Freight Technologies Narrows Loss 40% Amid Revenue Dip, Cost Cuts

TL;DR

**FRGT's 40% net loss reduction is a positive sign of cost control, but declining revenue and a negative equity position mean this stock is still a high-risk bet on a turnaround.**

AI Summary

Freight Technologies, Inc. (FRGT) filed a 10-K/A for the fiscal year ended December 31, 2024, primarily to include additional information requested by SEC comment letters and adjust several financial items. The company reported a revenue decrease of 19.5% to $13.7 million in 2024 from $17.1 million in 2023, driven by a focus on higher-margin customers and a 3.5% decline in the Mexican peso. Net loss significantly improved, decreasing by 40% to $5.6 million in 2024 from $9.3 million in 2023, largely due to a $1.6 million gain from debt extinguishment and reduced operating expenses. Compensation and employee benefits decreased by 10.3% to $5.3 million, and general and administrative expenses fell by 37.7% to $2.0 million. The company also undertook a cost-cutting initiative in early 2025, reducing its workforce by approximately 20% to optimize resources and shift focus to its TMS software, Fleet Rocket. Total assets declined to $5.7 million in 2024 from $10.0 million in 2023, and total stockholders' equity shifted to a deficit of $(654,760) from a positive $2.6 million.

Why It Matters

This 10-K/A provides crucial clarity on Freight Technologies' financial health and strategic pivot, addressing SEC concerns and offering investors a clearer picture of its operational adjustments. The significant reduction in net loss, despite declining revenue, suggests management is actively controlling costs and streamlining operations, which could be a positive signal for long-term viability. However, the shift to a stockholders' deficit indicates ongoing financial fragility. Competitors in the logistics tech space will be watching to see if FRGT's focus on higher-margin business and its new TMS software, Fleet Rocket, can reverse the revenue decline and establish a sustainable growth path.

Risk Assessment

Risk Level: high — The company's total stockholders' equity shifted from a positive $2,626,981 in 2023 to a deficit of $(654,760) in 2024, indicating a precarious financial position. Additionally, revenue declined by 19.5% year-over-year to $13.7 million, and the company reduced its workforce by approximately 20% in early 2025, signaling ongoing operational challenges and a need for aggressive cost-cutting.

Analyst Insight

Investors should exercise extreme caution with FRGT. While the reduction in net loss is encouraging, the negative stockholders' equity and continued revenue decline suggest significant underlying issues. Monitor future filings closely for sustained revenue growth, positive cash flow from operations, and a return to positive equity before considering an investment.

Financial Highlights

debt To Equity

N/A

revenue

$13.7M

operating Margin

N/A

total Assets

$5.7M

total Debt

N/A

net Income

-$5.6M

eps

N/A

gross Margin

N/A

cash Position

N/A

revenue Growth

-19.5%

Revenue Breakdown

Key Numbers

• $13.7M — Revenue for 2024 (decreased 19.5% from $17.1M in 2023)
• $5.6M — Net Loss for 2024 (decreased 40% from $9.3M in 2023)
• $1.6M — Gain from extinguishment of debt (contributed to reduced net loss in 2024)
• $5.3M — Compensation and employee benefits for 2024 (decreased 10.3% from $6.0M in 2023)
• $2.0M — General and administrative expenses for 2024 (decreased 37.7% from $3.2M in 2023)
• $(654,760) — Total stockholders' equity (deficit) for 2024 (shifted from positive $2.6M in 2023)
• 20% — Workforce reduction (undertaken in January and February 2025)
• 35.9% — Decline in Freight Transportation Brokerage revenue (to $8.6M in 2024)
• 42% — Increase in Dedicated Capacity revenue (to $5.1M in 2024)
• 2,265,074 — Ordinary Shares outstanding (as of March 31, 2025)

Key Players & Entities

• Freight Technologies, Inc. (company) — registrant
• SEC (regulator) — Securities and Exchange Commission
• Andres Gonzalez (person) — Chairman of the Nominating Committee
• Leilei Nie (person) — member of Audit and Compensation Committees
• Kimberly Clark de Mexico (company) — primary Fr8Fleet customer
• Freight Opportunities, LLC (company) — lender for term notes
• Fleet Rocket (company) — Company's TMS software offering
• Nasdaq Stock Market LLC (regulator) — exchange where FRGT is registered

