Business Context and Reporting Period
This Form 6-K is filed by Hudson Capital Inc. (a foreign private issuer) for the month of September 2021. The filing reports the consummation of a securities purchase agreement and a related loan transaction involving Fr8App (Freight Technologies, Inc.). The transaction closed on September 28, 2021.
Key Financial Metrics
- Capital Raised: Aggregate purchase price of $2,700,000 from ATW Opportunities Master Fund, L.P.
- Net Proceeds: Approximately $2.6 million after expenses.
- Securities Issued: 630,000 ordinary shares and a pre-funded warrant to purchase 650,000 ordinary shares.
- Loan Deployment: $1.5 million of net proceeds allocated to fund a loan to Fr8App.
- Warrant Value: Fr8App issued a warrant to Hudson Capital with an aggregate value of $2,700,000, which was assigned to ATW.
Note: The filing does not provide revenue, profit, cash flow, margin, or total debt figures for Hudson Capital or Fr8App.
Material Changes
The primary material change is the execution and closing of the Securities Purchase on September 28, 2021. This transaction resulted in:
- Increased liquidity for Hudson Capital via the $2.6 million net proceeds.
- Creation of a new asset (promissory note) and contingent equity interest (warrant) in Fr8App.
- Assignment of the Fr8App warrant to the investor (ATW) as part of the deal structure.
Outlook, Risks, and Contingencies
Management Commentary: The transaction was contingent on the closing of the Securities Purchase, which has now been consummated. The Fr8App Loan and Warrant effectiveness were tied to this closing.
Risks and Contingencies: The filing includes extensive forward-looking statements regarding a proposed merger between Hudson Capital and Fr8App. 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 growth milestones.
Investor Verification Checklist
- Verify the final closing status of the proposed merger between Hudson Capital and Fr8App.
- Confirm the terms and repayment schedule of the $1.5 million promissory note issued by Fr8App.
- Review the prospectus/proxy statement (Form S-4) for detailed risk factors and participant interests.
- Monitor Fr8App's ability to meet business milestones and manage growth profitably as cited in the risk factors.
- Check for any subsequent filings regarding the listing status of Hudson Capital shares on Nasdaq.