{"url_path":"/sec/frgt/10-k/2026/item-4","section_key":"item-4","section_title":"Item 4 INFORMATION ON THE COMPANY","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":8378,"has_tables":true,"body_markdown":"** **\n\nITEM\n4. INFORMATION ON THE COMPANY\n\n \n\n4.A.\nHistory and Development of the Company\n\n** **\n\n**Corporate\nHistory of Freight Technologies, Inc.**\n\n \n\nFr8Tech,\nInc. is a technology-driven logistics company focused on providing digital freight brokerage and transportation management solutions\nfor cross-border and domestic freight movements in North America. The Company is incorporated under the laws of the British Virgin Islands.\n\n \n\nOur\nprincipal operating subsidiary, Freight App, Inc. (formerly known as “Freight Hub, Inc.” and hereinafter referred to as “Fr8App”)\nwas incorporated in 2015 as a Delaware corporation. It was founded with a vision to develop and bring solutions to the relatively unorganized\ncross-border commercial freight market on the U.S.-Mexico border, and by extension, the U.S.-Canada border. In January 2019, Freight\nHub México, S.A De C.V., a wholly-owned subsidiary of Fr8App was formed. In December 2021, Freight Hub Mexico, S.A De C.V. changed\nits name to Freight App de Mexico, S.A De C.V. (“Freight App Mexico”).\n\n \n\nFreight\nlogistics operations and our Fr8App marketplace solution, begins with Shippers and with Carriers. Within the demand and supply equation,\nShippers seeking suitable means of transportation for their goods or products represent demand and Carriers with freight transportation\ncapabilities represent supply. The Fr8App marketplace was designed to facilitate matching the two: demand with supply. The first commercial\nversion of Fr8App’s products was launched in 2017. Fr8App’s initial commercial efforts focused on promoting the Fr8App marketplace\nto freight brokers in the logistics industry.\n\n \n\nFr8App\ncontinued its product development efforts throughout 2018 and added business intelligence and analytics to supplement its Platform in\n2019. Subsequently the firm offered a revised products package with active freight brokerage support, customer service and other enhanced\nfeatures and functionality, which were fully launched during the second quarter of 2020. During the third quarter of 2020, a new management\nteam renewed focus on promoting freight services to Shippers and Carriers and de-emphasize marketing to brokers in the logistics industry.\n\n \n\nIn\nDecember 2021, the Company expanded its service offerings with the launch of its fixed fleet product under the Fr8Fleet brand. In 2023,\nthe Company introduced a less-than-truckload solution under the Fr8Now brand. In July 2024, the Company launched Waavely, a containerized\nocean freight brokerage platform, and in February 2025 introduced Fleet Rocket, a transportation management system (TMS) software offering.\n\n \n\n*The\nMerger*\n\n \n\nHudson\nCapital Inc. (“Hudson Capital”) was initially established as “China Internet Nationwide Financial Services Inc.”,\na holding company incorporated under the laws of British Virgin Islands on September 28, 2015. On July 28, 2017, Hudson Capital announced\nthe pricing and closing of its initial public offering (“IPO”) and its shares began trading on Nasdaq Global Market on August\n8, 2017 under the symbol “CIFS.” In keeping with the board’s plan to diversity its operations, rebrand itself and seek\nnew strategic options, Hudson Capital board members and management were completely changed and the corporate name was changed to “Hudson\nCapital, Inc.” on April 23, 2020.\n\n \n\nThe\nHudson Capital board considered multiple potential merger candidates before identifying Fr8App as the best option to complete a merger\nand offer the best potential value for its stockholders. Pursuant to such determination, Hudson Capital and Fr8App entered into an Agreement\nand Plan of Merger (as amended from time to time, the “Merger Agreement”) on October 10, 2020 with Hudson Capital Merger\nSub I, Inc., its Delaware wholly-owned subsidiary (“Merger Sub I”), Hudson Capital Merger Sub II, Inc., a Delaware subsidiary\nof Merger Sub I (“Merger Sub II”), Fr8Tech and ATW Master Fund II, L.P., as the representative of the stockholders of Fr8App\n(the “Stockholders’ Representative”).\n\n \n\nThis\nMerger Agreement was terminated on December 13, 2021 and on December 29, 2021, a new merger agreement was entered into between, Hudson\nCapital, Merger Sub I, Fr8App and the Stockholders’ Representative (the “New Merger Agreement”). On February 14, 2022,\na Certificate of Merger was filed with the Secretary of State of the State of Delaware, in accordance with the relevant provisions of\nDelaware law, whereby in accordance with the New Merger Agreement, Merger Sub I merged with and into Fr8App, with Fr8App surviving the\nMerger and continuing as a direct wholly-owned subsidiary of the Company. The Merger closed on February 14, 2022. On February 14, 2022,\nwe effected another 2.2:1 reverse split of our ordinary shares and our ordinary shares began trading on a split adjusted basis on February\n15, 2022.\n\n \n\nFollowing\nthe Merger, on March 25, 2022, we dissolved Merger Sub II and Hudson Capital Holding Co., Ltd. On March 30, 2022, we sold Hong Kong Internet\nFinancial Services Limited (“HKIFS”) in its entirety to a private investor. The divestment of HKIFS was effected through\nthe sale of the entirety of the equity interest in HKIFS. As of the divestment date, there are no remaining or contingent obligations\nor benefits from HKIFS.\n\n \n\n26\n\n \n\n \n\nIn\nconnection with the Merger, the following unregistered, restricted securities were issued by Hudson Capital to shareholders of Fr8App,\nsubject to customary adjustments for share splits, dividends, rights offerings, pro rata distributions and fundamental transactions (the\n“Merger Consideration”):\n\n \n\nSecurities Issued in Merger \nIssued\nat Merger* \nUnderlying\n\nOrdinary Shares**\n\nOrdinary Shares \n 2,577,655  \n 1,031 \n\nA2 Preferred Shares \n 1,264,360  \n 1,128 \n\nA1A Preferred Shares \n 4,473,547  \n 2,666 \n\nSeries Seed Preferred Shares \n 7,020  \n 3 \n\nSeries B Preferred Shares \n 7,389,850  \n 13,935 \n\nSeries A4 Preferred Shares \n 568,930  \n 341 \n\nOrdinary Shares Warrant \n 5,218  \n 2 \n\nSeries Seed Warrant \n 4,165  \n 4,165 \n\nEquity Awards for Ordinary Shares \n 1,958,287  \n 783 \n\nTotal Issued in Merger \n 18,249,032  \n 24,055 \n\n \n\n*\nIssued at Merger is not adjusted for the Reverse Splits.\n\n \n\n**\nThe amounts of underlying ordinary shares are adjusted for the Reverse Splits.\n\n \n\nHudson\nCapital continued as a BVI business company and on May 26, 2022 changed its name to Freight Technologies, Inc. and its symbol on the\nNasdaq Capital Market to “FRGT”. Fr8App continues as a corporation incorporated in the State of Delaware and as a wholly-owned\nsubsidiary of Freight Technologies, Inc.\n\n \n\nWith\nthe divestment of HKIFS mentioned earlier, we are no longer involved in any of the businesses originally started by Hudson Capital. We\nare now, through Fr8Tech, a BVI business company, operating under the brands, Fr8App, Fr8Fleet, Waavely, Fr8Now, Fr8Radar, Fleet Rocket,\nand Zayren.\n\n \n\n**Reverse Share Splits**\n\n \n\nSince becoming publicly listed, the Company has\neffected reverse share splits at various times in order to maintain compliance with Nasdaq listing requirements. All share and per-share\ninformation presented in this annual report has been retroactively adjusted to reflect the applicable reverse share splits.\n\n \n\nOn March 24, 2023, the Company effected March\n2023 Reverse Split.