Freight Technologies, Inc.

Previous wording

Freight Technologies, Inc. (Nasdaq: FRGT) (“Fr8Tech”), through its wholly-owned subsidiary, Fr8App, and Fr8App’s wholly-owned Mexico subsidiary, Freight App de México, S.A De C.V. (“Freight App Mexico”) is a technology company primarily involved in the freight management business. We offer a diverse portfolio of proprietary platform solutions powered by artificial intelligence (“AI”) and machine learning to optimize and automate the supply chain process. Freight logistics operations and our Fr8App marketplace solution, begins with parties connecting their transportation needs (“Shippers”) with those offering freight transportation services (“Carriers”). Within the demand and supply equation, Shippers seeking suitable means of transportation for their goods or products represent demand and Carriers with freight transportation capabilities represent supply. Focused on addressing the distinct challenges within the supply chain ecosystem, the Company’s portfolio of solutions includes the Fr8App platform for seamless over-the-road (“OTR”) business-to-business (“B2B”) cross-border shipping across the USMCA region; Fr8Now, a specialized service for LTL shipping; Fr8Fleet, a dedicated capacity service for enterprise clients in Mexico; Waavely, a digital platform for efficient ocean freight booking and management of container shipments between North America and ports worldwide; and, Fleet Rocket a nimble, scalable and cost-effective Transportation Management System (“TMS”) for brokers, Shippers, and other logistics operators. Together, each product is interconnected within a unified platform to connect Carriers and Shippers and significantly improve matching and operation efficiency via innovative technologies such as live pricing and real-time tracking, digital freight marketplace, brokerage support, transportation management, fleet management, and committed capacity solutions. More information on the Company and its service offerings is available on its corporate website, fr8technologies.com.

Current wording

Focused on addressing the distinct challenges within the supply chain ecosystem, the Company’s portfolio of solutions includes the Fr8App platform for seamless over-the-road (“OTR”) business-to-business (“B2B”) cross-border shipping across the USMCA region; Fr8Now, a specialized service for LTL shipping; Fr8Fleet, a dedicated capacity service for enterprise clients in Mexico; Waavely, a digital platform for efficient ocean freight booking and management of container shipments between North America and ports worldwide; and, Fleet Rocket a nimble, scalable and cost-effective Transportation Management System (“TMS”) for brokers, Shippers, and other logistics operators. Together, each product is interconnected within a unified platform to connect Carriers and Shippers and significantly improve matching and operation efficiency via innovative technologies such as live pricing and real-time tracking, digital freight marketplace, brokerage support, transportation management, fleet management, and committed capacity solutions. More information on the Company and its service offerings is available on its corporate website, fr8technologies.com.

Previous wording

As of March 31, 2024, the Company had an accumulated deficit of $46,518,825 and cash balance of $416,476. During the three months ended March 31, 2025 and the year ended December 31, 2024, we had a net loss of $1,602,046 and $5,601,227, respectively. To date, the Company has financed its operations primarily through capital raises and sales of its services. In September 2022, the Company filed the Shelf Registration Statement, which was declared effective by the SEC on September 26, 2022, for potential offerings of up to $15,000,000 in aggregate, subject to the requirement that in no event may we sell shares having a value exceeding more than one-third of our public float in any 12-month period under the Shelf Registration Statement so long as our public float remains below $75,000,000. In May 2024, the Company entered into the ATM Sales Agreement, and filed a prospectus supplement to the Shelf Registration Statement for the ATM Financing for gross proceeds of up to $2,300,000. In June 2024, the Company filed an additional prospectus supplement to the Shelf Registration Statement to increase the maximum gross proceeds to $4,750,000. In February 2025, the Company raised $3,000,000 from proceeds from the issuance of Series A4 preferred shares. Based on the Company’s existing cash resources and the cash expected to be received from future planned financings, it is expected that the Company will have sufficient funds to carry out the Company’s planned operations through December 31, 2025 and for at least 12 months beyond that period.

Current wording

As of June 30, 2025, the Company had an accumulated deficit of $45,869,587 and cash balance of $586,658. During the six months ended June 30, 2025 and the year ended December 31, 2024, we had a net loss of $952,808 and $5,601,227, respectively. To date, the Company has financed its operations primarily through capital raises and sales of its services. In September 2022, the Company filed the Shelf Registration Statement, which was declared effective by the SEC on September 26, 2022, for potential offerings of up to $15,000,000 in aggregate, subject to the requirement that in no event may we sell shares having a value exceeding more than one-third of our public float in any 12-month period under the Shelf Registration Statement so long as our public float remains below $75,000,000.

