Freight Technologies Inc (FRGT)

[StockLogistics]

Looks like this may be keeping price down:

“Entry into a Material Definitive Agreement
Unregistered Sales of Equity Securities

Securities Purchase Agreement

On January 3, 2023, Freight Technologies Inc. (the “Company”) and Freight Opportunities LLC (“Freight Opportunities”) entered into a Securities Purchase Agreement pursuant to which the Company agreed to issue and Freight Opportunities agreed to purchase a convertible promissory note in the principal amount of up to $6,593,407 (the “Note”) and a warrant to purchase the Company’s ordinary shares (the “Warrant”). The Note carries an original issue discount of nine percent (9%), or in the aggregate, up to $593,407 (the “OID”).

The securities purchase shall close in tranches (each, a “Tranche”), with the Closing of the first Tranche consisting of note with an aggregate purchase price of $1,650,000 and an aggregate principal amount (including OID) of $1,813,187.00 (the “Initial Closing”). So long as no Event of Default has occurred under the note, the closing of (i) the second Tranche, consisting of an aggregate purchase price of $1,100,000 and an aggregate principal amount (including OID) of $1,208,791.00, shall occur within sixty (60) business days of the Initial Closing; and (ii) the third Tranche, consisting of the aggregate purchase price of up to $3,250,000 and an aggregate principal amount (including OID) of up to $3,571,429.00, shall occur no later than the fifth (5th) business day (i) upon satisfaction of the Equity Conditions (as defined in the Note) and (ii) provided that the Company’s ordinary shares have a daily VWAP of over $1.00 for 20 of the last 20 Trading Days (as defined in the Note) prior to the closing and the daily dollar trading volume of the ordinary shares shall have exceeded $500,000 for 20 of the last 30 Trading Days prior to the closing (which conditions may be waived in the sole and absolute discretion of Freight Opportunities, and in such event such Tranche may funded in whole or in part in the sole discretion of Freight Opportunities. Notwithstanding the foregoing, Freight Opportunities shall have no obligation to fund the third Tranche if the Third Tranche Conditions (as defined in the Note) have not been met by the date that is three (3) years from January 3, 2023.

Interest rate on the Note shall reset daily and accrue (a) for payments made in cash, at a rate equal to the greater of (i) the Prime Rate plus four percent (4%) per annum, or (ii) nine percent (9%) and (b) for payments made in ordinary shares, at a rate equal to the greater of (i) the Prime Rate plus six percent (6%) per annum, or (ii) nine percent (9%). Subject to provisions of Section 1.2 of the Note, at the option of the Company, the Company may, upon not less than five business days’ written notice to Freight Opportunities prior to the date on which interest is due (the “Interest Date”), pay such interest (i) in cash or (ii) in such number of fully paid and non-assessable ordinary shares as is determined by dividing (x) that portion of the interest by the Interest Conversion Rate (as defined in the Note). Interest shall be due and payable on the last Trading Day of each fiscal quarter of the Company during the term of the Note; provided that if the Equity Conditions (as defined in the Note) are not satisfied, then the Company shall be required to make such payment of interest in cash, which requirement may be waived by Freight Opportunities, in its sole discretion.

The Note has a maturity date of January 3, 2029 upon which the principal amount for each Tranche, shall be due and payable.

The Note shall be convertible (in whole or in part), at the option of Freight Opportunities, into such number of fully paid and non-assessable ordinary shares as is determined by dividing (x) that portion of (A) the outstanding principal amount, (B) accrued and unpaid interest with respect to such outstanding principal amount of this Note, (C) the Make-Whole Amount (as defined in the Note), if any, that it elects to convert (the “Conversion Amount”) by (y) $0.23 (the “Conversion Price”).

Also on January 3, 2023, the Company issued to Freight Opportunities a Warrant to purchase up to 28,666,985 of its ordinary shares at an exercise price of $1.50. The Warrant carries a cashless exercise feature and an expires on January 3, 2033.

The funding from the Note is intended to be used for general working capital purposes in support of the Company’s anticipated growth.

The preceding description of the aforementioned agreements and securities does not purport to be complete and is qualified in its entirety by reference to the Securities Purchase Agreement, the form of Note and Warrant, which are filed as exhibits to this report and incorporated herein by reference.

The foregoing securities were offered and sold by the Company in reliance upon an exemption from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D thereunder.”

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