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Fr8Tech(FRGT) - 2024 Q4 - Annual Results
FRGTFr8Tech(FRGT)2025-01-10 22:00

Assets and Equipment - Property and equipment, net decreased to 12,404asofJune30,2024,from12,404 as of June 30, 2024, from 18,239 as of December 31, 2023[2] - Long-lived assets decreased to 710,369asofJune30,2024,from710,369 as of June 30, 2024, from 803,549 as of December 31, 2023, with 591,021locatedinMexicoand591,021 located in Mexico and 119,348 in the United States[24] - Capitalized software, net, as of June 30, 2024, was 684,195,comparedto684,195, compared to 771,133 as of December 31, 2023[113] Liabilities and Accrued Expenses - Total accrued expenses decreased to 1,525,355asofJune30,2024,from1,525,355 as of June 30, 2024, from 2,239,171 as of December 31, 2023[3] - The borrowing balance under the revolving line of credit was 4,443,944asofJune30,2024[10]−TheCompanysecuredatermloanof4,443,944 as of June 30, 2024[10] - The Company secured a term loan of 750,000 on March 11, 2024, and an additional term loan of 125,000onJune4,2024,bothaccruinginterestat8125,000 on June 4, 2024, both accruing interest at 8% per annum[12][13] - The fair value of the convertible note decreased to 219,840 as of June 30, 2024, from 242,442asofDecember31,2023[20]−ThecompanycanceledaConvertiblePromissoryNoteandtwopromissorynotestotaling242,442 as of December 31, 2023[20] - The company canceled a Convertible Promissory Note and two promissory notes totaling 1,095, including accrued interest, on September 4, 2024[36] - Total liabilities increased from 7.410millionasofDecember31,2023to7.410 million as of December 31, 2023 to 9.065 million as of June 30, 2024[71] - The company reported negative working capital of 0.8millionandshort−termdebtof0.8 million and short-term debt of 5.6 million as of June 30, 2024[82] Revenue and Expenses - Total revenue for the six months ended June 30, 2024, was 8,125,602,with8,125,602, with 5,043,432 coming from Mexico and 3,082,170fromtheUnitedStates[24]−Revenueincreasedby3,082,170 from the United States[24] - Revenue increased by 507 (6.7%) to 8,126forthesixmonthsendedJune30,2024,drivenbya1358,126 for the six months ended June 30, 2024, driven by a 135% increase in Fr8Fleet dedicated services, partially offset by a 24% decrease in spot services[39] - Cost of revenue rose by 233 (3.4%) to 7,170forthesixmonthsendedJune30,2024,withgrossmarginpercentageimprovingfrom9.07,170 for the six months ended June 30, 2024, with gross margin percentage improving from 9.0% to 11.8% due to a focus on higher-margin customers[40] - Compensation and employee benefits expenses decreased by 24 (0.8%) to 2,818forthesixmonthsendedJune30,2024,primarilyduetolowercommissionsandemployeemixchanges[41]−Generalandadministrativeexpensesincreasedby2,818 for the six months ended June 30, 2024, primarily due to lower commissions and employee mix changes[41] - General and administrative expenses increased by 588 (54.2%) to 1,672forthesixmonthsendedJune30,2024,drivenbyforeignexchangevariancesandhigherprofessionalfees[42]−NetrevenueforthesixmonthsendedJune30,2024,increasedby6.71,672 for the six months ended June 30, 2024, driven by foreign exchange variances and higher professional fees[42] - Net revenue for the six months ended June 30, 2024, increased by 6.7% to 8,126,000 compared to 7,619,000inthesameperiodin2023[50]−OperatinglossforthesixmonthsendedJune30,2024,increasedby9.07,619,000 in the same period in 2023[50] - Operating loss for the six months ended June 30, 2024, increased by 9.0% to 3,788,000 compared to 3,475,000inthesameperiodin2023[50]−NetlossforthesixmonthsendedJune30,2024,decreasedby0.33,475,000 in the same period in 2023[50] - Net loss for the six months ended June 30, 2024, decreased by 0.3% to 4,211,000 compared to 4,223,000inthesameperiodin2023[57]−Salesandmarketingexpensesdecreasedby12.84,223,000 in the same period in 2023[57] - Sales and marketing expenses decreased by 12.8% to 34,000 for the six months ended June 30, 2024, compared to 39,000inthesameperiodin2023[51]−Depreciationandamortizationexpensesincreasedby14.639,000 in the same period in 2023[51] - Depreciation and amortization expenses increased by 14.6% to 220,000 for the six months ended June 30, 2024, compared to 192,000inthesameperiodin2023[52]−Otherfinancialexpensesdecreasedby52.2192,000 in the same period in 2023[52] - Other financial expenses decreased by 52.2% to 405,000 for the six months ended June 30, 2024, compared to 847,000inthesameperiodin2023[55]−RevenueforthesixmonthsendedJune30,2024was847,000 in the same period in 2023[55] - Revenue for the six months ended June 30, 2024 was 8.126 million, compared to 7.619millionforthesameperiodin2023[73]−NetlossforthesixmonthsendedJune30,2024was7.619 million for the same period in 2023[73] - Net loss for the