’s business. Many of these laws and regulations are still evolving and being tested in courts and could be interpreted in ways that could harm Fr8Tech’s business.
As a result of the foregoing, our public shareholders may have more difficulty in protecting their interests through actions against us, our management, our directors or our major shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States. 18 The laws of the British Virgin Islands provide limited protection for minority shareholders, so minority shareholders may have limited or no recourse if they are dissatisfied with the conduct of our affairs.
As a result of the foregoing, our public shareholders may have more difficulty in protecting their interests through actions against us, our management, our directors or our major shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States. 17 The laws of the British Virgin Islands provide limited protection for minority shareholders, so minority shareholders may have limited or no recourse if they are dissatisfied with the conduct of our affairs.
Although we transitioned to the Nasdaq Capital Market and had regained compliance with the continued listing requirements of the Nasdaq, we recently received another written notification from the Nasdaq on May 13, 2021 informing us that we no longer meet Nasdaq Listing Rule 5550(b)(1), which requires us to maintain a minimum $2,500,000 in stockholders’ equity for continued listing.
Although we transitioned to the Nasdaq Capital Market and have regained compliance with the continued listing requirements of the Nasdaq, we recently received another written notification from the Nasdaq on May 13, 2021 informing us that we no longer meet Nasdaq Listing Rule 5550(b)(1), which requires us to maintain a minimum $2,500,000 in stockholders’ equity for continued listing.
The selected consolidated statements of comprehensive income data for the three years ended December 31, 2022 and 2021 and the consolidated balance sheets data as of December 31, 2022 and 2021 have been derived from our audited consolidated financial statements, which are included in this annual report beginning on page F-1 and are consistent with numbers reported in our prior 20F Filings.
The selected consolidated statements of comprehensive income data for the years ended December 31, 2023, 2022 and 2021, and the consolidated balance sheets data as of December 31, 2023, 2022 and 2021, have been derived from our audited consolidated financial statements, which are included in this annual report beginning on page F-1 and are consistent with numbers reported in our prior 20F Filings.
As a result, the application, interpretation and enforcement of these laws and regulations are often uncertain, particularly in the new and evolving industry in which Fr8Tech operates and may be interpreted and applied inconsistently from country to country and inconsistently with its current policies and practices. Fr8Tech’s customers upload and store customer data in its cloud-based platform.
As a result, the application, interpretation and enforcement of these laws and regulations are often uncertain, particularly in the new and evolving industry in which Fr8Tech operates and may be interpreted and applied inconsistently from country to country and inconsistently with its current policies and practices. Fr8Tech’s customers upload and store their data in Fr8Tech’s cloud-based platform.
Regardless of its compliance with security requirements or the steps Fr8Tech takes to secure the data on its platform, it could also be the target of an attack or security breaches could occur, which could materially adversely affect Fr8Tech’s business. Fr8Tech’s growth plan may not succeed as quickly as anticipated, if at all.
Regardless of its compliance with security requirements or the steps Fr8Tech takes to secure the data on its platform, it could also be the target of an attack or security breaches could occur, which could materially adversely affect Fr8Tech’s business. Fr8Tech’s growth plans may not succeed as quickly as anticipated, if at all.
Accordingly, Fr8Tech’s future results could be harmed by a variety of factors, including: ● economic weakness, including inflation, or political instability, particularly on the U.S./Mexico and U.S./Canada international borders; ● differing and changing regulatory requirements for product or service approvals; ● differing jurisdictions could present different issues for securing, maintaining or obtaining freedom to operate in such jurisdictions; ● potentially reduced protection for intellectual property rights; ● difficulties in compliance with different, complex and changing laws, regulations and court systems of multiple jurisdictions and compliance with a wide variety of foreign laws, tax requirements, treaties and regulations; ● changes in U.S. and non-U.S. regulations and customs, tariffs and trade barriers; 11 ● changes in non-U.S. currency exchange rates of the Mexican Peso or the Canadian dollar and the potential imposition of currency controls; ● trade protection measures, import or export licensing requirements or other restrictive actions by governments; ● differing reimbursement regimes and price controls in certain non-U.S. markets; ● difficulties with compliance with transfer pricing regulations; ● changing restrictions or conditions for the repatriation of profits; ● negative consequences from changes in tax laws; ● compliance with tax, employment, immigration and labor laws for employees living or traveling abroad, including, for example, the variable tax treatment in different jurisdictions of options granted under its share option schemes or equity incentive plans; ● workforce uncertainty or labor unrest; ● litigation or administrative actions resulting from claims against us by current or former employees or consultants individually or as part of class actions, including claims of wrongful terminations, discrimination, misclassification or other violations of labor law or other alleged conduct; ● difficulties associated with staffing and managing international operations, including differing labor relations; and ● business interruptions resulting from geo-political actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floods and fires.
Accordingly, Fr8Tech’s future results could be harmed by a variety of factors, including, but not limited to: ● economic weakness, including inflation, or political instability, particularly on the U.S./Mexico and U.S./Canada international borders; ● differing and changing regulatory requirements for product or service approvals; ● differing jurisdictions could present different issues for securing, maintaining or obtaining freedom to operate in such jurisdictions; ● potentially reduced protection for intellectual property rights; ● difficulties in compliance with different, complex and changing laws, regulations and court systems of multiple jurisdictions and compliance with a wide variety of foreign laws, tax requirements, treaties and regulations; ● changes in U.S. and non-U.S. regulations and customs, tariffs and trade barriers; ● changes in non-U.S. currency exchange rates of the Mexican Peso or the Canadian dollar and the potential imposition of currency controls; ● trade protection measures, import or export licensing requirements or other restrictive actions by governments; ● differing reimbursement regimes and price controls in certain non-U.S. markets; ● difficulties with compliance with transfer pricing regulations; ● changing restrictions or conditions for the repatriation of profits; ● negative consequences from changes in tax laws; ● compliance with tax, employment, immigration and labor laws for employees living or traveling abroad, including, for example, the variable tax treatment in different jurisdictions of options granted under its share option schemes or equity incentive plans; ● workforce uncertainty or labor unrest; ● litigation or administrative actions resulting from claims against us by current or former employees or consultants, individually or as part of class actions, including claims of wrongful terminations, discrimination, misclassification or other violations of labor law or other alleged conduct; ● difficulties associated with staffing and managing international operations, including differing labor relations; and ● business interruptions resulting from geo-political actions, including war, terrorism, or trade restrictions or natural disasters including earthquakes, hurricanes, tornadoes, floods, fires, etc.
Truck driver or other supply shortages within the transportation value chain could have material adverse effect on Fr8Tech’s business and operating results. Fr8Tech’s freight brokerage support and customer services relies on Fr8Tech being able to assist with securing carrier services for Shippers at commercially feasible rates.
Truck driver or other supply shortages within the transportation value chain could have material adverse effect on Fr8Tech’s business and operating results. Fr8Tech’s freight brokerage support and customer services rely on Fr8Tech being able to assist with securing carrier services for Shippers at commercially feasible rates.
In addition to market and industry factors, the price and trading volume for our ordinary shares may be highly volatile for specific business reasons, including: ● variations in our results of operations; ● the high number of preferred shares and warrants convertible into ordinary shares outstanding in comparison to total ordinary shares; ● announcements about our earnings that are not in line with analyst expectations; 15 ● publication of operating or industry metrics by third parties, including government statistical agencies, that differ from expectations of industry or financial analysts; ● changes in financial estimates by securities research analysts; ● announcements made by us or our competitors of new product and service offerings, acquisitions, strategic relationships, joint ventures or capital commitments; ● press reports, whether or not true, about our business; ● regulatory allegations or actions or negative reports or publicity against us, regardless of their veracity or materiality to our company; ● changes in pricing made by us or our competitors; ● conditions in the financial advisory market; ● additions to or departures of our management; ● fluctuations of exchange rates of the Mexican Peso and the U.S. dollar and to a lesser extent, the Canadian dollar; ● release or expiry of transfer restrictions on our outstanding ordinary shares; ● sales or perceived potential sales or other disposition of existing or additional ordinary shares or other equity or equity-linked securities, including by our principal shareholders, directors officers and other affiliates; ● actual or perceived general economic and business conditions and trends globally and in the freight industry in particular; and ● the potential or actual effect of program trading on our stock price; and ● changes or developments in the global regulatory environment.
In addition to market and industry factors, the price and trading volume for our ordinary shares may be highly volatile for specific business reasons, including but not limited to: ● variations in our results of operations; ● the high number of preferred shares and warrants convertible into ordinary shares outstanding in comparison to total ordinary shares; ● announcements about our earnings that are not in line with analyst expectations; 14 ● publication of operating or industry metrics by third parties, including government statistical agencies, that differ from expectations of industry or financial analysts; ● changes in financial estimates by securities research analysts; ● announcements made by us or our competitors of new products and service offerings, acquisitions, strategic relationships, joint ventures or capital commitments; ● press reports, whether true or not true, about our business; ● regulatory allegations or actions or negative reports or publicity against us, regardless of their veracity or materiality to our company; ● changes in pricing made by us or our competitors; ● conditions in global financial markets; ● additions to or departures of our management; ● fluctuations of exchange rates of the Mexican Peso and the U.S. dollar and to a lesser extent, the Canadian dollar; ● release or expiry of transfer restrictions on our outstanding ordinary shares; ● sales or perceived potential sales or other disposition of existing or additional ordinary shares or other equity or equity-linked securities, including by our principal shareholders, directors, officers and other affiliates; ● actual or perceived general economic and business conditions and trends globally and in the freight industry in particular; ● the potential or actual effect of program trading on our stock price; and ● changes or developments in the global regulatory environment.
Exchange rate fluctuations may materially affect Fr8Tech’s results of operations and financial condition. Though a majority of Fr8Tech’s revenues are denominated in U.S. dollars, Fr8Tech does effect contracts in Mexico in which Fr8Tech invoices for its services in Mexican pesos.
Exchange rate fluctuations may materially affect Fr8Tech’s results of operations and financial condition. Though a majority of Fr8Tech’s revenues are denominated in U.S. dollars, Fr8Tech does effect contracts in Mexico in which Fr8Tech bills for its services in Mexican pesos.
Motor carrier deregulation in the U.S. began in 1970-71 with initiatives in the Nixon Administration and continued into the 1980s through the Carter administration. They were part of a sweeping reduction in price controls, entry controls, and collective vendor price setting in U.S. transportation.
Motor carrier deregulation in the U.S. began in 1970 - 1971 with initiatives in the Nixon Administration and continued into the 1980s through the Carter administration. They were part of a sweeping reduction in price controls, entry controls, and collective vendor price setting in U.S. transportation.
This means that even if shareholders were to sue us successfully, they may not be able to recover anything to make up for the losses suffered. The requirements of being a public company may strain our resources and distract our management. We are required to comply with various regulatory and reporting requirements, including those required by the SEC.
This means that even if shareholders were to sue us successfully, they may not be able to recover anything to make up for the losses suffered. The requirements of being a public company may strain our resources and distract our management. We are required to comply with various regulatory and reporting requirements, including those required by the U.S.
Fr8Tech’s business can be greatly impacted by the laws, regulations and policies that affect trade among these three countries, including tariff and trade policies, export requirements and other restrictions and general political stability or unrest.
Fr8Tech’s business can be greatly impacted by the laws, regulations and policies that affect trade among these three countries, including tariff and trade policies, export requirements and other restrictions and general political instability or unrest.
Capitalization and indebtedness Not applicable. C. Reasons for the offer and use of proceeds Not applicable. D. Risk Factors COVID-19 Pandemic A global pandemic or spread of disease, real or perceived, as well as natural disasters in any country in which Fr8Tech operates could materially and adversely affect the demand for its services, its operations and financial conditions.
Reasons for the offer and use of proceeds Not applicable. D. Risk Factors COVID-19 Pandemic A global pandemic or spread of disease, real or perceived, as well as natural disasters in any country in which Fr8Tech operates could materially and adversely affect the demand for its services, its operations and financial conditions.
Should we not be able to maintain compliance, our ordinary shares might be delisted and you will likely experience a devaluation in the market price of your shares as well as face challenges in trading them forthwith. NASDAQ may apply additional and more stringent criteria for our continued listing.
If we are not able to maintain compliance, our ordinary shares might be delisted and you will likely experience a devaluation in the market price of your shares as well as face challenges in trading them forthwith. NASDAQ may apply additional and more stringent criteria for our continued listing.
It expects to continue to face significant competition, which could adversely affect Fr8Tech. The 3PL and logistics industries are rapidly evolving, including demand for greater efficiency, increasing usage of artificial intelligence (“AI”) and increased visibility into the shipment lifecycle. Fr8Tech expects continued significant competition on a national and international level.
It expects to continue to face significant competition, which could adversely affect Fr8Tech. The 3PL and logistics industries are rapidly evolving, including demand for greater efficiency, increasing usage of artificial intelligence (“AI”) and increased visibility into logistics processes. Fr8Tech expects continued significant competition on a national and international level.
The coronavirus (COVID-19) pandemic, or any other similar pandemic may have an unexpected effect on Fr8Tech’s business, financial condition, and results of operations. In March 2020, the World Health Organization declared COVID-19 a global pandemic, and governmental authorities around the world implemented measures to reduce the spread of COVID-19.
The coronavirus (COVID-19) pandemic, or any other similar pandemics, may have an unexpected effects on Fr8Tech’s business, financial condition, and results of operations. In March 2020, the World Health Organization declared COVID-19 a global pandemic, and governmental authorities around the world implemented measures to reduce the spread of COVID-19.
As we have yet to complete this work, management is unable to conclude on the effectiveness or lack of effectiveness of its internal controls as of December 31, 2022. Discovery of a material weakness and its possible effects on our results could have material and adverse effect on our stock price.
As we have yet to complete this work, management is unable to conclude on the effectiveness or lack of effectiveness of its internal controls as of December 31, 2023. Discovery of a material weakness and its possible effects on our results could have material and adverse effect on our stock price. 20
Complying with these reporting and other regulatory requirements will be time-consuming and will result in increased costs to us, either or both of which could have a negative effect on our business, financial condition and results of operations.
Securities and Exchange Commission. Complying with these reporting and other regulatory requirements will be time-consuming and will result in increased costs to us, either or both of which could have a negative effect on our business, financial condition and results of operations.
Substantial future sales or registrations or perceived potential sales or registrations of our ordinary shares or other equity or equity-linked securities in the public market could cause the price of our ordinary shares to decline significantly.
Future sales or registrations or perceived potential sales or registrations of our ordinary shares, ordinary shares or other equity or equity-linked securities in the public market could cause the price of our ordinary shares to decline.
Higher fuel charges may affect Carriers results and performance when they are unable to pass on their higher costs to Shipper clients. Changes in fuel prices, disruption in energy supplies as a result of war, actions by producers or other factors beyond Fr8Tech’s control, could in turn have a material adverse effect on Fr8Tech’s business.
Higher fuel charges may affect Carriers results and performance when they are unable to pass on their higher costs to Shippers. Changes in fuel prices, disruption in energy supplies as a result of war, actions by oil producers or other factors beyond Fr8Tech’s control, could in turn have a material adverse effect on Fr8Tech’s business.
Our independent registered public accounting firm, UHY LLP, has included an explanatory paragraph in their audit report that accompanies our audited consolidated financial statements as of and for the year ended December 31, 2022, stating that there are conditions that raise substantial doubt about our ability to continue as a going concern.
Our independent registered public accounting firm, UHY LLP, has included an explanatory paragraph in its audit report that accompanies our audited consolidated financial statements as of and for the year ended December 31, 2023, stating that there are conditions that raise substantial doubt about our ability to continue as a going concern.
Further, if we are a PFIC for any year during which a U.S. investor holds our ordinary shares, we generally will continue to be treated as a PFIC with respect to that investor for all succeeding years during which he is a shareholder.
Further, if we are a PFIC for any year during which a U.S. investor holds our ordinary shares, we generally will continue to be treated as a PFIC with respect to that investor for all succeeding years during which they are a shareholder.
If research analysts do not establish and maintain adequate research coverage or if one or more of the analysts who covers us downgrades our ordinary shares or publishes inaccurate or unfavorable research about our business, the market price for our ordinary shares would likely decline.
If research analysts do not establish and maintain adequate research coverage or if one or more of the analysts who covers us downgrades our ordinary shares or publishes inaccurate or unfavorable research about our business, the market price for our ordinary shares could decline.
Trade wars or adverse political changes in any country in which Fr8Tech operates could materially and adversely affect the demand for its services, its operations and financial conditions. Fr8Tech has business operations in the U.S., Mexico and Canada.
Trade tensions or adverse regulatory or political changes in any country in which Fr8Tech operates could materially and adversely affect the demand for its services, its operations and financial conditions. Fr8Tech has business operations in the U.S., Mexico and Canada.
Any predictions you make about its future success or viability may not be as accurate as they would be if Fr8Tech had a longer operating history or a history of successfully developing and marketing its product offerings. Fr8Tech’s relatively limited operating history may make it difficult for you to evaluate the success of its business and assess its future viability.
Any predictions made about its future success or viability may not be as accurate if Fr8Tech had a longer operating history or a longer history of successfully developing and marketing its product offerings. Fr8Tech’s relatively limited operating history may make it difficult for to evaluate the success of its business and assess its future viability.
Taxation — Material United States Federal Income Tax Considerations — Passive Foreign Investment Company.” We have recently received several written notifications from The Nasdaq Stock Market LLC informing us that we no longer meet certain continued listing requirements of the Nasdaq Global Market/Nasdaq Capital Market.
Taxation — Material United States Federal Income Tax Considerations — Passive Foreign Investment Company.” In the past, we have received written notifications from The Nasdaq Stock Market LLC informing us that we no longer meet certain continued listing requirements of the Nasdaq Global Market/Nasdaq Capital Market.
Moreover, if we are not able to comply with the requirements of Section 404 in a timely manner or if it identifies or its independent registered public accounting firm identifies deficiencies in Fr8Tech’s internal control over financial reporting that are deemed to be material weaknesses, the market price of the Company’s ordinary shares could decline and the Company could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities, which would require additional financial and management resources.
Moreover, if we are not able to comply with the requirements of Section 404 in a timely manner, or if we identify or our independent registered public accounting firm identifies deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses, the market price of the Company’s ordinary shares could decline and/or the Company could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities, which would require additional financial and management resources.
Fr8Tech has a history of significant operating losses and expect to incur losses for the foreseeable future, and Fr8Tech may never achieve or maintain profitability. Fr8Tech has a history of significant operating losses, and Fr8Tech has not been profitable since inception in 2015. Fr8Tech plans to continue to invest in improving Fr8Tech’s platform and services.
Fr8Tech has a history of significant operating losses and expects to incur losses in the future, and Fr8Tech may never achieve or maintain profitability. Fr8Tech has a history of significant operating losses, and Fr8Tech has not been profitable since inception in 2015. Fr8Tech plans to continue to invest in improving Fr8Tech’s platform and services.
