NEW YORK, Oct. 15, 2020 (GLOBE NEWSWIRE) -- Hudson Capital Inc. (HUSN) has entered into a definitive merger agreement to acquire FreightHub, Inc., a North American transportation logistics platform company focused on US-Mexico cross-border shipping. Existing Fr8Hub shareholders intend to invest $12 million in connection with the closing of the transaction. The transaction is expected to close in the first quarter of 2021.
Fr8Hub is simplifying domestic and international cross-border shipping through its cloud-based transportation logistics platform. The company’s digital freight marketplace, transportation management systems (TMS), public application programming interface (API), and customer support tools have been designed to maximize efficiency from scheduling to delivery for shippers and carriers. Fr8Hub’s innovative digital freight matching technology connects shippers with a broad network of reliable carriers and drivers in Mexico, Canada and the United States’ borders. The company’s proprietary platform enables shippers to autonomously manage their own fleet and post loads in the marketplace to minimize dead space and, at the same time, seamlessly integrate with third-party systems to streamline communication amongst partners. Altogether, Fr8Hub’s mission is to make shipping simple, transparent, and efficient.
Hon Man Yun, Chief Financial Officer of Hudson Capital, stated, “With its differentiated technology platform, first mover advantage and extensive management experience and expertise, Fr8Hub is well positioned to capitalize on the expanding truckload freight industry cross-border between the United States and Mexico. After three years of innovative software development, the company began selling Fr8Hub 2.0 in earnest in June. Since that time, they have seen extraordinary month-over-month revenue growth.”
With Fr8Hub 2.0 software in place, Fr8Hub’s monthly revenue grew from $247,000 in May 2020 to over $1.0 million in September 2020. With this press release, Fr8Hub management is providing full year 2020 revenue guidance to be in excess of $9 million.
Yun added, “Fr8Hub’s President Mike Flinker has more than 30 years of logistics business experience with a focus on cross-border and domestic commercial freight. Fr8Hub plans to build upon its market-leading transportation logistics platform, leveraging its innovative, proprietary technology and significant industry expertise.”
Flinker said, “We believe we are the first mover in Mexico to combine a top-tier transportation logistics platform with an intimate knowledge of over the road cross-border shipping, especially in relation to the US-Mexico border. Being a publicly traded company will enable us to build a market leading position serving the $40 billion trucking industry in Mexico. Mexico is now the United States’ second largest trading partner, with cross-border trading between the two countries totaling approximately $429 billion, according to the United States Department of Transportation. As an established digital freight marketplace broker, we are well-positioned for growth domestically in both countries, beginning in Mexico, where the fragmented industry provides a great opportunity for consolidation. Additionally, we plan to leverage our technology to expand our shipper TMS to include a carrier fleet management system and last mile solution. These growth initiatives help substantiate the basis for our revenue earnout targets.”
Fr8Hub has exhibited month-over-month revenue growth while introducing its next generation of software, Fr8Hub 2.0, and further establishing the company amongst its peers in the digital freight sector, including Uber Freight LLC, Convoy Inc, Transfix, Inc, and NEXT Trucking Inc.
Consummation of the merger will require approval of the shareholders of both Hudson Capital and Fr8Hub and is subject to other customary closing conditions, including the receipt of listing approval of the post-closing company by The Nasdaq Stock Market, LLC and the completion of the review of the Registration Statement on Form S-4 to be filed with the SEC in connection with the proposed merger.
If all requisite approvals are obtained, the transaction , will result in the redomestication of Hudson Capital from the British Virgin Islands to Delaware and the acquisition of Fr8Hub as a wholly-owned subsidiary of Hudson Capital.
More About Fr8Hub
Fr8Hub’s online freight marketplace and mobile application give carriers full visibility on all of the company’s freight capabilities and gives them the ability to book shipments instantly through Fr8Hub’s app or web-based portal. The company also offers a cloud-based TMS solution to assist with maximizing the efficiency of transportation operations.
