Business Context and Reporting Period
This Form 6-K is filed by Hudson Capital Inc. (the "Registrant") for the month of September 2021. The filing discloses material definitive agreements related to the proposed merger between Hudson Capital and Freight App, Inc. (fka FreightHub Inc., "Fr8App"). The Registrant is a foreign private issuer filing under Form 20-F.
Key Financial Metrics and Transactions
The filing details a specific securities purchase transaction rather than standard periodic financial results (revenue, profit, or cash flow) for the reporting period.
- Securities Purchase: Hudson Capital agreed to sell 630,000 ordinary shares and a pre-funded warrant to purchase 650,000 ordinary shares to ATW Opportunities Master Fund, L.P. ("ATW").
- Purchase Price: Aggregate purchase price of $2,700,000.
- Net Proceeds: Approximately $2.6 million after expenses.
- Loan to Fr8App: $1.5 million of the net proceeds will fund a loan to Fr8App evidenced by a promissory note.
- Warrant Issuance: Fr8App issued Hudson Capital a warrant to purchase Fr8App securities with an aggregate value of $2,700,000, which Hudson Capital agreed to assign to ATW.
The filing text does not provide clear values for revenue, profit, operating margins, total debt, or liquidity positions for the period.
Material Changes and Agreements
On September 16, 2021, the following material changes and agreements were executed:
- Amendment No. 6 to Merger Agreement: Parties amended the original October 10, 2020, Merger Agreement to insert new definitions and clarify provisions in Sections 1.16, 1.35, 1.47, 13.1(a), and 13.4.
- Securities Purchase Agreement: Executed with ATW to raise capital contingent on closing conditions.
- Fr8App Loan and Warrant: Effectiveness of the $1.5 million loan and the associated Fr8App warrant is contingent on the closing of the Securities Purchase by ATW.
Guidance, Outlook, Risks, and Contingencies
The filing contains extensive forward-looking statements regarding the proposed acquisition. Management cautions that actual results may differ materially from expectations due to significant risks and uncertainties.
- Contingencies: The closing of the securities purchase and the subsequent loan to Fr8App are subject to customary closing conditions. The merger itself is subject to shareholder approvals, regulatory approvals, and other conditions.
- Key Risks:
- Termination of the Merger Agreement.
- Failure to obtain shareholder or regulatory approvals.
- Impact of the COVID-19 pandemic on Fr8App's business and the transaction timeline.
- Inability to maintain Nasdaq listing post-merger.
- Disruption of current operations and inability to retain key employees.
- Uncertainty regarding projected financial information for Fr8App.
- Outlook: No specific financial guidance or revenue projections are provided in this filing.
Important Facts for Investor Verification
- Verify the closing status of the $2.7 million securities purchase with ATW Opportunities Master Fund, L.P.
- Confirm the execution of the $1.5 million promissory note loan to Fr8App.
- Review the full text of Amendment No. 6 to the Merger Agreement (Exhibit 10.1) for specific changes to deal terms.
- Monitor the status of shareholder and regulatory approvals required to consummate the merger between Hudson Capital and Fr8App.
- Check for the filing of the prospectus supplement related to the securities purchase.