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Freight Technologies, Inc.

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Business Summary

Freight Technologies, Inc. (Fr8Tech) operates as a technology company primarily focused on freight management, offering a portfolio of proprietary platform solutions powered by artificial intelligence (AI) and machine learning to optimize and automate the supply chain process. The company's core business model involves connecting Shippers with Carriers through its digital marketplace, Fr8App, which focuses on full truckload (FTL) freight for domestic and cross-border markets in Mexico, the U.S., and Canada. Revenue is generated from freight transportation brokerage services and dedicated capacity services, with gross margins primarily earned from the difference between revenue invoiced to Shippers and costs paid to Carriers per completed transaction or provided capacity. The company also offers a Software as a Service (SaaS) model for its Fleet Rocket TMS. A significant portion of the company's revenue is transactional, derived from individual shipments and dedicated capacity arrangements. Kimberly Clark de Mexico (KCM) is a major customer, accounting for 88% of accounts receivables and 48% of revenues in 2024.

Fr8Tech's product and service lines include Fr8App, its primary B2B freight-matching platform for FTL domestic and cross-border shipping across the USMCA region. Fr8Fleet is a dedicated capacity service for large corporate enterprise customers in Mexico, providing exclusive use of an entire truck or fleet for regular shipping needs. Fr8Now is a specialized service for less-than-truckload (LTL) shipping, primarily focused on businesses within the domestic Mexican market. Waavely, launched in July 2024 , is a digital platform for efficient ocean freight booking and management of container shipments between North America and ports worldwide, extending services to existing customers for containerized shipments. Fleet Rocket, formally launched in February 2025 , is a nimble, scalable, and cost-effective Transportation Management System (TMS) offered under a SaaS model for brokers, Shippers, and other logistics operators, integrating AI technology to optimize cross-border logistics and nearshoring operations. Fr8Radar is a product feature providing Shippers and Carriers track and trace visibility via Fr8App's mobile solution or third-party GPS integrations.

For the fiscal year ended December 31, 2024, Fr8Tech reported total revenue of $13,728,922 , a decrease of 19.5% from $17,060,753 in 2023. Cost of revenue was $12,389,520 , resulting in a gross margin percentage of 9.8% , an increase from 7.9% in 2023. Operating loss for 2024 was $(6,490,251) . The company reported a net loss of $(5,601,227) , an improvement from $(9,327,606) in 2023. Diluted EPS was $(6.14) for 2024, compared to $(194.87) in 2023. Net cash used in operating activities was $(4,206,168) . As of December 31, 2024, cash and cash equivalents stood at $204,032 , total current liabilities were $6,345,005 , and short-term borrowings were $3,343,710 . The company had an accumulated deficit of $(44,916,779) and a total stockholders' equity (deficit) of $(654,760) .

Year-over-year, total revenue decreased by $3.3 million or 19.5% in 2024, primarily due to a focus on higher-margin customers and lanes, reduced spot market and dedicated service activity in Q3 2023, and an approximate 3.5% decline in the Mexican peso relative to the US dollar. Spot market revenue declined 36% to $8.6 million , while Fr8Fleet revenue increased 42% to $5.1 million . Gross margin percentage improved by 1.8% to 9.8% in 2024 from 7.9% in 2023, driven by changes in product mix and improved margins in Fr8Fleet. Compensation and employee benefits decreased by $0.6 million or 10.3% to $5.3 million , mainly due to lower executive compensation, bonuses, stock-based compensation, and a weaker Mexican peso, partially offset by additional hiring. General and administrative expenses decreased by $1.2 million or 37.7% to $2.0 million , largely due to a favorable change in the exchange valuation of working capital balances and lower outside legal and insurance costs.

During 2024, Fr8Tech launched Waavely in July , an ocean freight booking and management platform. Substantial progress was made on Fleet Rocket, a TMS software platform, with initial customer demonstrations completed before its formal launch in February 2025 . The company achieved ISO 9001:2015 certification for its US and Mexico operations. Senior management focused on improving gross margins, which resulted in higher gross profit despite lower revenues, and helped reduce net losses and improve cash flows from operations year-over-year. In May 2024, an At The Market (ATM) offering commenced for up to $2,300,000 of ordinary shares, later increased to $4,750,000 in June 2024, through which 528,576 shares were sold for net proceeds of $2,912,266 . The company also entered into a Cancellation Agreement on September 3, 2024, to cancel the remaining balance of a Convertible Promissory Note and two promissory notes totaling $875,000 , along with accrued interest of $482,103 and $32,956 , respectively, resulting in a gain from extinguishment of debt of $1.6 million .