Previous wording

Fr8Tech believes the growing interest in digital freight matching platforms shows that traditional 3PL providers recognize the sweeping technological shifts in the industry. We are offering solutions that significantly improve end-to-end freight procurement transactions to market participants. During the last five years, the industry experienced significant swings in supply, demand and costs due to distortions in both domestic and global markets resulting from the global pandemic caused by the virus known as COVID-19 and its follow-on effects. This substantial supply chain volatility 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, 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.

Current wording

Fr8Tech believes the growing interest in digital freight matching platforms shows that traditional 3PL providers recognize the sweeping technological shifts in the industry. We are offering solutions that significantly improve end-to-end freight procurement transactions to market participants. During the last five years, the industry experienced significant swings in supply, demand and costs due to distortions in both domestic and global markets resulting from the global pandemic caused by the virus known as COVID-19 and its follow-on effects. This substantial supply chain volatility led large and small freight brokers to, among other tactics, pivot toward more abundant and secure sources of freight capacity available in a digital marketplace and facilitated by software portals and platforms. Fr8Tech believes supply chain management will continue to evolve into increasingly digital forms and interactive marketplace platforms. As it does, Fr8Tech believes digital brokers, will play an increasingly integral role in easing capacity constraints, opening up new lanes, and providing a benchmarking tool for Shippers.

Previous wording

While the COVID-19 pandemic is largely behind us, Fr8Tech believes the pandemic changed the current nature of global commerce and shipping. Putting aside the recently increased import tariffs and threats of other possible restrictive trade policies of the Trump administration, the near-shoring phenomenon continues to point towards more freight crossing over the U.S. border with Mexico and a lesser extent, Canada, as manufacturers and producers seek to move operations closer to customers. Additionally, trucking capacity remains not steadily available in the Mexican domestic and across border markets. Fr8Tech believes that these conditions are creating a market opportunity for digital brokers to facilitate and improve the connections necessary to enable cross-border commerce*.*

Current wording

While the COVID-19 pandemic is behind us, Fr8Tech believes the pandemic changed the current nature of global commerce and shipping. Putting aside the recently increased import tariffs and threats of other possible restrictive trade policies of the Trump administration, the near-shoring phenomenon continues to point towards more freight crossing over the U.S. border with Mexico and a lesser extent, Canada, as manufacturers and producers seek to move operations closer to customers. Additionally, trucking capacity remains not steadily available in the Mexican domestic and across border markets. Fr8Tech believes that these conditions are creating a market opportunity for digital brokers to facilitate and improve the connections necessary to enable cross-border commerce*.*

Previous wording

Fr8Tech’s revenues decreased to $4,100,640 for the three months ended March 31, 2025 from $4,287,760 for the three months ended March 31, 2024, a reduction of $187,120 and 4.4% on year-over-year basis. The year-over-year decrease was primarily driven by lower dedicated capacity revenue following the Company’s decision to conclude Fr8Fleet services brokered through a Mexico-based 3PL.

Current wording

Fr8Tech’s revenues decreased to $7,090,550 for the six months ended June 30, 2025 from $8,125,602 for the six months ended June 30, 2024, a reduction of $1,035,052 or 13% on year-over-year basis. The year-over-year decrease was primarily driven by lower dedicated capacity revenue following the Company’s decision to limit credit exposure with the Company’s largest Fr8Fleet customer, and a stronger US dollar relative to the Mexican peso.

Previous wording

Fr8Tech’s cost of revenue, exclusive of depreciation and amortization, decreased to $3,593,300 for the three months ended March 31, 2025, from $4,056,627 for the three months ended March 31, 2024, a reduction of $463,327 and 11.4% on a year-over-year basis. Year-over-year cost of revenue decreased primarily due to the decline in revenue, management’s focus on higher margin customers and routes, and a stronger US dollar relative to the Mexican peso.

Current wording

Fr8Tech’s cost of revenue, which represents costs the Company incurs from its partner carriers to complete customer shipments, decreased to $6,127,989 for the six months ended June 30, 2025, from $7,170,071 for the six months ended June 30, 2024, a reduction of $1,042,082 and 15% on a year-over-year basis. Year-over-year cost of revenue decreased primarily due to the decline in revenue, management’s continued focus on higher margin customers and routes, and a stronger US dollar relative to the Mexican peso.

Previous wording

Fr8Tech’s compensation and employee benefits expenses were $1,254,789 for the three months ended March 31, 2025 compared to $1,454,341 for the three months ended March 31, 2024, which was a $199,552 or 13.7% decrease on a year-over-year basis. The decrease was primarily due to lower headcount in Q1 2025 following the elimination of approximately 20 positions across most functions in an effort to streamline operations and reduce costs.

Current wording

Fr8Tech’s compensation and employee benefits expenses were $2,363,930 for the six months ended June 30, 2025 compared to $2,817,736 for the six months ended June 30, 2024, which was a $453,806 or 16% decrease on a year-over-year basis. The decrease was primarily due to lower headcount in 2025 following the elimination of approximately 20 positions across most functions in an effort to streamline operations and reduce costs.

