Fr8Tech(FRGT) - 2024 Q4 - Annual Report

Financial Performance - As of December 31, 2024, the company reported a net loss of $(5,601,227) compared to $(9,327,606) in 2023, indicating a reduction in losses year-over-year[23] - The company had an accumulated deficit of $(44,916,779) and a cash balance of $204,032 as of December 31, 2024[23] - The company sold a total of 528,576 shares during the ATM offering, with compensation costs amounting to $297,809[24] Market Overview - The U.S. domestic truck freight transportation market was approximately $950 billion in 2023 and 2024, with expected low- to mid-single digit growth in 2025[28] - The Mexican domestic freight market is estimated to be approximately $46 billion in 2025, with the North American cross-border freight transportation market expected to exceed $308 billion by 2030[28] - The U.S. trucking industry faced a shortage of approximately 80,000 drivers at the end of 2024, with a projected need for 1.2 million additional drivers over the next decade[35] - The Mexican trucking industry is expected to grow at a CAGR of 5.2% through 2030, driven by a growing domestic economy and increasing trade flows[36] - The Mexican LTL market is expected to grow at an approximate 6% CAGR through 2029, outpacing GDP growth[114] Product and Service Development - The company launched Waavely, an ocean freight booking and management platform, in July 2024 to support logistics needs for containerized shipments[24] - Fr8App launched its first commercial version in 2017, focusing on freight brokerage support and enhanced features by Q2 2020[42] - In 2021, Fr8App introduced the broker portal and Fr8Fleet, enhancing its service offerings with automated onboarding and EDI integrations[44] - Fr8Now commenced operations in Q1 2023, targeting the LTL shipping market in Mexico with flexible options and affordable pricing[47] - Waavely, a freight matching platform for ocean container shipments, was launched in July 2024, expanding services for existing customers[48] - Fr8Tech plans to enhance its technology offerings, including the launch of an AI-powered Tendering Bot in March 2025 to automate load tendering processes[86] - Fr8Tech's Fleet Rocket software is sold under a SaaS model, integrating AI technology to optimize cross-border logistics and nearshoring operations[85] Technology and Innovation - Fr8App's Platform enables real-time tracking and automated matching of Shippers and Carriers, enhancing operational efficiency[50] - Fr8Data tools provide real-time dashboards and historical data analysis to improve decision-making for Shippers and Carriers[59] - Fr8App's API allows integration with customer systems, automating shipment booking and enhancing visibility[55] - The company has invested in developing new tools and functionalities, including 18 tracking integrations with GPS providers and real-time pricing tools[79] - The company utilizes automated monitoring tools and real-time data visualization to ensure system performance and security[99] - Fr8Tech's technology infrastructure is designed for scalability and efficiency, utilizing a micro-service architecture and CI/CD methodologies[90] Customer and Market Strategy - Kimberly Clark de Mexico (KCM) accounted for 48% of Fr8Tech's revenues for the year ended December 31, 2024, up from 33% in 2023[70] - As of December 31, 2024, KCM represented 88% of Fr8Tech's accounts receivables, compared to 66% in 2023[69] - Fr8Tech's growth strategy includes leveraging existing customer feedback to enhance user experiences and streamline operations[75] - The company is focused on balancing its business between primary and spot markets to capitalize on market volatility and demand fluctuations[80] - The company builds its Carrier network by demonstrating the value of its marketplace and providing timely payments upon shipment completion[101] Corporate Structure and History - Freight App, Inc. was incorporated in 2015 and aims to provide solutions for the cross-border commercial freight market between the U.S. and Mexico, and the U.S. and Canada[130] - The merger between Hudson Capital and Fr8App was completed on February 14, 2022, with Fr8App becoming a wholly-owned subsidiary of Hudson Capital[135] - Following the merger, Hudson Capital changed its name to Freight Technologies, Inc. and began trading under the symbol "FRGT" on the Nasdaq Capital Market[139] - The merger resulted in the issuance of 18,249,032 unregistered, restricted securities to shareholders of Fr8App[137] - The company has undergone multiple reverse stock splits, including a 10:1 split on March 24, 2023, and another 10:1 split on February 5, 2024[141][142] - Freight App de México S.A. de C.V. is a wholly-owned subsidiary of Freight App, Inc., expanding its operational footprint in Mexico[144] - The company has divested from its previous business, Hong Kong Internet Financial Services Limited, and is now focused on its freight technology solutions[140] - The company’s fiscal year ends on December 31, aligning its financial reporting with the calendar year[146] - The company has not been involved in bankruptcy or similar proceedings[147] - The company operates under multiple brands, including Fr8App, Fr8Fleet, Waavely, Fr8Now, Fr8Radar, and Fleet Rocket[140] Operational Metrics - As of December 31, 2024, Fr8Tech had a total of 82 employees, with 74 based in Mexico[118] - Fr8Tech's total current monthly rent for all office locations is approximately $11,000, with facility lease expenses of approximately $141,315 and $101,000 for the years ended December 31, 2024, and 2023, respectively[121] - Fr8Tech's principal asset consists of its software, which is continuously invested in through development work[122] - Fr8Tech's competitors include established logistics companies and emerging startups in the 3PL industry, indicating a rapidly evolving competitive landscape[109] - The company has established a service agreement with TB Networks for AI-powered shipment planning services, enhancing operational efficiency[96]