Fr8Hub helps its customers optimize their supply chain, eliminate empty miles on the road, and reduce their carbon footprint, thereby improving profitability and environmental sustainability. A transformation in the logistics transportation industry is taking place and Fr8Hub offers smart solutions with its proprietary software creating sustainable alternatives. Companies need to stay competitive - Fr8Hub’s advanced technology aims to improve customer distribution centers, warehouses, shipping, and transport management.
Founded in 2015, Fr8Hub delivered gross revenue of $4.2 million in 2019 and estimates 2020 to grow more than 100% organically. With 1,700+ carriers (80,000+ trucks) onboarded and 130+ shipper clients through September 2020, Fr8Hub has facilitated/completed 7,800+ shipping loads. US headquarters are in Chicago and Mexican headquarters are in Monterrey. As of September 30, 2020, Fr8Hub has 68 employees, 52 in Mexico and16 in the United States.
Transaction Overview
Immediately following the closing of the merger, the former Fr8Hub shareholders will hold approximately 85.7% of the combined company and the shareholders of Hudson Capital will retain ownership of approximately 14.3% of the combined company, on a fully diluted basis. Additionally, Fr8Hub will make a cash payment of $1.75 million to Hudson at closing. The Merger Agreement includes a revenue earnout schedule, based upon Fr8Hub achieving annual revenue thresholds of $25 million, $50 million and $100 million in 2021, 2022, and 2023, respectively. In the event Fr8Hub meets these annual revenue thresholds, existing Fr8Hub stockholders shall receive (on a pro rata basis) 3.33% of the issued and outstanding shares of common stock, in the combined company, on a fully-diluted basis as of the last day of the applicable calendar year-end, up to a maximum of 10.0% in the aggregate over the three year period. Finally, the current assets and liabilities of Hudson will be spun-off to existing shareholders of Hudson immediately prior to the closing of the transaction.
Upon completion of the merger, the existing Fr8Hub board will lead the merged company and Mike Flinker will serve as President and Director.
Chardan is acting as exclusive advisor to Fr8Hub on the proposed transaction and Loeb & Loeb LLP is acting as legal counsel. Block Wall Advisors is acting as exclusive advisor to Hudson Capital and Sichenzia Ross Ference LLP is acting as legal counsel to Hudson Capital.
The Boards of Directors of each of Hudson Capital and Fr8Hub have unanimously approved the transaction. The transaction will require the approval of the shareholders of both Hudson Capital and Fr8Hub, and is subject to other customary closing conditions, including the receipt of approval from The Nasdaq Stock Market, LLC and the completion of the review of the Registration Statement on Form S-4 to be filed with the SEC in connection with the proposed merger. The transaction is expected to close early in the first quarter of 2021. Additional information about the proposed transaction, including a copy of the merger agreement and investor presentation, will be provided in a Form 6-K to be filed by Hudson Capital with the Securities and Exchange Commission and will be available at www.sec.gov.
About FreightHub, Inc.
FreightHub, Inc. (Fr8Hub) makes shipping simple, transparent, and efficient. A transportation logistics platform company, Fr8Hub focuses on truckload freight for US-Mexico cross-border, domestic Mexico and domestic US. As an established digital freight marketplace, broker, transportation management system (TMS) and public API, Fr8Hub uses its proprietary technology platform to connect carriers and shippers and significantly improve matching and operation efficiency via innovative technologies such as live pricing and real-time tracking.
About Hudson Capital Inc.
Incorporated in 2014, Hudson Capital Inc. (formerly known as China Internet Nationwide Financial Services Inc. (NASDAQ: HUSN)) commenced its business by providing financial advisory services to small and medium size companies. The traditional business segments include commercial payment advisory, intermediary bank loan advisory and international corporate financing advisory services which help clients to meet their commercial payment and investment needs. For more information, about Hudson Capital, please see the documents filed by Hudson Capital with the SEC at www.sec.gov.