Fr8Tech expects to increase its business development efforts and grow its sales and carrier personnel, specifically targeting at its key accounts and leveraging known customer preferences, to increase adoption of Fr8Tech’s solution platform for both its Shippers and carriers with live 24/7 tracking on shipments. Fr8Tech is establishing creative marketing campaigns in Mexico’s domestic, cross-border market and now LTL market.
Fr8Tech expects to increase its business development efforts and grow its sales and carrier personnel, specifically targeting its key accounts and leveraging known customer preferences to increase adoption of Fr8Tech’s platform for both its Shippers and Carriers with live 24/7 tracking of shipments. Fr8Tech is establishing creative marketing campaigns in Mexico’s FTL domestic, cross-border and now LTL markets.
Litigation may be necessary to defend against such claims. If Fr8Tech fails in defending any such claims, in addition to paying monetary damages, it may lose valuable intellectual property rights or personnel or sustain damages.
Litigation may be necessary to defend against such claims. If Fr8Tech fails to fully defend itself against any such potential claims, in addition to paying monetary damages, it may lose valuable intellectual property rights or personnel or sustain damages.
The Company may focus its resources on developing market segments that do not produce income in the short-term, that produce negative margins or that lose value.
The Company may focus its resources on developing market segments that ultimately do not produce meaningful income in the short-term, that result in negative margins or that ultimately lose value for the Company.
Fr8Tech’s early stage operations could expose it to a high concentration of revenues in individual clients and increase the volatility of its revenues. Fr8Tech works with a number of large corporate entities, primarily Shippers, in helping address their companies’ logistics needs. Many of these clients use Fr8Tech for a very small amount of their overall logistics needs.
Fr8Tech’s early-stage operations could expose it to a high concentration of revenues in individual clients and increase the volatility of its revenues. Fr8Tech works with a number of large corporate entities, primarily Shippers, in helping to fulfill their logistics needs. Many of these clients use Fr8Tech for a small portion of their overall logistics requirements.
Large increases and decreases in Fr8Tech’s customer base or in the demands from some of the larger customers may add significant volatility to results while the Company remains in its early growth stages. 6 A significant data breach or IT system disruption could materially adversely affect Fr8Tech, including requiring Fr8Tech to increase spending on data and system security.
Changes in Fr8Tech’s customer base or in the demands from some of the larger customers may add volatility to results while the Company remains in its early growth stages. A significant data breach or information technology system disruption could materially adversely affect Fr8Tech, including requiring Fr8Tech to increase spending on data and system security.
In particular, Fr8Tech is required to perform system and process evaluation and testing of its internal control over financial reporting to allow management to report on the effectiveness of its internal control over financial reporting. We are in the process implementing a number of measures to address the material weakness that has been identified.
In particular, Fr8Tech is required to perform system and process evaluation and testing of its internal control over financial reporting to allow management to report on the effectiveness of its internal control over financial reporting. In 2023, management began the process of implementing a number of measures to address the material weakness that were identified.
Fr8Tech’s Chief Executive Officer accepted his position and our Chief Financial Officer joined Fr8Tech in September 2020 while our Chief Operating Officer joined the company in August 2021. These three executives had not worked together prior to joining Fr8Tech.
Fr8Tech’s Chief Executive Officer joined the Company in September 2020 and our Chief Financial Officer joined the Company in January 2024. Our Chief Operating Officer joined the Company in August 2021. These three executives had not worked together prior to joining Fr8Tech.
For the year ended December 31, 2022, we recognized a net loss of $8.2 million and negative cash flows from operations of $8.5 million.
For the year ended December 31, 2023, we recognized a net loss of $9.3 million and negative cash flows from operations of $5.8 million.
Some truck fleet owners are small companies, and like independent truck drivers, may not be familiar with the industry trends or have exposure to new technologies or new methods of doing business or may not be willing to work with new technology.
Some truck fleet owners and owner-operators are small companies and may not be familiar with the industry trends or have exposure to new technologies or new methods of doing business or may not be willing to work with or pay for new technology.
If Fr8Tech fails to execute its business plan and strategies, it may incur losses for the foreseeable future, and be unable to fund its operations at some time in the future. 10 Fr8Tech’s existing credit losses have been historically low, approximately 0.35% of sales over the past four years.
If Fr8Tech fails to execute its business plan and strategies, it may incur losses for the foreseeable future, and be unable to fund its operations at some time in the future. Historically, Fr8Tech’s existing credit losses have been minimal, less than 0.8 % of sales on average over the past four years.
DOT and EPA regulations are subject to varying interpretations which may evolve over time. If compliance with the current regulations is not actively enforced by these agencies, or enforcement continues to vary from region to region, that may affect some of Fr8Tech’s carriers’ businesses and in turn, its business could be materially and adversely affected.
If compliance with the current regulations is not actively enforced by these agencies, or enforcement continues to vary from region to region, that may affect some of Fr8Tech’s carriers’ businesses and in turn, its business could be materially and adversely affected.
We effected a 10:1 reverse stock split on March 24, 2023 and were informed on April 11, 2023 that we had regained compliance with Listing Rule 5550(a)(2), and the matter was closed We intend to take all reasonable actions to ensure compliance with the Nasdaq.
We effected a 10:1 reverse stock split on February 5, 2024 and were informed on February 20, 2024 that we had regained compliance with Listing Rule 5550(a)(2), and the matter was closed. We intend to take all reasonable actions to ensure compliance with the Nasdaq.
As a foreign private issuer, we are exempt from certain disclosure requirements under the Exchange Act, which may afford less protection to our shareholders than they would enjoy if we were a domestic U.S. company.
As a result, our shareholders may not be provided with the benefits of certain corporate governance requirements of the NASDAQ. As a foreign private issuer, we are exempt from certain disclosure requirements under the Exchange Act, which may afford less protection to our shareholders than they would enjoy if we were a domestic U.S. company.
We have begun the costly and challenging process of compiling the system and processing documentation necessary to perform the evaluation of its internal control over financial reporting needed to comply with Section 404, and we may not be able to complete our evaluation, testing and any required remediation in a timely fashion.
In 2023, we began the process of compiling the system and processing documentation necessary to perform the evaluation of our internal controls over financial reporting necessary to comply with Section 404, however, we may not be able to complete our evaluation, testing and any required remediation in a timely fashion.
Fr8Tech may have to incur additional recruiting and training expenses to adequately staff its company. Fr8Tech may not be able to attract and retain personnel on acceptable terms. The trucking industry is highly fragmented and regulated. The trucking industry, one of Fr8Tech’s target customers, is a disparate group comprised of truck fleet owners and independent truck drivers.
Fr8Tech may have to incur additional recruiting and training expenses to adequately staff its company. Fr8Tech may not be able to attract and retain personnel on favorable terms. The trucking industry is highly fragmented and regulated. The trucking industry in which Fr8Tech operates is a fragmented and disparate, comprised of truck fleet owners, independent truck drivers and owner-operators.
Fr8Tech has also launched a fixed fleet product under Fr8fleet. The success of the Fr8fleet product offering and brand are uncertain if even achievable. Fr8Tech is also launching an LTL product in Mexico, with little experience within this segment. The ultimate success of the Fr8Now product offering and brand are uncertain if even achievable.
Fr8Tech has also launched a fixed fleet product under Fr8Fleet. The success of the Fr8Fleet product offering and brand are uncertain if even achievable. Fr8Tech also launched an LTL (less-than-truckload) product in Mexico under the brand name Fr8Now, with minimal prior experience in this segment. The ultimate success of the Fr8Now product offering and brand are uncertain if even achievable.
Competition may also come from other sources in the future as new technologies are developed and new methods of transportation are made widely available. Innovations in transportation technology, including driverless trucks, AI and logistics could adversely affect the demand for Fr8Tech’s 3PL and services. If Fr8Tech is unable to adapt to these changes, its business could be adversely affected.
Competition may also come from other sources in the future as new technologies are developed and new methods of transportation are made widely available. Innovations in transportation technology, including driverless trucks, AI and logistics could adversely affect the demand for Fr8Tech’s 3PL and services.
Year Ended Year Ended All $ Numbers (US$’000’s) December 31 2022 December 31 2021 Revenue $ 25,888 $ 21,474 Cost and expenses Cost of revenue (exclusive of depreciation and amortization shown separately below) 23,625 19,559 Compensation and employee benefits 4,963 3,712 General and administrative 3,561 2,618 Sales and marketing 557 92 Depreciation and amortization 243 302 Total Cost and expenses 32,949 26,283 Operating Loss (7,061 ) (4,809 ) Other income and (expenses) Interest income 25 34 Interest expense (932 ) (1,170 ) Other income) - 116 Loss on initial issuance of private warrants - (2,829 ) Change in fair value of warrant liabilities (128 ) 498 Total other expense (1,035 ) (3,351 ) Loss before income taxes (8,096 ) (8,160 ) Income tax expense 91 40 Net loss (8,187 ) (8,200 ) Foreign currency translation 89 (51 ) Comprehensive loss (8,098 ) (8,251 ) Weighted average number of shares, basic and diluted* 3,905,629 778,442 Loss per share, basic and diluted $ (2.10 ) $ (10.53 ) * - The number of shares outstanding was adjusted retroactively for all period presented to reflect the 2.2 to 1 reverse stock split change which was effective on February 15, 2022 and a 10.0 to 1 reverse stock split change which was effective March 24, 2023.
Year Ended Year Ended Year Ended All $ Numbers (US$’000’s) December 31 2023 December 31 2022 December 31 2021 Revenue $ 17,061 $ 25,888 $ 21,474 Cost and expenses Cost of revenue (exclusive of depreciation and amortization shown separately below) 15,710 23,625 19,559 Compensation and employee benefits 5,964 4,963 3,712 General and administrative 3,163 3,561 2,618 Sales and marketing 80 557 92 Depreciation and amortization 405 243 302 Total Cost and expenses 25,322 32,949 26,283 Operating Loss (8,261 ) (7,061 ) (4,809 ) Other income and (expenses) Interest income 9 25 34 Interest expense (817 ) (932 ) (1,170 ) Other income) - - 116 Other expense (499 ) - - Loss on initial issuance of private warrants - - (2,829 ) Change in fair value of warrant liabilities - (128 ) 498 Change in fair value of convertible notes 345 - - Total other expense (962 ) (1,035 ) (3,351 ) Loss before income taxes (9,223 ) (8,096 ) (8,160 ) Income tax expense 105 91 40 Net loss (9,328 ) (8,187 ) (8,200 ) Foreign currency translation 453 89 (51 ) Comprehensive loss (8,875 ) (8,098 ) (8,251 ) Weighted average number of shares, basic and diluted* 1,196,668 390,563 77,844 Loss per share, basic and diluted $ (7.79 ) $ (20.96 ) (105.35 ) 4 * - The number of shares outstanding was adjusted retroactively for all periods presented to reflect the 2.2-to-1 reverse stock split change which was effected on February 15, 2022, a 10-to-1 reverse stock split change which was effected on March 24, 2023, and a 10-to-1 reverse split which was effected on February 5, 2024.
In December 2021, Fr8Tech first offered its fixed fleet product under the Fr8fleet brand name, and it introduced a LTL product, under the Fr8Now brand name, during the first quarter of 2023. Accordingly, you should consider Fr8Tech’s prospects in light of the costs, uncertainties, delays and difficulties frequently encountered by companies in the early stages of development.
In December 2021, Fr8Tech launched its fixed fleet product under the Fr8Fleet brand name, and introduced a LTL product, under the Fr8Now brand name in 2023. Accordingly, consideration should be taken toward Fr8Tech’s prospects in light of the costs, uncertainties, delays and difficulties frequently encountered by companies in the early stages of development.
Fr8Tech’s commercial freight marketplace and mobile application platform matching the needs of carriers offering transportation services and Shippers requiring commercial freight services is relatively new to the market. Success of its digital commercial freight matching brokerage service will depend on the adoption rate of this relatively new technology by Fr8Tech’s customers.
Fr8Tech’s commercial freight marketplace and mobile application platform, which match the needs of Carriers offering transportation services and Shippers requiring commercial freight services, are relatively new. The success of Fr8Tech’s digital commercial freight matching brokerage services will depend on the adoption rate of the relatively new mobile application platform by Fr8Tech’s customers.
Since inception, we have met our cash needs through proceeds from issuing convertible notes, debt, and issuance of preferred and ordinary shares and we expect that we will need to meet our future cash needs by raising debt and issuing ordinary and preferred shares and/or warrants.
Since inception, we have met our cash needs through proceeds from issuing convertible notes, debt, and issuance of preferred and ordinary shares, and we expect that we will need to meet future cash needs by raising debt and issuing ordinary and preferred shares and/or warrants. The Company has a revolving line of credit facility of up to $5 million.
The Company’s independent registered public accounting firm will not be required to attest to the effectiveness of the Company’s internal control over financial reporting for so long as the Company remains a “smaller reporting company” as defined in applicable SEC regulations.
The Company’s independent registered public accounting firm will not be required to attest to the effectiveness of the Company’s internal control over financial reporting for so long as the Company remains a “smaller reporting company” as defined in applicable SEC regulations. Management will be required to disclose changes made in its internal controls and procedures on an annual basis.
As of December 31, 2022, we had an accumulated deficit of $30.0 million, shareholder’s equity of $3.1 million and a working capital of $2.2 million. As of December 31, 2022, we had $3.4 million of debt and $1.0 million of unrestricted cash on hand.
As of December 31, 2023, we had an accumulated deficit of $39.3 million, shareholder’s equity of $2.6 million and a working capital of $2.0 million. As of December 31, 2023, we had $2.8 million of short-term debt and $1.6 million of unrestricted cash on hand.
If Fr8Tech is unable to raise additional funds when needed, it may be required to delay, limit, reduce or terminate its product development or future commercialization efforts or grant rights to develop and market product candidates that it would otherwise prefer to develop and market itself and/or it may not be able to continue operating as it has on a historical basis.
If Fr8Tech is unable to raise additional funds when needed, it may be required to delay, limit, reduce or terminate its product development or future commercialization efforts, or the Company may need to grant rights to develop and market product candidates that it would otherwise prefer to develop and market itself.
We have identified material weaknesses in our internal control systems and may need to hire additional personnel and develop and maintain proper and effective internal control over financial reporting, or the accuracy and timeliness of its financial reporting will be adversely affected.
Failure to manage its growth could disrupt its operations and materially and adversely affect its results of operations and financial condition. 13 We have identified material weaknesses in our internal control systems and may need to hire additional personnel and develop and maintain proper and effective internal control over financial reporting, or the accuracy and timeliness of its financial reporting could be adversely affected.
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 or discontinue some operations or divest some or all of our assets.
The Company withdrew $2.8 million from this credit line as of December 31, 2023. 9 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 or discontinue some operations or divest some or all of our assets.
Fr8Tech’s wholly owned subsidiary Fr8App was founded in 2015 with a view to developing and bringing solutions to the cross-border commercial freight market on the U.S.-Mexico border, and by extension, the U.S.-Canada border. The first commercial version of Fr8App’s products was launched in 2017.
Fr8Tech’s wholly owned subsidiary Fr8App was founded in 2015 with a purpose to develop and offer solutions to the US-Mexico cross-border commercial freight market, and by extension, the US-Canada border. The first commercial version of Fr8App’s platform was launched in 2017.
Consequently, the Company’s share value and appreciation might be hindered from what it might be otherwise and would have a negative impact on us, our equity raising efforts, and our shareholders. 16 We are vulnerable to predatory short selling practices.
Therefore, the Company’s share value and appreciation might be hindered from what it might be otherwise and may have a negative impact on us, our ability to raise capital, and our shareholders. 15 We are vulnerable to predatory short selling practices.
We are in the process of reviewing and identifying control deficiencies in the design and operation of our internal control over financial reporting, as further described in Item 15 of this Annual Report (“Controls and Procedures”).
We are in the process of implementing and evaluating the effectiveness of additional policies and procedures to address identified control deficiencies in the design and operation of our internal control over financial reporting, as further described in Item 15 of this Annual Report (“Controls and Procedures”).
The number of ordinary shares outstanding and reported on a number of financial web-sites does not incorporate the effect from conversion of preferred shares, warrants, options or convertible debt and can lead to confusion on the Company’s valuation and hindering its stock value .
If adversely determined, the class action suits may have a material adverse effect on our financial condition and results of operations The number of ordinary shares we have outstanding and reported on a number of financial web-sites does not incorporate the effect from conversion of preferred shares, warrants, options or convertible debt and can lead to confusion on the Company’s valuation and hindering its stock value.
These activities may divert management’s attention from other business concerns and we will incur significant legal, accounting and other expenses that we did not have as a private company prior to going public, which could have a material adverse effect on our business, financial condition and results of operations. 19 There could be adverse United States federal income tax consequences to United States investors if we were or were to become a passive foreign investment company (“PFIC”).
These activities may divert management’s attention from other business concerns and we will incur significant legal, accounting and other expenses that we did not have as a private company prior to going public, which could have a material adverse effect on our business, financial condition and results of operations.
In addition, NASDAQ has used its discretion to deny initial or continued listing or to apply additional and more stringent criteria in the instances, including but not limited to where the company engaged an auditor that has not been subject to an inspection by PCAOB, an auditor that PCAOB cannot inspect, or an auditor that has not demonstrated sufficient resources, geographic reach, or experience to adequately perform the company’s audit; (ii) where a company planned a small public offering, which would result in insiders holding a large portion of the company’s listed securities.
In addition, NASDAQ has used its discretion to deny initial or continued listing, or to apply additional and more stringent criteria in the instances, including, but not limited to: (i) where the company engaged an auditor that has not been subject to an inspection by PCAOB, an auditor that PCAOB cannot inspect, or an auditor that has not demonstrated sufficient resources, geographic reach, or experience to adequately perform the company’s audit; (ii) where a company planned a small public offering, which would result in insiders holding a large portion of the company’s listed securities, or where NASDAQ was concerned that an offering size was insufficient to establish the company’s initial valuation, and there would not be sufficient liquidity to support a public market for the company; and (iii) where the company did not demonstrate sufficient nexus to the U.S. capital market, including having no U.S. shareholders, operations, or members of the board of directors or management.
The effect these potential regulations could have on the commercial freight business, and in turn, its business and operating results may be long-lasting. 9 Risks Related to Fr8Tech’s Financial Position and Need for Additional Capital The audited consolidated financial statements for the year ended December 31, 2022 include an explanatory paragraph in our independent registered public accounting firm’s audit report stating that there are conditions that raise substantial doubt about our ability to continue as a going concern.
Risks Related to Fr8Tech’s Financial Position and Need for Additional Capital The audited consolidated financial statements for the year ended December 31, 2023 include an explanatory paragraph in our independent registered public accounting firm’s audit report stating that there are conditions that raise substantial doubt about our ability to continue as a going concern.
