Freight Technologies Announces 1-for-25 Reverse Stock Split

Rhea-AI Summary

Freight Technologies (Nasdaq: FRGT) has announced a 1-for-25 reverse stock split of its ordinary shares, effective September 25, 2024. This move will reduce the number of outstanding shares from 35,844,999 to 1,433,800. The company's shares will continue trading on Nasdaq under the symbol 'FRGT' but with a new CUSIP number.

The reverse split aims to increase the per-share trading price to meet Nasdaq's $1.00 minimum bid price requirement for continued listing. Shareholders will receive one new share for every 25 pre-split shares, with fractional shares rounded up or cancelled based on specific criteria. The total number of authorized shares remains unchanged.

Positive

• Potential to maintain Nasdaq listing by meeting minimum bid price requirement
• Reduction in outstanding shares from 35,844,999 to 1,433,800

Negative

• Significant dilution for existing shareholders
• Reverse split often perceived negatively by market

Insights

Financial Analyst

Freight Technologies' 1-for-25 reverse stock split is a significant move aimed at maintaining Nasdaq listing compliance. This action will reduce the outstanding shares from 35,844,999 to 1,433,800, potentially increasing the stock price by a factor of 25. However, it's important to note that this doesn't change the company's fundamental value or market cap.

The primary goal is to meet Nasdaq's $1.00 minimum bid price requirement, which suggests the stock was trading below this threshold. While this may temporarily boost the stock price, it doesn't address underlying business performance issues. Investors should be cautious, as companies resorting to reverse splits often struggle with declining share prices and may face delisting risks.

The impact on existing shareholders is neutral in terms of value, but it could affect market perception and liquidity. Historically, reverse splits can be seen as a red flag, potentially leading to increased scrutiny from investors and analysts.

Market Research Analyst

This reverse split could have mixed implications for Fr8Tech's market perception. On one hand, it may attract institutional investors who have minimum share price requirements. On the other, it might signal financial distress to some market participants.

The reduction in outstanding shares could lead to:

• Increased volatility due to a smaller float
• Potentially higher short-term trading costs for retail investors
• Possible improvement in analyst coverage if the higher share price attracts more attention

However, the key for long-term success lies in the company's ability to leverage its "diverse portfolio of technology-driven solutions" in the logistics sector. Investors should closely monitor Fr8Tech's financial performance and growth strategies post-split to gauge its true potential.

HOUSTON, Sept. 23, 2024 (GLOBE NEWSWIRE) -- Freight Technologies, Inc. (Nasdaq: FRGT, “Fr8Tech” or the “Company”), a logistics management innovation company, offering a diverse portfolio of technology-driven solutions that address distinct challenges within the supply chain ecosystem, announced today that the board of directors of the Company approved a one (1) for twenty-five (25) reverse split of its issued and outstanding ordinary shares, no par value (the “Ordinary Shares”). The Company’s Ordinary Shares will begin trading on a split adjusted basis on September 25, 2024.

As a result of the reverse share split, each twenty-five (25) pre-split Ordinary Shares of the Company will automatically combine into one (1) Ordinary Share without any action on the part of the holders, and the number of outstanding Ordinary Shares will be reduced from 35,844,999 to 1,433,800. The Company’s Ordinary Shares will continue to trade on the Nasdaq Capital Market (the “Nasdaq”) under the symbol “FRGT” but will trade under a new CUSIP number (G51413139).

No fractional shares will be issued as a result of the reverse share split. Shareholders who otherwise would be entitled to a fractional share because they hold a number of Ordinary Shares not evenly divisible by the one (1) for 25 reverse split ratio, will automatically be entitled to receive an additional fractional share of the Company’s Ordinary Shares to round up to the next whole share if they were to hold a fractional share less than one-half or more. Shareholders who hold a fractional share equal to less than one-half will have the fractional share cancelled.

The reverse stock split is intended to increase the per share trading price of the Ordinary Shares to satisfy the $1.00 minimum bid price requirement for continued listing on the Nasdaq. Following the reverse stock split the Company will have approximately 1.43 million Ordinary Shares issued and outstanding, exclusive of shares issuable under outstanding options and warrants. The reverse stock split will not affect the number of total authorized Ordinary Shares of the Company.

The Company’s transfer agent, Transhare Corporation will act as the exchange agent. Please contact Transhare Corporation for further information at (303) 662-1112.

About Freight Technologies Inc.

Freight Technologies (Nasdaq: FRGT) (“Fr8Tech") is a technology company offering a diverse portfolio of proprietary platform solutions powered by AI and machine learning to optimize and automate the supply chain process. Focused on addressing the distinct challenges within the supply chain ecosystem, the Company’s portfolio of solutions includes the Fr8App platform for seamless OTR B2B cross-border shipping across the USMCA region; Fr8Now, a specialized service for less-than-truckload (LTL) shipping; Fr8Fleet, a dedicated capacity service for enterprise clients in Mexico; and Waavely, a digital platform for efficient ocean freight booking and management of container shipments between North America and ports worldwide. 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. The company is headquartered in Houston, Texas. For more information, please visit fr8technologies.com.

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Fr8Tech’s and Fr8App Inc.’s actual results may differ from their expectations, estimates and projections and, consequently, readers should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue” and similar expressions (or the negative versions of such words or expressions) are intended to identify such forward-looking statements.

These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from those discussed in the forward-looking statements. Most of these factors are outside Fr8Tech’s and Fr8App Inc.’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: (1) the impact of the COVID-19 pandemic on Fr8App Inc.’s business, if it should recur; (2) the inability to obtain or maintain the listing of Fr8Tech’s ordinary shares on Nasdaq; (3) changes in applicable laws or regulations; (4) the possibility that Fr8Tech or Fr8App Inc. may be adversely affected by other economic, business and/or competitive factors; (5) risks relating to the uncertainty of the projected financial information with respect to Fr8App Inc.; (6) risks related to the organic and inorganic growth of Fr8App Inc.’s business and the timing of expected business milestones; and (7) other risks and uncertainties identified, including those under “Risk Factors,” to be filed in ’Fr8Tech other filings with the SEC.

Fr8Tech cautions that the foregoing list of factors is not exclusive. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Fr8Tech and Fr8App Inc. caution readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Fr8Tech and Fr8App Inc. do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in their expectations or any change in events, conditions or circumstances on which any such statement is based.

FAQ

What is the reverse stock split ratio for Freight Technologies (FRGT)?

Freight Technologies (FRGT) has announced a 1-for-25 reverse stock split, meaning every 25 pre-split shares will be combined into one new share.

When will Freight Technologies' (FRGT) reverse stock split take effect?

The reverse stock split for Freight Technologies (FRGT) will take effect on September 25, 2024, when the company's ordinary shares will begin trading on a split-adjusted basis.

Why is Freight Technologies (FRGT) implementing a reverse stock split?

Freight Technologies (FRGT) is implementing the reverse stock split to increase its per-share trading price and satisfy the $1.00 minimum bid price requirement for continued listing on the Nasdaq.

How will the reverse split affect Freight Technologies' (FRGT) outstanding shares?

The reverse split will reduce Freight Technologies' (FRGT) outstanding ordinary shares from 35,844,999 to approximately 1,433,800.