Previous wording

General and administrative expenses were $596,753 for the three months ended March 31, 2025 compared to $731,537 for the three months ended March 31, 2024, which was a decrease of $134,784 or 18.4%, primarily due to lower spend on outside professional services and insurance.

Current wording

General and administrative expenses were $1,260,025 for the six months ended June 30, 2025 compared to $1,671,927 for the six months ended June 30, 2024, which was a decrease of $411,902 primarily due to lower spend on outside professional services and insurance, and a stronger US dollar relative to the Mexican peso.

Previous wording

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 $6,353 to $103,854 for the three months ended March 31, 2025, from $110,207 for the three months ended March 31, 2024.

Current wording

Depreciation and amortization expenses represent the amortization of previously capitalized software development costs, as appropriate, and depreciation expenses related to Fr8App’s fixed assets. This expense decreased $9,457 to $210,789 for the six months ended June 30, 2025, from $220,246 for the six months ended June 30, 2024.

Previous wording

Interest expense for the three months ended March 31, 2025 decreased to $134,864 from $172,704 for the three months ended March 31, 2024, or by $38,601 primarily due lower borrowing against the Company’s revolving credit facility.

Current wording

Interest expense for the six months ended June 30, 2025, decreased to $343,109 from $404,532 for the six months ended June 30, 2024, or by $61,423 primarily due lower borrowing against the Company’s revolving credit facility.

Previous wording

Fr8Tech has historically met its cash needs through a combination of cash flows from operating activities, term loans, promissory notes, bonds, convertible notes, private placement offerings and sales of equity. Fr8Tech’s cash requirements are generally for operating activities and debt repayments. Fr8Tech funded its early operations with a combination of debt and equity and we continue to work to position the Company to operate on a go-forward basis with a minimal amount of long-term debt and other borrowings. On January 3, 2023, Fr8Tech closed on a $6.6 million convertible note facility with a private investor, which was increased to $9.9 million in April 2023. The convertible note was mostly converted to equity during 2023. The balance of the convertible note of $219 thousand as of June 30, 2024, was extinguished in September 2024. The Company entered into a $750 thousand 1-year term note purchase agreement with Freight Opportunities, LLC on March 11, 2024, and an additional term note for $125 thousand with Freight Opportunities, LLC on June 4, 2024. Both promissory notes were also extinguished in September 2024. On February 3, 2025, the Company raised $3.0 million through the issuance of Series A4 preferred shares.

Current wording

Fr8Tech has historically met its cash needs through a combination of cash flows from operating activities, term loans, promissory notes, bonds, convertible notes, private placement offerings and sales of equity. Fr8Tech’s cash requirements are generally for operating activities and debt repayments. Fr8Tech funded its early operations with a combination of debt and equity and we continue to work to position the Company to operate on a go-forward basis with a minimal amount of long-term debt and other borrowings. On January 3, 2023, Fr8Tech closed on a $6.6 million convertible note facility with a private investor, which was increased to $9.9 million in April 2023. The convertible note was mostly converted to equity during 2023. The balance of the convertible note of $219 thousand as of June 30, 2024, was extinguished in September 2024. The Company entered into a $750 thousand 1-year term note purchase agreement with Freight Opportunities, LLC on March 11, 2024, and an additional term note for $125 thousand with Freight Opportunities, LLC on June 4, 2024. Both promissory notes were also extinguished in September 2024.

Previous wording

Our combined accounts receivable and unbilled receivable balance of $5.9 million at March 31, 2025, increased by $1.8 million or 45.1% from 2025 $4.1 million at December 31, 2024, primarily due to lower collections compared to the prior quarter.

Current wording

Our combined accounts receivable and unbilled receivable balance of $6.5 million at June 30, 2025, increased by $2.4 million or 60% from $4.1 million at December 31, 2024, primarily due to lower collections compared to the prior year.

Previous wording

As of March 31, 2025, Fr8Tech’s accounts payable, short-term borrowings and accrued expenses increased by $750 thousand or 12.4% to $6.8 million compared to December 31, 2024, due mostly to higher accrued expenses and increased borrowing on the revolving credit facility. At March 31, 2025, Fr8Tech had net working capital of $349 thousand.

Current wording

As of June 30, 2025, Fr8Tech’s accounts payable, short-term borrowings and accrued expenses increased by $1,302,912 to $7,369,702 compared to December 31, 2024, due mostly to increased borrowing on the revolving credit facility. At June 30, 2025, Fr8Tech had net working capital of negative $179,851.