While losses from lack of payment by any shipper have been low throughout the company’s history, it could suffer from either delays in payment or refusals to pay for services rendered from any of its Shipper clients.
While losses from lack of payment by any Shipper have been low throughout the Company’s history, it could suffer from either delays in payment or refusals to pay for services rendered from any of its Shipper clients. Not being paid on time by its Shippers can adversely affect the Company’s financial position and the results of its operations.
If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for our ordinary shares and trading volume could decline. The trading market for our ordinary shares will depend in part on the research and reports that securities or industry analysts publish about us or our business.
The trading market for our ordinary shares may depend in part on the research and reports that securities or industry analysts publish about us or our business.
These measures adversely affected workforces, customers, supply chains, consumer sentiment, economies, and financial markets, and, along with decreased consumer spending, have led to an economic downturn across many global economies.
These measures adversely affected workforces, customers, supply chains, consumer sentiment, economies, and financial markets, and, along with decreased consumer spending, have led to an economic downturn across numerous markets. COVID-19 has also caused widespread unemployment and border closings.
Any and all of the foregoing would have a negative impact on us and to our shareholders. You must rely on the judgment of our management as to the use of its resources, the different market segments it may develop or its ability to develop certain relationships. Our management has considerable discretion in the market segments it chooses to pursue.
Any and all of the foregoing would have a negative impact on us and to our shareholders. Investors in Fr8Tech must rely on the judgment of management regarding the use of Company resources, the different market segments the Company may develop, and the Company’s ability to develop certain relationships.
Fr8Tech’s information technology systems are susceptible to damage, disruptions or shutdowns due to programming errors, defects or other vulnerabilities, power outages, hardware failures, computer viruses, cyber-attacks, ransomware attacks, malware attacks, theft, misconduct by employees or other insiders, telecommunications failures, misuse, human errors or other catastrophic events.
The scope of the laws that may be applicable to us is often uncertain and may be conflicting, particularly with respect to foreign laws. 6 Fr8Tech’s information technology systems are susceptible to damage, disruptions or shutdowns due to programming errors, defects or other vulnerabilities, power outages, hardware failures, computer viruses, cyber-attacks, ransomware attacks, malware attacks, theft, misconduct by employees or other insiders, telecommunications failures, misuse, human errors or other catastrophic events.
Risks Related to Fr8Tech’s Operations A number of Fr8Tech’s personnel are based outside of the United States and regularly conduct business outside of the United States. Fr8Tech is subject to economic, political, regulatory and other risks associated with international operations.
Furthermore, the Company may not be able to continue operating as it has on a historical basis. 10 Risks Related to Fr8Tech’s Operations A number of Fr8Tech’s personnel are based outside of the United States and regularly conduct business outside of the United States. Fr8Tech is subject to economic, political, regulatory and other risks associated with international operations.
Post Merger, Fr8Tech’s financial statements have become those of the Company’s and Fr8Tech’s management team members are now the executive officers of the Company. Fr8Tech is required, pursuant to Section 404 of the Sarbanes-Oxley Act, or Section 404, to furnish a report by management on, among other things, the effectiveness of the Company’s internal control over financial reporting.
Fr8Tech is required, pursuant to Section 404 of the Sarbanes-Oxley Act, or Section 404, to furnish a report by management on, among other things, the effectiveness of the Company’s internal control over financial reporting.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Fr8Tech’s Chief Financial Officer and Secretary, Paul Freudenthaler, has over 30 years of financial experience and has been Chief Financial Officer for several leading companies in both the U.S. and Mexico.
Fr8Tech’s Secretary, Paul Freudenthaler, has over 30 years of financial experience and has been Chief Financial Officer for several leading companies in both the U.S. and Mexico.
The vetting process for Shippers includes the following: ● Mexico Beneficial Cargo Owner (BCO) or Broker (3PL): Articles Incorporation charter, tax registration number, legal representative power of attorney, legal representative ID, banking information, address receipt, fiscal situation document, fiscal obligations opinion document (updated), Fr8App credit form ● For US or Canada Client (BCO) or Broker (3PL): W-9 form for US, TD1 form for Canada, Fr8App credit form Fr8Tech collections group performs a credit report analysis which includes a due diligence of the customer credit record, revenues of the customer for the latest 3 years, industry in which client operates, review of current insurance coverage, and payment terms negotiated.
The vetting process for Shippers includes the following: ● Mexico Beneficial Cargo Owner (BCO) or Broker (3PL): Articles Incorporation charter, tax registration number, legal representative power of attorney, legal representative ID, banking information, address receipt, fiscal situation document, fiscal obligations opinion document (updated), Fr8App credit form ● For US or Canada Client (BCO) or Broker (3PL): W-9 form for US, TD1 form for Canada, Fr8App credit form 27 Fr8Tech collections group performs a credit report analysis which includes a due diligence of the customer credit record, revenues of the customer for the latest 3 years, industry in which client operates, review of current insurance coverage, and payment terms negotiated.
Each of the following executives was appointed to the respective office set opposite to his/her name: Javier Selgas – Chief Executive Officer Mike Flinker - President Luisa Irene Lopez Reyes – Chief Operating Officer Paul Freudenthaler – Secretary and Chief Financial Officer 23 Hudson Capital continued as a British Virgin Islands (“BVI”) business company and on May 26, 2022 changed its name to Freight Technologies Inc. and its symbol on the Nasdaq Capital Market to “FRGT”.
Each of the following executives was appointed to the respective office set opposite to his/her name: Javier Selgas – Chief Executive Officer Mike Flinker - President Luisa Irene Lopez Reyes – Chief Operating Officer Paul Freudenthaler – Secretary and Chief Financial Officer Hudson Capital continued as a British Virgin Islands (“BVI”) business company and on May 26, 2022 changed its name to Freight Technologies, Inc. and its symbol on the Nasdaq Capital Market to “FRGT”.
Fr8App believes the replacement of NAFTA with the USMCA creates a stable environment attractive to multi-national companies considering Mexico as a market from which to export to both the United States and Canada. In early 2020, U.S. President Donald Trump used trade policy in a manner that displaced global supply chains across industries and around the world.
Fr8App believes the replacement of NAFTA with the USMCA creates a stable environment attractive to multi-national companies considering Mexico as a market from which to export to both the United States and Canada. 25 In early 2020, U.S. President Donald Trump used trade policy in a manner that displaced global supply chains across industries and around the world.
Organization structure . The following is a list of our principal subsidiaries and consolidated affiliated entities as of the date of this annual report on Form 20-F: Name Place of Formation Relationship Freight App, Inc. Delaware Wholly-owned subsidiary Freight App de México S.A. de C.V. Mexico Wholly-owned subsidiary D. Property, plants and equipment.
Organization structure . The following is a list of our principal subsidiaries and consolidated affiliated entities as of the date of this annual report on Form 20-F: Name Place of Formation Relationship Freight App, Inc. Delaware Wholly-owned subsidiary Freight App de México S.A. de C.V. Mexico Wholly-owned subsidiary D. Property and equipment.
Carriers can use Fr8App’s Platform (through the Portal or mobile App), to accept shipment requests, assign transportation jobs to available truck drivers instantaneously, or make themselves available on routes or route segments to avoid driving “dead” or empty trucks from one location to another.
Carriers can use Fr8App’s Platform (through the Portal or mobile App), to accept shipment requests, assign transportation jobs to available truck drivers instantaneously, or make themselves available on routes or route segments to avoid driving empty trucks from one location to another.
Fr8Tech believes the TMS market to be in a development stage similar to the consumer transportation industry, or “taxicabs”, prior to the introduction of wider reaching platforms like Uber and Cabify.
Fr8Tech believes the TMS market to be in a development stage similar to the consumer transportation industry, or “taxicabs”, prior to the introduction of wider reaching platforms like Uber, Lyft and Cabify.
Following is a visual depiction of the Scrum Methodology: Its technology has been designed with the goals of building a highly efficient, adaptable, scalable and secure platform with the potential to vastly improve operating margins of freight transactions. Following are some of the features of Fr8Tech’s technology infrastructure and development methodologies: 1. Efficiency & Adaptability: a.
Following is a visual depiction of the Scrum Methodology: Its technology has been designed with the goals of building a highly efficient, adaptable, scalable and secure platform with the potential to vastly improve operating margins of freight transactions. Following are some of the features of Fr8Tech’s technology infrastructure and development methodologies: 1.
Fr8Tech’s principal asset consists of its software, which it invests in on a monthly basis through development work by employees and externally contracted parties. Fr8App invested approximately $0.4 million and $0.5 million in software during the years ended December 31, 2022 and 2021, respectively.
Fr8Tech’s principal asset consists of its software, which it invests in on a monthly basis through development work by employees and externally contracted parties. Fr8App invested approximately $0.34 million, $0.4 million, and $0.5 million in software during the years ended December 31, 2023, 2022 and 2021, respectively.
Fr8App’s Mobile App, FMS, TMS Users can access the Platform through an internet browser on a computer or through the mobile App in a smartphone, using the same credentials. Fr8App also offers a cloud-based TMS solution to maximize the efficiency of a company’s transportation operations.
Fr8App’s Mobile App, FMS, TMS Users can access the Platform through an internet browser on a computer or through the mobile application in a smartphone, using the same credentials. 24 Fr8App also offers a cloud-based TMS solution to maximize the efficiency of a company’s transportation operations.
Fr8App’s API Fr8App’s Platform has a public application programming interface (“API”), that is accessible free of charge and has the ability to integrate with both Shippers’ and Carriers’ systems to automate the process of booking a load and bringing visibility to the process.
Fr8App’s API Fr8App’s Platform has a public application programming interface (“API”), that is accessible free of charge and has the ability to integrate with both Shippers’ and Carriers’ systems to automate the process of booking shipments and bringing visibility to the process.
A Fr8App Platform user can be very involved in the process and actively control its shipment activities by inputting Shipper requirements and matching those with Carrier offerings and tracking shipments as they leave their point of origin and arrive at their ultimate destination, i.e., managing his or her company’s logistics.
A Fr8App Platform user can be very involved in the process and actively control its shipment activities by inputting Shipper requirements and matching those with Carrier offerings and tracking shipments as they leave their point of origin and arrive at their ultimate destination. In short, managing his or her company’s logistics.
TMS can be used by either a Shipper as its key logistics tool, independent of using Fr8App’s Platform or Portal solutions. TMS can help Shippers manage their fleet as well as post requests for freight services on its Platform. The cloud-based TMS solution is available to Shippers wanting to actively manage their supporting Carriers or their own fleet of trucks.
TMS can be used by a Shipper as its primary logistics tool, independent of using Fr8App’s Platform or Portal solutions. TMS can help Shippers manage their fleet as well as post requests for freight services on its Platform. The cloud-based TMS solution is available to Shippers wanting to actively manage their supporting Carriers or their own fleet of trucks.
An API is a tool allowing Fr8App to have a number of different customers and providers, each with different operating systems, to interact with and use Fr8App’s Platform and automate all the stages of any given load.
An API is a tool allowing Fr8App to have a number of different customers and providers, each with different operating systems, to interact with and use Fr8App’s Platform and automate all the stages of any given shipment.
An API is an interphase consisting of a series of computer instructions that allow one type of system to interact with another separate system by taking information from one system and making it legible and usable by another.
An API is an interface consisting of a series of computer instructions that allow one type of system to interact with another separate system by taking information from one system and making it legible and usable by another.
In January 2020, we entered into a lease agreement for 7 workstations in Mexico for a term of 12 months and expired on December 31, 2020. In November 2020, the Company entered into a lease agreement for 14 workstations in Mexico for a term of 12 months and expired on October 31, 2021.
In January 2020, we entered into a lease agreement for 7 workstations in Mexico for a term of 12 months, which expired on December 31, 2020. In November 2020, the Company entered into a lease agreement for 14 workstations in Mexico for a term of 12 months, which expired on October 31, 2021.
Fr8Tech further believes that its Fr8Radar is a tremendous value-add for both Shippers and Carriers in the country of Mexico, where there is little adoption of this key security and logistics planning tool. ● Be digital : Fr8Tech intends to continue refining and automating its operational flow and maximize efficiencies while thoughtfully growing its brokerage division.
Fr8Tech further believes that its Fr8Radar is a tremendous value-add for both Shippers and Carriers in the country of Mexico, where there has been limited adoption of this key security and logistics planning tool. ● Be Digital : Fr8Tech intends to continue refining and automating its operational flow and maximize efficiencies while thoughtfully growing its brokerage division.
In Mexico, our Fr8App and Fr8fleet brands compete with many logistics companies and freight brokers. They also buy from and sell transportation services to companies that compete with us.
In Mexico, our Fr8App and Fr8Fleet brands compete with many logistics companies and freight brokers. We also buy from and sell transportation services to companies that compete with us.
Fr8Tech believes that an ability to respond to increasing market volatility in real-time, can become an asset contributing to a Shipper’s business success. Fr8Tech believes this consideration is further exacerbated by qualified driver shortages in the U.S. and Canada.
Fr8Tech believes that an ability to respond to increasing market volatility in real-time, is a valuable asset contributing to a Shipper’s business success. Fr8Tech believes this consideration is further exacerbated by qualified driver shortages in the U.S. and Canada.
Item 4. Information on the Company A. History and development of the company. Our History and Corporate Structure History Freight App, Inc. (formerly known as “Freight Hub, Inc.” and hereinafter referred to as “Fr8 App”) was incorporated in 2015 as a Delaware corporation.
Item 4. Information on the Company A. History and development of the Company. Our History and Corporate Structure History Freight App, Inc. (formerly known as “Freight Hub, Inc.” and hereinafter referred to as “Fr8App”) was incorporated in 2015 as a Delaware corporation.
Fr8Tech believes this commercial freight market growth is driven by growing domestic economies and increasing trade flows, which are not only from one region to another, but are more decentralized and fragmented as well as by the arrival and presence of large on-line retailers such as Amazon and MercadoLibre.
Fr8Tech believes this commercial freight market growth is driven by growing domestic economies and increasing trade flows, which are not only from one region to another, but are more decentralized and fragmented due to the growth of large on-line retailers such as Amazon and MercadoLibre.
(“Hudson Capital”) was initially established as “China Internet Nationwide Financial Services Inc.”, a holding company incorporated under the laws of British Virgin Islands on September 28, 2015.
The Merger Hudson Capital Inc. (“Hudson Capital”) was initially established as “China Internet Nationwide Financial Services Inc.”, a holding company incorporated under the laws of British Virgin Islands on September 28, 2015.
Fr8App also gives a TMS solution user the option to source additional freight capacity or offer its over-capacity on the Fr8App Platform. Fr8FMS (Fr8App´s “FMS”) allows transportation companies and owner operators to handle their own fleet reducing their operational costs, and enables them to haul loads from Shippers in the platform´s marketplace.
Fr8App also gives a TMS solution user the option to source additional freight capacity or offer its over-capacity on the Fr8App Platform. Fr8FMS is Fr8App’s Fleet Management System, or “FMS”. It allows transportation companies and owner operators to handle their own fleet reducing their operational costs, and enables them to haul loads from Shippers in the platform´s marketplace.
Fr8Now was developed to be a trusted LTL shipping partner for businesses of all sizes with a focus on businesses in the country of Mexico. Our innovative technology provides an easy booking process, flexible options, and affordable pricing that are designed to make us the go-to choice for LTL shipping needs in Mexico.
Fr8Now was developed to be a trusted LTL shipping partner for businesses of all sizes with a focus on businesses within the domestic Mexican market. Our innovative technology provides an easy booking process, flexible options, and affordable pricing that are designed to make us the go-to choice for LTL shipping needs in Mexico.
Fr8Tech’s growth strategy consists of the following: Fr8Tech plans to expand the Shipper base and increase its Carrier ecosystem operating under the Fr8App brand throughout all three countries, with an initial focus on the Mexico-U.S. cross-border market, a select portion of the U.S. domestic market and a select segment of the Mexican domestic market.
Fr8Tech’s growth strategy consists of the following: Focus on Core Markets : Fr8Tech plans to expand its Shipper base and increase its Carrier ecosystem operating under the Fr8App brand throughout all three countries, with a continued focus on the Mexico-U.S. cross-border market, a select portion of the U.S. domestic market and a select segment of the Mexican domestic market.
Highly automated agile development process supported by CI and CD tools. b. Event based, microservice architecture. c. Applications packaged in Docker images. d. Container orchestration via Kubernetes leveraging automated rollouts and rollbacks, service discovery and load balancing. e. Modern, extendable, API suited for integration with industry data providers (TMS, telematics, ELD, Compliance, Big Data providers and other systems). 2.
Efficiency & Adaptability: ● Highly automated agile development process supported by CI and CD tools. ● Event based, microservice architecture. ● Applications packaged in Docker images. ● Container orchestration via Kubernetes leveraging automated rollouts and rollbacks, service discovery and load balancing. ● Modern, extendable, API suited for integration with industry data providers (TMS, telematics, ELD, Compliance, Big Data providers and other systems). 2.
We avoid relying on short-term advertising campaigns that can be expensive and only generate temporary presence, preferring to create valuable content, build relationships with our audience, and engage with them through the channels they use most. The company’s commitment to digital marketing is unwavering, and the company is always exploring new ways to improve our approach and reach new audiences.
We avoid relying on short-term advertising campaigns that can be expensive and only generate temporary presence, preferring to create valuable content, build relationships with our audience, and engage with them through the channels they use most. The company is firmly committed to digital marketing, and we are always exploring new ways to improve our approach and reach new audiences.
Effective July 1, 2020, the three countries signed a new free trade deal the United States, Mexico, Canada Agreement (“USMCA”), replacing the North American Free Trade Agreement (“NAFTA”) enacted on January 1, 1994. As of 2019, Mexico became the U.S.’s largest single trading partner.
Effective July 1, 2020, the three countries signed a new free trade deal called the United States, Mexico, Canada Agreement (“USMCA”), replacing the North American Free Trade Agreement (“NAFTA”), which was enacted on January 1, 1994. As of 2019, Mexico became the U.S.’s largest single trading partner, surpassing China.
Fr8Tech uses a range of techniques, such as search engine optimization, social media, and email marketing, to generate leads and gain brand presence. Fr8Tech’s strategy is focused on the long-term establishment of our brand as a reliable, top-quality provider in the logistics industry.
Fr8Tech uses a range of techniques, such as search engine optimization, social media, and email marketing to generate leads and gain brand presence. Fr8Tech’s strategy is focused on the long-term establishment of our brand as a reliable, best-in-class service provider in the logistics industry.
Fr8fleet is our technology-driven solution for large corporate enterprise customers with a demand for regular and ongoing shipping and logistics. In contrast to Fr8App which is based on booking individual loads, Fr8fleet, our dedicated capacity services, provides exclusive use of an entire truck to an enterprise, ensuring on-time delivery and reduced handling for pristine condition of goods.