Business Outlook

Fr8Tech explicitly states that based on its existing cash resources and expected cash from the ATM Financing and other planned financings, it anticipates having sufficient funds to carry out planned operations through December 31, 2025 and for at least 12 months beyond that period. However, the company also notes that it currently projects needing to draw additional funds on existing facilities and requiring additional capital to fund current operations and capital investment requirements until it scales to a revenue level that permits cash self-sufficiency.

A major growth area for Fr8Tech is the expansion of its digital freight matching platforms and related services in the Mexican domestic and U.S.-Mexico cross-border markets, with opportunistic expansion into select U.S. and Canadian routes. This involves ongoing investments in its Platform, internal sales capabilities, and targeted hiring in sales, operations, and software development. The company aims to increase adoption among existing Shippers and Carriers for its Fr8App, Fr8Fleet, Waavely, and Fr8Now offerings through targeted marketing campaigns and sales outreach. The company also plans to increase volumes with existing large enterprise customers and add new accounts, particularly in the domestic Mexican trucking industry and U.S.-Mexico cross-border trade routes.

Another significant growth vector is the commercialization of Fleet Rocket, its Transportation Management System (TMS) software solution, which was formally launched in February 2025 as a SaaS offering. Fr8Tech intends to build its Fleet Rocket subscriber base through existing customers and established industry connections, leveraging its infrastructure and network in the TMS business within the USMCA market. The company is investing in technology to improve and differentiate its Platform and further develop and market Fleet Rocket for brokers and Shippers. This includes empowering the offering with real-time load matching not only through Fr8App but also to other load boards via API interconnections. Fr8Tech's solutions are also expected to be leveraged to provide similar automated matching capabilities to adjacent markets, such as last-mile transportation, long-term storage, and warehousing.

Operationally, Fr8Tech is focused on margin trajectory and cost structure evolution. Senior management undertook measures in 2024 to improve gross margins on freight brokerage and dedicated capacity services, resulting in higher gross profit despite lower revenues and contributing to reduced net losses and improved cash flows from operations year-over-year. The gross margin percentage increased to 9.8% in 2024 from 7.9% in 2023, driven by product mix changes and improved Fr8Fleet margins. In January and February 2025, the company implemented a cost-cutting initiative, reducing its workforce by approximately 20% to optimize resources for operational performance and shift sales focus towards Fleet Rocket. This is anticipated to result in lower compensation and employee benefit expenses in 2025 compared to 2024.

The company continues to invest in technology infrastructure. Fr8App invested approximately $0.35 million and $0.34 million in software development during 2024 and 2023, respectively, and expects to continue investing in line with product expansion. Key technology developments in 2024 included 18 tracking integrations with GPS providers, ETA calculations on shipments, automatic status updates via geofencing, WhatsApp notifications for Shippers, bespoke customer integrations, facilities management capabilities, and new reports for all user types. In March 2025, Fr8Tech launched an AI-powered Tendering Bot to automate the load tendering process, which is fully integrated with Fleet Rocket to enhance automation, speed, efficiency, and accuracy of information sharing.

Regarding capital allocation, Fr8Tech plans to continue investing in its software, with historical investments of over $0.3 million per year in 2024 and 2023. Financing for software investment has historically come from operations and capital raising events. The company has a revolving line of credit facility of up to $5 million , with $3.3 million drawn as of December 31, 2024. In 2024, the company raised $0.9 million through promissory notes (which were subsequently forgiven) and $2.9 million net from an At The Market (ATM) offering of up to $4.75 million in ordinary shares. The company has never paid cash dividends and currently has no plans to do so, intending to retain earnings to finance business development and expansion.