Previous wording

In March 2019, we secured a revolving line of credit that is used to assist with managing our working capital needs. The maximum principal amount that may be drawn under the line of credit was increased since then to $5 million, which remains in place. As of March 31, 2025, and December 31, 2024, the amount drawn under this facility was $3.8 million $3.3 million, respectively. We continue to incur short-term debt with this facility, which is collateralized by our accounts receivable, and we expect to maintain this debt facility to support ongoing operations.

Current wording

In March 2019, we secured a revolving line of credit that is used to assist with managing our working capital needs. The maximum principal amount that may be drawn under the line of credit was increased since then to $5 million, which remains in place. As of June 30, 2025, and December 31, 2024, the amount drawn under this facility was $4.9 million $3.3 million, respectively. We continue to incur short-term debt with this facility, which is collateralized by our accounts receivable, and we expect to maintain this debt facility to support ongoing operations.

Previous wording

As shown in the accompanying consolidated financial statements as of March 31, 2025, we had an accumulated deficit of approximately $46.5 million, short-term debt of $3.8 million, unrestricted cash of approximately $0.4 million and a working capital of approximately $0.3 million. In addition, for the quarter ended March 31, 2025, and for the year ended December 31, 2024, we reported operating losses and negative cash flows from operations.

Current wording

As shown in the accompanying consolidated financial statements as of June 30, 2025, we had an accumulated deficit of approximately $45,869,587, short-term debt of $4,961,684, unrestricted cash of approximately $586,658 and a working capital of approximately negative $179,851. In addition, for the six months ended June 30, 2025, and for the year ended December 31, 2024, we reported operating losses and negative cash flows from operations.

Previous wording

The following table summarizes our sources and uses of cash for the three Months ended March 31, 2025, and March 31, 2024.

Current wording

The following table summarizes our sources and uses of cash for the six Months ended June 30, 2025, and June 30, 2024.

Previous wording

For the three months ended March 31, 2025, net cash used in operating activities was $3,096,429 primarily driven by a net loss of $1,602,046 and cash used for working capital of $1,823,320. The change in working capital was mainly due to increased accounts and unbilled receivables of $249,771 and $1,504,593, respectively.

Current wording

For the six months ended June 30, 2025, net cash used in operating activities was $5,039,217 primarily driven by a net loss of $952,808, the net change in value of cryptocurrencies of $2,427,754 and cash used for working capital of $2,417,671. The change in working capital was mainly due to increased accounts and unbilled receivables of $1,761,635 and $279,313, respectively.

Previous wording

For the three months ended March 31, 2024, net cash used in operating activities was $3,262,455 primarily driven by a net loss of $2,256,450 and cash used for working capital of $1,844,126. The change in working capital was mainly due to increased accounts receivables of $887,971 and decreased accounts payable and accrued expenses of $187,550 and $930,936, respectively.

Current wording

For the six months ended June 30, 2024, net cash used in operating activities was $4,857,126 primarily driven by a net loss of $4,211,006 and cash used for working capital of $1,851,119. The change in working capital was mainly due to decreased accrued expenses and accounts payable of $1,138,213 and $292,155, respectively.

Previous wording

For the three months ended March 31, 2025, net cash used in investing activities was $73,499, mostly for software development efforts for additional functionalities and capabilities of the Fr8App platform and related offerings, as well as building out Fleet Rocket.

Current wording

For the six months ended June 30, 2025, net cash used in investing activities was $984,831. Net purchases of Official Trump coin and FET token cryptocurrencies were $828,713, and $156,118 was spent on software development efforts for additional functionalities and capabilities of the Fr8App platform and related offerings, as well as ongoing development of Fleet Rocket.

Previous wording

For the three months ended March 31, 2024, net cash used in investing activities was $88,280, mostly for software development efforts for additional functionalities and capabilities of the Fr8App platform and related offerings.

Current wording

For the six months ended June 30, 2024, net cash used in investing activities was $173,879, mostly for software development efforts for additional functionalities and capabilities of the Fr8App platform and related offerings.

Previous wording

For the three months ended March 31, 2025, net cash provided by financing activities was $3,421,713 attributable to proceeds from the issuance of Series A4 shares and proceeds from short-term borrowings.

Current wording

For the six months ended June 30, 2025, net cash provided by financing activities was $6,407,563 attributable to proceeds from the issuance of Series A4 shares and proceeds from short-term borrowings.

Previous wording

For the three months ended March 31, 2024, net cash provided by financing activities was $2,149,198 primarily attributable to proceeds from the issuance of a $750,000 promissory note and $1,450,877 of net proceeds from short-term borrowings.

Current wording

For the six months ended June 30, 2024, net cash provided by financing activities was $3,923,593 primarily attributable to proceeds from equity sales of $1,453,589, a net drawdown of $1,697,468 from short-term borrowings, and from the issuance of a $873,000 promissory note.