Fr8Fleet is our technology-driven solution for large corporate enterprise customers with a demand for regular and ongoing shipping and logistics. In contrast to Fr8App which is based on booking individual loads, Fr8Fleet is a dedicated capacity service, providing exclusive use of an entire truck to an enterprise, to ensure on-time delivery and reduced handling for pristine condition of goods.
Within the demand and supply equation, Shippers seeking suitable means of transportation for their goods or products represent demand and Carriers with freight transportation capability represent supply. The Fr8App marketplace was designed to facilitate matching the two, i.e,. demand with supply. The first commercial version of Fr8App’s products was launched for commercial distribution in 2017.
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. The Fr8App marketplace was designed to facilitate matching the two: demand with supply. The first commercial version of Fr8App’s products was launched in 2017.
Every time there is a match and a Carrier hauls a load, the Platform’s algorithm takes this into account and creates a history that can be referred to when attempting to fulfill future Shipper requests.
Every time there is a match and a Carrier completes a shipment, the Platform’s algorithm takes this into account and creates a history that can be referred to when attempting to fulfill future Shipper requests.
Use of Fr8App’s Platform brings the additional benefit of providing transparency on all shipment characteristics to allow for the identification of available and qualified freight capacity. Fr8App’s Portal is the system’s front-end, a tool that Fr8App’s customers and providers use to summarize data on the Fr8App Platform such that it is in a usable form from a business perspective.
Use of Fr8App’s Platform brings the additional benefit of providing transparency on all shipment characteristics to allow for the identification of available and qualified freight capacity. 23 Fr8App’s Portal is the system’s front-end, a tool that Fr8App’s customers and providers use to summarize data on the Fr8App Platform such that it is in a usable and actionable format for business.
Fr8App’s competitors include the postal services of the U.S. and other nations, various motor carriers, express companies, freight forwarders, air couriers, large transportation and e-commerce companies that are making significant investments in their capabilities, and startups and other companies that combine technologies with crowdsourcing to focus on local market needs, some of whom may currently be its customers.
Fr8App’s competitors include the postal services of the U.S. and other nations, various motor carriers, express companies, freight forwarders, air couriers, large transportation and e-commerce companies that are making significant investments in their internal capabilities, and startups and other companies that combine technologies with crowdsourcing to focus on local market needs, some of with whom we share customers.
The next generation of Fr8Tech products were brought to market during the second quarter of 2020 and consist of (1) the online Portal and Mobile App by itself, (2) the TMS, and (3) Fr8App’s Platform supplemented with freight brokerage support and customer service.
The second generation of Fr8Tech products were brought to market during the second quarter of 2020 and consisted of: 1) the online Portal and Mobile App; 2) the TMS; and, 3) Fr8App’s Platform supplemented with freight brokerage support and customer service.
Fr8 Tech believes this supply chain volatility is driving an increase in demand for large and small freight brokers to secure more abundant freight capacity, in real-time, which is readily available on Fr8Tech’s freight-matching platform and facilitated by its Fr8App Platform solution and Fr8Radar.
Fr8Tech believes the recent supply chain volatility is driving an increase in demand for large and small freight brokers to secure more abundant freight capacity, in real-time, which is readily available on Fr8Tech’s freight-matching platform and facilitated by its Fr8App Platform solution and Fr8Radar.
We believe we are one of the first entrants in this particular segment in the country of Mexico. Fr8NOW started its first operations, albeit minimal, late in the first quarter of 2023. Fr8Tech’s Customers Fr8Tech’s customers consist of Shippers and Carriers across North America.
We believe we are one of the first entrants in this particular market segment in Mexico. Fr8Now started its first operations in the first quarter of 2023. Fr8Tech’s Customers Fr8Tech’s customers consist of Shippers and Carriers across North America.
It was founded with a view to developing and bringing solutions to the relatively unorganized cross-border commercial freight market on the U.S.-Mexico border, and by extension, the U.S.-Canada border. In January 2019, Freight Hub México, S.A De C.V., a wholly-owned subsidiary of Fr8 App was formed.
It was founded with a view to develop and bring solutions to the relatively unorganized cross-border commercial freight market on the U.S.-Mexico border, and by extension, the U.S.-Canada border. In January 2019, Freight Hub México, S.A De C.V., a wholly-owned subsidiary of Fr8App was formed.
All these enhanced functionalities will increase the utility and add value to any user of its Platform and in turn, help drive traffic to the Platform itself. Sales and Marketing Fr8Tech’s marketing approach centers on digital marketing as the primary channel to promote the company’s brands, including Fr8app, Fr8fleet and, most recently, Fr8Now.
All these enhanced functionalities will increase the utility and add value to all users of our Platform and in turn, help drive traffic to the Platform itself. Sales and Marketing Fr8Tech’s marketing approach centers on digital marketing as the primary channel to promote the company’s brands, including Fr8App, Fr8Fleet and Fr8Now.
By leveraging customer references and building off existing Shipper relationships, Fr8Tech believes it will be able to add new accounts to its portfolio across the domestic trucking industry in Mexico, at the U.S.-Mexico cross-border and opportunistically select routes within the U.S. and the U.S.-Canada border commercial freight transportation market.
By leveraging its customer base and long-standing industry relationships and building off existing Shipper feedback and experiences, Fr8Tech believes it will be able to add new accounts to its portfolio across the domestic trucking industry in Mexico, U.S.-Mexico cross-border trades and opportunistically select routes within the U.S. and the U.S.-Canada cross-border commercial freight transportation market.
As the market stabilizes, Fr8Tech will increasingly try to target higher volume, long-term contractual business directly from Shippers through its Fr8App brand, local traffic in Mexico through Fr8fleet and new streams of business through Fr8Now. Research and Development The first commercial version of Fr8Tech’s products was launched in 2017.
With periods of market stability, Fr8Tech will increasingly try to target higher volume, long-term contractual business directly from Shippers through its Fr8App brand, local traffic in Mexico through Fr8Fleet and Fr8Now. 30 Research and Development The first commercial version of Fr8Tech’s products was launched in 2017.
Fr8Tech believes the industry is still anchored in communication through traditional channels (phone or email), and human attention is valued in the management of shipments. 32 Fr8Tech’s BackOffice However, for traditional brokers, the Fr8Tech Platform is a solution to try to get capacity to their clients, quickly, when they have not achieved it through their traditional channels and methods.
Fr8Tech believes the industry is still anchored in communication through traditional channels (phone or email), and human attention is valued in the management of shipments. Fr8Tech’s BackOffice For traditional freight brokers, the Fr8Tech Platform is a valuable source to finding capacity for their clients quickly, when they have not achieved it through their traditional channels and methods.
Its cutting-edge cloud-based Platform was designed to connect in real-time parties with commercial transportation needs. The freight transportation supply chain begins with parties having transportation needs (“Shippers”) and addressed by those offering freight transportation services (“Carriers”). Shippers seeking suitable means of transportation for their supplies represent demand and Carriers with freight transportation capability represent supply.
Its cutting-edge cloud-based Platform was designed to connect in real-time parties with commercial transportation needs. The freight transportation supply chain begins with Shippers, whose transportations needs are addressed by Carriers. Shippers seeking suitable means of transportation for their supplies represent demand and Carriers with freight transportation capability represent supply.
As a result, the application, interpretation and enforcement of these laws and regulations are often uncertain, particularly in the new and evolving industry in which it operates and may be interpreted and applied inconsistently from country to country and inconsistently with its current policies and practices. Fr8Tech’s customers upload and store data in its Platform.
As a result, the application, interpretation and enforcement of these laws and regulations can be uncertain, particularly in the new and evolving industry in which we operate, and may be interpreted and applied inconsistently from country to country and inconsistently with our current policies and practices. Fr8Tech’s customers upload and store data on its Platform.
The latest generation consists of improvements and refinements to the Fr8App Platform, the offering of capacity through Fr8fleet and the nascent Fr8Now brand that will make inroads in the LTL market in Mexico.
The latest generation consists of improvements and refinements to the Fr8App Platform, the offering of capacity through Fr8Fleet and the Fr8Now brand that is servicing the LTL market in Mexico.
In January 2019, Freight Hub México, S.A De C.V., a wholly-owned subsidiary of Fr8App was formed. In December 2021, Freight Hub Mexico, S.A De C.V. changed its name to Freight App de México, S.A De C.V. (“Freight App Mexico”). As a result of the Merger, on February 14, 2022, Fr8App became our wholly-owned subsidiary.
In December 2021, Freight Hub Mexico, S.A De C.V. changed its name to Freight App de México, S.A De C.V. (“Freight App Mexico”). As a result of the Merger, on February 14, 2022, Fr8App became our wholly-owned subsidiary. The first commercial version of Fr8App’s products was launched in 2017.
By leveraging its technology, the increasing usage, and amount of traffic booked on its Platform, Fr8Tech can work with customers to optimize their supply chain, eliminate empty miles on the road, and reduce their carbon footprint. A transformation in the logistics transportation industry is taking place.
By leveraging its technology, the increasing usage, and amount of traffic booked on its Platform, Fr8Tech can work with customers to optimize their supply chain, eliminate empty miles on the road, and reduce their carbon footprint.
Scalability & High-availability: a. Project hosted in GoogleCloudPlatform. b. Underlying platform invented in telco industry, designed for scale with minimal downtime. c. Erlang’s (via Elixir) let-it-crash philosophy, reducing codebase and allowing smaller teams to produce more. d. CQRS design pattern used throughout the system, separation between read & write storage. e. Easy horizontal scaling via Kubernetes. f.
Scalability & Availability: ● Project hosted in GoogleCloudPlatform. ● Underlying platform invented in telco industry, designed for scale with minimal downtime. 31 ● Erlang’s (via Elixir) let-it-crash philosophy, reducing codebase and allowing smaller teams to produce more. ● CQRS design pattern used throughout the system, separation between read & write storage. ● Easy horizontal scaling via Kubernetes. ● EventStore as a framework for CQRS, EventsFr8App’scing, and messaging. ● Postgresql hosted in Aiven. 3.
Carriers are sent push notifications through the Platform every time a load or job request is entered by a Shipper that matches the criteria Carriers are looking for on a given shipment and lane.
Fr8App’s Platform can automatically and instantaneously match Shippers with Carriers within the Fr8App network. Carriers are sent push notifications through the Platform every time a load or job request is entered by a Shipper that matches the criteria Carriers are looking for on a given shipment and lane.
Fr8App’s Platform matches up Shippers and Carriers and assigns a driver and truck to the job. The driver picks up the supplies while the Platform tracks the progress of the trip, in real time.
Fr8App’s Platform matches up Shippers and Carriers and assigns a driver and truck to the job. The driver picks up the supplies while the Platform tracks the progress of the trip, in real time. The driver delivers the shipment, uploads documentary evidence of the delivery (“POD”) and is paid.
On March 30, 2022, we sold Hongkong Internet Financial Services Limited (“HKIFS”) in its entirety to a private investor. The divestment of HKIFS was effected through the sale of the entirety of the equity interest in HKIFS. As of the divestment date, there are no remaining or contingent obligations or benefits from HKIFS.
On March 30, 2022, we sold Hongkong Internet Financial Services Limited (“HKIFS”) in its entirety to a private investor. The divestment of HKIFS was effected through the sale of the entirety of the equity interest in HKIFS.
For Mexico Carriers, the relevant counterparty is the “Secretaria de Transporte” and in Canada it is “Canadian Transportation Agency”. Of note is that nearly the entirety of regulatory compliance burden with Fr8App’s business footprint falls on the Carriers themselves.
For Mexico Carriers, the relevant counterparty is the “Secretaria de Transporte”, and in Canada it is “Canadian Transportation Agency”. Nearly all of regulatory compliance burden within Fr8App’s scope of operations falls on the Carriers themselves.
Fr8NOW started its first LTL operations, albeit minimal, late in the first quarter of 2023. 24 Fr8App’s technology product offerings includes (i) a computerized platform (the “Platform”) that holds an online portal (the “Portal”) and a mobile App solution (the “App”) to provide 3PL services to companies actively involved in the freight transportation market, (ii) a Transport Management Solution (“TMS “) for customers to manage their own fleet, and (iii) freight brokerage support and customer service based on the Platform.
Fr8App’s technology product offerings include: (i) a computerized platform (the “Platform”) that maintains an online portal (the “Portal”) and a mobile application solution (the “App”) to provide 3PL services to companies actively involved in the freight transportation market; (ii) a Transport Management Solution (“TMS “) for customers to manage their own fleet; and, (iii) freight brokerage support and customer service based on the Platform.
Market Opportunity According to Modor Intelligence, the Mexican 3PL market is expected to register a compound annual growth rate of over 7.0% between 2021 and 2025. According to the same source, the US and Canadian 3PL markets are expected to grow at a 3.5% and 3.0% compound annual growth rate, respectively, over the same time period.
That market is expected to register a compound annual growth rate of 5.4% between 2024 and 2030. And according to the same source, the US and Canadian 3PL markets are expected to grow at a 3.4% and 4.4% compound annual growth rate, respectively, over the same time period.
Real-time tracking from Fr8radar offers complete transparency and assists users by providing regular updates on their shipments, and our platform allows for easy booking, tracking, and management. Fr8NOW Fr8NOW is our newest brand and is our first foray into the LTL business.
Real-time tracking from Fr8Radar offers complete transparency and assists users by providing regular updates on their shipments, and our platform allows for easy booking, tracking, and management. 28 Fr8Now Fr8Now is our solution for Shipper-Carrier freight matching servicing the LTL business.
With the divestment of HKIFS mentioned earlier, we are no longer involved in any of the businesses originally started by Hudson Capital. We are now, through Fr8Tech, a BVI business company, operating under three brands, Fr8App, Fr8Fleet and our recently announced Fr8NOW. B. Business overview. Freight App, Inc.
Fr8App continues as a corporation incorporated in the State of Delaware and as a wholly-owned subsidiary of Freight Technologies, Inc. With the divestment of HKIFS mentioned earlier, we are no longer involved in any of the businesses originally started by Hudson Capital. We are now, through Fr8Tech, a BVI business company, operating under three brands, Fr8App, Fr8Fleet and Fr8Now.
Fr8Data enables the analysis of historical data to find better matching between Shippers and Carriers and better pricing calculations, based on real data saved in Fr8App´s platform.
Fr8Data enables the analysis of historical data to find better matching between Shippers and Carriers and better pricing calculations based on real data saved in Fr8App´s platform. Fr8Data tools and analytics enable continual logistics and operational improvement to all system users: Shippers, Carriers and Fr8App itself.
Shippers can count on the safety and reliability of the Platform as Fr8Tech tracks cross border shipments. Lastly, Shippers can benefit by managing their logistics needs in one control center, all on Fr8Tech’s Platform. 30 For the year ended December 31, 2022, each of two customers accounted for 42% and 16% of Fr8App’s accounts receivable.
Shippers can count on the safety and reliability of the Platform as Fr8Tech tracks cross border shipments. Lastly, Shippers can benefit by managing their logistics needs in one control center on Fr8Tech’s Platform. As of December 31, 2023, one customer accounted for 66% of Fr8App’s accounts receivables.
Fr8Tech plans on integrating more of its business customers through customized API’s and launching a fleet management system for Carriers. 31 Focusing On Automation ● Go Digital : Fr8Tech believes that by providing more sophisticated automation to the relatively untapped digital commercial freight market in Mexico, and expanding upon initial efforts in the U.S. and Canada, it will strengthen its position within the domestic transportation segments in Mexico and the U.S. and grow its revenue stream.
Automation ● Go Digital : Fr8Tech believes that by providing more sophisticated automation to the relatively untapped digital commercial freight market in Mexico, and expanding upon initial efforts in the U.S. and Canada, it will strengthen its position within the domestic transportation segments in Mexico and the U.S. and grow its revenue stream.
In November 2021, the Company entered into a lease agreement for 62 workstations and two private offices in Mexico for a term of 12 months, which will expired on October 31, 2022.
In November 2021, the Company entered into a lease agreement for 62 workstations and two private offices in Mexico for a term of 12 months, which expired on October 31, 2022. 35 The Company entered into a lease agreement on November 2, 2022, for an office facility in Monterrey for a period of 12 months and renewed the lease on November 1, 2023 through November 1, 2024.
In December 2021, Freight Hub Mexico, S.A De C.V. changed its name to Freight App de Mexico, S.A De C.V. (“Freight App Mexico”). The freight transportation supply chain, and the Fr8App marketplace product, begins with parties having transportation needs (“Shippers”) which are fulfilled by those offering freight transportation services (“Carriers”).
In December 2021, Freight Hub Mexico, S.A De C.V. changed its name to Freight App de Mexico, S.A De C.V. (“Freight App Mexico”). Freight logistics operations and our Fr8App marketplace solution, begins with parties connecting their transportation needs (“Shippers”) with those offering freight transportation services (“Carriers”).
Fr8App believes market conditions have created an increased demand for digital freight brokers who can help ease capacity constraints, open up new shipping lanes, and provide a benchmarking tool for both Shippers and Carriers.
The ability to access real-time freight capacity and locate the right truck at the right time becomes critical to securing a reliable shipment service. Fr8App believes market conditions have created an increased demand for digital freight brokers who can help ease capacity constraints, open up new shipping lanes, and provide a benchmarking tool for both Shippers and Carriers.
Fr8Tech believes this supply chain volatility is aggravated by a shortage of drivers thereby creating further pressure on the need for a more comprehensive approach to logistics management, with the view to meeting supply chain requirements while attempting to minimize increases in the related freight costs.
Fr8Tech believes that the supply chain volatility was aggravated by a shortage of drivers thereby creating further demand for a more comprehensive approach to logistics management to meet supply chain requirements while minimizing increases in the related freight costs.
Meanwhile the US based Carriers Fr8App works with are also required to comply with the DOT but may also have additional requirements for maintaining a number of operating licenses, insurance requirements and special certifications (i.e., border-crossing). 34 Consequently, the cost to comply with government regulation for Fr8Tech as a whole is relatively low.
For example, Fr8App’s requirement in the U.S. is primarily for Carriers to remaining in good standing with the DOT, but they may also have additional requirements for maintaining a number of operating licenses, insurance requirements and special certifications (i.e., border-crossing). The cost for Fr8Tech to comply with government regulation as a whole is relatively low.
At December 31, 2021, each of two customers accounted for 35% and 15% of Fr8App’s accounts receivable. For the year ended December 31, 2022, each of two customers accounted for 17% and 11% of Fr8App’s revenues. For the year ended December 31, 2021, one customer accounted for 37% of Fr8App’s revenues.
As of December 31, 2022 and 2021 each of two customers accounted for 42% and 16% of Fr8App’s accounts receivables, and for 35% and 15% of Fr8App’s accounts receivables, respectively. For the year ended December 31, 2023, one customer accounted for 33% of Fr8App’s revenues.
