10-K: Freight Technologies (FRGT) Files 10-K: Focus on AI and Growth Initiatives Amidst Going Concern Uncertainty

Freight Technologies, Inc. (FRGT) reports its 2024 10-K, highlighting AI integration, new service launches, and efforts to improve profitability, while acknowledging substantial doubt about its ability to continue as a going concern.

Summary

• Freight Technologies, Inc. (FRGT) filed its 10-K report for the year ended December 31, 2024.
• The company is focused on technology-driven solutions for the freight management business, including AI and machine learning.
• Key initiatives in 2024 included developing new features for the Fr8App platform, launching Waavely (an ocean freight booking platform), and progressing with Fleet Rocket (a TMS software platform).
• FRGT achieved ISO 9001:2015 certification for its US and Mexico operations.
• Senior management focused on improving gross margins, resulting in higher gross profit despite lower revenues.
• The company commenced an At The Market (ATM) offering, selling 528,576 shares for net proceeds of $2,912,266.
• As of December 31, 2024, FRGT had an accumulated deficit of $(44,916,779) and a cash balance of $204,032.
• The company had a net loss of $(5,601,227) in 2024, compared to $(9,327,606) in 2023.
• FRGT expects to have sufficient funds to carry out planned operations through December 31, 2025, and for at least 12 months beyond that period, based on existing cash resources and expected proceeds from the ATM Financing and other planned financings.
• The company believes the growing interest in digital freight matching platforms shows that traditional 3PL providers recognize the sweeping technological shifts in the industry.
• The U.S. domestic truck freight transportation market was approximately $950 billion in 2023 and 2024, and it is expected to experience lowto mid-single digit growth in 2025.
• The Mexican domestic freight market is estimated to be approximately $46 billion in 2025, and the North American cross-border freight transportation market is estimated at $248 billion and expected to exceed $308 billion by 2030.
• Mexico's overall trade with the U.S. grew by 6.4% in 2024 with exports to US totaling $506 billion.
• The company launched an AI-powered Tendering Bot in March 2025 to automate the load tendering process.
• As of December 31, 2024, the company had 82 employees and 18 contract-based employees.
• The audited consolidated financial statements include an explanatory paragraph stating that there are conditions that raise substantial doubt about FRGT's ability to continue as a going concern.

Sentiment

Score: 4

Explanation: The document presents a mixed sentiment. While there are positive developments such as AI integration and new service launches, the going concern uncertainty and financial losses weigh heavily on the overall outlook.

Positives

• The company is focused on technology-driven solutions for the freight management business, including AI and machine learning.
• FRGT achieved ISO 9001:2015 certification for its US and Mexico operations.
• Senior management focused on improving gross margins, resulting in higher gross profit despite lower revenues.
• The company launched an AI-powered Tendering Bot in March 2025 to automate the load tendering process.

Negatives

• As of December 31, 2024, FRGT had an accumulated deficit of $(44,916,779) and a cash balance of $204,032.
• The company had a net loss of $(5,601,227) in 2024, compared to $(9,327,606) in 2023.
• The audited consolidated financial statements include an explanatory paragraph stating that there are conditions that raise substantial doubt about FRGT's ability to continue as a going concern.

Risks

• FRGT's limited operating history may make it difficult to evaluate its future viability.
• Early-stage operations could expose FRGT to a high concentration of revenues in individual clients.
• A significant data breach or information technology system disruption could materially adversely affect FRGT.
• Operational challenges associated with the use of AI technologies could disrupt FRGT's business and increase costs.
• Trade tensions or adverse regulatory or political changes in any country in which FRGT operates could materially and adversely affect the demand for its services.
• FRGT is directly affected by the cyclicality of the trucking industry and general economic conditions.
• Truck driver or other supply shortages within the transportation value chain could have material adverse effect on FRGT's business and operating results.
• FRGT currently does not hold any patents or own any registered trademarks.
• The audited consolidated financial statements include an explanatory paragraph in FRGT's independent registered public accounting firm's audit report stating that there are conditions that raise substantial doubt about FRGT's ability to continue as a going concern.
• FRGT has a history of significant operating losses and expects to incur losses in the future, and FRGT may never achieve or maintain profitability.
• Raising additional capital may cause dilution to FRGT's existing shareholders, restrict its operations or cause it to relinquish valuable rights.
• The trading price of FRGT's ordinary shares is likely to be volatile, which could result in substantial losses to its shareholders.

Future Outlook

FRGT expects to have sufficient funds to carry out planned operations through December 31, 2025, and for at least 12 months beyond that period, based on existing cash resources and expected proceeds from the ATM Financing and other planned financings. The company plans to expand its Shipper base and increase its Carrier ecosystem operating under the Fr8App brand throughout all three countries, with a continued focus on the Mexico-U.S. cross-border market, a select portions of both the Mexican and the U.S. domestic markets.

Management Comments

• Senior management undertook measures to improve the Company's gross margins earned on its freight brokerage and dedicated capacity services, which did result in higher gross profit earned in 2024 verse the prior year, despite lower revenues.
• Management continues to evaluate funding alternatives and currently seeks to raise additional funds through the issuance of equity or debt securities, from our existing or new investors or through obtaining credit from financial institutions.

Industry Context

The 3PL industry is rapidly evolving with demands for greater efficiency and increased visibility into the shipment lifecycle. FRGT expects increasing competition from domestic and international market participants. The company believes the growing interest in digital freight matching platforms shows that traditional 3PL providers recognize the sweeping technological shifts in the industry.

Comparison to Industry Standards

• The U.S. domestic truck freight transportation market was approximately $950 billion in 2023 and 2024, and it is expected to experience lowto mid-single digit growth in 2025, according to the 35th Annual State of Logistics Report.
• Per Mordor Intelligence, the Mexican domestic freight market is estimated to be approximately $46 billion in 2025, and the North American cross-border freight transportation market is estimated at $248 billion and expected to exceed $308 billion by 2030.
• Competitors include traditional 3PL providers like XPS Logistics, Inc., C.H. Robinson Worldwide, Inc. and J.B. Hunt Transport Services, Inc., as well as newer entrants like Uber Freight, Convoy, NEXT Trucking, and Cargo-Partner.
• In relation to the LTL market in Mexico, there are several established players, including Saia, Penske Logistics, TIBA, Pak2Go, Fletes, FedEx Estafeta and Transplace, to name a few.

Stakeholder Impact

• Shareholders face potential dilution from future capital raises.
• Employees may be affected by cost-cutting measures and workforce reductions.
• Customers may benefit from improved technology and service offerings.
• Creditors face increased risk due to the company's going concern uncertainty.

Next Steps

• FRGT intends to leverage Fr8Apps current position within these markets to opportunistically extend its footprint across select routes in the U.S. and into Canada, and simultaneously build its Fleet Rocket subscriber base through existing customers and established industry connections.
• FRGT plans to expand its Fr8Fleet offering in Mexico and leverage its presence in that market to expand its customer base and market penetration with highly targeted FTL and LTL solutions.

Key Dates

Keywords

Freight Technologies, FRGT, 10-K, Freight management, AI, Machine learning, Fr8App, Waavely, Fleet Rocket, Transportation, Logistics, Cross-border, Trucking, Financial results, Risk factors