{"url_path":"/sec/frgt/10-k/2026/item-10","section_key":"item-10","section_title":"Item 10 ADDITIONAL INFORMATION","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-14","source_url":"https://www.sec.gov/Archives/edgar/data/1687542/0001493152-26-023206-index.html","accession_number":"0001493152-26-023206","cik":"0001687542","ticker":"FRGT","issuer_name":"Freight Technologies, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1687542/0001493152-26-023206-index.html","primary_entity_key":"0001687542","primary_entity_name":"Freight Technologies, Inc."},"word_count":7311,"has_tables":true,"body_markdown":"ITEM\n10. ADDITIONAL INFORMATION\n\n \n\n10.A.\nShare Capital\n\n \n\nNot\napplicable.\n\n \n\n10.B.\nMemorandum and Articles of Association\n\n** **\n\nThe\nfollowing describes our amended and restated memorandum and articles of association.\n\n \n\n**Objects\nand Purposes, Register, and Shareholders.** Subject to the BVI Act and BVI law, our objects and purposes are unlimited. Our register\nof members is maintained by our transfer agent, Transhare Corporation. Under the BVI Act, a BVI company may treat the registered holder\nof a share as the only person entitled to (a) exercise any voting rights attaching to the share, (b) receive notices, (c) receive a distribution\nin respect of the share and (d) exercise other rights and powers attaching to the share. Consequently, as a matter of BVI law, where\na shareholder’s shares are registered in the name of a nominee such as Cede & Co, the nominee is entitled to receive notices,\nreceive distributions and exercise rights in respect of any such shares registered in its name. The beneficial owners of the shares registered\nin a nominee’s name will therefore be reliant on their contractual arrangements with the nominee in order to receive notices and\ndividends and ensure the nominee exercises voting and other rights in respect of the shares in accordance with their directions.\n\n \n\n**Directors’\nPowers.** Under the BVI Act, subject to any modifications or limitations in a company’s memorandum and articles of association,\na company’s business and affairs are managed by, or under the direction or supervision of, its directors; and directors generally\nhave all powers necessary to manage a company. A director must disclose any interest he has in a transaction entered into or to be entered\ninto by the Company with all the other directors. An interested director may, (a) vote on a transaction in which he has an interest,\n(b) attend a meeting of directors at which a matter relating to the transaction arises and be present at the meeting for the purposes\nof the quorum, and (c) sign a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to\nthe transaction. In accordance with, and subject to, our memorandum and articles, the directors may by resolution of directors exercise\nall the powers of the Company to incur indebtedness, liabilities or obligations and to secure indebtedness, liabilities or obligations\nwhether of the Company or of any third party.\n\n** **\n\n**Rights,\nPreferences and Restrictions of Ordinary Shares.** Subject to the restrictions described under the section titled “Dividend\nPolicy” above, our directors may (subject to the memorandum and articles) authorize dividends at such time and in such amount as\nthey determine. Each ordinary share is entitled to one vote on any resolution of shareholders. In the event of a voluntary or involuntary\nliquidation, dissolution or winding-up of the Company, the assets of the Company available for distribution to its shareholders, or in\nthe case of a deemed liquidation event the available proceeds, shall be distributed to the shareholders pro rata based on the number\nof shares they hold, treating for all purposes all securities as if they had been converted to Ordinary Shares pursuant to the memorandum\nand articles immediately prior to such liquidation, dissolution or winding-up of the Company. There are no sinking fund provisions applicable\nto our ordinary shares. The memorandum and articles has disapplied pre-emption rights pursuant to section 46 of the BVI Act and has also\ndisapplied the redemption provision in section 60 through 62 of the BVI Act.\n\n \n\nThe\nSeries A Preferred Shares, Series B Preferred Shares and Series C Preferred Shares in the Company all have conversion rights attached\nproviding the holder with the right to convert such shares into Ordinary Shares in the Company on the terms set out in the memorandum\nand articles and subject to any agreement between the Company and the holder of the Preferred Shares.\n\n \n\n**Variation\nof the Rights of Shareholders.** As permitted by the BVI Act and our memorandum and articles, the rights attached to shares of\nthe Company may (subject to the memorandum and articles) only, whether or not the Company is being wound up, be varied with the consent\nin writing of or by a resolution passed at a meeting by the holders of more than fifty percent of the issued shares of that class, except\nwhere a different majority is required under our memorandum and articles or the BVI Act.\n\n \n\n62\n\n \n\n \n\n**Shareholder\nMeetings.