Fr8Tech explicitly flagged several structural headwinds and execution risks. The company's early-stage operations could lead to high revenue concentration in individual clients, increasing revenue volatility, as seen with KCM accounting for 48% of 2024 revenues. Operational challenges and risks related to data integrity, accountability, and market adoption are associated with the use and integration of AI technologies, including potential technical malfunctions, data inaccuracies, or integration issues that could disrupt workflows and increase costs. Dependence on a third-party provider, Trebu, for AI development and integration exposes the company to operational and contractual risks, including service disruptions if Trebu fails to fulfill its obligations. The use of AI also increases exposure to data privacy and cybersecurity risks, with potential for regulatory penalties, litigation, or reputational damage from unauthorized data access or misuse. Evolving regulatory and compliance risks related to AI, such as potential future legislation on explainability, risk classification, and human oversight, could increase operational burdens and legal liability.

Geographic, regulatory, and macro factors identified as constraints include trade tensions or adverse regulatory/political changes in the U.S., Mexico, or Canada, which could materially affect demand for services, operations, and financial conditions. The cyclicality of the trucking industry and general economic conditions directly impact Fr8Tech, as downturns in consumer, industrial, and manufacturing sectors can create excess capacity and adversely affect business. Strikes or labor unrest at border crossings or organized crime activities affecting shipment integrity could disrupt cross-border freight and negatively impact operating results. Changing fuel and energy prices, particularly diesel, can significantly impact carrier expenses and potentially shift freight from truck to other modes if air freight becomes more attractive. Truck driver or other supply shortages within the transportation value chain could adversely affect the company's ability to secure carrier services at commercially favorable rates.

Risk Factors

Fr8Tech faces material risks including its limited operating history and early-stage operations, which contribute to a high concentration of revenues in individual clients, such as Kimberly Clark de Mexico accounting for 48% of 2024 revenues, increasing revenue volatility. The company's reliance on information technology and AI technologies exposes it to significant data breach, information system disruption, and cybersecurity risks, potentially requiring increased spending on security and leading to operational challenges, data inaccuracies, or legal liabilities. Dependence on third-party providers like Trebu for AI development and integration introduces operational and contractual risks, including potential service disruptions or data security failures. Evolving regulatory landscapes for AI, particularly in the U.S., Mexico, and the EU, could impose new compliance burdens, fines, or reputational damage. Macroeconomic factors such as the cyclicality of the trucking industry, general economic downturns, and volatile fuel prices directly affect demand and operating costs. Geopolitical risks, including trade tensions, adverse regulatory or political changes in the USMCA region, and labor unrest or organized crime activities at border crossings, could materially disrupt operations and demand for services. The company also faces substantial doubt about its ability to continue as a going concern, with an accumulated deficit of $(44.9) million , a shareholders' deficit of $(0.7) million , and negative cash flows from operations of $(4.2) million in 2024, necessitating future capital raises that may dilute existing shareholders.

