Fr8Tech(FRGT)2025-01-10 22:00Assets and Equipment - Property and equipment, net decreased to $12,404 as of June 30, 2024, from $18,239 as of December 31, 2023[2] - Long-lived assets decreased to $710,369 as of June 30, 2024, from $803,549 as of December 31, 2023, with $591,021 located in Mexico and $119,348 in the United States[24] - Capitalized software, net, as of June 30, 2024, was $684,195, compared to $771,133 as of December 31, 2023[113] Liabilities and Accrued Expenses - Total accrued expenses decreased to $1,525,355 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 $4,443,944 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 $125,000 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 $242,442 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 $7.410 million as of December 31, 2023 to $9.065 million as of June 30, 2024[71] - The company reported negative working capital of $0.8 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, with $5,043,432 coming from Mexico and $3,082,170 from the United States[24] - Revenue increased by $507 (6.7%) to $8,126 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 $7,170 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 $2,818 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 $1,672 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 $7,619,000 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 $3,475,000 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 $4,223,000 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 $39,000 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 $192,000 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 $847,000 in the same period in 2023[55] - Revenue for the six months ended June 30, 2024 was $8.126 million, compared to $7.619 million for the same period in 2023[73] - Net loss for the six months ended June 30, 2024 was $4.211 million, compared to $4.234 million for the same period in 2023[73] - Comprehensive loss for the six months ended June 30, 2024 was $4.626 million, compared to $4.032 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 $158.98 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 $4,223,808 in the same period in 2023[77] - Share-based compensation for the six months ended June 30, 2024, was $515,380, compared to $549,371 in the same period in 2023[77] - Depreciation and amortization for the six months ended June 30, 2024, was $220,246, compared to $192,484 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 $6,152,222 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 $1,467,100 in the same period in 2023[107] - Total revenue for the six months ended June 30, 2024, was $8,125,602, compared to $7,619,322 in the same period in 2023[107] - Amortization expense for the six months ended June 30, 2024, was $212,306, up from $183,307 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 $357,599 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 $1,471,839 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, 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 $1,608,000 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 $2.879 million, driven by proceeds from convertible notes of $4.8 million, partially offset by net repayment on borrowing facilities of $1.726 million, repayment of insurance premium funding of $153,000, and transaction costs of $42,000[68] - Cash and cash equivalents decreased from $1.560 million as of December 31, 2023 to $460,576 as of June 30, 2024[71] - Total current assets decreased from $9.153 million as of December 31, 2023 to $8.268 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 $1,608,102 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 $2,878,519 in the same period in 2023[77] - Cash and cash equivalents at the end of the period were $460,576, compared to $1,837,713 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 $8,615,881 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 $10,342,407 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 $64,431 in the same period in 2023[77] - The company has an accumulated deficit of $43.5 million and negative working capital of $0.8 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 $0.03 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 $537,670 for the same period in 2023[7] - Total stockholders' equity as of June 30, 2024, was $(32,356), compared to $3,035,270 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 $282,058 at December 31, 2023[94] - Unbilled receivables decreased to $637,566 as of June 30, 2024 from $961,747 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 $101,226 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]