** In accordance with, and subject to, our memorandum and articles, (a) any director of the Company may convene meetings\nof the shareholders at such times as the director considers necessary or desirable (and the director convening a meeting of shareholders\nmay fix as the record date for determining those shareholders that are entitled to vote at the meeting the date notice is given of the\nmeeting, or such other date as may be specified in the notice, being a date not earlier than the date of the notice); and (b) upon the\nwritten request of shareholders entitled to exercise 30% or more of the voting rights in respect of the matter for which the meeting\nis requested, the directors shall convene a meeting of shareholders. Under BVI law, the memorandum and articles of association may be\namended to decrease but not increase the required percentage to call a meeting above 30%. In accordance with, and subject to, our memorandum\nand articles, (a) the director convening a meeting shall give not less than 7 days’ notice of a meeting of shareholders to those\nshareholders whose names on the date the notice is given appear as shareholders in the register of members of the Company and are entitled\nto vote at the meeting; and the other directors; (b) a meeting of shareholders held in contravention of the requirement to give notice\nis valid if shareholders holding at least 90% of the total voting rights on all the matters to be considered at the meeting have waived\nnotice of the meeting and, for this purpose, the presence of a shareholder at the meeting shall constitute waiver in relation to all\nof the ordinary shares that that shareholder holds; (c) a meeting of shareholders is duly constituted if, at the commencement of the\nmeeting, there are present in person or by proxy not less than one-third of the votes of the ordinary shares or class or series of ordinary\nshares entitled to vote on resolutions of shareholders to be considered at the meeting; and (d) if within two hours from the time appointed\nfor the meeting a quorum is not present, the meeting, if convened upon the request of the shareholders, shall be dissolved; in any other\ncase it shall stand adjourned to the next business day in the jurisdiction in which the meeting was to have been held at the same time\nand place or to such other time and place as the directors may determine, and if at the adjourned meeting there are present within one\nhour from the time appointed for the meeting in person or by proxy not less than one third of the votes of the ordinary shares entitled\nto vote on the matters to be considered by the meeting, those present shall constitute a quorum but otherwise the meeting shall be dissolved.\n\n \n\n**Dividends.**Subject to the BVI Act and our memorandum and articles, our directors may, by resolution, declare dividends at a time and amount\nas they think fit if they are satisfied, based on reasonable grounds, that, immediately after distribution of the dividend, the value\nof our assets will exceed our liabilities and we will be able to pay our debts as they fall due. There is no further BVI law restriction\non the amount of funds which may be distributed by us by dividend, including all amounts paid by way of the subscription price for ordinary\nshares regardless of whether such amounts may be wholly or partially treated as share capital or share premium under certain accounting\nprinciples. Shareholder approval is not (except as otherwise provided in our memorandum or articles) required to pay dividends under\nBVI law. In accordance with, and subject to, our memorandum and articles, no dividend shall bear interest as against the Company (except\nas otherwise provided in our memorandum or articles).\n\n \n\n**Appointment\nand Removal of Directors.**In accordance with, and subject to our memorandum and articles, (a) the first directors of the Company\nshall be appointed by the first registered agent within 6 months of the date of incorporation of the Company and thereafter, the directors\nshall be elected by resolution of shareholders or by resolution of directors for such term as the shareholders or directors determine;\n(b) each director holds office for the term, if any, fixed by the resolution of shareholders or resolution of directors appointing him,\nor until his disqualification, earlier death, resignation or removal, (c) a director may be removed from office: (i) with or without\ncause by resolution of shareholders passed at a meeting of shareholders called for the purpose of removing the director or for purposes\nincluding the removal of the director or by a written resolution passed by at least seventy-five percent of the shareholders of the Company\nentitled to vote; or (ii) with cause, by a resolution of directors passed at a meeting of the directors called for the purpose of removing\nthe director or for purposes including the removal of the director, (d) a director may resign his office by giving written notice of\nhis resignation to the Company and the resignation has effect from the date the notice is received by the Company at the office of its\nregistered agent or such later date as may be specified in the notice and a director shall resign forthwith as a director if he is, or\nbecomes, disqualified from acting as director under the BVI Act, (e) the directors may at any time appoint any person to be a director\neither to fill a vacancy or as an addition to the existing directors and where the directors appoint the person as a director to fill\na vacancy, the terms shall not exceed the term that remained when the person who has ceased to be a director ceased to hold office, (f)\na vacancy in relation to directors occurs if a director dies or otherwise ceases to hold office prior to the expiration of his term of\noffice, and (g) a director is not required to hold shares in the Company as a qualification to office.\n\n \n\n**Meetings\nof Directors.