In connection with the Merger, the following unregistered, restricted securities were issued by Hudson Capital to shareholders of Fr8App, subject to customary adjustments for stock splits, dividends, rights offerings, pro rata distributions and fundamental transactions (the “Merger Consideration”): Securities Issued in Merger Issued at Merger* Underlying Ordinary Shares** Ordinary Shares 2,577,655 257,766 A2 Preferred Shares _ 1,264,360 126,436 A1A Preferred Shares 4,473,547 447,354 Series Seed Preferred Shares 7,020 702 Series B Preferred Shares 7,389,850 738,985 Series A4 Preferred Shares 568,930 56,893 Ordinary Shares Warrant 5,218 522 Series Seed Warrant 4,165 416 Equity Awards for Ordinary Shares 1,958,287 195,829 Total Issued in Merger 18,249,032 1,824,903 * Issued at Merger is not adjusted for the March 24, 2023 reverse split. ** Underlying Ordinary Shares is adjusted for the March 24, 2023 reverse split.
As of the divestment date, there are no remaining or contingent obligations or benefits from HKIFS. 21 In connection with the Merger, the following unregistered, restricted securities were issued by Hudson Capital to shareholders of Fr8App, subject to customary adjustments for stock splits, dividends, rights offerings, pro rata distributions and fundamental transactions (the “Merger Consideration”): Securities Issued in Merger Issued at Merger* Underlying Ordinary Shares** Ordinary Shares 2,577,655 25,777 A2 Preferred Shares 1,264,360 28,195 A1A Preferred Shares 4,473,547 66,656 Series Seed Preferred Shares 7,020 70 Series B Preferred Shares 7,389,850 348,062 Series A4 Preferred Shares 568,930 8,534 Ordinary Shares Warrant 5,218 52 Series Seed Warrant 4,165 4,165 Equity Awards for Ordinary Shares 1,958,287 19,583 Total Issued in Merger 18,249,032 501,094 * Issued at Merger is not adjusted for the March 24, 2023 reverse stock split or the February 5, 2024 reverse stock split. ** The amount of underlying ordinary shares are adjusted for the March 24, 2023 reverse stock split or the February 5, 2024 reverse stock split.
Below are two screen-shots from the Portal for illustrative purposes: Fr8App’s Platform Fr8App’s Platform contains the primary operating system. It is a digital freight-matching platform that facilitates booking of freight transactions at the Shipper and Carrier level. The matching of Shipper requirements and Carrier capacities can occur on the Platform automatically, without the need for human intervention.
It is a digital marketplace that facilitates booking of freight transactions at the Shipper and Carrier levels. The matching of Shipper requirements and Carrier capacities can occur on the Platform automatically, without the need for human intervention.
Additionally, Fr8Tech believes it is well positioned to benefit from the increasing trade across both the U.S.-Mexico and the U.S.-Canada borders caused by supply chain volatility and magnified by the COVID-19 pandemic as well as the increasing needs for reliable freight service within the country of Mexico. 27 Fr8Tech believes that traditional 3PLs rely on a network of offices staffed with individuals tasked with communicating with colleagues, customers and transportation companies to identify and secure freight services that meet their customers’ specific needs.
Additionally, Fr8Tech believes it is well positioned to benefit from the increasing trade across both the U.S.-Mexico and the U.S.-Canada borders caused by supply chain volatility and magnified by the COVID-19 pandemic as well as the increasing needs for reliable freight service within the country of Mexico.
U.S. federal, state and foreign laws and regulations which in some cases can be enforced by private parties in addition to government entities, are constantly evolving and can be subject to significant change.
Foreign data protection, privacy, content and other laws and regulations can impose different obligations and could be more restrictive than those in the U.S. U.S. federal, state and foreign laws and regulations are in some cases enforced by private parties in addition to government entities, are continuously evolving, and can be subject to significant change.
Fr8Tech’s Chief Operating Officer, Luisa Lopez, has over 25 years of experience within the logistics and supply chain industry across North America. 36 Facilities Fr8Tech’s U.S. headquarters office is located at 2001 Timberloch Place, Suite 500, The Woodlands, Texas 77380, and its Mexican headquarters office is in Monterrey, Mexico. The headquarters location consists of a rental office.
Facilities Fr8Tech’s U.S. headquarters office is located at 2001 Timberloch Place, Suite 500, The Woodlands, Texas 77380, and its Mexican headquarters office is in Monterrey, Mexico. The headquarters location consists of a rental office.
The Mexican domestic freight market was estimated at approximately $45.5 billion, and the U.S.-Mexico cross-border freight transportation market was estimated at $535 billion, up from an estimated $461 billion in 2021. Additionally, Mexico’s overall trade with the U.S. is estimated to grow at an CAGR of approximately 2.7% between 2021 and 2025.
Per Mordor Intelligence, the Mexican domestic freight market was estimated at approximately $43.1 billion, and the North American cross-border freight transportation market is estimated at $236 billion and expected to exceed $308 billion by 2030. Additionally, Mexico’s overall trade with the U.S. is estimated to grow at an CAGR of approximately 2.7% between 2021 and 2025.
Access to multiple data centers in different geographic zones 33 Fr8Tech is developing and plans to develop reporting, online analytical processing, analytics, data mining, process mining, complex event processing, business performance management, benchmarking, text mining, predictive analytics, and prescriptive analytics.
WAL records ● Entire instances backed up ● Access to multiple data centers in different geographic zones Fr8Tech has developed, will continue to enhance, and will develop new business intelligence capabilities around reporting, online analytical processing, analytics, data mining, process mining, complex event processing, business performance management, benchmarking, text mining, predictive analytics, and prescriptive analytics.
Fr8Tech believes Carriers value its ability to assist in minimizing empty (deadhead) miles and making every mile, a mile paid for. Carriers also benefit from the Platform’s transparency and know how much they are scheduled to make from fulfilling each job. Carriers receive faster payment for their services by using Fr8Tech’s Platform and avoid potentially expensive factoring companies.
Carriers also benefit from the Platform’s transparency and know how much they are scheduled to make from fulfilling each job. Carriers receive faster payment for their services by using Fr8Tech’s Platform and avoid potentially expensive factoring companies. Lastly, Carriers can benefit from Fr8Tech’s Platform by using it as a tool to streamline workflows and increase overall efficiency.
Fr8Tech expects to continue investing in its software in line with the expansion of its product offerings. Financing for investment in software has historically been provided for by the company’s operations.
Fr8App invested approximately $0.34 million, $0.4 million, and $0.5 million in software during the years ended December 31, 2023, 2022, and 2021, respectively. Fr8Tech expects to continue investing in its software in line with the expansion of its product offerings. Financing for investment in software has historically been provided for by the company’s operations.
This data is accessed online on a computer via a browser, or through a mobile App located on a smart telephone. Once Shippers and Carriers gain access to the Platform they can enter into transactions such as booking a load and administering the manner in which that load will be managed, and reviewing summary information on display within the Platform.
Once customers and providers (Shippers and Carriers, respectively) gain access to the Platform they can enter into transactions such as booking a shipment, administering the manner in which this load will be managed, and reviewing summary information on display within the Platform. Fr8App’s Platform Fr8App’s Platform contains the primary operating system.
Lastly, by leveraging its infrastructure and network in the FTL business, Fr8Tech believes it will be uniquely suited to launch a selectively targeted LTL offering within select markets in Mexico through Fr8Now.
Lastly, by leveraging its infrastructure and network in the FTL business, Fr8Tech believes it will be uniquely suited to launch a selectively targeted LTL offering within select markets in Mexico through Fr8Now. 29 Investing in Customers, Carriers and Employees to Drive Organic Growth : Fr8Tech plans to continue to incorporate customer feedback and their user experiences to solve their biggest pain points across the logistics landscape.
A system user can also set up routes that are physically different from one that the Platform might recommend if that system user has a preference for a given route over another, perhaps because of altitude or temperature differences on competing routes. 25 Shippers can use Fr8App’s Platform to post their freight needs, find available Carriers, enter into a freight contract with them, and monitor the transported goods while their shipment is in transit.
A system user can also set up routes that are physically different from one that the Platform might recommend if that system user has a preference for a given route over another, perhaps because of altitude or temperature differences on competing routes.
These may involve privacy, data protection and personal information, content, intellectual property, data security, retention and deletion. In particular it is subject to federal, state and foreign laws regarding privacy and protection of people’s data. Foreign data protection, privacy, content and other laws and regulations can impose different obligations or be more restrictive than those in the U.S.
These may involve privacy, data protection of personal and/or confidential information, content creation and distribution, intellectual property, data security and data retention. In particular, it is subject to federal, state and foreign laws regarding privacy and protection of companies’ and individuals’ data.
With recent investments in its Platform, internal tools for sales representatives, and targeted hiring, Fr8Tech plans to gain from returns to scale from a highly trained labor force, most of it in Mexico, to manage its ongoing daily operations throughout North America.
Ongoing investments in its Platform, internal sales tools, and targeted hiring in sales, operations and software development, Fr8Tech stands to benefit from well-trained labor force, mostly in Mexico, to manage its ongoing daily operations throughout North America.
The Carriers with which Fr8fleet transacts its business are usually smaller entities, either owner-drivers or companies with less than 20 trucks.
Regulations The Carriers with which Fr8App transacts cross-border business, are mostly legal corporate entities, LLCs, or their equivalents, in Mexico and Canada. The Carriers with which Fr8Fleet transacts its business are usually smaller entities, either owner-operators or companies with less than 20 trucks.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Compensation and Employee Benefits Fr8Tech’s compensation and employee benefits expenses were $4,963 for the year ended December 31, 2022 compared to $3,712 for the year ended December 31, 2021, which was a $1,251 or 33.7% increase on a year-over-year basis.
Fr8Tech’s compensation and employee benefits expenses were $4,963 for the year ended December 31, 2022 compared to $3,712 for the year ended December 31, 2021, which was a $1,251 or 33.7% increase on a year-over-year basis.
The vetting process for Shippers includes the following: ● Mexico Beneficial Cargo Owner (BCO) or Broker (3PL): Articles Incorporation charter, tax registration number, legal representative power of attorney, legal representative ID, banking information, address receipt, fiscal situation document, fiscal obligations opinion document (updated), Fr8App credit form ● For US or Canada Client (BCO): W-9 form for US, TD1 form for Canada, Fr8App credit form Fr8Tech collections group performs a credit report analysis which includes a due diligence of the customer credit record, revenues of the customer for the latest 3 years, industry in which client operates, review of current insurance coverage, and payment terms negotiated.
The vetting process for Shippers includes the following: ● Mexico Beneficial Cargo Owner (BCO) or Broker (3PL): Articles Incorporation charter, tax registration number, legal representative power of attorney, legal representative ID, banking information, address receipt, fiscal situation document, fiscal obligations opinion document (updated), Fr8App credit form ● For US or Canada Client (BCO) or Broker (3PL): W-9 form for US, TD1 form for Canada, Fr8App credit form Fr8Tech collections group performs a credit report analysis which includes a due diligence of the customer credit record, revenues of the customer for the latest 3 years, industry in which client operates, review of current insurance coverage, and payment terms negotiated.
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 obligation, arising under contracts the Company has entered into with customers that define the price for each shipment and payment terms. The Company’s acceptance of the shipment request establishes enforceable rights and obligations for each contract.
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.
Fr8Tech has had immaterial bad debt expense in the past several years. The vetting process for Carriers includes the following: A due diligence review is performed to ensure that carriers are following regulatory compliance, whether they are a line or base haul carrier, which routes they operate, truck types, cargo they are eligible to transport, reliability and availability.
Fr8Tech has had immaterial bad debt expense in the past several years. 45 The vetting process for Carriers includes the following: ● A due diligence review is performed to ensure that carriers are following regulatory compliance, whether they are a line or base haul carrier, which routes they operate, truck types, cargo they are eligible to transport, reliability and availability.
See “Forward-Looking Information.” In evaluating our business, you should carefully consider the information provided under the caption “Item 3 Key Information — D. Risk Factors” in this annual report on Form 20-F. We caution you that our businesses and financial performance are subject to substantial risks, changes and uncertainties. 37 A.
See “Forward-Looking Information.” In evaluating our business, you should carefully consider the information provided under the caption “Item 3 Key Information — D. Risk Factors” in this annual report on Form 20-F. We caution you that our businesses and financial performance are subject to substantial risks, changes and uncertainties. A.
Shippers can count on the safety and reliability of the Platform as Fr8Tech tracks cross border shipments. Lastly, Shippers can benefit by managing their logistics needs in one control center, all on Fr8Tech’s Platform. Fr8Tech believes Carriers value its ability to assist in minimizing empty (deadhead) miles and making every mile, a mile paid for.
Shippers can count on the safety and reliability of the Platform as Fr8Tech tracks cross border shipments. Lastly, Shippers can benefit by managing their logistics needs in one control center on Fr8Tech’s Platform. Fr8Tech believes Carriers value its ability to assist in minimizing empty (deadhead) miles and making every mile, a mile paid for.
Fair Value of Financial Instruments The carrying amounts of the Company’s financial instruments, which include trade accounts receivable, unbilled receivables, accounts payable, accrued expenses, and debt at variable interest rates, approximate their fair values at December 31, 2022 and 2021, respectively, principally due to the short-term nature, maturities, or nature of interest rates of the above listed items.
Fair Value of Financial Instruments The carrying amounts of the Company’s financial instruments, which include trade accounts receivable, unbilled receivables, accounts payable, accrued expenses, and debt at variable interest rates, approximate their fair values at December 31, 2023, 2022, and 2021, respectively, principally due to the short-term nature, maturities, or nature of interest rates of the above listed items.
After HKIFS was sold in its entirety on March 30, 2022, there are no assets, liabilities or contingencies remaining from Hudson Capital Inc.’s financial services businesses or any other of Hudson businesses as of that date. The first commercial version of Fr8Tech’s products were launched in 2017.
After HKIFS was sold in its entirety on March 30, 2022, there are no assets, liabilities or contingencies remaining from Hudson Capital Inc.’s financial services businesses or any other of Hudson businesses as of that date. The first commercial version of Fr8Tech’s products was launched in 2017.
Item 5. Operating and Financial Review and Prospects The following discussion of our financial condition and results of operations is based upon, and should be read in conjunction with, our audited consolidated financial statements and the related notes included in this annual report on Form 20-F. This report contains forward-looking statements.
Item 5. Operating and Financial Review and Prospects The following discussion of our financial condition and results of operations is based upon, and should be read in conjunction with, our audited consolidated financial statements and the related notes included in this annual report on Form 20-F. This annual report (this “Report”) contains forward-looking statements.
Net Loss Fr8Tech’s net loss for the year ended December 31, 2022 decreased to $8,187 from $8,200 for the year ended December 31, 2021 or by $13 or 0.2% on a year-over-year basis, as a result of the items described above.
Fr8Tech’s net loss for the year ended December 31, 2022 decreased to $8,187 from $8,200 for the year ended December 31, 2021 or by $13 or 0.2% on a year-over-year basis, as a result of the items described above. B.
Fr8Tech believes the TMS market to be in a development stage similar to the consumer transportation industry, or “taxicabs”, prior to the introduction of wider reaching platforms like Uber and Cabify.
Fr8Tech believes the TMS market to be in a development stage similar to the consumer transportation industry, or “taxicabs”, prior to the introduction of wider reaching platforms like Uber, Lyft and Cabify.
Sales and Marketing Sales and marketing expenses were $557 for the year ended December 31, 2022 compared to $92 for the year ended December 31, 2021, which was an increase of $465 or a 505.4% increase.
Sales and marketing expenses were $557 for the year ended December 31, 2022 compared to $92 for the year ended December 31, 2021, which was an increase of $465 or a 505% increase.
The ability to access real-time freight capacity and locate the right truck at the right time becomes critical to securing a reliable shipment service. Fr8Tech believes market conditions have created an increased demand for digital freight brokers who can help ease capacity constraints, open up new shipping lanes, and provide a benchmarking tool for both Shippers and Carriers.
The ability to access real-time freight capacity and locate the right truck at the right time becomes critical to securing a reliable shipment service. Fr8App believes market conditions have created an increased demand for digital freight brokers who can help ease capacity constraints, open up new shipping lanes, and provide a benchmarking tool for both Shippers and Carriers.
A Shipper will use Fr8Tech’s Platform to request bids on a shipment or a series of shipments of certain characteristics and a Carrier will agree to the terms set forth on its Platform. Carriers have the option to carry out deliveries prior to receiving payment from Fr8Tech, and Shippers may start shipments before submitting their payment to Fr8Tech.
A Shipper will use Fr8Tech to request bids on a shipment or a series of shipments of certain characteristics and a Carrier will agree to the terms set forth on its Platform. Carriers have the option to carry out deliveries prior to receiving payment from Fr8App, and Shippers may start shipments before submitting their payment to Fr8Tech.
Through our wholly-owned subsidiaries, Hongkong Internet Financial Services Limited and CIFS (Xiamen) Financial Leasing Co., Ltd, our contractually controlled and managed company, Hongkong Shengqi Technology Limited, its wholly-owned subsidiary, Beijing Yingxin Yijia Network Technology Co., Ltd and its contractually controlled and managed company, Sheng Ying Xin (Beijing) Management Consulting Co., Ltd (“SYX” or “Sheng Ying Xin”), and SYX’s wholly-owned subsidiaries, Kashgar Sheng Yingxin Enterprise Consulting Co., Ltd.
Through wholly-owned subsidiaries, Hongkong Internet Financial Services Limited and CIFS (Xiamen) Financial Leasing Co., Ltd, the contractually controlled and managed company, Hongkong Shengqi Technology Limited, its wholly-owned subsidiary, Beijing Yingxin Yijia Network Technology Co., Ltd and its contractually controlled and managed company, Sheng Ying Xin (Beijing) Management Consulting Co., Ltd (“SYX” or “Sheng Ying Xin”), and SYX’s wholly-owned subsidiaries, Kashgar Sheng Yingxin Enterprise Consulting Co., Ltd.
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 was 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.
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.
The cash required to fund the change in our net operating assets and liabilities was primarily due to increases in accounts receivable of $2,603 and prepaid assets of $684, offset by an increase in accounts payable, security deposit and accrued expenses of $605.
The cash required to fund the change in our net operating assets and liabilities was primarily due to increases in accounts receivable of $2,603 and prepaid assets of $684, offset by a net increase in accounts payable, security deposit and accrued expenses of $605.
In addition, for the years ended December 31,2022 and 2021, we reported operating losses and negative cash flows from operations. We have spent most of our cash resources on funding our operating activities.
In addition, for the years ended December 31, 2023 and 2022, we reported operating losses and negative cash flows from operations. We have spent most of our cash resources on funding our operating activities.
Through December 31, 2022, we have financed our operations primarily with the proceeds from the sale and issuance of our ordinary and preferred shares as well as convertible promissory notes and debt.
Through December 31, 2023, we have financed our operations primarily with the proceeds from the sale and issuance of our ordinary and preferred shares as well as convertible promissory notes and debt.