\n\n \n\nOn February 5, 2024, the Company effected the\nFebruary 2024 Reverse Split.\n\n \n\nOn September 25, 2024, the Company effected the\nSeptember 2024 Reverse Split.\n\n \n\nOn May 27, 2025, the Company effected the May 2025\nReverse Split.\n\n \n\nOn December 15, 2025, the Company effected the December\n2025 Reverse Split.\n\n \n\n**Corporate\nInformation**\n\n \n\nOur\ncorporate address and registered office is located at Emilio Zola Num. 743 Piso 4, Int. 1, Col. Obispado, Monterrey Nuevo Leon, Mexico\nCP 64060. We also maintain an address at 2001 Timberloch Place, Suite 500, The Woodlands, TX 77380. The phone number of our corporate\noffice and registered office is (773) 905-5076. We maintain websites at https://fr8technologies.com, https://www.fr8.app/, and https://fleetrocket.io/en/.\n\n \n\nOur\nagent for service of process in the United States is Donald Quinby, whose business address is: c/o 2001 Timberloch Place, Suite 500,\nThe Woodlands, TX 77380.\n\n \n\nThe\ninformation contained on our websites is not a part of this Annual Report, nor is such content incorporated by reference herein, and\nshould not be relied upon in determining whether to make an investment in the ordinary shares.\n\n \n\nThe\nSEC maintains an internet site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding\nissuers that file electronically with the SEC.\n\n \n\n27\n\n \n\n \n\n4.B.\nBusiness Overview\n\n \n\n**Overview**\n\n \n\nFreight\nTechnologies, Inc., through its wholly-owned subsidiary, Fr8App, and Fr8App’s wholly-owned Mexico subsidiary, Freight App de México,\nS.A De C.V. is a technology company primarily involved in the freight management business. Freight logistics operations and our Fr8App\nmarketplace solution, begin with parties connecting their transportation needs (“Shippers”) with those offering freight transportation\nservices (“Carriers”). Within the demand and supply equation, Shippers seeking suitable means of transportation for their\ngoods or products represent demand and Carriers with freight transportation capabilities represent supply. The Company is focused on\naddressing distinct challenges within the supply chain ecosystem through a diverse portfolio of proprietary platform solutions powered\nby AI and machine learning to optimize and automate the supply chain process. Our solutions are described in detail below, and additional\ninformation on the Company and its service offerings is available on its corporate website, fr8technologies.com.\n\n \n\n*Fiscal\nYear 2025 Highlights*\n\n \n\nThe\nfiscal year ended December 31, 2025 marked a strategic pivot for Fr8Tech toward a software- and artificial-intelligence-driven business\nmodel. The Company launched its first commercial software-as-a-service product, transitioned its sales focus from volume-led freight\nbrokerage to higher-quality customer relationships, and significantly reduced its operating cost base, all while expanding the technology\nsurface of its multi-product platform.\n\n \n\nTotal\nrevenues for fiscal 2025 were approximately $13.1 million, compared to $13.7 million in fiscal 2024, a decrease of approximately $0.6\nmillion or 4.9%. The year-over-year revenue decline reflected a deliberate management decision to deprioritize customer relationships\ncharacterized by long payment cycles and weaker contribution margins, in order to protect the Company’s cash flow and working capital\nposition, and to redirect resources toward higher-margin lanes and toward the Company’s new software offerings. The discipline\napplied to customer selection in 2025 resulted in lower top-line revenue but was accompanied by an 11.5% increase in Freight Transportation\nBrokerage revenue (the higher-margin spot market business) and a 24.1% increase in Brokerage shipment volumes. Dedicated Capacity revenue\ndecreased by 32.9%, primarily reflecting a shift by our largest dedicated customer toward shorter-haul, lower-rate movements rather than\na loss of customer relationships. See Item 5.A Operating Results for a detailed discussion.\n\n \n\nKey\ndevelopments during the year, in chronological order, included:\n\n \n\n●\n**Fleet\nRocket TMS**: In February 2025, the Company launched Fleet Rocket, a cloud-based transportation management system, as a commercial\nsoftware-as-a-service product. Fleet Rocket is the productized version of the proprietary TMS that Fr8Tech had previously used internally\nto operate its freight brokerage business. As a stand-alone product, Fleet Rocket is sold on a subscription basis to other freight\nbrokers, small fleet operators and Shipper logistics teams. Fleet Rocket is powered by an artificial intelligence model developed\nin-house by Fr8Tech and a set of proprietary AI agents that interact directly with the TMS to automate carrier matching, document\nhandling, exception management and pricing workflows. The launch of Fleet Rocket established a new software revenue line for the\nCompany and is intended to leverage technology investments previously made for internal operations into a scalable third-party SaaS\nbusiness.\n\n \n \n\n●\n**AI\nCollaboration with Fetch.ai**: During 2025, Fr8Tech advanced its strategic AI collaboration with Fetch.ai (Fetch Compute, Inc.),\ninitially focused on the deployment of AI-powered voice agents leveraging Fetch.ai’s Agentverse platform and ASI:One large\nlanguage model. In November 2025, the parties restructured their commercial relationship and entered into a multi-year Pre-Paid Services\nAgreement under which Fr8Tech has access to Fetch.ai’s ASI LLM Platform and Fetch Developer Tools to support the development\nof the Company’s own products and services. The Company believes the expanded relationship complements its in-house AI capabilities\nand supports its software-first strategy. The Pre-Paid Services Agreement was filed as an exhibit to the Company’s Current\nReport on Form 6-K furnished to the SEC on November 20, 2025.\n\n \n \n\n●\n**Operating\nCost Discipline**: Technology-enabled automation and process improvements, together with the strategic shift toward software and\nhigher-margin customers, enabled the Company to reduce total headcount by approximately 34% versus the prior year, with compensation\nand employee benefits expense decreasing by approximately $0.8 million or 16% year-over-year. The Company expects compensation expense\nto be lower in 2026 than in 2025 as the full-year benefit of the headcount reduction takes effect.\n\n \n\n28\n\n \n\n \n\n●\n**Zayren**:\nIn November 2025, the Company commercially launched Zayren, an artificial-intelligence-driven sales co-pilot for the freight brokerage\nindustry, in November 2025. Zayren operates as a stand-alone SaaS product and integrates with Fleet Rocket TMS, allowing customers\nof either product to benefit from a connected workflow. Zayren productizes the same AI-driven sales automation tools the Company\nhas built for its own internal use.\n\n \n \n\n●\n**Cross-Border\nFocus**: The Company continued to concentrate its commercial efforts on the United States–Mexico cross-border corridor, where\ncustomer contributions per shipment remained higher than in our domestic Mexican services. This is consistent with our strategy of\nbuilding a USMCA-focused logistics platform.\n\n \n \n\n●\n**JAK\nSolar Loans Acquisition**: On December 31, 2025, the Company acquired JAK Solar Loans 1 Limited from DIP SPV I, L.P. for consideration\nof 5,500,000 Series C Preferred Shares. JAK Solar Loans 1 Limited owns a portfolio of 62 active and performing U.S.-based residential\nsolar power system loans. The acquisition was made for the strategic purpose of diversifying the Company’s revenue base with\nrecurring, contractual cash flows that are uncorrelated with freight market cycles. See Note 4 to the consolidated financial statements.