** In accordance with and subject to our memorandum and articles, (a) any one director of the Company may call a meeting\nof the directors by sending a written notice to each other director, (b) the directors of the Company or any committee thereof may meet\nat such times and in such manner as the directors may determine to be necessary or desirable, (c) a director shall be given not less\nthan 3 days’ notice of meetings of directors, but a meeting of directors held without 3 days’ notice having been given to\nall directors shall be valid if all the directors entitled to vote at the meeting who do not attend waive notice of the meeting, and\nfor this purpose the presence of s director at a meeting shall constitute waiver by that director and the inadvertent failure to give\nnotice of a meeting to a director, or the fact a director has not received notice, does not invalidate the meeting, (d) a meeting of\ndirectors is duly constituted for all purposes if at the commencement of the meeting there are present in person or by alternate not\nless than one-half of the total number of directors, subject to a minimum of two, (e) a director may by a written instrument appoint\nan alternate who need not be a director and the alternate shall be entitled to attend meetings in the absence of the director who appointed\nhim and to vote or consent in place of the director until the appointment lapses or is terminated, (f) a resolution of directors is passed\nif either: (i) the resolution is approved at a duly convened and constituted meeting of directors of the Company by the affirmative vote\nof a majority of the directors present at the meeting who voted except that where a director is given more than once vote, he shall be\ncounted by the number of votes he casts for the purposes of establishing a majority; (ii) or the resolution is consented to in writing\nby all directors or by all members of a committee of directors of the Company, as the case may be, unless the BVI Act or the memorandum\nand articles require a different majority.\n\n \n\n63\n\n \n\n \n\n**Indemnification\nof Directors.**In accordance with and subject to our memorandum and articles,, the Company shall indemnify against all expenses\nincluding legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal,\nadministrative or investigative proceedings any person who is (a) is or was a party or is threatened to be made a party to any threatened,\npending or completed proceedings, whether civil, criminal, administrative or investigative, by reason of the fact that the person is\nor was a director of the Company, or (b) is or was at the request of the Company, serving as a director of, or in any other capacity\nis or was acting for, another company or a partnership, joint venture, trust or other enterprise.\n\n \n\nIn\naccordance with and subject to the articles and memorandum, (a) the indemnity referred to above only applies if the person acted honestly\nand in good faith with a view to the best interests of the Company and, in the case of criminal proceedings, the person had no reasonable\ncause to believe that the conduct was unlawful, (b) the decision of the directors as to whether the person had no reasonable cause to\nbelieve that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of the articles, unless a question of\nlaw is involved, and (d) the termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle\nprosequi does not, by itself, create a presumption that the person did not act honestly and in good faith and with a view to the best\ninterests of the Company or that the person had reasonable cause to believe that his conduct was unlawful.\n\n \n\nIn\naccordance with and subject to the articles and memorandum, the Company may purchase and maintain insurance in relation to any person\nwho is or was a director, officer or liquidator of the Company, or who at the request of the Company is or was serving as a director,\nofficer or liquidator of, or in any other capacity is or was acting for, another company or a partnership, joint venture, trust or other\nenterprise, against any liability asserted against the person and incurred by the person in that capacity, whether or not the Company\nhas or would have the power to indemnify the person against the liability as provided in the articles.\n\n \n\n**Disclosure of the Securities and Exchange\nCommission’s Position on Indemnification for Securities Act Liabilities.** Insofar as indemnification for liabilities arising\nunder the Securities Act may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provisions,\nthe registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public\npolicy as expressed in the Securities Act and is therefore unenforceable.\n\n \n\n**Transfer\nof Shares.**Subject to any applicable restrictions or limitations arising pursuant to (i) our memorandum and articles; or (ii)\nthe BVI Act, any of our shareholders may transfer all or any of his or her shares by an instrument of transfer in the usual or common\nform or in any other form which our directors may approve (such instrument of transfer being signed by the transferor and containing\nthe name and address of the transferee). Our memorandum and articles also (save as otherwise provided therein) provide that shares may\nbe dealt with by means of a system utilized for the purposes of holding and transferring of shares in uncertificated form.\n\n \n\n10.C.\nMaterial Contracts\n\n \n\nWe\nhave not entered into any material contracts other than in the ordinary course of business and other than those described in Item 4 “*Information\non the Company*,” Item 7 “*Major Shareholders and Related Party Transactions*,” or filed (or incorporated by\nreference) as exhibits to this annual report or otherwise described or referenced in this Annual Report.\n\n \n\n10.D.