Fr8Tech(FRGT) - 2025 Q1 - Quarterly Report

Financial Performance - For the three months ended March 31, 2025, revenue decreased to $4,100,640 from $4,287,760 for the same period in 2024, representing a reduction of $187,120 or 4.4% year-over-year[143] - The company reported a net loss of $1,602,046 for the three months ended March 31, 2025, compared to a net loss of $2,256,450 for the same period in 2024[142] - Operating loss for the three months ended March 31, 2025, was $1,464,101, an improvement from the operating loss of $2,083,746 in the same period of 2024[142] - Fr8Tech had an accumulated deficit of approximately $46.5 million and reported operating losses and negative cash flows from operations for the quarter ended March 31, 2025[155] Cost Management - Cost of revenue for the three months ended March 31, 2025, decreased to $3,593,300 from $4,056,627 in the same period of 2024, a reduction of $463,327 or 11.4% year-over-year[144] - Fr8Tech's compensation and employee benefits expenses decreased by $199,552 or 13.7% year-over-year to $1,254,789 for Q1 2025, primarily due to a reduction in headcount[145] - General and administrative expenses fell by $134,784 or 18.4% to $596,753 for Q1 2025, mainly due to lower spending on professional services and insurance[146] - Sales and marketing expenses decreased by $2,749 or 14.6% to $16,045 for Q1 2025, attributed to reduced online advertising and industry event expenditures[147] - Interest expense decreased by $38,601 to $134,864 for Q1 2025, primarily due to lower borrowing against the revolving credit facility[150] Cash Flow and Liquidity - Net cash used in operating activities for Q1 2025 was $3,096,429, driven by a net loss of $1,602,046 and cash used for working capital of $1,823,320[162] - Net cash provided by financing activities increased to $3,421,713 for Q1 2025, primarily from the issuance of Series A4 shares and short-term borrowings[166] - The liquidity condition raises substantial doubt about Fr8Tech's ability to continue as a going concern for the next twelve months[158] Strategic Focus and Market Conditions - The demand for the company's platform is influenced by overall economic conditions in North America, including international trade levels[137] - The company is focused on enhancing its digital freight matching capabilities to address supply chain challenges and improve operational efficiency[138] - The company believes that the near-shoring trend will continue to create market opportunities for digital brokers in cross-border commerce[139] Financing Activities - The company raised $3,000,000 from the issuance of Series A4 preferred shares in February 2025, contributing to its financing efforts[136] - The company expects to have sufficient funds to carry out planned operations through December 31, 2025, and for at least 12 months beyond that period[136] Accounts Receivable and Payable - Accounts receivable and unbilled receivable balance increased by $1.8 million or 45.1% to $5.9 million as of March 31, 2025, due to lower collections[152] - Accounts payable, short-term borrowings, and accrued expenses rose by $750,000 or 12.4% to $6.8 million as of March 31, 2025, mainly due to higher accrued expenses[153]