\n\n \n \n\n●\n**Financing\ncapacity**: In October 2025, the Company entered into a $1 billion ELOC facility, which is expected to provide meaningful\nflexibility to fund operations and selective strategic transactions starting in 2026. See Item 5.B Liquidity and Capital Resources for\nfurther discussion.\n\n \n\n*Our\nHistorical Performance*\n\n \n\nAs\nof December 31, 2025, the Company had an accumulated deficit of $(52,818,556) and cash balance of $346,718. During the years ended December\n31, 2025 and 2024, we had a net loss of $(7,901,777) and $(5,601,227), respectively. To date, the Company has financed its operations\nprimarily through capital raises and sales of its services.\n\n \n\nIn\n2024, the Company raised $0.9 million through the issuance of promissory notes, which were forgiven in the year, and established an ATM\nprogram to offer and sell ordinary shares in aggregate of up to $4.75 million, through which the Company raised $2.9 million net of all\ncommissions, fees and expenses.\n\n \n\nIn 2025, the company raised\napproximately $3.5 million through the issuance of equity securities, $2.9 million through the issuance of convertible notes, and held\nan outstanding balance under its revolving line of credit of approximately $2.9 million as of December 31, 2025. In October 2025, the\nCompany entered into the ELOC to sell to the ELOC Investor up to $1 billion of ordinary shares subject to the terms and conditions contained\nin the ELOC.\n\n \n\nBased on the Company’s\nexisting cash resources and the cash expected to be received from the ELOC facility and other financings, it is expected that the Company\nwill have sufficient funds to carry out the Company’s planned operations through December 31, 2026 and for at least 12 months beyond\nthat period. For further discussion, see Item 5.B. *Liquidity and Capital Resources.*”\n\n \n\n**Our\nStrategy**\n\n** **\n\nFr8Tech’s\nstrategy is to build the leading multi-product logistics technology platform serving the United States–Mexico–Canada (“USMCA”)\ncorridor. We pursue this strategy along three reinforcing axes: focused geographic positioning in the USMCA cross-border market, an integrated\nand steadily expanding portfolio of complementary technology products, and a proprietary artificial intelligence capability built on\nmore than a decade of operational data from our own freight forwarding business.\n\n \n\n*USMCA\ncross-border focus*\n\n* *\n\nWe\ndo not seek to compete head-to-head with global asset-light brokers such as C.H. Robinson Worldwide, Inc. or asset-based carriers such\nas J.B. Hunt Transport Services, Inc. across the entire North American transportation market. Rather, our commercial focus is concentrated\non the cross-border lane between the United States and Mexico — a market that, according to the U.S. Bureau of Transportation Statistics,\ngenerated approximately $51.5 billion in U.S.–Mexico freight value moved by truck in December 2025 alone, with Mexico having overtaken\nCanada as the largest U.S. trading partner during 2024 and maintained that position through 2025. Cross-border shipments require operational fluency on both sides of the border, knowledge of two regulatory frameworks\n(United States Federal Motor Carrier Safety Administration on one side and Secretaría de Infraestructura, Comunicaciones y Transportes\n(“SICT,” the Mexican federal infrastructure, communications and transportation ministry, formerly known as the Secretaría\nde Comunicaciones y Transportes (“SCT”) prior to its November 2022 renaming) of Mexico on the other), bilingual operations\nand the ability to coordinate handoffs between United States long-haul carriers, drayage operators and Mexican long-haul carriers. We\nbelieve the operational complexity of this corridor creates a meaningful barrier to entry for non-specialist competitors.\n\n \n\n29\n\n \n\n \n\n*Integrated\nmulti-product platform with disciplined launch cadence*\n\n* *\n\nWe\noffer a portfolio of complementary technology products developed over more than a decade. Fr8App provides our flagship cross-border digital\nbrokerage solution; Fr8Now serves the LTL segment within Mexico; Fr8Fleet offers dedicated fleet capacity to enterprise Shippers; Fr8Radar\nprovides real-time shipment visibility; Waavely is our ocean freight digital booking platform; Fleet Rocket is our AI-powered transportation\nmanagement system sold to other freight brokers and small fleet operators; Zayren and Zayren Pro are our AI-powered sales co-pilots for\nthe freight brokerage industry; and DODA Smart, launched in April 2026, is our Mexican customs compliance product. Each product can operate\nindependently, but together they form an integrated platform from which we can serve the same customer across multiple modalities and\nincrease share of wallet over time.\n\n \n\nOur\nproduct strategy combines deep operational maturity in our established core products (Fr8App, Fr8Now, Fr8Fleet and Fr8Radar) with a disciplined\ncadence of new product launches each year — Waavely in 2024, Fleet Rocket TMS and Zayren in 2025, and DODA Smart in 2026. We seek\nto extend the platform into adjacent segments where our existing technology assets, customer relationships and operational data give\nus a defensible right to compete.\n\n \n\n*Proprietary\nartificial intelligence built on more than a decade of logistics data*\n\n* *\n\nArtificial\nintelligence is central to our product strategy and to our internal operating model. We have developed a proprietary artificial intelligence\nmodel in-house, trained by Fr8Tech and specialized for logistics use cases. The differentiating asset behind this model is our own data:\nwe have been operating as a freight forwarder for more than ten years and have collected substantial proprietary operational data over\nthat period — including shipment records, carrier performance, lane economics, exception patterns and cross-border documentation\nflows. This dataset, which is not available to general-purpose AI providers, is the foundation on which we have trained our model to\nperform logistics-specific tasks more accurately than off-the-shelf alternatives.\n\n \n\nOn\ntop of this proprietary model, we have developed a portfolio of proprietary AI agents that automate workflows across our platform. Some\nof these agents run on our in-house model; others, where it is operationally appropriate, are built on top of third-party large language\nmodels chosen for the specific use case. We view this combined approach — proprietary model and dataset for the tasks where domain-specific\naccuracy matters most, and selective use of third-party models where general-purpose capability is sufficient — as the most effective\nway to deploy AI at scale in a capital-efficient manner.\n\n \n\nDuring\n2025, automation enabled by these AI capabilities allowed the Company to reduce total headcount by approximately 34% while sustaining\ncustomer service levels. Beyond internal margin expansion, we are also monetizing these capabilities externally through Fleet Rocket\nTMS (commercially launched February 2025) and Zayren (commercially launched November 2025), both of which embed our proprietary AI capabilities\nin software-as-a-service products sold to third parties.\n\n \n\n**Competition**\n\n \n\nThe\nfreight transportation and logistics industry is highly fragmented, intensely competitive and characterized by low barriers to entry\nin certain segments and meaningful barriers to entry in others, notably cross-border operations. We compete with a wide range of asset-based\ncarriers, asset-light brokers, freight technology platforms and traditional freight forwarders. Many of our competitors have significantly\ngreater financial resources, larger customer bases, longer operating histories and broader geographic reach than we do.