\nExchange Controls\n\n \n\nThere\nare no material British Virgin Islands laws, decrees, regulations or other legislation that impose foreign exchange controls on us or\nthat affect our payment of dividends, interest or other payments to non-resident holders of our shares. British Virgin Islands law and\nour Memorandum of Association and Articles of Association impose no limitations on the right of non-resident or foreign owners to hold\nor vote our common shares. However, we operate through subsidiaries located in Mexico. Mexico has had a free market for foreign exchange\nsince 1991, and the Mexican Government has allowed the peso to float freely against the U.S. dollar since December 1994. We have no control\nover or influence on this exchange rate policy. The Mexican Government has announced that it does not intend to change its floating exchange\nrate policy, but there is no guarantee that the Mexican Government will not change this policy.\n\n \n\n64\n\n \n\n \n\n10.E.\nTaxation\n\n \n\n**ANTICIPATED\nMATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES TO U.S. HOLDERS OF COMPANY SECURITIES**\n\n \n\n**General**\n\n \n\nThe\nfollowing is a summary of the anticipated U.S. federal income tax consequences to U.S. Holders of the ownership and disposal of ordinary\nshares. As used in this discussion, the term “U.S. Holder” means a beneficial owner of securities that is for U.S. federal\nincome tax purposes:\n\n \n\n \n●\nan individual citizen or resident of the United States;\n\n \n \n \n\n \n●\na corporation (or other entity treated as a corporation) that\nis created or organized (or treated as created or organized) in or under the laws of the United States, any state thereof or the District\nof Columbia;\n\n \n \n \n\n \n●\nan estate whose income is includible in gross income for U.S.\nfederal income tax purposes regardless of its source; or\n\n \n \n \n\n \n●\na trust if (i) a U.S. court can exercise primary supervision\nover the trust’s administration and one or more U.S. persons are authorized to control all substantial decisions of the trust,\nor (ii) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.\n\n \n\nIf\na beneficial owner of securities is not described as a U.S. Holder and is not an entity or arrangement treated as a partnership or other\npass-through entity for U.S. federal income tax purposes, such owner will be considered a “Non-U.S. Holder” for purposes\nof this discussion. However, if a beneficial owner is an entity or arrangement treated as a partnership or other pass-through entity\nfor U.S. federal income tax purposes, the tax treatment of the partners or owners generally depends on their individual status.\n\n \n\nThis\ndiscussion is based upon existing provisions of the Internal Revenue Code of 1986, as amended (“Code”), Treasury regulations\npromulgated thereunder, published revenue rulings and procedures from the IRS, and judicial decisions, all as currently in effect. These\nauthorities are subject to change or differing interpretations, possibly on a retroactive basis.\n\n \n\nThis\ndiscussion does not address all aspects of U.S. federal income taxation that may be relevant to any particular holder based on such holder’s\nindividual circumstances. In particular, this discussion considers only holders that own and hold securities as capital assets within\nthe meaning of Section 1221 of the Code. This discussion does not address the alternative minimum tax or the U.S. federal income tax\nconsequences to holders that are subject to special rules, including:\n\n \n\n \n●\nfinancial institutions or financial services entities;\n\n \n \n \n\n \n●\nbroker-dealers;\n\n \n \n \n\n \n●\npersons that are subject to the mark-to-market accounting rules\nunder Section 475 of the Code;\n\n \n \n \n\n \n●\ntax-exempt entities;\n\n \n \n \n\n \n●\ngovernments or agencies or instrumentalities thereof;\n\n \n \n \n\n \n●\ninsurance companies;\n\n \n \n \n\n \n●\nregulated investment companies;\n\n \n \n \n\n \n●\nreal estate investment trusts;\n\n \n \n \n\n \n●\ncertain expatriates or former long-term residents of the United\nStates;\n\n \n\n65\n\n \n\n \n\n \n●\nNon-U.S. Holders;\n\n \n \n \n\n \n●\npersons that actually or constructively own five percent (5%)\nor more of the Company’s securities (except as specifically provided below);\n\n \n \n \n\n \n●\npersons that acquired Company securities pursuant to an exercise\nof employee options, in connection with employee incentive plans or otherwise as compensation;\n\n \n \n \n\n \n●\npersons that hold Company securities as part of a straddle,\nconstructive sale, hedging, redemption or other integrated transaction;\n\n \n \n \n\n \n●\npersons whose functional currency is not the U.S. dollar; or\n\n \n \n \n\n \n●\ncontrolled foreign corporations.\n\n \n\nThis\ndiscussion does not address any aspect of U.S. federal non-income tax laws, such as gift or estate tax laws, state, local or non-U.S.\ntax laws or, except as discussed herein, any tax reporting obligations of a holder of Company securities. Additionally, this discussion\ndoes not consider the tax treatment of partnerships or other pass-through entities or persons who hold Company securities through such\nentities. If a partnership (or other entity or arrangement classified as a partnership for U.S. federal income tax purposes) is the beneficial\nowner of Company securities, the U.S. federal income tax treatment of a partner in the partnership will generally depend on the status\nof the partner and the activities of the partnership. This discussion also assumes that any distribution made (or deemed made) on Company\nsecurities and any consideration received (or deemed received) by a holder in consideration for the sale or other disposition of Company\nsecurities will be in U.S. dollars.