Business Context and Reporting Period
This Form 6-K is filed by Hudson Capital Inc. (not Freight Technologies, Inc.) for the month of February 2022, dated February 11, 2022. The filing reports the entry into a definitive material agreement involving the assignment of a securities purchase agreement and the funding of a loan to Freight App, Inc. (Fr8App) in connection with a proposed merger.
Key Financial Metrics
The filing does not provide standard financial statements (revenue, profit, cash flow, or margins) for the reporting period. However, it discloses specific transaction values:
- Transaction Proceeds: Net proceeds from the Assignees' Securities Purchase were approximately $1,356,178.
- Debt Issuance: A promissory note (the "Fr8App Loan") was issued by Fr8App to Hudson Capital for the amount of the net proceeds ($1,356,178).
- Securities Issued: 677,750 pre-funded warrants were assigned and converted into ordinary shares at a price of $2.00 per warrant.
Material Changes and Transactions
The filing details a multi-stage capital transaction:
- Original Agreement: On December 13, 2021, Hudson Capital agreed to sell pre-funded warrants to ATW Opportunities Master Fund, L.P. for $862,000.
- Amendment: On December 16, 2021, the agreement was amended to increase the subscription amount to $2,355,000 and the warrant count to 1,177,500 shares.
- Assignment and Closing: On February 10, 2022, ATW assigned the right to purchase 677,750 warrants to ten new investors ("Assignees") for $1,356,178. The transaction closed, and the warrants were immediately converted into ordinary shares.
- Use of Proceeds: The net proceeds were used to fund a loan to Fr8App, evidenced by a promissory note dated February 10, 2022.
Outlook, Risks, and Management Commentary
Management Commentary: The transaction is part of the broader process leading to a proposed merger between Hudson Capital and Fr8App. The filing notes that the closing of the securities purchase was required to occur before the Merger.
Risks and Contingencies: The filing includes extensive forward-looking statements regarding the proposed merger. Key risks include:
- Failure to obtain shareholder or regulatory approvals for the merger.
- Termination of the definitive merger agreement.
- Impact of the COVID-19 pandemic on Fr8App's business.
- Inability to maintain Nasdaq listing post-merger.
- Uncertainty regarding Fr8App's projected financial information and ability to grow profitably.
Investor Verification Checklist
- Verify the final terms of the proposed merger between Hudson Capital and Fr8App in the upcoming Form S-4 prospectus/proxy statement.
- Confirm the status of the $1,356,178 promissory note issued by Fr8App to Hudson Capital.
- Review the "Risk Factors" section of the Form S-4 for detailed risks regarding Fr8App's financial projections and operational stability.
- Monitor regulatory approvals required to close the merger and the potential impact on Hudson Capital's Nasdaq listing.