Freight Technologies, Inc. Announces Conversion of $3.55M Convertible Debt to Equity
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Insights
The conversion of convertible debt into preferred share equity represents a strategic financial maneuver for Freight Technologies, Inc. This action effectively reduces the company's debt obligations while simultaneously expanding its equity base. By converting debt to equity, the company is likely attempting to improve its balance sheet and reduce interest expenses. The $3.55 million conversion is significant as it could signal to the market that the investors have confidence in the company's future and its strategic direction.
From a financial perspective, the conversion has implications for the company's capital structure and could potentially dilute current shareholders. However, it may also lead to a more stable financial position, which is critical for maintaining Nasdaq listing requirements. The impact on the company's cost of capital will depend on the terms of the preferred shares, but generally, equity is more expensive than debt. The conversion could also be viewed as a vote of confidence by investors, possibly leading to a positive market reaction.
Freight Technologies, Inc.'s focus on AI and machine-learning for freight matching in the B2B cross-border and domestic shipping markets is part of a growing trend in the logistics industry to increase efficiency and reduce costs. The conversion of debt into equity by investors may provide the company with more resources to invest in technology and market expansion. It's important to analyze how this conversion might affect the company's market position and competitive edge, especially in the technology-driven logistics sector.
Investors and potential investors should consider how the company's enhanced financial position could support its strategic initiatives, such as further development of the Fr8App platform. If successful, these initiatives could lead to increased market share and revenue growth. However, it is also essential to monitor how the company manages the dilution of existing shares and communicates the value of these strategic moves to the market.
The conversion of convertible debt into equity by a group of investors in Freight Technologies, Inc. can have broader economic implications. It could be indicative of a more optimistic economic outlook among investors, who may expect higher returns from equity investments compared to fixed income from debt in the current economic climate. This transaction also reflects the dynamic nature of corporate finance in adjusting to market conditions and aligning with corporate governance objectives.
For the broader economy, such conversions can support business growth and investment, leading to potential job creation and economic activity. However, it is essential to consider the context of the overall market and economic trends, as a series of similar conversions across various companies could also signal a shift in how businesses are seeking to finance their operations in response to economic pressures or opportunities.
Investor converts
HOUSTON, Dec. 27, 2023 (GLOBE NEWSWIRE) -- via IBN – Freight Technologies, Inc. (Nasdaq: FRGT) (“Fr8Tech” and/or “Company”), a technology company whose 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 shipping and domestic shipping within the USMCA region, today announces conversion by investors of convertible debt to equity.
Investors in the Company’s convertible notes have converted approximately
CEO Javier Selgas commented: “The conversion is very positive news for the Company. The amount converted is a relevant amount that will help the Company continue being listed in good standing with the Nasdaq insofar as required minimum capital amounts for continued listing as of the end of our 2023 calendar year. We believe it is also a strong indicator of the significant support that a group of our investors continue to demonstrate in the Company’s strategic direction. We continue to take steps towards improving our technology and offering our solutions to niche target markets across North America.”
About Fr8App
Fr8App is a freight forwarding matching platform that uses innovative technology to connect shippers and carriers with available loads and trucks. With a focus on user experience and real-time data, Fr8App is making it easier than ever for businesses to manage their logistics operations and streamline their supply chain. For more information, please visit: Fr8App
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”), 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. Freight Technologies' and Fr8App’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 include, without limitation, Freight Technologies’ and Fr8App’s expectations with respect to future performance and anticipated financial impacts of its acquisition of Fr8App.
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 Freight Technologies’ and Fr8App’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’s business; (2) the inability to obtain or maintain the listing of Freight Technologies’ ordinary shares on Nasdaq; (3) the ability to recognize the anticipated benefits of the merger, which may be affected by, among other things, competition and the ability of Fr8App to grow, manage growth profitably and retain its key employees; (4) costs related to the merger; (5) changes in applicable laws or regulations; (6) the possibility that Freight Technologies or Fr8App may be adversely affected by other economic, business and/or competitive factors; (7) risks relating to the uncertainty of the projected financial information with respect to Fr8App; (8) risks related to the organic and inorganic growth of Fr8App’s business and the timing of expected business milestones; and (9) other risks and uncertainties identified, including those under “Risk Factors,” to be filed in Freight Technologies' other filings with the SEC. Freight Technologies 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. Freight Technologies and Fr8App caution readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Freight Technologies and Fr8App 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.
Fr8Tech Contact:
investors@fr8technologies.com
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Los Angeles, California
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