\n\n \n\nThe\nCompany has not sought, and will not seek, a ruling from the IRS as to any U.S. federal income tax consequence described herein. The\nIRS may disagree with the description herein, and its determination may be upheld by a court. Moreover, there can be no assurance that\nfuture legislation, regulations, administrative rulings or court decisions will not adversely affect the accuracy of the statements in\nthis discussion.\n\n \n\nBECAUSE\nOF THE COMPLEXITY OF THE TAX LAWS AND BECAUSE THE TAX CONSEQUENCES TO ANY PARTICULAR HOLDER OF COMPANY SECURITIES MAY BE AFFECTED BY\nMATTERS NOT DISCUSSED HEREIN, EACH HOLDER OF COMPANY SECURITIES IS URGED TO CONSULT WITH ITS OWN TAX ADVISOR WITH RESPECT TO THE SPECIFIC\nTAX CONSEQUENCES TO SUCH HOLDER OF THE OWNERSHIP AND DISPOSITION OF COMPANY SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY\nSTATE, LOCAL, AND NON-U.S. TAX LAWS, AS WELL AS U.S. FEDERAL TAX LAWS AND ANY APPLICABLE TAX TREATIES.\n\n \n\nTHE\nFOLLOWING SUMMARIES OF THE TAX CONSIDERATIONS ARE FOR GENERAL INFORMATION ONLY AND ARE NOT INTENDED TO PROVIDE ANY DEFINITIVE TAX REPRESENTATIONS\nTO HOLDERS. EACH SECURITYHOLDER SHOULD CONSULT HIS OR HER TAX ADVISOR AS TO THE PARTICULAR CONSEQUENCES THAT MAY APPLY TO SUCH SECURITYHOLDER.\n\n \n\n**U.S.\nHolders**\n\n \n\n**Taxation\nof Cash Distributions Paid on Ordinary Shares**\n\n \n\nSubject\nto the passive foreign investment company rules discussed below, a U.S. Holder of ordinary shares generally will be required to include\nin gross income as ordinary income the amount of any cash or property distribution paid on the ordinary shares. A cash distribution on\nsuch securities generally will be treated as a dividend for U.S. federal income tax purposes to the extent the distribution is paid out\nof the Company’s current or accumulated earnings and profits (as determined under U.S. federal income tax principles). The portion\nof such distribution, if any, in excess of such earnings and profits generally will constitute a return of capital that will be applied\nagainst and reduce (but not below zero) the U.S. Holder’s adjusted tax basis in its ordinary shares. Any remaining excess generally\nwould be treated as gain from the sale or other disposition of the Company’s securities and will be treated as described under\n“—*Taxation on the Disposition of Company Securities*” below. With respect to non-corporate U.S. Holders, including\nindividual U.S. Holders, dividends will be taxed at the preferential capital gains rate applicable to qualified dividend income, provided\nthat (1) the ordinary shares are readily tradable on an established securities market in the United States, or the Company is eligible\nfor the benefits of a qualifying income tax treaty with the United States that includes an exchange of information program, (2) the Company\nis not a passive foreign investment company (as discussed below) for either the taxable year in which the dividend is paid or the preceding\ntaxable year, and (3) certain holding period requirements are met. You are urged to consult your tax advisors regarding the availability\nof the preferential rate for qualified dividends paid with respect to ordinary shares.\n\n \n\n66\n\n \n\n \n\n**Taxation\non the Disposition of Company Securities**\n\n \n\nUpon\na sale or other taxable disposition of Company securities (which, in general, would include a distribution in connection with the Company’s\nliquidation), a U.S. Holder of such securities generally is expected to recognize capital gain or loss in an amount equal to the difference\nbetween the amount realized and the U.S. Holder’s adjusted tax basis in such securities.\n\n \n\nSubject\nto the passive foreign investment company rules discussed below, a U.S. Holder will recognize taxable gain or loss on any sale, exchange\nor other taxable disposition of ordinary shares equal to the difference between the amount realized (in U.S. dollars) for the ordinary\nshares and a U.S. Holder’s tax basis (in U.S. dollars) in the ordinary shares. The gain or loss will be capital gain or loss. If\na U.S. Holder is a non-corporate U.S. Holder, including an individual U.S. Holder, who has held the ordinary shares for more than one\nyear, the U.S. Holder may be eligible for preferential tax rates on any such capital gains. The deductibility of capital losses is subject\nto various limitations.\n\n \n\n**Passive\nForeign Investment Company (“PFIC”)**\n\n \n\nA\nnon-U.S. corporation is considered a PFIC for any taxable year if either:\n\n \n\n \n●\nIncome Test: at least 75% of its gross income for such taxable\nyear is passive income; or\n\n \n \n \n\n \n●\nAsset Test: at least 50% of the value of its assets (based\non an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the\nproduction of passive income (the “asset test”).\n\n \n\nPassive\nincome generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of\na trade or business) and gains from the disposition of passive assets. The Company will be treated as owning its proportionate share\nof the assets and earning its proportionate share of the income of any other corporation in which it owns, directly or indirectly, at\nleast 25% (by value) of the stock. In determining the value and composition of its assets for purposes of the PFIC asset test, (1) the\ncash the Company owns at any time will generally be considered to be held for the production of passive income and (2) the value of the\nCompany’s assets must be valued based on the market value of ordinary shares from time to time, which could cause the value of\nits non-passive assets to be less than 50% of the value of all of its assets (including cash) on any particular quarterly testing date\nfor purposes of the asset test. The Company must make a separate determination each year as to whether it is a PFIC. The Company will\nmake this determination following the end of any particular tax year. If the Company is a PFIC for any year during which a U.S. Holder\nholds ordinary shares, it will continue to be treated as a PFIC for all succeeding years during which the U.S. Holder holds ordinary\nshares. However, if the Company ceases to be a PFIC and a U.S. Holder did not previously make a timely “mark-to-market” election\nas described below, the U.S. Holder may avoid some of the adverse effects of the PFIC regime by making a “purging election”\n(as described below) with respect to the ordinary shares.