Business Context and Reporting Period
Company: Freight Technologies, Inc. (FRGT)
Filing Type: Form 20-F (Annual Report)
Reporting Period: Fiscal Year Ended December 31, 2025
Jurisdiction: British Virgin Islands (Foreign Private Issuer)
Business Overview: Fr8Tech is a technology-driven logistics company focused on the US-Mexico-Canada (USMCA) corridor. The company operates a portfolio of freight brokerage platforms (Fr8App, Fr8Fleet, Fr8Now, Waavely) and is transitioning toward a software-first model with SaaS products (Fleet Rocket, Zayren). In December 2025, the company acquired JAK Solar Loans 1 Limited to diversify revenue streams into residential solar loans.
Key Financial Metrics (Year Ended Dec 31, 2025)
| Metric | 2025 Value | 2024 Value | Change |
|---|---|---|---|
| Total Revenue | $13.06 million | $13.73 million | -4.9% |
| Net Loss | $(7.90) million | $(5.60) million | Widened 41% |
| Operating Loss | $(5.89) million | $(6.49) million | Improved 9.2% |
| Cash Flow from Operations | $(4.53) million | $(4.21) million | Negative |
| Cash and Equivalents (End of Period) | $0.35 million | $0.20 million | Positive |
| Working Capital | $0.03 million | $(0.30) million | Positive |
| Short-Term Debt | $2.88 million | $3.34 million | Decreased |
| Accumulated Deficit | $(52.82) million | $(44.92) million | Increased |
Revenue Breakdown (2025): Freight Transportation Brokerage ($9.63M, +11.5%); Dedicated Capacity ($3.42M, -32.9%); Software ($0.02M, new line).
Material Changes vs. Prior Period
- Revenue Decline: Total revenue decreased 4.9% primarily due to a 32.9% drop in Dedicated Capacity revenue (Fr8Fleet), driven by a shift in the largest customer's (Kimberly-Clark de México) demand toward shorter-haul, lower-rate movements. This was partially offset by an 11.5% increase in spot market brokerage revenue.
- Increased Net Loss: Net loss widened to $7.9 million from $5.6 million. This was driven by a $1.65 million realized loss on the sale of cryptocurrency (Official Trump tokens and FET tokens) and increased interest expense, despite a reduction in operating expenses.
- Cost Reductions: The company reduced total headcount by approximately 34% (from 100 to 66 employees), resulting in a 16% decrease in compensation and employee benefits expenses ($4.48M vs $5.35M).
- Acquisition: On December 31, 2025, the company acquired JAK Solar Loans 1 Limited for $5.73 million in Series C Preferred Shares, recognizing $4.49 million in goodwill. This adds a portfolio of 62 residential solar loans to the balance sheet.
- Capital Structure: The company executed multiple reverse stock splits (1-for-10, 1-for-25, 1-for-4, and 1-for-5) throughout 2024 and 2025 to maintain Nasdaq listing compliance.
Guidance, Outlook, Risks, and Unusual Items
Strategic Outlook and Guidance
- Strategic Pivot: Management is transitioning from a volume-led freight brokerage model to a software-first, AI-native logistics technology company. The focus is on monetizing proprietary SaaS products (Fleet Rocket, Zayren) and AI capabilities.
- Brokerage Review: In April 2026 (subsequent to year-end), the Board announced an evaluation of strategic alternatives for its online brokerage operations, including a potential sale. This could materially alter the revenue profile if completed.
- Financing: The company entered a $1 billion Equity Purchase Facility (ELOC) in October 2025 to fund operations and strategic transactions. It also raised approximately $3.5 million in equity and $2.9 million in convertible notes during 2025.
Material Risks and Contingencies
- Going Concern: The independent auditor (TAAD LLP) has included an explanatory paragraph in the audit report stating there is substantial doubt about the company's ability to continue as a going concern for twelve months from the report date. This is due to recurring losses, negative cash flows, and an accumulated deficit of $52.8 million.
- Liquidity: With only $0.35 million in unrestricted cash and $2.88 million in short-term debt, the company relies on the ELOC and additional capital raises to fund operations.
- Customer Concentration: One customer (Kimberly-Clark de México) accounted for approximately 42% of 2025 revenues and 31% of accounts receivable.
- Internal Controls: The company identified material weaknesses in internal controls over financial reporting, specifically regarding dedicated services billing and revenue recognition.
- Cryptocurrency Exposure: The company incurred significant losses from cryptocurrency trading activities, which are not core to its logistics business.
Investor Verification Checklist
- Going Concern Status: Verify the company's ability to secure additional funding beyond the ELOC and existing credit lines to sustain operations through 2026.
- Brokerage Sale Progress: Monitor updates on the strategic review of brokerage operations announced in April 2026; a sale would fundamentally change the business model and revenue base.
- Customer Concentration: Assess the risk associated with the top customer (Kimberly-Clark de México) representing 42% of revenue and the impact of their shift to lower-rate services.
- Internal Control Remediation: Review the status of remediation efforts for the identified material weaknesses in internal controls over financial reporting.
- Cryptocurrency Strategy: Confirm whether the company has ceased or limited non-core cryptocurrency trading activities that caused significant realized losses in 2025.
- Nasdaq Compliance: Monitor the company's ability to maintain Nasdaq listing requirements given the history of reverse splits and stock price volatility.