Freight Technologies raises $3 million through private placement

HOUSTON - Freight Technologies, Inc. (NASDAQ: FRGT), a logistics technology company with a current market capitalization of $6.76 million, has announced the completion of a $3 million private placement of Series A4 preferred shares to accredited investors. The funding comes at a crucial time, as InvestingPro data shows the company has been rapidly burning through cash with a negative EBITDA of $8.53 million. The net proceeds, amounting to approximately $2.9 million after expenses, are earmarked for working capital and corporate purposes, including funding strategic growth initiatives and enhancing balance sheet flexibility.

The newly issued preferred shares, totaling 1,540,832, are immediately convertible into ordinary shares at the shareholder’s discretion, based on a conversion price outlined in the company’s Amended and Restated Memorandum and Articles of Association dated January 31, 2025. The conversion price will be the greater of the lowest daily VWAP of the ordinary shares during the seven trading days preceding the conversion or the established Series A4 Conversion Price Floor. According to InvestingPro analysis, the stock has experienced significant volatility, with a 97.66% decline over the past year and is currently trading near its 52-week low of $1.25.

Freight Technologies plans to file a registration statement with the Securities and Exchange Commission for the ordinary shares issuable upon conversion of the preferred shares by March 30, 2025. This move is detailed in the company’s Current Reports on Form 8-K filed with the SEC on February 3, 2025.

Javier Selgas, CEO of Freight Technologies, expressed gratitude for the continued support from investors and emphasized that the capital raised will support the company’s operational and strategic growth initiatives. While analysts anticipate sales growth this year, InvestingPro analysis reveals challenges with a negative gross profit margin of -24.57% and significant debt concerns. Freight Technologies is known for its AI and machine learning-powered platform solutions that aim to optimize and automate the supply chain process. The company’s products include the Fr8App for over-the-road (OTR) B2B cross-border shipping, Fr8Now for less-than-truckload shipping, Fr8Fleet for enterprise clients in Mexico, and Waavely for ocean freight booking.

This news is based on a press release statement and provides investors with the latest financial developments of Freight Technologies, Inc. For deeper insights into FRGT’s financial health, valuation metrics, and 15 additional ProTips, consider subscribing to InvestingPro.

In other recent news, Freight Technologies has made significant amendments to its corporate governance structure, lowering the quorum requirement for shareholder meetings to one-third of votes. This change is in response to the company’s financial challenges, as reported by analysts at InvestingPro. Freight Technologies also faces a potential NASDAQ delisting due to a deficit in stockholders’ equity, but plans to submit a compliance plan within the given 45-day window.

On a positive note, the company has secured new contracts and extended existing ones, including a logistics services contract with a global toy brand and a renewed contract with Kimberly-Clark (NYSE:KMB) de México. These developments have contributed to a 6.6% revenue increase in the first half of 2024, totaling $8.1 million, and a 40% rise in gross profits year-over-year.

Freight Technologies’ shareholders have approved key proposals, including the election of directors, the ratification of the independent auditor, Marcum LLP, and two amendments changing the ordinary shares’ par value and reducing the quorum for shareholder meetings. These are recent developments that investors should keep an eye on.

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