Freight Technologies Announces Extinguishment of $1.1M of Outstanding Debt and Convertible Notes

Rhea-AI Summary

Freight Technologies (Nasdaq: FRGT) has reached an agreement with Freight Opportunities to extinguish $1.1 million of outstanding debt. This includes $906,000 in promissory notes and accumulated interest, plus $220,000 in Convertible Notes. The move is seen as a vote of confidence in the company's long-term prospects and management's ability to drive innovation in the USMCA logistics market.

CEO Javier Selgas and CFO Don Quinby both expressed positive sentiments about the development. Quinby noted that the transaction strengthens the company's balance sheet, improves shareholders' equity, and frees up cash for business investment. Freight Opportunities remains committed as an equity investor in Fr8Tech, believing in the company's long-term potential, technology, and management team.

Positive

• Extinguishment of $1.1 million in outstanding debt
• Strengthening of the company's balance sheet
• Improvement in shareholders' equity
• Freeing up of additional cash for business investment
• Vote of confidence from a major investor in the company's long-term prospects

Negative

• None.

Insights

Financial Analyst

The extinguishment of $1.1M in debt is a significant positive development for Freight Technologies (FRGT). This move strengthens the company's balance sheet by reducing liabilities and improving shareholders' equity. The elimination of $906K in promissory notes and $220K in convertible notes will lower interest expenses and reduce potential future dilution. This financial restructuring frees up cash flow that can be reinvested into the business, potentially accelerating growth initiatives. However, investors should note that while this improves FRGT's financial position, it's important to monitor how effectively the company utilizes this newfound financial flexibility to drive revenue growth and profitability in the competitive freight-matching market.

Tech Expert

Freight Technologies' AI and machine-learning powered Fr8App platform operates in the rapidly evolving logistics tech sector. The debt extinguishment indirectly benefits the company's technological advancement by potentially allowing for increased R&D investment. In the USMCA region's B2B cross-border shipping market, continuous innovation is important to maintain a competitive edge. The company's focus on real-time freight matching aligns with industry trends towards efficiency and automation. However, the true test will be how FRGT leverages this financial improvement to enhance its AI capabilities, expand platform features, or possibly acquire complementary technologies. Investors should watch for announcements regarding technological upgrades or expansions in the coming months as indicators of the company's strategic direction and competitive positioning.

Market Research Analyst

The debt extinguishment signals investor confidence in Freight Technologies' long-term prospects, particularly noteworthy given the challenges in the freight industry. The USMCA region presents significant opportunities for growth in cross-border logistics, with the market expected to expand as regional trade intensifies. FRGT's AI-driven platform positions it well to capitalize on the increasing demand for efficient, tech-enabled freight solutions. However, the company faces stiff competition from both established players and startups in the logistics tech space. Investors should closely monitor FRGT's market share growth, user acquisition costs and platform adoption rates among shippers and carriers. The improved financial position could allow for more aggressive marketing and expansion strategies, potentially accelerating FRGT's market penetration in this dynamic and growing sector.

HOUSTON, Sept. 03, 2024 (GLOBE NEWSWIRE) -- Freight Technologies, Inc. (Nasdaq: FRGT, “Fr8Tech” or the “Company”), a technology company offering its custom-developed Fr8App, an industry-leading freight-matching platform powered by AI and machine-learning that offers a real-time portal for B2B cross-border and domestic shipping within the USMCA region, today announced that it has reached an agreement with Freight Opportunities LLC to extinguish $906K of outstanding promissory notes and accumulated interest and the remaining balance of Convertible Notes held on Freight Technologies’ June 30, 2024 balance sheet at $220K. Freight Opportunities remains an equity investor in the Company.

CEO Javier Selgas commented, “This development is very positive news for Freight Technologies. It is a strong vote of confidence in the long-term prospects of the Company and in management’s ability to drive real innovation in the logistics industry across the USMCA market. We are excited about the opportunities in front of us, and are eager to execute against them in order to deliver long-term results to our stakeholders.”

Fr8Tech CFO Don Quinby added, “This transaction with Freight Opportunities is quite favorable for the Company. It bolsters our shareholders’ equity balance and frees up additional cash to invest in the business. This strengthens our balance, and will help us improve our working capital in the second half of 2024.”

Freight Opportunities LLC remains committed to its investment in Freight Technologies and believes in the long-term potential in the Company, its technology and management team.

About Freight Technologies Inc.

Freight Technologies (Nasdaq: FRGT) (“Fr8Tech”) is a technology company developing solutions to optimize and automate the supply chain process. Its wholly owned subsidiary, Freight App, Inc. (Fr8App Inc.), is a B2B cross-border shipping marketplace in the USMCA region powered by AI and machine learning. Focused on making shipping transparent and efficient, Fr8App provides carriers with increased growth opportunities and shippers with flexibility, visibility and simplicity for the once-complex process of international over-the-road (OTR) shipping. Fr8App uses its proprietary technology 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, broker, 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 total amount of debt extinguished by Freight Technologies (FRGT)?

Freight Technologies (FRGT) has extinguished a total of $1.1 million in outstanding debt, consisting of $906,000 in promissory notes and accumulated interest, plus $220,000 in Convertible Notes.

How does the debt extinguishment affect Freight Technologies' (FRGT) financial position?

The debt extinguishment strengthens Freight Technologies' (FRGT) balance sheet, improves shareholders' equity, and frees up additional cash for business investment, potentially improving working capital in the second half of 2024.

Who is the investor that agreed to extinguish Freight Technologies' (FRGT) debt?

Freight Opportunities agreed to extinguish the debt and remains an equity investor in Freight Technologies (FRGT), expressing confidence in the company's long-term potential.

What does Freight Technologies (FRGT) CEO say about the debt extinguishment?

Freight Technologies (FRGT) CEO Javier Selgas called the debt extinguishment 'very positive news' and a 'strong vote of confidence' in the company's long-term prospects and management's ability to drive innovation in the USMCA logistics market.