\n\n \n\n*Our\ncompetitive positioning*\n\n* *\n\nWe\ndo not position Fr8Tech as a head-to-head competitor of large established North American freight intermediaries. Rather, we focus our\ncommercial efforts on the United States–Mexico cross-border corridor and on a portfolio of complementary technology products, leveraging\nthe operational and regulatory complexity of the cross-border lane as our principal source of differentiation. Within this corridor we\ncompete primarily on speed of execution, technology-enabled customer experience, bilingual operational capability, and our ability to\nserve customers across multiple modalities through a single integrated platform.\n\n \n\n30\n\n \n\n \n\n*Categories\nof competitors*\n\n \n\nWe\nface competition principally from the following categories of market participants:\n\n \n\nEstablished\nNorth American asset-light brokers and 3PLs, including C.H. Robinson Worldwide, Inc., XPO Logistics, Inc., RXO, Inc., Hub Group, Inc.,\nEcho Global Logistics, Inc. and Landstar System, Inc. These companies operate at significantly larger scale than we do but generally\ndo not specialize in the United States–Mexico cross-border corridor.\n\n \n\nAsset-based\ncarriers with cross-border operations, including J.B. Hunt Transport Services, Inc., Schneider National, Inc., Werner Enterprises, Inc.,\nKnight-Swift Transportation Holdings Inc. and the cross-border operations of Mexican fleet operators such as Grupo Traxión, S.A.B.\nde C.V.\n\n \n\nFreight\ntechnology platforms and digital brokers, including Uber Freight (a subsidiary of Uber Technologies, Inc.), Loadsmart, Inc., Flexport,\nInc., Nuvocargo, Inc., and Mexico-focused digital freight marketplaces such as Flete.com. These companies share our digital-first approach\nto freight intermediation, with varying focus across domestic United States operations, global ocean freight, single-country Mexican\noperations and the cross-border trucking lane.\n\n \n\nMexican\ndomestic LTL and parcel competitors: in our Fr8Now business we compete principally with Mexican LTL specialists including Saia, Inc.,\nPenske Logistics, TIBA Group and Pak2Go, as well as the Mexican operations of global parcel and express carriers including Federal Express\nCorporation, DHL Express and Estafeta Mexicana, S.A. de C.V.\n\n \n\nTransportation\nmanagement system providers: for our Fleet Rocket product we compete with established TMS vendors including McLeod Software, MercuryGate\nInternational, Inc. and Trimble Inc., as well as a long tail of smaller TMS providers serving the small-fleet and broker segments.\n\n \n\nOcean\nfreight digital platforms: for our Waavely product we compete with global ocean freight digital platforms including Flexport, Inc., Freightos\nLimited and the digital booking offerings of major ocean carriers such as Maersk and CMA CGM.\n\n \n\n*Future\ncompetitive landscape*\n\n* *\n\nThe\ncompetitive landscape continues to evolve. Innovations in transportation technology — including autonomous trucking, advanced driver-assistance\nsystems, large language model–powered automation and platform consolidation — could materially change the structure of the\nindustry over the medium and long term. We monitor these developments closely and continue to invest in our technology platform to maintain\nour competitive position.\n\n** **\n\n**Industry\nOverview**\n\n \n\n*United\nStates Logistics Market*\n\n \n\nThe\nUnited States logistics industry is one of the largest sectors of the U.S. economy. According to the 36th Annual State of Logistics Report\n“Navigating Through the Fog,” produced annually for the Council of Supply Chain Management Professionals by Kearney and presented\nby Penske Logistics (the “2025 State of Logistics Report”), U.S. business logistics costs reached approximately $2.6 trillion\nin 2024, equivalent to approximately 8.7% of national gross domestic product. The same report forecasts that U.S. logistics and transportation\noutput will grow by approximately 2% in 2025.\n\n \n\nTrucking\nremains the dominant mode of freight transportation in the United States. According to the American Trucking Associations, the trucking\nindustry accounted for over 70% of the nation’s total freight tonnage in 2024 and generated approximately $906 billion in gross\nrevenues, representing approximately 72.6% of the nation’s freight bill. The U.S. trucking market is highly fragmented, with the\ntop 50 for-hire carriers accounting for less than 50% of total industry revenue.\n\n \n\n31\n\n \n\n \n\n*United\nStates–Mexico Cross-Border Market*\n\n* *\n\nThe\nUnited States–Mexico cross-border trucking market is one of the fastest-growing segments of North American logistics. According\nto the U.S. Bureau of Transportation Statistics’ 2025 Transborder Freight Data Annual Report, U.S.–Mexico freight moved by\ntruck reached approximately $51.5 billion in December 2025. Trucking accounted for approximately 73.6% of total U.S.–Mexico trade\nby value in 2025. Mexico overtook China as the largest U.S. trading partner in 2024 and maintained that position throughout 2025, with\ntotal bilateral trade exceeding $840 billion in 2024.\n\n \n\nThis\ngrowth has been driven primarily by the nearshoring trend, in which manufacturers of goods consumed in the United States have relocated\nproduction from Asia to Mexico to shorten supply chains, reduce delivery times and benefit from preferential treatment under the United\nStates–Mexico–Canada Agreement (“USMCA”), which entered into force on July 1, 2020. The Bajío–Mexico\nCity–Querétaro industrial corridor in central Mexico, together with the northern manufacturing hubs of Monterrey, Saltillo\nand the border cities of Ciudad Juárez, Nuevo Laredo and Tijuana, have become the principal sources of cross-border freight volume.\nAccording to a Kearney study on cross-border logistics, the Mexico–United States cross-border transportation and logistics market\nis expected to reach approximately $56 billion by 2030, growing at a compound annual growth rate of approximately 7% from 2025.\n\n \n\n*USMCA\nReview and the Case for Technology-Enabled Logistics*\n\n \n\nThe\nthree signatory governments are scheduled to conduct a joint review of the USMCA agreement in mid-2026. While the outcome of this review\nintroduces near-term uncertainty for cross-border trade flows, we believe that any meaningful evolution of the USMCA regulatory framework\nwould increase the operational and technological complexity of cross-border trade rather than reduce trade volumes. The underlying economic\ndrivers of U.S.–Mexico trade — proximity to U.S. consumer markets, established manufacturing capacity, supply chain resilience\nconsiderations and labor cost differentials relative to Asian alternatives — remain structurally intact.\n\n \n\nIn\nour view, a more complex regulatory environment reinforces the strategic value of technology-enabled logistics platforms relative to\ntraditional intermediaries. Additional compliance burden — whether in the form of stricter rules of origin verification, expanded\ndocumentation requirements, customs procedural changes or enforcement intensification — is most efficiently absorbed by providers\nwith automation infrastructure that can process additional regulatory steps at low marginal cost. We believe technology-enabled logistics\nproviders, including Fr8Tech, are positioned to gain share over traditional intermediaries that lack such automation infrastructure.