{"url_path":"/sec/frgt/10-k/2026/item-3","section_key":"item-3","section_title":"Item 3 D Risk Factors for a discussion of risks associated with the strategic review process","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":809,"has_tables":true,"body_markdown":"Item 3.D Risk Factors for a discussion of risks associated with the strategic review process\n\n \n\n*April\n2026 — Commercial launch of DODA Smart*\n\n* *\n\nOn\nApril 7, 2026, the Company commercially launched DODA Smart, a software product addressing the Mexican customs compliance market. DODA\nSmart digitizes and automates compliance with the Documento de Operación para Despacho Aduanero (“DODA”) regime under\nMexican customs law and with the new procedural and documentation requirements being implemented during 2026 by Mexican customs authorities,\nincluding the Servicio de Administración Tributaria (“SAT”) and the Agencia Nacional de Aduanas de México (“ANAM”).\nThe product addresses three customer segments:\n\n \n\n**Mexican\nCustoms Brokers (Agencias Aduanales)**: DODA Smart automates the preparation, validation and submission of customs documentation required\nto comply with the new ANAM procedures.\n\n \n\n**Mexican\nImporters and Exporters (Shippers)**: DODA Smart provides real-time visibility into the status of customs operations and enables automated\nmonitoring and follow-up of pending clearance steps.\n\n \n\n**Carriers**:\nDODA Smart includes verification capabilities designed to detect falsified or expired DODAs, the use of which can expose drivers and\npersons processing customs documentation to civil and, in certain cases, criminal liability under Mexican law.\n\n \n\nThe\nDODA Smart launch is occurring in parallel with the implementation of the reforms to the Mexican Customs Law (Ley Aduanera) published\nin the Diario Oficial de la Federación on November 19, 2025 and effective from January 1, 2026.\n\n \n\n39\n\n \n\n \n\n*April\n2026 — Launch of the Fr8Tech AI Transformation Framework*\n\n* *\n\nOn\nApril 21, 2026, the Company announced the launch of the Fr8Tech AI Transformation Framework (“FATF”), a proprietary methodology\ndeveloped by the Company’s in-house AI Lab that establishes the use of agentic AI across the Company’s software development\nand enterprise operations. The FATF establishes an internal AI governance structure including executive oversight, a centralized AI Lab\nand designated AI champions across departments, and is structured by reference to four international voluntary standards: ISO/IEC 42001:2023,\nthe NIST AI Risk Management Framework, the OWASP Top 10 for Large Language Model Applications and ISO 9001:2015. References to these\ninternational standards describe the voluntary reference frameworks used to structure the FATF and do not constitute a claim of certification\nagainst those standards. The Company currently holds ISO 9001:2015 certification but has not obtained, and has not scheduled, an ISO/IEC\n42001 certification audit.\n\n \n\n4.C.\nOrganizational Structure\n\n \n\nThe\nfollowing is a list of our principal subsidiaries and consolidated affiliated entities as of the date of this Annual Report:\n\n \n\n**Name**\n \n**Place\nof Formation**\n \n**Relationship**\n\nFreight\nApp, Inc.\n \nDelaware\n \nWholly-owned\nsubsidiary\n\nFreight\nApp de México S.A. de C.V.\n \nMexico\n \nWholly-owned\nsubsidiary\n\nJAK\nSolar Loans 1 Limited\n \nBritish\nVirgin Islands\n \nWholly-owned\nsubsidiary\n\n** **\n\n4.D.\nProperty, Plants, and Equipment\n\n \n\n**Facilities**\n\n \n\nFr8Tech’s\nglobal headquarters are in Monterrey, Mexico at Emilio Zola Num. 743 Piso 4, Int. 1, Col. Obispado, Monterrey Nuevo Leon, Mexico CP 64060.\nWe also lease office space in Mexico City, Mexico for several employees. Our physical office in the United States is located at 2001\nTimberloch Place, Suite 500, The Woodlands, Texas 77380. All office locations are rental office spaces.\n\n \n\nThe\nCompany entered into a lease agreement on November 2, 2022, for an office in Monterrey, Mexico located at Hidalgo 2035, Interior M20,\nObispado, Monterrey, Nuevo Leon, Mexico 64060 for a period of 12 months, amended the lease for additional adjacent office space in August\n2023, and twice renewed the leases for subsequent 12-month terms on November 1, 2023 and 2024. The lease agreement expired on October\n31, 2025. The Company entered into a new office lease in Monterrey, Mexico at its current location at Emilio Zola Num. 743 Piso 4, Int.\n1, Col. Obispado, Monterrey Nuevo Leon, Mexico CP 64060 on November 1, 2025. The lease expires on October 31, 2026.\n\n \n\nThe\nCompany entered into a lease agreement for office space in Mexico City to accommodate three to five employees on February 1, 2024. That\nlease was renewed on February 1, 2025. In October 2020, the Company entered into a work-suites arrangement for a workspace in an office\nlocated in The Woodlands, Texas, on a month-to-month basis, which continues in effect.\n\n \n\nTotal\ncurrent monthly rent for all office locations is approximately $12,000. The facility lease expenses for the years ended December 31,\n2025 and 2024, were approximately $132,581 and $141,315, respectively. Certain employees located in the U.S., Spain, and elsewhere in\nMexico work remotely. Employees in Monterrey, Mexico have the option to work remotely for part of the week.\n\n \n\n**Equipment**\n\n \n\nFr8Tech’s\nprincipal asset consists of its software, which it invests in on a monthly basis through development work by information technology and\ndevelopment employees and externally contracted parties. The Company invested approximately $0.31 million and $0.35 million in software\nduring the years ended December 31, 2025, and 2024, respectively, and expects to continue investing in its software in line with the\nexpansion of its product offerings. Financing for investment in software has historically been provided for by the company’s operations.\n\n \n\n40"}