This year-over-year increase moves in similar fashion and magnitude with our revenue, with some differences due to varying margins in the traffic and in the traffic mix itself from quarter-to-quarter and year-to-year.
This year-over-year increase moved in similar fashion and magnitude with our revenue, with some differences due to varying margins in the traffic and in the traffic mix itself from quarter-to-quarter and year-to-year.
Fr8Tech further believes that its Fr8Radar is a tremendous value-add for both Shippers and Carriers in the country of Mexico, where there is little adoption of this key security and logistics planning tool. ● Be digital : Fr8Tech intends to continue refining and automating its operational flow and maximize efficiencies while thoughtfully growing its brokerage division.
Fr8Tech further believes that its Fr8Radar is a tremendous value-add for both Shippers and Carriers in the country of Mexico, where there has been limited adoption of this key security and logistics planning tool. ● Be Digital : Fr8Tech intends to continue refining and automating its operational flow and maximize efficiencies while thoughtfully growing its brokerage division.
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 year ended December 31, 2022 and 2021. 50 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.
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 years ended December 31, 2023 , 2022, and 2021. 49 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.
Fr8Tech believes that its ability to secure available freight capacity, using the Portal and Platform solutions, amongst available truck drivers offers customers an organized, efficient solution to transporting goods domestically and internationally in favorable or unfavorable market environments.
Fr8Tech believes that its ability to secure available freight capacity, using the Fr8App Platform solution, amongst available truck drivers offers customers an organized, efficient solution to transporting goods domestically and internationally in favorable or unfavorable market environments.
The increase in marketing expenses in 2022 was almost entirely due in large part to a strategic alliance with a US-based counterparty that is working with us to originate and manage US domestic business and that was paid for with the issuance of Ordinary shares.
The increase in marketing expenses in 2022 was almost entirely due in large part to a strategic alliance with a US-based counterparty that worked with us to originate and manage US domestic business and that was paid for with the issuance of ordinary shares.
The Company has a number of facilities in place, including for future debt and securities placements with established investors with maturity dates beyond twelve months from the date these consolidated financial statements are available to be issued.
The Company has facilities in place, including for future debt and securities placements with established investors with maturity dates beyond twelve months from the date these consolidated financial statements are available to be issued.
(“Kashgar SYX”), Fu Hui (Shenzhen) Commercial Factoring Co., Ltd (“FuhuiSZ”), Yingda Xincheng (Beijing) Insurance Broker Co., Ltd (“ Yin Da Xin Cheng”), Fuhui (Xiamen) Commercial Factoring Co., Ltd (“FuhuiXM”), Zhizhen Investment & Research (Beijing) Information Consulting Co., Ltd. and Hangzhou Yuchuang Investment Partnership.
(“Kashgar SYX”), Fu Hui (Shenzhen) Commercial Factoring Co., Ltd (“FuhuiSZ”), Yingda Xincheng (Beijing) Insurance Broker Co., Ltd (“Yin Da Xin Cheng”), Fuhui (Xiamen) Commercial Factoring Co., Ltd (“FuhuiXM”), Zhizhen Investment & Research (Beijing) Information Consulting Co., Ltd. and Hangzhou Yuchuang Investment Partnership.
Cash flows ($’000’s) Comparison of the Years ended December 31, 2022 and December 31, 2021 The following table summarizes our sources and uses of cash for the years ended December 31, 2022, and December 31, 2021: (All amounts in $’000s) 2022 2021 Net cash used in operating activities (8,470 ) (5,930 ) Net cash used in investing activities (381 ) (470 ) Net cash provided by financing activities 6,572 6,833 Net effect of exchange rates on cash (37 ) (47 ) Net (decrease) increase in cash and cash equivalents (2,316 ) 386 41 Cash flows used in Operating Activities Net cash used in operating activities represent the cash receipts and disbursements related to our activities other than investing and financing activities.
Cash flows ($’000’s) Comparison of the Years ended December 31, 2023, December 31, 2022, and December 31, 2021 The following table summarizes our sources and uses of cash for the years ended December 31, 2023, December 31, 2022, and December 31, 2021: (All amounts in $’000s) 2023 2022 2021 Net cash used in operating activities (5,791 ) (8,470 ) (5,930 ) Net cash used in investing activities (363 ) (381 ) (470 ) Net cash provided by financing activities 6,801 6,572 6,833 Net effect of exchange rates on cash (100 ) (37 ) (47 ) Net increase (decrease) in cash and cash equivalents 547 (2,316 ) 386 Cash flows used in Operating Activities Net cash used in operating activities represent the cash receipts and disbursements related to our activities other than investing and financing activities.
We act as an intermediary between the total system’s freight requirements and the related freight demand in a more efficient manner than if various of the parties requiring freight contracted these services on their own or managed their own proprietary fleets.
Fr8Tech acts as an intermediary between the total system’s freight requirements and the related freight demand in a more efficient manner than if various of the parties requiring freight contracted these services on their own or managed their own proprietary fleets.
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, including the ongoing COVID-19 pandemic, that may impact the collectability of outstanding receivables. Balances are considered past due based on invoiced terms.
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.
Operating Results Overview After February 14, 2022, when we consummated the Merger and after March 30, 2022, when we sold our wholly-owned Hong Kong subsidiary, Hongkong Internet Financial Services Limited (“HKIFS”), which held and operated our financial advisory business, in its entirety to a private investor, we are no longer in the financial advisory business and no longer have any presence or holdings outside of North America.
Operating Results Overview After February 14, 2022, when we consummated the Merger and after March 30, 2022, when we sold our wholly-owned Hong Kong subsidiary, HKIFS, which held and operated our financial advisory business, in its entirety to a private investor, we are no longer in the financial advisory business and no longer have any presence or holdings outside of North America.
Other income and expenses Interest expenses for the year ended December 31, 2022 decreased to $907,013 from $1,136,096 for the year ended December 31, 2021 due to the conversion of the notes payables at the Merger in February 2022, partially offset by interest expenses related to the increase in the short-term borrowing facility.
Interest expenses for the year ended December 31, 2022 decreased to $907 from $1,136 for the year ended December 31, 2021 due to the conversion of the notes payables at the Merger in February 2022, partially offset by interest expenses related to the increase in the short-term borrowing facility.
Cross-border travel and trade restrictions were put into effect and could return, even as economies and trade continue to re-open around the globe. Trucking capacity is not steadily available across borders. Contract carriers can still only go to certain pre-specified locations and companies continue to need to determine where specific available freight capacity is and how much it costs.
Cross-border travel and trade restrictions were put into effect and could return, even though economies and trade have fully reopened around the globe. Trucking capacity is not steadily available across borders. Contract carriers can still only go to certain pre-specified locations and companies continue to need to determine where specific available freight capacity is and how much it costs.
Fr8Tech believes that traditional 3PLs rely on a network of offices staffed with individuals tasked with communicating with colleagues, customers and transportation companies to identify and secure freight services that meet their customers’ specific needs. The process is manual, inefficient, and lacks transparency. Cross-border transportation challenges can include tracking, visibility, multiple hand-offs (where applicable), and international customs and regulatory inefficiencies.
Traditional 3PLs rely on a network of offices staffed with individuals tasked with communicating with colleagues, customers and transportation companies to identify and secure freight services that meet their customers’ specific needs. The process is manual, inefficient, and lacks transparency. Cross-border transportation challenges can include tracking, visibility, trans-loading and potentially multiple hand-offs, multiple languages, international customs and regulatory inefficiencies.
As it does so, Fr8Tech believes digital brokers, can play an integral role in easing capacity constraints, opening up new lanes, and providing a benchmarking tool for shippers. 38 In the short-term, Fr8Tech believes the COVID-19 pandemic has also changed the nature of global commerce and shipping.
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. In the short-term, Fr8Tech believes the COVID-19 pandemic has changed the current nature of global commerce and shipping.
Costs of Revenue Similar to the pattern seen in revenues, Fr8Tech’s cost of revenue, exclusive of depreciation and amortization, grew to $23,625 for the year ended December 31, 2022 from $19,559 for the year ended December 31, 2021, an increase of $4,066 and 20.8% on a year-over-year basis.
Fr8Tech’s cost of revenue, exclusive of depreciation and amortization, grew to $23,625 for the year ended December 31, 2022 from $19,559 for the year ended December 31, 2021, an increase of $4,066 and 20.8% on a year-over-year basis.
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 December 31, 2022 and 2021, the allowance for credit losses was $171,009 and $77,483, respectively.
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 December 31, 2023 and 2022 the allowance for credit losses was $282,058 and $171,009, respectively.
For the year ended December 31, 2022, net cash used in operating activities was $8,470. The $8,470 of net cash used in operating activities consisted of a net loss of $8,187 adjusted for non-cash charges of $2,399 offset by net changes in our net operating assets and liabilities amounting to $2,681.
The $8,470 of net cash used in operating activities consisted of a net loss of $8,187 adjusted for non-cash charges of $2,399 offset by net changes in our net operating assets and liabilities amounting to $2,681.
Fr8Tech’s principal asset consists of its software, which it invests in on a monthly basis through development work by employees and externally contracted parties. Fr8Tech invested approximately $0.4 million, $0.5 million and $0.2 million in software during the years ended December 31, 2022, 2021 and 2020, respectively.
Fr8Tech’s principal assets consist of its software, which it invests in on a monthly basis through development work by employees and externally contracted parties. Fr8Tech invested approximately $0.34 million, $0.4 million and $0.5 million in software during the years ended December 31, 2023, 2022 and 2021, respectively.
With its proprietary software, Fr8Tech offers smart solutions under its various brand names that create sustainable alternatives and offer benefits to both Shippers and Carriers, including: ● a single point of contact as a control center ● full visibility to freight transportation, in real-time ● ability to book shipment loads in minutes ● matching with only pre-approved Carrier compliance ● live 24/7 tracking on shipment while in-transit ● real-time messaging capabilities with Carriers ● advanced data analytics ● ability to secure quality loads faster on preferred routes ● ability to reduce “deadhead” empty loads ● convenient and faster payment ● scalable technology for Carriers who plan to grow their fleet Fr8Tech’s Customers Fr8Tech’s customers consist of Shippers and Carriers across North America.
With its proprietary software, Fr8Tech offers smart solutions under its various brand names that create sustainable alternatives and offer benefits to both Shippers and Carriers, including: ● a single point of contact as a control center ● full visibility to freight transportation, in real-time ● ability to book shipment loads in minutes ● matching with only pre-approved Carrier compliance ● live 24/7 tracking on shipment while in-transit ● real-time messaging capabilities with Carriers ● advanced data analytics ● ability to secure quality loads faster on preferred routes ● ability to reduce “deadhead” empty loads ● convenient and faster payment ● scalable technology for Carriers who plan to grow their fleet Fr8Fleet Fr8Fleet is our technology-driven solution for large corporate enterprise customers with a demand for regular and ongoing shipping and logistics.
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 Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”).
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 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”).
This supply chain volatility has led large and small freight brokers to, among other tactics, pivot toward more abundant and secure sources of freight capacity which is available in a digital marketplace and facilitated by software portals and platforms. Fr8Tech believes the supply chain will continue to evolve into an increasingly digital platform.
This substantial supply chain volatility has 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 shown in the accompanying consolidated financial statements as of December 31, 2022, we had an accumulated deficit of approximately $30.0 million, short-term debt of $3.4 million, unrestricted cash of approximately $1 million and a working capital of approximately $2.2 million.
As shown in the accompanying consolidated financial statements as of December 31, 2023, we had an accumulated deficit of approximately $39.3 million, short-term debt of $2.8 million, unrestricted cash of approximately $1.6 million and a working capital of approximately $2.0 million.
As of 2019, Mexico became the U.S.’s largest single trading partner. According to the United Nations, Mexico exported an extra $3.5 billion of goods into the U.S., in the first half of 2019, since the summer of 2018 when the trade war between the U.S. and China began.
According to the United Nations, Mexico exported an extra $3.5 billion of goods into the U.S., in the first half of 2019, since the summer of 2018 when the trade war between the U.S. and China began.
This supply chain volatility has led large and small freight brokers to, among other tactics, pivot toward more abundant and secure sources of freight capacity which is available in a digital marketplace and facilitated by software portals and platforms. Fr8Tech believes the supply chain will continue to evolve into a more digital platform.
This substantial supply chain volatility has 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 so, Fr8Tech believes digital brokers, like Fr8Tech can play an integral role in easing capacity constraints, opening up new lanes, and providing a benchmarking tool for shippers. 43 In the short-term, Fr8App believes the COVID-19 pandemic has also changed the nature of global commerce and shipping.
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. In the short-term, Fr8Tech believes the COVID-19 pandemic has changed the current nature of global commerce and shipping.
Patent and Trademark Office for the Fr8Technologies design mark. Fr8App currently does not hold any patents or own any registered trademarks. Fr8App believes that the success of its business depends on the quality of its proprietary software solutions, technology, processes, and domain expertise.
Fr8App currently does not hold any patents or own any registered trademarks. Fr8App believes that the success of its business depends on the quality of its proprietary software solutions, technology, processes, and domain expertise.
Total employees at December 31, 2022 and 2021 were 88 and 82, respectively. 39 General and Administrative General and administrative expenses were $3,561 for the year ended December 31, 2022 compared to $2,618 for the year ended December 31, 2021, which was an increase of $943 or 36.0%.
General and administrative expenses were $3,561 for the year ended December 31, 2022 compared to $2,618 for the year ended December 31, 2021, which was an increase of $943 or 36.0%.
By leveraging customer references and building off existing Shipper relationships, Fr8App believes it will be able to add new accounts to its portfolio across the domestic trucking industry in Mexico, at the U.S.-Mexico cross-border and opportunistically select routes within the U.S. and the U.S.-Canada border commercial freight transportation market.
By leveraging its customer base and long-standing industry relationships and building off existing Shipper feedback and experiences, Fr8Tech believes it will be able to add new accounts to its portfolio across the domestic trucking industry in Mexico, U.S.-Mexico cross-border trades and opportunistically select routes within the U.S. and the U.S.-Canada cross-border commercial freight transportation market.
Net cash flows used in operating activities is derived by adjusting our net loss for: ● non-cash operating items such as depreciation and amortization, stock-based compensation and other non-cash income or expenses; ● changes in operating assets and liabilities reflect timing differences between the receipt and payment of cash associated with transactions and when they are recognized in results of operations as well as any losses from extinguishment of debt or changes in value of preferred stock.
We expect cash provided by operating activities to be our primary use of funds for the foreseeable future as the Company continues to fund its growing operations Net cash flows used in operating activities is derived by adjusting our net loss for: ● non-cash operating items such as depreciation and amortization, stock-based compensation and other non-cash income or expenses; ● changes in operating assets and liabilities reflect timing differences between the receipt and payment of cash associated with transactions and when they are recognized in results of operations as well as any losses from extinguishment of debt or changes in value of preferred stock.
As an example, there are standard ways in which a new carrier is evaluated as a potential business counterparty in the U.S. There are several industry, data and government databases and electronic tools for investigating a potential business supplier and no such vetting processes overseeing the commercial freight transportation market in Mexico.
As an example, there are standard ways in which a new carrier is evaluated as a potential business counterparty in the U.S, including industry databases, government registries and electronic tools for investigating a potential business supplier. However, there are no established vetting processes to navigate the commercial freight transportation market in Mexico.
Fr8Tech’s growth strategy consists of the following: Fr8Tech plans to expand Fr8App’s Shipper base and increase its Carrier ecosystem throughout all three countries, with an initial focus on the Mexico-U.S. cross-border market, a select portion of the U.S. domestic market and a select segment of the Mexican domestic market.
Fr8Tech’s growth strategy consists of the following: Focus on Core Markets : Fr8Tech plans to expand its Shipper base and increase its Carrier ecosystem operating under the Fr8App brand throughout all three countries, with a continued focus on the Mexico-U.S. cross-border market, a select portion of the U.S. domestic market and a select segment of the Mexican domestic market.
As the market stabilizes, Fr8Tech will increasingly try to target higher volume, long-term contractual business directly from Shippers through its Fr8App brand, local traffic in Mexico through Fr8fleet and new streams of business through Fr8Now. 48 E. Critical Accounting Policies and Estimates.
With periods of market stability, Fr8Tech will increasingly try to target higher volume, long-term contractual business directly from Shippers through its Fr8App brand, local traffic in Mexico through Fr8Fleet and Fr8Now. E. Critical Accounting Policies and Estimates.
By leveraging its technology, the increasing usage, and amount of traffic booked on its Platform, Fr8Tech can work with customers to optimize their supply chain, eliminate empty miles on the road, and reduce their carbon footprint. A transformation in the logistics transportation industry is taking place.
By leveraging its technology, the increasing usage, and amount of traffic booked on its Platform, Fr8Tech can work with customers to optimize their supply chain, eliminate empty miles on the road, and reduce their carbon footprint.
Cross-border travel and trade restrictions were put into effect and may return, even as economies and trade continue to re-open around the globe. Trucking capacity is no longer readily available across borders. Contract carriers can still only go to certain pre-specified locations and companies continue to need to determine where specific available freight capacity is and how much it costs.
Cross-border travel and trade restrictions were put into effect and could return, even though economies and trade have fully reopened around the globe. Trucking capacity is not steadily available across borders. Contract carriers can still only go to certain pre-specified locations and companies continue to need to determine where specific available freight capacity is and how much it costs.
The changes in our accounts payable and accounts receivable balances are a result of the Company’s overall increase in business activities relative to earlier periods. Cash flows used in Investing Activities For the year ended December 31, 2022, net cash used in investing activities was $381.
The changes in our accounts payable and accounts receivable balances are a result of the Company’s overall increase in business activities relative to earlier periods. Cash flows used in Investing Activities For the year ended December 31, 2023, net cash used in investing activities was $363. The cash flow used was driven mostly by purchase of property and equipment.
Fr8Tech believes this supply chain volatility is driving an increase in demand for large and small freight brokers to secure more abundant freight capacity, in real-time, which is readily available on Fr8Tech’s digital marketplace and facilitated by its Portal and Platform solutions.
Fr8Tech believes the recent supply chain volatility is driving an increase in demand for large and small freight brokers to secure more abundant freight capacity, in real-time, which is readily available on Fr8Tech’s freight-matching platform and facilitated by its Fr8App Platform solution and Fr8Radar.
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, among other conditions for equity classification.
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.
Carriers are sent push notifications through the Platform every time a load or job request is entered by a Shipper that matches the criteria Carriers are looking for on a given shipment and lane.
Fr8App’s Platform can automatically and instantaneously match Shippers with Carriers within the Fr8App network. Carriers are sent push notifications through the Platform every time a load or job request is entered by a Shipper that matches the criteria Carriers are looking for on a given shipment and lane.
Fr8Tech believes that an ability to respond to increasing market volatility in real-time, can become an asset contributing to a Shipper’s business success. Fr8Tech believes this consideration is further exacerbated by qualified driver shortages in the U.S. and Canada.