\n\n \n\nIf\nthe Company is a PFIC for any taxable year(s) during which a U.S. Holder holds ordinary shares, the U.S. Holder will be subject to special\ntax rules with respect to any “excess distribution” that the U.S. Holder receives and any gain the U.S. Holder realizes from\na sale or other disposition (including a pledge) of the ordinary shares, unless the U.S. Holder makes a “mark-to-market”\nelection as discussed below. Distributions a U.S. Holder receives in a taxable year that are greater than 125% of the average annual\ndistributions the U.S. Holder received during the shorter of the three preceding taxable years or the U.S. Holder’s holding period\nfor the ordinary shares will be treated as an excess distribution. Under these special tax rules:\n\n \n\n \n●\nthe excess distribution or gain will be allocated ratably over\nthe U.S. Holder’s holding period for the ordinary shares;\n\n \n \n \n\n \n●\nthe amount allocated to the U.S. Holder’s current taxable\nyear, and any amount allocated to any of the U.S. Holder’s taxable year(s) prior to the first taxable year in which the Company\nwas a PFIC, will be treated as ordinary income, and\n\n \n \n \n\n \n●\nthe amount allocated to each of the U.S. Holder’s other\ntaxable year(s) will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments\nof tax will be imposed on the resulting tax attributable to each such year.\n\n \n\n67\n\n \n\n \n\nThe\ntax liability for amounts allocated to years prior to the year of disposition or “excess distribution” cannot be offset by\nany net operating losses for such years, and gains (but not losses) realized on the sale of the ordinary Shares cannot be treated as\ncapital, even if the U.S. Holder holds the ordinary shares as capital assets.\n\n \n\nA\nU.S. Holder of “marketable stock” (as defined below) in a PFIC may make a mark-to-market election for such stock to elect\nout of the tax treatment discussed above. If the U.S. Holder makes a mark-to-market election for the first taxable year which the U.S.\nHolder holds (or is deemed to hold) ordinary shares and for which the Company is determined to be a PFIC, the U.S. Holder will include\nin its income each year an amount equal to the excess, if any, of the fair market value of the ordinary shares as of the close of such\ntaxable year over the U.S. Holder’s adjusted basis in such ordinary shares, which excess will be treated as ordinary income and\nnot capital gain. The U.S. Holder is allowed an ordinary loss for the excess, if any, of the adjusted basis of the ordinary shares over\nits fair market value as of the close of the taxable year. However, such ordinary loss is allowable only to the extent of any net mark-to-market\ngains on the ordinary shares included in the U.S. Holder’s income for prior taxable years. Amounts included in the U.S. Holder’s\nincome under a mark-to-market election, as well as gain on the actual sale or other disposition of the ordinary shares, are treated as\nordinary income. Ordinary loss treatment also applies to any loss realized on the actual sale or disposition of the ordinary shares,\nto the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such ordinary shares.\nThe U.S. Holder’s basis in the ordinary shares will be adjusted to reflect any such income or loss amounts. If a U.S. Holder makes\na valid mark-to-market election, the tax rules that apply to distributions by corporations which are not PFICs would apply to distributions\nby the Company, except that the lower applicable capital gains rate for qualified dividend income discussed above under *“*—*Taxation\nof Cash Distributions Paid on Company Securities*” generally would not apply.\n\n \n\nThe\nmark-to-market election is available only for “marketable stock”, which is stock that is traded in other than de minimis\nquantities on at least 15 days during each calendar quarter (“regularly traded”) on a qualified exchange or other market\n(as defined in applicable U.S. Treasury regulations), including Nasdaq. If the ordinary shares are regularly traded on Nasdaq and if\na U.S. Holder is a U.S. Holder of ordinary shares, the mark-to-market election would be available to the U.S. Holder if the Company is\nor becomes a PFIC.\n\n \n\nAlternatively,\na U.S. Holder of stock in a PFIC may make a “qualified electing fund” election with respect to such PFIC to elect out of\nthe tax treatment discussed above. A U.S. Holder who makes a valid qualified electing fund election with respect to a PFIC will generally\ninclude in gross income for a taxable year such holder’s pro rata share of the corporation’s earnings and profits for the\ntaxable year. However, the qualified electing fund election is available only if such PFIC provides such U.S. Holder with certain information\nregarding its earnings and profits as required under applicable U.S. Treasury regulations. The Company does not currently intend to prepare\nor provide the information that would enable a U.S. Holder to make a qualified electing fund election. If a U.S. Holder holds ordinary\nshares in any taxable year in which the Company is a PFIC, the U.S. Holder will be required to file IRS Form 8621 in each such year and\nprovide certain annual information regarding such ordinary shares, including regarding distributions received on the ordinary shares\nand any gain realized on the disposition of the ordinary shares.