six months ended June 30, 2024 was 4.211 million, compared to 4.234millionforthesameperiodin2023[73]−ComprehensivelossforthesixmonthsendedJune30,2024was4.234 million for the same period in 2023[73] - Comprehensive loss for the six months ended June 30, 2024 was 4.626 million, compared to 4.032millionforthesameperiodin2023[73]−NetlosspershareattributabletocommonstockholdersforthesixmonthsendedJune30,2024was4.032 million for the same period in 2023[73] - Net loss per share attributable to common stockholders for the six months ended June 30, 2024 was 15.94, compared to 158.98forthesameperiodin2023[73]−WeightedaveragenumberofcommonsharesbasicanddilutedforthesixmonthsendedJune30,2024was264,225,comparedto26,568forthesameperiodin2023[73]−NetlossforthesixmonthsendedJune30,2024,was158.98 for the same period in 2023[73] - Weighted average number of common shares basic and diluted for the six months ended June 30, 2024 was 264,225, compared to 26,568 for the same period in 2023[73] - Net loss for the six months ended June 30, 2024, was 4,211,006, compared to 4,223,808inthesameperiodin2023[77]−Share−basedcompensationforthesixmonthsendedJune30,2024,was4,223,808 in the same period in 2023[77] - Share-based compensation for the six months ended June 30, 2024, was 515,380, compared to 549,371inthesameperiodin2023[77]−DepreciationandamortizationforthesixmonthsendedJune30,2024,was549,371 in the same period in 2023[77] - Depreciation and amortization for the six months ended June 30, 2024, was 220,246, compared to 192,484inthesameperiodin2023[77]−FreightTransportationBrokeragerevenueforthesixmonthsendedJune30,2024,was192,484 in the same period in 2023[77] - Freight Transportation Brokerage revenue for the six months ended June 30, 2024, was 4,675,171, a decrease from 6,152,222inthesameperiodin2023[107]−DedicatedCapacityrevenueforthesixmonthsendedJune30,2024,was6,152,222 in the same period in 2023[107] - Dedicated Capacity revenue for the six months ended June 30, 2024, was 3,450,431, a significant increase from 1,467,100inthesameperiodin2023[107]−TotalrevenueforthesixmonthsendedJune30,2024,was1,467,100 in the same period in 2023[107] - Total revenue for the six months ended June 30, 2024, was 8,125,602, compared to 7,619,322inthesameperiodin2023[107]−AmortizationexpenseforthesixmonthsendedJune30,2024,was7,619,322 in the same period in 2023[107] - Amortization expense for the six months ended June 30, 2024, was 212,306, up from 183,307inthesameperiodin2023[113]−Estimatedamortizationforcapitalizedsoftwarefortheremainderof2024(July1–December31)is183,307 in the same period in 2023[113] - Estimated amortization for capitalized software for the remainder of 2024 (July 1 – December 31) is 187,101[114] Cash Flow and Financing - The Company incurred 357,599ininterestexpenserelatedtotherevolvinglineofcreditforthesixmonthsendedJune30,2024,comparedto357,599 in interest expense related to the revolving line of credit for the six months ended June 30, 2024, compared to 133,038 for the same period in 2023[11] - The company raised 1,471,839netofcommissionsandfeesbyselling138,466ordinarysharesatanadjustedpriceof1,471,839 net of commissions and fees by selling 138,466 ordinary shares at an adjusted price of 11.01 per share as of June 30, 2024[33] - 318,820 Ordinary Share warrants were exercised for 270,995 Ordinary Shares during the six months ended June 30, 2024, based on a conversion ratio of 0.85[28] - The company entered into a Sales Agent Agreement to offer and sell ordinary shares with an aggregate offering price of up to 2,300,000,payingAGPa3.02,300,000, paying AGP a 3.0% commission on gross proceeds[30] - Freight Opportunities, LLC exercised 29,917,656 Ordinary Share warrants for 1,190,000 shares from July 1, 2024, through January 10, 2025[38] - The company effected a one-for-twenty-five reverse stock split on September 25, 2024, retroactively adjusting all ordinary shares and per-share information[35] - Net cash used in operating activities increased to 4,857,000 for the six months ended June 30, 2024, compared to 1,608,000inthesameperiodin2023[62]−Netcashprovidedbyfinancingactivitieswas1,608,000 in the same period in 2023[62] - Net cash provided by financing activities was 3,924,000 for the six months ended June 30, 2024, driven by equity sales and borrowing[67] - Net cash provided by financing activities for the six months ended June 30, 2023 was 2.879million,drivenbyproceedsfromconvertiblenotesof2.879 million, driven by proceeds from convertible notes of 4.8 million, partially offset by net repayment on borrowing facilities of 1.726million,repaymentofinsurancepremiumfundingof1.726 million, repayment of insurance premium funding of 153,000, and transaction costs of 42,000[68]−Cashandcashequivalentsdecreasedfrom42,000[68] - Cash and cash equivalents decreased from 