SCHEDULE: Investment Group Discloses 9.9% Stake in Freight Technologies

A group of investors, including DIP SPV I, L.P. and ATW Fund I, L.P., has disclosed a 9.9% beneficial ownership stake in Freight Technologies, Inc. through convertible preferred stock.

Summary

• DIP SPV I, L.P., ATW Fund I, L.P., ATW Partners LLC, Kerry Propper, and Antonio Ruiz-Gimenez collectively reported beneficial ownership of 184,309 Ordinary Shares of Freight Technologies, Inc.
• This ownership represents 9.9% of the company's outstanding Ordinary Shares.
• The reported shares are the approximate number that DIP SPV I, L.P. can acquire within 60 days by exercising or converting Series C Preferred Stock.
• A 'blocker' provision prevents the conversion of Preferred Stock if it would result in the Holding Company and its affiliates owning more than 9.99% of the outstanding shares.
• The reporting persons disclaim beneficial ownership of the shares except to the extent of their pecuniary interest.

Sentiment

Score: 6

Explanation: The filing is a standard disclosure of a significant, passive investment. It's neutral to slightly positive as it confirms institutional interest and a prior capital infusion, but doesn't provide new operational or financial news.

Positives

• The disclosure indicates a significant investment by institutional and individual investors, potentially signaling confidence in Freight Technologies, Inc.
• The investment is structured with a 'blocker' provision, suggesting a passive investment intent rather than an immediate control-seeking strategy.

Risks

• The 'blocker' provision limits the immediate conversion of preferred stock, which could affect the liquidity or flexibility of the investment for the reporting persons.
• The beneficial ownership is derived from convertible Series C Preferred Stock, meaning the actual common share count could increase upon conversion, potentially diluting existing common shareholders.

Future Outlook

NA

Industry Context

This filing indicates continued investor interest in the freight technology sector, with institutional funds taking significant, albeit passive, stakes. Such investments can provide capital and validation for companies operating in logistics and supply chain innovation.

Related Party Transactions

• The filing details a group of related entities and individuals (DIP SPV I, L.P., ATW Fund I, L.P., ATW Partners LLC, Kerry Propper, and Antonio Ruiz-Gimenez) acting in concert to hold the beneficial ownership. ATW Partners LLC serves as the investment manager to ATW Fund I, L.P., and Kerry Propper and Antonio Ruiz-Gimenez are control persons of ATW Partners LLC.

Stakeholder Impact

• Shareholders: Potential for future dilution if the Series C Preferred Stock is converted into Ordinary Shares, although this is managed by the 9.99% blocker. The presence of institutional investors could be seen as a positive signal.
• Company: The prior issuance of Series C Preferred Stock provided capital to the company. The ongoing relationship with these investors could offer strategic benefits.

Next Steps

• The reporting persons may convert their Series C Preferred Stock into Ordinary Shares, subject to the 9.99% blocker provision.

Key Dates

Recommendation

This is a routine disclosure of a passive investment stake. It doesn't provide new information about the company's operational performance, financial health, or strategic direction that would warrant a change in investment recommendation. The presence of institutional investors is generally a neutral to slightly positive signal, but without further context on the company's fundamentals, a 'hold' recommendation is appropriate for existing investors, and 'na' for new investors as it doesn't provide enough information for a buy/sell decision.

Keywords

Freight Technologies, FTI, Schedule 13G, Beneficial Ownership, Convertible Preferred Stock, Institutional Investor, ATW Fund, DIP SPV, Kerry Propper, Antonio Ruiz-Gimenez, Equity Stake, SEC Filing