\nWe discuss the specific risks associated with the USMCA review and related regulatory and trade developments in Item 3.D Risk Factors.\n\n \n\n*Mexican\nDomestic Logistics Market*\n\n \n\nThe\nMexican domestic freight and logistics market continues to expand alongside the cross-border trade boom. The Mexican LTL segment is expected\nto grow at a compound annual growth rate in the mid-single digits over the medium term, supported by the expansion of the Mexican formal\nretail sector and the southbound flow of consumer goods into central Mexico. Within the Mexican LTL and parcel segments, established\ncompetitors include Saia, Inc., Penske Logistics, TIBA Group and Pak2Go, alongside parcel and express carriers including Estafeta Mexicana,\nS.A. de C.V., Federal Express Corporation and DHL Express. The Mexican market also includes a growing number of digital freight marketplaces,\nsuch as Flete.com, that compete with our Fr8App and Fr8Now offerings.\n\n \n\nFr8Tech’s\noperations are headquartered in Monterrey, Mexico, which has a long-standing history as a transportation hub within the domestic and\ncross-border Mexican freight transportation market, and from which the Company serves the United States–Mexico corridor.\n\n** **\n\n**Products\nand Services**\n\n** **\n\nFr8Tech\noffers an integrated portfolio of logistics technology products developed over more than a decade that has expanded materially in each\nof the last three fiscal years. The portfolio addresses distinct segments of the freight transportation value chain — full-truckload\nbrokerage, less-than-truckload, dedicated capacity, ocean freight, transportation management, sales automation and customs compliance.\nEach product can operate as a stand-alone offering, but together they form a unified platform from which the Company can serve customers\nacross multiple transportation modalities and use cases.\n\n \n\nAs\ndescribed further under Recent Developments and Events Subsequent to December 31, 2025 below, the Company announced in April 2026 that\nits Board of Directors is overseeing an evaluation of strategic alternatives for its online brokerage operations, including a potential\nsale. The descriptions of the Company’s brokerage products below reflect their status as of the date of this Annual Report, during\nwhich all products remain fully operational and commercially available.\n\n** **\n\n32\n\n \n\n** **\n\n*Established\nCore Products*\n\n** **\n\nThe\nCompany’s established core products, all of which have been in continuous commercial operation for several years, are the foundation\nof Fr8Tech’s freight brokerage business and customer relationships.\n\n \n\n**Fr8App**\n— Cross-Border Digital Freight Brokerage. Fr8App is the Company’s flagship product and has been in continuous commercial\noperation since the Company’s inception. It is a digital freight brokerage platform that connects Shippers with a vetted network\nof Carriers, with a particular focus on full-truckload movements between the United States and Mexico. The Fr8App platform automates\nload posting, carrier matching, rate negotiation, document management and payment workflows. As of December 31, 2025, the platform had\napproximately 5,000 registered Carriers and served customers across a broad range of industrial verticals.\n\n \n\n**Fr8Now**\n— Mexican Less-Than-Truckload. Fr8Now is the Company’s digital LTL service operating principally within Mexico, in continuous\ncommercial operation since 2023. The platform aggregates partial loads from multiple Shippers into consolidated linehaul movements, serving\nsmall and mid-sized Mexican Shippers that lack the volume to justify dedicated full-truckload service. Fr8Now leverages the Fr8App carrier\nnetwork and operational infrastructure.\n\n \n\n**Fr8Fleet**\n— Dedicated Fleet Capacity. Launched in December 2021, Fr8Fleet provides dedicated fleet capacity to enterprise Shippers that require\ncontractual, predictable transportation capacity. Under a Fr8Fleet engagement, the Company commits a defined number of trucks and drivers\nto a single Shipper for a defined contract term. Fr8Fleet customers tend to be large multinational manufacturers seeking to lock in cross-border\ncapacity. The Company’s largest Fr8Fleet customer, KCM, accounted for approximately 42% of total Company revenues in fiscal year\n2025.\n\n \n\n**Fr8Radar**\n— Visibility and Tracking. Fr8Radar provides real-time shipment visibility and tracking for Fr8App customers, integrating GPS data\nfrom Carriers, electronic logging device data and exception alerts into a single Shipper-facing dashboard. As of December 31, 2025, Fr8Radar\nintegrated with 82 third-party GPS providers, expanding its visibility coverage across our Carrier network.\n\n \n\n*Products\nlaunched in 2024*\n\n \n\n**Waavely**\n— Ocean Freight Digital Booking. Launched in July 2024, Waavely is the Company’s ocean freight digital booking platform,\nenabling Shippers to obtain quotes, book containers and manage shipments between North America and ports worldwide. Waavely complements\nFr8App’s ground-based cross-border capabilities by giving customers a single point of access for both surface and ocean transportation.\n\n \n\n*Products\nlaunched in 2025*\n\n* *\n\nDuring\nfiscal year 2025 the Company executed two major product launches that expanded its addressable market beyond traditional freight brokerage\nand into business-to-business software-as-a-service.\n\n \n\n**Fleet\nRocket TMS** — AI-Powered Transportation Management System (February 2025). Fleet Rocket is a cloud-based transportation management\nsystem commercially launched in February 2025 as the Company’s first software-as-a-service product. Fleet Rocket is the productized\nversion of the proprietary TMS that Fr8Tech had previously used internally to operate its freight brokerage business. As a stand-alone\ncommercial product, Fleet Rocket is sold on a subscription basis to other freight brokers, small fleet operators and Shipper logistics\nteams. Fleet Rocket is differentiated by an artificial intelligence layer developed in-house by Fr8Tech, comprising a proprietary AI\nmodel and a set of proprietary AI agents, including an AI Tendering Bot, that automate carrier matching, document handling, exception\nmanagement and pricing workflows.\n\n \n\n**Zayren\nand Zayren Pro** — AI Sales Co-Pilots for the Freight Brokerage Industry (November 2025). Zayren is the Company’s second\nsoftware-as-a-service product, commercially launched in November 2025. It is an AI-powered sales co-pilot for freight brokers, automating\nprospect research, outreach personalization, quote preparation and follow-up workflows. Zayren Pro, a premium version with additional\nenterprise features, was released in January 2026. Zayren is designed to integrate with Fleet Rocket TMS so that customers of either\nproduct can benefit from a connected workflow spanning the freight broker’s full sales-to-execution cycle.\n\n \n\nThe\nTendering Bot is fully integrated with Fleet Rocket to enhance its automation capabilities and support enterprise clients by enabling\nfaster decision-making, real-time load visibility, and reduced operating costs. The integration also facilitates structured data flow\nbetween Fr8App and Fleet Rocket.\n\n \n\n33\n\n \n\n \n\nAll\nfreight matching products (Fr8App, Waavely and Fr8Now) work under a similar business model whereby contribution margins are primarily\nearned from revenue invoiced to Shippers less costs paid to Carriers per completed transaction. Under Fr8Fleet, contribution margins\nare earned on dedicated capacity engagements. Fleet Rocket and Zayren are sold under subscription-based SaaS models with pricing tiers\nbased primarily on shipment volumes and feature requirements.