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Freight Technologies, Inc. (NASDAQ:FRGT) announced Monday that it has amended its Memorandum and Articles of Association to change the terms related to the conversion of its Series A4 preferred shares. The amendment, which became effective upon filing on Friday following board approval, is intended to support compliance with the Nasdaq Capital Market’s minimum stockholders’ equity requirement.
According to a press release statement, the company had previously received a deficiency notice from Nasdaq on January 17, 2025, indicating non-compliance with Listing Rule 5550(b)(1), which requires listed companies to maintain at least $2.5 million in stockholders’ equity. Freight Technologies reported total shareholders’ equity of $6,159,098 as of March 31, 2025, after the sale and issuance of $8.2 million in Series A4 preferred shares. However, a floor price reset provision in the preferred shares’ conversion rights was identified as potentially conflicting with Nasdaq’s equity requirements.
The amendment to the company’s governing documents removes the provision that reset the conversion price floor for the Series A4 preferred shares every six months. Under the new terms, each preferred share may be converted into ordinary shares at the option of the holder, at a price that is the greater of the lowest daily volume weighted average price (VWAP) during the seven trading days before conversion or 20% of the closing price on the day before the preferred share was issued. The removal of the periodic floor price reset is expected to help the company maintain compliance with Nasdaq’s equity rules.
Freight Technologies is incorporated in the British Virgin Islands and its ordinary shares are listed on The Nasdaq Stock Market LLC under the symbol FRGT. The information in this article is based on a press release statement filed with the Securities and Exchange Commission.
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