FAQ

Risk Factors

• Negative Stockholders' Equity [high — financial]: The company's total stockholders' equity has shifted to a deficit of $(654,760) in 2024, down from a positive $2.6 million in 2023. This indicates that liabilities exceed assets, which can raise concerns about financial stability and solvency.
• Revenue Decline [medium — operational]: Total revenue decreased by 19.5% to $13.7 million in 2024 from $17.1 million in 2023. This decline, particularly in the Freight Transportation Brokerage segment (-35.9%), suggests challenges in customer acquisition or retention, or a strategic shift away from certain revenue streams.
• Dependence on Debt Extinguishment Gain [medium — financial]: A significant portion of the net loss improvement was due to a $1.6 million gain from debt extinguishment. While positive, this is a non-recurring event and does not reflect underlying operational improvements in profitability.
• Workforce Reduction [medium — operational]: The company undertook a 20% workforce reduction in early 2025. While intended to optimize resources and focus on its TMS software, this signals potential restructuring challenges and impacts on operational capacity.
• Foreign Currency Fluctuation [low — market]: A 3.5% decline in the Mexican peso contributed to the overall revenue decrease. Fluctuations in foreign currency exchange rates can impact revenue and profitability for companies operating internationally.

Industry Context

The freight technology industry is highly competitive, characterized by evolving customer demands for efficiency, visibility, and cost-effectiveness. Trends include the increasing adoption of digital platforms and software solutions like TMS to streamline logistics operations. Companies face pressures from fluctuating fuel costs, driver shortages, and macroeconomic factors impacting shipping volumes.

Regulatory Implications

As a publicly traded company, Freight Technologies, Inc. is subject to SEC regulations and reporting requirements, including the timely and accurate filing of financial statements. Amendments like the 10-K/A suggest potential scrutiny from regulators or a need for greater transparency regarding financial disclosures.

What Investors Should Do

1. Monitor the impact of the workforce reduction and strategic shift to TMS software.
2. Analyze the sustainability of profitability improvements.
3. Evaluate the financial health given the negative stockholders' equity.

Key Dates

• 2024-12-31: Fiscal Year End — Marks the period covered by the 10-K/A filing, reflecting the company's financial performance and position.
• 2025-01-01: Start of Cost-Cutting Initiative — Initiation of a 20% workforce reduction to optimize resources and focus on TMS software, indicating strategic shifts and potential operational impacts.
• 2025-03-31: Ordinary Shares Outstanding Record Date — Provides a snapshot of the company's share structure as of this date, relevant for per-share calculations and ownership analysis.

Glossary

10-K/A

An amended annual report filed with the SEC to correct or supplement information previously filed in a Form 10-K. (This filing indicates that Freight Technologies, Inc. has made significant adjustments or additions to its previous annual report, requiring investor attention.)

Debt Extinguishment

The process of retiring or paying off debt. A gain on extinguishment occurs when debt is settled for less than its carrying amount. (A $1.6 million gain from this activity significantly improved FRGT's net loss in 2024, but it's a non-recurring event.)

TMS Software

Transportation Management System software, used to plan, execute, and optimize the physical movement of goods. (FRGT is shifting its focus towards its Fleet Rocket TMS software, indicating a strategic pivot in its business model.)

Stockholders' Equity

The residual interest in the assets of an entity after deducting all its liabilities. It represents the net worth of the company. (FRGT's shift to a deficit in stockholders' equity is a critical indicator of financial distress.)

Year-Over-Year Comparison

Compared to the prior fiscal year, Freight Technologies, Inc. reported a significant 19.5% decrease in revenue, falling to $13.7 million. While the net loss improved by 40% to $5.6 million, this was largely driven by a $1.6 million gain from debt extinguishment rather than core operational improvements. Key expense reductions were noted in compensation and G&A, but the company's total assets declined, and stockholders' equity moved into a deficit position, highlighting ongoing financial challenges.