\n\n \n\n*Products\nlaunched in 2026 (subsequent to fiscal year-end)*\n\n* *\n\nIn\nApril 2026, the Company commercially launched DODA Smart, a software product addressing the Mexican customs compliance market. This product\nis described in further detail under “Recent Developments and Events Subsequent to December 31, 2025” below.\n\n \n\n**Research\n& Development**\n\n \n\n*Fr8Tech’s\nBackOffice*\n\n \n\nFor\ntraditional freight brokers, the Fr8App Platform is a valuable source to finding capacity for their clients quickly, when they have not\nachieved it through their traditional channels and methods. Brokers use the portal to help augment their businesses and provide Fr8Tech\nwith valuable market data and revenue diversification.\n\n \n\nFr8Tech’s\nsystems development team works in a development environment that is based on Scrum methodology. This methodology allows it to deliver\nnew functionalities as frequently as it designs, which is presently every two weeks. By applying concepts such as Continuous Integration\nand Continuous Delivery (“CI/CD”), Fr8Tech believes its development process is highly robust. Following is a visual depiction\nof the Scrum Methodology:\n\n \n\nIts\ntechnology has been designed with the goals of building a highly efficient, adaptable, scalable and secure platform with the potential\nto vastly improve operating margins of freight transactions. Following are some of the features of Fr8Tech’s technology infrastructure\nand development methodologies:\n\n \n\n1.\nEfficiency\n& Adaptability\n\n \n\n●\nHighly\nautomated agile development process supported by CI and CD tools\n\n●\nEvent\nbased, micro-service architecture\n\n●\nApplications\npackaged in Docker images\n\n●\nContainer\norchestration via Kubernetes leveraging automated rollouts and rollbacks, service discovery and load balancing.\n\n●\nModern,\nextendable, API suited for integration with industry data providers (TMS, telematics, ELD, Compliance, Big Data providers and other\nsystems)\n\n \n\n2.\nScalability\n& Availability\n\n \n\n●\nProject\nhosted in GoogleCloudPlatform\n\n●\nUnderlying\nplatform invented in telco industry, designed for scale with minimal downtime\n\n●\nErlang’s\n(via Elixir) let-it-crash philosophy, reducing codebase and allowing smaller teams to produce more\n\n●\nCQRS\ndesign pattern used throughout the system, separation between read & write storage\n\n●\nEasy\nhorizontal scaling via Kubernetes\n\n●\nEventStore\nas a framework for CQRS, Events Fr8App’scing, and messaging\n\n●\nPostgresql\nhosted in Aiven\n\n \n\n3.\nSecurity\n& Auditability\n\n \n\n●\nData\nloss prevention - all transactions are stored in immutable storage, Fr8App revert and reinterpret data from the inception with hindsight\n\n●\nSystem\nis monitored by automated monitoring tools (Stackdriver, Prometheus) and alerts the engineering team via Slack integration\n\n●\nGrafana\nis used to visualize system parameters in real-time\n\n●\nAll\nAPI traffic is stored in BigQuery for deep analysis of system’s usage\n\n●\nUsing\nhighest industry available encryption standards\n\n \n\n34\n\n \n\n \n\n●\nAll\ninformation is encrypted in real time, https and wss\n\n●\nPersonally\nidentifiable information is encrypted in rest\n\n●\nStrict\ndata and code access policies applied to product, and to development process\n\n●\nFull\nsnapshot, i.e. base backup of PostgreSQL\n\n●\nPostgreSQL\nstreaming backup, i.e. WAL records\n\n●\nEntire\ninstances backed up\n\n●\nAccess\nto multiple data centers in different geographic zones\n\n \n\nFr8Tech\nhas developed and will continue to create and enhance new business intelligence capabilities around reporting, online analytical processing,\nanalytics, data mining, process mining, complex event processing, business performance management, benchmarking, text mining, predictive\nanalytics, and prescriptive analytics. All these enhanced functionalities will increase the utility and add value to all users of our\nPlatform and in turn, help drive traffic to the Platform itself.\n\n \n\n*Integrations*\n\n \n\nAt\nthe core Fr8App’s networking capabilities are key integrations with outside GPS tracking service providers that give our customers\nnumerous options for real time location and movement data on trucks shipping their loads. This is central to our Fr8Radar offering. We\nhave also invested software development resources to establish dozens of bespoke customer integrations to link Fr8App with customer’s\nERPs and operating platforms to streamline dataflow and processes, ensure data accuracy and enhance reporting and analytics to improve\ntheir operating efficiencies.\n\n \n\nAnother\nexample of advancing our offerings through key integrations is service agreement with Trebu, signed on November 16, 2024, for an initial\none-year term with an automatic renewal clause, under\nwhich Trebu provides automated shipment planning services using AI to process customer requests. Trebu is implementing and maintaining\nthe AI-powered automation system that identifies and processes shipment planning requests, ensuring proper integration and synchronization\nof shipment and facility data, and providing ongoing support and maintenance to guarantee system reliability and efficiency. For more\ninformation, see Item 3.D. “*Risk Factors – Risks Related to Fr8Tech’s Business - Our dependence on a third-party\nprovider for the development and integration of AI technologies exposes us to operational and contractual risks*.”\n\n \n\n*Artificial\nIntelligence*\n\n \n\nIn\n2025, Fr8Tech launched its AI Lab. In collaboration with University of Monterrey, the Company started this program to set new technology\nstandards for the OTR freight market in Mexico by harnessing machine learning to create intelligent, self-optimizing logistics solutions\nand integrating cognitive AI systems into its technology-driven solutions. The mission of the AI Lab is to: 1.) develop AI-powered logistics\nproducts with tangible real-world applications; 2.) leverage cognitive architectures to enhance decision-making and automation; 3.) foster\ncollaboration between academia and industry to advance AI research; and, 4.) attract and nurture top AI talent to build a networked team\nof leading technologists.\n\n \n\nOver\nthe past year, the Company has also partnered with Fetch.ai to deploy AI-powered voice agents using Agentverse, Fetch.ai’s decentralized\nplatform for autonomous agents, powered by ASI:One, its flagship agentic LLM. The deployment supported Fr8Tech’s move toward smarter,\ndecentralized logistics systems and advanced the Company’s growing role in the emerging ecosystem of AI-native supply chain solutions.\n\n \n\nResearching,\ncreating and advancing AI-enabled technology are central to the Company’s mission and its ongoing development of tangible, value-added\nsolutions for the OTR freight market in North America. Fr8Tech will continue to invest in its internal software and AI development teams,\nas well as in its technology development partnerships to bring the best possible solutions to market.\n\n \n\n**Customers\nand Customer Acquisition**\n\n \n\n*Customer\nBase*\n\n \n\nFr8Tech\nserves a diversified base of Shippers ranging from small and mid-sized Mexican exporters to large multinational manufacturers. As of\nDecember 31, 2025, the Company served customers across a broad range of industrial verticals, including automotive, electronics, consumer\npackaged goods, paper and pulp, aluminum and metals, pharmaceuticals, recycling, toys, agricultural and other industrial sectors. For\nthe year ended December 31, 2025, our largest customer, KCM, accounted for approximately 42% of revenues and is principally served through\nour Fr8Fleet dedicated capacity product. As of December 31, 2025 and December 31, 2024, KCM accounted for 31% and 88% of Fr8App’s\naccounts receivable, respectively. A second customer accounted for approximately 11% of revenues, with the remaining customer base being\nhighly fragmented. This customer concentration is discussed further in Item 3.D Risk Factors.