In addition to profitability, sustainability and reliability has likely become a consideration of every Shipper’s bottom line. Fr8Tech believes that an ability to respond to increasing market volatility in real-time, is a valuable asset contributing to a Shipper’s business success. Fr8Tech believes this consideration is further exacerbated by qualified driver shortages in the U.S. and Canada.
The sale was for a nominal amount of $1. Instead, we are now, through our wholly-owned subsidiary, Freight App, Inc. (formerly known as “Freight Hub, Inc.” and hereinafter referred to as “Fr8App”) and Fr8App’s wholly-owned Mexico subsidiary, Freight App de México, S.A De C.V. (“Freight App Mexico”) involved in the freight management business.
The sale was for a nominal amount of $1. We are now, through our wholly-owned subsidiary, Fr8App, and Fr8App’s wholly-owned Mexico subsidiary, Freight App de México, S.A De C.V. (“Freight App Mexico”) solely involved in the freight management business.
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.
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.
During the last three years, the industry has seen severe swings due to the volatility of global and domestic supply chains in light of significant market distortions resulting from the global pandemic caused by the virus known as COVID-19 and its follow-on effects.
During the last three 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.
Fr8Tech continues to invest in improving its TMS technology and expects these investments to help improve its Platform as well as the range of services it may offer to its Shippers and Carriers, under its three different brands, over time.
Fr8Tech continues to invest in improving its TMS technology and expects these investments to help improve its Platform as well as the range of services Fr8Tech offers and will offer in the future to its Shippers and Carriers.
General economic factors, including the amount of international trade across North America may affect our shipper client needs for our services. A slowdown in the economy, such as from a rise in the unemployment rate and a decrease in real income, may affect individuals’ level of disposable income and the consequent effect on international trade.
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 rise 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.
Results of Operations Comparison of the Years Ended December 31, 2022 and December 31, 2021 CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME ($’000’s) For year ended Dec 31 2022 Dec 31 2021 Inc/(Dec) % Revenue Revenue 25,888 21,474 4,414 20.6 % Cost and Expenses Cost of revenue (exclusive of depreciation and amortization shown separately below) 23,625 19,559 4,066 20.8 % Compensation and employee benefits 4,963 3,712 1,251 33.7 % General and administrative 3,561 2,618 943 36.0 % Sales and marketing 557 92 465 505.4 % Depreciation and amortization 243 302 (59 ) -19.5 % Total cost and expenses 32,949 26,283 6,666 25.4 % Operating loss (7,061 ) (4,809 ) (2,252 ) 46.8 % Other income and (expenses) Interest expense, net (907 ) (1,136 ) 229 (20.2 %) Other income and (expenses) (128 ) (2,215 ) 2,087 (89.5 %) Total other income (expense) (1,035 ) (3,351) (2,316 ) (69.1 %) Loss before income taxes (8,096 ) (8,160 ) 64 (0.8 %) Income tax expense 91 40 51 127.5 % Net loss attributable to ordinary shareholders (8,187 ) (8,200 ) 13 (0.2 %) Foreign translation adjustment 89 (51 ) 140 (274.5 %) Comprehensive loss (8,098 ) (8,251 ) 153 (1.9 %) Revenues Fr8Tech’s revenues grew to $25,888 for the year ended December 31, 2022 from $21,474 for the year ended December 31, 2021, an increase of $4,414 and 20.6% on year-over-year basis.
Results of Operations Comparison of the Years Ended December 31, 2023, December 31, 2022, and December 31, 2021 CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME ($’000’s) Dec 31 2023 Dec 31 2022 Dec 31 2021 Revenue Revenue 17,061 25,888 21,474 Cost and Expenses Cost of revenue (exclusive of depreciation shown separately below) 15,710 23,625 19,559 Compensation and employee benefits 5,964 4,963 3,712 General and administrative 3,163 3,561 2,618 Sales and marketing 80 557 92 Depreciation and amortization 405 243 302 Total cost and expenses 25,322 32,949 26,283 Operating loss (8,261 ) (7,061 ) (4,809 ) Other income and (expenses) Interest expense, net (808 ) (907 ) (1,136 ) Other income and (expenses) (154 ) (128 ) (2,215 ) Total other income (expense) (962 ) (1,035 ) (3,351 ) Loss before income taxes (9,223 ) (8,096 ) (8,160 ) Income tax expense 105 91 40 Net loss attributable to ordinary shareholders (9,328 ) (8,187 ) (8,200 ) Foreign translation adjustment 453 89 (51 ) Comprehensive loss (8,875 ) (8,098 ) (8,251 ) 37 Revenues Fr8Tech’s revenues decreased to $17,061 for the year ended December 31, 2023 from $25,888 for the year ended December 31, 2022, a reduction of $8,827 and 34.1% on year-over-year basis.
The cash flow used was driven by investment in software development and purchases of equipment. For the year ended December 31, 2021, net cash used in investing activities was $470.
For the year ended December 31, 2022, net cash used in investing activities was $381. The cash flow used was driven mostly by software development costs capitalized. For the year ended December 31, 2021, net cash used in investing activities was $470. The cash flow used was driven by mostly by capitalized software development costs.
Fr8Tech believes the growing interest in digital freight matching platforms shows that traditional 3PL providers recognize the sweeping technological shifts in the industry and is ready to offer solutions to market participants.
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.
The Company’s contracts with customers 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, the Company is responsible for identifying and directing independent freight carriers to transport the shipper’s goods.
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.
According to Mordor Intelligence, the Mexican LTL market grew at a CAGR of 44.3% from 2016-2021, making it one of the fastest growing logistics segments in North America.
Market Opportunity According to Mordor Intelligence, the Mexican LTL market grew at a CAGR of 44.3% from 2016-2021, making it one of the fastest growing logistics segments in North America. That market is expected to register a compound annual growth rate of 5.4% between 2024 and 2030.
This may negatively shippers desire to transport goods and the 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 and is ready to offer solutions to market participants.
This may reduce Shippers’ needs to transport goods and their need to use our platform. 36 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.
However, since those facilities have conditions precedent for future fundings, and even though in some cases the capital providers of these facilities have been waived these same conditions in prior fundings, given that the funding is not unconditional, there can be no assurance that such financing would be available to us on favorable terms or at all.
However, since those facilities have conditions precedent for future fundings, and even though in some cases the capital providers of these facilities have been waived these same conditions in prior fundings, given that the funding is not unconditional, there can be no assurance that such financing would be available to us on favorable terms or at all. 40 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.
The near-shoring phenomenon continues to point towards more freight crossing over the US border with Mexico and a lesser extent, Canada. Fr8Tech believes that these conditions are creating part of the market void where digital brokers come into play for cross-border and consequently, intra-country commerce .
The near-shoring phenomenon continues to point towards more freight crossing over the U.S. border with Mexico and a lesser extent, Canada. Fr8Tech believes that these conditions are creating a market opportunity for digital brokers to facilitate and improve the connections necessary that enable cross-border commerce .
Additionally, Fr8Tech believes it is well positioned to benefit from the increasing trade across both the U.S.-Mexico and the U.S.-Canada borders caused by supply chain volatility, magnified by the recent COVID-19 pandemic and now manifesting itself with the more recent near-shoring phenomenon.
Additionally, Fr8Tech believes it is well positioned to benefit from the increasing trade across both the U.S.-Mexico and the U.S.-Canada borders caused by supply chain volatility and magnified by the COVID-19 pandemic as well as the increasing needs for reliable freight service within the country of Mexico.
Fr8Tech believes this commercial freight market growth is driven by growing domestic economies and increasing trade flows, which are not only from one region to another, but are more decentralized and fragmented as well as by the arrival and presence of large on-line retailers such as Amazon and MercadoLibre.
Fr8Tech believes this commercial freight market growth is driven by growing domestic economies and increasing trade flows, which are not only from one region to another, but are more decentralized and fragmented due to the growth of large on-line retailers such as Amazon and MercadoLibre. 44 Fr8Tech believes these factors are expected to intensify the complexity of logistics activities in the coming years in what has been a relatively fragmented Mexican transportation market on a historical basis.
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. Fr8Tech’s Warrant Liability of $4,951 at December 31, 2021 was exercised to equity at the Merger in February 2022.
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.
We also received net proceeds at the closing of the Merger in the amount of approximately $3.5 million and continue to incur short-term debt over the near-term that is collateralized by our accounts receivable. Fr8Tech expects it will maintain its short-term debt facility with a third party to continue to support ongoing operations.
We continue to incur short-term debt over the near-term that is collateralized by our accounts receivable. We expect to maintain our short-term debt facility of $5 million with a third party to continue to support ongoing operations.
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 to $243 for the year ended December 31, 2022, from $302 for the year ended December 31, 2021, a decrease of $59 or 19.5% on a year-over-year basis.
Depreciation and amortization expenses decreased to $243 for the year ended December 31, 2022, from $302 for the year ended December 31, 2021, a decrease of $59 or 19.5% on a year-over-year basis consistent with the levels of investment in Fr8App’s software and fixed assets as these decreased by nearly 22.7% on a year-over-year basis during 2022.
Fr8Tech expects to continue investing in its software in line with the expansion of its product offerings. Financing for investment in software has historically been provided for by the company’s operations.
Fr8Tech expects to continue investing in its software in line with the expansion of its product offerings.
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. 51 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.
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.
Fr8Tech believes this supply chain volatility is aggravated by a shortage of drivers thereby creating further pressure on the need for a more comprehensive approach to logistics management, with the view to meeting supply chain requirements without needing to increase the related freight costs.
Fr8Tech believes that the supply chain volatility was aggravated by a shortage of drivers thereby creating further demand for a more comprehensive approach to logistics management to meet supply chain requirements while minimizing increases in the related freight costs.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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The compensation committee will be responsible for, among other things: ● reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers; ● reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors; ● reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and ● selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management.
The compensation committee will be responsible for, among other things: ● reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers; ● reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors; ● reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and 55 ● selecting compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management.
Prior to that, he was the President/CFO and board member of Ideanomics, Inc. (formerly known as YOU On Demand Holdings, Inc.) He has been an executive at various private and public companies in the past 25 years. He earned his B.S. in Accounting from Babson College. B. Compensation.
Prior to that, he was the President/CFO and board member of Ideanomics, Inc. (formerly known as YOU On Demand Holdings, Inc.) He has been an executive at various private and public companies in the past 25 years. He earned his B.S. in Accounting from Babson College.
None of our non-executive directors has a service contract with us that provides for benefits upon termination of service. 56 Committees of the Board of Directors We established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee. We have adopted a charter for each of the three committees.
None of our non-executive directors has a service contract with us that provides for benefits upon termination of service. Committees of the Board of Directors We established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee. We have adopted a charter for each of the three committees.
A shareholder may in certain limited exceptional circumstances have the right to seek damages in our name if a duty owed by the directors is breached. Our board of directors has all the powers necessary for managing, and for directing and supervising, our business affairs.
A shareholder may in certain limited exceptional circumstances have the right to seek damages in our name if a duty owed by the directors is breached. 56 Our board of directors has all the powers necessary for managing, and for directing and supervising, our business affairs.
Pursuant to these agreements, the directorship of our independent director appointees will last until the earlier of (i) the date on which the director resigns, or (ii) is removed in accordance with the Company’s governing documents and applicable law.
Pursuant to these agreements, the directorship of our director appointees will last until the earlier of (i) the date on which the director resigns, or (ii) is removed in accordance with the Company’s governing documents and applicable law.
A copy of the compensation committee’s current charter is available at our corporate website at: https://www.fr8technologies.com/governance/. 57 Nominating and Corporate Governance Committee. Our nominating and corporate governance committee consists of Messrs. Adler and Samuels.
A copy of the compensation committee’s current charter is available at our corporate website at: https://www.fr8technologies.com/governance/. Nominating and Corporate Governance Committee. Our nominating and corporate governance committee consists of Messrs. Adler and Samuels.
He earned his BA in English Literature from Georgetown University, MA in English Literature from the University of Pennsylvania and J.D. from Emory University. 55 Marc Urbach , a current member of Fr8App’s Board of Directors, is the owner of Doorstep Delivery Logistics LLC and has been its Chief Executive Officer since August 2020, and consultant at OTS Ventures Inc. since January 2017.
He earned his BA in English Literature from Georgetown University, MA in English Literature from the University of Pennsylvania and J.D. from Emory University. 53 Marc Urbach , a current member of Fr8App’s board of directors, is the owner of Doorstep Delivery Logistics LLC and has been its Chief Executive Officer since August 2020, and consultant at OTS Ventures Inc. since January 2017.
A copy of the nominating and corporate governance committee’s current charter is available at our corporate website at: https://www. technologies.com /governance/ Duties of Directors Under British Virgin Islands law, our directors owe fiduciary duties to our company, including a duty of loyalty, a duty to act honestly and a duty to act in what they consider in good faith to be in our best interests.
A copy of the nominating and corporate governance committee’s current charter is available at our corporate website at: https://www.fr8technologies.com/governance/ Duties of Directors Under British Virgin Islands law, our directors owe fiduciary duties to our Company, including a duty of loyalty, a duty to act honestly and a duty to act in what they consider in good faith to be in our best interests.
We believe that we maintain a good working relationship with our employees and we have not experienced any significant labor disputes. 60 E . Share ownership.
We believe that we maintain a good working relationship with our employees and we have not experienced any significant labor disputes. E . Share ownership.
Each committee’s members and functions are described below. Audit Committee . Our audit committee consists of Messrs. Adler, Samuels and Urbach. Mr. Urbach is the chairman of our audit committee. We have determined that Messrs. Adler, Samuels and Urbach satisfy the “independence” requirements of NASDAQ Rule 5605 and Rule 10A-3 under the Securities Exchange Act of 1934.
Each committee’s members and functions are described below. Audit Committee . Our audit committee consists of Messrs. Adler, Samuels and Urbach. Mr. Urbach is the chairman of our audit committee. We have determined that Messrs. Adler, Samuels and Urbach satisfy the “independence” requirements of NASDAQ Rule 5605 and Rule 10A-3 under the Exchange Act.
Luisa have a Business Coaching Master, Supply Chain Management Certification and a Bachelor Degree in PR. Non-Employee Directors Nicholas H. Adler, our current Chairman of the Board, is a practicing attorney in Nashville, Tennessee specializing in defense litigation, bankruptcy, foreclosure, and real estate matters. He has been a partner at Brock & Scott PLLC since 2012.
Luisa has a Business Coaching Master, Supply Chain Management Certification and a Bachelor’s Degree in PR. Non-Employee Directors Nicholas H. Adler, our current Chairman of the Board, is a practicing attorney in Nashville, Tennessee specializing in defense litigation, bankruptcy, foreclosure, and real estate matters. He has been a partner at Brock & Scott PLLC since 2012.
Adler, Samuels, Urbach, and Selgas were appointed as directors to the board of directors, Mr. Freudenthaler as Secretary to the board of directors, Mr. Selgas to the position of Chief Executive Officer, Mr. Freudenthaler to the position of Chief Financial Officer and Mrs. Lopez to the position of Chief Operating Officer effective on February 14, 2022. 2. Messrs.
Messrs. Adler, Samuels, Urbach, and Selgas were appointed as directors to the board of directors, Mr. Freudenthaler as Secretary to the board of directors, Mr. Selgas to the position of Chief Executive Officer, Mr. Freudenthaler to the position of Chief Financial Officer and Mrs. Lopez to the position of Chief Operating Officer, effective as of February 14, 2022. Mr.
Under his Employment Agreement with Fr8Tech, Mr. Javier Selgas serves as Fr8 Tech’s Chief Executive Officer, receives an annual base salary of $250,000 and is eligible for benefits and a discretionary bonus payable in the first fiscal quarter after the end of each fiscal year.
Under his Employment Agreement with Fr8Tech, Mr. Javier Selgas serves as Fr8Tech’s Chief Executive Officer, receives an annual base salary of $250,000 and is eligible for benefits and a discretionary bonus payable in the first fiscal quarter after the end of each fiscal year.
Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares as of the date of this annual report by: ● each of our directors and executive officers; and ● each of our principal shareholders who beneficially own more than 5% of our total outstanding ordinary shares; The calculations in the table below are based on ordinary shares outstanding as of April 17, 2023.
Except as specifically noted, the following table sets forth information with respect to the beneficial ownership of our ordinary shares as of the date of this annual report by: ● each of our directors and executive officers; and ● each of our principal shareholders who beneficially own more than 5% of our total outstanding ordinary shares; 59 The calculations in the table below are based on ordinary shares outstanding as of May 7, 2024.
Freudenthaler is terminated without cause or for good reason, he will be entitled to receive continued payment of his base salary for six months immediately following the termination date.
Freudenthaler was terminated without cause or for good reason, he was entitled to receive continued payment of his base salary for six months immediately following the termination date.
Section (a)(3) of Marketplace Rule 5615 provides that foreign private issuers such as our company are required to comply with certain specific requirements of Marketplace Rule 5600, but, as to the balance of Marketplace Rule 5600, foreign private issuers are not required to comply if the laws of their home jurisdiction do not otherwise mandate compliance with the same or substantially similar requirement.
Section (a)(3) of Marketplace Rule 5615 provides that foreign private issuers such as our company are required to comply with certain specific requirements of Marketplace Rule 5600, but, as to the balance of Marketplace Rule 5600, foreign private issuers are not required to comply if the laws of their home jurisdiction do not otherwise mandate compliance with the same or substantially similar requirement. 58 We currently comply with those specifically mandated provisions of Marketplace Rule 5600.
Our officers are elected by and serve at the discretion of the board of directors. 58 Employment Agreements and Indemnification Agreements Fr8Tech’s current Chief Executive Officer joined Fr8Tech in March 2020 as its Chief Technology Officer, and became the Chief Executive Officer in September 2020. Both our ex-President and Chief Financial Officer of Fr8Tech joined Fr8Tech in September 2020.
Our officers are elected by and serve at the discretion of the board of directors. Employment Agreements and Indemnification Agreements Fr8Tech’s current Chief Executive Officer joined Fr8Tech in March 2020 as its Chief Technology Officer, and became the Chief Executive Officer in September 2020. Our Chief Financial Officer joined Fr8Tech in January 2024.
Executive Compensation The following table sets forth the amount of compensation that was paid, earned and/or accrued during the fiscal year ended December 31, 2022, to each of our officers and directors above.
Compensation. Executive Compensation The following table sets forth the amount of compensation, including stock-based compensation, that was paid, earned and/or accrued during the fiscal years ended December 31, 2023 and 2022, to each of our officers and directors above.
(6) Each of the directors’ holdings represent a mixture of restricted stock and stock options from the employee stock ownership plan convertible into ordinary shares that have vested within 60 days after the date of this report. Each of Messrs. Adler, Samuels and Urbach own 3,267, 2,979, and 2,979 ordinary shares, respectively. Mr.