Management Priorities

Management's message to shareholders conveys a tone of strategic adaptation and focused growth amidst challenging market conditions. They emphasize the company's initiatives to expand its business through technology development and new product launches, such as Waavely in July 2024 and Fleet Rocket in February 2025. A key strategic priority is the continuous investment in and enhancement of its proprietary platform solutions, leveraging AI and machine learning to optimize supply chain processes and improve matching and operational efficiency. Management also highlights efforts to improve financial performance, noting that measures taken in 2024 to improve gross margins resulted in higher gross profit despite lower revenues, and helped reduce net losses and improve cash flows from operations year-over-year. Furthermore, a significant strategic shift is the cost-cutting initiative undertaken in January and February 2025, which included a 20% workforce reduction, aimed at optimizing resources and shifting sales focus to emphasize the Fleet Rocket TMS software offering and lower ongoing operating expenses. Management explicitly states their expectation that the company will have sufficient funds to carry out planned operations through December 31, 2025 and for at least 12 months beyond that period, based on existing cash and expected proceeds from the ATM Financing and other planned financings.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Fr8Tech's Customers
  2. [2] Item 1, Business — Fr8Tech's Customers
  3. [3] Item 1, Business — Fiscal Year 2024 Highlights
  4. [4] Item 1, Business — Fiscal Year 2024 Highlights
  5. [5] Item 7, MD&A — Select Financial Data
  6. [6] Item 7, MD&A — Revenues
  7. [7] Item 7, MD&A — Select Financial Data
  8. [8] Item 7, MD&A — Select Financial Data
  9. [9] Item 7, MD&A — Costs of Revenue
  10. [10] Item 7, MD&A — Costs of Revenue
  11. [11] Item 7, MD&A — Select Financial Data
  12. [12] Item 7, MD&A — Select Financial Data
  13. [13] Item 7, MD&A — Select Financial Data
  14. [14] Item 7, MD&A — Select Financial Data
  15. [15] Item 7, MD&A — Select Financial Data
  16. [16] Item 7, MD&A — Cash flows
  17. [17] Item 7, MD&A — Select Financial Data
  18. [18] Item 7, MD&A — Select Financial Data
  19. [19] Item 7, MD&A — Liquidity and Financial Position
  20. [20] Item 7, MD&A — Select Financial Data
  21. [21] Item 7, MD&A — Select Financial Data
  22. [22] Item 7, MD&A — Revenues
  23. [23] Item 7, MD&A — Revenues
  24. [24] Item 7, MD&A — Revenues
  25. [25] Item 7, MD&A — Revenues
  26. [26] Item 7, MD&A — Revenues
  27. [27] Item 7, MD&A — Revenues
  28. [28] Item 7, MD&A — Revenues
  29. [29] Item 7, MD&A — Costs of Revenue
  30. [30] Item 7, MD&A — Costs of Revenue
  31. [31] Item 7, MD&A — Costs of Revenue
  32. [32] Item 7, MD&A — Compensation and Employee Benefits
  33. [33] Item 7, MD&A — Compensation and Employee Benefits
  34. [34] Item 7, MD&A — Compensation and Employee Benefits
  35. [35] Item 7, MD&A — General and Administrative
  36. [36] Item 7, MD&A — General and Administrative
  37. [37] Item 7, MD&A — General and Administrative
  38. [38] Item 1, Business — Fiscal Year 2024 Highlights
  39. [39] Item 1, Business — Fiscal Year 2024 Highlights
  40. [40] Item 1, Business — Fiscal Year 2024 Highlights
  41. [41] Item 1, Business — Fiscal Year 2024 Highlights
  42. [42] Item 1, Business — Fiscal Year 2024 Highlights
  43. [43] Item 1, Business — Fiscal Year 2024 Highlights
  44. [44] Item 1, Business — Fiscal Year 2024 Highlights
  45. [45] Item 5, Market for Registrant’s Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities — Use of Proceeds from Registered Securities
  46. [46] Item 5, Market for Registrant’s Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities — Use of Proceeds from Registered Securities
  47. [47] Item 5, Market for Registrant’s Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities — Use of Proceeds from Registered Securities
  48. [48] Item 7, MD&A — Other income and expenses
  49. [49] Item 1, Business — Our Historical Performance
  50. [50] Item 1, Business — Fiscal Year 2024 Highlights
  51. [51] Item 7, MD&A — Costs of Revenue
  52. [52] Item 7, MD&A — Costs of Revenue
  53. [53] Item 18, Subsequent Events — Restructure
  54. [54] Item 1, Business — Intellectual Property
  55. [55] Item 1, Business — Intellectual Property
  56. [56] Item 1, Business — AI – Powered Tendering Bot
  57. [57] Item 7, MD&A — Research and development, patents and licenses
  58. [58] Item 7, MD&A — Liquidity and Financial Position
  59. [59] Item 7, MD&A — Liquidity and Financial Position
  60. [60] Item 1A, Risk Factors — The audited consolidated financial statements for the year ended December 31, 2024 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.
  61. [61] Item 1A, Risk Factors — The audited consolidated financial statements for the year ended December 31, 2024 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.
  62. [62] Item 1A, Risk Factors — The audited consolidated financial statements for the year ended December 31, 2024 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.
  63. [63] Item 1A, Risk Factors — Fr8Tech’s early-stage operations could expose it to a high concentration of revenues in individual clients and increase the volatility of its revenues.
  64. [64] Item 1A, Risk Factors — Fr8Tech’s early-stage operations could expose it to a high concentration of revenues in individual clients and increase the volatility of its revenues.
  65. [65] Item 1A, Risk Factors — The audited consolidated financial statements for the year ended December 31, 2024 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.
  66. [66] Item 1A, Risk Factors — The audited consolidated financial statements for the year ended December 31, 2024 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.
  67. [67] Item 1A, Risk Factors — The audited consolidated financial statements for the year ended December 31, 2024 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.
  68. [68] Item 18, Subsequent Events — Restructure
  69. [69] Item 1, Business — Our Historical Performance

Analysis on 5/21/2026