\n\n \n\n35\n\n \n\n \n\nFr8Tech\nbelieves that Shippers value the features and benefits of its platform because it gives them access to vetted and trusted Carriers that\nhelp alleviate driver shortages. Shippers also benefit from cost transparency, as there are no hidden fees, and they can rely on real-time\nshipment tracking across all cross-border movements. Fr8Tech believes that Carriers value the Company’s ability to assist in minimizing\nempty, or deadhead, miles and maximizing revenue per mile. Carriers also benefit from income predictability based on scheduled fulfillments,\nfaster payment for services and the ability to avoid potentially expensive factoring companies.\n\n \n\n*Sales\nand Marketing*\n\n* *\n\nThe\nCompany’s sales and marketing efforts are aimed primarily at direct contact with Shipper logistics, supply chain and transportation\nprocurement teams. Our sales process includes outbound prospecting by a dedicated business development team, inbound lead generation\nthrough our website and digital marketing channels, and account management for existing customers. Members of our commercial and executive\nteam attend selected industry conferences and trade events in the United States and Mexico to maintain relationships with prospective\ncustomers and monitor market developments.\n\n* *\n\nIn\naddition to direct sales, the Company markets its products through digital channels including search engine marketing, content marketing\nand industry-specific publications. As we expand the Zayren and Fleet Rocket SaaS products, we expect to increase our investment in product-led\ngrowth motions, including self-service onboarding, free trials and integrations with widely used freight industry software.\n\n \n\nFr8Tech\nbuilds its Carrier network by marketing its platform to reputable Carriers, demonstrating the value of the marketplace, bringing high-volume\nconsistent business from Shippers, maintaining an intuitive and engaging user experience, providing key operations support, and making\ntimely payments when shipments are completed.\n\n \n\n*Shipper\nVetting*\n\n \n\nBefore\nactivating a new Shipper account, the Company performs commercial due diligence, including verification of the Shipper’s legal\nexistence and good standing in its jurisdiction of incorporation, review of credit references and financial information where appropriate,\nand confirmation of contact information and authorized billing parties. For Mexican Shippers, the Company additionally verifies the Shipper’s\nRFC (Registro Federal de Contribuyentes, the Mexican federal taxpayer registry) and issues facturas in compliance with Mexican tax invoicing\nrequirements.\n\n \n\n**Carrier\nNetwork and Carrier Vetting**\n\n \n\n*Carrier\nNetwork*\n\n \n\nFr8Tech\noperates an asset-light business model. The Company does not own trucks, trailers or other transportation assets. Rather, the Company\ncontracts with a network of Carriers — independent trucking companies and owner-operators — to perform the physical movement\nof freight. As of December 31, 2025, the Company’s network included approximately 5,000 registered Carriers operating in the United\nStates and Mexico.\n\n \n\n*Technology-Enabled\nCarrier Onboarding*\n\n \n\nCarrier\nonboarding and credentialing at Fr8Tech is fully technology-enabled. Carriers register and complete the vetting process directly through\nthe Fr8App platform, which automates the verification of operating authority, insurance coverage, safety credentials and tax registration\nagainst the relevant public regulatory databases in the United States and Mexico. Once a Carrier is activated, the platform monitors\nthe validity of credentials on an ongoing basis and automatically flags or suspends Carriers whose credentials lapse or whose safety\nratings deteriorate.\n\n \n\n*United\nStates Carrier Vetting*\n\n* *\n\nBefore activating a new U.S.-based Carrier on\nthe Fr8App platform, the Company verifies, among other items, the Carrier’s: operating authority issued by the FMCSA, evidenced\nby a valid Motor Carrier number; DOT number; Standard Carrier Alpha Code; current automobile liability and cargo insurance coverage in\namounts meeting or exceeding regulatory minimums; safety rating and Compliance, Safety, Accountability scores published by the FMCSA;\nand Customs-Trade Partnership Against Terrorism (“C-TPAT”) and Free and Secure Trade (“FAST”) certifications,\nwhere applicable for cross-border operations.\n\n* *\n\n36\n\n \n\n* *\n\n*Mexican\nCarrier Vetting*\n\n \n\nBefore activating a new Mexican Carrier on the\nFr8App platform, the Company verifies, among other items, the Carrier’s: registration with the Servicio de Administración\nTributaria (“SAT”), evidenced by a valid RFC; operating permit issued by the SICT; ability to issue the Complemento Carta\nPorte, the digital fiscal document required by SAT for goods transported by road within Mexico; current insurance coverage meeting Mexican\nregulatory requirements and Fr8Tech’s internal standards; and C-TPAT and FAST certifications, where applicable for cross-border\noperations.\n\n \n\n*Carta\nPorte Management Within Our Technology Platform*\n\n \n\nThe\nComplemento Carta Porte is a digital fiscal document required by the SAT for the transportation of goods by road within Mexico, fully\nimplemented in 2022. Fr8Tech manages Carta Porte issuance, validation and storage natively within Fleet Rocket TMS. We believe the integration\nof Carta Porte management directly within our TMS is a meaningful differentiator versus legacy intermediaries that rely on third-party\ntools or manual processes for Mexican fiscal compliance.\n\n \n\n**Regulations**\n\n \n\n*United\nStates Regulation*\n\n* *\n\nThe\nCompany’s freight brokerage operations in the United States are regulated principally by the U.S. Department of Transportation\nthrough the Federal Motor Carrier Safety Administration. As a property freight broker, the Company is required to maintain a broker authority\nlicense issued by the FMCSA, post a surety bond or trust fund agreement in the amount required by FMCSA regulations, and comply with\nbroker registration, recordkeeping and disclosure requirements. Cross-border operations are additionally subject to oversight by U.S.\nCustoms and Border Protection and to the security requirements of the C-TPAT and FAST programs.\n\n \n\n*Mexican\nRegulation*\n\n \n\nIn Mexico, the Company’s operations are regulated principally by the SICT, the Mexican federal infrastructure,\ncommunications and transportation ministry. SICT was renamed in November 2022 from its prior name, SCT. The Carriers in our Mexican network\nare required to hold operating permits issued by SICT and to comply with applicable federal and state transportation regulations, including\nthose administered by the Servicio de Administración Tributaria (“SAT”) for tax matters and by the Agencia Nacional\nde Aduanas de México (“ANAM”) for cross-border operations\n\n \n\n*Cross-Border\nRegulatory Framework*\n\n \n\nThe\ncross-border operations of the Company and its Carriers are governed by the USMCA, which entered into force on July 1, 2020 and replaced\nNAFTA. USMCA provides for preferential tariff treatment for qualifying goods, harmonized customs procedures and rules of origin requirements\nthat affect the routing and documentation of cross-border shipments. The three signatory governments are scheduled to conduct a joint\nreview of the agreement in mid-2026. We discuss the risks associated with potential changes to the USMCA framework in Item 3.D. “Risk Factors”.