1.560 million as of December 31, 2023 to 460,576asofJune30,2024[71]−Totalcurrentassetsdecreasedfrom460,576 as of June 30, 2024[71] - Total current assets decreased from 9.153 million as of December 31, 2023 to 8.268millionasofJune30,2024[71]−CashusedinoperatingactivitiesforthesixmonthsendedJune30,2024,was8.268 million as of June 30, 2024[71] - Cash used in operating activities for the six months ended June 30, 2024, was 4,857,126, compared to 1,608,102inthesameperiodin2023[77]−CashprovidedbyfinancingactivitiesforthesixmonthsendedJune30,2024,was1,608,102 in the same period in 2023[77] - Cash provided by financing activities for the six months ended June 30, 2024, was 3,923,593, compared to 2,878,519inthesameperiodin2023[77]−Cashandcashequivalentsattheendoftheperiodwere2,878,519 in the same period in 2023[77] - Cash and cash equivalents at the end of the period were 460,576, compared to 1,837,713inthesameperiodin2023[77]−Proceedsfromshort−termborrowingsforthesixmonthsendedJune30,2024,were1,837,713 in the same period in 2023[77] - Proceeds from short-term borrowings for the six months ended June 30, 2024, were 9,848,259, compared to 8,615,881inthesameperiodin2023[77]−Repaymentofshort−termborrowingsforthesixmonthsendedJune30,2024,was8,615,881 in the same period in 2023[77] - Repayment of short-term borrowings for the six months ended June 30, 2024, was 8,150,791, compared to 10,342,407inthesameperiodin2023[77]−CapitalizationofsoftwaredevelopmentcostsforthesixmonthsendedJune30,2024,was10,342,407 in the same period in 2023[77] - Capitalization of software development costs for the six months ended June 30, 2024, was 171,997, compared to 64,431inthesameperiodin2023[77]−Thecompanyhasanaccumulateddeficitof64,431 in the same period in 2023[77] - The company has an accumulated deficit of 43.5 million and negative working capital of 0.8millionasofJune30,2024[58]−Thecompanyanticipatestheneedforadditionalcapitaltofundoperationsandcapitalinvestmentsuntilachievingcashself−sufficiency[59]−Thecompanyhasanaccumulateddeficitof0.8 million as of June 30, 2024[58] - The company anticipates the need for additional capital to fund operations and capital investments until achieving cash self-sufficiency[59] - The company has an accumulated deficit of 43.5 million and a negative shareholders' equity of 0.03millionasofJune30,2024[82]−Thecompanyprojectsitwillneedadditionalcapitaltofundoperationsuntilitachievescashself−sufficiency[83]StockandEquity−TheCompanyrecognized0.03 million as of June 30, 2024[82] - The company projects it will need additional capital to fund operations until it achieves cash self-sufficiency[83] Stock and Equity - The Company recognized 511,619 of stock compensation expense for the six months ended June 30, 2024, compared to 537,670forthesameperiodin2023[7]−Totalstockholders′equityasofJune30,2024,was537,670 for the same period in 2023[7] - Total stockholders' equity as of June 30, 2024, was (32,356), compared to 3,035,270asofJune30,2023[75]−Anti−dilutiveordinaryshareequivalentsasofJune30,2024,totaled6,571,894,asubstantialincreasefrom65,022inthesameperiodin2023[109]AccountsReceivableandCredit−Onecustomeraccountedfor793,035,270 as of June 30, 2023[75] - Anti-dilutive ordinary share equivalents as of June 30, 2024, totaled 6,571,894, a substantial increase from 65,022 in the same period in 2023[109] Accounts Receivable and Credit - One customer accounted for 79% of the company's accounts receivable as of June 30, 2024, up from 66% at December 31, 2023[92] - 83% of accounts receivable were held by the Mexican entity as of June 30, 2024, compared to 76% at December 31, 2023[93] - One customer accounted for 46% of the company's revenues for the six months ended June 30, 2024, up from 30% for the same period in 2023[93] - The company's allowance for credit losses was 281,937 as of June 30, 2024, slightly down from 282,058atDecember31,2023[94]−Unbilledreceivablesdecreasedto282,058 at December 31, 2023[94] - Unbilled receivables decreased to 637,566 as of June 30, 2024 from 961,747atDecember31,2023[95]−Thecompanyrecognized961,747 at December 31, 2023[95] - The company recognized 3,343,913 in unbilled receivables during the six months ended June 30, 2024[96] - The company's cash balances exceeded federally insured limits by 101,226asofJune30,2024,downfrom101,226 as of June 30, 2024, down from 1,188,813 at December 31, 2023[91] Accounting Standards and Disclosures - The Company is evaluating the potential impact of adopting ASU 2023-07 on its consolidated financial statements and related disclosures[111] - The Company is evaluating the impact of adopting ASU 2023-09 on its consolidated financial statements and disclosures[112] - The Company does not expect the adoption of ASU 2020-04 to have a material impact on its consolidated financial statements[110]