\n\n \n\nIf\na U.S. Holder does not make a timely “mark-to-market” election (as described above), and if the Company were a PFIC at any\ntime during the period the U.S. Holder holds ordinary shares, then such ordinary shares will continue to be treated as stock of a PFIC\nwith respect to the U.S. Holder even if the Company ceases to be a PFIC in a future year, unless the U.S. Holder makes a “purging\nelection” for the year the Company ceases to be a PFIC. A “purging election” creates a deemed sale of such ordinary\nshares at their fair market value on the last day of the last year in which the Company is treated as a PFIC. The gain recognized by\nthe purging election will be subject to the special tax and interest charge rules treating the gain as an excess distribution, as described\nabove. As a result of the purging election, a U.S. Holder will have a new basis (equal to the fair market value of the ordinary shares\non the last day of the last year in which the Company is treated as a PFIC) and holding period (which new holding period will begin the\nday after such last day) in the U.S. Holder’s ordinary shares for tax purposes.\n\n \n\nU.S.\nHolders are urged to consult their tax advisors regarding the application of the PFIC rules to their investment in ordinary shares and\nthe elections discussed above.\n\n \n\n68\n\n \n\n \n\n**Information\nReporting and Backup Withholding**\n\n \n\nCertain\nU.S. Holders are required to report information to the IRS on IRS Form 8938 relating to an interest in “specified foreign financial\nassets,” including shares issued by a non-U.S. corporation, for any year in which the aggregate value of all such specified foreign\nfinancial assets exceeds $50,000 (or such higher threshold as may apply based on the U.S. Holder´s filing status and place of residence),\nsubject to certain exceptions (including an exception for shares held in custodial accounts maintained with a United States financial\ninstitution). These rules also impose penalties if a U.S. Holder is required to submit such information to the IRS and fails to do so.\n\n \n\nDividend\npayments with respect to ordinary shares and proceeds from the sale, exchange, or redemption of ordinary shares may be subject to information\nreporting to the IRS and possible U.S. backup withholding at a current rate of 24%. Backup withholding will not apply, however, to a\nU.S. Holder who furnishes a correct taxpayer identification number and makes any other required certification on IRS Form W-9 or who\nis otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status by submitting a properly\ncompleted IRS Form W-9 certifying their exemption or correct taxpayer identification number.. U.S. Holders are urged to consult their\ntax advisors regarding the application of the U.S. information reporting and backup withholding rules.\n\n \n\nBackup\nwithholding is not an additional tax. Amounts withheld as backup withholding may be credited against a U.S. Holder’s U.S. federal\nincome tax liability, and a U.S. Holder may obtain a refund of any excess amounts withheld under the backup withholding rules by timely\nfiling the appropriate claim for refund with the IRS and timely furnishing any required information. Transactions effected through certain\nbrokers or other intermediaries may also be subject to withholding taxes (including backup withholding), and such brokers or intermediaries\nmay be required by law to withhold such taxes unless the U.S. Holder has provided appropriate certification.\n\n \n\n**ANTICIPATED\nMATERIAL BRITISH VIRGIN ISLANDS TAX CONSIDERATIONS FOR NON-RESIDENT HOLDERS OF COMPANY SECURITIES**\n\n** **\n\nUnder\nBritish Virgin Islands law as currently in effect, a holder of ordinary shares who is not a resident of the British Virgin Islands is\nexempt from British Virgin Islands income tax on dividends paid with respect to the ordinary shares and all holders of ordinary shares\nare not liable to the British Virgin Islands for income tax on gains realized during that year on sale or disposal of such shares. The\nBritish Virgin Islands does not impose a withholding tax on dividends paid by a company incorporated or re-registered under the BVI Act.\n\n \n\nThere\nare no capital gains, gift or inheritance taxes levied by the British Virgin Islands on companies incorporated or re-registered under\nthe BVI Act or persons not resident in the British Virgin Islands. In addition, shares of companies incorporated or re-registered under\nthe BVI Act are not subject to transfer taxes, stamp duties or similar charges where the company and other companies within its group\nare not BVI land owning companies for the purposes of the BVI Act.\n\n \n\nThere\nis no income tax treaty currently in effect between the United States and the British Virgin Islands.\n\n \n\n**THE\nBRITISH VIRGIN ISLANDS TAX CONSIDERATIONS SUMMARIZED ABOVE ARE FOR GENERAL INFORMATION ONLY AND ARE NOT INTENDED TO PROVIDE ANY DEFINITIVE\nTAX REPRESENTATIONS TO HOLDERS. EACH COMPANY SECURITYHOLDER SHOULD CONSULT HIS OR HER TAX ADVISOR AS TO THE PARTICULAR CONSEQUENCES THAT\nMAY APPLY TO SUCH SECURITYHOLDER.