\n\n \n\n*Data\nProtection and Privacy Regulation*\n\n \n\nIn the course of our operations we collect and\nprocess personal data of individuals, including driver identification and contact information, real-time vehicle location and telematics\ndata associated with drivers, and contact information of personnel at our Shipper and Carrier counterparties. In Mexico, our processing\nof personal data is governed principally by the Ley Federal de Protección de Datos Personales en Posesión de los Particulares\nand its implementing regulations. In the United States, our processing of personal data may be subject to applicable state privacy laws,\nincluding the California Consumer Privacy Act, as amended by the California Privacy Rights Act. We discuss the risks associated with privacy\nand data protection matters in Item 3.D. “*Risk Factors*”.\n\n \n\n37\n\n \n\n \n\n**Intellectual\nProperty**\n\n \n\nFr8Tech\nrelies on a combination of trademark law, trade secret protection, and contractual arrangements to protect its intellectual property.\n\n \n\n*Trademarks*\n\n \n\nThe\nCompany holds two registered trademarks in the United States with the U.S. Patent and Trademark Office: the FR8TECHNOLOGIES & Design\nmark and the FR8HUB & Design mark, both registered following Statements of Use filed and confirmed in September 2023. The FR8HUB\n& Design mark relates to a predecessor brand that is no longer actively used in the Company’s operations.\n\n \n\nThe\nCompany has also filed trademark applications for its FLEET ROCKET product brand. In the United States, a trademark application for FLEET\nROCKET (Application No. 98820629) was filed with the USPTO in October 2024 and a Statement of Use (Allegation of Use) was submitted to\nthe USPTO in March 2026; the application remains pending. A corresponding trademark application for FLEET ROCKET was filed with the Mexican\nInstitute of Industrial Property (Instituto Mexicano de la Propiedad Industrial, “IMPI”) prior to June 2025, with filing\nreceipts received from IMPI; that application also remains pending. The Company does not currently hold any patents.\n\n \n\n*Software\nand Proprietary Technology*\n\n \n\nFr8Tech’s\nprincipal intellectual property assets are its proprietary software platform, its portfolio of artificial intelligence models and AI\nagents, and the underlying logistics operational dataset on which those models have been trained. The Company has developed a proprietary\nartificial intelligence model in-house, trained on more than a decade of its own logistics operational data, including shipment records,\ncarrier performance data, lane economics, exception patterns and cross-border documentation flows. The Company has also developed a portfolio\nof proprietary AI agents built on top of this model that automate workflows across its product platform. Fr8Tech regards this combination\nof proprietary model, training dataset and AI agent portfolio as core intellectual property assets of the business.\n\n \n\nThe\nCompany invests in its software platform on an ongoing basis through development work by employees and externally contracted parties.\nThe Company invested approximately $0.31 million and $0.35 million in software during the years ended December 31, 2025 and 2024, respectively.\nFr8Tech expects to continue investing in its software commensurate with the expansion of its product offerings.\n\n \n\n*Protection\nMeasures*\n\n \n\nFr8Tech\nbelieves that the success of its business depends on the quality of its proprietary software solutions, technology, processes, and domain\nexpertise, and that its competitive position depends primarily on its ability to develop and maintain a technology leadership position\nin the USMCA cross-border freight market by delivering innovative proprietary solutions, business intelligence, and platform capabilities\nthat satisfy the needs of both Shippers and Carriers. Fr8Tech protects its proprietary software, source code, algorithms and data assets\nthrough a combination of trade secret protections, contractual confidentiality obligations with its employees and third-party developers,\nand technical access controls on its systems and data.\n\n \n\n**Recent\nDevelopments and Events Subsequent to December 31, 2025**\n\n** **\n\nThe\nfollowing events occurred after the December 31, 2025 fiscal year-end and through the date of this Annual Report on Form 20-F, presented\nin chronological order.\n\n \n\n*January\n2026 — Commercial launch of Zayren Pro*\n\n* *\n\nOn\nJanuary 22, 2026, the Company commercially launched Zayren Pro, a premium commercial version of Zayren with additional enterprise features\nand next-generation AI agent capabilities. Zayren Pro is the second commercial release in the Zayren product line, following the launch\nof Zayren in November 2025.\n\n \n\n*February\n2026 — ISO 9001:2015 Annual Audit*\n\n* *\n\nIn\nFebruary 2026, the Company completed its annual ISO 9001:2015 audit, maintaining its quality management system certification. ISO 9001:2015\nis an internationally recognized standard for quality management systems.\n\n \n\n38\n\n \n\n \n\n*March\n2026 — Securities Purchase Agreement*\n\n \n\nOn\nMarch 12, 2026, the Company entered into a securities purchase agreement with certain accredited investors for the issuance of additional\nSeries C Preferred Shares for aggregate gross proceeds of approximately $1 million.\n\n \n\n*March\n2026 — ELOC Waiver Agreement*\n\n \n\nOn March 23, 2026, the Company executed a limited\nwaiver agreement with the ELOC Investor relating to the timing of the registration statement required to be filed in connection with the\nELOC. See Note 19 to the consolidated financial statements.\n\n \n\n*April\n2026 — Strategic Review of Brokerage Operations*\n\n \n\nOn\nApril 2, 2026, the Company announced a strategic update on its transition to an AI-powered, software-first logistics technology company\nand disclosed that it is exploring strategic alternatives for its online brokerage operations, including a potential sale. The Company\nhas engaged with multiple interested parties as part of that process, and the Company’s Board of Directors is overseeing the evaluation\nof strategic alternatives for the brokerage operations.\n\n \n\nThe\nCompany’s brokerage operations — conducted primarily through Fr8App, Fr8Fleet and Fr8Now — have historically represented\nthe majority of the Company’s revenues. The strategic review reflects the Board’s determination that a focused AI-software\nbusiness model, built around the Company’s commercially deployed SaaS products including Fleet Rocket, Zayren and Zayren Pro, represents\nthe most direct path to deliver long-term value. The Company emphasized that its enterprise customer relationships, technology infrastructure\nand AI development pipeline are unaffected by the strategic review process.\n\n \n\nThe\nexploration of strategic alternatives is preliminary and exploratory in nature. There can be no assurance that this process will result\nin any transaction, and the Company does not intend to provide further updates unless and until a definitive agreement is reached or\ndisclosure is otherwise required. This announcement was made in a Report on Form 6-K filed with the Securities and Exchange Commission\non April 2, 2026.\n\n \n\nSee"}