Key Financial Figures

• $13.7 million — enues Fr8Tech's revenues decreased to $13.7 million for the year ended December 31, 2024 fr
• $17.1 million — r the year ended December 31, 2024 from $17.1 million for the year ended December 31, 2023, a
• $3.3 million — ended December 31, 2023, a reduction of $3.3 million and 19.5% on year-over-year basis. The
• $8.6 million — Our spot market revenue declined 36% to $8.6 million in 2024, partially offset by a 42% incr
• $5.1 million — 42% increase in our Fr8Fleet revenue to $5.1 million and to a lesser extent the launch of Wa
• $25.9 million — r the year ended December 31, 2023 from $25.9 million for the year ended December 31, 2022, a
• $8.8 million — ended December 31, 2022, a reduction of $8.8 million and 34.1% on year-over-year basis. The
• $12.4 million — Fr8Tech's cost of revenue decreased to $12.4 million for the year ended December 31, 2024 fr
• $15.7 million — r the year ended December 31, 2024 from $15.7 million for the year ended December 31, 2023, a
• $23.6 million — r the year ended December 31, 2023 from $23.6 million for the year ended December 31, 2022, a
• $7.9 million — ended December 31, 2022, a reduction of $7.9 million and 33.5% on a year-over-year basis. Th
• $5.3 million — ion and employee benefits expenses were $5.3 million for the year ended December 31, 2024 co
• $6.0 million — ear ended December 31, 2024 compared to $6.0 million for the year ended December 31, 2023, w
• $0.6 million — ar ended December 31, 2023, which was a $0.6 million or 10.3% decrease on a year-over-year b
• $5.0 million — ear ended December 31, 2023 compared to $5.0 million for the year ended December 31, 2022, w

Filing Documents

• form10-ka.htm (10-K/A) — 231KB
• ex31-1.htm (EX-31.1) — 19KB
• ex31-2.htm (EX-31.2) — 20KB
• ex32-1.htm (EX-32.1) — 8KB
• ex32-2.htm (EX-32.2) — 8KB
• 0001641172-25-025025.txt ( ) — 523KB
• frgt-20241231.xsd (EX-101.SCH) — 3KB
• frgt-20241231_lab.xml (EX-101.LAB) — 35KB
• frgt-20241231_pre.xml (EX-101.PRE) — 23KB
• form10-ka_htm.xml (XML) — 8KB

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations. 1 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. 8 Item 9A.

Controls and Procedures

Controls and Procedures. 9 PART III Item 13. Certain Relationships and Related Transactions, and Director Independence. 11 Item 14. Principal Accountant Fees and Services. 12 PART IV Item 15. Exhibit and Financial Statement Schedules. 13

Signatures

Signatures 14 i EXPLANATORY NOTE Freight Technologies, Inc. (the "Company") filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the "Original Filing") with the Securities and Exchange Commission (the "SEC") on April 14, 2025. The purpose of Amendment No. 1 on Form 10-K/A (this "Amendment") is to include additional information throughout that has been requested to be included pursuant to SEC comment letters, dated June 5, 2025 and July 24, 2025. Additionally, we have made adjustments to Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations, Item 9 - Changes in and Disagreements with Accountants on Accounting and Financial Disclosure, Item 9A - Controls and Procedures and Item 14 - Principal Accountant Fees and Services. Also as disclosed in the Current Report on Form 8-K, filed by the Company with the SEC on April 30, 2025 that the board of directors (the "Board") of the Company appointed Andres Gonzalez as Chairman of the Nominating Committee of the Board and a member of the Compensation Committee of the Board (the "Compensation Committee"), and Leilei Nie as a member of both the Audit Committee of the Board and the Compensation Committee, the Company also made adjustments to Item 13 - Certain Relationships and Related Transactions, and Director Independence. This Amendment is being filed solely to reflect the above adjustments. No other changes were made to the Original Filing. Further, no attempt has been made in this Amendment to modify or update the other disclosures presented in the Original Filing. This Amendment does not reflect events occurring after the date of the Original Filing or modify or update those disclosures that may be affected by subsequent events. Accordingly, this Amendment should be read in conjunction with the Original Filing and the registrant's other filings with the SEC. ii PART II ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AN

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View this 10-K/A filing on SEC EDGAR