Freight Technologies, Inc. Liquidation Value

Freight Technologies, Inc. (FRGT) presents a deeply distressed liquidation posture as of June 30, 2025. MFFAIS-calculated cash liquidation value of negative $7.7 million and liquid liquidation value of negative $2.1 million confirm that creditor claims exceed recoverable asset value under any reasonable liquidation scenario. The company carries a $45.9 million accumulated deficit and management has issued a going concern qualification for the twelve months from the filing date.

On the asset side, the balance sheet totals $17.1 million. Cash is $587K (100% recovery). Combined AR and unbilled receivables are $6.5 million ($5.6M billed AR at 90-95% = ~$5.1-$5.3M; $847K unbilled at lower confidence). PP&E net book value is $9K — negligible. Capitalized software net is $564K — zero recovery under liquidation lens (intangible). Prepaid expenses of $1.1 million are largely non-recoverable. The dominant asset is crypto holdings: $8.4 million fair value (FET tokens $8.0M, Official Trump coins $410K, small ETH/SOL positions) classified as noncurrent intangible assets under ASC 350-60. Crypto receives a 0% intangible haircut under the standard liquidation lens; however, these are Level 1 fair-value assets traded on active markets, so their realizable value is closer to market price less liquidation friction — a practitioner would apply a stressed crypto haircut (30-50%) rather than a full write-off, yielding perhaps $4-6M recoverable. Even with this more favorable treatment, the asset side remains insufficient to cover liabilities.

Liability stack as of June 30, 2025 totals $8.3 million, all current: revolving credit facility $4.9 million (increased from $3.3M at December 31, 2024 — a $1.5M draw increase QoQ), accounts payable $1.4 million, accrued liabilities $1.1 million, convertible notes payable $500K, taxes payable $297K, and other current items. All liabilities are current; there is no long-term debt. Net working capital is negative $180K.

The material development since the prior filing (Q1 2025, March 31) is the crypto treasury pivot: FRGT sold Series A4 preferred shares for FET tokens ($5.2M notional), established a $20M convertible note facility exclusively to buy Official Trump coins ($TRUMP), drew $2M on that facility, purchased $2M of TRUMP tokens, converted $1.5M of those notes into Series A4 preferred, and holds $500K of convertible notes outstanding. Total crypto fair value grew from zero at year-end 2024 to $8.4M at June 30, 2025. The $2.35M unrealized crypto gain is the primary driver of the company reporting positive Q2 net income ($649K) versus prior-period losses. Operating cash burn remains severe: negative $5.0M for the six months ended June 30, 2025. The revolving credit facility was amended post-period (July 11, 2025) to extend maturity to March 2027 with $5M capacity including $4M overline availability.

Filing discusses the $20M convertible note facility with up to $18M remaining available for additional TRUMP token purchases in MD&A but the facility's ongoing draw risk and associated contingent dilution are not separately tagged in XBRL beyond the current $500K outstanding balance tag.