(5) Each of the directors’ holdings represent a mixture of restricted stock and stock options from the employee stock ownership plan convertible into ordinary shares that have vested within 60 days after the date of this report. Each of Messrs. Adler, Samuels and Urbach own 327, 298, and 298 ordinary shares, respectively. Mr.
Adler 47 Director William Samuels 46 Director Marc Urbach 50 Director 54 Executive Officers Javier Selgas, Chief Executive Officer and director, was Fr8App’s Chief Technology Officer from March to September 2020, and was responsible for all of Fr8App’s technologies and products.
Adler 48 Director William Samuels 48 Director Marc Urbach 51 Director Executive Officers Javier Selgas, Chief Executive Officer and director, was Fr8App’s Chief Technology Officer from March to September 2020, and was responsible for all of Fr8App’s technologies and products.
Prior to joining Fr8App, Paul has served as the chief financial officer for several leading companies in both the U.S. and Mexico. From August 2015 to April 2016, he was the chief financial officer for EZ Corp., the Mexico division of Crediamigo, a payroll discount lender.
Paul Freudenthaler , Secretary, joined Fr8Tech in September 2020. Prior to joining Fr8Tech, Paul served as the chief financial officer for several leading companies in both the U.S. and Mexico. From August 2015 to April 2016, he was the chief financial officer for EZ Corp., the Mexico division of Crediamigo, a payroll discount lender.
Paul Freudenthaler serves as Fr8Fr8Tech’s Chief Financial Officer, receives an annual base salary of $250,000 and is eligible to receive a discretionary bonus payable in the first fiscal quarter after the end of each fiscal year.
Paul Freudenthaler served as Fr8Tech’s Chief Financial Officer, received an annual base salary of $250,000 and was eligible to receive a discretionary bonus payable in the first fiscal quarter after the end of each fiscal year.
The following table sets forth the number of our employees by function as of the same date: Functional Area Number of Employees % of Total Senior management 3 3.3 % Human resources and administrative personnel 6 6.7 % Accounting and Finance staff 10 11.1 % Sales – Shipper and Carrier 23 25.6 % Marketing 2 2.2 % IT and Development staff 11 12.2 % Operations and Fr8fleet 33 36.7 % Total 88 100.0 % As required by local regulations where our employees reside, we participate in various employee social security plans, including retirement plans, and medical insurance.
The following table sets forth the number of our employees by function as of the same date: Functional Area Number of Employees % of Total Senior management 4 5 % Human resources and administrative personnel 5 6 % Accounting and Finance staff 9 12 % Sales – Shipper and Carrier 28 36 % Marketing 1 1 % IT and Development staff 6 8 % Operations and Fr8Fleet 25 32 % Total 78 100 % As required by local regulations where our employees reside, we participate in various employee social security plans, including retirement plans, and medical insurance.
Name Compensation ($) Directors and Officers Nick Adler 1 2 60,000 William Samuels 1 2 65,000 Marc Urbach 1 2 50,000 Jerry Hutter 3 10,000 Javier Selgas 4 424,889 Paul Freudenthaler 4 399,517 Luisa Lopez 1 175,567 Mike Flinker 5 225,170 Total $ 1,410,143 1. Messrs.
Name 2023 Compensation ($) 2022 Compensation ($) Directors and Officers Nick Adler 1,2 $ 64,419 $ 60,000 William Samuels 1,2 $ 64,419 $ 65,000 Marc Urbach 1,2 $ 64,419 $ 50,000 Jerry Hutter 6 $ - $ 10,000 Javier Selgas 1,3 $ 542,374 $ 424,889 Paul Freudenthaler 1,3 $ 542,374 $ 399,517 Mike Flinker 5 $ - $ 225,170 Luisa Lopez 1,4 $ 241,184 $ 175,567 Total $ 1,519,189 $ 1,410,143 1.
He was awarded an additional stock option grant for 5,330 ordinary shares of Fr8Tech at $13.87 per share, vesting over four years starting in December 2021, and 90,000 shares of Fr8Tech ordinary shares at $2.850 per share, vesting over four years starting in August 2022. Under her Employment Agreement with Fr8Tech, Ms.
He was awarded an additional stock option grant for 5,330 ordinary shares of Fr8Tech at $13.87 per share, vesting over four years starting in December 2021, and 90,000 shares of Fr8Tech ordinary shares at $2.850 per share, vesting over four years starting in August 2022. On January 19, 2024, Mr.
Adler 8 3,396 0.0 % William Samuels 8 2,979 0.0 % Marc Urbach 8 2,979 0.0 % All Directors and Executive Officers as Group 75,881 0.8 % (1) For each person and group included in this table, percentage ownership is calculated by dividing the sum of the number of ordinary shares beneficially owned by such person or group and the number of the number of ordinary shares underlying share options or warrants held by such person or group that are exercisable within 60 days after the date of this annual report. by the sum of (i) 9,548,370 being the number of shares outstanding as of the date of this annual report and (ii) the number of ordinary shares underlying share options held by such person or group that are exercisable within 60 days after the date of this annual report.
Adler 345 ** % William Samuels 298 ** % Marc Urbach 298 ** % All Directors and Executive Officers as Group 0.05 % (1) For each person and group included in this table, percentage ownership is calculated by dividing the sum of the number of ordinary shares beneficially owned by such person or group and the number of ordinary shares underlying share options or warrants held by such person or group that are exercisable within 60 days after the date of this Report by the sum of (i) 4,845,993 being the number of shares outstanding as of May 7, 2024 and (ii) the number of ordinary shares underlying share options held by such person or group that are exercisable within 60 days after the date of this Report.
Prior to joining AJEGroup, Javier dedicated his professional career as an IT consultant in big corporations such as Endesa and Ibermatica. Javier earned a Master’s Degree from Barcelona University, and a Bachelor of Science degree in Software Engineering from European University. Paul Freudenthaler , Chief Financial Officer and Secretary, joined Fr8App in September 2020.
Prior to joining AJEGroup, Javier dedicated his professional career as an IT consultant in big corporations such as Endesa and Ibermatica. Javier earned a Master’s Degree from Barcelona University, and a Bachelor of Science degree in Software Engineering from European University. 52 Donald Quinby , Chief Financial Officer. Donald Quinby joined Fr8Tech as Chief Financial Officer on January 19, 2024.
Directors and Executive Officers Age Position/Title Javier Selgas 38 Chief Executive Officer and Director Paul Freudenthaler 58 Chief Financial Officer and Secretary Luisa Irene Lopez Reyes 51 Chief Operating Officer Nicholas H.
Directors and Executive Officers Age Position/Title Javier Selgas 39 Chief Executive Officer and Director Donald Quinby 49 Chief Financial Officer Luisa Irene Lopez Reyes 52 Chief Operating Officer Paul Freudenthaler 59 Secretary and Director Nicholas H.
Paul earned his MBA in Finance from The Wharton School of Business, a CPA License from Texas State Board of Public Accounting, and a Bachelor of Commerce in Accounting and Economics from the University of Calgary, Canada. Luisa Irene Lopez Reyes , Chief Operating Officer, joined Fr8App in August 2021.
Paul earned his MBA in Finance from The Wharton School of Business, a CPA License from Texas State Board of Public Accounting, and a Bachelor of Commerce in Accounting and Economics from the University of Calgary, Canada.
As of December 31, 2022, we had 88 employees, with 75 in Mexico, 10 in the US and the remainder elsewhere, working remotely.
As of December 31, 2023, we had 78 employees, with 70 in Mexico, 8 in the US and the remainder elsewhere, working remotely.
The executive officers have also agreed to disclose in confidence to us all inventions, designs and trade secrets which they conceive, develop or reduce to practice during the executive officer’s employment with us and to assign all right, title and interest in them to us, and assist us in obtaining and enforcing patents, copyrights and other legal rights for these inventions, designs and trade secrets. 59 We have entered into board services agreements and indemnification agreements with each of our independent director appointees and our CEO, who is a non-independent member of the Company’s board of directors.
The executive officers have also agreed to disclose in confidence to us all inventions, designs and trade secrets which they conceive, develop or reduce to practice during the executive officer’s employment with us and to assign all right, title and interest in them to us, and assist us in obtaining and enforcing patents, copyrights and other legal rights for these inventions, designs and trade secrets.
Item 6. Directors, Senior Management and Employees A. Directors and senior management. The following table sets forth information regarding our executive officers and directors as of the date of this annual report. All these officers and directors assumed their respective positions on February 14, 2022 upon the closing of the Merger.
Item 6. Directors, Senior Management and Employees A. Directors and senior management. The following table sets forth information regarding our executive officers and directors as of the date of this annual report.
The remainder of their holdings and Mrs. Lopez entire beneficial ownership represent options from the employee stock ownership plan convertible into ordinary shares that have vested within 60 days after the date of this report.
Lopez’s entire beneficial ownership represent options from the employee stock ownership plan convertible into ordinary shares that have vested within 60 days after the date of this report. *Rounded to the nearest hundredth digit. **Less than 0.01%. 60
Name of Beneficial Owner 1 Number of Shares % of Class Five Percent Holders ATW Opportunities Master Fund, L.P. 2 17 State Street, 2100, New York, NY 10004 2,121,945 43.1 % Freight Opportunities, LLC 3 17 State Street, 2100, New York NY 10004 2,231,247 45.3 % ATW Master Fund II, L.P. 2 17 State Street, 2100, New York, NY 10004 824,236 15.5 % Directors and Named Executive Officers 6 : Javier Selgas 7 30,226 0.5 % Luisa Irene Lopez Reyes 7 7,556 0.2 % Paul Freudenthaler 7 28,745 0.5 % Nicholas H.
Name of Beneficial Owner 1 Number of Shares % of Class* Five Percent Holders Freight Opportunities, LLC 2 17 State Street, 2100, New York NY 10004 42,582,959 90.35 % Directors and Named Executive Officers 4 5 : Javier Selgas 10,337 0.02 % Donald Quinby - 0 % Luisa Irene Lopez Reyes 3,201 ** % Paul Freudenthaler 10,300 0.02 % Nicholas H.
Mike Flinker was our President from September 2020 to December 1, 2022, at which time he tendered his resignation. C. Board practices. Board of Directors Our board of directors consists of four directors. A director is not required to hold any shares in our company to qualify to serve as a director.
Hutter was a member of our board of directors until his passing in late 2021. 54 C. Board Practices. Board of Directors During 2023, our board of directors consisted of four directors. A director is not required to hold any shares in our company to qualify to serve as a director.
Freight Opportunities, LLC. beneficially owns notes convertible to 1,791,687 ordinary shares and warrants convertible into 439,560 ordinary shares under various terms and conditions. (4) Unless otherwise indicated, the address for those listed below is c/o Freight App, Inc., at 2001 Timberloch Place, Suite 500, The Woodlands, Texas 77380. (5) Mr. Selgas and Mr. Freudenthaler each own 6,907 ordinary shares.
(4) Unless otherwise indicated, the address for those listed below is c/o Freight App, Inc., at 2001 Timberloch Place, Suite 500, The Woodlands, Texas 77380.
ATW Opportunities Master Fund, L.P. beneficially preferred shares convertible to 1,918,938 ordinary shares and warrants convertible into 203,007 ordinary shares under various terms and conditions. ATW Master Fund II, LP beneficially owns preferred shares convertible to 802,579 ordinary shares and warrants convertible into 21,657 ordinary shares under various terms and conditions.
(2) Freight Opportunities, LLC beneficially owns 401,660 ordinary shares, notes convertible to 487,164 ordinary shares, preferred shares convertible to 1,639,595 ordinary shares and warrants convertible into 40,054,540 ordinary shares under various terms and conditions.
Removed
Adler, Samuel and Urbach each received a $40,000 share grant during 2022. 3. Mr. Hutter was a member of our board of directors until his passing in late 2021. 4. Messrs. Selgas and Freudenthaler each received a $125,000 share grant during 2022. 5. Mr.
Added
Prior to joining the Company, Mr. Quinby held leading finance roles with several public companies. Since 2018, Mr. Quinby has been a Finance Director covering financial planning and analysis and investor relations at Nextracker Inc., a leader in utility scale solar tracker and software solutions. Prior to that, from 2016 to 2018, Mr.
Removed
We currently comply with those specifically mandated provisions of Marketplace Rule 5600.
Added
Quinby was a Finance Director for a smart-home residential solar business at Flex, preceded by being a Senior Manager of Financial Planning & Analysis for SunEdison’s Residential and Small Commercial solar business from 2015 to 2016. Mr. Quinby was a Senior Manager of Business Finance at Dolby Laboratories from 2009 to 2015.
Removed
(2) ATW Opportunities Master Fund, L.P. and ATW Master Fund II, L.P. are limited partnerships, comprising Messrs Antonio Ruiz-Gimenez and Kerry Propper as General Partners. Accordingly. Both Messrs Ruiz-Gimenez and Propper hold joint voting and dispositive power of the ordinary shares held by the limited partnerships.
Added
From 2004 to 2008, he was a Senior Manager, then director with KPMG, LLP’s Transaction Services, providing Mergers and Acquisitions advisory services on numerous deals for private equity and corporate clients. Mr. Quinby received an MBA from the University of California at Davis and a BA from Colby College. He has been a Chartered Financial Analyst charterholder since 2007.
Removed
(3) Freight Opportunities, LLC, a Delaware limited partnership, comprising ATW Opportunities Master Fund, L.P. as the sole member and manager of the company. Accordingly. Both Messrs Ruiz-Gimenez and Propper hold joint voting and dispositive power of the ordinary shares held by the company.
Added
Paul Freudenthaler resigned as Fr8Tech’s Chief Financial Officer on January 19, 2024, after which he continued serving as Secretary and began serving as Director. Luisa Irene Lopez Reyes , Chief Operating Officer, joined Fr8App in August 2021.
Removed
Adler also owns options convertible into 129 ordinary shares.
Added
Election of Officers Our executive officers are appointed by, and serve at the discretion of, our board of directors. Family Relationships None of the directors or executive officers has a family relationship as defined in Item 401 of Regulation S-K.
Added
Involvement in Certain Legal Proceedings To the best of our knowledge, none of our directors or executive officers has, during the past ten years, been involved in any legal proceedings described in subparagraph (f) of Item 401 of Regulation S-K.
Added
Our directors and officers have not been involved in any transactions with us or any of our affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.
Added
Diversity Matrix of Board of Directors The following table provides the diversity statistics of our Board of Directors required by Rule 5606 of the Nasdaq Listing Rules: Board Diversity Matrix as at the date of this Annual Report Country of Principal Executive Offices: USA Foreign Private Issuer Yes Disclosure Prohibited Under Home Country Law No Total Number of Directors 5 Female Male Non-Binary Did Not Disclose Gender Part I: Gender Identity Directors 0 5 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 1 LGBTQ+ 0 Did Not Disclose Demographic Background 0 B.
Added
Freudenthaler resigned as the Company’s Chief Financial Officer on January 19, 2024, after which he continued serving as Secretary and began serving as director. Mr. Quinby began serving as the Company’s Chief Financial Officer on January 19, 2024. 2. Messrs. Adler, Samuel and Urbach each received a grant date fair value of $24,687 of stock based compensation during 2023. 3.
Added
Messrs. Selgas and Freudenthaler each received a grant date fair value of $135,779 of stock based compensation during 2023. 4. Mrs. Lopez received a grant date fair value $49,375 of stock based compensation during 2023. 5. Mr. Mike Flinker was our President from September 2020 to December 1, 2022, at which time he tendered his resignation. 6. Mr.
Added
Donald Quinby receive an annual base salary of $250,000, paid in periodic installments, subject to payroll deductions and other tax withholdings in accordance with the Company’s customary payroll practices and applicable wage payment laws, but no less frequently than monthly. Mr. Quinby is eligible to receive a discretionary bonus based on performance as determined by our board of directors.
Added
Pursuant to his Employment Agreement with the Company, the Company will grant Mr. Quinby such number of options to purchase Company shares under its 2022 Stock Incentive Plan representing $220,000 in intrinsic value. 57 Under his Employment Agreement with Fr8Tech, Mr.
Added
Freudenthaler resigned as Fr8Tech’s Chief Financial Officer, after which he continued serving as Secretary and began serving as a director. Mr. Freudenthaler’s Employment Agreement terminated upon his resignation. In connection with his appointment as director, Mr. Freudenthaler entered into a Board Services Agreement with the Company. Pursuant to such Board Services Agreement, the Company shall pay Mr.
Added
Freudenthaler a quarterly compensation of $4,000 for his services as Secretary. Under her Employment Agreement with Fr8Tech, Ms.
Added
We have entered into board services agreements and indemnification agreements with (i) each of our independent director appointees and (ii) our CEO and Secretary, who are non-independent members of the Company’s board of directors.
Added
Freight Opportunities LLC does not have the right to convert or exercise any portion of its holdings to ordinary shares if, to the extent that after giving effect to such conversion or exercise, it would beneficially own in excess of 4.99% of the ordinary shares outstanding immediately after giving effect to such conversion or exercise, provided, that if at any time after the date hereof, Freight Opportunities, LLC beneficially owns in excess of 4.99% of any class of shares in the Company that is registered under the Exchange Act, then the maximum percentage shall automatically increase to 9.99% so long as it owns in excess of 4.99% of such class of shares.
Added
Adler also owns options convertible into 18 ordinary shares. Mr. Selgas and Mr. Freudenthaler each own 691 ordinary shares. The remainder of their holdings and Mrs.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

2 edited+0 added−2 removed2 unchanged
Item 7. Major Shareholders and Related Party Transaction A. Major Shareholders. Please refer to “Item 6.E. Directors, Senior Management and Employees—Share Ownership.” B. Related party transactions. Transaction and balances from related parties: The Company also provided freight services to a customer owned by a shareholder.
Item 7. Major Shareholders and Related Party Transaction A. Major Shareholders. Please refer to “Item 6.E. Directors, Senior Management and Employees—Share Ownership.” B. Related party transactions. Transaction and balances from related parties: The Company has provided freight services to a customer owned by a shareholder prior to the year ended December 31, 2022.
The accounts receivable from this certain customer as of December 31, 2022 and 2021 was $0. The revenue of these services for the years ended December 31, 2022 and 2021 was $0 and $99,000, respectively. 61 During January 2023, the Company issued various warrants and notes to Freight Opportunities, LLC, an affiliate of a shareholder.
The accounts receivable from this certain customer as of December 31, 2023 was $0. The revenue of these services for the year ended December 31, 2023, 2022 and 2021 was $0, $0 and $99,000, respectively.
Removed
(See Note 21 of audited financials). In 2022, the Company issued various warrants and ordinary shares to ATW Opportunities Master Fund, L.P. and ATW Master Fund II, L.P., each an affiliate of a shareholder.
Removed
In 2021, the Company issued various warrants to Opportunities Master Fund, L.P. and ATW Master Fund II, L.P., each an affiliate of a shareholder and entered into various promissory notes and warrant agreements with shareholders. (See Notes 13 and 18 of the consolidated financial statements).

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