**\n\n** **\n\n**ANTICIPATED\nMATERIAL MEXICO TAX CONSIDERATIONS FOR NON-RESIDENT HOLDERS OF COMPANY SECURITIES**\n\n** **\n\nThis\nsummary of certain Mexican federal tax considerations refers only to holders of ordinary shares that are not residents of Mexico for\nMexican tax purposes and that will not hold the ordinary shares or a beneficial interest therein through a permanent establishment for\ntax purposes (we refer to any such non-resident holder as a Foreign Holder). For purposes of Mexican taxation, an individual is a resident\nof Mexico if he/she has established his/her domicile in Mexico. When an individual also has a place of residence in another country,\nthat individual will be considered a resident of Mexico for tax purposes, if such individual has his/her center of vital interest in\nMexico. An individual would be deemed to have his/her center of vital interest in Mexico if, among other things: (a) more than 50% of\nhis/her total income for the year were derived from Mexican sources, or (b) his/her principal center of professional activities were\nlocated in Mexico.\n\n \n\nA\nlegal entity is a resident of Mexico if:\n\n \n\n \n●\nit maintains the principal administration of its business in\nMexico; or\n\n \n●\nit has established its effective management in Mexico.\n\n \n\n69\n\n \n\n \n\nThe\nprincipal administration of a business or the effective location of management is deemed to exist in Mexico if the individual or individuals\nhaving the authority to decide or effect the decisions of control, management, operation or administration are located in Mexico. Mexican\nresident entities are subject to income tax on their worldwide income at a 30% rate.\n\n \n\nA\nMexican national is presumed to be a resident of Mexico unless such person can demonstrate the contrary. If a legal entity or individual\nhas a permanent establishment in Mexico, such permanent establishment shall be required to pay taxes in Mexico on income attributable\nto such permanent establishment in accordance with Mexican federal tax law.\n\n \n\n*Taxation\nof Dispositions*. Capital gains resulting from the sale or other disposition of the ordinary shares by a Foreign Holder will not be\nsubject to Mexican income or withholding taxes, to the extent that the book value of such shares does not derive directly or indirectly\nin more than 50% from real estate located in Mexico.\n\n \n\n*Other\nMexican Tax Considerations*. Under the Mexican Income Tax Law, any discount received by a non-resident upon purchase of the notes\nor bonds from a Mexican resident or a non-resident with a permanent establishment in Mexico is deemed interest income, and therefore,\nsubject to taxes in Mexico. Such interest income results from the difference between the face value (plus accrued interest not subject\nto withholding) and the purchase price of such notes or bonds. Tax relief may be applicable under the double tax treaties entered into\nby Mexico.\n\n \n\n*Transfer\nand Other Taxes*. There is no Mexican stamp, registration or similar taxes payable by a Foreign Holder in connection with the purchase,\nownership or disposition of the Registered Securities. A Foreign Holder of the Registered Securities will not be liable for Mexican estate,\nsuccession, gift, inheritance or similar tax with respect to such securities.\n\n \n\n**THE\nMEXICO TAX CONSIDERATIONS SUMMARIZED ABOVE ARE FOR GENERAL INFORMATION ONLY AND ARE NOT INTENDED TO PROVIDE ANY DEFINITIVE TAX REPRESENTATIONS\nTO HOLDERS. EACH COMPANY SECURITYHOLDER SHOULD CONSULT HIS OR HER TAX ADVISOR AS TO THE PARTICULAR CONSEQUENCES THAT MAY APPLY TO SUCH\nSECURITYHOLDER.**\n\n \n\n10.F.\nDividends and Paying Agents\n\n \n\nNot\napplicable.\n\n \n\n10.G.\nStatement by Experts\n\n \n\nNot\napplicable.\n\n \n\n10.H.\nDocuments on Display\n\n \n\nWe\nare subject to the informational requirements of the Exchange Act as a foreign private issuer and file reports and other information\nwith the SEC, including annual reports on Form 20-F and reports on Form 6-K. Reports and other information filed by us with the SEC,\nincluding this Annual Report, may be viewed from the SEC’s internet site at http://www.sec.gov.\n\n \n\nOur\nwebsite address is https://fr8technologies.com. Through our website, we make available, free of charge, the following documents as soon\nas reasonably practicable after they are electronically filed with, or furnished to, the SEC, including our annual reports on Form 10-K,\n20-F; quarterly reports on Form 10-Q ; our proxy statements for our annual and special shareholder meetings; our reports on Form 8-K\nor report of foreign private issuer on Form 6-K; and Schedules 13D and 13G with respect to our securities filed on behalf of our directors\nand our executive officers; and amendments to those documents. We have not incorporated by reference into this Annual Report the information\non our website, and you should not consider it to be a part of this Annual Report.\n\n \n\nStatements\nmade in this Annual Report as to the contents of any document referred to are not necessarily complete. With respect to each such document\nfiled as an exhibit to this Annual Report, reference is made to the exhibit for a more complete description of the matter involved, and\neach such statement shall be deemed qualified in its entirety by such reference.\n\n \n\n70\n\n \n\n \n\nAs\na foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of quarterly reports\nand proxy statements, officers and directors are exempt from the short-swing profit recovery provisions contained in Section 16 of the\nExchange Act, and principal shareholders are exempt from both the reporting and short-swing profit recovery provisions contained in Section\n16 of the Exchange Act.\n\n \n\n10.I.\nSubsidiary Information\n\n \n\nNot\napplicable.\n\n \n\n10.J.\nAnnual Report to Security Holders\n\n \n\nIf\nwe are required to provide an annual report to security holders in response to the requirements of Form 6-K, we will submit the annual\nreport to security holders in electronic format in accordance with the EDGAR Filer Manual."}